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Mahindra & Mahindra Limited Annual Report 2007-08

youdriveus

Directors’ Report

Management Discussion and Analysis

Corporate Governance

Accounts

Statement pursuant to Section 212

Consolidated Accounts

Contents

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61

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To the customer.

For the customer.

With the customer.

At Mahindra & Mahindra,

we work with a simple philosophy

Customers drive us...

DYOU

R

At Mahindra our objective is not just to sell vehiclesbut to build relationships. For us the most importantaspect of this relationship begins after the sale hasoccurred. We strive to continue being a part of yourlife. To ensure that you never regret having chosen usabove others for taking care of your needs.

IVEUS

YOUBeing next to

dictates our reach

Reach for it. Push yourself as far as you can.

I lived in the US for about nine years and have always been

an automobile enthusiast, owning a lot of classic cars. And

don’t think I am exaggerating, if I say that the driving

experience of the jeep Legend comes very close to that of

Porsche Boxster. Moreover, the level of customer service

that I receive is unheard of in the world.

Mr. Mahendra Raj, Madurai

“

”

I find myself very secure and safe when I travel in my

Scorpio. It makes me feel comfortable and I don't feel worn

out. I believe it to be a very sturdy and low maintenance

vehicle. As a child, I used to envy M&M vehicles, but today

others envy me and I feel proud to be the owner of my

Mahindra Scorpio.

Anjali Pramod Jadhav, Mumbai

“

”

I was really pessimistic of Logan prior to its launch. But

after studying every feature of cars from this segment as

against their price matrix, I eventually purchased Logan

because of its cost effectiveness. I really loved the

ceremonial delivery. The way they shoot and the way all

the staff members start clapping with respect, one really

feels special to be an owner of an M&M vehicle instead of

a Skoda or a Hyundai. And finally it was very touching to

receive a pooja kit to cap it off.

Mr. Amandeep Singh, Ludhiana

“

”

It was really fast. They worked day and night. It was like a

war field. I have never seen this kind of service in my life

time. I was totally amazed to see the teamwork… I am

really proud of the Mahindra & Mahindra Brand. Through

this service you have made me your customer for life.

Elango Mani

“

”

Dedication is not what others expect of you, it is what you can give to others.

YOUServicing

with dedication defines our existence

I have been around equipment all my life. But for

$27,000, complete with a front loader, the 54-hp

Mahindra (tractor) is by far the best for the money. It has

more power and heavier steel. When you lock it into a

four-wheel drive, you can move 3,000 pounds like nothing.

That thing's an animal.

Jamie Lucenberg, 35, during the cleanup in the wake of

Hurricane Katrina as reported in an article in Business

Week.

“

”

I have been using a Mahindra tractor for close to 20 years,

even before it was turned into a DI tractor. It gives the best

mileage compared to any other tractor. They even come

to our doorstep to serve us and always help us during

our season.

Shekhar Reddy, AP

“

”

Mahindra Tractors represent the best value and quality

for your dollar. The reliability and acceptance has been

outstanding. We have dealt with several tractor makers in

the past, but these tractors are clearly great performers at

a reasonable price point.

Mr Anthony Mangold, Australia

“

”

Mahindra Tractor is a powerful tractor and can be used

for multiple applications. I use it for ploughing the field

and combine harvesting. When not required in agricultural

fields, I use it for loader applications.

Shriram Pal – Raipur, Chattisgarh

“

”

At the beginning of Barack Obama’s campaign for the US

Presidential nomination, nobody expected him to stand a

serious chance. Supporters were few and campaign funds

were scarce. And yet the very first thing that Mr Obama did

was to spend his scarce funds on creating a ‘customer service

centre,’ so that any one who called at any hour of the day or

night would always have a human voice at the other end to

listen to his or her concern.

The rest is history.

Against all odds, Mr Obama is today a Presidential candidate,

and his people-centred, bottom-up strategy of engaging

people’s hopes and emotions has played a large part in

putting him there.

It is interesting that TIME magazine reports that Mr Obama

decided from the beginning to run his campaign like a

business. Which meant that he followed the dictum of

‘customer is king’. It’s a dictum that we in M&M try to live up

to every day and in every way. A few years ago we publicly

declared our ambition to become the most customer centric

corporation in the world. And we consciously try to gear all

our actions towards achieving this goal.

In the course of this journey, we have realised that customer

centricity springs from something much deeper than providing

the cheapest product or flaunting celebrity endorsements or

the most attractive freebies. Rather, it stems from seeing the

customer as a person rather than a statistic in a market share.

It comes from an ability to don the shoes of the customer and

to see a problem from a customer perspective. It comes from

offering customers something that nobody else does –

whether it is a service or an experience or just genuine

attention and concern. It comes not from making sales but

from building relationships.

So when an M&M employee stops his car in the middle of his

holiday to help a customer who is stranded by the side of the

road – we call that customer centricity. When the President of

our Automotive Sector goes on TV to pledge publicly that we

are striving to become the most customer caring auto

company in India – we call that customer centricity. When we

offer a Mahindra On Call service – one phone number for all

our products and a friendly voice at any time of the day or

night – we call that customer centricity. We measure our levels

of customer centricity with an internal score and our

companies vie with each other for higher scores.

Our customers respond to this customer centricity with great

generosity. We have a Scorpio owner who jokingly calls

himself a GM of M&M because he has sold so many Scorpios

for us by recommending them to his friends. We have many

farmers who have influenced their village communities to buy

our tractors. And as our customer base grows beyond the

shores of India we hope we will have European, Chinese,

American, African, Australian and South American customers

also doing the same thing.

A happy customer is our best brand ambassador. And the day

that every customer becomes a self-appointed brand

ambassador for M&M will be the day when we become the

most customer centric corporation in the world.

YOUmatter the most

1

MAHINDRA & MAHINDRA LIMITED

COMMITTEES OF THE BOARD

Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeDeepak S. ParekhChairmanNadir B. GodrejM. M. MurugappanR. K. Kulkarni

Share TShare TShare TShare TShare Transfer and Shareholders/ransfer and Shareholders/ransfer and Shareholders/ransfer and Shareholders/ransfer and Shareholders/Investors Grievance CommitteeInvestors Grievance CommitteeInvestors Grievance CommitteeInvestors Grievance CommitteeInvestors Grievance CommitteeKeshub MahindraChairmanAnand G. MahindraBharat DoshiA. K. NandaR. K. Kulkarni

Remuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation CommitteeNarayanan VaghulChairmanKeshub MahindraNadir B. GodrejM. M. Murugappan

Loans & Investment CommitteeLoans & Investment CommitteeLoans & Investment CommitteeLoans & Investment CommitteeLoans & Investment CommitteeKeshub MahindraChairmanAnand G. MahindraBharat DoshiA. K. NandaR. K. Kulkarni

Research & Development CommitteeResearch & Development CommitteeResearch & Development CommitteeResearch & Development CommitteeResearch & Development CommitteeA. S. GangulyChairmanAnand G. MahindraNadir B. GodrejM. M. MurugappanBharat Doshi

GROUP MANAGEMENT BOARDAnand G. MahindraVice-Chairman & Managing DirectorBharat DoshiGroup Chief Financial OfficerA. K. NandaPresident - Infrastructure Development SectorAnjanikumar ChoudhariPresident - Farm Equipment SectorRajeev DubeyPresident - HR, After - Market & Corporate ServicesPawan GoenkaPresident - Automotive SectorHemant LuthraPresident - Systems & Technologies SectorRaghunath MurtiPresident - Trade, Retail and Logistics SectorUday Y. PhadkePresident - Finance, Legal and Financial Services SectorUlhas N. YargopPresident - Information Technology Sector

BOARD OF DIRECTORS

Keshub MahindraChairman

Anand G. MahindraVice-Chairman & Managing Director

Deepak S. ParekhNadir B. GodrejM. M. MurugappanNarayanan VaghulA. S. GangulyR. K. KulkarniAnupam PuriThomas Mathew T.Nominee of Life Insurance Corporation of India

Bharat DoshiExecutive Director

A. K. NandaExecutive Director

Narayan ShankarCompany Secretary

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BankersBankersBankersBankersBankers

Bank of America N.A.

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Limited

Standard Chartered Bank

State Bank of India

Union Bank of India

AuditorsAuditorsAuditorsAuditorsAuditors

Deloitte Haskins & Sells

12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate,

Worli, Mumbai 400 018.

AdvocatesAdvocatesAdvocatesAdvocatesAdvocates

Khaitan & Co., Meher Chambers,

R K Marg, Ballard Estate, Mumbai 400 038.

Registered OfficeRegistered OfficeRegistered OfficeRegistered OfficeRegistered Office

Gateway Building, Apollo Bunder, Mumbai 400 001.

BranchesBranchesBranchesBranchesBranches

7, Dr. Ishaque Road (Old KYD Street), Kolkata 700 016.

Mahindra Towers, 2-A Bhikaji Cama Place, New Delhi 110 066.

Mahindra Towers, First Floor, 17/18, Pattulous Road, Chennai 600 002.

Raheja Chambers, First Floor, 12, Museum Road, Bengaluru 560 001.


3

Directors’ ReportDear ShareholdersYour Directors present their Report together with theaudited accounts of your Company for the year ended 31st

March, 2008.

Financial HighlightsFinancial HighlightsFinancial HighlightsFinancial HighlightsFinancial Highlights(Rs. in crores)

20082008200820082008 2007Gross Income 1323813238132381323813238 11558Less: Excise Duty on Sales 15661566156615661566 1337Net Income 1167211672116721167211672 10221Profit before Depreciation, Interest,Exceptional items and Taxation 15051505150515051505 1458Less: Depreciation / Amortisation 239239239239239 209Profit before Interest, Exceptionalitems and Taxation 12661266126612661266 1249Less: Interest (Net) 2424242424 (67)Profit before Exceptional items and Taxation 12421242124212421242 1316Add: Exceptional items 165165165165165 122Profit before Taxation 14071407140714071407 1438Less: Provision for tax – Current tax(including Fringe Benefit Tax) 279279279279279 366Less: Provision for tax – Deferred tax (Net) 2525252525 (15)Profit for the year before prior periodadjustments 11031103110311031103 1087Prior Period Adjustment (Net of Tax) ----- 19Profit for the year 11031103110311031103 1068Balance of profit for earlier years 21252125212521252125 1476Add: Transfer (to)/from DebentureRedemption Reserve (17)(17)(17)(17)(17) 16Profit available for appropriation 32113211321132113211 2560Less:General Reserve 115115115115115 110

Interim Dividend paid ----- 184Income-tax on Interim Dividend paid ----- 26Proposed Dividend 283283283283283 98Income-tax on Proposed Dividend 3838383838 17

Balance carried forward 27752775277527752775 2125

PPPPPerformance Reviewerformance Reviewerformance Reviewerformance Reviewerformance Review

Automotive Sector:

For the sixth consecutive year the Company’s vehicle

production and sales recorded outstanding performance

levels despite the industry slowdown during the year. A

total of 2,00,132 vehicles and 34,556 three-wheelers were

produced as against 1,44,090 vehicles and 34,892 three-

wheelers in the last year. These include 11,079 light

commercial vehicles (LCVs) and 26,653 cars (previous year

8,811 LCVs and 614 cars) manufactured and supplied to

two of your subsidiaries, Mahindra International Limited

(MIL) and Mahindra Renault Private Limited (MRPL).

Your Company recorded sales of 1,61,001 vehicles and

34,076 three-wheelers as compared to 1,35,961 vehicles

and 33,718 three-wheelers in the previous year registering

a growth of 18.4% and 1.1% in vehicles sales and three-

wheeler sales respectively.

The total domestic sales volume of 1,48,791 vehicles was

higher by 16.3% than the previous year’s volume of

1,27,958 vehicles.

Your Company reported a record sale of 1,48,761 multi

utility vehicles (MUV or MUVs) in the domestic market in

the year under review as against sale of 1,27,856 MUVs in

the previous year. The Company’s domestic MUV sales

volume grew a very healthy 16.4%, against the industry

MUV sales growth of 5.1%.

Your Company strengthened its dominant position in the

domestic MUV sub-segment by increasing its market

share to 51.5% over the previous year’s market share of

46.6%.

4

The small pick up model, Maxi Truck, was responsible for

the Company pick up volumes registering a growth of

17% while the pick up sub-segment industry de-grew by

4%. As a result, your Company’s market share jumped to

76.9% from the previous year’s market share of 63.2%.

In the Overseas Markets, your Company’s initiatives resulted

in a strong growth of 54% in export volumes - from 8,021

vehicles [including 254 vehicles sourced from MIL] in the

previous year to 12,359 vehicles [including 363 vehicles

sourced from MIL] in the year under review.

Spare parts sales for the year stood at Rs.388.30 crores

(Exports Rs.39.89 crores) as compared to Rs.307.33 crores

(Exports Rs.23.54 crores) in the previous year.

Farm Equipment Sector:

Your Company registered a production of 98,917 Tractors

for the year under review as compared to 1,03,847 Tractors

in the previous year. This was despite the material supply

constraints faced by domestic tractor industry in the Financial

Year 2008. In addition, 31,922 Engines were produced for

the Mahindra Powerol brand. The strategy of increasing

production at the Company’s Rudrapur Plant, compared to

earlier dependence on the Kandivali Plant, has significantly

contributed to lowering the manufacturing cost.

Your Company recorded sales of 99,042 Tractors, as

compared to 1,02,531 Tractors sold in the previous year.

Sale of domestic Tractors was 90,509 Tractors compared

to 95,006 Tractors sold in the previous year (a de-growth

of 4.7%). This was in a year that witnessed industry de-

growth of 5.1%, following four consecutive years of

Industry growth. The de-growth was mainly due to slow

down in bank financing on account of higher NPA’s, and

tightening of lending norms. The situation was further

aggravated by increased interest rates.

In this challenging scenario, your Company has maintained

its market leadership in the domestic market for the 25th

consecutive year.

Against the backdrop of strengthening of the Rupee against

the US dollar, exports of the Company’s Tractors have actually

increased to 8,533 Tractors, a growth of 13.4%, compared

to 7,525 Tractors exported last year. Your Company’s Tractors

are now being sold in 6 continents of the world. Apart

from the US market and the African Countries, the

neighbouring countries of Sri Lanka, Bangladesh and Nepal

are the other large overseas markets. Forays have also been

made into new markets, namely New Zealand and the Latin

American Countries of Brazil and Chile.

A number of new products were introduced, in both the

domestic and international space, with many more in the

pipeline.

In the domestic market, the 30-40 HP Segment is the

largest, comprising nearly 55% of the market. Your

Company introduced the 295 DI Super Turbo, which was

the first turbo charged Tractor in this Segment. Also, the

595 DI Super Turbo (greater than 40 HP Segment) was

upgraded. The Arjun Ultra-1 has now been transformed

into a versatile product which has demonstrated superlative

performance both on and off the field. Mahindra Shaan -

a 25 HP multi-utility Tractor, which was launched by your

Company in 2007, won the ‘Outstanding Innovation

Award’ from ASABE (American Society for Agricultural and

Biological Engineers), USA. This Award has acknowledged

the Company’s ability to conceive and deliver innovative

products.

On the International front, Tier III and Tier IV compliant

Tractors were introduced in the US market and to meet

the demand of the higher HP Segment in Africa, the ‘8000’

Tractor series was launched there.

To leverage domain expertise in logistics and to enhance

effectiveness of the supply chain in operation, the Company

outsourced a significant part of its Logistics operations to

Mahindra Logistics, a Division of the Company. Additional

savings have been accrued as a result of this move.


5

Under the Mahindra Powerol Brand, your Company sold

31,922 engines during the year, as against 24,141 engines

last year, a growth of 32%. From having a single institutional

customer in the Financial Year 2002, today the engine

business has 22 corporate clients. Mahindra Powerol has

retained its market leadership in gensets market, catering

primarily to the telecom segment. Your Company expanded

the Mahindra Powerol genset product range up to 62.5

KVA with the introduction of 40, 50 and 62.5 KVA engines.

Mahindra Powerol was recognised with the Frost and Sullivan

‘Voice of the Customer’ Award for being the ‘Most Preferred

Genset Brand in the Telecom Segment’.

Your Company has been awarded the Japan Quality MedalJapan Quality MedalJapan Quality MedalJapan Quality MedalJapan Quality Medal

(JQM)(JQM)(JQM)(JQM)(JQM) in 2007, by the Union of Japanese Scientists and

Engineers (JUSE), Tokyo, Japan. JQM is a rare honour given

to a Company for excellence in Total Quality Management

(TQM). The Company is the only Tractor Company in the

world to win this Award. The Company had also won the

Deming Application Prize in 2003. Both of these prizes are

recognition of the Company’s customer focus, commitment

to TQM practices and demonstration of results by

significantly improving product and process quality.

Mahindra Defence Systems Division:

Your Company provides world class armouring solutions

for light combat vehicles and SUVs as well as high mobility

vehicles for defence use. Your Company developed the

AXE, a high mobility fast attack vehicle. This Vehicle was

awarded the “Indigenous Design of the Year” by Overdrive.

The Marksman is another modern light armoured vehicle

developed during the year.

Your Company continues to develop competencies in special

vehicles and is in the advanced stages of construction of

the Mahindra Special Military Vehicles facility at Faridabad.

This is the first such dedicated defence vehicle facility in

the private sector.

Your Company has established a manufacturing facility for

underwater systems at Pune and is now well placed to

deliver Sea Mines and Decoy Launchers to the Indian Navy.

Your Company has obtained an export order from Ghana

for up-armoured Scorpios during the year under review.

Mahindra Logistics Division:

The Logistics arm of your Company continues its impressive

growth by recording revenues of Rs.607 crores as compared

to Rs.383 crores in the previous year, registering a sustained

increase of over 50% on a year on year basis for the past few

years. The business has acquired its leadership position in the

Automotive / BPO and ITES Industry Segments and is now

building its presence in Retail and other Industry Segments.

Profits:

The Profit for the year before Depreciation, Interest,

Exceptional items and Taxation was Rs.1,504.47 crores as

against Rs.1,457.83 crores in the previous year registering

an increase of 3.20%. Profit after tax was Rs.1,103.37

crores as against Rs.1,068.39 crores in the previous year

recording an increase of 3.27%. Your Company continues

with its rigorous cost restructuring exercises by efficiency

improvements which have resulted in significant savings

through value engineering, cost re-engineering and

economising, optimum utilisation of available

manufacturing locations, outsourcing of service activities,

optimisation of plant capacity util isation, cost

competitiveness and right sizing in almost all areas.

Management Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis Report

A detailed analysis of the Company’s performance is

discussed in the Management Discussion and Analysis

Report, which forms part of this Annual Report.

Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

Your Company is committed to transparency in all its

dealings and places high emphasis on business ethics. For

several years your Company has been following good

Corporate Governance procedures long before they were

6

mandated. A Report on Corporate Governance along with

a Certificate from the Auditors of the Company regarding

the compliance of conditions of Corporate Governance as

stipulated under Clause 49 of the Listing Agreement forms

part of the Annual Report.

DividendDividendDividendDividendDividend

Keeping in mind the overall performance during the year,

your Directors are pleased to recommend a dividend of

115% (Rs.11.50 per Equity Share), payable to those

Shareholders whose names appear in the Register of

Members as on the Book Closure Date. The equity dividend

outgo for the financial year 2007-08, inclusive of tax on

distributed profits (after reducing the tax on distributed

profits of Rs.9.55 crores payable by the subsidiaries on the

dividends receivable from them during the current financial

year) would absorb a sum of Rs.321.09 crores (as against

Rs.324.73 crores comprising an interim dividend of 75%

and the final dividend of 40% [comprising the final dividend

of 25% and a special dividend of 15%] paid for the previous

year).

FinanceFinanceFinanceFinanceFinance

During the year, your Company raised resources from the

capital markets to part finance its various ongoing

modernisation and expansion programmes. Your Company

successfully accessed both overseas and domestic markets

with diverse instruments, maturities and interest rate fixings.

The Company raised Unsecured External Commercial

Borrowing (ECB) of US$ 50 million. The ECB was raised at

an average maturity of six years at highly competitive rates.

In the domestic market, your Company raised Rs.200 crores

by way of Private Placement of Secured, Non-Convertible

Redeemable Debentures with a bullet maturity of 3 years.

ICRA has assigned a “LAA+” rating to these Debentures

indicating high credit quality. Your Company also raised

Rs.100 crores through FCNR (B) Loan from a Consortium

Bank at a highly competitive rate.

In order to meet short-term mismatches, your Company

utilised its fund based working capital limits from time to

time, apart from making regular use of non-fund based

limits. Your Company inter alia raised Rs.100 crores through

issue of Commercial Paper at very competitive rates. The

Paper was rated “P1+” by CRISIL, the highest rating for a

short term paper. The Consortium of Bankers continue to

rate the Company as a prime customer and extend facilities/

services at prime rates.

Your Company follows a prudent financial policy and aims

to maintain optimum financial gearing at all times. The

Company’s total Debt to Equity Ratio was 0.60 as at 31st

March, 2008.

During the year, CRISIL has reaffirmed the “AA+ with a

Negative outlook” rating assigned by it to the Company’s

outstanding Debentures in the previous financial year.

CRISIL’s rating indicates high safety on timely payment of

interest and principal.

Subsequent to 31st March, 2008, the Board of Directors of

your Company have considered and approved, subject to

receipt of requisite approvals and consent of the

Shareholders by means of a Postal Ballot, issuance of

93,95,974, 9.25% p.a. Unsecured Fully and Compulsorily

Convertible Debentures (“FCD” or “FCDs”) of the Face Value

of Rs.745 each aggregating Rs.700,00,00,630 to Golboot

Holdings Limited, an entity controlled by Goldman Sachs,

each FCD being convertible into one Equity Share of Rs.10

each in the Company at a price of Rs.745 per Share

(including premium of Rs.735 per Share) in accordance

with Chapter XIII of the Securities and Exchange Board of

India (Disclosure & Investor Protection) Guidelines, 2000.

The FCDs shall be convertible into Equity Shares at anytime

within 18 months from the date of allotment of FCDs at

the option of the Investor, and mandatorily convertible

into Equity Shares on the date falling 18 months from the


7

date of allotment. Your Company will utilise the amount

raised through this preferential offer towards its Automobile

and Farm Equipment businesses.

Stock OptionsStock OptionsStock OptionsStock OptionsStock Options

On the recommendation of the Remuneration/

Compensation Committee of your Company, the Trustees

of the Mahindra & Mahindra Employees’ Stock Option

Trust have granted 16,48,081 Stock Options to Eligible

Employees during the year under review.

Details required to be provided under the Securities and

Exchange Board of India (Employee Stock Option Scheme

and Employee Stock Purchase Scheme) Guidelines, 1999

are set out in Annexure I to this Report.

Industrial RelationsIndustrial RelationsIndustrial RelationsIndustrial RelationsIndustrial Relations

Industrial Relations generally remained cordial and

harmonious throughout the year. The Management

Discussion and Analysis Report gives an overview of the

developments in Human Resources/Industrial Relations

during the year. In a restructuring exercise to rightsize the

work force, the Company has, during the year under review

accepted Voluntary Retirement from 28 employees of the

Automotive Sector under the Scheme in existence since

1995 which has since been discontinued. These measures

will enable the Company to obtain optimum utilisation of

the existing work force and increase the level of productivity.

SafetySafetySafetySafetySafety, Health and Environmental P, Health and Environmental P, Health and Environmental P, Health and Environmental P, Health and Environmental Performanceerformanceerformanceerformanceerformance

Your Company has always demonstrated its strong

commitment and responsibility towards Safety,

Occupational Health and Environment which stems from

its Vision and enjoins upon the Company to sustain business

growth with deep commitment towards Safety,

Occupational Health and Environment.

Your Company has a well-established Safety, Occupational

Health and Environmental (SH&E) Policy drilled down from

the Corporate Policy revised and released during the year.

The Safety, Occupational Health and Environment of its

employees are embedded in the core organisational values

of the Company. The SH&E Policy inter alia ensures safety

of public, employees, plant, equipment and business

associates, ensuring compliance with all statutory rules and

regulations on monthly basis, imparting training to its

employees and business associates as per Training Calendar,

carrying out Statutory safety audits of its facilities as per

legal requirement, conducting regular medical check up of

its employees and promoting eco-friendly activities. Various

initiatives on Safety including Safety Promotions, Safety

Patrol Rounds, Safety and Surveillance Audits, Safety

Training, Safety Kaizens, reporting of near-miss incidents

are encouraged to resolve the safety issues and various

special initiatives such as emergency mock drills and

upgradation of Fire Protection Systems were carried out

thereby resulting in improved Safety Performance. Your

Company’s Plants continue to strive to achieve “Accident

Reduction” in all its units ensuring a safety culture

throughout all levels of the organisation.

The Occupational Health and Safety (OHSAS) system aims to

eliminate or minimise risk to employees and other interested

parties who may be exposed to Occupational Health and

Safety risks associated with its activities. During the year 2007-

08, various product units of Haridwar and Nashik Plants have

also been certified for OHSAS Management System (OHSAS

18001:2007) amended standard.

All Plants of the Automotive Sector have been certified

with the amended standard for Environmental Management

System ISO 14001: 2004.

Your Company has given the utmost importance for

Environment Monitoring at all its Plants by implementing

various environmental initiatives such as effluent treatment,

increased green zones, water and waste water management,

solid waste management, air pollution management thereby

8

complying with all relevant Environment Legislations. The

Environmental performance is well within the limits stipulated

in statutory guidelines for all operations and fulfills the

required statutory requirements of respective State Pollution

Control Boards. Major environmental parameters required

are being regularly monitored and reported to the concerned

regulatory bodies.

Your Company’s Plants continued its commitment to

improve the well being of the employees. Medical Check-

ups, both curative and preventive Check-ups have been

organised at all its Plants including educating the employees

on Industrial Hygiene at the work place.

Corporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social Responsibility

Corporate Social Responsibility (CSR) has always been an

integral part of the vision of the Mahindra Group and has

been the cornerstone of its core value of Good Corporate

Citizenship. CSR for the Company is all encompassing,

including making socially responsible products, engaging in

responsible employee relations, and not only making a

responsible commitment to the community but also

encouraging employee engagement in community initiatives.

The Mahindra Group has pledged amounts not exceeding

1% of its profit after tax (PAT) on a yearly basis for the

Company’s CSR initiatives, largely to benefit the socially

and economically disadvantaged sections of society.

While the Company’s focus area for CSR has been in the

field of education, as responsible citizens, the Company

has also been actively supporting issues such as health

and environment.

Some of the major initiatives your Company has invested

in are described below:

Mahindra Pride School:

As part of the 60th year celebrations, through the K. C.

Mahindra Education Trust, the Company has committed

to setting up two Mahindra Pride Schools. The Schools

aim to empower the youth from socially disadvantaged

sections of society by extending livelihood training which

will enable them to gain employment based on the skills

learned at these Schools.

Mid Day Meal Kitchen:

The Company had entered into a tripartite public private

partnership with the Government of Rajasthan and Naandi

Foundation for setting up of a centralised Mid Day Meal

Kitchen at Govindgarh Taluka, Jaipur District, in the state

of Rajasthan. This kitchen will provide hygienic, nutritious

and wholesome mid day meals to approximately 25,000 –

35,000 primary school children studying in 314 Government

Schools in Govindgarh Taluka, Jaipur District.

Supporting Nanhi Kali:

Nanhi Kali, which supports the education of the

disadvantaged girl child has been the flagship programme

of the K. C. Mahindra Education Trust. The Mahindra Group

has committed to independently support 6,000 girls in urban,

rural and tribal parts of India by providing academic support

as well as material support in the form of uniforms, clothes,

school bags, shoes, etc. In addition, the Company has

entered into a partnership with the Government of Rajasthan

to jointly support the education of 10,000 disadvantaged

girl children in the tribal area of Udaipur District.

Gifting Cochlear Implants:

By gifting the power of sound through the donation of

cochlear implants, the Mahindra Group has changed the

life and future of 41 profoundly hearing-impaired,

underprivileged children till date. Operations are performed

by Dr. Milind Kirtane, India’s leading ENT surgeon. All

recipients are selected in consultation with Dr. Kirtane and

his team of doctors, audiologists, teachers of the hearing

impaired and social counselors.

Supporting Government Schools:

Continuing its commitment to make quality education

accessible to all children, the Mahindra Group has continued


9

support to 6 Government Schools in Mumbai (5 Schools at

Kandivli and 1 in Worli). Naandi Foundation, the

implementation partner for the School Adoption Programme,

has through its Ensuring Children Learn strategy, been

running Gyan Jyothi Centres – or academic support classes

to ensure that children coming to BMC Schools acquire

grade specific learning competencies.

Mahindra All India Talent Scholarships (MAITS):

498 students from 11 Centres all over India were awarded

the MAITS in the last financial year to enable them to

pursue a job oriented diploma course at a recognised

Government Polytechnic in India. These students have been

provided with this scholarship for a 3 year period. A

majority of the scholarship awardees are girls, as the Trust

is keen to empower girls through vocational education.

Employee Social Options (ESOPS):

Employee Social Options (ESOPS) the unique programme

at the Mahindra Group where each employee can exercise

his own social responsibility by volunteering in CSR initiatives

received great support, with 14,535 employees volunteering

for various initiatives with ESOPS expanding to 6 new States

namely Uttar Pradesh, Assam, Madhya Pradesh, Rajasthan,

Bihar and Tamil Nadu.

Some of the Notable ESOPS initiatives this year were:

The Lifeline Express; undertaken by the Tractor Plant in

Rudrapur, where 647 surgeries were performed free of cost.

Mahindra Hariyali; The Management’s vision of planting

One million trees has already reached the 2.8 lakhs mark

across the country.

AIDS Awareness Campaign; inaugurated in July, 2007, and

conducted in partnership with an NGO AAS Centre for

Human Hope aims to create Aids awareness among the

Company’s employees, school/college students, vendor/

suppliers and other citizens of Nashik City.

The Company has been recognised for its CSR work and feels

privileged to have received the Businessworld FICCI SEDF CSR

Award and the BSR Business for Social Responsibility Award.

DirectorsDirectorsDirectorsDirectorsDirectors

Mr. Anand G. Mahindra, Mr. A. K. Nanda, Mr. Nadir B.

Godrej and Mr. M. M. Murugappan retire by rotation and,

being eligible, offer themselves for re-appointment.

Directors’ Responsibility StatementDirectors’ Responsibility StatementDirectors’ Responsibility StatementDirectors’ Responsibility StatementDirectors’ Responsibility Statement

Pursuant to section 217(2AA) of the Companies Act, 1956,

your Directors, based on the representations received from

the Operating Management, and after due enquiry, confirm

that:

(i) in the preparation of the annual accounts, the

applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies,

consulted the Statutory Auditors and these have been

applied consistently and reasonable and prudent

judgments and estimates have been made so as to

give a true and fair view of the state of affairs of the

Company as at 31st March, 2008 and of the profit of

the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the

maintenance of adequate accounting records in

accordance with the provisions of the Companies Act,

1956 for safeguarding the assets of the Company and

for preventing and detecting fraud and other

irregularities;

(iv) the annual accounts have been prepared on a going

concern basis.

Subsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary Companies

The subsidiary companies of your Company have reflected

a significantly improved performance over the previous

year and are moving from strength to strength, thereby

contributing to the overall growth of the Company and

10

appreciation in Shareholders value. The major subsidiaries

such as Tech Mahindra Limited with a 399.5% growth in

profits, Mahindra Holidays & Resorts India Limited with a

92.82% growth in profits and Mahindra & Mahindra

Financial Services Limited with a 33.22% growth in profits,

deserve special mention. The consolidated Group Profit for

the year after exceptional items, prior period adjustments

and tax and after deducting minority interests is Rs.1,571.12

crores as against Rs.1,497.15 crores earned last year - a

growth of 4.94%.

During the year under review, Mahindra Retail Private

Limited, Mahindra Hotels and Residences India Limited,

Mahindra Holdings Limited, Mahindra Rural Housing

Finance Limited, Tech Mahindra (Malaysia) SDN.BHD, Tech

Mahindra (Beijing) IT Services Limited, Bristlecone (Malaysia)

SDN.BHD, Mahindra Residential Developers Limited,

Mahindra Technology Park Limited, Mahindra Automotive

Limited, Punjab Tractors Limited, Mahindra Logistics

Limited, Mahindra Forgings Limited, Mahindra Castings

Private Limited, Mahindra Navistar Engines Private Limited,

Heritage Bird (M) Sdn Bhd, Mahindra First Choice Services

Limited, Mahindra Graphic Research Design s.r.l., Mahindra

Aerospace Private Limited and Ashtamudi Resorts Private

Limited became subsidiaries of your Company.

During the year under review, Mahindra Forgings Overseas

Limited, Mahindra Forgings Mauritius Limited, Falkenroth

Grundstucksgesellschaft GmbH, Tech Mahindra

(R&D Services) Pte. Limited, Fried. Hunninghaus GmbH, Fried.

Hunninghaus GmbH & Co. KG, Mahindra Stokes Holding

Company Limited, Plexion Technologies (India) Private Limited,

Mahindra Ashtech Limited and Ashtamudi Resorts Private

Limited ceased to be subsidiaries of the Company.

Subsequent to the year-end, iPolicy Networks Limited and

Tech Mahindra (R&D Services) Limited ceased to be

subsidiaries of the Company.

The Statement pursuant to section 212 of the Companies

Act, 1956 containing details of the Company’s subsidiaries

is attached.

The Consolidated Financial Statements of the Company

and its subsidiaries, prepared in accordance with

Accounting Standard AS 21 form part of the Annual

Report.

The Company has made an application to the Ministry of

Corporate Affairs seeking exemption from attaching the

copy of the Balance Sheet, Profit and Loss Account, Reports

of the Board of Directors and Auditors of the subsidiaries

with the Balance Sheet of the Company. If in terms of the

approval granted by the Ministry of Corporate Affairs under

section 212(8) of the Companies Act, 1956, the copy of

the Balance Sheet, etc. of the subsidiaries are not required

to be attached to the Balance Sheet of the Company, the

Company Secretary will make these documents available

upon receipt of request from any Member of the Company

interested in obtaining the same. These documents will

also be available for inspection at the Head Office of the

Company and the office of the respective subsidiary

companies, during working hours upto the date of the

Annual General Meeting.

AuditorsAuditorsAuditorsAuditorsAuditors

Messrs. Deloitte Haskins & Sells, Chartered Accountants,

retire as Auditors of the Company and have given their

consent for re-appointment. The Shareholders will be

required to elect Auditors for the current year and fix their

remuneration.

As required under the provisions of section 224(1B) of the

Companies Act, 1956, the Company has obtained a written

certificate from the above Auditors proposed to be re-

appointed to the effect that their re-appointment, if made,

would be in conformity with the limits specified in the said

section.

Public Deposits and Loans/AdvancesPublic Deposits and Loans/AdvancesPublic Deposits and Loans/AdvancesPublic Deposits and Loans/AdvancesPublic Deposits and Loans/Advances

Out of the total 2,070 deposits of Rs.372.19 lakhs from

the public and Shareholders as at 31st March, 2008, 141


11

deposits amounting to Rs.22.14 lakhs, which had matured,

had not been claimed as at the end of the financial year.

Since then, 17 of these deposits of the value of Rs.2.90

lakhs have been claimed.

The particulars of loans/advances and investment in its

own shares by listed companies, their subsidiaries,

associates, etc., required to be disclosed in the annual

accounts of the Company pursuant to Clause 32 of the

Listing Agreement are furnished separately.

Current YCurrent YCurrent YCurrent YCurrent Yearearearearear

During the period 1st April, 2008 to 27th May, 2008, 32,468

vehicles were produced as against 28,680 vehicles and

32,214 vehicles were despatched as against 27,247 vehicles

during the corresponding period in the last year. During the

same period 15,834 Tractors were produced and 15,639

Tractors despatched as against 16,010 Tractors produced

and 16,099 Tractors despatched during the corresponding

period in the previous year.

The Indian economic performance has been impressive with

a healthy GDP Growth Rate coupled with strong growth in

the Industry as well as in the Services Sector. The expected

normal monsoon and increase in the support prices

announced by the Government should brighten the outlook

for agriculture. While these macro economic factors remain

strong, higher oil, commodity and food prices resulting in

inflation, a sharply appreciating rupee, slowing world

growth and fluid domestic and international financial

conditions are likely to persist which will create pressure

on pricing and margins. Consumer demand will remain

below potential until interest rates soften. The Company

expects to meet these challenges through innovative cost

control, process efficiencies and designing products that

exceed consumer expectations.

Acquisitions and other mattersAcquisitions and other mattersAcquisitions and other mattersAcquisitions and other mattersAcquisitions and other matters

Punjab Tractors Limited:

As mentioned in the last Annual Report, your Company

with a view to further consolidating its presence in the

Tractor Industry, along with Mahindra Holdings & Finance

Limited (MHFL), entered into a Share Purchase Agreement

with Actis Group and the Burman Family to acquire 43.3%

of the issued and fully paid-up equity capital of Punjab

Tractors Limited (PTL). In addition to this, your Company

along with MHFL had made an open offer to acquire an

additional stake of upto 20% in PTL and also for acquiring

upto 20% stake in Swaraj Engines Limted and Swaraj

Automotives Limited, in accordance with Regulations 10

and 12 of the Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers)

Regulations, 1997, as amended. Pursuant to these open

offers, your Company acquired 20% additional stake in

PTL, 20% in Swaraj Automotives Limited and 0.1% in Swaraj

Engines Limited in the fiscal year 2007-08.

PTL is a strategic fit to your Company. Its Swaraj Brand has

a good reputation in the market for reliability and efficient

working. PTL has also significant unutilised capacity which

the Company would be utilising to ramp up not only sales

of Swaraj Tractors but also exploit synergies with the Farm

Equipment Sector of your Company. The Company will be

in a unique position to leverage upon these opportunities

coupled with other advantages such as economies of scale,

sourcing benefits and some amount of vendor

rationalisation. To add to these, PTL has certain products

in the above 50 HP range which will add to the portfolio

of the Company.

Mahindra Graphic Research Design s.r.l.:

With a view to further consolidating its presence in the

Automotive Sector, your Company, through Mahindra

Overseas Investment Company (Mauritius) Ltd. (MOICML),

a wholly owned subsidiary of the Company, entered into

an Asset Purchase Agreement with G.R. Graphica Ricerca

Design S.r.l. to purchase its assets and business. GR Design,

started in 1996, has a rich experience in automotive body

and trim design and a systematic and process oriented

methodology. Since 1998, their quality system is ISO 9001

certified. Since July, 2005 they have adopted a quality-

environmental integrated system and in 2006, they have

12

obtained ISO 14001:2004 Certificates. Their capabilities

cover the development of chassis, body, external and

internal trim on automobiles, light and heavy trucks. The

purpose of acquisition is to create an in-house design centre

to meet the requirements of the Company’s Automotive

Sector.

Merger of the Forgings Business:

In order to build a robust, global scale business in forging

and to reap the benefits of operational synergy and enhance

stakeholder value, the forging entities of the group namely,

Stokes Group Limited, Jeco Holding AG and Schöneweiss

& Co. GmbH were integrated by way of a Scheme of

Arrangement between Mahindra Stokes Holding Company

Limited, Mahindra Forgings Mauritius Limited and Mahindra

Forgings Overseas Limited with Mahindra Forgings Limited.

The Scheme which was approved by the Honourable

Bombay High Court on 23rd November, 2007, was made

effective on 27th December, 2007 and the Appointed Date

for the same was 1st April, 2007.

Mahindra Holdings & Finance Limited:

In order to simplify and consolidate the group holding

structure, your Company decided to merge its wholly owned

subsidiary Mahindra Holdings & Finance Limited (MHFL)

into your Company. This would help rationalise operations

for both the companies. Besides, the restructuring would

benefit the companies and its stakeholders on account of

enhanced financial strength and capability. The

amalgamation would integrate operations of both

companies and would provide efficient management control

and systems. In addition, the proposed Scheme would

enhance your Company’s financial strength, and result in

higher Shareholder value creation and distribution. The

proposed Scheme was approved by the Shareholders at a

Court Convened Meeting held on 12th April, 2008. This

merger would be effective post the approval by the

Honourable Bombay High Court and the Appointed Date

for the same is 1st February, 2008.

Divestment in Mahindra Ashtech Limited:

Given the priority of your Company to invest only in its

core businesses, your Company divested its holding in

Mahindra Ashtech Limited, a wholly owned subsidiary of

your Company, engaged in the business of Ash handling

systems and Traveling Water Screen in favour of Fusion

Fittings (India) Limited.

Energy Conservation, TEnergy Conservation, TEnergy Conservation, TEnergy Conservation, TEnergy Conservation, Technology Absorption andechnology Absorption andechnology Absorption andechnology Absorption andechnology Absorption andFFFFForeign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and Outgo

Particulars required to be disclosed under the Companies

(Disclosure of Particulars in the Report of Board of Directors)

Rules, 1988 are set out in Annexure II to this Report.

PPPPParticulars of Employeesarticulars of Employeesarticulars of Employeesarticulars of Employeesarticulars of Employees

The Company had 237 employees who were in receipt of

remuneration of not less than Rs.24,00,000 during the

year ended 31st March, 2008 or not less than Rs.2,00,000

per month during any part of the said year. However, as

per the provisions of section 219(1)(b)(iv) of the Companies

Act, 1956, the Directors’ Report and Accounts are being

sent to all the Shareholders of the Company excluding the

Statement of particulars of employees. Any Shareholder

interested in obtaining a copy of the Statement may write

to the Company Secretary of the Company.

For and on behalf of the Board

KESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRA

Chairman

Mumbai, 28th May, 2008


13

ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31STSTSTSTST MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008Information to be disclosed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines, 1999:

(a) Options granted 72,27,250

(b) The pricing formula 1st Tranche 2nd Tranche 3rd Tranche 4th Tranche 5th Tranche 6th Tranche 7th Tranche 8th Tranche

Average Average Discount Discount Average Discount Discount Discountprice price of 5.13% of 4.85% price of 5.02% of 4.89% of 4.97%preceding preceding on the on the preceding on the on the on thethe the average average the average average averagespecified specified price price specified price price pricedate - 27th date - 30th preceding preceding date - 14th preceding preceding precedingSeptember, May, 2003 the the September, the the the2001 specified specified 2005 specified specified specified

date - 31st date - 30th date - 29th date - 13th date - 30th

May, 2004 May, 2005 May, 2006 September, July, 20072006

Average price - Average of the daily high and low of the prices for the Company’s

Equity Shares quoted on Bombay Stock Exchange Limited during

the 15 days preceding the specified date.

The specified date - Date on which the Remuneration/Compensation Committee decided

to recommend to the Mahindra & Mahindra Employees’ Stock Option

Trust (Trust), the grant of Options.

(c) Options vested 47,56,553 Options stand vested on 31st March, 2008.

(d) Options exercised 31,83,568

(e) The total number of shares 31,83,568 Equity Shares of Rs.10 each. These were transferred from the Trust to the Eligible

arising as a result of exercise Employees.

of option

(f) Options lapsed 4,57,314

(g) Variation of terms of options At the Sixty-first Annual General Meeting of the Company held on 30th July, 2007, the

Mahindra & Mahindra Limited Employees Stock Option Scheme was amended to provide for

recovery from Eligible Employees, the fringe benefit tax in respect of Options which are

granted to or vested or exercised by the Eligible Employees on or after the 1st day of April,

2007.

(h) Money realised by exercise Rs.30,05,17,410. This amount was received by the Trust.

of options

(i) Total number of options 35,86,368

in force

14

(j) Employee-wise details of

options granted to:

(i) Senior managerial As per Statement attached

personnel

(ii) Any other employee Names Options granted Names Options granted

who receives a grant in during the year during the year

any one year of option ended 31st March, ended 31st March,

amounting to 5% or 2004* 2005*

more of option granted

during that year

Mr. Raghunath Murti 15,000 Mr. Pranab Datta 15,240

Mr. Hemant Luthra 15,240 Mr. Rajeev Dubey 15,000

Mr. Ramesh Iyer 25,920 Mr. Allen Sequeira 10,160

Mr. Prince M. Augustin 5,080

* The Options granted stand augmented by an equal number of Options and the Exercise

Price stands reduced to half on account of the 1:1 Bonus Issue made in September, 2005.

(iii) Identified employees Nil

who were granted option,

during any one year, equal

to or exceeding 1% of the

issued capital (excluding

outstanding warrants and

conversions) of the

company at the time of

grant

(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares

on exercise of option calculated in accordance with

Accounting Standard (AS) 20 ‘Earnings per Share’

(l) Where the company has calculated the employee

compensation cost using the intrinsic value of the stock

options, the difference between the employee

compensation cost so computed and the employee

compensation cost that shall have been recognised if it

had used the fair value of the options, shall be disclosed.

The impact of this difference on profits and on EPS of the

company shall also be disclosed.

Rs.41.52

The Company has calculated the employee compensation cost

using the intrinsic value of stock options. Had the fair value

method been used, in respect of stock options granted on or

after 30th June, 2003, the employee compensation cost would

have been higher by Rs.23.01 crores, Profit after tax lower by

Rs.23.01 crores and the basic and diluted earnings per share

would have been lower by Re.0.96 and Re.0.90 respectively.


15

(m) Weighted-average exercise prices and weighted-average

fair values of options shall be disclosed separately for

options whose exercise price either equals or exceeds or is

less than the market price of the stock.

(n) A description of the method and significant assumptions

used during the year to estimate the fair values of options,

including the following weighted-average information:

(i) risk-free interest rate, 7.34%

(ii) expected life, 2.50 years

(iii) expected volatility, 53.40%

(iv) expected dividends, and 3.04%

(v) the price of the underlying share in market at the Rs.728.80

time of option grant.

STSTSTSTSTAAAAATEMENT ATEMENT ATEMENT ATEMENT ATEMENT ATTTTTTTTTTACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31STSTSTSTST MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008

Name of Senior ManagerialName of Senior ManagerialName of Senior ManagerialName of Senior ManagerialName of Senior Managerial Options granted inOptions granted inOptions granted inOptions granted inOptions granted in Options granted inOptions granted inOptions granted inOptions granted inOptions granted in Options granted inOptions granted inOptions granted inOptions granted inOptions granted in Options granted inOptions granted inOptions granted inOptions granted inOptions granted in

PPPPPersons to whom Stockersons to whom Stockersons to whom Stockersons to whom Stockersons to whom Stock DecemberDecemberDecemberDecemberDecember, 2001*, 2001*, 2001*, 2001*, 2001* June, 2005**June, 2005**June, 2005**June, 2005**June, 2005** SeptemberSeptemberSeptemberSeptemberSeptember, 2006, 2006, 2006, 2006, 2006 JulyJulyJulyJulyJuly, 2007, 2007, 2007, 2007, 2007

Options have been grantedOptions have been grantedOptions have been grantedOptions have been grantedOptions have been granted

Mr. Deepak S. Parekh 20,000 5,000 Nil Nil

Mr. Nadir B. Godrej 20,000 5,000 Nil Nil

Mr. M. M. Murugappan 20,000 5,000 Nil Nil

Mr. Narayanan Vaghul 20,000 5,000 Nil Nil

Dr. A. S. Ganguly 20,000 5,000 Nil Nil

Mr. R. K. Kulkarni 20,000 5,000 Nil Nil

Mr. Anupam Puri 20,000 5,000 Nil Nil

Mr. Bharat Doshi 1,00,000 10,000 11,345 8,362

Mr. A. K. Nanda 1,00,000 10,000 11,345 8,362

* All the above Options have been exercised.

** The Options granted stand augmented by an equal number of Options and the Exercise Price stands reduced to half on account

of the 1:1 Bonus Issue made in September, 2005.

Options Grant Date Exercise price Fair value(Rs.) (Rs.)

31st July, 2007 762.00 252.98

The fair-value of the stock options granted on 31st July, 2007

have been calculated using Black-Scholes Options pricingFormula and the significant assumptions made in this regard

are as follows:

16

PARTICULARS AS PER THE COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)RULES, 1988 AND FORMING PART OF THE DIRECTORS’REPORT FOR THE YEAR ENDED 31ST MARCH, 2008

A )A )A )A )A ) Conservation of EnergyConservation of EnergyConservation of EnergyConservation of EnergyConservation of Energy

Energy Conservation Measures:

1.1.1.1.1. Engineering InitiativesEngineering InitiativesEngineering InitiativesEngineering InitiativesEngineering Initiatives

a) Installation of energy efficient screwcompressors at various locations.

b) Installation of Heat pump for heating ofsynclean solution in Igatpuri, Kandivali.

c) Supply duct modification in paint shop at Nashik.

d) Unique development of super heat recoveryfrom air conditioning units to eliminate use ofconventional electrical heaters at washingmachines in Transmission PU.

e) Installation of Variable Frequency Drives forpumps, blowers.

f) Natural draft Turbine air ventilators instead ofelectrical driven exhaust fans at Kandivalireplacing powered exhaust blowers.

g) Automatic power factor controllers at variouslocations which has improved power factorfrom 0.92 to 0.993.

h) Installation of fix capacitor bank for the motorabove 50 KW rating.

i) Controlling the temperature of split AirConditioner installed in the office space bymodifying the microcontroller and setting itto a 23deg.C instead of 16 deg. C.

j) Installation of Beblec-make energy saver panelto lighting load at Tractor P. U. in KandivaliPlant.

k) Reduction in power consumed by aircompressor by plugging all the air leaks,replacing pneumatic tools by DC nut runnersand by increasing unloading time ofcompressors.

l) To eliminate uneven fuel consumption in heatexchanger, fuel pump pressure adjusted tooptimum level and heat exchanger replacedfor better efficiency of Diesel consumption.

2.2.2.2.2. Through Process ImprovementThrough Process ImprovementThrough Process ImprovementThrough Process ImprovementThrough Process Improvement

a) Waste heat recovery from Exhaust Flue gas atcontinuous Gas carburizing Furnace in HeatTreatment to eliminate use of electrical heatersat post wash.

b) Ingenious ideas implemented at Kandivali/Nashik/ Igatpuri/ Zaheerabad /Haridwar such as:

i) Energy alert system for air compressors.

ii) Temperature Controllers for window airconditioning units.

iii) Auto valves for water and compressed airapplication.

iv) Timers for blowers, fans and lights.

v) Occupancy sensor auto-switches for shopfloor lighting.

vi) Higher H.P to lower H.P motors.

vii) Use of compact fluorescent Lamps (CFL).

viii) Continuous to intermittent operation ofmotors.

ix) Electronic chokes and new reflector tubelights.

c) Installation of heat pump at canteen whicheliminates the 40 KW heater and 4.5KW watercooler in Canteen.

d) Eliminate low productivity by tacklemodification so the NST hood & SFC grill canbe loaded on single tackle.

e) Reduction of air consumption by stopping airblowing & completely drying the chassis beforetaken to oven in paint shop.

3.3.3.3.3. Awareness for Energy ConservationAwareness for Energy ConservationAwareness for Energy ConservationAwareness for Energy ConservationAwareness for Energy Conservation

a) Celebrated Energy Conservation Week from14th December, 2007 to 21st December, 2007

ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31STSTSTSTST MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008 MARCH, 2008


17

to promote energy saving and conservationof resources. Energy Conservation Productsdisplayed in the plant for awareness.

b) Conducted slogan, poster and suggestioncompetition on Energy efficiency withoverwhelming response by receiving 987entries from all the product units. Winners ofthe competition are suitably rewarded.

c) Distributed leaflets with Energy Saving tips toall employees.

d) Energy Conservation awareness has beencreated amongst vendors, suppliers andexternal agencies like Indian Railway officials,FICCI, etc. by various interactions and seminars.

e) Emails and posters used to create awarenessamong the Employees about the need forsaving energy.

f) Cross functional team for reducing theconsumption of electricity during non-production time.

g) Reward and Recognition for energy savingprojects.

h) Red tag system to reduce the air leakages.

i) Training provided to cell members to thinkinnovatively to reduce the energy consumption.

j) Display of Energy generation and consumptionprocess.

k) Detailed Energy audit conducted by externalAgency to quantify energy consumption andmake people aware of potential areas of action.

The above initiatives and other efforts have resultedin reduction in energy consumption. Thesemeasures have also resulted in cost savings forthe Company, aggregating approximately Rs.21crores. In recognition of these efforts, the Companyreceived following prestigious awards viz:

The Automotive Sector, Zaheerabad Plant won thefirst prize in National Energy Conservation Awardfrom BEE.

The Automotive Sector, Nashik Plant won secondexcellence Award at National Energy ConservationAward from BEE.

Both the above Awards were received from theHonourable President of India, Smt. Pratibha Patil.

The Automotive Sector, Nashik and Kandivali Plantswon the Maharashtra State Level Award - Firstand Second prize respectively.

The Automotive Sector, Nashik Plant also won thewater conservation excellence award from CII.

B )B )B )B )B ) Research & Development and TResearch & Development and TResearch & Development and TResearch & Development and TResearch & Development and TechnologyechnologyechnologyechnologyechnologyAbsorptionAbsorptionAbsorptionAbsorptionAbsorption

During the year under review, pursuant to R & D effortson development of new technologies, new models likeScorpio VLX with mHawk Engine and NGT530Rimproved transmission, Alfa Passenger, Bolero CamperDX, Scorpio Getaway Double Cab, 295 DI Super Turboand Upgraded Sarpanch 595DI Super Turbo for thedomestic market, 8000DI for Africa and Tier IIIand Tier IV upgrades for the US market, etc. werelaunched.

Keeping in view the future requirements oftechnological upgradation, the Company hasundertaken various programs like development ofengines to meet future regulatory norms in India, USAand other countries to which the Company’s productsare exported.

During the year, the Company’s Tractor Division hasfiled 9 Patent applications and 8 Design registrationapplications (including 5 in USA). Seven Patents weregranted to the Company’s Tractor Division during theyear, applications for which were filed in earlier years.Three Patents were granted to the Company’sAutomotive Division during the year.

The Company spent Rs.245.33 crores (includingRs. 53.81 crores for Capital Expenditure) on Researchand Development work during the year which wasapproximately 1.85% of the total turnover.

18

C )C )C )C )C ) Imported TImported TImported TImported TImported Technology for the last 5 yearsechnology for the last 5 yearsechnology for the last 5 yearsechnology for the last 5 yearsechnology for the last 5 yearsSrSrSrSrSr. No.. No.. No.. No.. No. TTTTTechnology Importedechnology Importedechnology Importedechnology Importedechnology Imported YYYYYear of Importear of Importear of Importear of Importear of Import StatusStatusStatusStatusStatus

1. Power shift transmission for higher HP Tractors 2003 In the process of Absorption

2. NEF TCI 2004 Technology Absorbed

3. NEF Performance improvements 2004 Technology Absorbed

4. MDI Engine upgradation 2004 Technology Absorbed

5. Anticlock Braking System on utility vehicle 2004 Technology Absorbed

6. Common Rail Diesel on utility vehicle 2004 Technology Absorbed

7. New CRDe Engine Development 2004 Technology Absorbed

8. Development of a new MPV 2004 In the process of Absorption

9. Euro IV Emission developments for exports 2004 Technology Absorbed

10. Multi Link Suspension for utility vehicle 2004 Technology Absorbed

11. Development of Air Bags on utility vehicle 2005 In the process of Absorption

12. Development of cruise control on utility vehicle 2005 Technology Absorbed

13. Fatigue Lab and track design for MRV, Chennai 2005 In the process of Absorption

14. Sandwich material for noise absorption 2005 In the process of Absorption

15. Development of Nano-Technology for IP etc. 2005 Technology Absorbed

16. Climate control (Heated and Cooled) seats 2005 In the process of Absorption

17. Bio-Diesel and Gas based engine 2005 In the process of Absorption

18. Transmission Design of Compact Tractor 2006 Technology Absorbed

19. Development of Integrated Cabin for Tractor 2006 In the process of Absorption

20. Hydrophilic Nano coated Feature 2007 In the process of Absorption

21. Automatic Transmission for SUV 2007 In the process of Absorption

22. Transmisison for new SUV 2007 In the process of Absorption

23. New Generation system for Brakes for SUV 2007 In the process of Absorption

24. New Electricals & Electronics Features 2007 In the process of Absorption

25. CNG engines for LCV 2007 Technology Absorbed

26. Common Rail Diesel on Light commercial vehicle 2007 Technology Absorbed

27. Next generation Common rail adaptation 2007 Technology Absorbed

28. Hydrogen ICE 2007 In the process of Absorption

29. Fuel Cell Vehicle Development 2007 In the process of Absorption

30. 2nd Generation Biofuels (Biomass to Liquid / Gas to Liquid) 2007 In the process of Absorption

31. Hybrid Vehicles 2008 In the process of Absorption

32. Transmission Upgrade 2008 In the process of Absorption

33. Electricals & Electronics Update 2008 In the process of Absorption

34. Design for New Tractor Transmission 2008 In the process of Absorption

FFFFForeign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and Outgooreign Exchange Earnings and OutgoThe Company continues to strive to improve its export earnings. Further details in respect of exports are set out elsewhere in the Report.The information on foreign exchange earnings and outgo is furnished in the Notes on Accounts.

For and on behalf of the Board

KESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRAKESHUB MAHINDRAMumbai, 28th May, 2008 Chairman


19

PPPPParticulars of loans/advances and investment in its own shares by listed companies, their subsidiaries,articulars of loans/advances and investment in its own shares by listed companies, their subsidiaries,articulars of loans/advances and investment in its own shares by listed companies, their subsidiaries,articulars of loans/advances and investment in its own shares by listed companies, their subsidiaries,articulars of loans/advances and investment in its own shares by listed companies, their subsidiaries,associates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clauseassociates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clauseassociates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clauseassociates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clauseassociates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clause32 of the Listing Agreement.32 of the Listing Agreement.32 of the Listing Agreement.32 of the Listing Agreement.32 of the Listing Agreement.

Loans and advances in nature of loans to subsidiaries:Loans and advances in nature of loans to subsidiaries:Loans and advances in nature of loans to subsidiaries:Loans and advances in nature of loans to subsidiaries:Loans and advances in nature of loans to subsidiaries:

(Rupees in crores)(Rupees in crores)(Rupees in crores)(Rupees in crores)(Rupees in crores)

Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Balances as onBalances as onBalances as onBalances as onBalances as on Maximum outstandingMaximum outstandingMaximum outstandingMaximum outstandingMaximum outstanding

3131313131ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008 during the yearduring the yearduring the yearduring the yearduring the year

Mahindra & Mahindra Financial Services Limited — 4.00

Mahindra Intertrade Limited 0.15 3.13

(including loans where there is no interest) (0.15) (3.13)

Bristlecone India Limited 8.03 8.03

Mahindra Gujarat Tractor Limited 1.00 1.00

Mahindra Shubhlabh Services Limited 8.25 8.25

NBS International Limited 2.00 2.00

Mahindra Forgings Limited — 233.98

(Mahindra Forgings Overseas Limited, Mahindra Forgings

Mauritus Limited and Stokes Forgings Holding Company

Limited since merged with Mahindra Forgings Limited

(Appointed Date - 01.04.2007)

Bristlecone Limited 40.67 40.67

Mahindra Ashtech Limited — 6.50

Loans and advances in the nature of loans to firms/companies in which Directors are Interested:Loans and advances in the nature of loans to firms/companies in which Directors are Interested:Loans and advances in the nature of loans to firms/companies in which Directors are Interested:Loans and advances in the nature of loans to firms/companies in which Directors are Interested:Loans and advances in the nature of loans to firms/companies in which Directors are Interested:

(Rupees in lakhs)(Rupees in lakhs)(Rupees in lakhs)(Rupees in lakhs)(Rupees in lakhs)

Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Balances as onBalances as onBalances as onBalances as onBalances as on Maximum outstandingMaximum outstandingMaximum outstandingMaximum outstandingMaximum outstanding

3131313131ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008 during the yearduring the yearduring the yearduring the yearduring the year

Infrastructure Development Finance Company Limited 15.00 15.00

Except as indicated above, the Company has not made any loans and advances in the nature of loans to associates or

loans and advances in the nature of loans where there is no repayment schedule or repayment beyond seven years or no

interest or interest below section 372A of the Companies Act, 1956.

Investments by the Loanee in the shares of Subsidiary CompanyInvestments by the Loanee in the shares of Subsidiary CompanyInvestments by the Loanee in the shares of Subsidiary CompanyInvestments by the Loanee in the shares of Subsidiary CompanyInvestments by the Loanee in the shares of Subsidiary Company, when the Company has made loans or advances in the, when the Company has made loans or advances in the, when the Company has made loans or advances in the, when the Company has made loans or advances in the, when the Company has made loans or advances in the

nature of loan:nature of loan:nature of loan:nature of loan:nature of loan:

Nil

20

Management Discussion & AnalysisIndustry StructureIndustry StructureIndustry StructureIndustry StructureIndustry Structure

The Automotive Sector

The automotive industry is one of the key contributors to

the Indian manufacturing economy. The Indian automotive

industry achieved a turnover in excess of Rs.1,65,000 crores

in 2005-06. It accounted for over 13 mn direct and indirect

jobs and 17% of the total indirect taxes as per the

Automotive Mission Plan 2016, Government of India.

The total production of Multi Utility Vehicles (MUVs), Light

Commercial Vehicles (LCVs) and three wheelers in India

during the year under review grew by 1% over the previous

year and stood at 1,100,303 vehicles. (Source: SIAM). The

Company produced 208,035 vehicles during the same

period, a growth of 16% over the previous year. The

Company accounted for 18.9% of the Indian production

of MUVs, LCVs and three wheelers in the year under review.

MUVs are a family of vehicles capable of versatile

applications such as passenger transport, goods transport

or a combination of the two. There are six manufacturers

of multi utility vehicles in India. The Company is the largest

manufacturer of MUVs in India, offering a range of over

20 models. 288,600 MUVs were sold in India in the year

F-08, a growth of 5.1 % over F-07 (Source: Industry and

internal). MUVs are further categorized into soft tops, hard

tops and pick-ups.

LCVs (carrying a payload of 2MT to 4 MT) are commercial

vehicles used mostly for intra-state movement of goods. In

F-08 44,957 LCVs of this category were sold – a growth of

4.3% over F-07 (Source: Industry and internal).The company

competes in this segment through its subsidiary Mahindra

International Ltd (MIL). There are six manufacturers in India

in this specific LCV segment.

India is the largest market in the world for three

wheelers. In F-08 this segment decelerated by 9.7% over

F-07, with 364,700 three wheelers being sold in India.

(Source: SIAM).

The Farm Equipment Sector

The Indian Tractor market is the largest in the world, in

terms of sales volume. In the current year all the tractor

manufacturers together sold 3,02,241 tractors in the

domestic market. Additionally, 44,260 tractors were

exported.

The domestic tractor market is segmented by horsepower

into the low horsepower 25 HP segment, the mid segment

of 35 HP and the high segment of above 45 HP. Most of

the major players cater to all the three segments. However,

their relative strengths and market positions differ from

segment to segment. The domestic tractor industry is

fragmented, with about 14 major players and some small

local players.

Many factors affect tractor sales including monsoons,

means of irrigation, water levels, government declared

support prices for crops, general commodity prices,

crop production expenses (including seeds, fuel,

fertilizer, pesticides and other costs) and the credit

policy announced by RBI. The availability of finance is one

of the most significant factors influencing tractor demand,

as more than 90% of tractors are sold through bank

finance.

M&M’s Farm Equipment Sector (FES), which designs,

develops, manufactures and markets tractors for Indian

and overseas markets, is the largest manufacturer of tractors

in India. FES has sustained its market leadership in the

Indian tractor market for over 25 years.


21

Industry DevelopmentsIndustry DevelopmentsIndustry DevelopmentsIndustry DevelopmentsIndustry Developments


The Indian automotive industry had experienced a strong

growth wave over the last five years. F-08 however, saw a

drop in production (including two wheelers) by 2.3% and

a drop in sales (including two wheelers) by 4.7% (Source:

SIAM). The only segments that registered growth in sales

were passenger vehicles (12.2%) and commercial vehicles

(4.1%). The three wheeler and two wheeler segments

witnessed a drop in growth of 9.7% and 7.9% respectively.

A combination of factors contributed to this situation, the

main ones being a rise in interest rates, continued increase

in fuel prices, sharp commodity inflation leading to higher

costs and a slight economic slowdown.

The total number of MUVs sold in India increased by 5.1%,

Within the MUV sub segments, the hard top sub segment,

which is the largest sub segment in MUVs, saw a volume

increase of 9% in the year under review as compared to

16% in the previous year. The soft tops sub segment,

which has been declining significantly over the last few

years, declined a further 6 % in the year under review. The

pick-up market declined by 4% this year, after a 20%

growth last year.

The mid size car segment where the Logan competes,

increased by 16%.

In the LCV segment (2-4 MT of payload) the sales increased

by 4.3%. The volumes in the small three-wheeler segment

(0.5T load) declined by 18.6% and the large three-wheeler

segment witnessed a decline in volumes of 37.3%. (Source:

Industry and internal)


The first monsoon (between June and Sept) of FY 07-08

was 105% of the Long Period Average, resulting in a good

Kharif crop. The second monsoon was lesser than normal

in more than half of the areas across India. Hence, Rabi

sowing was lower than F-07 by 3%. However crop

production during F-08 (Rabi and Kharif combined) is

estimated to be 3% higher than the last year. The

Government also announced significantly higher Minimum

Support Prices for various crops for both Rabi and Kharif

periods. Overall, it is estimated that the agricultural GDP

of India will grow by 2.6% in F-08.

Credit allocation to agriculture had been increased to

Rs.2,25,000 Crores. Yet, due to higher NPAs, we witnessed

a slow down in bank financing and a tightening of lending

norms. This, coupled with increased interest rates, caused

a drop of 5.1% in domestic sales in the tractor industry

over F-07. The domestic industry closed at 3,02,241 tractors

in F-08, compared to 3,18,328 tractors in F-07. Exports

from India totalled 44,260 tractors in F-08, a growth of

31.5% over the last year.

The industry had to bear the impact of hikes in the price

of raw materials. Over the last four years, the prices of

important input materials like steel, pig iron, and lead

have continuously increased. The prices of crude oil

increased significantly in the current year. Simultaneously,

exports were impacted due to a significant appreciation of

the rupee against the U.S. Dollar. Margins therefore

continued to be under pressure.

The industry is witnessing consolidation in the domestic

market. In F-06, Tractor and Farm Equipment Ltd. (TAFE)

bought Eicher Tractors Ltd. In F-08, M&M FES increased its

dominance of the domestic market with the acquisition of

Punjab Tractors Ltd. (PTL), With this acquisition, M&M FES

now commands nearly 40% of the domestic market.

M&M PM&M PM&M PM&M PM&M Performanceerformanceerformanceerformanceerformance


The Automotive Sector (AS) of the Company is engaged in

the Multi Utility Vehicle (MUV) and three wheeler segments

22

directly. It competes in the Light Commercial Vehicle (LCV)

segment through its joint venture subsidiary MIL, and in

the passenger car segment through another joint venture

subsidiary Mahindra Renault Pvt. Ltd (MRPL). The Company

manufactures LCVs for MIL and passenger cars for MRPL

on contract basis. The Company also markets these LCVs

and cars for the two companies respectively under

distribution contract for a fee.

For the sixth consecutive year, the Company’s vehicle

production and sales touched an all-time high during the

year under review, despite the industry slowdown. A total

of 234,688 vehicles (including 34,556 three wheelers, 11,079

LCVs for MIL and 26,653 cars for MRPL) were produced,

which is a growth of 31.1 % over the previous year.

On the domestic sales front, the company along with its

subsidiaries MIL and MRPL sold a total of 218,998 vehicles

(including 33,927 three wheelers, 10,373 LCVs through

MIL and 25,907 cars through MRPL), recording a growth

of 28.7% over the previous year.

The Company’s domestic MUV sales volumes grew a very

healthy 16.4%, against the industry MUV sales growth of

5.1%. A record number of 148,761 MUVs were sold by

M&M in the domestic market in the year under review as

against the sale of 127,856 MUVs in the previous year.

The company strengthened its domination of the domestic

MUV sub segment by increasing its market share to 51.5%

over the previous year’s market share of 46.6%

In the hard top MUV sub segment, the success of the

refreshed Scorpio and the Bolero models helped the

Company grow its volumes by 19%. The refreshed version

of the Bolero that was launched in March 2007 was a hit

with customers and the Bolero brand sales volume increased

by 33% over the previous year. In the process, Bolero brand

sales crossed the milestone of 50,000 vehicles sold in a

year and Bolero continued to be India’s largest selling

MUV, for the third year in a row.

November 2007 saw the launch of the VLX variant of the

Scorpio. Powered by the m-Hawk - a new indigenously

developed, state of the art, 2.2 liter common rail diesel

engine - and bundled together with a host of electronic

features. The Scorpio VLX has found great favour with the

customer.

In the soft top sub segment, the Company’s soft-top sale

volume declined by 7 % in line with the industry decline

of 6%.

The Company pick up volumes registered a growth of

17% in spite of an industry de-growth of 4% in this sub

segment. As a result, the Company’s market share jumped

to 76.9% from the previous year’s share of 63.2%. The

credit goes to the success of the small pick up model, the

Maxi Truck.

In LCVs, M&M, through its subsidiary MIL, has a presence

only in the lower payload (< 4MT) segment of the market.

The Company’s sales in this sub segment improved by

20.3%, as against an industry sub segment growth of 4.4

% in the year under review. This was due to recent launches

in the passenger segment as well as the repositioning of a

load carrying model. One of the principal reasons for this

very healthy growth was the increased focus on the business

through MIL. This led to an increase in the Group’s market

share in the segment from 20.1% in the previous year to

23.1% in the year under review. The subsidiary company is

currently also working on developing products for the

higher end of the LCV segment as well as larger commercial

vehicles.

In November 2007, the company signed a joint venture

agreement with International Trucks (a wholly owned

affiliate of Navistar International Corporation) to produce

diesel engines for medium and heavy commercial trucks

and buses in India. The joint venture, named Mahindra

Navistar Engines Pvt. Ltd. (MNEL), is 51% owned by

Mahindra & Mahindra (M&M) and 49% owned by


23

Warrenville based Navistar, North America’s largest

combined commercial truck, school bus and mid-range

diesel engine producer.

F-08 also witnessed the launch of the Logan car by MRPL.

The Logan boasts of best in class fuel efficiency, cabin

space and driving comfort and has won multiple awards.

Competing in the very competitive midsize segment of the

domestic car market, the Logan has been amongst the top

selling cars in the segment since launch and has captured

a 11.2 % market share of this segment. 25,907 Logan

cars were sold in F-08.

In the 0.5 T load segment of the three wheeler market,

the company has now acquired a sizeable market share of

19.3% with the Alfa three wheeler selling 21,564 units.

This is a growth of 10.3% over the previous year, in a

scenario where the industry volumes declined by 18.6%.

In February 2008 the company also entered the 3-seat

three wheeler passenger market with the launch of the

Alfa passenger, in Chandigarh, Rajasthan, Bihar, Assam,

West Bengal and Kerala. Customer acceptance has been

positive and this model should contribute to the Company’s

growth in the current year, with the Pan India launch

being completed by July 2008.

In the declining large three wheeler segment, the Company

sold 9,799 large three wheelers against 14,146 in the

previous year. This is a decline of 30.7% in sales volumes

compared to a 37.3% decline for industry as a whole.

In the last MDA it was reported that two greenfield

manufacturing sites, one at Chakan, near Pune and one at

Oragadam near Chennai, were being planned. During the

year under review, based on a re-alignment of its

manufacturing strategy, the company has deferred its

investment at the joint manufacturing site at Chennai in

partnership with Renault s.a.s and Nissan Motor Company

Ltd. The company will utilise the capacity available at their

new plant in Chakan and other existing plants to meet its

medium term requirements, for both domestic and overseas

production.

Work on the greenfield plant at Chakan, near Pune has

been initiated. Land acquisition is complete and

construction work is in full swing. This plant near Pune

will have the capabilities to manufacture the company’s

range of new generation MUVs as well as commercial

application vehicles. It will also manufacture CVs for MIL.

Additionally, MNEL will manufacture engines at this facility.

The Company has intensified its efforts to identify niche

markets for its automotive products throughout the world,

especially in geographical areas that have similar sales,

distribution and marketing conditions as India. Over the

last three years the Company introduced its vehicles into

many new countries including Europe, Middle East, South

America and South-East Asia by adapting unique business

models for each country.

In F-08, vehicles were launched in Australia, Chile and

Sudan. The year also witnessed the launch of the sector’s

first CKD operations abroad with the opening of CKD

assembly plants in Egypt and Brazil.

These initiatives resulted in continuing strong growth in

export volumes, with a 54% export growth from 8,021

vehicles [including 254 vehicles sourced from MIL] in the

previous year to 12,359 vehicles [including 363 vehicles

sourced from MIL] in the year under review. The entry into

all these new markets was under the “MAHINDRA” brand

name, in keeping with the objective of promoting and

establishing the Mahindra brand across the globe.

In Operations, the Company focused on increasing capacity

at existing plants, on rigorous cost reduction, and on a

ramp up of its new Uttaranchal plant. Energy conservation

was an area of particular focus. The impact of our efforts

was recognised when, the Zaheerabad and Nasik Plants

24

were awarded the National Energy Conservation Award

(1st rank and 2nd rank respectively), and the Nashik and

Kandivli plants won the state level prizes for energy

conservation. The Automotive Sector’s Nashik plant also

won the National Award for excellence in water

conservation.

The Company has also been making significant efforts to

take customer satisfaction to even higher levels in its pursuit

of becoming one of the most customer caring automotive

companies. The Company significantly improved its standing

to 3rd rank on sales satisfaction in syndicated studies

conducted by independent third party agencies like J.D.

Power. Two of the company’s products – Scorpio and Logan

were ranked No. 1 in the TNS Total Customer Satisfaction

scores in their respective categories. In the TNS study on

Dealer Satisfaction released in 2007, the Company ranked

first. The Company was also rated second in a TNS study

on the Most Trusted Indian car companies.


FES achieved a major milestone in F-08 when the cumulative

sales of its tractors till date crossed the 13 lakh mark. It

sustained its leadership position for the 25th consecutive

year with a market share of 30% in the domestic tractor

market, 90,509 tractors were sold in F-08 as against 95,006

tractors in F-07. Additionally, 8,533 tractors were exported

in F-08 against 7,525 tractors in F-07.

The year F-08 was marked by the introduction of new and

upgraded products and technologies. The 295 DI Super

Turbo and the upgraded Sarpanch 595DI Super Turbo were

launched in the month of October 2007. The former is a

39HP Turbo charged tractor with a new technology. It is

the first Turbo tractor in the mid segment and is one of

the most powerful tractors in this category. The latter is an

upgraded product, with significant improvement in the

product performance and in the value offered to the

customer. The Arjun Ultra-1 has now been transformed

into a versatile product capable of being used in the fields,

as well as for construction and mining applications.

The Mahindra ‘Shaan’, launched in F-07, won the

“Outstanding Innovation Award” from ASABE (American

Society for Agricultural & Biological Engineers) This is a

recognition of FES’ ability to conceive and develop

innovative products that meet the customers’ latent needs.

In its endeavor to offer unparalleled customer quality,

durable and high performance products, FES tests its

products in the most demanding environments. M&M -

FES was awarded the ‘Indian Innovation Award 2006’ for

‘reducing time to market in New Product Development by

bringing field to lab’. This is an acknowledgement of FES’

technological advances and its ability to test its products

with the same rigor within the confines of a test lab.

This year, FES further increased its focus on Customer

Centricity by leveraging technology to provide innovative

new services. A 24x7 toll free number has been

extended pan India to give customers a unique ownership

experience.

To meet the growing demand for automobiles running on

alternate fuels, Bio-Diesel technology readiness for up to

5% bio-fuel has been achieved. FES has sold tractors with

this capability. Bio-fuel hubs have been created in some

areas to facilitate availability of this green fuel. FES is at the

forefront of efforts in the development of green technologies,

which will contribute to environmental sustainability.

FES also sells engines and gensets under the ‘Mahindra

Powerol’ brand. ‘Mahindra Powerol’ retained its market

leadership in the telecom segment for gensets. In F-08, it

increased its customer base, with engine and genset sales

put together increasing by 32% in volume terms, and by

an even more substantial 72% in value terms. Mahindra

Powerol also expanded its genset product range upto 62.5

KVA. This was accompanied by the introduction of super


25

silent gensets (less than 62 db) for usage in silent zones in

accordance with the Central Pollution Control Board norms.

Innovative brand promotion like FM radio campaigns &

advertisements in public transport were undertaken - a

first in this segment. Branded show rooms were set-up in

25 Indian cities to boost its presence in the retail segment.

Mahindra Powerol won with the Frost & Sullivan ‘Voice of

the Customer’ Award” for being the ‘Most preferred Genset

Brand in the Telecom Segment’, which truly reflects the

impact that Mahindra Powerol has created in the telecom

space. This is another reflection of the FES spirit of customer

centricity.

On the global front FES’ strategic joint venture in China -

the Mahindra (China) Tractor Company Ltd. (MCTCL)

increased its presence in the Chinese market by spreading

its distribution to new regions in North West and Central

China. This enabled a sales growth despite a sluggish

domestic industry. On the exports front, MCTCL launched

its 25HP - 4wd product in the USA market. This product

has been well received by dealers in US. MCTCL has also

made inroads in South Asia by penetrating markets like

Bangladesh and Sri Lanka. MCTCL embarked on a product

range expansion program by introducing products up to

55 HP. The enhanced market presence in domestic and

exports markets and the product range expansion program

will enable MCTCL to gain a significant presence in the

China tractor industry.

In the USA, the 0-70 HP tractor industry declined by 13%

between April 2007 and March 2008. The major reasons

were fuel price increases, softening of the credit market

due to sub prime crisis and higher energy costs. Mahindra

USA (MUSA) sales increased by 1%.

Mahindra USA has been recognized as an important player

in the American market, and has been invited to join the

Board of the Association of Equipment Manufacturers

(AEM), which is a leading international trade association

focused on meeting the global business needs of equipment

manufacturers and service providers.

The overall growth in exports for Rest of the World (ROW)

tractor markets (excluding USA and China) in F-08 was

18%. Australia and Africa were major contributors to this

growth. Satellite assembly plants were set up in the African

states of Tchad and Mali in F-08. FES also entered new

markets, including Iran in the Middle East, {where it had

partnered with Iran Tractor Manufacturing Co. (ITMCo)}

and Brazil in South America.

FES won the All India Award for Export Excellence instituted

by Engineering Export Promotion Council (EEPC), which

recognized its outstanding contribution to Engineering

Exports in the field of agricultural machinery. In addition,

at the 74th International Fair of Agriculture, at Novi Sad,

Serbia, M&M bagged the ‘Best Tractor Introduction’ award.

The Union of Japanese Scientists and Engineers (JUSE),

Tokyo, Japan awarded the ‘Japan Quality Medal’ to FES for

2007. The JQM is an internationally acclaimed Quality

accolade, awarded to a company with outstanding Quality

Management. FES is now the only tractor company in the

world to attain this award, and with this win, it joins the

league of global companies. FES also won the Deming

Application Prize in 2003 for its Customer Focus,

commitment to TQM practices and demonstration of results

in improving product and process quality. For FES, after

winning the Deming Prize, the JQM win signifies the

culmination of a dream, the confirmation of our self-belief,

and the embodiment of the ‘We can’ spirit.

FES continued its journey towards excellence in business

process improvements in several ways. Its Lean

Manufacturing initiative continued with strong momentum

at all its plants. The Total Productivity Management (TPM)

initiative that was launched at the Mumbai plant in

November 2006 has been extended to Nagpur plant.

Involving suppliers in the process strengthened the ongoing

26

focus on continuous improvement. The ISO: 9000:2000,

TS 16949 & ISO: 14001 re-certification & surveillance audits

have continued at the various FES plants and all the

stringent requirements have been met successfully.

The Mumbai and Rudrapur plants were certified in F-07

for ‘Occupational Health & Safety Assessment Series’

(OHSAS- 18001), making all the four FES plants OHSAS

certified. This year, re-certification and surveillance audits

for OHSAS were conducted. In recognition of its excellent

health & safety practices, FES was awarded the ‘Golden

Peacock Occupational Health & Safety Award’ for the year

2007. Similarly, for the efforts in the area of Quality,

FES was awarded the ‘Golden Peacock National Quality

Award -2007’.

FES continues to improve its supply chain efficiency by

reducing dealer stocks and outstandings.

OpportunitiesOpportunitiesOpportunitiesOpportunitiesOpportunities

The Indian economy has been growing at an annual average

growth rate of well above 8% for the last four years making

it one of the fastest growing large economies in the world.

This kind of secular long term growth combined with the

Company’s diligent expansion of its technological and

product development capabilities, and its active search for

overseas partners and markets, augurs well for the coming

years for both sectors. The sectors also share synergies of

resources, especially for sourcing, giving major opportunities

for savings.

India’s automotive sector is one of the fastest growing in

the world. With the Indian economy on a high growth

path on a secular long-term basis and with the consequently

increased disposable incomes of the population at large,

the Indian automotive industry is expected to have

significant growth opportunities. The Indian Government’s

Automotive Mission Plan 2016 will enable such growth

and targets a doubling of automotive industry’s

contribution to the Indian economy over 2006-2016. With

the Company’s enhanced presence in the Indian automotive

industry thorough its joint ventures for CVs and cars as

well with its entry into the smaller three wheeler category,

the Company is well poised to garner an increasing share

of this relatively high long term growth segment of the

Indian economy. However the current year may witness

sluggish growth due to global and local economic pressures

as listed under the next section.

In the Automotive Sector, the Company believes that its

core MUV market is likely to increase its share in the light

vehicles category due to the inherent versatility of MUVs

for a fast growing developing country. The proportion of

MUVs in India is relatively low compared to corresponding

figures in Asian countries that share a similar or more

developed profile. In the long term, we believe that the

light vehicle market will expand at a fast clip in India and

that MUVs will take an increasing share of this market.

The AMP 2016 also states that fiscal benefits should be

provided to MUVs, which could lead to further MUV

growth. The Company’s entry into the car market and the

CV market through joint ventures and its strong presence

in the MUV segment will enable the leveraging of the full

range of opportunities.

The WTO and Free Trade Area negotiations with Thailand,

ASEAN, SAARC countries and the Mercosur countries are

likely to lead to lowered tariffs across many target export

markets. This could provide a significant opportunity to

generate larger volumes from export sales and further the

auto sector’s strategic emphasis on the development of

exports.

Given the current state of road infrastructure in the interiors,

as well as the extremely high cost required for improvement,

MUVs will continue to be the most appropriate and

economical vehicles for transporting people in the interiors.

Rural public transportation is not as extensively developed


27

as in the urban areas, providing further opportunities for

MUVs and LCVs.

MUVs and CVs are preferred vehicles for projects and

construction sites like the Golden Quadrilateral road project

and the North, South, East and West Corridor project. A

higher level of industrial development generally leads to a

greater demand for MUVs and CVs. Hence if the planned

rate of GDP growth is achieved over the next decade, the

demand for MUVs and CVs should increase

commensurately.

The increased infrastructural investments required to

maintain the high growth of the Indian economy - like the

North South East West corridor which has a budget of

tens of thousands of crores - and the increased goods

movement from a fast growing economy, would maintain

a high demand for commercial vehicles. To capture a share

of the growing medium and heavy commercial vehicles

segment, the Company’s subsidiary, MIL, will launch a new

range of medium and heavy commercial vehicles over the

next few years and thus ensure the Company’s participation

in this important segment of the Indian automotive industry.

The direct tax changes announced in the Government

of India’s budget for F-09 would lead to an additional

increase in the disposable incomes of taxpayers. In addition

the release of higher salaries to government employees as a

result of the sixth Pay Commission would also increase

disposable incomes to a large group of people. Both

these factors are likely to have a positive influence on

vehicle demand, especially for personal use vehicles in the

current year.

The burgeoning Indian middle class population, with fast

growing disposable incomes, with an increasing propensity

to spend, along with the huge increase in the working age

population expected over the next 10 years, will drive high

growth for passenger vehicles like Bolero and Scorpio. Given

that over half the Indian market is accounted for by

passenger cars, the Company’s partnership with Renault

to introduce Renault models through its subsidiary MRPL

will continue to provide the Company growth from

participating in the other fast growing segment of the

Indian auto industry.

Thus, through these strategic initiatives, the Auto Sector

of M&M has put in place plans to increase its size of the

addressable market of the Indian automotive industry from

17% in F-05 to 75% by F-10, providing a huge opportunity

for growth.

There are opportunities for the Farm Equipment Sector as

well. The Govt. of India has increased its focus on

agriculture in the budget for F-09. There are also certain

states in India where penetration of tractors is low and

these provide opportunities for growth. FES will leverage

these opportunities by strong marketing initiatives like brand

building, creating stronger franchisees, restructuring dealers

and the introduction of new products.

The USA and China are amongst the top three tractor

markets in the world apart from India. To tap the potential

in these markets, FES plans to continue its focus on these

markets to become a global leader. M&M is well positioned

to grow sales in the Chinese market. M&M is also exploring

various global tractor markets in Africa, East Europe and

the Middle East.

Facilities at Nagpur and Rudrapur Plant will ensure low

cost manufacturing for FES. China will also serve as a low

cost sourcing base for FES products. These can be leveraged

suitably.

ThreatsThreatsThreatsThreatsThreats

A slowdown of the Indian economy is quite possible for

the short term given current global developments. Due to

the strong linkage of the automotive industry to the

economy, such an event would adversely impact growth in

the short term for the Company.

28

For the Automotive Sector more stringent regulatory norms

are being introduced. While these measures are welcome,

they may result in an increase in manufacturing cost, which,

in turn, may affect margins or demand in a price sensitive

situation.

Import tariffs have been progressively reduced and are

expected to be reduced further in the future in line with

India’s obligations under WTO and its bilateral free trade

agreements with certain countries, with the possible

eventual elimination of import tariffs on imports from these

countries. This will increase competitive pressures on the

Company.

The Company’s exports, a strong thrust area, can be

adversely affected if the Rupee continues to appreciate.

Tightening of credit disbursals for vehicles and increase in

interest rates impacted demand in many segments in

F-08. Maintenance of these factors or any increase in them

would impact demand in the current year and this may

affect sales volumes, leading to lower profitability.

However having a subsidiary company, Mahindra Finance

alleviates this concern to some extent. The entry of new

players has made the passenger car and MUV markets

much more competitive affecting the margins of all

participants. The Company is countering this threat by a

stronger focus on reducing costs and increasing efficiency

of operations.

High fuel prices increase the cost of ownership and could

also adversely impact demand for both sectors.

Any reduction in the price differential between petrol and

diesel could increase demand for petrol MUVs at the

expense of diesel MUVs. Almost all of the Company’s MUV

models are diesel powered and an increase in preference

for petrol vehicles could be a disadvantage to the Company.

However, even after five years of fuel price decontrol, a

substantial differential has been maintained.

For FES, high fuel prices increase the running costs, which

may directly impact the tractor industry. The cost of diesel

constitutes around 60% of the running cost of a tractor.

Any further increase in the price of diesel may adversely

impact input costs for farmers. If not compensated by a

crop price increase, this can impact the availability of funds

with farmers and, in turn, the tractor demand.

Mandatory use of vehicles powered by alternative energy

sources could affect both sectors. For the Auto Sector, it

could lead to a demand for different types of vehicles. The

Company has developed products powered by alternate

energy like CNG and electricity to provide lower polluting

products for a better environment, which minimizes this

risk. The Company has also developed prototypes of a

hybrid Scorpio and hydrogen powered three wheeler as

well as a bio diesel powered Scorpio and Bolero.

For FES, the mandatory use of vehicles powered by

alternative energy sources could lead to a demand for

different types of tractors. To minimize this risk, FES is

customizing products powered by alternate energy like bio

diesel. In F-08 FES has achieved technology readiness to

introduce tractors powered by 5% bio diesel into the

market.

The company is therefore well placed to move with the

trend towards alternative energy in both sectors, should it

become a norm in future.

A major threat to both sectors lies in the escalation in raw

material prices. Such price hikes, especially for iron, steel

and rubber are likely to put pressure on prices and could

affect margins or demand. Commodity prices have seen

significant price escalation in F-08 and the trend has

continued into F-09. This has resulted in a significant rise

in input costs, in turn causing price escalation. This may

therefore impact demand with a consequent impact on

the bottom-line if not passed on. The Company’s Auto

Sector continued to be amongst the most aggressive in


29

passing on these costs to consumers, but may not be able

to always do so in the future.

Reduction of excise rates on small cars in February 2008

has increased the tax levy differential between small cars

and larger vehicles significantly. With a resulting lower

price tag for small cars, customers on the margin may opt

to postpone large car purchases or buy a small car, which

could impact MUV and the larger car segment growth

adversely.

With M&M’s strong focus on globalisation, any form of

tariff/non-tariff barriers imposed by any country where

M&M has a significant presence or has plans to grow will

be a threat. As for all exporters, any political, economic

uncertainty or natural calamity in the countries of export

would be a potential threat.

Apart from this, a steep increase in crude oil prices globally,

has an inflationary impact on the overall economy.

Risks and ConcernsRisks and ConcernsRisks and ConcernsRisks and ConcernsRisks and Concerns

Stringent legislation on pollution and emission requirements

will increase the cost of the Company’s products for the

Automotive Sector. Holding the price line could have an

impact on profitability. Price increases on the other hand

could impact volumes.

The Auto Sector is in the process of setting up a new

greenfield plant at Chakan, near Pune. With the addition of

the full capacity of this new plant, the dedicated final capacity

will significantly increase as compared to its current capacity.

If for some reason, demand does not allow a significant

utilization of these new capacities, the increased fixed costs

would impact profitability in the future. The Company has

plans to bring in the incremental capacity from this new

plant, phase wise to protect it from this risk.

For the overseas operations rupee appreciation could be a

risk for both sectors. However, M&M, as a practice, is

taking appropriate steps to hedge currency exposure thus

limiting the impact of risk. Both sectors will continue to

focus on cost cutting measures through value engineering.

In the domestic tractor market, growing NPAs of banks

are a concern for FES, as this puts pressure on the credit

availability to the farmers, 90% of whom buy tractors

against loans.

Interest rates for tractor loans tend to be higher than for

housing and car loans. In recent times, banks have been

increasing the interest rates, which could impact the loan

repayment ability of the farmers, and thus impact tractor

demand. The loan waiver may in the short term improve

the credit availability to the farmer, but in the longer term

this may lead to greater defaults in loan repayments and

thus impact tractor demand.

ExciseExciseExciseExciseExcise

In 1991, an excise dispute arose at the Nashik and Kandivli

factories relating to the Commander range of ten-seater

vehicles. The jurisdictional Central Excise authorities, after

due inquiry, approved the classification of these vehicles as

ten-seaters which attracted a lower rate of excise duty

under Tariff Entry 8702. The Company successfully

contested the subsequent challenge by the excise

authorities, in two different fora. The Excise Department

accepted these decisions and the classification of the vehicle

as a ten-seater was consistently approved by the authorities.

Inspite of the above, the Excise Department subsequently

disputed the classification on the ground that classification

of the Commander under Tariff Entry 8702 as ten-seater

did not meet certain parameters of the Motor Vehicles

Act, 1988 and the Maharashtra Motor Vehicles Rules, 1989,

and demanded differential duty. The Department’s stand

was that the Commander should be classified under Tariff

Entry 8703, attracting a higher rate of excise duty. The

Company challenged these demands by writ petitions

30

before the Bombay High Court, which stayed the further

proceedings unconditionally. The High Court remanded

these matters for adjudication before the Excise authorities.

The Commissioner (Adjudication), Navi Mumbai passed an

order dated 30th March 2005 confirming the demand of

Rs.216.03 crores and imposed a penalty of Rs. 88.08 crores.

The Company has filed an appeal and a stay application in

the Tribunal challenging this order. The Tribunal has granted

an unconditional stay against the demand and penalty in

terms of its order dated 9th October 2007.

In another concurrent proceeding, the Tribunal passed an

order in July 2005 holding that the vehicles were

appropriately classifiable under Tariff Entry 8702 as ten-

seaters. The Department has challenged this order by filing

a Civil Appeal, before the Supreme Court, which has been

admitted. The matter is yet to be finally heard.

The Company does not expect any liability on this account

as it has been advised that an extraneous legislation like

the Motor Vehicles Act cannot be referred to for the

purpose of excise classification. The Excise Commissioners,

the Tribunal and various expert/statutory bodies holding

the vehicle to be a ten-seater have accepted this stand.

During the current year, the Commissioner of Central Excise,

Nashik has also confirmed a demand of Rs. 24.55 crores

and imposed a penalty of Rs.20 lacs in respect of “Armada”

range of vehicles manufactured by its Nashik Unit

during the period 1992 to 1996, on the same basis as

adopted for Commander range of vehicles. The Tribunal

was pleased to grant an unconditional stay against this

order as well.

The final hearing in both the above matters is awaited.

OutlookOutlookOutlookOutlookOutlook

There is a strong linkage between the strength of the

automotive industry and the strength of the economy of a

country. High growth of the industry leads to accelerated

growth of the economy, which in turn leads to a higher

growth for the automotive industry in a virtuous cycle.

The last six years have seen both the Indian economy and

the Indian automotive industry growing at a fast clip. The

Indian auto industry is one of the fastest growing

automotive industries in the world. Between 1997 and

2005, the global production of vehicles increased from

55.9 mn to 66.5 mn - an average growth of 2.2% p.a.

(Source: OICA). Over the same period, vehicle production

in India increased by an average 9.3% p.a. (Source: SIAM).

In fact the growth of production across all categories of

vehicles averaged 17% p.a. over F-02 to F-07 (Source:

Automotive Mission Plan 2016, Government of India)

The Indian economy is projected to grow at a brisk rate

and demand conditions in the medium to long term are

expected to remain strong. However, due to the high

base in segments like cars and passenger MUVs,

combined with globally challenging economic conditions,

inflationary pressures, high fuel and commodity prices,

relatively high interest rates and the market sentiment there

is a stronger risk of lower growth in F-09 than that

witnessed in F-08.

Part of this risk would be possibly neutralized by the increase

in disposable incomes of tax payers and government

employees as explained earlier. However there are significant

cost pressures facing the industry in the current year and if

they were to be fully passed on, could impact demand for

the year.

The continuation of strong demand for the Bolero and the

Scorpio VLX and the recently launched Alfa Passenger

version could assist in generating higher growth than the

industry as in F-08. The Company also plans to launch a

new product being developed under the Project name

Ingenio, during the later part of the current year. This will

be the first “ground up” new MUV since 2002 and hence


31

should provide a boost to the Company’s volumes relative

to the industry for F-09.

In the longer term, given the high correlation of the

automotive industry to GDP growth and the fact that the

industry itself accounts for about 4.5% of India’s GDP, the

outlook for the auto industry on a GDP growth forecast of

7-8% p.a. is quite bright.

The scenario for FES is also encouraging. For F-09, the

Government of India has proposed to allocate Rs. 2.8 lakh

crores for agricultural credit, which is expected to give a

boost to the tractor industry. Moreover there is a strong

focus on irrigation projects and investment for development

of rainless areas with an outlay of Rs. 20,000 crores. The

government’s emphasis on rural economic development

and support to the agriculture sector will create

opportunities for growth in farm mechanization.

Debt-waiver to the tune of Rs.50,000 cr. has been

announced for small and marginal farmers, as also a one-

time settlement of 25% of loan for remaining farmers.

However, since the tractor penetration among the small

and marginal farmers is low, this is expected to have a

negligible impact on tractor demand. In view of all these

factors, it is expected that the domestic tractor industry

will maintain a growth trend in the long term

In the international market, FES plans to expand aggressively

into newer markets and strengthen its presence in markets

where it is already present.

Both sectors with their updated product portfolios and

their exploration of global horizons, will strive to maintain

their leadership position. Simultaneously, the Company will

continue its focus on achieving cost leadership through

focused cost optimization, value engineering, improved

efficiency measures like supply chain management,

countrywide connectivity of all its suppliers and dealers,

and exploiting synergies between its Sectors.

Material developments in Human Resources /Material developments in Human Resources /Material developments in Human Resources /Material developments in Human Resources /Material developments in Human Resources /Industrial RelationsIndustrial RelationsIndustrial RelationsIndustrial RelationsIndustrial Relations

Industrial relations during the year for AS were cordial at

all the plants and area offices. Senior management has

spent time communicating the company’s overall focus

areas to the workmen. Further, there was focus on workmen

training and their involvement in improving Quality,

Productivity and cost effectiveness.

FES too saw cordial Industrial relations during the year at

all its plants and area offices. Manpower utilization is now

at an effectiveness level of almost 100%.

At FES, this year there was a major thrust to increase

workmen participation in improvements under the

‘Akraman’ (War on waste) movement. In this movement,

the Continuous Improvement Teams work to solve

business problems by using a systematic problem solving

approach. This initiative has received 100 percent

participation.

All HR/IR activities were shaped by the imperative to create

a culture of sustained business outperformance

accompanied by extreme care for all stakeholders, starting

with customers and employees, while sustaining and

strengthening the core values of the Group.

Productivity, Cost and Quality were important areas of focus

during the year, while innovation continued to be a mantra

that HR activities sought to promote.

The single most important HR Metric that is being tracked

is the Employee Engagement Index thrown up by the annual

Gallup survey. This index has shown sharp improvement in

the past three years, helped by the detailed action planning

at each unit level based on the survey results.

Talent management continues to be a major area of focus.

Considerable progress has been made in succession

planning for critical positions, and the use of development

32

centres for management development. Creating a large

number of coaches and mentors will be high on our priority

list for the years to come, as will cross-Sector rotations.

The Shadow Boards worked on major business issues facing

the Company, and came up with innovative suggestions

many of which were implemented.

The network of Sector and Functional Talent Councils, under

the overall guidance of the Apex Talent Council, has been

busy through the year strategizing and shaping the Talent

Management Process.

The integration of acquired companies was an important

activity requiring intense HR inputs.

Global leadership and leadership lifecycle programmes are

an important element of creating the Mahindra leader of

tomorrow. In addition, technical and functional

programmes are conducted by the businesses and

e-learning is beginning to gather momentum. Bodhi

Vriksha in Nasik has been humming with activity with

both the Mahindra Management Development

Centre (MMDC) and the Mahindra Institute of Quality

(MIQ) together doing more than 15000 man days of

training.

Performance Management continues to be the backbone

of all HR activities, and goal setting has received a lot of

focus in the year under review.

Two way communication – telling and equally important,

listening, - has used various physical and electronic

platforms and has been branded in multiple ways across

the Sectors.

The Transformational IR movement continues to pick up

momentum. There was a large increase in the number

of self managed teams, worker training, and

worker involvement in CSR activities. Two way

continuous communication and dialogue is central to this

movement.

CSR and employee volunteering through the Employee Social

Option activities continue to focus on three broad areas:

1. Education, with special emphasis on the girl child;

2. The Environment – we have plated 250000 trees this

season and will complete 1 million by Oct ’08.

3. Public health – which includes the AIDS initiative by

the Auto Sector.

The number of volunteers now exceeds 11,000 across the

Group. We believe that participating in CSR activities not

only helps create a Mahindra culture but also creates better

leaders.

Finally, creating leadership through customer centric

innovation is vitally dependant on creating an atmosphere

of trust and collaboration across the Company. More than

anything else this is dependant on the everyday behaviour

of leaders at all levels and therefore HR becomes the domain

of all managers, with the fulltime HR personnel acting as

strategic catalysts.

The permanent employee strength of the company as on

31st March 2008 was 13,960.

Internal Control SystemsInternal Control SystemsInternal Control SystemsInternal Control SystemsInternal Control Systems

The Company maintains adequate internal control systems,

which provide, among other things, reasonable assurance

of recording the transactions of its operations in all material

respects and of providing protection against significant

misuse or loss of company assets. The Company uses an

Enterprise Resource Planning (ERP) package, which

enhances the internal control mechanism. The Company

has a strong and independent internal audit function. The

Chief Internal Auditor reports directly to the Chairman of

the Board. Professionally qualified technical and financial

personnel of the internal audit function conduct periodic

audits to ensure that the Company’s internal control

systems are adequate and are complied with.


33

OverviewOverviewOverviewOverviewOverview

The financial statements have been prepared in compliance

with the requirements of the Companies Act, 1956, and

Generally Accepted Accounting Principles (GAAP) in India.

The Group’s consolidated financial statements have been

prepared in compliance with the standard AS 21 on

Consolidation of Accounts and presented in a separate

section. The company has provided segment reporting on

a consolidated basis as per standard AS 17 on segment

reporting. This information appears along with the

consolidated accounts.

Financial InformationFinancial InformationFinancial InformationFinancial InformationFinancial Information

Fixed Assets:Fixed Assets:Fixed Assets:Fixed Assets:Fixed Assets:

As at 31st March 2008 the Gross Block of Fixed Assets and

Capital Work in Progress was Rs. 4202.58 crores as

compared to Rs. 3510.29 crores as at 31st March, 2007.

During the year, the Company incurred capital expenditure

of Rs. 754.27 crores (previous year Rs. 544.59 crores). The

major items of capital expenditure were on New Product

Development, Capacity Enhancement, and Research &

Development. This included purchase of Intangible assets

aggregating to Rs. 71.42 crores (previous year Rs. 36.95

crores).

Inventories:Inventories:Inventories:Inventories:Inventories:

March 31, 2008March 31, 2008March 31, 2008March 31, 2008March 31, 2008 March 31, 2007March 31, 2007March 31, 2007March 31, 2007March 31, 2007

Raw materials and bought out components as a % of consumption 4.66% 4.64%

Finished goods as a % of gross sales 4.68% 4.10%

The inventory of Raw Material as on 31st March 2008 is on level with last year. The increase in Finished Goods inventory in

% terms of sales is only apparent, as in terms of number of days sales there is no increase in Finished Goods inventory.

Sundry Debtors:Sundry Debtors:Sundry Debtors:Sundry Debtors:Sundry Debtors:

Sundry debtors amount to Rs. 1004.88 crores as at March 31, 2008, as compared with Rs. 700.89 crores as at March

31, 2007. Debtors as a percentage of gross sales and income from operations are 7.69% for the year ended March 31,

2008, as compared to 6.17 % for the previous year. The increase in debtors is mainly on account of increase in exports

growth in Company’s Genset engines and logistic business.

RESULRESULRESULRESULRESULTS OF OPERATS OF OPERATS OF OPERATS OF OPERATS OF OPERATIONSTIONSTIONSTIONSTIONS

IncomeIncomeIncomeIncomeIncome : : : : : (Rupees crores)

PPPPParticularsarticularsarticularsarticularsarticulars F – 2008F – 2008F – 2008F – 2008F – 2008 F – 2007F – 2007F – 2007F – 2007F – 2007 Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)

Amount % Amount % %

Gross Sales/Income from operations 13069.87 113.62 11363.05 113.33 15.02

Less : Excise Duty on Sales 1566.39 13.62 1336.78 13.33 17.18

Net Sales/Income from operations 11503.48 100.00 10026.27 100.00 14.73

Other Income 168.16 1.46 194.97 1.94 (13.75)

Discussion on Financial PDiscussion on Financial PDiscussion on Financial PDiscussion on Financial PDiscussion on Financial Performance with respect to Operational Performance with respect to Operational Performance with respect to Operational Performance with respect to Operational Performance with respect to Operational Performanceerformanceerformanceerformanceerformance

34

Other Income:Other Income:Other Income:Other Income:Other Income:

Other income during F-2008 at Rs. 168.16 crores is lower than Rs 194.97 crores earned in the previous year. This is on

account of lower dividend received from subsidiaries and lower income from surplus funds.

Expenditure:Expenditure:Expenditure:Expenditure:Expenditure:

(Rupees crores)

PPPPParticularsarticularsarticularsarticularsarticulars F – 2008F – 2008F – 2008F – 2008F – 2008 F – 2007F – 2007F – 2007F – 2007F – 2007 Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)Inc./(Dec.)

Amount % Amount % %

Raw materials, Finished andSemi-finished Products 7725.91 67.16 6827.93 68.10 13.15

Personnel expenses 852.45 7.41 666.15 6.64 27.97

Interest, commitment and finance charges 24.24 0.21 (67.45) (0.67) -

Depreciation 238.66 2.07 209.59 2.09 13.87

Other expenses 1580.65 13.74 1269.33 12.66 24.53

Provision for Contingencies 8.16 0.07 - - -

TTTTTotal Expenditureotal Expenditureotal Expenditureotal Expenditureotal Expenditure 10430.0710430.0710430.0710430.0710430.07 90.6790.6790.6790.6790.67 8905.558905.558905.558905.558905.55 88.8288.8288.8288.8288.82 17.1217.1217.1217.1217.12

The total expenditure during the year as a percentage of

Net sales / Income from Operations is 90.67% in the last

year as compared to 88.82 % in the current year.

Material Cost :Material Cost :Material Cost :Material Cost :Material Cost :

For the year ended March 31, 2008, material cost as a

percentage of net sales shows a decrease over the previous

year mainly due to efficiencies arising out of strategic

sourcing and reengineering initiatives undertaken by the

company. Material cost is also impacted by product-mix

changes.

PPPPPersonnel Cost :ersonnel Cost :ersonnel Cost :ersonnel Cost :ersonnel Cost :

Personnel cost as a percentage of sales has increased from

6.64 % to 7.48 %. This is mainly due to increase in officers’

strength, annual increments and refinements in actuarial

assumptions affecting calculation of gratuity and leave pay

provisions.

Other Expenses :Other Expenses :Other Expenses :Other Expenses :Other Expenses :

Other expenses as a percentage of net sales shows an

increase over the previous year. This is mainly because of

increase in variable expenses on Power & Fuel and higher

spend on professional fees and traveling for new projects

and developing new markets.

Depreciation :Depreciation :Depreciation :Depreciation :Depreciation :

The depreciation for the year ended March 31, 2008 is at

Rs. 238.66 crores as compared to Rs. 209.59 crores in the

previous year due to higher capitalization and the increase

in amortization of intangibles.

Interest (Net) :Interest (Net) :Interest (Net) :Interest (Net) :Interest (Net) :

The interest expense (net of interest income) for the year

ended March 31, 2008 is a net expense of Rs. 24.24

crores as against a net interest income of Rs 67.45 crores


35

in the previous year. Gross of interest income (CY: Rs.63.35

crores, PY Rs. 87.25 crores) the interest cost for the current

period at Rs. 87.59 crores was higher than Rs.19.80 crores

in the previous year due to increased borrowings to meet

the company’s growth plans.

Exceptional Items :Exceptional Items :Exceptional Items :Exceptional Items :Exceptional Items :

The profit from Exceptional items during the year ended

31st March 2008 is Rs. 165.20 crores as against Rs.121.99

crores last year. The profit in the current year is mainly

from the valuation of certain shares received by the

company under two court approved merger schemes at

the fair value of the shares parted with in exchange

for them. In the previous year the profit was mainly from

the sale of shares of Tech Mahindra Limited

offered as a part of that Company’s Initial Public Offering.

Provision for taxation :Provision for taxation :Provision for taxation :Provision for taxation :Provision for taxation :

The provision for current tax, fringe benefit tax and deferred

tax for the year ended March 31, 2008 as a percentage to

profit before tax is lower than the previous year, on account

of a zero incidence of tax on the exceptional items

mentioned above and higher tax benefits during the year

under section 80 IC due to increased profits in a new

plant and under section 35 (2AB) on weighted deduction

for R & D Expenditure.

Consolidated Financial PConsolidated Financial PConsolidated Financial PConsolidated Financial PConsolidated Financial Position of theosition of theosition of theosition of theosition of theM&M GroupM&M GroupM&M GroupM&M GroupM&M Group

During the financial year 2008, the company acquired

63.33% stake in Punjab Tractors Ltd. Post the acquisition

the Company’s effective holdings in Swaraj Automotives

Ltd and Swaraj Engines Ltd increased respectively to 35.64%

and 21.49% there by bringing both the Companies into

the Group as Associates. The company also increased its

stake in Mahindra Forgings Ltd and converted it in to a

subsidiary. As on 31st March 2008 the Group comprised of

the flagship holding company, Mahindra & Mahindra

Limited, 85 Subsidiaries, 4 Joint Ventures and 10 Associates

engaged in various businesses.

The Gross turnover for the year ended 31st March 2008 of

Consolidated Mahindra Group is Rs. 26,600.11 crores as

against Rs.19,417.45 crores for the previous year. The

Group’s net turnover grew by 36.80 % to Rs.24,445.29

crores in the current year from Rs. 17,868.93 crores in F-

2007. The profit before exceptional items and tax for the

current year is Rs. 2,806.50 crores as compared to Rs.

2319.69 crores in the previous year – a growth of 20.99%.

This is due to the excellent performance of the parent

company and group companies like Tech Mahindra Limited,

Mahindra & Mahindra Financial Services Limited, Mahindra

Holidays and Resorts India Limited, Mahindra Lifespace

Developers Limited and others. During the year there was

an exceptional charge of Rs. 302.51 crores arising mainly

on account of an exlusivity payment of Rs. 440.12 crores

made by Tech Mahindra to a customer, a profit of

Rs. 178.00 crores on account of deemed divestiture of

Mahindra & Mahindra Financial Services Ltd. The

consolidated Group Profit for the year after exceptional

items, prior period adjustments and tax and after deducting

minority interests is Rs.1,571.12 crores as against Rs.

1497.15 crores earned last year – a growth of 4.94 %.

This growth in profits could be achieved due to the excellent

performance by some Group companies, a few of which

are mentioned here.

The Group’s major IT subsidiary, Tech Mahindra Limited

(Consolidated), witnessed a Revenue growth of 31.87 %

with total income increasing from Rs. 2935.02 crores last

year to Rs.3870.50 crores in the current year. The profit

after tax before exceptional items for the year was

Rs. 769.50 crores as compared to Rs. 612.70 crores in the

previous year – an increase of 25.59 %.

The Group’s Finance company, Mahindra & Mahindra

Financial Services Limited, despite of interest volatility and

36

stiff competition, achieved a 45.73 % growth in its total

income from Rs. 841.84 crores to Rs. 1226.80 crores. It is

one of the leading NBFCs in financing of four wheelers and

its profit after tax grew by 33.22 % from Rs. 132.88 crores

in the previous year to Rs. 177.02 crores in the current year.

Mahindra Holidays and Resorts India Ltd., during the year

under review, continued to grow towards dominance in

the Holiday Segment with membership growing to 73533

nos. The total income grew by 55.84% from Rs. 240.65

crores to Rs. 375.04 crores. The profit after tax for the

year registered a growth of 92.82 % from Rs. 41.76 crores

in F-2007 to Rs 80.52 crores in F-2008.

Mahindra Lifespace Developers Limited (formerly known

as ‘Mahindra Gesco Developers Limited’), the Group’s

subsidiary in the business of real estate and infrastructure

development showed impressive growth during the year

under review. The demand for housing is buoyant and is

expected to remain so at least for the near medium term.

The Company through its subsidiary companies is engaged

in setting up SEZs at Chennai, Jaipur & in Maharashtra.

The Company’s total income increased from Rs. 163.25

crores to Rs 219.96 crores – a growth of 34.74%. The

profit after tax during the year increased by 361.07% from

Rs 14.18 crores to Rs 65.38 crores.

Segment ResultsSegment ResultsSegment ResultsSegment ResultsSegment Results

The results achieved by major business segments of the Group are given below:

(Rupees Crores)

Segments F-2008 F-2007

1. Automotive 741.55 653.03

2. Farm Equipment 603.91 498.93

3. Financial Services 279.14 207.56

4. Steel Processing & Trading 89.02 49.28

5. Infrastructure 75.31 9.62

6. Hospitality 110.87 63.95

7. IT Services 362.13 161.23

8. Systech 204.81 165.69

Certain statements in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates,

expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and

regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to

the Company’s operations include raw material availability and prices, cyclical demand and pricing in the Company’s

principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries

in which the Company conducts business and other incidental factors.

37


Corporate GovernanceYour Company has always practiced Corporate Governance

of the highest standards. Your Company manages its affairs

with diligence, transparency, responsibility and

accountability and believes in maintaining superior

standards of corporate conduct towards its employees,

stakeholders and society. The Company is of the view that

good governance goes beyond good working results and

financial propriety and is a pre-requisite to attainment of

excellent performance in terms of stakeholder value

creation.

Your Company practices a culture that is built on core

values and ethics. During the year, CRISIL has reaffirmed

the highest level rating (Level 1) for Governance and Value

Creation. This rating indicates that the capability of the

Company with respect to wealth creation for all its

stakeholders while adopting strong Corporate Governance

practices is the highest.

A report on compliance with the Code of Corporate

Governance as prescribed by the Securities and Exchange

Board of India and incorporated in the Listing Agreement

is given below.

I.I.I.I.I. Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors

The composition of the Board is in total conformity with

Clause 49 of the Listing Agreement, as amended from

time to time. The Company has a Non – Executive Chairman

and the number of Non-Executive Independent Directors

is more than one-half of the total number of Directors.

The Board reviews and approves strategy and oversees

the results of management to ensure that the

long term objectives of enhancing stakeholders’ value

are met.

The Vice-Chairman & Managing Director and the two

Executive Directors are Whole-time Directors. The Chairman

who is a Non-Executive Chairman and the Vice-Chairman

& Managing Director, though professional Directors in their

individual capacities, belong to the Company’s promoter

group. The remaining Non-Executive Directors (including

the Nominee Director) are Independent Directors, and have

the requisite qualifications and experience in general

corporate management, finance, banking, insurance and

other allied fields which enable them to contribute

effectively to the Company in their capacity as Independent

Director.

Apart from reimbursement of expenses incurred in the

discharge of their duties, the remuneration that these

Directors would be entitled to under the Companies Act,

1956 as Non-Executive Directors and the remuneration that

a Director may receive for professional services rendered to

the Company through a firm in which he is a partner, none

of these Directors has any other material pecuniary

relationships or transactions with the Company, its Promoters,

its Directors, its Senior Management or its Subsidiaries and

Associates which in their judgment would affect their

independence. None of the Directors of the Company are

inter-se related to each other.

Khaitan & Co., Advocates & Solicitors, in which Mr. R. K.

Kulkarni, Non-Executive Director is a partner, received

professional fees of Rs.121.13 lakhs.

The Senior Management have made disclosures to the

Board confirming that there are no material, financial and/

or commercial transactions between them and the

Company which could have potential conflict of interest

with the Company at large.

38

AAAAA..... Composition of the BoardComposition of the BoardComposition of the BoardComposition of the BoardComposition of the Board

Currently, the Board comprises of twelve Directors. The

names and categories of Directors, the number of

Directorships and Committee positions held by them in

the companies are given below. None of the Directors on

the Board is a Member on more than 10 Committees and

Chairman of more than 5 Committees (as specified in Clause

49 of the Listing Agreement), across all the companies in

which he is a Director:

DirectorsDirectorsDirectorsDirectorsDirectors CategoryCategoryCategoryCategoryCategory TTTTTotal Number of Committee Memberships,otal Number of Committee Memberships,otal Number of Committee Memberships,otal Number of Committee Memberships,otal Number of Committee Memberships,Chairmanships and Directorships of publicChairmanships and Directorships of publicChairmanships and Directorships of publicChairmanships and Directorships of publicChairmanships and Directorships of public

companies* as on 31companies* as on 31companies* as on 31companies* as on 31companies* as on 31ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008

CommitteeCommitteeCommitteeCommitteeCommittee CommitteeCommitteeCommitteeCommitteeCommittee Directorships $Directorships $Directorships $Directorships $Directorships $Memberships+Memberships+Memberships+Memberships+Memberships+ Chairmanships+Chairmanships+Chairmanships+Chairmanships+Chairmanships+

NON-EXECUTIVE:NON-EXECUTIVE:NON-EXECUTIVE:NON-EXECUTIVE:NON-EXECUTIVE:

Mr. Keshub Mahindra Promoter 1 1 7(Chairman)

Mr. Deepak S. Parekh Independent 7 5 12

Mr. N. B. Godrej Independent 4 2 13

Mr. M. M. Murugappan Independent 6 4 9

Mr. Narayanan Vaghul Independent 3 1 11

Dr. A. S. Ganguly Independent 1 - 5

Mr. R. K. Kulkarni Independent 7 2 7

Mr. Anupam Puri Independent 1 1 4

Mr. Thomas Mathew T. Independent - - 5

EXECUTIVE:EXECUTIVE:EXECUTIVE:EXECUTIVE:EXECUTIVE:

Mr. Anand G. Mahindra Promoter 1 - 13(Vice-Chairman &Managing Director)

Mr. Bharat Doshi Non-independent 4 2 12(Executive Director)

Mr. A. K. Nanda Non-independent 7 4 15(Executive Director)

***** Excludes private limited companies, foreign companies, companies registered under section 25 of the CompaniesAct, 1956 and government bodies.

+ Committees considered are Audit Committee and Shareholders/Investors Grievance Committee, including that ofMahindra & Mahindra Limited.

$ Excludes Alternate Directorships but includes Additional Directorships and Directorship in Mahindra & MahindraLimited.

39


B.B.B.B.B. Board ProcedureBoard ProcedureBoard ProcedureBoard ProcedureBoard Procedure

A detailed Agenda folder is sent to each Director in advance

of Board and Committee Meetings. To enable the Board to

discharge its responsibilities effectively, the Vice-Chairman

& Managing Director apprises the Board at every Meeting

of the overall performance of the Company, followed by

presentations by the Sector Presidents. A detailed functional

report is also placed at Board Meetings. The Board also

inter alia reviews strategy and business plans, annual

operating and capital expenditure budgets, investment and

exposure limits, compliance reports of all laws applicable

to the Company, as well as steps taken by the

Company to rectify instances of non-compliances, review

of major legal issues, minutes of the Board Meetings of

your Company’s unlisted subsidiary companies, significant

transactions and arrangements entered into by the unlisted

subsidiary companies, adoption of quarterly/half-yearly/

annual results, significant labour issues, transactions

pertaining to purchase/ disposal of property(ies), major

accounting provisions and write-offs, corporate

restructuring, Minutes of Meetings of the Audit and other

Committees of the Board, and information on recruitment

of Officers just below the Board level, including the

Company Secretary and Compliance Officer.

C.C.C.C.C. Number of Board Meetings, Attendance of theNumber of Board Meetings, Attendance of theNumber of Board Meetings, Attendance of theNumber of Board Meetings, Attendance of theNumber of Board Meetings, Attendance of theDirectors at Meetings of the Board and at theDirectors at Meetings of the Board and at theDirectors at Meetings of the Board and at theDirectors at Meetings of the Board and at theDirectors at Meetings of the Board and at theAnnual General Meeting (AGM)Annual General Meeting (AGM)Annual General Meeting (AGM)Annual General Meeting (AGM)Annual General Meeting (AGM)

Six Board Meetings were held during the year 1st April,

2007 to 31st March, 2008 on the following dates – 20th

April, 2007, 28th May, 2007, 30th July, 2007, 29th October,

2007, 30th January, 2008 and 28th March, 2008. The gap

between two Meetings did not exceed four months. These

Meetings were well attended.

The Sixty-first Annual General Meeting (AGM) of the

Company was held on 30th July, 2007.

The attendance of the Directors at these Meetings is as

under:

DirectorsDirectorsDirectorsDirectorsDirectors Number of BoardNumber of BoardNumber of BoardNumber of BoardNumber of Board Attendance at theAttendance at theAttendance at theAttendance at theAttendance at theMeetings AttendedMeetings AttendedMeetings AttendedMeetings AttendedMeetings Attended AGMAGMAGMAGMAGM

Mr. Keshub Mahindra 6 Yes

Mr. Anand G. Mahindra 6 Yes

Mr. Deepak S. Parekh 4 Yes

Mr. N. B. Godrej 5 Yes

Mr. M. M. Murugappan 5 Yes

Mr. Bharat Doshi 6 Yes

Mr. A. K. Nanda 6 Yes

Mr. Narayanan Vaghul 5 Yes

Dr. A. S. Ganguly 6 Yes

Mr. R. K. Kulkarni 6 Yes

Mr. Anupam Puri 4 Yes

Mr. Thomas Mathew T. 4 No

40

D.D.D.D.D. Directors seeking appointment/re-appointmentDirectors seeking appointment/re-appointmentDirectors seeking appointment/re-appointmentDirectors seeking appointment/re-appointmentDirectors seeking appointment/re-appointment

Mr. Anand G. Mahindra, Mr. A. K. Nanda, Mr. Nadir B.

Godrej and Mr. M. M. Murugappan retire by rotation and,

being eligible, have offered themselves for re-appointment.

MrMrMrMrMr. Anand G. Mahindra. Anand G. Mahindra. Anand G. Mahindra. Anand G. Mahindra. Anand G. Mahindra

Mr. Anand G. Mahindra is Vice-Chairman & Managing

Director of Mahindra & Mahindra Limited. After graduating

from Harvard College and earning an MBA degree from

the Harvard Business School, he returned to India and

joined Mahindra Ugine Steel Company Limited (MUSCO),

the country’s foremost producer of specialty steel, as

Executive Assistant to the Finance Director. He rose to

become President and Deputy Managing Director of

MUSCO in 1989. During his stint at MUSCO, he initiated

the Mahindra Group’s diversification into the new business

areas of real estate development and hospitality

management. In 1991, he was appointed Deputy Managing

Director of Mahindra & Mahindra Limited, the flagship

Company of the Mahindra Group, and the country’s

dominant producer of off-road vehicles and agricultural

tractors. In April, 1997 he was appointed Managing

Director of Mahindra & Mahindra Limited and in January,

2001 given the additional responsibility of Vice-Chairman.

His focus in Mahindra & Mahindra Limited has been to

drive a comprehensive change programme that has

transformed the Company and the Group into an efficient

and aggressive competitor in the new liberalised economic

environment in India.

Mr. Anand Mahindra is a Past President of the

Confederation of Indian Industry, and of the Automotive

Research Association of India (ARAI). He is also on the

Board of the National Stock Exchange of India Limited.

Mr. Anand Mahindra is the Co-Chairman of the

International Council of the Asia Society, New York, and a

Member of the 2nd India Advisory Panel of International

Enterprise Singapore. He is a Member of the Board of

Dean’s Advisors of Harvard Business School, and also serves

on the Advisory Committee of the Harvard University Asia

Centre. Mr. Mahindra takes a keen interest in education in

India and is on the Governing Board of several educational

institutions.

Mr. Anand Mahindra is the recipient of numerous national

and international awards, including the ‘Knight of the Order

of Merit’ by the President of the French Republic, the Rajiv

Gandhi Award for outstanding contribution in the business

field, the 2005 Leadership Award from the American India

Foundation, Person of the Year 2005 by Auto Monitor,

CNBC Asia Business Leader Award for the year 2006, The

Most Inspiring Corporate Leader of the Year 2007 by NDTV

Profit, and Business Man of the Year 2007 from Business

India.

Mr. Anand Mahindra is Chairman of Bristlecone Limited;

Cayman Islands, Mahindra Forgings Limited, Mahindra

International Limited, Mahindra Lifespace Developers

Limited, Mahindra Sona Limited, Mahindra (China) Tractor

Company Limited, Tech Mahindra Limited, Tech Mahindra

(Americas) Inc., Mahindra & Mahindra Financial Services

Limited and Vice-Chairman of Mahindra Ugine Steel

Company Limited. He is also Director of Angular

Constructions Private Limited, Avion Aerosols Private

Limited, FirstChoice Wheels Limited, Kotak Mahindra Bank

Limited, Mahindra Holdings Limited, Mahindra Holdings &

Finance Limited, MW.Com India Private Limited, M.A.R.K.

Hotels Private Limited, Prana Holdings Inc. and Tech

Mahindra Foundation.

41


Mr. Anand G. Mahindra is a Member of the following Board Committees:

SrSrSrSrSr. No.. No.. No.. No.. No. Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Name of CommitteeName of CommitteeName of CommitteeName of CommitteeName of Committee PPPPPosition heldosition heldosition heldosition heldosition held

1. Mahindra & Mahindra Limited Share Transfer & Shareholders/Investors MemberGrievance Committee

2. Mahindra & Mahindra Limited Research & Development Committee Member

3. Mahindra & Mahindra Limited Loans & Investment Committee Member

4. Mahindra Ugine Steel Company Limited Remuneration Committee Member

5. Mahindra & Mahindra Financial Remuneration Committee MemberServices Limited

6. Kotak Mahindra Bank Limited Compensation Committee Member

7. Mahindra International Limited Remuneration Committee Chairman

8. Mahindra Forgings Limited Remuneration Committee Member

Mr. Anand Mahindra holds 4,000 Ordinary (Equity) Shares

in the Company.

MrMrMrMrMr. A. A. A. A. A. K. Nanda. K. Nanda. K. Nanda. K. Nanda. K. Nanda

Mr. Arun Nanda holds a Degree in Law from the University

of Calcutta and is a fellow member of the Institute of

Chartered Accountants of India (FCA) and the Institute of

Company Secretaries of India (FCS). Mr. Nanda has also

participated in a Senior Executive Programme at the London

Business School. He joined the Group in 1973. He has

held several important positions within the Group and

was also the Company Secretary of the Company from

1987 to 2006. He joined the Board in August, 1992 and is

currently the Executive Director and President, Infrastructure

Development Sector which includes areas such as property

development, construction, leisure and lifetime holidays,

infrastructure privatization projects and engineering

consultancy. He has played a pioneering role in building

Mahindra World Cities.

As a Board Member of Mahindra & Mahindra Limited (US $

6 Billion Group), Mr. Nanda shoulders multiple responsibilities

at corporate level – including Compliances, Corporate

Governance, Investments, Strategic Planning, identifying new

business opportunities and Corporate Communications.

In addition, he is also the Chairman Emeritus of the Indo-

French Chamber of Commerce, a member of the governing

Board of the council of EU Chambers of Commerce in

India and a member of the governing board of Bombay

First. He is the Chairman of “CII National Committee on

Water” since 2006-07.

Very recently he has been awarded with “Chevalier de la

Legion d’Honneur” (Knight of the Legion of Honour) by

the President of the French Republic, Mr. Nicolas Sarkozy.

Mr. A. K. Nanda is Chairman of Mahindra Construction

Company Limited, Mahindra Consulting Engineers Limited,

Mahindra Holidays & Resorts India Limited, Mahindra

Infrastructure Developers Limited, Mahindra Technology Park

Limited, Owens Corning (India) Limited and Vice-Chairman

of Mahindra Lifespace Developers Limited and Mahindra

World City Developers Limited. He is also Director of ABN

AMRO Asset Management (India) Limited, Mahindra (China)

Tractor Company Limited, Mahindra Holdings Limited,

Mahindra Holdings & Finance Limited, Mahindra Holidays

and Resorts (USA) Inc., MHR Hotel Management GmbH,

Mahindra World City (Jaipur) Limited, Mahindra World City

(Maharashtra) Limited and Mahindra Water Utilities Limited.

42

Mr. A. K. Nanda is a Member of the following Board Committees:


1. Mahindra & Mahindra Limited Share Transfer & Shareholders/ MemberInvestors Grievance Committee

2. Mahindra & Mahindra Limited Loans & Investment Committee Member

3. Mahindra & Mahindra Limited Mahindra & Mahindra Employees’ TrusteeStock Option Trust

4. Mahindra & Mahindra Limited M&M Superannuation Scheme Trustee

5. Mahindra & Mahindra Limited Corporate Social Responsibility Committee Member

6. Mahindra & Mahindra Limited Mahindra World School Education Trust, TrusteeChennai

7. Mahindra Holdings & Finance Limited Audit Committee Chairman

8. Mahindra Holidays & Resorts India Limited Remuneration Committee Member

9. Mahindra Holidays & Resorts India Limited Employees Stock Option Trust Trustee

10. Owens Corning (India) Limited Audit Committee Chairman

11. ABN AMRO Asset Management (India) Limited Remuneration Committee Member

12. ABN AMRO Asset Management (India) Limited Audit Committee Chairman

13. Mahindra Construction Company Limited Remuneration Committee Member

14. Mahindra Lifespace Developers Limited Inverstors’ Grievance and Shareholders’ ChairmanCommittee

15. Mahindra Lifespace Developers Limited Loans & Investment Committee Chairman

16. Mahindra Lifespace Developers Limited Remuneration Committee Member

17. Mahindra Lifespace Developers Limited Capital Issue Committee Chairman

18. Mahindra Lifespace Developers Limited Employees’ Stock Option Trust Trustee

19. Mahindra Infrastructure Developers Limited Audit Committee Member

20. Mahindra World City (Jaipur) Limited Audit Committee Member

21. Mahindra World City (Jaipur) Limited Capital Issue Committee Member

22. Mahindra World City (Jaipur) Limited Land Lease Committee Member

23. Mahindra World City (Jaipur) Limited Loans & Investment Committee Member

24. Mahindra World City (Jaipur) Limited Remuneration Committee Chairman

25. Mahindra World City (Maharashtra) Limited Capital Issue Committee Member

26. Mahindra Consulting Engineers Limited Mahindra Consulting Engineers Employees TrusteeWelfare Trust

Mr. A. K. Nanda holds 1,91,198 Ordinary (Equity) Shares in the Company.

43


MrMrMrMrMr. Nadir B. Godrej. Nadir B. Godrej. Nadir B. Godrej. Nadir B. Godrej. Nadir B. Godrej

Mr. N. B. Godrej joined the Board in 1992. He holds a Master

of Science degree in chemical engineering from Stanford

University and an MBA from Harvard Business School. He has

been a Director of several Godrej companies since 1977 and

has developed the animal feed, agricultural inputs and

chemicals businesses of Godrej Industries and other associated

companies, and has been very active in research. Besides his

professional assignments, Mr. Godrej was the former President

of Oil Technologists’ Association of India, Indo-French Technical

Association and the Compound Livestock Feed Manufacturers

Association of India. He is currently the President of the Alliance

Francaise de Bombay. Mr. Godrej is the Chairman of Godrej

Agrovet Limited, Goldmohur Foods & Feeds Limited, Godrej

Mr. N. B. Godrej is a Member of the following Board Committees:


1. Godrej Consumer Products Limited Shareholders’ Committee Chairman

2. Godrej Global Solutions Limited Audit Committee Chairman

3. Godrej Sara Lee Limited Audit Committee Member

4. Mahindra & Mahindra Limited Audit Committee Member


6. Mahindra & Mahindra Limited Remuneration/Compensation Committee Member

Global Solutions Limited, Poultry Processors’ Association

of India and the Managing Director of Godrej Industries

Limited. He is spearheading the Business Process Outsourcing

initiative of the Godrej Group.

Mr. Nadir B. Godrej is also Director of ACI Godrej Agrovet

Private Limited; Bangladesh, Avestha Gengraine

Technologies Limited, CBay Systems Holdings Limited,

Compass BPO Limited, Godrej & Boyce Mfg. Co. Limited,

Godrej Consumer Products Limited, Godrej Global Mid East

FZE, Godrej Gold Coin Aquafeed Limited, Godrej

International Limited, Godrej Properties Limited, Godrej

Sara Lee Limited, KarROX Technologies Limited, Keyline

Brands Limited, Rapidol (Pty) Limited, Tata Teleservices

(Maharashtra) Limited and Boston Analytic LLC.

Mr. N. B. Godrej holds 1,16,782 Ordinary (Equity) Shares

in the Company.

MrMrMrMrMr. M. M. Murugappan. M. M. Murugappan. M. M. Murugappan. M. M. Murugappan. M. M. Murugappan

Mr. Murugappan has been a Director of the Company

since August, 1992. He holds a Bachelor of Technology

degree in Chemical Engineering from the University of

Madras and has a Master of Science in Chemical

Engineering from the University of Michigan. He is a

member of the Supervisory Board of the Murugappa Group

of companies. He is the Chairman of Carborundum

Universal Limited, CUMI America Inc.; USA, CUMI

Canada Inc., CUMI Middle East FZE, Murugappa

Morgan Thermal Ceramics Limited, MEL Systems & Services

Limited, Net Access (India) Private Limited, Sterling

Abrasives Limited, Tube Investments of India Limited and

Wendt India Limited. Apart from his many interests in

business, Mr. Murugappan takes a keen interest in the

development of various citizenship initiatives, particularly

44

in education and health care. He serves on the Board of

Governors of IIT Madras.

Mr. M. M. Muruggapan is also Director of A M M Medical

Foundation, BorgWarner Morse TEC Murugappa Private

Mr. M. M. Murugappan is a Member of the following Board Committees:


1. Carborundum Universal Limited Share Transfer, Finance & Investors’ Grievance ChairmanCommittee

2. Wendt India Limited Shareholders/Investors Grievance Committee Chairman

3. Tube Investments of India Limited Audit Committee Member

4. Tube Investments of India Limited Inverstors’ Grievance Committee Chairman

5. Infotech Enterprises Limited Audit Committee Chairman

6. Mahindra & Mahindra Limited Audit Committee Member

7. Mahindra & Mahindra Limited Remuneration/Compensation Committee Member


Limited, iDea Lab (India) Private Limited, Infotech Enterprises

Limited, Jingri-CUMI Super Hard Materials Company

Limited; China, M M Muthiah Research Foundation, New

Ambadi Estates Private Limited and Volzhsky Abrasive

Works; Russia.

Mr. M. M. Murugappan holds 43,332 Ordinary (Equity)

Shares in the Company.

EEEEE. Codes of ConductCodes of ConductCodes of ConductCodes of ConductCodes of Conduct

The Board has laid down two separate Codes of Conduct

(Codes), one for Board Members and other for Senior

Management and Employees of the Company. These

Codes have been posted on the Company’s website

http://wwwhttp://wwwhttp://wwwhttp://wwwhttp://www.mahindra.com.mahindra.com.mahindra.com.mahindra.com.mahindra.com. All Board Members and Senior

Management Personnel have affirmed compliance with these

Codes. A declaration signed by the Vice-Chairman & Managing

Director to this effect is enclosed at the end of this Report.

FFFFF..... CEO/CFO CertificationCEO/CFO CertificationCEO/CFO CertificationCEO/CFO CertificationCEO/CFO Certification

As required under Clause 49 V of the Listing Agreement

with the Stock Exchanges, the Vice-Chairman & Managing

Director and the Group Chief Financial Officer of the

Company have certified to the Board regarding the Financial

Statements for the year ended 31st March, 2008.

II.II.II.II.II. Remuneration to DirectorsRemuneration to DirectorsRemuneration to DirectorsRemuneration to DirectorsRemuneration to DirectorsAAAAA..... Remuneration PRemuneration PRemuneration PRemuneration PRemuneration Policyolicyolicyolicyolicy

While deciding on the remuneration for Directors,the Board, Remuneration/Compensation Committee(Committee) considers the performance of the Company,the current trends in the industry, the qualification of theappointee(s), their experience, past performance and otherrelevant factors. The Board / Committee regularly keepstrack of the market trends in terms of compensation levelsand practices in relevant industries through participationin structured surveys. This information is used to reviewthe Company’s remuneration policies.

B.B.B.B.B. Remuneration to Non-Executive Directors for theRemuneration to Non-Executive Directors for theRemuneration to Non-Executive Directors for theRemuneration to Non-Executive Directors for theRemuneration to Non-Executive Directors for theyear ended 31year ended 31year ended 31year ended 31year ended 31ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008

The eligible Non-Executive Directors are paid commissionupto a maximum of 1% of the net profits of the Companyas specifically computed for this purpose. A commission ofRs. 1.20 crores has been provided as payable to the eligibleNon-Executive Directors in the accounts of the year under

review.

45


During the year under review, the Non-Executive Directors

were paid a commission of Rs.96 lakhs (provided in the

accounts for the year ended 31st March, 2007), distributed

amongst the Directors as under:

(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)

DirectorsDirectorsDirectorsDirectorsDirectors Commission for the year endedCommission for the year endedCommission for the year endedCommission for the year endedCommission for the year ended3131313131ststststst March, 2007, paid during March, 2007, paid during March, 2007, paid during March, 2007, paid during March, 2007, paid during

the year under reviewthe year under reviewthe year under reviewthe year under reviewthe year under review

Mr. Keshub Mahindra 32.00

Mr. Deepak S. Parekh 8.00

Mr. N. B. Godrej 8.00

Mr. M. M. Murugappan 8.00

Mr. Narayanan Vaghul 8.00

Dr. A. S. Ganguly 8.00

Mr. R. K. Kulkarni 8.00

Mr. Anupam Puri 8.00

Mr. Thomas Mathew T. (Nominee of LIC) 8.00#

# The Commission is paid to the Nominating Financial Institution.

Non-Executive Directors are also paid a sitting fee of Rs. 10,000 for every Meeting of the Board or Committee attended. The

sitting fees paid to Non-Executive Directors for the year ended 31st March, 2008 alongwith their shareholdings are as under:

DirectorsDirectorsDirectorsDirectorsDirectors Sitting FSitting FSitting FSitting FSitting Fees for the Boardees for the Boardees for the Boardees for the Boardees for the Board No. of Ordinary (Equity)No. of Ordinary (Equity)No. of Ordinary (Equity)No. of Ordinary (Equity)No. of Ordinary (Equity)and Committee Meetingsand Committee Meetingsand Committee Meetingsand Committee Meetingsand Committee Meetings Shares held as onShares held as onShares held as onShares held as onShares held as on

paid during the yearpaid during the yearpaid during the yearpaid during the yearpaid during the year 3131313131ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008ended 31ended 31ended 31ended 31ended 31ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008

(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)(Rs. in Lakhs)

Mr. Keshub Mahindra 1.10 2,01,148

Mr. Deepak S. Parekh 1.10 49,422

Mr. N. B. Godrej 1.70 1,16,782

Mr. M. M. Murugappan 1.40 43,332

Mr. Narayanan Vaghul 0.80 43,332

Dr. A. S. Ganguly 0.90 43,332

Mr. R. K. Kulkarni 1.80 42,120

Mr. Anupam Puri 0.40 40,000

Mr. Thomas Mathew T. (Nominee of LIC) 0.40* Nil

* Sitting Fees for Board Meetings were paid to LIC.

1,60,000 Stock Options granted to Non-Executive Directors

under the Company’s Stock Option Scheme on 6th December,

2001 have been fully exercised by them. 35,000 Stock Options

granted in June, 2005 to the Non-Executive Directors which

have vested in June, 2006 can be exercised in three tranches

over a period of five years from the date of vesting at an

Original Exercise Price of Rs.454 per share. The Options granted

stand augmented by an equal number of Options and the

Exercise Price stands reduced to half on account of the 1:1

Bonus Issue made in September, 2005. Details of the Options

granted to each of the Directors are given in the Statement

attached to Annexure I to the Directors’ Report.

46

C.C.C.C.C. Remuneration paid/payable to Managing/Executive Director(s) (Whole-time Directors) for the year endedRemuneration paid/payable to Managing/Executive Director(s) (Whole-time Directors) for the year endedRemuneration paid/payable to Managing/Executive Director(s) (Whole-time Directors) for the year endedRemuneration paid/payable to Managing/Executive Director(s) (Whole-time Directors) for the year endedRemuneration paid/payable to Managing/Executive Director(s) (Whole-time Directors) for the year ended3131313131ststststst March, 2008 March, 2008 March, 2008 March, 2008 March, 2008

Remuneration to Whole-time Directors is fixed by the Remuneration / Compensation Committee which is subsequently

approved by the Board of Directors and Shareholders at a General Meeting.

Following is the remuneration paid/payable to the Whole-time Directors during the year ended 31st March, 2008:

(Rs. In lakhs)(Rs. In lakhs)(Rs. In lakhs)(Rs. In lakhs)(Rs. In lakhs)

DirectorsDirectorsDirectorsDirectorsDirectors SalarySalarySalarySalarySalary Comm-Comm-Comm-Comm-Comm- Company’sCompany’sCompany’sCompany’sCompany’s PPPPPerquisiteserquisiteserquisiteserquisiteserquisites TTTTTotalotalotalotalotal ContractContractContractContractContract No. ofNo. ofNo. ofNo. ofNo. of No. ofNo. ofNo. ofNo. ofNo. of No. ofNo. ofNo. ofNo. ofNo. ofissionissionissionissionission Contribu-Contribu-Contribu-Contribu-Contribu- andandandandand PPPPPerioderioderioderioderiod OptionsOptionsOptionsOptionsOptions OptionsOptionsOptionsOptionsOptions OptionsOptionsOptionsOptionsOptions

tion totion totion totion totion to allowancesallowancesallowancesallowancesallowances grantedgrantedgrantedgrantedgranted granted ingranted ingranted ingranted ingranted in grantedgrantedgrantedgrantedgrantedFFFFFunds*unds*unds*unds*unds* in June, in June, in June, in June, in June, SeptemberSeptemberSeptemberSeptemberSeptember,,,,, in Julyin Julyin Julyin Julyin July,,,,,

20052005200520052005$ 20062006200620062006 $$ 20072007200720072007$$$

Mr. Anand G. Mahindra 60.73 107.19 16.40 44.13 228.45 4th April, Nil Nil Nil(Vice-Chairman & 2007 toManaging Director) 3rd April,

2012

Mr. Bharat Doshi 54.85 68.66 14.81 19.27 157.59 28th August, 10,000 11,345 8,362(Executive Director) 2007 to

27th August,2012

Mr. A. K. Nanda 54.85 68.66 14.81 20.01 158.33 28th August, 10,000 11,345 8,362(Executive Director) 2007 to

27th August,2012

* Aggregate of the Company’s contributions to Superannuation Fund, Provident Fund, Gratuity and Privilege Leave Encashment.$ These Options which vested in June, 2006 in each of the Executive Directors can be exercised in three tranches over a period of five

years from the date of vesting at an Original Exercise Price of Rs. 454 per share. The Options granted stand augmented by an equalnumber of Options and the Exercise Price stands reduced to half on account of the 1:1 Bonus Issue made in September, 2005.

$$ These Options would vest in four equal instalments in September, 2007, September, 2008, September, 2009 and September,2010 respectively. These Options can be exercised within five years from the date of vesting of the Options at an Exercise Priceof Rs. 616 per share.

$$$ These Options would vest in four equal instalments in July, 2008, July, 2009, July, 2010 and July, 2011 respectively. TheseOptions can be exercised within five years from the date of vesting of the Options at an Exercise Price of Rs. 762 per share.

Details of the Options granted including discount are given in the Statement attached to Annexure I to the Directors’ Report.Notes:Notes:Notes:Notes:Notes:a) Notice period applicable to each of the Whole-time Directors – six months.b) Employee Stock Option and Commission are the only components of remuneration that are performance-linked. All other

components are fixed.

III.III.III.III.III. Risk ManagementRisk ManagementRisk ManagementRisk ManagementRisk Management

Your Company has a well-defined risk management

framework in place. The risk management framework

adopted by the Company is discussed in detail in the

Management Discussion and Analysis Chapter of

this Annual Report. Your Company has established

procedures to periodically place before the Board, the risk

assessment and minimisation procedures being followed

by the Company and steps taken by it to mitigate

these risks.

47


IVIVIVIVIV..... Committees of the BoardCommittees of the BoardCommittees of the BoardCommittees of the BoardCommittees of the Board

AAAAA..... Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit Committee

This Committee comprises solely of Independent Directors

viz. Mr. Deepak S. Parekh (Chairman of the Committee),

Mr. R. K. Kulkarni, Mr. N. B. Godrej and Mr. M. M.

Murugappan. All the Members of the Committee possess

strong accounting and financial management

knowledge. The Company Secretary is the Secretary to the

Committee.

The terms of reference of this Committee are very wide.

Besides having access to all the required information from

within the Company, the Committee can obtain external

professional advice whenever required. The Committee acts

as a link between the Statutory and the Internal Auditors

and the Board of Directors of the Company. It is authorised

to select and establish accounting policies, review reports

of the Statutory and the Internal Auditors and meet with

them to discuss their findings, suggestions and other related

matters. The Committee is empowered to inter alia review

the remuneration payable to the Statutory Auditors and to

recommend a change in Auditors, if felt necessary. It is

also empowered to review Financial Statements and

investments of unlisted subsidiary companies, Management

Discussion & Analysis, Material individual transactions with

related parties not in normal course of business or which

are not on an arm’s length basis. Generally all items listed

in Clause 49 II (D) of the Listing Agreement are covered in

the terms of reference. The Audit Committee has been

granted powers as prescribed under Clause 49 II (C).

The Meetings of the Audit Committee are also attended

by the Vice-Chairman & Managing Director, the

Executive Directors of the Company, the President-Finance,

Legal and Financial Services Sector, the Statutory Auditors,

Chief Internal Auditor and the Company Secretary. The

Chairman of the Audit Committee, Mr. Deepak S. Parekh

was present at the 61st Annual General Meeting of the

Company held on 30th July, 2007.

The Committee met six times during the year under review

and the gap between two Meetings did not exceed four

months. Members of the Committee attended all the

Meetings. The attendance of the Meetings is as under:

MembersMembersMembersMembersMembers Number ofNumber ofNumber ofNumber ofNumber of

Meetings attendedMeetings attendedMeetings attendedMeetings attendedMeetings attended

Mr. Deepak S. Parekh (Chairman) 6

Mr. R. K. Kulkarni 6

Mr. N. B. Godrej 6

Mr. M. M. Murugappan 6

B.B.B.B.B. Remuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation CommitteeRemuneration/Compensation Committee

The role of the Remuneration/Compensation Committee is

to review market practices and to decide on remuneration

packages applicable to the Vice-Chairman & Managing

Director, the Executive Directors and Senior Executives of

the Company. During the course of its review, the

Committee also decides on the commission of the Directors

and/or other incentives payable, taking into account the

individual’s performance as well as that of the Company.

The Committee has formulated and administers the

Mahindra & Mahindra Limited Employees’ Stock Option

Scheme and also attends to such other matters as may be

prescribed from time to time.

Mr. N. Vaghul is the Chairman of the Committee.

Mr. Keshub Mahindra, Mr. N. B. Godrej and Mr. M. M.

Murugappan are the other Members of the Committee.

The Committee met three times during the year under

review. The attendance at the Meetings is as under:

MembersMembersMembersMembersMembers Number ofNumber ofNumber ofNumber ofNumber of

Meetings attendedMeetings attendedMeetings attendedMeetings attendedMeetings attended

Mr. N. Vaghul (Chairman) 3

Mr. Keshub Mahindra 3

Mr. N. B. Godrej 3

Mr. M. M. Murugappan 3

48

C.C.C.C.C. Share TShare TShare TShare TShare Transfer and Shareholders/Investorsransfer and Shareholders/Investorsransfer and Shareholders/Investorsransfer and Shareholders/Investorsransfer and Shareholders/InvestorsGrievance CommitteeGrievance CommitteeGrievance CommitteeGrievance CommitteeGrievance Committee

The Company’s Share Transfer and Shareholders/Investors

Grievance Committee functions under the Chairmanship

of Mr. Keshub Mahindra, Chairman of the Board and a

Non-Executive Director. Mr. Anand G. Mahindra, Mr. R. K.

Kulkarni, Mr. Bharat Doshi and Mr. A. K. Nanda are also

on the Committee. Mr. Narayan Shankar, Company

Secretary, is the Compliance Officer of the Company.

The Committee meets as and when required, to inter alia

deal with matters relating to transfer of shares and monitor

redressal of complaints from shareholders relating to

transfers, non-receipt of balance-sheet, non-receipt of

dividends declared, etc. With a view to expediting the process

of share transfers, Mr. A. K. Nanda, Executive Director as

well as Mr. Narayan Shankar, Company Secretary of

the Company are severally authorised to approve

transfers of not more than 5,000 Ordinary (Equity) Shares

per transfer.

The Committee met two times during the year. Both the

Meetings were attended by all its Members.

During the year, 31 complaints were received from the

Shareholders, all of which have been attended to/resolved

to date.

As of date, there are no pending share transfers pertaining

to the year under review.

D.D.D.D.D. Research & Development CommitteeResearch & Development CommitteeResearch & Development CommitteeResearch & Development CommitteeResearch & Development Committee(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)

The Research & Development (R&D) Committee, which was

constituted by the Board in 1998, provides direction on

the R&D mission and strategy and key R&D and technology

issues. The Committee also reviews and makes

recommendations on skills and competencies required and

the structure and the process needed to ensure that the

R&D initiatives result in products that are in keeping with

the business needs.

Dr. A. S. Ganguly is the Chairman of the Committee. Mr.

Anand G. Mahindra, Mr. N. B. Godrej, Mr. Bharat Doshi

and Mr. M. M. Murugappan are the other Members of the

Committee.

The Committee held three Meetings during the year under

review, which were well attended.

E.E.E.E.E. Loans & Investment CommitteeLoans & Investment CommitteeLoans & Investment CommitteeLoans & Investment CommitteeLoans & Investment Committee(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)(a voluntary initiative of the Company)

The Committee approves of the making of loans and

investment, disinvestment, borrowing moneys and related

aspects of fund management in accordance with the

Guidelines prescribed by the Board. Mr. Keshub Mahindra

is the Chairman of the Committee. Mr. Anand G. Mahindra,

Mr. R. K. Kulkarni, Mr. Bharat Doshi and Mr. A. K. Nanda,

are the other Members of the Committee.

VVVVV..... Subsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary Companies

The Clause 49 defines a “material non-listed Indian

subsidiary” as an unlisted subsidiary, incorporated in India,

whose turnover or net worth (i.e. paid-up capital and free

reserves) exceeds 20% of the consolidated turnover or net

worth respectively, of the listed holding company and its

subsidiaries in the immediately preceding accounting year.

Under this definition, the Company did not have any

“material non-listed Indian subsidiary” during the year under

review.

VI.VI.VI.VI.VI. DisclosuresDisclosuresDisclosuresDisclosuresDisclosures

AAAAA..... Disclosure of transactions with Related PDisclosure of transactions with Related PDisclosure of transactions with Related PDisclosure of transactions with Related PDisclosure of transactions with Related Partiesartiesartiesartiesarties

During the financial year 2007-08, there were no materially

significant transactions entered into between the Company

and its promoters, Directors or the management, subsidiaries

or relatives, etc. that may have potential conflict with the

interests of the Company at large. Further details of related

party transactions are presented in note number “29” in

Schedule XIV to Annual Accounts of the Annual Report.

49


B.B.B.B.B. Disclosure of Accounting TDisclosure of Accounting TDisclosure of Accounting TDisclosure of Accounting TDisclosure of Accounting Treatment in Preparationreatment in Preparationreatment in Preparationreatment in Preparationreatment in Preparationof Financial Statementsof Financial Statementsof Financial Statementsof Financial Statementsof Financial Statements

The Company has followed the Accounting Standards laid

down by The Companies (Accounting Standards) Rules,

2006 in preparation of its financial statements.

C.C.C.C.C. Code for Prevention of Insider TCode for Prevention of Insider TCode for Prevention of Insider TCode for Prevention of Insider TCode for Prevention of Insider Trading Practicesrading Practicesrading Practicesrading Practicesrading Practices

The Company has instituted a comprehensive Code of

Conduct for prevention of Insider Trading for its designated

employees, in compliance with Securities and Exchange

Board of India (Prohibition of Insider Trading) Regulation,

1992. The Code lays down Guidelines, which advises them

on procedures to be followed and disclosures to be made,

while dealing with shares of the Company, and cautioning

them of the consequences of violations.

VII.VII.VII.VII.VII.Shareholder InformationShareholder InformationShareholder InformationShareholder InformationShareholder Information

1.1.1.1.1. 6262626262ndndndndnd Annual General Meeting Annual General Meeting Annual General Meeting Annual General Meeting Annual General Meeting

Date : 30th July, 2008

Time : 3:30 p.m.

Venue : Birla Matushri Sabhagar,

19, Sir Vithaldas

Thackersey Marg

(New Marine Lines),

Mumbai - 400 020.

2.2.2.2.2. Dates of Book Closure/Record DateDates of Book Closure/Record DateDates of Book Closure/Record DateDates of Book Closure/Record DateDates of Book Closure/Record Date

Dates of Book Closure for Dividend will be from

5th July, 2008 to 30th July, 2008, both days inclusive.

3.3.3.3.3. Date of Dividend PDate of Dividend PDate of Dividend PDate of Dividend PDate of Dividend Paymentaymentaymentaymentayment

Date of payment of Dividend would be on or after

30th July, 2008.

4.4.4.4.4. Financial YFinancial YFinancial YFinancial YFinancial Year of the Companyear of the Companyear of the Companyear of the Companyear of the Company

The financial year covers the period from 1st April to

31st March.

Financial Reporting for:Financial Reporting for:Financial Reporting for:Financial Reporting for:Financial Reporting for:

Quarter ending

30th June, 2008 - End July, 2008

Half-year ending

30th September, 2008 - End October, 2008

Quarter ending

31st December, 2008 - End January, 2009

Year ending

31st March, 2009 - End May, 2009

NoteNoteNoteNoteNote: The above dates are indicative.

5.5.5.5.5. Registered OfficeRegistered OfficeRegistered OfficeRegistered OfficeRegistered OfficeMahindra & Mahindra Limited

Gateway Building,

Apollo Bunder,

Mumbai - 400 001.

6.6.6.6.6. Listing of Ordinary (Equity) Shares and DebenturesListing of Ordinary (Equity) Shares and DebenturesListing of Ordinary (Equity) Shares and DebenturesListing of Ordinary (Equity) Shares and DebenturesListing of Ordinary (Equity) Shares and Debentureson Stock Exchangeson Stock Exchangeson Stock Exchangeson Stock Exchangeson Stock Exchanges

The Company’s Shares are listed on Bombay Stock

Exchange Limited (BSE) and National Stock Exchange

of India Limited (NSE). The Global Depositary Receipts

(GDRs) of the Company are listed on the Luxembourg

Stock Exchange. The US $ 200 million Zero Coupon

Foreign Currency Convertible Bonds (FCCBs) due for

redemption in 2011 are listed at Singapore Exchange

Securities Trading Limited. The requisite listing

fees have been paid in full to all these Stock Exchanges.

The Company has paid the requisite listing fees in full

to NSE in respect of the Non-convertible Debentures of

the Company which are listed.

7.7.7.7.7. Stock CodeStock CodeStock CodeStock CodeStock Code

1. Bombay Stock Exchange Limited (BSE) : 500520

2. National Stock Exchange of India Limited (NSE): M&M

3. Demat International Security Identification Number

(ISIN) in NSDL and CDSL for Equity Shares -

INE101A01018

50

8.8.8.8.8. Stock PStock PStock PStock PStock Performanceerformanceerformanceerformanceerformance

The performance of the Company’s shares relative to the BSE Sensitive Index is given in the chart below:

The performance of the Company’s shares relative to the NSE Sensitive Index (S&P CNX Nifty Index) is given in the chartbelow:

0

100

200

300

400

500

600

700

800

900

1000

Mar-08

Feb-08

Jan-08

Dec-07

Nov-07

Oct-07

Sep-07

Aug-07

Jul-07

Jun-07

May-07

Apr-07

0

5000

10000

15000

20000

25000

Closing Price on Last Trading day of the Month

M&M on BSEBSE Index

M&

M o

n B

SE

BSE

Ind

ex

0

100

200

300

400

500

600

700

800

900

1000

Mar-08

Feb-08

Jan-08

Dec-07

Nov-07

Oct-07

Sep-07

Aug-07

Jul-07

Jun-07

May-07

Apr-07

0

1000

2000

3000

4000

5000

6000

7000

Closing Price on Last Trading day of the Month

M&M on NSENSE Index

M&

M o

n N

SE

NSE

Ind

ex

51


9.9.9.9.9. Stock Price Data:Stock Price Data:Stock Price Data:Stock Price Data:Stock Price Data:

Equity SharesEquity SharesEquity SharesEquity SharesEquity Shares GDRsGDRsGDRsGDRsGDRs

Bombay StockBombay StockBombay StockBombay StockBombay Stock National StockNational StockNational StockNational StockNational Stock Luxembourg StockLuxembourg StockLuxembourg StockLuxembourg StockLuxembourg StockExchange LimitedExchange LimitedExchange LimitedExchange LimitedExchange Limited Exchange of India LimitedExchange of India LimitedExchange of India LimitedExchange of India LimitedExchange of India Limited Exchange*Exchange*Exchange*Exchange*Exchange*

HighHighHighHighHigh LowLowLowLowLow HighHighHighHighHigh LowLowLowLowLow HighHighHighHighHigh LowLowLowLowLow Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.Rs.Rs.Rs.Rs. Rs.Rs.Rs.Rs.Rs. US $US $US $US $US $ US $US $US $US $US $

April, 2007 781.00 703.00 780.00 703.00 18.71 16.56

May, 2007 802.00 711.00 803.00 709.00 19.31 17.46

June, 2007 784.00 678.50 782.70 679.50 18.97 16.72

July, 2007 838.00 715.00 838.70 701.25 20.50 18.01

August, 2007 725.05 608.00 730.20 591.65 17.43 15.22

September, 2007 807.95 685.10 809.70 690.45 19.74 17.05

October, 2007 857.00 701.00 857.00 700.00 21.32 18.22

November, 2007 785.00 688.00 821.00 684.00 22.00 17.89

December, 2007 867.80 733.00 869.50 730.00 21.92 19.30

January, 2008 872.00 543.00 873.90 525.00 21.97 15.37

February, 2008 703.10 574.00 706.00 555.55 17.58 14.62

March, 2008 721.00 612.00 724.00 612.05 17.31 15.31

* Based on closing prices.

10.10.10.10.10. Registrar and TRegistrar and TRegistrar and TRegistrar and TRegistrar and Transfer Agentsransfer Agentsransfer Agentsransfer Agentsransfer AgentsSharepro Services (India) Private LimitedUnit: Mahindra & Mahindra LimitedSatam Estate, 3rd Floor,Above Bank of Baroda,Cardinal Gracious Road,Chakala, Andheri (East),Mumbai - 400 099.Telephone No.: +91-22-67720300Fax: +91-22-28375646email: [email protected]

The Registrar and Transfer Agents also have an office at:912, Raheja Centre,Free Press Journal Road,Nariman Point,Mumbai - 400 021.Telephone No.: +91-22-66134700Fax: +91-22-22825484

52

11.11.11.11.11. Share TShare TShare TShare TShare Transfer Systemransfer Systemransfer Systemransfer Systemransfer System

Trading in Ordinary (Equity) Shares of the Company through

recognized Stock Exchanges is permitted only in

dematerialised form.

Shares sent for transfer in physical form are registered and

returned within a period of thirty days from the date of

receipt of the documents, provided the documents are

valid and complete in all respects. With a view to expediting

the process of share transfers, Mr. A. K. Nanda, Executive

Director as well as Mr. Narayan Shankar, Company Secretary

of the Company are severally authorised to approve the

transfers of not more than 5,000 Equity Shares per transfer.

The Share Transfer and Shareholders/Investors Grievance

Committee meets as and when required to consider the

other transfer proposals and attend to shareholder

grievances.

12.12.12.12.12. Distribution of shareholding as on 31Distribution of shareholding as on 31Distribution of shareholding as on 31Distribution of shareholding as on 31Distribution of shareholding as on 31ststststst March, 2008: March, 2008: March, 2008: March, 2008: March, 2008:

Number of Shares heldNumber of Shares heldNumber of Shares heldNumber of Shares heldNumber of Shares held Number ofNumber ofNumber ofNumber ofNumber of Number ofNumber ofNumber ofNumber ofNumber of % of% of% of% of% ofShareholdersShareholdersShareholdersShareholdersShareholders Shares heldShares heldShares heldShares heldShares held ShareholdingShareholdingShareholdingShareholdingShareholding

1 to 500 1,29,946 85,75,677 3.49

501 to 1000 4,966 36,64,589 1.49

1001 to 5000 4,091 83,63,547 3.40

5001 to 10000 429 29,66,703 1.21

10001 and above 610 22,21,71,297 90.41

TTTTTotalotalotalotalotal 1,40,0421,40,0421,40,0421,40,0421,40,042 24,57,41,81324,57,41,81324,57,41,81324,57,41,81324,57,41,813 100.00100.00100.00100.00100.00

Shareholding PShareholding PShareholding PShareholding PShareholding Patternatternatternatternattern as on 31as on 31as on 31as on 31as on 31ststststst March, 2008: March, 2008: March, 2008: March, 2008: March, 2008:

SrSrSrSrSr. No.. No.. No.. No.. No. Category of ShareholdersCategory of ShareholdersCategory of ShareholdersCategory of ShareholdersCategory of Shareholders TTTTTotal Holdingsotal Holdingsotal Holdingsotal Holdingsotal Holdings PPPPPercentageercentageercentageercentageercentage

1. Promoters and Promoter Group 5,55,90,917 22.62

2. Mutual Funds 1,27,06,111 5.17

3. Banks, Financial Institutions, Insurance Companies, 5,23,15,085 21.29State Government

4. FIIs/FFIs/FCs/Foreign Bodies* 6,27,01,359 25.52

5. Private Corporate Bodies 1,59,25,273 6.48

6. Indian Public 2,53,07,730 10.30

7. NRIs/OCBs 19,22,946 0.78

8. Bank of New York (for GDR holders) 1,92,72,392 7.84

Grand TGrand TGrand TGrand TGrand Totalotalotalotalotal 24,57,41,81324,57,41,81324,57,41,81324,57,41,81324,57,41,813 100.00100.00100.00100.00100.00

***** FIIs/FFIs/FCs/Foreign Bodies does not include shareholding aggregating 117.50 lakhs Shares representing 4.78%of the paid-up share capital of the Company held by a FII as the same is included under the category ofPromoters and Promoter Group.

53


13.13.13.13.13. Dematerialisation of SharesDematerialisation of SharesDematerialisation of SharesDematerialisation of SharesDematerialisation of Shares

98.01% of the paid-up Equity Share Capital is held indematerialised form with National Securities DepositoryLimited and Central Depository Services (India) Limited ason 31st March, 2008. The market lot of the share is oneshare, as the trading in the Equity Shares of the Companyis permitted only in dematerialised form. Non-Promoters’holding is 77.38% and the stock is highly liquid.

14.14.14.14.14. Outstanding GDRs / ADRs / WOutstanding GDRs / ADRs / WOutstanding GDRs / ADRs / WOutstanding GDRs / ADRs / WOutstanding GDRs / ADRs / Warrants or anyarrants or anyarrants or anyarrants or anyarrants or anyConvertible Instruments, Conversion date and likelyConvertible Instruments, Conversion date and likelyConvertible Instruments, Conversion date and likelyConvertible Instruments, Conversion date and likelyConvertible Instruments, Conversion date and likelyimpact on equityimpact on equityimpact on equityimpact on equityimpact on equity

1,92,72,392 GDRs were outstanding as at 31st March, 2008.Since the underlying Ordinary (Equity) Shares representedby GDRs have been allotted in full, the outstanding GDRshave no impact on the Equity of the Company.

1,00,000 Zero Coupon Convertible Bonds (due 2009) ofUS $ 1000 each (FCCBs) aggregating US$ 100 millionissued in May, 2004, were at the option of the Bondholdersconvertible into around 68,61,911 Equity Shares/GDRs (eachGDR representing one Equity Share of the Company) at aninitial conversion price of Rs.647.05 per Share at any timebetween 7th June, 2004 and 8th April, 2009. Consequentto the issue of Bonus Equity Shares by the Company in theratio of 1:1 in September, 2005, the initial conversionprice of Rs.647.05 per Share was adjusted to Rs.323.52per Share with effect from 3rd September, 2005 resultinginto an increase in the number of Equity Shares underlyingFCCBs to around 1,37,24,035.

During the year, FCCBs aggregating US$ 27,00,000 wereconverted into 3,70,548 Equity Shares/GDRs. As at 31st

March, 2008, all the FCCBs amounting to US$ 100 million(due 2009) have been fully converted into Equity Shares/GDRs (each GDR representing one Equity Share of theCompany).

2000 Zero Coupon Convertible Bonds (due 2011) of US$1,00,000 each aggregating US$ 200 million issued in April,2006, may at the option of the Bondholder, be convertedinto around 96,35,156 Equity Shares/GDRs at an initialconversion price of Rs.922.04 at any time between 7th

May, 2006 and 7th March, 2011. Till date, no conversionof any Bonds has taken place.

15.15.15.15.15. Plant LocationsPlant LocationsPlant LocationsPlant LocationsPlant Locations

The Company’s manufacturing facilities are located atKandivali, Nashik, Igatpuri, Nagpur, Zaheerabad, Jaipur,Rudrapur, Haridwar and Pune.

16.16.16.16.16. Address for correspondenceAddress for correspondenceAddress for correspondenceAddress for correspondenceAddress for correspondence

Shareholders may correspond with the Registrar andTransfer Agents at:

Sharepro Services (India) Private LimitedUnit: Mahindra & Mahindra LimitedSatam Estate, 3rd Floor,Above Bank of Baroda,Cardinal Gracious Road,Chakala, Andheri (East),Mumbai - 400 099.Telephone No.: +91-22-67720300Fax: +91-22-28375646email: [email protected]

on all matters relating to transfer/dematerialisation ofshares, payment of dividend and any other query relatingto Equity Shares or Debentures of the Company.

The Company has also designated [email protected] an exclusive email ID for Shareholders for the purposeof registering complaints and the same has been displayedon the Company’s website.

Shareholders would have to correspond with the respectiveDepositary Participants for Shares held in demateralisedform.

For all investor related matters, the Company Secretary &Compliance Officer can be contacted at:

Mahindra Towers,5th Floor, Dr. G. M. Bhosale Marg,Worli, Mumbai - 400 018.Telephone Nos.: +91-22-24905624, +91-22-24975074Fax: +91-22-24900833email: [email protected] [email protected]

The Company can also be visited at its website:::::http://wwwhttp://wwwhttp://wwwhttp://wwwhttp://www.mahindra.com.mahindra.com.mahindra.com.mahindra.com.mahindra.com

54

VIII. OTHER DISCLVIII. OTHER DISCLVIII. OTHER DISCLVIII. OTHER DISCLVIII. OTHER DISCLOSURESOSURESOSURESOSURESOSURES

1.1.1.1.1. Details of General Meetings and Special Resolutions passedDetails of General Meetings and Special Resolutions passedDetails of General Meetings and Special Resolutions passedDetails of General Meetings and Special Resolutions passedDetails of General Meetings and Special Resolutions passed

Annual General Meetings held during the past 3 years and the Special Resolutions passed therein:

YYYYYearearearearear DateDateDateDateDate TimeTimeTimeTimeTime Special Resolutions passedSpecial Resolutions passedSpecial Resolutions passedSpecial Resolutions passedSpecial Resolutions passed

2005 28th July, 2005 3.30 p.m. 1. Payment of Commission to Non-Wholetime Directors including Non-Resident Directors.

2. Revision in the remuneration payable to Mr. Anand G. Mahindra, Vice-Chairman & Managing Director and the two Executive Directors of theCompany viz. Mr. Bharat Doshi and Mr. A. K. Nanda.

3. Approval for commencement of new businesses of the Company.

4. Approval for increase in limit for holdings by FIIs from 35% to 49% ofthe paid-up Equity Share Capital of the Company.

5. Alteration of Article 3 in the Articles of Association of the Company.

2006 26th July, 2006 3.30 p.m. No Special Resolution was passed at the AGM.

2007 30th July, 2007 3.30 p.m. 1. Re-appointment of Mr. Anand G. Mahindra, Vice-Chairman & ManagingDirector for a period of 5 years w.e.f. 4th April, 2007.

2. Re-appointment of two Executive Directors of the Company viz.Mr. Bharat Doshi and Mr. A. K. Nanda for a period of 5 years w.e.f.28th August, 2007 respectively.

3. Alteration of Article 3 of the Articles of Association of the Company.

4. Authority to the Board to recover from Eligible Employees, the fringebenefit tax in respect of Options which are granted to or vested orexercised by the Eligible Employees on or after the 1st day of April, 2007.

Extraordinary General Meetings held during the past 3 years:

YYYYYearearearearear DateDateDateDateDate TimeTimeTimeTimeTime Special Resolution passedSpecial Resolution passedSpecial Resolution passedSpecial Resolution passedSpecial Resolution passed

2007 20th April, 2007 11.00 a.m. Making investments, etc. in excess of the limits prescribed under section372A of the Companies Act, 1956 upto an amount of Rs. 1500 crores.

All the Meetings were held at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg (New Marine Lines), Mumbai -400 020.

Subsequent to the year end, a Court Convened Meeting of the Equity Shareholders was held to pass the followingResolution:

YYYYYearearearearear DateDateDateDateDate TimeTimeTimeTimeTime Resolution passedResolution passedResolution passedResolution passedResolution passed

2008 12th April, 2008 3.30 p.m. Approving the arrangement embodied in the Scheme of Amalgamation ofMahindra Holdings & Finance Limited with Mahindra and Mahindra Limitedand their respective Shareholders.

55


The Meeting was held at Y. B. Chavan Centre, General Jagannathrao Bhosale Marg, Next to Sachivalaya Gymkhana,

Mumbai - 400 021.

Details of Special Resolutions passed through PDetails of Special Resolutions passed through PDetails of Special Resolutions passed through PDetails of Special Resolutions passed through PDetails of Special Resolutions passed through Postal Ballots:ostal Ballots:ostal Ballots:ostal Ballots:ostal Ballots:

Date of BoardDate of BoardDate of BoardDate of BoardDate of Board DescriptionDescriptionDescriptionDescriptionDescription % of V% of V% of V% of V% of Votes inotes inotes inotes inotes in Scrutinizer forScrutinizer forScrutinizer forScrutinizer forScrutinizer for

MeetingMeetingMeetingMeetingMeeting favour of thefavour of thefavour of thefavour of thefavour of the conducting theconducting theconducting theconducting theconducting the

Special ResolutionSpecial ResolutionSpecial ResolutionSpecial ResolutionSpecial Resolution PPPPPostal Ballotostal Ballotostal Ballotostal Ballotostal Ballot

20th April, 2007 1. Authorising the Board to offer, issue and

allot Securities and/or QIP Securities as

specified in the Postal Ballot Notice dated

27th April, 2007.

2. Authorising the Board to make loan(s),

and/or give guarantee(s), and/or provide

security(ies) in excess of the limits

prescribed under section 372A of the

Companies Act, 1956 upto an amount of

Rs.1,500 crores as specified in the Postal

Ballot Notice dated 27th April, 2007.

28th May, 2007 Authorising the Board to make loan(s) and/or

give guarantee(s) and/or provide security(ies)

and/or make investment(s) in excess of the

limits prescribed under section 372A of the

Companies Act, 1956 upto an amount of

Rs.2,000 crores as specified in the Postal Ballot

Notice dated 8th June, 2007.

Subsequent to the year end, the Board of Directors, have proposed the following Special Resolution to be passed through

Postal Ballot.

Date of BoardDate of BoardDate of BoardDate of BoardDate of Board DescriptionDescriptionDescriptionDescriptionDescription Last Date of ReceivingLast Date of ReceivingLast Date of ReceivingLast Date of ReceivingLast Date of Receiving Date of DeclarationDate of DeclarationDate of DeclarationDate of DeclarationDate of Declaration

MeetingMeetingMeetingMeetingMeeting PPPPPostal Ballot Fostal Ballot Fostal Ballot Fostal Ballot Fostal Ballot Formsormsormsormsorms of Resultof Resultof Resultof Resultof Result

3rd May, 2008 Authorising the Board to create, offer, issue

and allot 93,95,974, 9.25% Unsecured Fully

& Compulsorily Convertible Debentures to

Golboot Holdings Limited on terms as specified

in the Postal Ballot Notice dated 3rd May, 2008.

93.41% Dr. S. D. Israni,

Practising Company

Secretary, Mumbai

93.25%

92.28% Dr. S. D. Israni,

Practising Company

Secretary, Mumbai

7th June, 2008 11th June, 2008

56

Dr. S. D. Israni, Practising Company Secretary, Mumbai

has been appointed as a Scrutinizer for conducting

the above Postal Ballot in a fair and transparent manner.

The procedure for Postal Ballot is as per section 192A

of the Companies Act, 1956 and Rules made

thereunder namely Companies (Passing of the

Resolution by Postal Ballot) Rules, 2001.

2.2.2.2.2. Details of non-compliance etc.Details of non-compliance etc.Details of non-compliance etc.Details of non-compliance etc.Details of non-compliance etc.

The Company has complied with all the requirements

of regulatory authorities. During the last three years,

there were no instances of non-compliance by the

Company and no penalty or strictures were imposed

on the Company by the Stock Exchanges or SEBI or

any statutory authority, on any matter related to the

capital markets.

3.3.3.3.3. Means of CommunicationMeans of CommunicationMeans of CommunicationMeans of CommunicationMeans of Communication

The quarterly, half-yearly and yearly results are published

in Business Standard and Sakal which are national and

local dailies. These are not sent individually to the

Shareholders. The Company’s results and official news

releases are displayed on the Company’s website

http://wwwhttp://wwwhttp://wwwhttp://wwwhttp://www.mahindra.com.mahindra.com.mahindra.com.mahindra.com.mahindra.com

Presentations are also made to international and

national institutional investors and analysts, which are

regularly put up on the website of the Company.

The Company was regularly posting information

relating to its financial results and shareholding pattern

on the SEBI EDIFAR website at www.sebiedifar.nic.in.

Thereafter, it is being filed on Corporate Filing and

Dissemination System (CDFS) viz. www.corpfiling.co.in,

the common platform launched by BSE and NSE for

electronic filing by listed companies.

4.4.4.4.4. The Management Discussion and Analysis ReportThe Management Discussion and Analysis ReportThe Management Discussion and Analysis ReportThe Management Discussion and Analysis ReportThe Management Discussion and Analysis Report

The Management Discussion and Analysis Report

(MDA) has been attached to the Directors’ Report and

forms part of this Annual Report.

5.5.5.5.5. Compliance with Mandatory requirementsCompliance with Mandatory requirementsCompliance with Mandatory requirementsCompliance with Mandatory requirementsCompliance with Mandatory requirements

The Company has complied with all the mandatory

requirements of Clause 49 of the Listing Agreement

relating to Corporate Governance.

6.6.6.6.6. Compliance with Non-mandatory requirementsCompliance with Non-mandatory requirementsCompliance with Non-mandatory requirementsCompliance with Non-mandatory requirementsCompliance with Non-mandatory requirements

a.a.a.a.a. Office of the ChairmanOffice of the ChairmanOffice of the ChairmanOffice of the ChairmanOffice of the Chairman

The Company has provided the Chairman (Non-

Executive) with a full-fledged office, the expenses

of which are borne by the Company. The Chairman

is reimbursed all expenses incurred in the

performance of his duties.

b.b.b.b.b. Remuneration CommitteeRemuneration CommitteeRemuneration CommitteeRemuneration CommitteeRemuneration Committee

The Company has set up the Remuneration/

Compensation Committee long before the mandate

of Clause 49 of Listing Agreement.

c.c.c.c.c. Audit QualificationsAudit QualificationsAudit QualificationsAudit QualificationsAudit Qualifications

During the period under review, there is no audit

qualification in the Company’s financial statements.

The Company continues to adopt best practices to

ensure regime of unqualified financial statements.

The Company has not adopted the other non-

mandatory requirements as specified in Annexure ID

of the Clause 49.

Mumbai, 28th May, 2008.

57


CERTIFICACERTIFICACERTIFICACERTIFICACERTIFICATETETETETE

TTTTTooooo

The Members of Mahindra & Mahindra Limited.The Members of Mahindra & Mahindra Limited.The Members of Mahindra & Mahindra Limited.The Members of Mahindra & Mahindra Limited.The Members of Mahindra & Mahindra Limited.

We have examined the compliance of conditions of Corporate Governance by Mahindra & Mahindra Limited, for the year

ended on 31st March, 2008, as stipulated in Clause 49 of the Listing Agreement of the said company with stock

exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was

limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions

of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the

company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the

company has complied with the conditions of the Corporate Governance as stipulated in the above mentioned Listing

Agreement.

We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or

effectiveness with which the management has conducted the affairs of the company.

For Deloitte Haskins & Sells

Chartered Accountants

B. PB. PB. PB. PB. P. Shroff. Shroff. Shroff. Shroff. Shroff

(Partner)

Membership Number: 34382


DECLARADECLARADECLARADECLARADECLARATION BTION BTION BTION BTION BY THE MANAGING DIRECTOR UNDER CLAY THE MANAGING DIRECTOR UNDER CLAY THE MANAGING DIRECTOR UNDER CLAY THE MANAGING DIRECTOR UNDER CLAY THE MANAGING DIRECTOR UNDER CLAUSE 49USE 49USE 49USE 49USE 49OF THE LISTING AGREEMENTOF THE LISTING AGREEMENTOF THE LISTING AGREEMENTOF THE LISTING AGREEMENTOF THE LISTING AGREEMENT

TTTTTooooo

The Members of Mahindra & Mahindra LimitedThe Members of Mahindra & Mahindra LimitedThe Members of Mahindra & Mahindra LimitedThe Members of Mahindra & Mahindra LimitedThe Members of Mahindra & Mahindra Limited

I, Anand G. Mahindra, Vice-Chairman & Managing Director of Mahindra & Mahindra Limited declare that all the

Members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Codes of

Conduct for the year ended 31st March, 2008.

Anand G. MahindraAnand G. MahindraAnand G. MahindraAnand G. MahindraAnand G. Mahindra

Vice-Chairman & Managing Director


58

Financial PFinancial PFinancial PFinancial PFinancial Position at a Glanceosition at a Glanceosition at a Glanceosition at a Glanceosition at a Glance(Rupees crores)

20082008200820082008 20072007200720072007 20062006200620062006 20052005200520052005 20042004200420042004 20032003200320032003 20022002200220022002 20012001200120012001 20002000200020002000 19991999199919991999

Gross Fixed Assets 4203 3510 3065 2810 2559 2489 2417 2231 1859 1615

Net Fixed Assets 2361 1871 1555 1475 1391 1466 1537 1483 1232 1099

Investments 4215 2238 1669 1190 1111 862 800 710 823 810

Inventories 1084 878 879 760 500 457 469 553 515 437

Debtors 1005 701 638 512 400 517 648 632 462 592

Other Current Assets 1566 2169 1232 1028 625 640 616 529 684 804

Misc. Expenditure not written off 14 18 18 24 10 40 - 224 155 97

BorrowingsLong-term 2187 1558 837 941 652 1072 1192 791 845 1335

Short-term 400 78 46 111 78 68 185 344 109 132

Current Liabilities and Provisions 3251 2666 2052 1760 1329 1095 1051 927 900 870

Deferred Tax Liability (Net) 57 20 147 190 203 177 138 - - -

Equity Capital 239 238 233 112 116 116 116 111 110 103

Reserves 4111 3315 2676 1875 1659 1454 1388 1958 1907 1399

Net Worth 4350 3553 2909 1987 1775 1570 1504 2069 2017 1502

Book Value Per Share (Rupees) 180.87 147.98 *123.29 174.46 150.89 130.56 128.26 165.50 166.90 134.14

***** Book value per share is shown after giving effect to a 1:1 bonus issue in September, 2005

Book value per share is calculated after reducing Miscellaneous Expenditure not written off and Revaluation Reserve from Net

worth.

59


Summary of OperationsSummary of OperationsSummary of OperationsSummary of OperationsSummary of Operations(Rupees crores)

20082008200820082008 20072007200720072007 20062006200620062006 20052005200520052005 20042004200420042004 20032003200320032003 20022002200220022002 20012001200120012001 20002000200020002000 19991999199919991999

Income @Income @Income @Income @Income @ 1323813238132381323813238 1155811558115581155811558 94519451945194519451 78047804780478047804 60016001600160016001 45974597459745974597 39973997399739973997 43534353435343534353 44094409440944094409 41674167416741674167

MaterialsDirect 7726 6828 5714 4603 3353 2500 2117 2359 2210 2227

Indirect 89 79 68 60 43 39 32 49 46 43

Excise Duty (Net) 1584 1335 1136 1055 955 785 677 755 773 654

Personnel 861 666 553 465 421 385 375 401 397 377

Interest (Net) @ 24 (67) (18) (6) 52 87 83 62 75 94

Depreciation (Net) 239 209 200 184 165 165 139 140 123 112

Other Expenses 1,473 1,192 909 743 603 496 476 443 426 372

Exceptional items (165) (122) (210) (14) (29) (57) 17 15 13 8

Extra-ordinary items - - - - - - - - (4) -

Profit before tax for the yearProfit before tax for the yearProfit before tax for the yearProfit before tax for the yearProfit before tax for the year 1,4071,4071,4071,4071,407 1,4381,4381,4381,4381,438 10991099109910991099 714714714714714 438438438438438 197197197197197 8181818181 129129129129129 350350350350350 280280280280280

Tax for the year - Current 279 366 285 215 63 12 3 8 87 52

Deferred Tax Liability/(Asset) 25 (15) (43) (14) 26 39 (25) - - -

Adj. pertaining to Prev. Years - 19 - - - - 6 - - 2

Balance profit 1,103 1,068 857 513 349 146 97 121 263 226

DividendsDividendsDividendsDividendsDividends #+321#+321#+321#+321#+321 +115+115+115+115+115 +278+278+278+278+278 +172+172+172+172+172 +118+118+118+118+118 + 72+ 72+ 72+ 72+ 72 5656565656 +67+67+67+67+67 +67+67+67+67+67 +63+63+63+63+63

Equity Dividend (%) #115.00 115.00 100.00 130.00 90.00 55.00 50.00 55.00 55.00 55.00

Earnings per Share (Rupees) *Earnings per Share (Rupees) *Earnings per Share (Rupees) *Earnings per Share (Rupees) *Earnings per Share (Rupees) * 46.2446.2446.2446.2446.24 45.1545.1545.1545.1545.15 38.0738.0738.0738.0738.07 23.0423.0423.0423.0423.04 15.0215.0215.0215.0215.02 6.286.286.286.286.28 4.314.314.314.314.31 5.465.465.465.465.46 11.9311.9311.9311.9311.93 10.9310.9310.9310.9310.93

Vehicles produced ** (Units) 196956 169557 148213 148025 117670 87088 66256 63146 76983 70639

Vehicles sold ** (Units) 195077 169679 147591 145024 117399 86890 65338 62927 76437 70548

Tractors produced (Units) 98917 103847 87075 67115 50102 45183 54524 80261 73222 66211

Tractors sold (Units) 99042 102531 85029 65390 49576 47028 58006 79237 70571 69362

@ Interest income netted off ininterest expense 63 87 45 36 25 29 33 51 67 58

# Proposed Dividend.+ Including Income Tax on Proposed Dividend/Dividends.** Including CKD packs.

60

Financial HighlightsFinancial HighlightsFinancial HighlightsFinancial HighlightsFinancial Highlights

PPPPPAAAAAT and Net Income (Rupees Crores)T and Net Income (Rupees Crores)T and Net Income (Rupees Crores)T and Net Income (Rupees Crores)T and Net Income (Rupees Crores) Earnings PEarnings PEarnings PEarnings PEarnings Per Shares (Rs.)er Shares (Rs.)er Shares (Rs.)er Shares (Rs.)er Shares (Rs.)

Net Segmental Revenue FNet Segmental Revenue FNet Segmental Revenue FNet Segmental Revenue FNet Segmental Revenue F-2008-2008-2008-2008-2008 Debt Equity RatioDebt Equity RatioDebt Equity RatioDebt Equity RatioDebt Equity Ratio

Automotive62%

FarmEquipment

35%

Others3%

0

10

20

30

40

50

FY 2008FY 2007FY 2006FY 2005FY 2004

23.04

15.02

38.07

45.1546.24

EPS (

Rs.

)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

FY 2008FY 2007FY 2006FY 2005FY 2004

0.42

0.53

0.31

0.46

0.60

Perc

en

tag

e

Net In

co

me

PA

T

0

2000

4000

6000

8000

10000

12000

Net Income

0

250

500

750

1000

1250

1500

Profit After Tax

FY 2008FY 2007FY 2006FY 2005FY 2004

5057

6769

8327

10221

11672

349

513

857

1068

1103

MAHINDRA & MAHINDRA LIMITEDMAHINDRA & MAHINDRA LIMITED

61

ACCOUNTSACCOUNTSACCOUNTSACCOUNTSACCOUNTS

62

1. We have audited the attached balance sheet of Mahindra &Mahindra Limited as at 31st March, 2008, the profit andloss account and also the cash flow statement for the yearended on that date annexed thereto. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditor’s Report) Order, 2003(hereinafter referred to as ‘the Order’) issued by the CentralGovernment of India in terms of sub-section (4A) of Section227 of the Companies Act, 1956, we enclose in theAnnexure, a statement on the matters specified in paragraphs4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that:

i. we have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purposes of our audit;

ii. in our opinion, proper books of account as required bylaw have been kept by the company so far as appearsfrom our examination of those books;

iii. the balance sheet and the profit and loss account dealtwith by this report are in agreement with the books ofaccount;

iv. in our opinion, the balance sheet and the profit andloss account dealt with by this report comply with theaccounting standards referred to in sub-section (3C) ofSection 211 of the Companies Act, 1956;

v. in our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by theCompanies Act, 1956, in the manner so required andgive a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) in the case of the balance sheet, of the state ofaffairs of the company as at 31st March, 2008;

(b) in the case of the profit and loss account, of theprofit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cashflows for the year ended on that date.

5. On the basis of the written representations received fromthe directors, as on 31st March, 2008, and taken on recordby the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2008 from beingappointed as a director in terms of clause (g) of sub-section(1) of section 274 of the Companies Act, 1956.

For Deloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & SellsChartered Accountants

B.PB.PB.PB.PB.P. Shroff. Shroff. Shroff. Shroff. Shroff(Partner)

Membership Number: 34382


Auditors’ Report to the members of Mahindra & Mahindra LimitedAuditors’ Report to the members of Mahindra & Mahindra LimitedAuditors’ Report to the members of Mahindra & Mahindra LimitedAuditors’ Report to the members of Mahindra & Mahindra LimitedAuditors’ Report to the members of Mahindra & Mahindra Limited


63

(i) (a) The company is maintaining proper records showingfull particulars, including quantitative details and unitwise situation of fixed assets.

(b) The fixed assets have not been physically verified by themanagement during the year but the company has asystem of verifying the fixed assets once in every threeyears. In our opinion the frequency of verification is atreasonable intervals.

(c) During the year, in our opinion, a substantial part offixed assets has not been disposed off by the company.

(ii) (a) The inventory of the company has been physicallyverified by the management during the year and at orafter the year end. In respect of stocks lying with thirdparties, a substantial portion was physically verified orhas been confirmed by third parties during the year orat the year end. In our opinion the frequency ofverification is reasonable.

(b) In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventory followed by the managementwere found reasonable and adequate in relation to thesize of the company and the nature of its business.

(c) On the basis of our examination of records of inventory,in our opinion, the company has maintained properrecords of inventory and the discrepancies noticed onphysical verification between the physical stocks andthe book records were not material in relation to theoperations of the company.

(iii) According to the information and explanations given to us,the company has neither granted nor taken any loans,secured or unsecured, to or from companies, firms or otherparties covered in the register maintained under Section301 of the Companies Act, 1956 and accordingly paragraphs4 (iii) (b), (c), (d), (f) and (g) of the Companies (Auditor’sReport) Order, 2003, are not applicable.

(iv) In our opinion and according to the information andexplanations given to us, having regard to the explanationthat many of the items are of a special nature and theirprices cannot be compared with alternative quotations, thereis an adequate internal control system commensurate withthe size of the company and the nature of its business forthe purchase of inventory and fixed assets and for the saleof goods and services. Further, on the basis of ourexamination and according to the information andexplanations given to us, we have neither come across norhave we been informed of any instance of major weaknessesin the aforesaid internal control system.

(v) (a) In our opinion and according to the information andexplanations given to us, the particulars of contracts or

Annexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ ReportAnnexure to the Auditors’ Report

(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Mahindra & Mahindra Limited)(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Mahindra & Mahindra Limited)(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Mahindra & Mahindra Limited)(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Mahindra & Mahindra Limited)(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Mahindra & Mahindra Limited)

arrangements referred to in Section 301 of theCompanies Act, 1956 have been entered in the registerrequired to be maintained under that section.

(b) In our opinion and according to the information andexplanations given to us, having regard to the commentsin (iv) above, the transactions made in pursuance ofsuch contracts or arrangements and exceeding the valueof rupees five lakhs in respect of any party during theyear have been made at prices, which are reasonablehaving regard to the prevailing market prices at therelevant time.

(vi) In our opinion and according to the information andexplanations given to us, the company has complied withthe provisions of Section 58A, 58AA and any other relevantprovisions of the Companies Act, 1956 and the Companies(Acceptance of Deposits) Rules, 1975, as applicable, withregard to the deposits accepted from the public. Accordingto the information and explanations given to us, no orderunder the aforesaid sections has been passed by theCompany Law Board or National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal, onthe company.

(vii) In our opinion, the company has an internal audit systemcommensurate with its size and the nature of its business.

(viii) We have broadly reviewed the books of account maintainedby the company relating to the manufacture of motorvehicles and tractors pursuant to the rules made by theCentral Government for the maintenance of cost recordsunder Section 209 (1) (d) of the Companies Act, 1956 andwe are of the opinion that prima facie the prescribedaccounts and records have been maintained and are beingmade up. We have not, however, made a detailedexamination of the records with a view to determiningwhether they are accurate or complete. To the best of ourknowledge and according to the information given to us,the Central Government has not prescribed the maintenanceof cost records under Section 209 (1) (d) of the CompaniesAct, 1956, for any other products of the company.

(ix) (a) According to the information and explanations givento us and according to the books and records asproduced and examined by us, in our opinion, theundisputed statutory dues including provident fund,investor education and protection fund, employees’ stateinsurance, income-tax, sales-tax, wealth tax, service tax,custom duty, excise duty, cess and other materialstatutory dues as applicable have generally beenregularly deposited by the company during the yearwith the appropriate authorities. According to theinformation and explanations given to us, there are noarrears of statutory dues as mentioned aboveoutstanding as at 31st March, 2008 for a period of

64

more than six months from the date they becamepayable.

(b) As at 31st March, 2008 according to the records of thecompany and the information and explanations given

to us, the following are the particulars of dues onaccount of income-tax, sales-tax, wealth tax, servicetax, customs duty, excise duty and cess matters thathave not been deposited on account of any dispute:

Name of theName of theName of theName of theName of the Nature ofNature ofNature ofNature ofNature of AmountAmountAmountAmountAmount PPPPPeriod to whicheriod to whicheriod to whicheriod to whicheriod to which FFFFForum where pendingorum where pendingorum where pendingorum where pendingorum where pendingstatutestatutestatutestatutestatute the duesthe duesthe duesthe duesthe dues Rs. in croresRs. in croresRs. in croresRs. in croresRs. in crores the amount relatesthe amount relatesthe amount relatesthe amount relatesthe amount relates

various yearsvarious yearsvarious yearsvarious yearsvarious yearscovering the periodcovering the periodcovering the periodcovering the periodcovering the period

Income - Tax Laws Income - Tax 0.81 1998-1999 Appellate Authority – Tribunal level

48.05 1998-2007 Appellate Authority – Commissioner ofIncome-tax (Appeals)

Sales - Tax Laws Sales - Tax 121.89 1985-2003 High Court

0.15 1986-2002 Appellate Authority – Tribunal level

2.80 2007 Appellate Authority – upto Commissioner(Appeals) level

10.76 1988-2005 Appellate Authority – upto Commissionerlevel

Service Tax Laws Service Tax 0.54 2001-2003 Appellate Authority – Tribunal level

0.19 2001-2002 Appellate Authority – upto Commissioner(Appeals) level

Excise Duty Laws Excise Duty 365.84 1987-2007 Appellate Authority – Tribunal level

0.93 1995-2006 Appellate Authority – upto Commissioner(Appeals) level

8.12 2005-2007 Appellate Authority – upto Commissionerlevel

Custom Duty Laws Custom Duty 4.55 1996-2001 Appellate Authority – Tribunal level

Out of the above amounts aggregating Rs. 564.63 crores, Rs.449.44 crores have been stayed for recovery by the relevantauthorities.

(x) The company does not have accumulated losses as at 31st

March, 2008 and has not incurred cash losses during thefinancial year ended on that date and in the immediatelypreceding financial year.

(xi) In our opinion and according to the information andexplanations given to us, the company has not defaultedin repayment of dues to a financial institution, bank ordebenture holders during the year.

(xii) In our opinion and according to the information andexplanations given to us, the company has not granted

any loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified underparagraph 4 (xiii) of the Order are not applicable to thecompany.

(xiv) In our opinion, the company is not dealing in or tradingin shares, securities, debentures and other investments.Accordingly, the provisions of paragraph 4 (xiv) of theOrder are not applicable to the company.

(xv) According to the information and explanations given tous, the company has not given any guarantees for loanstaken by others from banks or financial institutions, the


65

terms and conditions, whereof, in our opinion, areprejudicial to the interest of the company.

(xvi) In our opinion and according to the information andexplanations given to us, the term loans were applied forthe purpose for which the loans were obtained.

(xvii) Based on the information and explanations given to usand on an overall examination of the balance sheet of thecompany, in our opinion, there are no funds raised onshort term basis which have been used for long terminvestments.

(xviii) The company has not made any preferential allotment ofshares to parties and companies covered in the registermaintained under Section 301 of the Companies Act, 1956,during the year.

(xix) According to the information and explanations given tous, the company has created security in respect ofdebentures issued during the year.

(xx) The company has not raised any money by public issueduring the year.

(xxi) During the course of our examination of the books andrecords of the company, carried out in accordance withthe generally accepted auditing practices in India, andaccording to the information and explanations given tous, we have neither come across any instance of significantfraud on or by the company, noticed or reported duringthe year nor have we been informed of such case by themanagement.



Membership Number: 34382Mumbai, 28th May, 2008

66

Per our report attached

For Deloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & SellsDeloitte Haskins & Sells Deepak S. PDeepak S. PDeepak S. PDeepak S. PDeepak S. Parekharekharekharekharekh KKKKKeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindra ChairmanChartered Accountants N. VN. VN. VN. VN. Vaghulaghulaghulaghulaghul

R. K. KR. K. KR. K. KR. K. KR. K. Kulkarniulkarniulkarniulkarniulkarni Anand G. MahindraAnand G. MahindraAnand G. MahindraAnand G. MahindraAnand G. Mahindra Vice Chairman & Managing DirectorAAAAA. S. Ganguly. S. Ganguly. S. Ganguly. S. Ganguly. S. Ganguly Directors

B. PB. PB. PB. PB. P. Shroff. Shroff. Shroff. Shroff. Shroff AAAAA. P. P. P. P. P. Puri. Puri. Puri. Puri. Puri Bharat DoshiBharat DoshiBharat DoshiBharat DoshiBharat DoshiPartner N. B. GodrejN. B. GodrejN. B. GodrejN. B. GodrejN. B. Godrej AAAAA. K. Nanda. K. Nanda. K. Nanda. K. Nanda. K. Nanda Executive Directors

Narayan ShankarNarayan ShankarNarayan ShankarNarayan ShankarNarayan Shankar Company Secretary

Mumbai, 28th May, 2008 Mumbai, 28th May, 2008

} }}}}}

Balance SheetBalance SheetBalance SheetBalance SheetBalance Sheet as at 31st March, 2008as at 31st March, 2008as at 31st March, 2008as at 31st March, 2008as at 31st March, 2008

Rupees crores

ScheduleScheduleScheduleScheduleSchedule 20082008200820082008 2007

I.I.I.I.I. SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SHAREHOLDERS’ FUNDS :Capital ................................................................................. IIIII 239.07239.07239.07239.07239.07 238.03Employee Stock Options Outstanding ................................. 4.004.004.004.004.00 3.18Reserves and Surplus ........................................................... IIIIIIIIII 4,107.004,107.004,107.004,107.004,107.00 3,311.70

4,350.074,350.074,350.074,350.074,350.07 3,552.91LOAN FUNDS : .....................................................................(a) Secured Loans .............................................................. III AIII AIII AIII AIII A 617.26617.26617.26617.26617.26 106.65(b) Unsecured Loans .......................................................... III BIII BIII BIII BIII B 1,969.801,969.801,969.801,969.801,969.80 1,529.35

2,587.062,587.062,587.062,587.062,587.06 1,636.00DEFERRED TAX LIABILITY (Net) ............................................ 56.7256.7256.7256.7256.72 19.79

Total .......... 6,993.856,993.856,993.856,993.856,993.85 5,208.70

II.II.II.II.II. APPLICAAPPLICAAPPLICAAPPLICAAPPLICATION OF FUNDS :TION OF FUNDS :TION OF FUNDS :TION OF FUNDS :TION OF FUNDS :FIXED ASSETS :Gross Block .......................................................................... 3,656.133,656.133,656.133,656.133,656.13 3,229.69Less : Depreciation .............................................................. 1,841.681,841.681,841.681,841.681,841.68 1,639.12

Net Block ............................................................................. IVIVIVIVIV 1,814.451,814.451,814.451,814.451,814.45 1,590.57CAPITAL WORK-IN-PROGRESS .............................................. 546.45546.45546.45546.45546.45 280.60

2,360.902,360.902,360.902,360.902,360.90 1,871.17INVESTMENTS ...................................................................... VVVVV 4,215.064,215.064,215.064,215.064,215.06 2,237.46CURRENT ASSETS, LOANS AND ADVANCES :(a) Inventories .................................................................... VI AVI AVI AVI AVI A 1,084.111,084.111,084.111,084.111,084.11 878.48(b) Sundry Debtors ............................................................ VI BVI BVI BVI BVI B 1,004.881,004.881,004.881,004.881,004.88 700.89(c) Cash and Bank Balances ............................................... VI CVI CVI CVI CVI C 861.23861.23861.23861.23861.23 1,326.07(d) Other Current Assets .................................................... VI DVI DVI DVI DVI D 13.2713.2713.2713.2713.27 3.31(e) Loans and Advances ..................................................... VI EVI EVI EVI EVI E 691.88691.88691.88691.88691.88 839.42

3,655.373,655.373,655.373,655.373,655.37 3,748.17CURRENT LIABILITIES AND PROVISIONS :(a) Current Liabilities .......................................................... VII AVII AVII AVII AVII A 2,307.552,307.552,307.552,307.552,307.55 1,950.22(b) Provisions ..................................................................... VII BVII BVII BVII BVII B 943.46943.46943.46943.46943.46 715.43

3,251.013,251.013,251.013,251.013,251.01 2,665.65NET CURRENT ASSETS ......................................................... 404.36404.36404.36404.36404.36 1,082.52MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOTWRITTEN OFF OR ADJUSTED) .............................................. VIIIVIIIVIIIVIIIVIII 13.5313.5313.5313.5313.53 17.55

Total .......... 6,993.856,993.856,993.856,993.856,993.85 5,208.70

NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS ............................................................... XIVXIVXIVXIVXIV


67

Profit and Loss AccountProfit and Loss AccountProfit and Loss AccountProfit and Loss AccountProfit and Loss Account for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008

Rupees crores


SALESSALESSALESSALESSALES - - - - - Traded and Manufactured Goods [Note 11(a)] .......................................... 12,371.0312,371.0312,371.0312,371.0312,371.03 10,940.50Less :Less :Less :Less :Less : Excise Duty on Sales (Net) ............................................................................. 1,566.391,566.391,566.391,566.391,566.39 1,336.78

Net SalesNet SalesNet SalesNet SalesNet Sales ................................................................................................................. 10,804.64 10,804.64 10,804.64 10,804.64 10,804.64 9,603.72Income from Operations and Other Income ........................................................... IXIXIXIXIX 867.00867.00867.00867.00867.00 617.52

Net IncomeNet IncomeNet IncomeNet IncomeNet Income .............................................................................................................. 11,671.6411,671.6411,671.6411,671.6411,671.64 10,221.24EXPENDITURE :EXPENDITURE :EXPENDITURE :EXPENDITURE :EXPENDITURE :

Raw Materials, Finished and Semi-finished Products ....................................... XXXXX 7,725.917,725.917,725.917,725.917,725.91 6,827.93Excise Duty ....................................................................................................... 18.1818.1818.1818.1818.18 (2.14)Personnel .......................................................................................................... XIXIXIXIXI 852.45852.45852.45852.45852.45 666.15Interest, Commitment and Finance Charges (Net) ........................................... XIIXIIXIIXIIXII 24.2424.2424.2424.2424.24 (67.45)Depreciation/Amortisation [Note 5(d)(i)] .......................................................... 238.66238.66238.66238.66238.66 209.59Other Expenses ................................................................................................. XIIIXIIIXIIIXIIIXIII 1,608.961,608.961,608.961,608.961,608.96 1,318.57

10,468.4010,468.4010,468.4010,468.4010,468.40 8,952.65Less :Less :Less :Less :Less : Cost of Manufactured Products Capitalised .................................................. 46.4946.4946.4946.4946.49 47.10

10,421.9110,421.9110,421.9110,421.9110,421.91 8,905.55Profit before provision for contingencies, exceptional items and taxation .............. 1,249.731,249.731,249.731,249.731,249.73 1,315.69Less :Less :Less :Less :Less : Provision for contingencies [Note 10 (b) & (c)] ............................................. 8.168.168.168.168.16 —

Profit before exceptional items and taxation ........................................................... 1,241.571,241.571,241.571,241.571,241.57 1,315.69Add :Add :Add :Add :Add : Exceptional Items [Note 23] .......................................................................... 165.20165.20165.20165.20165.20 121.99

Profit before taxation .............................................................................................. 1,406.771,406.771,406.771,406.771,406.77 1,437.68Less :Less :Less :Less :Less : Provision for Tax - Current Tax (including Fringe Benefit Tax) .................. 278.75278.75278.75278.75278.75 365.73

- Deferred Tax (Net) [Note 24] ...................................... 24.6524.6524.6524.6524.65 (15.63)

Profit for the year before prior period adjustments ................................................ 1,103.371,103.371,103.371,103.371,103.37 1,087.58Prior Period Adjustment (Net of Tax) : [Note 16] .................................................... ————— 19.19

Profit for the year .................................................................................................... 1,103.371,103.371,103.371,103.371,103.37 1,068.39Balance of Profit for earlier years ............................................................................ 2,125.082,125.082,125.082,125.082,125.08 1,475.75(Less)/Add :(Less)/Add :(Less)/Add :(Less)/Add :(Less)/Add : Transfer (to)/from Debenture Redemption Reserve (Net) ..................... (16.88)(16.88)(16.88)(16.88)(16.88) 15.67

2,108.202,108.202,108.202,108.202,108.20 1,491.42

Total of Profit and Loss Account balances shown above ........................................ 3,211.573,211.573,211.573,211.573,211.57 2,559.81

DeductDeductDeductDeductDeduct ::::: General Reserve ...................................................................................... 115.00115.00115.00115.00115.00 110.00::::: Interim Dividend Paid .............................................................................. ————— 184.03::::: Income Tax on Interim Dividend Paid ..................................................... ————— 25.81::::: Proposed Dividend .................................................................................. 282.61282.61282.61282.61282.61 98.20::::: Income Tax on Proposed Dividend……………… .................................... 38.4838.4838.4838.4838.48 16.69

Balance for 2007-2008 and earlier years carried to Balance Sheet ......................... 2,775.482,775.482,775.482,775.482,775.48 2,125.08

EARNINGS PER SHARE [Note 25] :EARNINGS PER SHARE [Note 25] :EARNINGS PER SHARE [Note 25] :EARNINGS PER SHARE [Note 25] :EARNINGS PER SHARE [Note 25] :(Face value Rs. 10/- per share) (Rupees)

Basic ................................................................................................................. 46.2446.2446.2446.2446.24 45.15Diluted……… ................................................................................................... 41.5241.5241.5241.5241.52 40.94

NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS ............................................................................................ XIVXIVXIVXIVXIV







}}}}}}

68

Cash Flow StatementCash Flow StatementCash Flow StatementCash Flow StatementCash Flow Statement for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008

Rupees crores

20082008200820082008 2007

AAAAA..... CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERATING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :

Net Profit before exceptional items and taxation ................................... 1,241.571,241.571,241.571,241.571,241.57 1,315.69

Adjustments for :

Depreciation/Amortisation ............................................................... 238.66238.66238.66238.66238.66 209.59

(Profit)/Loss on Exchange (Net) ....................................................... (39.90)(39.90)(39.90)(39.90)(39.90) 6.36

Investment and Interest Income ...................................................... (143.60)(143.60)(143.60)(143.60)(143.60) (234.65)

Interest Commitment and Finance charges ..................................... 87.5987.5987.5987.5987.59 19.80

Amortisation of Expenses ................................................................ 2.752.752.752.752.75 2.06

(Profit)/Loss on sale of investments (Net) ........................................ (28.94)(28.94)(28.94)(28.94)(28.94) (5.62)

(Profit)/Loss on fixed assets sold/scrapped/written off (Net) ........... 2.822.822.822.822.82 1.73

Excess of cost over fair value of current investments (Net) ............ (1.74)(1.74)(1.74)(1.74)(1.74) 2.36

Provision for diminution in the value of long term investments .... (5.40)(5.40)(5.40)(5.40)(5.40) —

112.24112.24112.24112.24112.24 1.63

Operating Profit before Working Capital changes .................................. 1,353.811,353.811,353.811,353.811,353.81 1,317.32

Changes in :

Trade and other receivables ............................................................. (450.40)(450.40)(450.40)(450.40)(450.40) (168.17)

Inventories ....................................................................................... (205.63)(205.63)(205.63)(205.63)(205.63) 0.26

Trade and other payables ................................................................ 408.87408.87408.87408.87408.87 365.67

(247.16)(247.16)(247.16)(247.16)(247.16) 197.76

Miscellaneous Expenditure (to the extent not written offor adjusted) incurred during the year .................................................... (3.12)(3.12)(3.12)(3.12)(3.12) (2.73)

Cash generated from operations ............................................................ 1,103.531,103.531,103.531,103.531,103.53 1,512.35

Income Taxes paid (Net of refunds) ........................................................ (277.70)(277.70)(277.70)(277.70)(277.70) (343.40)

NET CASH FROM OPERATING ACTIVITIES ............................................... 825.83825.83825.83825.83825.83 1168.95


69

Cash Flow StatementCash Flow StatementCash Flow StatementCash Flow StatementCash Flow Statement (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Rupees crores

20082008200820082008 2007

B.B.B.B.B. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :

Purchase of fixed assets ......................................................................... (729.09)(729.09)(729.09)(729.09)(729.09) (504.45)

Sale of fixed assets ................................................................................. 12.0012.0012.0012.0012.00 22.55

Purchase of investments ......................................................................... (16,091.67)(16,091.67)(16,091.67)(16,091.67)(16,091.67) (9,267.62)

Sale of investments ................................................................................ 14,487.8114,487.8114,487.8114,487.8114,487.81 8,652.08

Interest received ..................................................................................... 68.9568.9568.9568.9568.95 80.09

Dividends received .................................................................................. 65.6165.6165.6165.6165.61 120.39

Inter corporate deposits (Net) ................................................................ 111.31111.31111.31111.31111.31 (196.19)

Exceptional Items :

Sales Proceeds (Net) on sale of Long Term Investments ......................... ————— 142.75

NET CASH USED IN INVESTING ACTIVITIES ............................................ (2,075.08)(2,075.08)(2,075.08)(2,075.08)(2,075.08) (950.40)

C.C.C.C.C. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :

Proceeds from borrowings ..................................................................... 2,303.552,303.552,303.552,303.552,303.55 1,078.57

Repayments of borrowings (including premium on prepayments) ......... (1,294.08)(1,294.08)(1,294.08)(1,294.08)(1,294.08) (149.22)

Dividends paid [including income tax on dividends Rs. 16.69 croresRs. 16.69 croresRs. 16.69 croresRs. 16.69 croresRs. 16.69 crores(2007 : Rs. 60.03 crores)] ...................................................................... (118.01)(118.01)(118.01)(118.01)(118.01) (483.46)

Interest Commitment and Finance charges paid .................................... (80.12)(80.12)(80.12)(80.12)(80.12) (27.81)

NET CASH FROM FINANCING ACTIVITIES ............................................... 811.34811.34811.34811.34811.34 418.08

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS ............ (437.91)(437.91)(437.91)(437.91)(437.91) 636.63

CASH AND CASH EQUIVCASH AND CASH EQUIVCASH AND CASH EQUIVCASH AND CASH EQUIVCASH AND CASH EQUIVALENTS [Note 1] :ALENTS [Note 1] :ALENTS [Note 1] :ALENTS [Note 1] :ALENTS [Note 1] :

Opening Balance .................................................................................... 1,361.791,361.791,361.791,361.791,361.79 725.16

Closing Balance ...................................................................................... 923.88923.88923.88923.88923.88 1,361.79

See Notes attached.







}}}}}}

70

Notes to the Cash Flow StatementNotes to the Cash Flow StatementNotes to the Cash Flow StatementNotes to the Cash Flow StatementNotes to the Cash Flow Statement for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008

Rupees crores

20082008200820082008 2007

1 Cash and Bank Balances ......................................................................... 861.23861.23861.23861.23861.23 1,326.07

Unrealised (Gain)/Loss on foreign currency cash and cash equivalents . 62.6562.6562.6562.6562.65 35.72

Total cash and cash equivalents ............................................................. 923.88923.88923.88923.88923.88 1361.79

2 During the year the Company has acquired/formed the following subsidiaries :-

a) Punjab Tractors Limited Rs. 1287.21 crores

b) Mahindra Logistics Limited Rs. 0.05 crores

c) Mahindra Castings Private Limited Rs. 0.05 crores

d) Mahindra Automotive Limited Rs. 0.05 crores

e) Mahindra Aerospace Private Limited Rs. 0.05 crores

f) Mahindra FirstChoice Services Limited Rs. 0.05 crores

g) Mahindra Navistar Engines Private Limited Rs. 0.01 crores

3 During the year the Company received on disposal the following subsidiary :-Mahindra Ashtech Limited Rs. 0.33 crores

4 During the year the Company has consolidated its business interest in Mahindra Hinoday Industries Limited by swapping theshares held by the Company in Mahindra Hinoday Industries Limited for shares of Mahindra Castings Private Limited. This beinga non cash transaction does not form part of cash flow.

5 a) Arising out of the scheme of arrangement for the merger between Company’s subsidiaries Mahindra Stokes HoldingCompany Limited, Mahindra Forgings Overseas Limited, Mahindra Forgings Mauritius Limited with Mahindra ForgingsLimited, the Company received shares of Mahindra Forgings Limited. The Company is required to value the shares receivedby referencing it to the fair value of the shares given up. As a result the gain of Rs. 157.10 crores has been accounted foras an exceptional item. This being a non cash transaction does not form part of cash flow.

b) Arising out of the scheme of arrangement for the merger between Company’s subsidiaries Plexion Technologies (India)Private Limited with Mahindra Engineering Design & Development Company Limited the Company received shares ofMahindra Engineering Design & Development Company Limited. The Company is required to value the shares received byreferencing it to the fair value of the shares given up. As a result the gain of Rs. 15.63 crores has been accounted for as anexceptional item. This being a non cash transaction does not form part of cash flow.

6 Previous year’s figures have been regrouped/restated wherever necessary.


71

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE I I I I IRupees crores

20082008200820082008 2007

Share Capital [Note 2] :Share Capital [Note 2] :Share Capital [Note 2] :Share Capital [Note 2] :Share Capital [Note 2] :Authorised :Authorised :Authorised :Authorised :Authorised :

37,50,00,00037,50,00,00037,50,00,00037,50,00,00037,50,00,000 (2007 - 27,50,00,000) Ordinary (Equity) Shares of Rs. 10 each ................. 375.00375.00375.00375.00375.00 275.0025,00,00025,00,00025,00,00025,00,00025,00,000 Unclassified shares of Rs.100 each ............................................................. 25.0025.0025.0025.0025.00 25.00

Total .......... 400.00400.00400.00400.00400.00 300.00

Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :24,57,41,81324,57,41,81324,57,41,81324,57,41,81324,57,41,813 (2007 - 24,53,71,265) Ordinary (Equity) Shares of

Rs.10 each fully paid up ............................................................................. 245.74245.74245.74245.74245.74 245.37

245.74245.74245.74245.74245.74 245.37Less :

66,68,43166,68,43166,68,43166,68,43166,68,431 (2007 - 73,38,558) Ordinary (Equity) Shares of Rs. 10 each fullypaid up issued to ESOP Trust but not allotted to employees ..................... 6.676.676.676.676.67 7.34

Adjusted : Issued and Subscribed Share Capital ......................................... 239.07239.07239.07239.07239.07 238.03

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE II II II II IIRupees crores

20072007200720072007 AdditionsAdditionsAdditionsAdditionsAdditions DeductionsDeductionsDeductionsDeductionsDeductions 20082008200820082008

Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :

1 Capital Reserve ............................................................... 11.5011.5011.5011.5011.50 ————— ————— 11.5011.5011.5011.5011.5011.50 — — 11.50

2 Securities Premium Account [Note 3(a)(i)] ..................... 502.10502.10502.10502.10502.10 27.0427.0427.0427.0427.04 2.012.012.012.012.01 527.13527.13527.13527.13527.13516.20 149.01 163.11 502.10

Less : Premium on shares issued to ESOP Trustbut not allotted to employees [Note 3(b)] ..................... 17.9817.9817.9817.9817.98 ————— 1.641.641.641.641.64 16.3416.3416.3416.3416.34

18.38 — 0.40 17.98

484.12484.12484.12484.12484.12 27.0427.0427.0427.0427.04 0.370.370.370.370.37 510.79510.79510.79510.79510.79497.82 149.01 162.71 484.12

3 Revaluation Reserve [Note 3(a)(ii)] .................................. 12.8612.8612.8612.8612.86 ————— 0.390.390.390.390.39 12.4712.4712.4712.4712.4713.33 — 0.47 12.86

4 General Reserve .............................................................. 633.92633.92633.92633.92633.92 115.00115.00115.00115.00115.00 ————— 748.92748.92748.92748.92748.92604.82 110.00 80.90 • 633.92

Add : Bonus shares issued to ESOP Trust ....................... 3.673.673.673.673.67 ————— 0.340.340.340.340.34 3.333.333.333.333.33but not alloted to employees [Note 3(b)] ...................... 3.75 — 0.08 3.67

637.59637.59637.59637.59637.59 115.00115.00115.00115.00115.00 0.340.340.340.340.34 752.25752.25752.25752.25752.25608.57 110.00 80.98 637.59

5 Debenture Redemption Reserve ...................................... 1.121.121.121.121.12 16.8816.8816.8816.8816.88 ————— 18.0018.0018.0018.0018.0016.79 — 15.67 1.12

6 Investment Fluctuation Reserve [Note 27] ...................... 39.4339.4339.4339.4339.43 ————— ————— 39.4339.4339.4339.4339.4350.12 — 10.69 39.43

7 Hedging Reserve Account [Note 3(c)] ............................ ————— ————— 12.9212.9212.9212.9212.92 (12.92)(12.92)(12.92)(12.92)(12.92)— — — —

1,186.621,186.621,186.621,186.621,186.62 158.92158.92158.92158.92158.92 14.0214.0214.0214.0214.02 1,331.521,331.521,331.521,331.521,331.521,198.13 259.01 270.52 1,186.62

8 Balance for 2007-2008 and earlier years as perProfit and Loss Account ................................................. 2,775.482,775.482,775.482,775.482,775.48

2,125.08

Total .......... 4,107.004,107.004,107.004,107.004,107.003,311.70

Transfer from Profit and Loss Account Rs. 115.00 crores Rs. 115.00 crores Rs. 115.00 crores Rs. 115.00 crores Rs. 115.00 crores (2007 : Rs. 110.00 crores) • Adjustment on adoption of Accounting Standard 15 (revised 2005) ‘Employee Benefits’ (Net of Tax of Rs. 41.05 crores). Refer Note 16.

Transfer from Profit and Loss Account Rs. 16.88 croresRs. 16.88 croresRs. 16.88 croresRs. 16.88 croresRs. 16.88 crores (2007 : Rs. Nil)Transfer to Profit and Loss Account net of charge created Rs. 0.22 crores

72

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE III III III III IIIRupees crores

20082008200820082008 2007

Loan FLoan FLoan FLoan FLoan Funds [Note 4] :unds [Note 4] :unds [Note 4] :unds [Note 4] :unds [Note 4] :

(A)(A)(A)(A)(A) Secured :Secured :Secured :Secured :Secured :

(1) Debentures/Bonds .............................................................................. 205.51205.51205.51205.51205.51 5.51

(2) Foreign Currency Loans from Banks ................................................... 121.80121.80121.80121.80121.80 35.25

(3) Loans and Advances on cash credit account from Banks .................. 9.049.049.049.049.04 65.89

(4) Short-term Foreign Currency Loans from Banks ................................. 280.91280.91280.91280.91280.91 —

617.26617.26617.26617.26617.26 106.65(B)(B)(B)(B)(B) Unsecured :Unsecured :Unsecured :Unsecured :Unsecured :

(1) Fixed Deposits .................................................................................... 3.723.723.723.723.72 3.99

(2) Short-term Loans from Banks ............................................................ 106.14106.14106.14106.14106.14 8.03

(3) Other Loans :

(a) From Financial Institutions .......................................................... 521.13521.13521.13521.13521.13 326.67

(b) Foreign Currency Loan from Banks ............................................. 491.02491.02491.02491.02491.02 262.63

(c) Zero Coupon Convertible Bonds….............................................. 802.60802.60802.60802.60802.60 879.41

(d) From Others [including interest accrued and dueRs. 0.02 croresRs. 0.02 croresRs. 0.02 croresRs. 0.02 croresRs. 0.02 crores (2007 : Rs. 0.02 crores)] .................................... 45.1945.1945.1945.1945.19 48.62

1,859.941,859.941,859.941,859.941,859.94 1,517.33

1,969.801,969.801,969.801,969.801,969.80 1,529.35

Total ............. 2,587.062,587.062,587.062,587.062,587.06 1,636.00

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE IV IV IV IV IVFixed Assets [Note 5] :Fixed Assets [Note 5] :Fixed Assets [Note 5] :Fixed Assets [Note 5] :Fixed Assets [Note 5] : Rupees crores

Description of Assets Cost/ AdditionsAdditionsAdditionsAdditionsAdditions Deduc-Deduc-Deduc-Deduc-Deduc- Cost/Pro-Cost/Pro-Cost/Pro-Cost/Pro-Cost/Pro- Deprecia- Deprecia-Deprecia-Deprecia-Deprecia-Deprecia- DeductionsDeductionsDeductionsDeductionsDeductions Deprecia-Deprecia-Deprecia-Deprecia-Deprecia- NetNetNetNetNet NetProfessional andandandandand tionstionstionstionstions fessionalfessionalfessionalfessionalfessional tion/Amor- tion/tion/tion/tion/tion/ andandandandand tion/tion/tion/tion/tion/ BalanceBalanceBalanceBalanceBalance Balance

valuation adjust-adjust-adjust-adjust-adjust- andandandandand valuationvaluationvaluationvaluationvaluation tisation AmorAmorAmorAmorAmor----- adjust-adjust-adjust-adjust-adjust- Amortisa-Amortisa-Amortisa-Amortisa-Amortisa- as atas atas atas atas at as atas at 31st mentsmentsmentsmentsments adjust-adjust-adjust-adjust-adjust- as at 31stas at 31stas at 31stas at 31stas at 31st to 31st tisationtisationtisationtisationtisation mentsmentsmentsmentsments tiontiontiontiontion 31st 31st 31st 31st 31st 31st

March, during theduring theduring theduring theduring the mentsmentsmentsmentsments March,March,March,March,March, March, for 2007-for 2007-for 2007-for 2007-for 2007- of Depre-of Depre-of Depre-of Depre-of Depre- to 31stto 31stto 31stto 31stto 31st March,March,March,March,March, March,2007 yearyearyearyearyear duringduringduringduringduring 20082008200820082008 2007 20082008200820082008 ciation/ciation/ciation/ciation/ciation/ March,March,March,March,March, 20082008200820082008 2007

the yearthe yearthe yearthe yearthe year Amorti-Amorti-Amorti-Amorti-Amorti- 20082008200820082008sationsationsationsationsation

Land - Freehold ......................... 43.73 10.0010.0010.0010.0010.00 ————— 53.7353.7353.7353.7353.73 — ————— ————— ————— 53.7353.7353.7353.7353.73 43.73

Land - Leasehold ....................... 66.20 0.200.200.200.200.20 ————— 66.4066.4066.4066.4066.40 1.72 0.720.720.720.720.72 ————— 2.442.442.442.442.44 63.9663.9663.9663.9663.96 64.48

Buildings .................................... 465.21 53.7453.7453.7453.7453.74 0.740.740.740.740.74 518.21518.21518.21518.21518.21 105.85 14.1414.1414.1414.1414.14 0.200.200.200.200.20 119.79119.79119.79119.79119.79 398.42398.42398.42398.42398.42 359.36

Plant and Machinery ................. 2,418.28 286.71286.71286.71286.71286.71 35.0335.0335.0335.0335.03 2,669.962,669.962,669.962,669.962,669.96 1,436.25 185.14185.14185.14185.14185.14 31.1831.1831.1831.1831.18 1,590.211,590.211,590.211,590.211,590.21 1,079.751,079.751,079.751,079.751,079.75 982.03

Furniture and Fittings ................ 80.67 17.4417.4417.4417.4417.44 1.191.191.191.191.19 96.9296.9296.9296.9296.92 35.62 6.326.326.326.326.32 0.560.560.560.560.56 41.3841.3841.3841.3841.38 55.5455.5455.5455.5455.54 45.05

Vehicles, Cycles, etc. .................. 87.06 31.3931.3931.3931.3931.39 7.397.397.397.397.39 111.06111.06111.06111.06111.06 34.08 13.5313.5313.5313.5313.53 4.724.724.724.724.72 42.8942.8942.8942.8942.89 68.1768.1768.1768.1768.17 52.98

Development Expenditure ......... 49.12 54.3754.3754.3754.3754.37 ————— 103.49103.49103.49103.49103.49 16.12 8.188.188.188.188.18 ————— 24.3024.3024.3024.3024.30 79.1979.1979.1979.1979.19 33.00

Software Expenditure ................ 19.42 16.9416.9416.9416.9416.94 ————— 36.3636.3636.3636.3636.36 9.48 11.1911.1911.1911.1911.19 ————— 20.6720.6720.6720.6720.67 15.6915.6915.6915.6915.69 9.94

Total .......... 3,229.69 470.79470.79470.79470.79470.79 44.3544.3544.3544.3544.35 3,656.133,656.133,656.133,656.133,656.13 1,639.12 239.22239.22239.22239.22239.22 36.6636.6636.6636.6636.66 1,841.681,841.681,841.681,841.681,841.68 1,814.451,814.451,814.451,814.451,814.45 1,590.57 2,885.53 443.18 99.02 3,229.69 1,510.27 210.05 81.20 1,639.12 1,590.57


73

SCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VInvestments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) : Rupees crores

NoteNoteNoteNoteNote 20082008200820082008 2007

FFFFFace Vace Vace Vace Vace ValuealuealuealuealuePPPPPer Uniter Uniter Uniter Uniter Unit Long TLong TLong TLong TLong Termermermermerm CurrentCurrentCurrentCurrentCurrent Long Term Current

NumberNumberNumberNumberNumber RupeesRupeesRupeesRupeesRupees

Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :(a) In Subsidiary Companies :

(i) Equity Shares :53,78,235 10 Mahindra Engineering and Chemical Products Limited ....................... 5.645.645.645.645.64 ————— 5.64 —

2,71,00,006 10 Mahindra Intertrade Limited [including 1,50,00,000 sharespartly paid-up Rs. 3 per share] ............................................................. 16.6016.6016.6016.6016.60 ————— 16.60 —

37,23,874 10 Mahindra Steel Service Centre Limited ................................................. 6.386.386.386.386.38 ————— 6.38 —14,66,00,593 10 Mahindra Holdings & Finance Limited ................................................. 146.60146.60146.60146.60146.60 ————— 146.60 —

4,50,00,000 US $ 0.10 Mahindra USA Incorporated ................................................................. 19.3819.3819.3819.3819.38 ————— 19.38 —16,83,218 10 Mahindra Gujarat Tractor Limited ........................................................ 3.553.553.553.553.55 ————— 3.55 —

1,48,33,793 10 Mahindra Shubhlabh Services Limited .................................................. (b) 15.8715.8715.8715.8715.87 ————— 15.87 —2,26,25,348 10 FirstChoice Wheels Limited (formerly known as Automartindia Limited) (b) 29.2129.2129.2129.2129.21 ————— 29.21 —

63,49,500 10 Mahindra Logisoft Business Solutions Limited ..................................... 5.785.785.785.785.78 ————— 5.78 —— 10 Mahindra Ashtech Limited ................................................................... (c)(1) ————— ————— 7.91 —

42,22,250 US $ 0.001 Bristlecone Limited ................................................................................ 19.2619.2619.2619.2619.26 ————— 19.26 —35,70,000 ZAR 1 Mahindra & Mahindra South Africa (Proprietary) Limited…… ............ (b) 2.492.492.492.492.49 ————— 2.49 —81,26,218 10 Mahindra Engineering Design & Development Company Limited ....... (b)(c)(2) 59.9659.9659.9659.9659.96 ————— 7.05 —

2,23,40,000 US $ 1 Mahindra Overseas Investment Company (Mauritius) Limited ............. (b)(c)(3) 94.8594.8594.8594.8594.85 ————— 38.46 —45,53,739 10 Mahindra SAR Transmission Private Limited ......................................... (c)(4) 21.7721.7721.7721.7721.77 ————— 14.63 —

10,16,24,232 10 Mahindra Renault Private Limited ........................................................ (b)(c)(5) 154.38154.38154.38154.38154.38 ————— 129.48 —5,03,75,600 10 Mahindra International Limited ............................................................ 52.3452.3452.3452.3452.34 ————— 52.34 —

— 10 Plexion Technologies (India) Private Limited ......................................... (c)(6) ————— ————— 37.28 —— EURO 1 Mahindra Forgings Overseas Limited ................................................... (c)(7) ————— ————— 286.50 —— EURO 1 Mahindra Forgings Mauritius Limited .................................................. (c)(8) ————— ————— 78.16 —— 10 Mahindra Hinoday Industries Limited

(formerly known as DGP Hinoday Industries Limited) .......................... (c)(9) ————— ————— 95.84 —— 10 Mahindra Stokes Holding Company Limited ........................................ (c)(10) ————— ————— 40.91 —

12,48,00,000 10 Mahindra Automotive Limited .............................................................. (c)(11) 124.81124.81124.81124.81124.81 ————— — —1,64,87,602 10 Mahindra Castings Private Limited ....................................................... (c)(12)&(13) 105.25105.25105.25105.25105.25 ————— — —

50,000 10 Mahindra Logistics Limited ................................................................... (c)(14) 0.050.050.050.050.05 ————— — —5,10,000 10 Mahindra Navistar Engines Private Limited

(formerly known as MIM Engines India Private Limited) ..................... (c)(15) 0.510.510.510.510.51 ————— — —50,000 10 Mahindra Aerospace Private Limited .................................................... (c)(16) 0.050.050.050.050.05 ————— — —50,000 10 Mahindra First Choice Services Limited ................................................ (c)(17) 0.050.050.050.050.05 ————— — —

18,75,000 100 (ii) 7.25% Cumulative Redeemable Preference Shares :Mahindra Intertrade Limited ................................................................ 18.7518.7518.7518.7518.75 ————— 18.75 —

— 100 (iii) 8.50% Cumulative Redeemable Preference Shares :Mahindra Ashtech Limited ................................................................... (c)(1) ————— ————— 11.00 —

70,00,000 US $ 0.001 (iv) Series’A’ Preference Shares : Bristlecone Limited .................................. 31.7231.7231.7231.7231.72 ————— 31.72 —69,20,000 US $ 0.001 (v) Series’B’ Preference Shares : Bristlecone Limited .................................. 15.1215.1215.1215.1215.12 ————— 15.12 —

— 10 (vi) 8.00% Non Cumulative Redeemable Preference Shares :Mahindra Hinoday Industries Limited(formerly known as DGP Hinoday Industries Limited) .......................... (c)(9) ————— ————— 8.42 —

950.37950.37950.37950.37950.37 ————— 1,144.33 —

(b) In Other Companies :(i) Equity Shares :

312 100 Montreal Engineering International Limited ......................................... ***** ————— * —8,55,646 10 Machinery Manufacturers Corporation Limited .................................... (b) 0.940.940.940.940.94 ————— 0.94 —1,00,000 10 Judricks (India) Private Limited ............................................................. 0.100.100.100.100.10 ————— 0.10 —

35,000 10 Mahindra & Mahindra Contech Limited ............................................... 0.040.040.040.040.04 ————— 0.04 —75,000 10 NTTF Industries Limited ........................................................................ 0.150.150.150.150.15 ————— 0.15 —

— 10 Jayem Automotives Limited .................................................................. (c)(20) ————— ————— * —7,49,997 10 Officemartindia.com Limited ................................................................ 0.220.220.220.220.22 ————— 0.22 —

50,000 10 Indian NGOs.com Private Limited ......................................................... 0.060.060.060.060.06 ————— 0.06 —20,000 10 Sixth Sense Studios Private Limited ...................................................... 0.020.020.020.020.02 ————— 0.02 —

2,85,000 10 Utility Engineers (India) Limited ............................................................ 0.290.290.290.290.29 ————— 0.29 —— 10 Mahindra Renault Nissan Automotive Private Limited

(formerly known as Mahindra Renault Automotive Private Limited) ... (c)(21) ————— ————— 0.01 —Others ................................................................................................... (a) ***** ————— * —

2,296 100 (ii) 4.00% Tax-free Cumulative Preference Shares :Machinery Manufacturers Corporation Limited .................................... (b) 0.020.020.020.020.02 ————— 0.02 —

1,78,000 100 (iii) 11.00% Redeemable Preference Shares :Sixth Sense Studios Private Limited ...................................................... 1.781.781.781.781.78 ————— 1.78 —

3.623.623.623.623.62 ————— 3.63 —

*denotes amounts less than Rs.50,000

74

SCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE V (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) : Rupees crores




Quoted :Quoted :Quoted :Quoted :Quoted :(a) In Subsidiary Companies :

(i) Equity Shares :1,54,01,126 10 Mahindra Lifespace Developers Limited

(formely known as Mahindra Gesco Developers Limited) .................... (b) 216.34216.34216.34216.34216.34 ————— 216.34 —5,82,41,532 10 Mahindra & Mahindra Financial Services Limited ................................ (b) 150.91150.91150.91150.91150.91 ————— 150.91 —5,37,76,252 10 Tech Mahindra Limited ......................................................................... (b) 191.81191.81191.81191.81191.81 ————— 191.81 —3,84,76,510 10 Punjab Tractors Limited ........................................................................ (c)(18) 1,388.751,388.751,388.751,388.751,388.75 ————— — —4,15,26,329 10 Mahindra Forgings Limited (transferred from Quoted Non Subsidiary) (b)(c)(19) 754.14754.14754.14754.14754.14 ————— — —

2,701.952,701.952,701.952,701.952,701.95 ————— 559.06 —

(b) In Non-Subsidiary Companies :(i) Equity Shares :

— 10 + Fairfield Atlas Limited ........................................................................... (c)(22) ————— ————— 1.39 —— 10 Mahindra Forgings Limited (transferred to Quoted Subsidiary) ........... ————— ————— 128.51 —

7,417 10 Swaraj Engines Limited ......................................................................... (c)(23) 0.950.950.950.950.95 ————— — —4,79,543 10 Swaraj Automotives Limited ................................................................. (c)(24) 12.3912.3912.3912.3912.39 ————— — —

13.3413.3413.3413.3413.34 ————— 129.90 —

Debentures/Bonds : (Non-trade & fully paid-up) :Debentures/Bonds : (Non-trade & fully paid-up) :Debentures/Bonds : (Non-trade & fully paid-up) :Debentures/Bonds : (Non-trade & fully paid-up) :Debentures/Bonds : (Non-trade & fully paid-up) :Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :(a) In Subsidiary Companies :

— 1,00,00,000 11.19% Mahindra & Mahindra Financial Services Limited ............................. (d)(2) ————— ————— 4.00 —(b) In Other Companies :

13 100 0.50% The East India Clinic Limited ............................................................... ***** ————— * —— 100 9.00% Jayem Automotives Limited ................................................................. (d)(1) ————— ————— 13.22 —

***** ————— 17.22 —

Quoted :Quoted :Quoted :Quoted :Quoted :(a) In Subsidiary Companies :

200 10,00,000 7.50% Mahindra & Mahindra Financial Services Limited ............................... ————— 20.2220.2220.2220.2220.22 — 20.22100 10,00,000 8.60% Mahindra & Mahindra Financial Services Limited ............................... ————— 10.0210.0210.0210.0210.02 — 10.02

(b) In Other Companies :7,75,000 100 6.75% Tax Free US 64 Bonds .......................................................................... ————— 8.098.098.098.098.09 — 8.09

18 10,00,000 7.00% Power Finance Corporation Limited (2011) Series XXII ...................... ————— 1.801.801.801.801.80 — 1.80150 10,00,000 7.99% Infrastructure Development Finance Company Limited ...................... ————— 15.0015.0015.0015.0015.00 — 15.00

————— 55.1355.1355.1355.1355.13 — 55.13

————— 55.1355.1355.1355.1355.13 17.22 55.13

Less : Excess of cost over fair value of current investments of Debentures/Bonds .. ————— (1.44)(1.44)(1.44)(1.44)(1.44) — (3.49)

————— 53.6953.6953.6953.6953.69 17.22 51.64

Other Investments :Other Investments :Other Investments :Other Investments :Other Investments :Government Securities :Government Securities :Government Securities :Government Securities :Government Securities :Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :

— 36,000 ^ 6 Years National Savings Certificates .............................................................. (e)(1) ***** ————— * —

***** ————— * —

Quoted :Quoted :Quoted :Quoted :Quoted :— 16,92,70,000 ^ Government of India Securities ...................................................................... (e)(2) ————— 17.4017.4017.4017.4017.40 — 2.02

————— 17.4017.4017.4017.4017.40 — 2.02

***** 17.4017.4017.4017.4017.40 * 2.02

Less : Excess of cost over fair value of current investmentsof Government Securities ................................................................................ ————— (0.48)(0.48)(0.48)(0.48)(0.48) — (0.17)

***** 16.9216.9216.9216.9216.92 * 1.85

+ Trade Investment^ Total Face Value* denotes amounts less than Rs. 50,000


75

SCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE V (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) : Rupees crores



NumberNumberNumberNumberNumber RupeesRupeesRupeesRupeesRupeesUnits :Units :Units :Units :Units :Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :

50,00,000 10 ABN AMRO Mutual Fund - Dual Advantage Fund Plan A Series 1Institutional Growth .................................................................................................. ————— 5.005.005.005.005.00 — 5.00

1,16,34,531 10 Birla Mutual Fund - Cash Plus Institutional Premium Daily Dividend ....................... (f)(6) ————— 11.6611.6611.6611.6611.66 — —

4,99,66,023 10 Birla Mutual Fund - Sun Life Liquid Plus Institutional Daily Dividend ...................... (f)(7) ————— 50.0050.0050.0050.0050.00 — —

— 10 Deutsche Mutual Fund - Fixed Term Fund Series 9 Growth Option ......................... (f)(14) ————— ————— — 4.00

1,06,78,643 10 Deutsche Mutual Fund - Insta Cash Plus Fund Super InstitutionalDaily Dividend Plan .................................................................................................... (f)(15) ————— 10.7010.7010.7010.7010.70 — —

1,00,12,609 10 Deutsche Mutual Fund - Money Plus Advantage Fund Institutional Plan Dividend .... (f)(18) ————— 10.1210.1210.1210.1210.12 — —

— 1,000 DSP Merrill Lynch Mutual Fund - Liquid Plus Institutional Plan Daily Dividend ........ (f)(19) ————— ————— — 21.22

99,990 1,000 DSP Merrill Lynch Mutual Fund - Cash Plus Institutional Daily Dividend .................. (f)(20) ————— 10.0010.0010.0010.0010.00 — —

— 10 Franklin Templeton Mutual Fund - Fixed Tenure Fund Series V 13 Months Plan Growth (f)(22) ————— ————— — 5.00

2,59,71,950 10 Franklin Templeton Mutual Fund - Floating Rate Income Fund Long Term PlanSuper Institutional Option Daily Dividend ................................................................. (f)(23) ————— 26.0026.0026.0026.0026.00 — —

— 10 HDFC Mutual Fund - Multiple Yield Fund Plan 2005 Growth .................................. (f)(27) ————— ————— — 5.00

— 10 HDFC Mutual Fund - Multiple Yield Fund Growth ................................................... (f)(28) ————— ————— — 5.00

— 10 HDFC Mutual Fund - Cash Management Fund Call PlanDaily Dividend Reinvestment Option ......................................................................... (f)(29) ————— ————— — 19.71

1,41,02,516 10 HDFC Mutual Fund - Cash Manangement Fund Savings PlanDaily Dividend Reinvestment Option ......................................................................... (f)(30) ————— 15.0015.0015.0015.0015.00 — —

— 10 HDFC Mutual Fund - FMP 13M March 2006 ( I ) Institutional Plan Growth ........... (f)(31) ————— ————— — 10.00

— 10 HSBC Mutual Fund - Liquid Plus Institutional Plus Daily Dividend ........................... (f)(36) ————— ————— — 22.57

— 10 JM Financial Mutual Fund - High Liquidity Fund Growth PlanBonus Option Bonus Units ........................................................................................ (f)(39) ————— ————— — 2.40

1,22,66,828 10 Kotak Mahindra Mutual Fund - Liquid Institutional Premium Daily Dividend .......... (f)(42) ————— 15.0015.0015.0015.0015.00 — —

91,07,385 10 LIC Mutual Fund - Liquid Fund Dividend Plan .......................................................... (f)(45) ————— 10.0010.0010.0010.0010.00 — —

99,98,300 10 Lotus India Mutual Fund - Liquid Fund Super Institutional Daily Dividend .............. (f)(47) ————— 10.0010.0010.0010.0010.00 — —

— 10 Principal Mutual Fund - Income Fund Growth Plan ................................................. (f)(48) ————— ————— — 20.03

2,19,18,952 10 Principal Mutual Fund - Floating Rate Fund FMP Institutional OptionDaily Dividend ........................................................................................................... (f)(49) ————— 21.9521.9521.9521.9521.95 — —

50,00,000 10 Principal Mutual Fund - Fixed Maturity Plan (FMP-43)91 Days Series XIII Regular Dividend Payout Feb. 08 ............................................... (f)(52) ————— 5.005.005.005.005.00 — —

— 10 Prudential ICICI Mutual Fund - Sweep Cash Option Daily Dividend ........................ (f)(55) ————— ————— — 10.00

1,49,99,250 10 Prudential ICICI Mutual Fund - Institutional Liquid Plan Super InstitutionalDaily Dividend ........................................................................................................... (f)(56) ————— 15.0015.0015.0015.0015.00 — —

— 10 Standard Chartered Mutual Fund - Fixed Maturity 2nd Plan Dividend .................... (f)(60) ————— ————— — 5.00

— 1,000 Standard Chartered Mutual Fund - Liquidity Manager Plus Daily Dividend ............. (f)(61) ————— ————— — 9.90

— 10 Standard Chartered Mutual Fund - Grindlays Fixed Maturity Plus Plan III B Growth .. (f)(62) ————— ————— — 5.00

1,00,00,000 10 Standard Chartered Mutual Fund - Fixed Maturity Plan Quarterly Series 26 Dividend .. (f)(63) ————— 10.0010.0010.0010.0010.00 — —

1,00,00,000 10 Sundaram Mutual Fund - BNP Paribas FTP 90 Days Series 3 Institutional Dividend ... (f)(68) ————— 10.0010.0010.0010.0010.00 — —

— 1,000 Tata Mutual Fund - Liquid Super High Investment Fund Daily Dividend .................. (f)(74) ————— ————— — 5.00

95,50,985 10 Tata Mutual Fund - Dynamic Bond Fund Option A Dividend ................................... (f)(75) ————— 10.0310.0310.0310.0310.03 — —

1,47,139 1,000 UTI Mutual Fund - Liquid Cash Plan Institutional Daily Income Option ................... (f)(76) ————— 15.0015.0015.0015.0015.00 — —

1,00,00,000 10 UTI Mutual Fund - Fixed Income Interval Fund Monthly Interval Plan IIInstitutional Dividend Plan ........................................................................................ (f)(77) ————— 10.0010.0010.0010.0010.00 — —

2,50,00,000 10 UTI Mutual Fund - Fixed Maturity Plan HFMP 03/08 I Institutional DividendPlan Payout ............................................................................................................. (f)(78) ————— 25.0025.0025.0025.0025.00 — —

— 10 UTI Mutual Fund - Fixed Maturity Plan (YFMP/09/06) Growth Plan ......................... (f)(81) ————— ————— — 10.00

————— 295.46295.46295.46295.46295.46 — 164.83

76

SCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE V (Contd.) (Contd.) (Contd.) (Contd.) (Contd.)Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) : Rupees crores




Others :Others :Others :Others :Others :Certificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositUnquoted :Unquoted :Unquoted :Unquoted :Unquoted :

25,00,00,000 ^ State Bank of Travancore ........................................................................................... (g)(1) ————— 23.1523.1523.1523.1523.15 — 23.60

25,00,00,000 ^ ABN AMRO Bank ....................................................................................................... (g)(2) ————— 23.1223.1223.1223.1223.12 — 9.30

— ^ State Bank of Mysore ................................................................................................ (g)(3) ————— ————— — 23.83

— ^ Allahabad Bank .......................................................................................................... (g)(4) ————— ————— — 13.89

— ^ Kotak Mahindra Bank Limited ................................................................................... (g)(5) ————— ————— — 33.02

— ^ HDFC Bank ............................................................................................................. (g)(6) ————— ————— — 28.33

45,00,00,000 ^ State Bank of Bikaner & Jaipur .................................................................................. (g)(7) ————— 42.7142.7142.7142.7142.71 — 9.49

25,00,00,000 ^ State Bank of Hyderabad ........................................................................................... (g)(8) ————— 23.8023.8023.8023.8023.80 — 9.52

25,00,00,000 ^ State Bank of Patiala ................................................................................................. (g)(9) ————— 24.5524.5524.5524.5524.55 — 14.02

20,00,00,000 ^ Union Bank of India .................................................................................................. (g)(10) ————— 19.1619.1619.1619.1619.16 — —

25,00,00,000 ^ Punjab National Bank ................................................................................................ (g)(11) ————— 23.2223.2223.2223.2223.22 — —

————— 179.71179.71179.71179.71179.71 — 165.00

3,669.283,669.283,669.283,669.283,669.28 545.78545.78545.78545.78545.78 1,854.14 383.32

Total .......... 4,215.064,215.064,215.064,215.064,215.06 2,237.46

Cost (Net of amounts written off) of Unquoted investments .................................. 1,429.161,429.161,429.161,429.161,429.16 1,495.01

Cost of Quoted Investments ..................................................................................... 2,787.822,787.822,787.822,787.822,787.82 746.11

4,216.984,216.984,216.984,216.984,216.98 2,241.12

Less : Excess of cost over fair value of Current Investments (Net) ........................... (1.92)(1.92)(1.92)(1.92)(1.92) (3.66)

4,215.064,215.064,215.064,215.064,215.06 2,237.46

Market Value of Quoted Investments ........................................................................ 7,669.907,669.907,669.907,669.907,669.90 10,303.89

^ Total Face Value

Notes :Notes :Notes :Notes :Notes :

FFFFFace Vace Vace Vace Vace ValuealuealuealuealuePPPPPer Uniter Uniter Uniter Uniter Unit Long TLong TLong TLong TLong Termermermermerm Long Term

NumberNumberNumberNumberNumber RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees Rupees

(a) Shares (unquoted) in other companies comprise :

21 100 # The United Spices Importers Limited (Equity “B” Shares) ............................ 11111 1

74 16,667 # Engineering & Metal Works, Tehran ............................................................ 11111 1

(Rials)

Total ......... 22222 2

# Written off to Re.1

(b) Equity investments in these companies carry certain restrictions on transferof shares in terms of funds raised by these companies from financialinstitutions/banks.


77

SCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE VSCHEDULE V (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :Investments (At Cost, unless otherwise specified) :

(c) The following are the movements in Shares during the year :

Equity SharesEquity SharesEquity SharesEquity SharesEquity Shares Preference SharesPreference SharesPreference SharesPreference SharesPreference Shares

Acquired Sold Acquired/(Redeemed/Sold)

Nos. Nos. Nos.(1) Mahindra Ashtech Limited 70,00,000 $ 1,49,05,000 (11,00,000)(2) Mahindra Engineering Design & Development Company Limited 10,76,218 # — —(3) Mahindra Overseas Investment Company (Mauritius) Limited 1,35,30,000 — —(4) Mahindra SAR Transmission Private Limited 14,28,000 — —(5) Mahindra Renault Private Limited 1,46,45,007 $ — —(6) Plexion Technologies (India) Private Limited — 45,03,011 # —(7) Mahindra Forgings Overseas Limited — 4,88,88,001 # —(8) Mahindra Forgings Mauritius Limited 1,15,00,000 @ 2,47,30,001 # —(9) Mahindra Hinoday Industries Limited — 1,49,38,258 # (80,00,000)

(10) Mahindra Stokes Holding Company Limited — 82,21,107 # —(11) Mahindra Automotive Limited 12,48,00,000 — —(12) Mahindra Castings Private Limited 50,000 — —(13) Mahindra Castings Private Limited 1,64,37,602 # — —(14) Mahindra Logistics Limited 50,000 — —(15) Mahindra Navistar Engines Private Limited 5,10,000 — —(16) Mahindra Aerospace Private Limited 50,000 — —(17) Mahindra First Choice Services Limited 50,000 — —(18) Punjab Tractors Limited 3,84,76,510 — —(19) Mahindra Forgings Limited 2,83,25,959 # — —(20) Jayem Automotives Limited — 1 —(21) Mahindra Renault Nissan Automotive Private Limited 30,00,000 30,05,000 —(22) Fairfield Atlas Limited — 13,91,860 —(23) Swaraj Engines Limited 7,417 — —(24) Swaraj Automotive Limited 4,79,543 — —

$ Subscribed to on a rights basis # Consideration other than Cash @ Conversion of Loan into Equity

(d) The following are the movements in Debentures/Bonds during the year :

AcquiredAcquiredAcquiredAcquiredAcquired SoldSoldSoldSoldSold MaturedMaturedMaturedMaturedMatured

Nos. Rs. crores Nos.

(1) Jayem Automotives Limited ............................................................................................................. 9.00% — — 13,21,500 —

(2) Mahindra & Mahindra Financial Services Limited ........................................................................................ 11.19% — — — 4

(e) Government Securities :

(1) Face value of Rs. * croresRs. * croresRs. * croresRs. * croresRs. * crores (2007 : Rs. * crores) were lodged as security deposit.

(2) Government of India Securities of the face value Rs. 20.00 croresRs. 20.00 croresRs. 20.00 croresRs. 20.00 croresRs. 20.00 crores (2007 : Rs. Nil) were purchased and of the face value of Rs. 5.00 croresRs. 5.00 croresRs. 5.00 croresRs. 5.00 croresRs. 5.00 crores (2007 : Rs. Nil) sold during the year.

(f) The following are the movements in Units during the year :

AcquiredAcquiredAcquiredAcquiredAcquired SoldSoldSoldSoldSold


(1) ABN AMRO Mutual Fund - Money Plus Institutional Weekly Dividend ................................................................................. 99,97,606 10.02 99,97,606(2) ABN AMRO Mutual Fund - Money Plus Institutional Plan Daily Dividend ............................................................................. 6,51,79,681 65.18 6,51,79,681(3) ABN AMRO Mutual Fund - Cash Fund Institutional Plus Daily Dividend ............................................................................... 1,50,01,965 15.00 1,50,01,965(4) ABN AMRO Interval Fund Monthly Plan A Dividend ............................................................................................................. 1,50,91,012 15.09 1,50,91,012(5) Birla Mutual Fund - Interval Income Institutional Monthly Series 2 Dividend ....................................................................... 1,00,58,000 10.06 1,00,58,000(6) Birla Mutual Fund - Cash Plus Institutional Premium Daily Dividend .................................................................................... 1,02,47,80,089 1,026.78 1,01,31,45,558(7) Birla Mutual Fund - Sun Life Liquid Plus Institutional Daily Dividend .................................................................................... 16,54,33,206 165.55 11,54,67,182(8) Birla Mutual Fund - Floating Rate Fund Long Term Weekly Dividend ................................................................................... 1,22,67,257 12.28 1,22,67,257(9) Birla Mutual Fund - Interval Income Institutional Monthly Series 1 Dividend ....................................................................... 1,01,19,414 10.12 1,01,19,414

(10) Chola Mutual Fund - Liquid Institutional Daily Dividend Reinvestment Plan ......................................................................... 12,46,05,311 125.00 12,46,05,311(11) Chola Mutual Fund - Freedom Income STP Institutional Daily Dividend Reinvestment Plan ................................................. 12,31,20,307 123.13 12,31,20,307(12) Chola Mutual Fund - Liquid Super Institutional Plan Cumulative .......................................................................................... 1,43,13,660 15.00 1,43,13,660(13) Chola Mutual Fund - Short Term Floating Rate Fund Daily Dividend Reinvestment Plan ...................................................... 25,12,14,925 251.63 25,12,14,925

*denotes amounts less than Rs.50,000

78

(14) Deutsche Mutual Fund - Fixed Term Fund Series 9 Growth Option ...................................................................................... — — 40,00,000(15) Deutsche Mutual Fund - Insta Cash Plus Fund Super Institutional Daily Dividend Plan ........................................................ 6,53,46,836 65.46 5,46,68,193(16) Deutsche Mutual Fund - Insta Cash Plus Fund Institutional Plan Daily Dividend Option ...................................................... 11,73,46,337 117.58 11,73,46,337(17) Deutsche Mutual Fund - Money Plus Fund Institutional Plan Daily Dividend Option ............................................................ 9,06,02,534 90.68 9,06,02,534(18) Deutsche Mutual Fund - Money Plus Advantage Fund Institutional Plan Dividend ............................................................... 1,50,02,006 15.14 49,89,397(19) DSP Merrill Lynch Mutual Fund - Liquid Plus Institutional Plan Daily Dividend ..................................................................... 2,20,785 22.09 4,32,934(20) DSP Merrill Lynch Mutual Fund - Cash Plus Institutional Daily Dividend ............................................................................... 46,07,513 460.80 45,07,523(21) DSP Merrill Lynch Mutual Fund – Liquidity Fund Institutional Daily Dividend ....................................................................... 1,19,009 11.90 1,19,009(22) Franklin Templeton Mutual Fund - Fixed Tenure Fund Series V 13 Months Plan Growth ..................................................... — — 50,00,000(23) Franklin Templeton Mutual Fund - Floating Rate Income Fund Long Term Plan Super

Institutional Option Daily Dividend ....................................................................................................................................... 46,16,87,347 462.35 43,57,15,397(24) Franklin Templeton Mutual Fund - Floating Rate Income Fund Long Term Plan Dividend .................................................... 2,87,02,780 30.01 2,87,02,780(25) Franklin Templeton Mutual Fund - India Treasury Management Account Super Institutional

Plan Daily Dividend ................................................................................................................................................................ 98,96,368 989.88 98,96,368(26) HDFC Mutual Fund - Cash Manangement Fund - Savings Plus Plan Retail Weekly

Dividend Option ..................................................................................................................................................................... 1,62,60,799 16.30 1,62,60,799(27) HDFC Mutual Fund - Multiple Yield Fund Plan 2005 Growth ............................................................................................... — — 50,00,000(28) HDFC Mutual Fund - Multiple Yield Fund Growth ................................................................................................................ — — 41,89,254(29) HDFC Mutual Fund - Cash Management Fund Call Plan Daily Dividend Reinvestment Option ............................................. 3,48,53,823 36.34 5,37,57,410(30) HDFC Mutual Fund - Cash Manangement Fund Savings Plan Daily Dividend

Reinvestment Option ............................................................................................................................................................. 69,78,79,548 742.29 68,37,77,032(31) HDFC Mutual Fund - FMP 13M March 2006 ( I ) Institutional Plan Growth ........................................................................ — — 1,00,00,000(32) HDFC Mutual Fund - Floating Rate Income Fund - Short Term Plan Daily Dividend

Reinvestment Option ............................................................................................................................................................. 12,97,05,405 130.75 12,97,05,405(33) HDFC Mutual Fund - Floating Rate Income Fund Short Term Plan Wholesale Daily Dividend

Reinvestment Option ............................................................................................................................................................. 22,62,77,217 228.11 22,62,77,217(34) HDFC Mutual Fund - Cash Manangement Fund - Savings Plus Plan Wholesale Daily

Dividend Option ..................................................................................................................................................................... 6,44,29,044 64.63 6,44,29,044(35) HSBC Mutual Fund - Cash Fund - Institutional Plus Daily Dividend ...................................................................................... 68,18,46,753 682.23 68,18,46,753(36) HSBC Mutual Fund - Liquid Plus Institutional Plus Daily Dividend ........................................................................................ 27,24,92,650 272.84 29,50,42,039(37) JM Financial Mutual Fund - High Liquidity Fund Daily Dividend Plan ................................................................................... 1,43,83,417 15.00 1,43,83,417(38) JM Financial Mutual Fund - High Liquidity Fund Super Institutional Plan Daily Dividend ..................................................... 20,17,10,221 202.04 20,17,10,221(39) JM Financial Mutual Fund - High Liquidity Fund Growth Plan Bonus Option Bonus Units ................................................... — — 23,34,038(40) JM Financial Mutual Fund - Money Manager Fund Super Plus Plan Daily Dividend ............................................................. 7,74,77,074 77.50 7,74,77,074(41) Kotak Mahindra Mutual Fund - Flexi Debt Scheme Daily Dividend ....................................................................................... 29,04,43,254 291.35 29,04,43,254(42) Kotak Mahindra Mutual Fund - Liquid Institutional Premium Daily Dividend ....................................................................... 53,07,78,533 649.04 51,85,11,705(43) Kotak Mahindra Mutual Fund - Floater Short Term Daily Dividend ....................................................................................... 11,77,99,378 118.20 11,77,99,378(44) Kotak Mahindra Mutual Fund - Floater Short Term Weekly Dividend ................................................................................... 1,50,84,637 15.11 1,50,84,637(45) LIC Mutual Fund - Liquid Fund Dividend Plan ....................................................................................................................... 10,03,00,099 110.13 9,11,92,714(46) LIC Mutual Fund - Liquid Plus Fund Daily Dividend Plan ....................................................................................................... 2,50,84,615 25.08 2,50,84,615(47) Lotus India Mutual Fund - Liquid Fund Super Institutional Daily Dividend ........................................................................... 2,00,04,098 20.01 1,00,05,797(48) Principal Mutual Fund - Income Fund Growth Plan .............................................................................................................. — — 1,92,44,216(49) Principal Mutual Fund - Floating Rate Fund FMP Institutional Option Daily Dividend .......................................................... 29,65,24,863 296.89 27,46,05,911(50) Principal Mutual Fund - Floating Rate Fund FMP Institutional Option Dividend

Reinvestment Weekly ............................................................................................................................................................. 2,00,25,943 20.07 2,00,25,943(51) Principal Mutual Fund - Cash Management Fund Liquid Option Institutional Premium Plan

Daily Dividend ........................................................................................................................................................................ 35,01,02,688 350.13 35,01,02,688(52) Principal Mutual Fund - Fixed Maturity Plan (FMP - 43) 91 Days Series XIII Regular Dividend

Payout Feb. 08 ....................................................................................................................................................................... 50,00,000 5.00 —(53) Principal Mutual Fund - Floating Rate Fund SMP Institutional Option Daily Dividend .......................................................... 37,01,81,204 370.21 37,01,81,204(54) Prudential ICICI Mutual Fund - Flexible Income Plan Daily Dividend ..................................................................................... 8,39,68,264 88.78 8,39,68,264(55) Prudential ICICI Mutual Fund - Sweep Cash Option Daily Dividend ...................................................................................... 21,885 0.02 1,00,24,741(56) Prudential ICICI Mutual Fund - Institutional Liquid Plan Super Institutional Daily Dividend .................................................. 1,41,75,18,699 1,417.57 1,40,25,19,449(57) Reliance Mutual Fund - Liquidity Fund Daily Dividend Reinvestment Option ........................................................................ 3,01,00,024 30.11 3,01,00,024(58) SBI Mutual Fund - Magnum Insta Cash Fund Daily Dividend Option ................................................................................... 1,76,80,219 29.61 1,76,80,219(59) SBI Mutual Fund - Premier Liquid Fund Super Institutional Daily Dividend ........................................................................... 10,56,79,385 106.02 10,56,79,385(60) Standard Chartered Mutual Fund - Fixed Maturity 2nd Plan Dividend .................................................................................. — — 50,00,000(61) Standard Chartered Mutual Fund - Liquidity Manager Plus Daily Dividend ........................................................................... 91,59,867 916.17 92,58,875





79

(62) Standard Chartered Mutual Fund - Grindlays Fixed Maturity Plus Plan III - B Growth ............................................................ — — 50,00,000(63) Standard Chartered Mutual Fund - Fixed Maturity Plan Quarterly Series 26 Dividend ............................................................. 1,00,00,000 10.00 —(64) Standard Chartered Mutual Fund - Grindlays Floating Rate Fund LT Institutional Plan B

Daily Dividend ........................................................................................................................................................................... 26,01,63,475 260.22 26,01,63,475(65) Sundaram Mutual Fund - BNP Paribas Floater ST Institutional Daily Dividend ......................................................................... 10,97,01,781 110.27 10,97,01,781(66) Sundaram Mutual Fund - BNP Paribas Liquid Plus Super Institutional Daily Dividend ............................................................. 17,05,22,857 170.71 17,05,22,857(67) Sundaram Mutual Fund - BNP Paribas Money Fund Super Institutional Daily Dividend ........................................................... 10,89,83,242 110.02 10,89,83,242(68) Sundaram Mutual Fund - BNP Paribas FTP 90 Days Series 3 Institutional Dividend ................................................................ 1,00,00,000 10.00 —(69) Tata Mutual Fund - Fixed Income Portfolio Fund Scheme A1 Institutional .............................................................................. 1,50,80,483 15.09 1,50,80,483(70) Tata Mutual Fund - Fixed Income Portfolio Fund Scheme A2 Institutional .............................................................................. 50,25,694 5.03 50,25,694(71) Tata Mutual Fund - Floater Fund Daily Dividend ...................................................................................................................... 30,76,89,840 308.79 30,76,89,840(72) Tata Mutual Fund - Floating Rate Short Term Institutional Plan Daily Dividend ....................................................................... 15,69,83,863 157.07 15,69,83,863(73) Tata Mutual Fund - Liquidity Management Fund Daily Dividend .............................................................................................. 2,04,610 20.51 2,04,610(74) Tata Mutual Fund - Liquid Super High Investment Fund Daily Dividend .................................................................................. 37,28,237 415.52 37,73,112(75) Tata Mutual Fund - Dynamic Bond Fund Option A Dividend ................................................................................................... 95,50,985 10.03 —(76) UTI Mutual Fund - Liquid Cash Plan Institutional Daily Income Option ................................................................................... 90,89,261 926.60 89,42,122(77) UTI Mutual Fund - Fixed Income Interval Fund Monthly Interval Plan II Institutional Dividend Plan ............................................. 2,01,58,262 20.16 1,01,58,262(78) UTI Mutual Fund - Fixed Maturity Plan HFMP 03/08 I Institutional Dividend Plan Payout ....................................................... 2,50,00,000 25.00 —(79) UTI Mutual Fund - Liquid Plus Fund Institutional Plan Daily Dividend Option ......................................................................... 6,24,010 62.41 6,24,010(80) UTI Mutual Fund - Money Market Fund Daily Dividend Reinvestment Option ......................................................................... 11,20,57,931 197.94 11,20,57,931(81) UTI Mutual Fund - Fixed Maturity Plan (YFMP/09/06) Growth Plan ......................................................................................... — — 1,00,00,000

(g) The following are the movements in Certificate of Deposits during the year :

AcquiredAcquiredAcquiredAcquiredAcquired SoldSoldSoldSoldSold MaturedMaturedMaturedMaturedMatured

FFFFFace Vace Vace Vace Vace Valuealuealuealuealue TTTTTotal Votal Votal Votal Votal Valuealuealuealuealue FFFFFace Vace Vace Vace Vace Valuealuealuealuealue FFFFFace Vace Vace Vace Vace ValuealuealuealuealueRs. croresRs. croresRs. croresRs. croresRs. crores Rs. croresRs. croresRs. croresRs. croresRs. crores Rs. croresRs. croresRs. croresRs. croresRs. crores Rs. croresRs. croresRs. croresRs. croresRs. crores

(1) State Bank of Travancore ......................................................................................... 25.00 23.15 25.00 —(2) ABN AMRO Bank ..................................................................................................... 25.00 23.12 10.00 —(3) State Bank of Mysore .............................................................................................. — — 25.00 —(4) Allahabad Bank ........................................................................................................ — — 15.00 —(5) Kotak Mahindra Bank Limited .................................................................................. — — 35.00 —(6) HDFC Bank ............................................................................................................ — — 30.00 —(7) State Bank of Bikaner & Jaipur ................................................................................ 95.00 89.80 60.00 —(8) State Bank of Hyderabad ......................................................................................... 25.00 23.80 10.00 —(9) State Bank of Patiala ................................................................................................ 25.00 24.55 15.00 —(10) Union Bank of India ................................................................................................. 20.00 19.16 — —(11) Punjab National Bank .............................................................................................. 50.00 48.03 25.00 —(12) State Bank of India .................................................................................................. 50.00 49.10 — 50.00




80

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VI VI VI VI VI Rupees crores

20082008200820082008 2007

Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :(A)(A)(A)(A)(A) Inventories (at cost or net realisable value whichever is lower) :Inventories (at cost or net realisable value whichever is lower) :Inventories (at cost or net realisable value whichever is lower) :Inventories (at cost or net realisable value whichever is lower) :Inventories (at cost or net realisable value whichever is lower) :

(i) Finished Products produced and purchased for sale ...................... 579.43579.43579.43579.43579.43 448.34(ii) Contracts and Work-in-Progress ...................................................... 53.1553.1553.1553.1553.15 38.24(iii) Manufactured Components ............................................................ 48.1048.1048.1048.1048.10 44.99(iv) Raw Materials and Bought-out Components .................................. 351.95351.95351.95351.95351.95 305.52(v) Property Development Activity - Work-in-Progress [including

completed flats and premises Rs. 6.32 croresRs. 6.32 croresRs. 6.32 croresRs. 6.32 croresRs. 6.32 crores(2007 : Rs. 6.32 crores)] [Note 11(b)] ............................................. 6.326.326.326.326.32 6.32

(vi) Stores and Spares ............................................................................ 24.7624.7624.7624.7624.76 17.19(vii) Tools ................................................................................................ 20.4020.4020.4020.4020.40 17.88

1,084.111,084.111,084.111,084.111,084.11 878.48

(B)(B)(B)(B)(B) Sundry Debtors (Unsecured) [Note 6] :Sundry Debtors (Unsecured) [Note 6] :Sundry Debtors (Unsecured) [Note 6] :Sundry Debtors (Unsecured) [Note 6] :Sundry Debtors (Unsecured) [Note 6] :Outstanding over six months : Considered good ................................... 111.29111.29111.29111.29111.29 85.86

: Considered doubtful ............................. 31.6131.6131.6131.6131.61 45.95

142.90142.90142.90142.90142.90 131.81

Other Debts : Considered good ................................... 893.59893.59893.59893.59893.59 615.03: Considered doubtful ............................. 1.201.201.201.201.20 6.44

894.79894.79894.79894.79894.79 621.47

1,037.691,037.691,037.691,037.691,037.69 753.28Less : Provision for Doubtful Debts ........................................................ 32.8132.8132.8132.8132.81 52.39

1,004.881,004.881,004.881,004.881,004.88 700.89

(C)(C)(C)(C)(C) Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :Cash, cheques and stamps on hand ...................................................... 194.27194.27194.27194.27194.27 329.96Balances with Scheduled Banks :(i) On Current Account ........................................................................ 109.72109.72109.72109.72109.72 81.62(ii) On Fixed Deposit Account ............................................................... 550.59550.59550.59550.59550.59 910.12(iii) On Margin Account ........................................................................ 0.060.060.060.060.06 0.05

660.37660.37660.37660.37660.37 991.79Balances with Non-Scheduled Banks [Note 7] :On Current Account ............................................................................... 6.596.596.596.596.59 4.32

861.23861.23861.23861.23861.23 1,326.07

(D)(D)(D)(D)(D) Other Current Assets :Other Current Assets :Other Current Assets :Other Current Assets :Other Current Assets :Interest accrued on investments ............................................................. 2.132.132.132.132.13 3.17Others ..................................................................................................... 11.1411.1411.1411.1411.14 0.14

13.2713.2713.2713.2713.27 3.31

(E)(E)(E)(E)(E) Loans and Advances [Note 8] :Loans and Advances [Note 8] :Loans and Advances [Note 8] :Loans and Advances [Note 8] :Loans and Advances [Note 8] :(Unsecured, considered good unless otherwise stated) :Advances and Loans to subsidiaries :-Considered good .................................................................................... 100.73100.73100.73100.73100.73 290.22Considered doubtful ............................................................................... 5.995.995.995.995.99 7.24

106.72106.72106.72106.72106.72 297.46Less : Provision for doubtful Advances and Loans ................................. 5.995.995.995.995.99 7.24

100.73100.73100.73100.73100.73 290.22Bills of exchange, considered doubtful .................................................. 1.021.021.021.021.02 1.55Less : Provision for doubtful bills ........................................................... 1.021.021.021.021.02 1.55

————— —Advances recoverable in cash or in kind or for value to be received :Considered good .................................................................................... 470.53470.53470.53470.53470.53 448.44Considered doubtful ............................................................................... 47.8047.8047.8047.8047.80 50.03

518.33518.33518.33518.33518.33 498.47Less : Provision for Doubtful Advances .................................................. 47.8047.8047.8047.8047.80 50.03

470.53470.53470.53470.53470.53 448.44Payments towards Income Tax and Surtax [Note 20(d)] ......................... 119.92119.92119.92119.92119.92 100.42Balances - Customs, Port Trust, Excise, etc. ............................................ 0.700.700.700.700.70 0.34

691.88691.88691.88691.88691.88 839.42

Total..... 3,655.373,655.373,655.373,655.373,655.37 3,748.17


81

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VII VII VII VII VII Rupees crores

20082008200820082008 2007

Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :

(A)(A)(A)(A)(A) Current Liabilities* :Current Liabilities* :Current Liabilities* :Current Liabilities* :Current Liabilities* :

Acceptances ............................................................................................ 125.79125.79125.79125.79125.79 121.85

Sundry Creditors :

(i) Total outstanding dues of micro and small enterprises[Note 9] ........................................................................................... 4.164.164.164.164.16 3.58

(ii) Total outstanding dues of creditors other than micro and smallenterprises [including Rs. 112.05 croresRs. 112.05 croresRs. 112.05 croresRs. 112.05 croresRs. 112.05 crores (2007 : Rs. 77.70 crores)being advance payments for which value has still to be given] ..... 2,086.432,086.432,086.432,086.432,086.43 1,781.48

(iii) Dues to Subsidiaries ........................................................................ 70.7070.7070.7070.7070.70 28.57

2,161.292,161.292,161.292,161.292,161.29 1,813.63

Dividend payable .................................................................................... 4.214.214.214.214.21 7.33

Balances on Directors’ Current Accounts ............................................... 2.462.462.462.462.46 2.46

Interest accrued but not due on loans ................................................... 13.8013.8013.8013.8013.80 4.95

2,307.552,307.552,307.552,307.552,307.55 1,950.22

* There are no amounts due and outstanding to be creditedto the Investor Education and Protection Fund.

(B)(B)(B)(B)(B) Provisions :Provisions :Provisions :Provisions :Provisions :

Proposed Dividend ................................................................................. 282.61282.61282.61282.61282.61 98.20

Provision for Tax on Proposed Dividend ................................................. 38.4838.4838.4838.4838.48 16.69

Provision for diminution in value of long term investments .................. 25.1725.1725.1725.1725.17 52.25

Provision for premium payable on redemption of convertible bonds .... 224.97224.97224.97224.97224.97 244.58

Provision for contingencies [Note 10 (b) & (c)] ...................................... 8.168.168.168.168.16 —

Provision for compensated absences ...................................................... 200.76200.76200.76200.76200.76 169.95

Provision for taxation ............................................................................. 37.0937.0937.0937.0937.09 29.94

Provision Others [Note 10 (a) & (c)] ....................................................... 126.22126.22126.22126.22126.22 103.82

943.46943.46943.46943.46943.46 715.43

Total........ 3,251.013,251.013,251.013,251.013,251.01 2,665.65

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VIII VIII VIII VIII VIII Rupees crores

20082008200820082008 2007

Miscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous Expenditure(to the extent not written off or adjusted) :(to the extent not written off or adjusted) :(to the extent not written off or adjusted) :(to the extent not written off or adjusted) :(to the extent not written off or adjusted) :

(a) Finance Charges ..................................................................................... 5.735.735.735.735.73 5.33

(b) Separation and Other Costs ................................................................... 7.807.807.807.807.80 12.22

Total........ 13.5313.5313.5313.5313.53 17.55

82

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE IX IX IX IX IX Rupees crores

20082008200820082008 2007

Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :

Income from services rendered ...................................................................... 523.91523.91523.91523.91523.91 285.56

Property Development Activity-Property ......................................................... ————— 5.93

Dividends on Investments in subsidiaries-Gross ............................................. 65.2465.2465.2465.2465.24 114.10

Dividends on other Investments-Gross [Note 12(a)] ...................................... 15.0115.0115.0115.0115.01 33.30

Rent received ................................................................................................. 8.438.438.438.438.43 6.50

Miscellaneous Income .................................................................................... 225.47225.47225.47225.47225.47 166.51

Profit on sale of Investments (Net) [Note 12(d)] ........................................... 28.9428.9428.9428.9428.94 5.62

Total........ 867.00867.00867.00867.00867.00 617.52

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE X X X X X Rupees crores

20082008200820082008 2007

Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :

(A)(A)(A)(A)(A) Decrease/(Increase) in Stock of Finished Goods,Decrease/(Increase) in Stock of Finished Goods,Decrease/(Increase) in Stock of Finished Goods,Decrease/(Increase) in Stock of Finished Goods,Decrease/(Increase) in Stock of Finished Goods,WWWWWork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :

Opening Stock :

(i) Finished Products produced and purchased for sale ...................... 448.34448.34448.34448.34448.34 427.95

(ii) Contracts and Work-in-Progress ...................................................... 38.2438.2438.2438.2438.24 47.32

(iii) Manufactured Components ............................................................ 44.9944.9944.9944.9944.99 49.89

531.57531.57531.57531.57531.57 525.16

Less : Closing Stock :

(i) Finished Products produced and purchased for sale ...................... 579.43579.43579.43579.43579.43 448.34

(ii) Contracts and Work-in-Progress ...................................................... 53.1553.1553.1553.1553.15 38.24

(iii) Manufactured Components ............................................................ 48.1048.1048.1048.1048.10 44.99

680.68680.68680.68680.68680.68 531.57

Decrease/(Increase) in Stock ................................................................... (149.11)(149.11)(149.11)(149.11)(149.11) (6.41)

(B)(B)(B)(B)(B) Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :

Opening Stock ........................................................................................ 305.52305.52305.52305.52305.52 308.27

Add : Purchases [including outside processing chargesRs. 251.68 croresRs. 251.68 croresRs. 251.68 croresRs. 251.68 croresRs. 251.68 crores (2007 : Rs. 232.05 crores)] ............................. 7,602.267,602.267,602.267,602.267,602.26 6,581.78

7,907.787,907.787,907.787,907.787,907.78 6,890.05

Less : Closing Stock : .............................................................................. 351.95351.95351.95351.95351.95 305.52

7,555.837,555.837,555.837,555.837,555.83 6,584.53

(C)(C)(C)(C)(C) Purchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for sale ................................................. 319.19319.19319.19319.19319.19 249.81

Total........ 7,725.917,725.917,725.917,725.917,725.91 6,827.93


83

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XI XI XI XI XI Rupees crores

20082008200820082008 2007

PPPPPersonnel :ersonnel :ersonnel :ersonnel :ersonnel :

Salaries, Wages, Bonus, etc. .......................................................................... 709.71709.71709.71709.71709.71 554.95

Contribution to Provident and other funds ................................................... 47.4847.4847.4847.4847.48 38.06

Gratuity .......................................................................................................... 14.9714.9714.9714.9714.97 7.85

Welfare .......................................................................................................... 80.2980.2980.2980.2980.29 65.29

Total........ 852.45852.45852.45852.45852.45 666.15

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XII XII XII XII XII Rupees crores

20082008200820082008 2007

Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :

On Term Loans and Debentures .................................................................... 80.8080.8080.8080.8080.80 17.50

On Others (Net) ............................................................................................. 6.796.796.796.796.79 2.30

87.5987.5987.5987.5987.59 19.80Less : Interest Income :

(i) Interest on Government Securities, Debentures and Bonds - Gross[Note 12(b)] ............................................................................................ 4.874.874.874.874.87 4.82

(ii) Interest - Others - Gross [Note 12(c)] ..................................................... 58.4858.4858.4858.4858.48 82.43

63.3563.3563.3563.3563.35 87.25

Total........ 24.2424.2424.2424.2424.24 (67.45)

84

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XIII XIII XIII XIII XIII Rupees crores

20082008200820082008 2007


Stores consumed ........................................................................................... 73.0173.0173.0173.0173.01 64.53

Tools consumed ............................................................................................. 15.7915.7915.7915.7915.79 14.30

Power and Fuel .............................................................................................. 91.3391.3391.3391.3391.33 65.19

Rent including lease rentals ........................................................................... 36.4036.4036.4036.4036.40 21.08

Rates and Taxes ............................................................................................. 22.6922.6922.6922.6922.69 22.12

Insurance ....................................................................................................... 13.1013.1013.1013.1013.10 12.67

Repairs and Maintenance [Note 13] :

Buildings ................................................................................................. 17.6517.6517.6517.6517.65 18.22

Machinery ............................................................................................... 73.3573.3573.3573.3573.35 68.80

Others ..................................................................................................... 28.8128.8128.8128.8128.81 21.01

119.81119.81119.81119.81119.81 108.03

Advertisement ................................................................................................ 77.2277.2277.2277.2277.22 82.27

Commission on sales/contracts (Net) ............................................................. 70.7470.7470.7470.7470.74 52.85

Discount allowed ........................................................................................... 5.205.205.205.205.20 2.60

Freight outward ............................................................................................. 508.95508.95508.95508.95508.95 366.70

Sales Promotion Expenses .............................................................................. 142.40142.40142.40142.40142.40 130.69

Miscellaneous Expenses [Note 14] ................................................................. 452.17452.17452.17452.17452.17 357.05

Amortisation of expenses [Note 1(E)(a)] ........................................................ 0.590.590.590.590.59 0.33

Directors’ fees ................................................................................................ 0.100.100.100.100.10 0.10

Donations and contributions ......................................................................... 7.377.377.377.377.37 6.26

Loss on Fixed Assets sold/scrapped/written off (Net) ..................................... 2.822.822.822.822.82 1.73

Excess of cost over fair value of Current Investments (Net) .......................... (1.74)(1.74)(1.74)(1.74)(1.74) 2.36

Provision for doubtful debts/advances (Net) [Note 26] ................................. (23.59)(23.59)(23.59)(23.59)(23.59) 7.71

Provision for diminution in value of Long term investments (Net) [Note 27] (5.40)(5.40)(5.40)(5.40)(5.40) —

Total........ 1,608.961,608.961,608.961,608.961,608.96 1,318.57


85

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XlV XlV XlV XlV XlV

Notes on Accounts for the year ended 31st March, 2008Notes on Accounts for the year ended 31st March, 2008Notes on Accounts for the year ended 31st March, 2008Notes on Accounts for the year ended 31st March, 2008Notes on Accounts for the year ended 31st March, 2008

1. Significant Accounting Policies :

(A) Fixed Assets :

(a) (i) Fixed Assets are carried at cost less depreciation except as stated in (ii) below. Cost includes financing cost relating to borrowedfunds attributable to the construction or acquisition of qualifying fixed assets upto the date the asset is ready for use.

When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of accountand resultant profit (including capital profit) or loss, if any, is reflected in the Profit and Loss Account.

(ii) Land and Buildings, had been revalued as at 31st October, 1984 at depreciated replacement values on the basis of a valuationmade by a firm of Chartered Surveyors & Valuers. The indices, if any, used are not stated in the valuation.

(b) (i) Leasehold land is amortised over the period of the lease.

(ii) Depreciation on assets is calculated on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to theCompanies Act, 1956, except for :

(1) Certain items of Plant & Machinery individually costing more than Rs. 5,000 - over their useful lives (2 years, 3 years, 5 yearsor 7 years, as the case may be) as determined by the Company.

(2) Cars and Vehicles for commercial use - at 16.21% of cost and others - at 15% of cost.

(iii) Depreciation charge for each year is after deducting the amount representing the depreciation on the increase due to revaluationof Land and Buildings, transferred from the Revaluation Reserve.

(B) Intangible Assets :

Intangible Assets are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits areconsumed.

(a) Technical Knowhow :

The expenditure incurred is amortised over the estimated period of benefit, not exceeding six years commencing with the year ofpurchase of the technology.

(b) Development Expenditure :

The expenditure incurred on technical services and other project/product related expenses are amortised over the estimated period ofbenefit, not exceeding five years.

(c) Software Expenditure :

The expenditure incurred is amortised over three financial years equally commencing from the year in which the expenditure isincurred.

(C) Investments :

Long term investments are valued at cost. However, provision for diminution in value is made to recognise a decline other than temporaryin the value of investments. Current investments are valued at the lower of cost and fair value, determined by category of investment.

(D) Inventories :

Inventories are stated at cost or net realisable value, whichever is lower. Cost is arrived at on a weighted average method and includes,where appropriate, manufacturing overheads and excise duty. Long term contracts in progress are valued at cost.

(E) Miscellaneous Expenditure (to the extent not written off or adjusted) :

Expenditure carried forward under this head is being amortised as follows :

(a) Finance Charges :

The expenditure incurred in raising long term borrowings is amortised over the period of the borrowings. On early buyback,conversion or repayment of borrowings, any unamortised expenditure is fully written off in that year.

(b) Separation and Other Costs :

Special Payments/Pensions under Voluntary Retirement Schemes.

The liability is amortised by the year ended March, 2010 from the month in which the liability is incurred.

86

(F) Foreign Exchange Transactions :

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated atthe year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also ontranslation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of a forward exchange contract is recognised as income or expense over the life of thecontract, except in the case where the contract is designated as a cash flow hedge.

(G) Derivative Instruments and Hedge Accounting :

The Company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and highly probable forecast transactions. The Company does not hold derivative financial instrumentsfor speculative purposes. The Company has applied to all such contracts outstanding as on 31st March, 2008 the hedge accountingprinciples set out in Accounting Standard 30 “Financial Instruments : Recognition and Measurement” (AS 30) by marking them to market.

Changes in the fair value of the contracts that are designated and effective as hedges of future cash flows are recognised directly inHedging Reserve Account and the ineffective portion is recognised immediately in the profit and loss account.

(H) Revenue Recognition :

Sales of products and services are recognised when the products are shipped or services rendered. In respect of sale of property(concerning property development activity), the Company accounts for the income on the percentage of completion basis. [Refer paragraph(I) below].

Dividend from investments are recognised in the Profit and Loss Account when the right to receive payment is established.

(I) Property Development Activity :

The Company accounts for income on the percentage of completion basis which necessarily involves technical estimates of the percentageof completion, and costs to completion of the activity, on the basis of which profits/losses are accounted. Such estimates, made by theCompany and certified to the auditors, have been relied upon by them, as these are of a technical nature.

(J) Government Grants :

The Company is entitled to various incentives from a State Government, such as grants by way of refund of octroi duty paid by theCompany for its manufacturing unit located in a developing region. In view of the uncertainty in respect of the collection of these grants,such grants are accounted for as and when the disbursements are received.

(K) Employee Benefits :

Defined Contribution Plan/Defined Benefit Plan/Long Term Compensated Absences

Company’s contributions paid/payable during the year to Superannuation Fund, ESIC and Labour Welfare Fund are recognised in the Profitand Loss Account.

Contributions to Provident Fund are made to a Trust administered by the Company and are charged to Profit and Loss account as incurred.The Company is liable for the contribution and any shortfall in interest between the amount of interest realised by the investment and theinterest payable to members at the rate declared by the Government of India.

Company’s liability towards gratuity, long term compensated absences and post retirement medical benefit schemes are determined byindependent actuaries, using the projected unit credit method. Past services are recognised on a straight line basis over the average perioduntil the benefits become vested. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account asincome or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determinedby reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bondsare consistent with the currency and estimated terms of the defined benefit obligation.

(L) Redemption Premium :

Premium payable on redemption of Bonds/Debentures is fully provided and charged to Securities Premium Account (Net of Tax) in the yearof issue.

(M) Product Warranty :

In respect of warranties given by the Company on sale of certain products, the estimated costs of these warranties are accrued at the timeof sale. The estimates for accounting of warranties are reviewed and revisions are made as required.

(N) Leases :

The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns,computer hardware etc.). The leasing arrangements, which are not non-cancellable, range between eleven months and three yearsgenerally, and are usually renewable by mutual consent on agreed terms. The aggregate lease rentals payable are charged as rent includinglease rentals.


87

(O) Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subject toconsideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbeddepreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincing evidencethat sufficient future tax income will be available against which such deferred tax assets can be realised.

(P) Excise duty recovered on sales is included in “Sales – Traded and Manufactured Goods”. Excise duty in respect of Finished Goodsmanufactured is shown separately as an item of expense and included in valuation of finished goods produced.

2.2.2.2.2. Share Capital :Share Capital :Share Capital :Share Capital :Share Capital :

Issued and Subscribed Capital include :

(i) 1,66,809 Ordinary Shares allotted as fully paid-up pursuant to a contract without payment having been received in cash.

(ii) 17,06,07,504 Ordinary Shares allotted as fully paid-up by way of Bonus Shares by capitalisation of Securities Premium Account andReserves.

(iii) 12,56,562 Ordinary Shares issued consequent to the Scheme of Amalgamation with the Union Bank of India Limited. Of these, 13,737Ordinary Shares were issued on conversion of 41,211 8% Bonds.

(iv) 12,98,202 Ordinary Shares issued consequent to the Scheme of Amalgamation with International Tractor Company of India Limitedwithout payment having been received in cash.

(v) 1,88,166 Ordinary Shares issued consequent to the Scheme of Amalgamation with Mahindra Spicer Limited without payment having beenreceived in cash.

(vi) 9,73,200 Ordinary Shares issued consequent to the Scheme of Amalgamation with Mahindra Nissan Allwyn Limited without paymenthaving been received in cash.

3.3.3.3.3. Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Rupees crores

20082008200820082008 2007

(a) Movements during the year :

(i) Securities Premium Account :

Additions, arising out of exercise of options ............................................ 1.341.341.341.341.34 0.14

Premium on conversion of Debentures and Bonds ................................... 11.6211.6211.6211.6211.62 140.14

Reduction of provision for premium on redemption of Zero CouponConvertible Bonds (Net of Tax of Rs. 5.54 croresRs. 5.54 croresRs. 5.54 croresRs. 5.54 croresRs. 5.54 crores (2007 : Rs. Nil)) 14.0814.0814.0814.0814.08 8.73

27.0427.0427.0427.0427.04 149.01Applied, in accordance with Section 78 of the Companies Act, 1956, towards :

Writing-off of share and bonds/debenture issue expenses(Net of Tax of Rs. 0.49 croresRs. 0.49 croresRs. 0.49 croresRs. 0.49 croresRs. 0.49 crores (2007 : Rs. 0.48 crores)) ........................... 2.012.012.012.012.01 1.74

Premium on redemption/buyback of debentures and Zero Coupon ConvertibleBonds (Net of Tax of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 81.87 crores)) ............................ ----- 161.37

2.012.012.012.012.01 163.11

(ii) Revaluation Reserve :

Adjusted against depreciation for the year [Note 1 (A)(b)(iii)] .................. 0.390.390.390.390.39 0.43

Adjusted in respect of revalued Land and Buildings sold/demolished ....... ----- 0.04

0.390.390.390.390.39 0.47

(b) The Guidance Note on Accounting for Employee Share-based Payments issued by The Institute of Chartered Accountants of India requiresthat shares allotted to a trust but not transferred to employees be reduced from Share Capital and Reserves. Accordingly, the Company hasreduced the Share Capital by Rs. 3.34 croresRs. 3.34 croresRs. 3.34 croresRs. 3.34 croresRs. 3.34 crores (2007 : Rs. 3.67 crores), Securities Premium by Rs. 16.34 crores Rs. 16.34 crores Rs. 16.34 crores Rs. 16.34 crores Rs. 16.34 crores (2007 : Rs. 17.98 crores) forthe 33,34,21633,34,21633,34,21633,34,21633,34,216 shares (2007 : 36,69,279 shares) held by the trust pending transfer to the eligible employees.

The Share Capital of the Company has also been reduced and the General Reserve increased by Rs. 3.33 croresRs. 3.33 croresRs. 3.33 croresRs. 3.33 croresRs. 3.33 crores (2007 : Rs. 3.67 crores) forthe bonus shares issued by the Company in September 2005 to the trust but not yet transferred by the trust to the employees. The abovemonies which are treated as advance received from it, is included under Current Liabilities.

88

(c) Consequent to the announcement issued by The Institute of Chartered Accountants of India dated 29th March, 2008 in respect of forwardexchange contracts and currency and interest rate swaps, the Company has applied the Hedge Accounting principles set out in theAccounting Standard (AS) 30 “Financial Instruments : Recognition and Measurement” with effect from 31st March, 2008. Accordingly, allsuch contracts outstanding as on 31st March, 2008 are marked to market and the loss aggregating Rs. 12.92 crores (Net of Tax ofRs. 6.66 crores) arising consequently on contracts that were designated and effective as hedges of future cash flows has been recogniseddirectly in the Hedging Reserve Account.

Consequent to this change in accounting for such contracts, the Reserves and Surplus is lower by Rs. 12.92 crores (Net of Tax ofRs. 6.66 crores).

4.4.4.4.4. Loans :Loans :Loans :Loans :Loans :

(a) Debentures are redeemable/have been redeemed at par as follows –

(i) Rs. 5.00 crores on 16th July, 2008

(ii) Rs. 0.50 crores on 22nd May, 2008 (pursuant to exercise of call option)

(iii) Rs. 200.00 crores on 9th January, 2011

(iv) Also refer Note 4 (c) below

(b) (i) Debentures of Rs. 205.51 crores Rs. 205.51 crores Rs. 205.51 crores Rs. 205.51 crores Rs. 205.51 crores and Foreign Currency Loans from Banks of Rs. 121.80 croresRs. 121.80 croresRs. 121.80 croresRs. 121.80 croresRs. 121.80 crores are secured by a pari-passu charge onimmovable properties of the Company both present and future, subject to certain exclusions and are also secured by pari-passucharge on the movable properties of the Company including movable machinery, machinery spares, tools and accessories, bothpresent and future.

(ii) Short term Foreign Currency Loan of Rs. 280.91 crores Rs. 280.91 crores Rs. 280.91 crores Rs. 280.91 crores Rs. 280.91 crores from Banks and Loans and Advances on cash credit accounts from theCompany’s Bankers are secured by a first charge on a pari-passu basis on the whole of the current assets of the Company namelyinventories, book debts, outstanding monies, receivables, claims etc. both present and future.

(c) Debentures of the face value of Rs. 110 each and Zero Interest Bonds of the face value of Rs. 90 each were both compulsorily andautomatically fully converted into two equity shares of Rs.10 each at a premium of Rs. 45 per share and Rs. 35 per share respectively on1st April, 1991, 1st October, 1991 and 18th July, 1992. The balance amount of Rs. 0.01 crores will be converted, into appropriate numberof equity shares, on receipt of the balance amount due on allotment.

(d) The following amounts are repayable by 31st March, 2009 :

(i) Debenture holders ......................................................................... : Rs. 5.50 croresRs. 5.50 croresRs. 5.50 croresRs. 5.50 croresRs. 5.50 crores (2007 : Rs. Nil)

(ii) Foreign currency loans from Banks (secured) ................................. : Rs. 304.41 croresRs. 304.41 croresRs. 304.41 croresRs. 304.41 croresRs. 304.41 crores (2007 : Rs. 11.75 crores)

(iii) Fixed Deposit holders ..................................................................... : Rs. 2.15 crores Rs. 2.15 crores Rs. 2.15 crores Rs. 2.15 crores Rs. 2.15 crores (2007 : Rs. 1.59 crores)

(iv) Rupee Loans :-

(a) from banks ............................................................................ : Rs. 106.14 croresRs. 106.14 croresRs. 106.14 croresRs. 106.14 croresRs. 106.14 crores (2007 : Rs. 8.03 crores)

(b) from others ............................................................................ : Rs. 6.14 croresRs. 6.14 croresRs. 6.14 croresRs. 6.14 croresRs. 6.14 crores (2007 : Rs. 3.43 crores)

The Company had issued during the year ended 31st March, 2005, Zero Coupon Foreign Currency Convertible Bonds (Bonds 2009) aggregatingUS $ 100 million, at par. Upto 31st March, 2008, those Bonds have been fully converted into equity shares/GDRs.

Premium payable on redemption of Bonds 2009 had been fully provided in the previous year by debiting the same to Securities PremiumAccount (SPA). Consequent to the conversion premium aggregating Rs. 1.37 crores no longer payable on bonds converted into equity shares/GDRs has been credited back to SPA during the year.

The Company had issued during the year ended 31st March, 2007, Zero Coupon Foreign Currency Convertible Bonds (Bonds 2011) aggregatingUS $ 200 million, at par. The bond holders have an option to convert these bonds into Equity Shares with full voting rights or Global DepositoryReceipts (GDRs) determined at an initial conversion price of Rs. 922.04 per share with fixed exchange rate of conversion of Rs. 44.42 = US $ 1,at any time on or after 7th May, 2006 upto 7th March, 2011.

The Bonds 2011 may be redeemed, in whole but not in part, at the option of the Company at any time on or after 13th April, 2008 subject tosatisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the bonds fall due for redemption on14th April, 2011 at 128.03 per cent of their principal amount. Upto 31st March, 2008, none of the Bonds 2011 have been converted into equityshares/GDRs.

The net proceeds of Rs. 274.03 crores,Rs. 274.03 crores,Rs. 274.03 crores,Rs. 274.03 crores,Rs. 274.03 crores, unutilised as at 31st March, 2008, is disclosed under Cash and Bank Balances.


89

5.5.5.5.5. (a) Land includes a sum of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 1.30 crores) for which the conveyance is pending receipt of approval from the appropriateauthorities.

(b) Buildings include Rs. * croresRs. * croresRs. * croresRs. * croresRs. * crores (2007 : Rs. * crores) being the value of shares in co-operative housing societies.

(c) Additions to Plant and Machinery include Rs. NilRs. NilRs. NilRs. NilRs. Nil [2007 : Rs. 0.22 crores (debit) (Net)] on account of foreign exchange fluctuation.

(d) (i) The depreciation charge for the year excludes :

(a) An amount of Rs. 0.39 crores Rs. 0.39 crores Rs. 0.39 crores Rs. 0.39 crores Rs. 0.39 crores (2007 : Rs. 0.43 crores), representing depreciation on the increase due to revaluation of Land andBuildings transferred from the Revaluation Reserve.

(b) An amount of Rs. 0.17 croresRs. 0.17 croresRs. 0.17 croresRs. 0.17 croresRs. 0.17 crores (2007 : Rs. 0.03 crores), representing depreciation on assets used for development work. Thisexpenditure is transferred to Development Expenditure and is appropriately amortised.

(ii) The Revaluation Reserve is also adjusted for an amount of Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. 0.04 crores) in respect of revalued Land and Buildingssold/demolished during the year.

(iii) The net credit to the Profit and Loss Account consequent to the above adjustments to the Revaluation Reserve is Rs. 0.39 croresRs. 0.39 croresRs. 0.39 croresRs. 0.39 croresRs. 0.39 crores(2007 : Rs. 0.47 crores).

6.6.6.6.6. Sundry Debtors others include Rs. 0.22 crores Rs. 0.22 crores Rs. 0.22 crores Rs. 0.22 crores Rs. 0.22 crores (2007 : Rs.7.38 crores), which, in accordance with the terms of the contracts, were not due forpayment as at 31st March, 2008.

7.7.7.7.7. Cash and Bank Balances include balances lying with non-scheduled banks :

(a)(a)(a)(a)(a) In Current AccountIn Current AccountIn Current AccountIn Current AccountIn Current Account

Rupees crores

Bank Tejarat, Bank of Bank of The MunicipalTehran Australia China Co-op. Bank Ltd.

Balance as at 31st March, 2008 ........................................ ***** 4.384.384.384.384.38 0.060.060.060.060.06 2.152.152.152.152.15

Balance as at 31st March, 2007 ........................................ * 1.37 0.63 2.32

Maximum balance during the year ................................... ***** 5.625.625.625.625.62 1.411.411.411.411.41 3.613.613.613.613.61

Maximum balance during the previous year ..................... * 6.43 0.78 3.81

(b)(b)(b)(b)(b) In Deposit AccountIn Deposit AccountIn Deposit AccountIn Deposit AccountIn Deposit Account

Rupees crores

Bank of Australia

Balance as at 31st March, 2008 ........................................ -----

Balance as at 31st March, 2007 ........................................ -

Maximum balance during the year ................................... -----

Maximum balance during the previous year ..................... 0.16

8.8.8.8.8. Loans and Advances include :Loans and Advances include :Loans and Advances include :Loans and Advances include :Loans and Advances include :

(i) Fixed/Call deposits with/loans to limited companies Rs. 71.44 croresRs. 71.44 croresRs. 71.44 croresRs. 71.44 croresRs. 71.44 crores (2007 : Rs. 259.06 crores) including Rs. 64.95 croresRs. 64.95 croresRs. 64.95 croresRs. 64.95 croresRs. 64.95 crores (2007 : Rs.252.39 crores) with/to subsidiaries.

(ii) Amounts paid towards joint development of property Rs. 1.54 crores Rs. 1.54 crores Rs. 1.54 crores Rs. 1.54 crores Rs. 1.54 crores (2007 : Rs. 1.54 crores).

(iii) Share Application money pending allotment Rs. 9.33 crores Rs. 9.33 crores Rs. 9.33 crores Rs. 9.33 crores Rs. 9.33 crores (2007 : Rs. 15.72 crores) to subsidiaries.

(iv) Amount held in escrow account towards acquisition of shares in companies Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. 99.72 crores).

* denotes amounts less than Rs. 50,000

90

9.9.9.9.9. Micro, Small and Medium enterprises have been identified by the Company on the basis of the information available. Total outstanding dues ofMicro and Small enterprises, which are outstanding for more than the stipulated period are given below : -

Rupees crores

20082008200820082008 2007

(a) Dues remaining unpaid as at 31st March

Principal 3.093.093.093.093.09 1.50

Interest 0.040.040.040.040.04 *

(b) Interest paid in terms of Section 16 of the Act ----- -

(c) Amount of interest due and payable for the period of delay on

payments made beyond the appointed day during the year 0.100.100.100.100.10 0.01

(d) Amount of interest accrued and remaining unpaid as at 31st March 0.150.150.150.150.15 0.01

(e) Further interest due and payable even in the succeeding years, until such

date when the interest due as above are actually paid to the small enterprises 0.010.010.010.010.01 -

10.10.10.10.10. (a) Provision - Others Rs. 126.22 crores Rs. 126.22 crores Rs. 126.22 crores Rs. 126.22 crores Rs. 126.22 crores (2007 : Rs. 103.82 crores) includes provision for warranty Rs. 106.42 croresRs. 106.42 croresRs. 106.42 croresRs. 106.42 croresRs. 106.42 crores (2007 : Rs. 85.32 crores).This relates to warranty provision made in respect of sale of certain products, the estimated cost of which is accrued at the time of sale. Theproducts are generally covered under a free warranty period ranging from 6 months to 3 years.

(b) Provision for Contingencies Rs. 8.16 crores Rs. 8.16 crores Rs. 8.16 crores Rs. 8.16 crores Rs. 8.16 crores (2007 : Rs. Nil) is in respect of labour demands under negotiations at certain locations of theCompany.

(c) The movement in above provisions is as follows :

Rupees crores

WWWWWarrantyarrantyarrantyarrantyarranty ContingencyContingencyContingencyContingencyContingency

20082008200820082008 2007 20082008200820082008 2007

ProvisionsProvisionsProvisionsProvisionsProvisions

Balance as at 1st April 85.3285.3285.3285.3285.32 63.21 ----- 0.78

Add : Provision made during the year 90.7890.7890.7890.7890.78 81.55 8.168.168.168.168.16 -

Less : Utilisation during the year 69.6869.6869.6869.6869.68 59.44 ----- 0.78

Balance as at 31st MarchBalance as at 31st MarchBalance as at 31st MarchBalance as at 31st MarchBalance as at 31st March 106.42106.42106.42106.42106.42 85.32 8.168.168.168.168.16 -

11.11.11.11.11. (a) Sales include :

(i) Export benefits Rs. 28.64 croresRs. 28.64 croresRs. 28.64 croresRs. 28.64 croresRs. 28.64 crores (2007 : Rs. 48.49 crores).

(ii) Cost of items given for sales promotion/as donations Rs. 0.32 croresRs. 0.32 croresRs. 0.32 croresRs. 0.32 croresRs. 0.32 crores (2007 : Rs. 0.34 crores).

(b) Stock-in-Trade, Property Development Activity, includes completed premises Rs. 3.13 crores Rs. 3.13 crores Rs. 3.13 crores Rs. 3.13 crores Rs. 3.13 crores (2007 : Rs. 3.13 crores), which, pending sale,have been given out on leave and licence basis for which fresh agreement is under negotiation.

12.12.12.12.12. (a) Dividends on other investments Rs. 15.01 croresRs. 15.01 croresRs. 15.01 croresRs. 15.01 croresRs. 15.01 crores (2007 : Rs. 33.30 crores) are in respect of current investments.

(b) Interest on Government Securities, Debentures and Bonds includes tax deducted at source Rs. 0.90 croresRs. 0.90 croresRs. 0.90 croresRs. 0.90 croresRs. 0.90 crores (2007 : Rs. 0.94 crores) andcomprise Rs. 0.28 croresRs. 0.28 croresRs. 0.28 croresRs. 0.28 croresRs. 0.28 crores (2007 : Rs. 1.33 crores) and Rs. 4.59 croresRs. 4.59 croresRs. 4.59 croresRs. 4.59 croresRs. 4.59 crores (2007 : Rs. 3.49 crores) in respect of long term and currentinvestments respectively.

(c) Interest received - others includes tax deducted at source Rs. 3.91 croresRs. 3.91 croresRs. 3.91 croresRs. 3.91 croresRs. 3.91 crores (2007 : Rs. 5.44 crores).

(d) Profit on sale of investments (Net) includes profit on disposal of current investments (Net) Rs. 14.72 croresRs. 14.72 croresRs. 14.72 croresRs. 14.72 croresRs. 14.72 crores (2007 : Rs. 5.62 crores), andprofit on disposal of long term investments (Net) Rs. 14.22 croresRs. 14.22 croresRs. 14.22 croresRs. 14.22 croresRs. 14.22 crores (2007 : Rs. Nil).

13.13.13.13.13. Repairs and Maintenance includes machinery spares consumed Rs. 22.19 croresRs. 22.19 croresRs. 22.19 croresRs. 22.19 croresRs. 22.19 crores (2007 : Rs. 21.10 crores) but does not include items includedunder Consumption of Raw Materials and Bought-out Components and amounts charged to salaries and wages (amounts not ascertained).



91

14.14.14.14.14. Miscellaneous Expenses include :Miscellaneous Expenses include :Miscellaneous Expenses include :Miscellaneous Expenses include :Miscellaneous Expenses include :

(a) Amounts paid/payable to Auditors (net of service tax where applicable) :

Rupees crores

Statutory AuditorsStatutory AuditorsStatutory AuditorsStatutory AuditorsStatutory Auditors Cost AuditorsCost AuditorsCost AuditorsCost AuditorsCost Auditors

(i) Audit Fees ...................................................................................................................... 0.910.910.910.910.91 0.020.020.020.020.020.76 0.02

(ii) Company Law matters ................................................................................................... ***** -----* -

(iii) Other Services ................................................................................................................ 0.740.740.740.740.74 -----0.47 0.01

(iv) Reimbursement of expenses :

As auditor ...................................................................................................................... 0.060.060.060.060.06 *****0.01 *

1.711.711.711.711.71 0.020.020.020.020.021.24 0.03

The above amounts exclude Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 0.35 crores) paid to the Statutory Auditors which is being adjusted against SecuritiesPremium Account being FCCB issue expenses.

(b) An amount of Rs. 1.20 croresRs. 1.20 croresRs. 1.20 croresRs. 1.20 croresRs. 1.20 crores (2007 : Rs. 0.96 crores) payable as commission to non-wholetime Directors – Note 15 and Schedule XV.

(c) The cost of property sold including movement in work-in-progress in respect of property development activity are as under :

Rupees crores

20082008200820082008 2007

Opening balance as on 1st April ***** 1.69

Add : Construction Cost ----- 0.11

***** 1.80

Less : Flats Capitalised ----- 1.68

Less : Cost of Property Development Activity–Work–in–Progress as at 31st March ***** *

***** 1.68

----- 0.12

15.15.15.15.15. Managerial remuneration for Directors included in the Profit and Loss Account is Rs. 6.78 croresRs. 6.78 croresRs. 6.78 croresRs. 6.78 croresRs. 6.78 crores (2007 : Rs. 6.15 crores) including Directors’ feesof Rs. 0.10 croresRs. 0.10 croresRs. 0.10 croresRs. 0.10 croresRs. 0.10 crores (2007 : Rs. 0.10 crores), perquisites Rs. 1.25 croresRs. 1.25 croresRs. 1.25 croresRs. 1.25 croresRs. 1.25 crores (2007 : Rs. 1.20 crores) and commission Rs. 3.65 croresRs. 3.65 croresRs. 3.65 croresRs. 3.65 croresRs. 3.65 crores (2007 :Rs. 3.41 crores) (See Schedule XV) and excluding charge for gratuity, provision for leave encashment and post retirement medical benefit asseparate actuarial valuation figures are not available. The above perquisites include amortisation of Employees Stock Options amounting toRs. 0.09 croresRs. 0.09 croresRs. 0.09 croresRs. 0.09 croresRs. 0.09 crores (2007 : Rs. 0.11 crores).


92

16.16.16.16.16. Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :

Defined benefit plans – as per Actuarial valuation on 31st March, 2008.

Gratuity (FGratuity (FGratuity (FGratuity (FGratuity (Funded)unded)unded)unded)unded) Rupees crores

20082008200820082008 2007

I.I.I.I.I. Expense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st March

1. Current Service Cost 13.2013.2013.2013.2013.20 13.39

2. Interest 14.8414.8414.8414.8414.84 13.24

3. Expected Return on Plan Assets (12.45)(12.45)(12.45)(12.45)(12.45) (10.81)

4. Actuarial (Gain)/Loss (0.62)(0.62)(0.62)(0.62)(0.62) (7.97)

5. Total expense 14.9714.9714.9714.9714.97 7.85

II.II.II.II.II. Net Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st March

1. Present value of Defined Benefit Obligation as at 31st March 201.76201.76201.76201.76201.76 184.43

2. Fair value of plan assets as at 31st March 163.58163.58163.58163.58163.58 127.04

3. Funded status [Surplus/(Deficit)] (38.18)(38.18)(38.18)(38.18)(38.18) (57.39)

4. Net Asset/(Liability) as at 31st March (38.18)(38.18)(38.18)(38.18)(38.18) (57.39)

III.III.III.III.III. Change in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st March

1. Present value of Defined Benefit Obligation at the beginning of the year 184.43184.43184.43184.43184.43 173.08


3. Interest Cost 14.8414.8414.8414.8414.84 13.24


5. Benefit payments ** (10.09)(10.09)(10.09)(10.09)(10.09) (6.64)

6. Present value of Defined Benefit Obligation at the end of the year 201.76201.76201.76201.76201.76 184.43

IVIVIVIVIV..... Change in FChange in FChange in FChange in FChange in Fair Vair Vair Vair Vair Value of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st March

1. Fair value of plan assets at the beginning of the year 127.04127.04127.04127.04127.04 109.66

2. Expected return on plan asset 12.4512.4512.4512.4512.45 10.81

3. Contributions by employer 31.4531.4531.4531.4531.45 13.21

4. Actual benefits paid (7.36)(7.36)(7.36)(7.36)(7.36) (6.64)

5. Fair value of plan assets at the end of the year 163.58163.58163.58163.58163.58 127.04

6. Actual return on plan assets 12.4512.4512.4512.4512.45 10.81

VVVVV..... The major categories of plan assets as a percentage of total planThe major categories of plan assets as a percentage of total planThe major categories of plan assets as a percentage of total planThe major categories of plan assets as a percentage of total planThe major categories of plan assets as a percentage of total plan

Funded with LIC 100%100%100%100%100% 100%

VIVIVIVIVI Actuarial assumptionsActuarial assumptionsActuarial assumptionsActuarial assumptionsActuarial assumptions

1. Discount Rate 8.05%8.05%8.05%8.05%8.05% 8.20%

2. Expected rate of return on plan assets 9.45%9.45%9.45%9.45%9.45% 9.20%

3. In-Service Mortality Indian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives Mortality

(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate

4. Turnover Rate Age 21 to 30Age 21 to 30Age 21 to 30Age 21 to 30Age 21 to 30 10%10%10%10%10% Age 21 to 44 2%

Age 31 to 40Age 31 to 40Age 31 to 40Age 31 to 40Age 31 to 40 5%5%5%5%5% Age 45 to 60 1%

Age 41 to 50Age 41 to 50Age 41 to 50Age 41 to 50Age 41 to 50 3%3%3%3%3%

Age 51 & aboveAge 51 & aboveAge 51 & aboveAge 51 & aboveAge 51 & above 2%2%2%2%2%

VII.VII.VII.VII.VII. Experience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience Adjustments

1. Defined Benefit Obligation 201.76201.76201.76201.76201.76 184.43

2. Surplus/(Deficit) (38.18)(38.18)(38.18)(38.18)(38.18) (57.39)

3. Experience Adjustment on Plan Liabilities 4.674.674.674.674.67 -

* *Includes benefit payment recoverable Rs. 2.73 crores.


93

PPPPPost Retirement Medical Benefits (Unfunded)ost Retirement Medical Benefits (Unfunded)ost Retirement Medical Benefits (Unfunded)ost Retirement Medical Benefits (Unfunded)ost Retirement Medical Benefits (Unfunded) Rupees crores

20082008200820082008 2007

I.I.I.I.I. Expense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossExpense recognised in the Statement of Profit and LossAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st MarchAccount for the year ended 31st March


2. Interest 0.280.280.280.280.28 0.23


4. Total expense (0.28)(0.28)(0.28)(0.28)(0.28) 0.30

II.II.II.II.II. Net Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st MarchNet Asset/(Liability) recognised in the Balance Sheet as at 31st March

1. Present value of Defined Benefit Obligation as at 31st March 2.792.792.792.792.79 3.22

2. Funded status [Surplus/(Deficit)] (2.79)(2.79)(2.79)(2.79)(2.79) (3.22)

3. Net Asset/(Liability) as at 31st March (2.79)(2.79)(2.79)(2.79)(2.79) (3.22)

III.III.III.III.III. Change in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st MarchChange in the obligation during the year ended 31st March

1. Present value of Defined Benefit Obligation at the beginning of the year 3.223.223.223.223.22 3.08


3. Interest Cost 0.280.280.280.280.28 0.23


5. Benefit payments (0.15)(0.15)(0.15)(0.15)(0.15) (0.16)

6. Present value of Defined Benefit Obligation at the end of the year 2.792.792.792.792.79 3.22

IVIVIVIVIV..... Change in FChange in FChange in FChange in FChange in Fair Vair Vair Vair Vair Value of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st Marchalue of Assets during the year ended 31st March

1. Contributions by employer 0.150.150.150.150.15 0.16

2. Actual benefits paid (0.15)(0.15)(0.15)(0.15)(0.15) (0.16)

VVVVV..... Actuarial assumptionsActuarial assumptionsActuarial assumptionsActuarial assumptionsActuarial assumptions

1. Discount Rate 8.05%8.05%8.05%8.05%8.05% 8.20%

2. In-Service Mortality Indian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives MortalityIndian Assured Lives Mortality(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate(1994-96) Modified Ultimate

3. Turnover Rate Age 21 to 30Age 21 to 30Age 21 to 30Age 21 to 30Age 21 to 30 10%10%10%10%10% Age 21 to 44 2%Age 31 to 40Age 31 to 40Age 31 to 40Age 31 to 40Age 31 to 40 5%5%5%5%5% Age 45 to 60 1%Age 41 to 50Age 41 to 50Age 41 to 50Age 41 to 50Age 41 to 50 3%3%3%3%3%Age 51 & aboveAge 51 & aboveAge 51 & aboveAge 51 & aboveAge 51 & above 2%2%2%2%2%

4. Medical premium inflation 3.00%3.00%3.00%3.00%3.00%

VI.VI.VI.VI.VI. Effect of one percentage point change in the assumed medical inflation rateEffect of one percentage point change in the assumed medical inflation rateEffect of one percentage point change in the assumed medical inflation rateEffect of one percentage point change in the assumed medical inflation rateEffect of one percentage point change in the assumed medical inflation rate One percentage pointOne percentage pointOne percentage pointOne percentage pointOne percentage point One percentage pointOne percentage pointOne percentage pointOne percentage pointOne percentage pointincrease in medicalincrease in medicalincrease in medicalincrease in medicalincrease in medical decrease in medicaldecrease in medicaldecrease in medicaldecrease in medicaldecrease in medical

inflation ratesinflation ratesinflation ratesinflation ratesinflation rates inflation rates inflation rates inflation rates inflation rates inflation rates

20082008200820082008 2007 20082008200820082008 2007

1. Effect on the aggregate service and interest cost ofPost Employment Medical Benefits 0.050.050.050.050.05 0.09 (0.08)(0.08)(0.08)(0.08)(0.08) (0.06)

2. Effect on the accumulated Post Employment Medical Benefits Obligations 0.380.380.380.380.38 0.42 (0.32)(0.32)(0.32)(0.32)(0.32) (0.40)

VII.VII.VII.VII.VII. Experience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience Adjustments

1. Defined Benefit Obligation 2.792.792.792.792.79 3.22

2. Surplus/(Deficit) (2.79)(2.79)(2.79)(2.79)(2.79) (3.22)

3. Experience Adjustment on Plan Liabilities (0.55)(0.55)(0.55)(0.55)(0.55) 0.07

94

Basis used to determine expected rate of return on assets :

Based on expectation of the average long term rate of return expected on investment of the fund, during the estimated term of obligation.

The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevantfactors, such as supply and demand in the employment market.

During the previous year the Company had adopted Accounting Standard (AS) 15 (revised 2005) Employee Benefits. Read with the AccountingStandard Board Guidance on implementing AS 15, Employee Benefits (revised 2005) issued by The Institute of Chartered Accountants of India inMay 2007, the Company had

(i) accounted for Rs. 80.90 crores (Net of Tax of Rs. 41.05 crores) as a reduction from Revenue Reserves.

(ii) accounted as prior period adjustment (Net of Tax) Rs. 19.19 crores being on account of Provision for Gratuity Rs. 25.85 crores Gross arisingfrom certain refinements in the actuarial assumptions and accrual of Post Retirement Medical Benefits on an actuarial basis Rs. 3.08 croresGross and the resultant tax credit thereon was Rs. 9.74 crores.

17.17.17.17.17. The Company had allotted 55,24,219 ordinary (equity) shares in the year ended 31st March, 2002, to the Mahindra & Mahindra Employees’Stock Option Trust set up by the Company. The trust holds these shares for the benefit of the employees and issues them to the eligibleemployees as per the recommendation of the Compensation Committee.

In respect of options granted prior to 29th September, 2006, the equity settled options vest one year from the date of the grant and areexercisable on specified dates in 3 tranches within a period of 5 years from the date of vesting. The number of options exercisable in eachtranche is between the minimum of 100 and a maximum of 1/3rd of the options vested, except in case of the last date of exercise, where theemployee can exercise all the options vested but not exercised till that date.

Options granted on or after 29th September, 2006 vest in 4 equal instalments on the expiry of 12 Months, 24 Months, 36 Months and 48Months from the date of grant. The options may be exercised on the date of vesting and on specified dates within 5 years from the date ofvesting. Number of vested options exercisable on each specified date is subject to a minimum of 50 or number of options vested whichever islower, except in case of the last date of exercise, where the employee can exercise all the options vested but not exercised till that date.

The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.

Summary of Stock OptionsSummary of Stock OptionsSummary of Stock OptionsSummary of Stock OptionsSummary of Stock OptionsNo. of stock optionsNo. of stock optionsNo. of stock optionsNo. of stock optionsNo. of stock options WWWWWeighted averageeighted averageeighted averageeighted averageeighted average

exercise price (Rs.) exercise price (Rs.) exercise price (Rs.) exercise price (Rs.) exercise price (Rs.)

Options outstanding on 1st April, 2007 28,31,176 345.33

Options granted during the year 16,48,081 762.00

Options forfeited/lapsed during the year 2,22,762 257.15

Options exercised during the year 6,70,127 264.81

Options outstanding on 31st March, 2008 35,86,368 557.33

Options vested but not exercised on 31st March, 2008 14,22,559 303.00

Average share price on the date of exercise of theAverage share price on the date of exercise of theAverage share price on the date of exercise of theAverage share price on the date of exercise of theAverage share price on the date of exercise of theoptions are as underoptions are as underoptions are as underoptions are as underoptions are as under

Date of exerciseDate of exerciseDate of exerciseDate of exerciseDate of exercise Average share price (Rs.)Average share price (Rs.)Average share price (Rs.)Average share price (Rs.)Average share price (Rs.)

16th August, 2007 645.00

29th September, 2007 748.05

25th October, 2007 802.50

5th December, 2007 780.50

Information in respect of options outstanding as at 31Information in respect of options outstanding as at 31Information in respect of options outstanding as at 31Information in respect of options outstanding as at 31Information in respect of options outstanding as at 31ststststst March, 2008. March, 2008. March, 2008. March, 2008. March, 2008.

Range of exercise priceRange of exercise priceRange of exercise priceRange of exercise priceRange of exercise price Number of optionsNumber of optionsNumber of optionsNumber of optionsNumber of options WWWWWeighted averageeighted averageeighted averageeighted averageeighted averageremaining liferemaining liferemaining liferemaining liferemaining life

Rs. 29.50 - Rs. 61.50 26,368 1.17 yrs

Rs. 215.00 - Rs. 227.00 10,88,552 3.14 yrs

Rs. 361.00 27,742 3.57 yrs

Rs. 616.00 – Rs. 620.00 8,35,132 5.79 yrs

Rs. 762.00 16,08,574 6.83 yrs

The fair value of options granted during the year on 31st July, 2007 is Rs. 252.98 per share.


95

The fair value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are asfollows :

Grant datedGrant datedGrant datedGrant datedGrant dated3131313131ststststst July July July July July, 2007, 2007, 2007, 2007, 2007

Risk free interest rate 7.34%

Expected life 2.50 Years

Expected volatility 53.40%

Expected dividend yield 3.04%

Exercise price 762.00

Stock price 728.80

In respect of Options granted under the Employee Stock Option plan, in accordance with guidelines issued by SEBI, the accounting value of theoptions is accounted as deferred employee compensation, which is amortised on a straight line basis over the period between the date of grantof options and eligible dates for conversion into equity shares. Consequently, salaries, wages, bonus, etc. includes Rs. 2.16 croresRs. 2.16 croresRs. 2.16 croresRs. 2.16 croresRs. 2.16 crores (2007 : Rs.1.73 crores) being the amortisation of deferred employee compensation, after adjusting for reversals on account of options lapsed.

Had the Company adopted fair value method in respect of options granted on or after 1st April, 2005, the employee compensation cost wouldhave been higher by Rs. 22.93 croresRs. 22.93 croresRs. 22.93 croresRs. 22.93 croresRs. 22.93 crores, Profit after tax lower by Rs. 22.93 croresRs. 22.93 croresRs. 22.93 croresRs. 22.93 croresRs. 22.93 crores and the basic and diluted earning per share would have beenlower by Re. 0.96Re. 0.96Re. 0.96Re. 0.96Re. 0.96 and Re. 0.90Re. 0.90Re. 0.90Re. 0.90Re. 0.90 respectively.

18.18.18.18.18. The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March, 2008 is Rs. 522.77Rs. 522.77Rs. 522.77Rs. 522.77Rs. 522.77crorescrorescrorescrorescrores (2007 : Rs. 363.92 crores).

19.19.19.19.19. The Commissioner of Central Excise (Adjudication), Navi Mumbai, passed an order on 30th March, 2005, confirming the demand made on theCompany for payment of differential excise duty (including penalty) of Rs. 304.11 crores in connection with the classification of Company’sCommander range of vehicles, during the years 1991-1996. Whilst the Company had classified the Commander range of vehicles as 10-seaterattracting a lower rate of excise duty, the Commissioner of Central Excise (Adjudication), Navi Mumbai, has held that these vehicles could not beclassified as 10-seaters and as such attracted a higher rate of excise duty. In earlier proceedings, the Collector of Central Excise, Mumbai as alsothe Collector Central Excise (Appeals), Mumbai had upheld the classification of these vehicles as 10-seaters. Similarly, certain statutory/expertbodies have also confirmed the concerned vehicles to be 10-seater vehicles.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has also by its order dated 19th July, 2005 upheld this classification. Thedepartment’s Statutory Appeal against this order has been admitted by the Supreme Court.

The Commissioner of Central Excise, Nasik passed another order dated 20th March, 2006 confirming a demand of Rs. 24.75 crores in respect ofCompany’s Armada range of vehicles manufactured during the years 1992 – 1996, on the same grounds as adopted for Commander range ofvehicles.

The Company has been legally advised that the aforesaid orders dated 30th March, 2005 and 20th March, 2006 passed by the Commissioners areunsustainable in law. The Tribunal has also given an unconditional stay against both the aforesaid orders.

The final hearing in the above matters is awaited.

The Company is confident that it would succeed in the case and the Company’s stand that the Commander and Armada vehicles are 10-seatervehicles would be upheld. As such, the Company does not expect any liability on this account.

20.20.20.20.20. Contingent Liability :Contingent Liability :Contingent Liability :Contingent Liability :Contingent Liability :

(a) Guarantees given by the Company :

Rupees crores

Amount of guarantees Outstanding amountsagainst the guarantees

20082008200820082008 2007 20082008200820082008 2007

For employees 1.051.051.051.051.05 1.05 ***** *

For other companies 38.1038.1038.1038.1038.10 50.95 34.3734.3734.3734.3734.37 46.94

*denotes amounts less than Rs. 50,000

96

(b) Claims against the Company not acknowledged as debts comprise of :

(i) Excise Duty, Sales Tax and Service Tax claims disputed by the Company relating to issues of applicability and classification aggregatingRs. 184.03 crores (Net of TRs. 184.03 crores (Net of TRs. 184.03 crores (Net of TRs. 184.03 crores (Net of TRs. 184.03 crores (Net of Tax : Rs. 127.24 crores)ax : Rs. 127.24 crores)ax : Rs. 127.24 crores)ax : Rs. 127.24 crores)ax : Rs. 127.24 crores) [2007 : Rs. 52.37 crores (Net of Tax : Rs. 40.12 crores)].

(ii) Other Matters (excluding claims where amounts are not ascertainable) : Rs. 10.73 crores (Net of TRs. 10.73 crores (Net of TRs. 10.73 crores (Net of TRs. 10.73 crores (Net of TRs. 10.73 crores (Net of Tax : Rs. 7.61 crores)ax : Rs. 7.61 crores)ax : Rs. 7.61 crores)ax : Rs. 7.61 crores)ax : Rs. 7.61 crores)[2007 : Rs. 10.27 crores (Net of Tax : Rs. 7.33 crores)]

(iii) Claims on capital account : Rs. 1.18 crores Rs. 1.18 crores Rs. 1.18 crores Rs. 1.18 crores Rs. 1.18 crores (2007 : Rs. 1.18 crores)

(c) Uncalled liability on equity shares partly paid Rs. 10.50 croresRs. 10.50 croresRs. 10.50 croresRs. 10.50 croresRs. 10.50 crores (2007 : Rs. 10.50 crores).

(d) Taxation matters :

(i) Demands against the Company not acknowledged as debts and not provided for, relating to issues of deductibility and taxability inrespect of which the Company is in appeal and exclusive of the effect of similar matters in respect of assessments remaining to becompleted :

- Income Tax : Rs. 134.14 croresRs. 134.14 croresRs. 134.14 croresRs. 134.14 croresRs. 134.14 crores (2007 : Rs. 140.53 crores).

(ii) Items in respect of which the Company has succeeded in appeal, but the Income Tax Department is pursuing/likely to pursue inappeal/reference and exclusive of the effect of similar matters in respect of assessments remaining to be completed :

- Income Tax matters : Rs. 37.96 croresRs. 37.96 croresRs. 37.96 croresRs. 37.96 croresRs. 37.96 crores (2007 : Rs. 37.96 crores)

- Surtax matters : Rs. 0.13 crores Rs. 0.13 crores Rs. 0.13 crores Rs. 0.13 crores Rs. 0.13 crores (2007 : Rs. 0.13 crores)

(e) Bills discounted not matured Rs. 61.22 croresRs. 61.22 croresRs. 61.22 croresRs. 61.22 croresRs. 61.22 crores (2007 : Rs. 62.66 crores).

21.21.21.21.21. Research and Development expenditure debited to the Profit and Loss Account, including certain expenditure based on allocations made by theCompany, aggregate Rs. 191.52 croresRs. 191.52 croresRs. 191.52 croresRs. 191.52 croresRs. 191.52 crores (2007 : Rs. 145.88 crores) [excluding depreciation Rs. 25.83 croresRs. 25.83 croresRs. 25.83 croresRs. 25.83 croresRs. 25.83 crores (2007 : Rs. 20.97 crores)].

22.22.22.22.22. The net difference in foreign exchange gain credited to the Profit and Loss Account is Rs. 13.45 croresRs. 13.45 croresRs. 13.45 croresRs. 13.45 croresRs. 13.45 crores (2007 : Rs. 2.78 crores).

23.23.23.23.23. Exceptional items of Rs. 165.20 crores Rs. 165.20 crores Rs. 165.20 crores Rs. 165.20 crores Rs. 165.20 crores (2007 : Rs. 121.99 crores) comprise of :

(a) Profit on sale of certain long term investments Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. 128.36 crores) after considering a write back of provision for diminutionin value of investments and other assets Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 29.36 crores).

(b) Gain of Rs. 172.73Rs. 172.73Rs. 172.73Rs. 172.73Rs. 172.73 crores arising from the schemes of arrangement (merger) between the Company’s subsidiaries Mahindra Stokes HoldingCompany Limited (MSHCL), Mahindra Forgings Overseas Limited (MFOL) and Mahindra Forgings Mauritius Limited (MFML) with MahindraForgings Limited (MFL); and between Plexion (India) Private Limited with Mahindra Engineering Design and Development Company Limited(MEDDCL) approved by the High Court of Bombay. The schemes are operative from the appointed date of 1st April, 2007. ConsequentlyMFL became a subsidiary of the Company and MSHCL, MFOL, MFML and Plexion (India) Private Limited, ceased to be subsidiaries of theCompany. In compliance with Accounting Standard 13 - Accounting for investments, the Company is required to value the additionalshares received of MFL and MEDDCL, by referencing them to the fair value of the shares of MSHCL, MFOL, MFML, and Plexion (India)Private Limited respectively, resulting in the gain mentioned above.

(c) Amortisation of liability and other retirement benefits made under Voluntary Retirement Schemes aggregating Rs. 7.53 croresRs. 7.53 croresRs. 7.53 croresRs. 7.53 croresRs. 7.53 crores(2007 : Rs. 6.37 crores).

24.24.24.24.24. The components of Deferred TThe components of Deferred TThe components of Deferred TThe components of Deferred TThe components of Deferred Tax Liability and assets as at 31st March, 2008 are as under :ax Liability and assets as at 31st March, 2008 are as under :ax Liability and assets as at 31st March, 2008 are as under :ax Liability and assets as at 31st March, 2008 are as under :ax Liability and assets as at 31st March, 2008 are as under :Rupees crores

20082008200820082008 2007

Deferred Tax Liability :

(i) On fiscal allowances on Fixed Assets 196.65196.65196.65196.65196.65 182.90

(ii) Others 21.1121.1121.1121.1121.11 5.66

217.76217.76217.76217.76217.76 188.56

Deferred tax assets :

(i) On Provision for Compensated Absences 67.3667.3667.3667.3667.36 56.34

(ii) On Provision for Doubtful Debts/Advances 13.6813.6813.6813.6813.68 21.19

(iii) On Premium on redemption of Zero Coupon Convertible Bonds 48.6748.6748.6748.6748.67 67.61

(iv) On Provision for Employee Benefits 11.0111.0111.0111.0111.01 14.61

(v) Others 20.3220.3220.3220.3220.32 9.02

161.04161.04161.04161.04161.04 168.77

Net Deferred Tax Liability 56.7256.7256.7256.7256.72 19.79


97

25.25.25.25.25. Earnings per Share :Earnings per Share :Earnings per Share :Earnings per Share :Earnings per Share :

20082008200820082008 2007

Amount used as the numerator – Balance of profit for 2007-2008 (Rupees crores) ..................... 1,103.371,103.371,103.371,103.371,103.37 1,068.39

(Gain)/Loss on difference in exchange on bonds (Rupees crores) .................................................. (42.97)(42.97)(42.97)(42.97)(42.97) (24.08)

Amount used as the numerator for diluted earnings per share (Rupees crores) ............................ 1,060.401,060.401,060.401,060.401,060.40 1,044.31

Weighted average number of equity shares used in computing basic earnings per share ............. 23,86,22,36623,86,22,36623,86,22,36623,86,22,36623,86,22,366 23,66,06,170

Effect of potential ordinary (equity) shares on conversion of bonds/debentures ........................... 1,67,57,2761,67,57,2761,67,57,2761,67,57,2761,67,57,276 1,84,52,109

Weighted average number of equity shares used in computing diluted earnings per share .......... 25,53,79,64225,53,79,64225,53,79,64225,53,79,64225,53,79,642 25,50,58,279

Basic Earnings per share (Rs.) (Face value of Rs. 10 per share) ...................................................... 46.2446.2446.2446.2446.24 45.15

Diluted Earnings per share (Rs.) ..................................................................................................... 41.5241.5241.5241.5241.52 40.94

26.26.26.26.26. Provision for doubtful debts and advances for the year comprises :Rupees crores

20082008200820082008 2007

Provision for doubtful debts and advances made during the year (Net)(including Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. Nil) pursuant to the scheme of Arrangement approved by theHon’ble High Court of Bombay on 12th December, 2003). ............................................................ (23.59)(23.59)(23.59)(23.59)(23.59) 7.71

Less : Transfer from Investment Fluctuation Reserve pursuant to the above scheme ofarrangement .................................................................................................................................. ----- -

Total .............................................................................................................................................. (23.59)(23.59)(23.59)(23.59)(23.59) 7.71

27.27.27.27.27. Provision for diminution in the value of long term investments for the year comprises :Rupees crores

20082008200820082008 2007

Provision for diminution in value of investments, made during the year (Net)(including provision of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 10.69 crores) pursuant to the scheme ofArrangement approved by the Hon’ble High Court of Bombay on 12th December, 2003) ............ (5.40)(5.40)(5.40)(5.40)(5.40) 10.69

Less : Transfer from Investment Fluctuation Reserve pursuant to the above scheme ofarrangement .................................................................................................................................. ----- 10.69

Total .............................................................................................................................................. (5.40)(5.40)(5.40)(5.40)(5.40) -

28.28.28.28.28. The outstanding derivative instruments as on 31st March, 2008 :The outstanding derivative instruments as on 31st March, 2008 :The outstanding derivative instruments as on 31st March, 2008 :The outstanding derivative instruments as on 31st March, 2008 :The outstanding derivative instruments as on 31st March, 2008 :

The Company has taken forward contracts to hedge exposures arising out of trade payables in foreign currency. Such outstanding forwardcontracts have been booked for fixing exchange rates between cross currencies like JPY/US$. The amount of hedges is JPY 50.00 croresJPY 50.00 croresJPY 50.00 croresJPY 50.00 croresJPY 50.00 crores(2007 : JPY 35.00 crores and EUR 0.20 crores).

The export receivables of the Company have been hedged in part by forward contracts AAAAAUD 0.35 crores, EUR 1.00 crore and US$ 19.40 croresUD 0.35 crores, EUR 1.00 crore and US$ 19.40 croresUD 0.35 crores, EUR 1.00 crore and US$ 19.40 croresUD 0.35 crores, EUR 1.00 crore and US$ 19.40 croresUD 0.35 crores, EUR 1.00 crore and US$ 19.40 crores(2007 : US$ 2.73 crores) and partly US$ 33.75 crores US$ 33.75 crores US$ 33.75 crores US$ 33.75 crores US$ 33.75 crores and EUR 1.20 crores EUR 1.20 crores EUR 1.20 crores EUR 1.20 crores EUR 1.20 crores (2007 : Nil) by a derivative structure in the form of ‘strips’.

The foreign currency exposures not hedged by derivative instrument or otherwise as on 31st March, 2008 are – Receivables of JPY 4.25 crores,JPY 4.25 crores,JPY 4.25 crores,JPY 4.25 crores,JPY 4.25 crores,RMB * crores and PRMB * crores and PRMB * crores and PRMB * crores and PRMB * crores and Payables of Aayables of Aayables of Aayables of Aayables of AUD 0.04 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06 crores, SGD 0.02 crores,UD 0.04 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06 crores, SGD 0.02 crores,UD 0.04 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06 crores, SGD 0.02 crores,UD 0.04 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06 crores, SGD 0.02 crores,UD 0.04 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06 crores, SGD 0.02 crores, US$ 7.84US$ 7.84US$ 7.84US$ 7.84US$ 7.84crores, ZAR 0.12 crorescrores, ZAR 0.12 crorescrores, ZAR 0.12 crorescrores, ZAR 0.12 crorescrores, ZAR 0.12 crores (2007 : Receivables of EUR 4.02 crores, GBP 0.09 crores, AUD 0.15 crores, JPY 2.20 crores, US$ 13.81 crores, RMB 0.01crores and Payables of CHF * crores, SAR 0.01 crores, SEK 0.03 crores, SGD * crores, ZAR 0.57 crores).

The Company has outstanding borrowings of JPY 1,091.74 croresJPY 1,091.74 croresJPY 1,091.74 croresJPY 1,091.74 croresJPY 1,091.74 crores and US$ 11.45 crores US$ 11.45 crores US$ 11.45 crores US$ 11.45 crores US$ 11.45 crores (2007 : JPY 539.04 crores and US$ 2.00 crores) asForeign Currency Loans. The borrowing of JPY 509.44 croresJPY 509.44 croresJPY 509.44 croresJPY 509.44 croresJPY 509.44 crores (2007 : JPY 539.04 crores) has been completely hedged using cross currency swapstructure fixing the liability into a full fledged rupee liability. The borrowing of JPY 582.30 croresJPY 582.30 croresJPY 582.30 croresJPY 582.30 croresJPY 582.30 crores has been fixed to a US$ liability using a crosscurrency swap structure. The borrowing of US$ 2.00US$ 2.00US$ 2.00US$ 2.00US$ 2.00 crores has been hedged using a forward cover.

The Company had made an issue of US$ 20.00 crores in the form of Foreign Currency Convertible Bonds in April, 2006. Out of these issues,Bonds of value US$ 20.00 crores US$ 20.00 crores US$ 20.00 crores US$ 20.00 crores US$ 20.00 crores (2007 : US$ 20.27 crores) are outstanding and have not been hedged.

*denotes amounts less than 50,000 of respective currency.

98

29.29.29.29.29. Related PRelated PRelated PRelated PRelated Party Tarty Tarty Tarty Tarty Transactions :ransactions :ransactions :ransactions :ransactions :

(a) Related parties where control exist :

(i) Subsidiaries :

Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company

1. Mahindra Engineering and Chemical Products Limited 45. Stokes Forgings Limited2. Mahindra Ashtech Limited (up to 3rd January, 2008) 46. Stokes Forgings Dudley Limited3. Mahindra Logisoft Business Solutions Limited 47. Plexion Technologies (UK) Limited4. FirstChoice Wheels Limited (formerly known as 48. Plexion Technologies GmbH

Automartindia Limited)5. Mahindra USA Incorporated 49. Plexion Technologies Incorporated6. Mahindra Gujarat Tractor Limited 50. Mahindra Lifespace Developers Limited

(formerly known as Mahindra Gesco Developers Limited)7. Mahindra (China) Tractor Company Limited 51. Mahindra World City (Jaipur) Limited8. Mahindra Shubhlabh Services Limited 52. Mahindra World City Developers Limited9. Mahindra & Mahindra South Africa (Proprietary) Limited 53. Mahindra Infrastructure Developers Limited

10. Mahindra Europe s.r.l. 54. Mahindra Integrated Township Limited11. Mahindra Engineering Design & Development Company Limited 55. Mahindra World City (Maharashtra) Limited12. Mahindra SAR Transmission Private Limited 56. PT Tech Mahindra Indonesia13. Mahindra Overseas Investment Company (Mauritius) Limited 57. Mahindra Forgings International Limited14. Mahindra-BT Investment Company (Mauritius) Limited 58. CanvasM Technologies Limited15. Mahindra Intertrade Limited 59. CanvasM (Americas) Incorporated16. Mahindra Steel Service Centre Limited 60. Mahindra Forgings Europe AG

(formerly known as JECO Holdings AG)17. Mahindra Middleeast Electrical Steel Service Centre (FZC) 61. Gesenkschmiede Schneider GmbH18. Mahindra Holdings & Finance Limited 62. JECO-Jellinghaus GmbH19. Mahindra Consulting Engineers Limited 63. Falkenroth Umformtechnik GmbH20. Mahindra Holidays and Resorts India Limited 64. Mahindra Forgings Global Limited21. Mahindra Holidays and Resorts USA Incorporated 65. Schöneweiss & Co. GmbH22. NBS International Limited 66. Mahindra Hinoday Industries Limited

(formerly known as DGP Hinoday Industries Limited)23. Mahindra Ugine Steel Company Limited 67. iPolicy Networks Limited24. Mahindra & Mahindra Financial Services Limited 68. MHR Hotel Management GmbH25. Mahindra Insurance Brokers Limited 69. Mahindra Forgings Limited (appointed date 1st April, 2007)26. Tech Mahindra Limited 70. Mahindra Rural Housing Finance Limited

(w.e.f. 9th April, 2007)27. Tech Mahindra (Americas) Incorporated 71. Mahindra Hotels and Residences India Limited

(w.e.f 26th April, 2007)28. Tech Mahindra GmbH 72. Ashtamudi Resorts Private Limited

(from 9th May, 2007 to 30th June, 2007)29. Tech Mahindra (Singapore) Pte. Limited 73. Mahindra Automotive Limited (w.e.f. 25th May, 2007)30. Tech Mahindra (Thailand) Limited 74. Bristlecone (Malaysia) SDN.BHD (w.e.f. 30th May, 2007)31. Tech Mahindra Foundation 75. Tech Mahindra (Malaysia) SDN.BHD (w.e.f. 11th June, 2007)32. Tech Mahindra (R & D Services) Limited 76. Punjab Tractors Limited (w.e.f. 6th July, 2007)33. Tech Mahindra (R & D Services) Incorporated 77. Mahindra Castings Private Limited (w.e.f. 30th August, 2007)34. Tech Mahindra (R & D Services) Pte. Limited 78. Mahindra Retail Private Limited (w.e.f. 3rd September, 2007)

(upto 7th April, 2007)35. Bristlecone Limited 79. Mahindra Technology Park Limited

(w.e.f. 28th September, 2007)36. Bristlecone Incorporated 80. Mahindra Holdings Limited (w.e.f. 2nd November, 2007)37. Bristlecone UK Limited 81. Mahindra Logistics Limited (w.e.f. 12th December, 2007)38. Bristlecone India Limited 82. Tech Mahindra (Beijing) IT Services Limited

(w.e.f. 21st December, 2007)39. Bristlecone (Singapore) Pte. Limited 83. Mahindra Navistar Engines Private Limited

(formerly known as MIM Engines India Private Limited)(w.e.f. 31st January, 2008)

40. Bristlecone GmbH 84. Mahindra Residential Developers Limited(w.e.f. 1st February, 2008)

41. Mahindra Renault Private Limited 85. Mahindra Graphic Research Design s.r.l.(w.e.f. 20th February, 2008)

42. Mahindra International Limited 86. Mahindra Aerospace Private Limited(w.e.f. 28th February, 2008)

43. Stokes Group Limited 87. Heritage Bird (M) SDN.BHD (w.e.f. 3rd March, 2008)44. Jensand Limited 88. Mahindra First Choice Services Limited (w.e.f. 24th March, 2008)


99

(b) Other parties with whom transactions have taken place during the year.

(i) Associates :


1. Mahindra Composites Limited 5. Swaraj Automotive Limited (w.e.f. 3rd July, 2007)

2. Mahindra Construction Company Limited 6. Swaraj Engines Limited (w.e.f. 6th July, 2007)

3. Owens Cornings (India) Limited 7. Mahindra Renault Nissan Automotive Private Limited(upto 9th March, 2008)

4. Mahindra Water Utilities Limited

(ii) Joint Venture :

Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company

1. Mahindra Sona Limited

(iii) Key Management Personnel :

Vice Chairman and Managing Director Mr. Anand MahindraExecutive Directors Mr. B.N. Doshi

Mr. A.K. Nanda

(c) The related party transactions are as under :Rupees crores

Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Nature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions SubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiaries AssociateAssociateAssociateAssociateAssociate Joint VJoint VJoint VJoint VJoint Venturesenturesenturesenturesentures KKKKKey Managementey Managementey Managementey Managementey ManagementCompaniesCompaniesCompaniesCompaniesCompanies PPPPPersonnelersonnelersonnelersonnelersonnel

1. Purchases :

Goods ....................................................................... 441.75441.75441.75441.75441.75 1.591.591.591.591.59 50.5150.5150.5150.5150.51 -----

(226.87) (55.14) (39.27) (-)

Fixed Assets .............................................................. 9.739.739.739.739.73 0.330.330.330.330.33 ----- -----

(2.50) (-) (*) (-)

Services ..................................................................... 85.6785.6785.6785.6785.67 ----- ----- -----

(61.12) (-) (-) (-)

2. Sales :

Goods ....................................................................... 567.07567.07567.07567.07567.07 ----- ----- -----

(602.46) (-) (-) (-)

Fixed Assets .............................................................. 0.770.770.770.770.77 ----- ----- -----

(0.61) (-) (-) (-)

Services ..................................................................... 186.25186.25186.25186.25186.25 0.020.020.020.020.02 0.040.040.040.040.04 -----

(30.85) (5.83) (0.02) (-)

3. Investments :

Purchase ................................................................... 1,067.461,067.461,067.461,067.461,067.46 3.003.003.003.003.00 ----- -----

(609.25) (182.71) (-) (-)

Sales/Redemption ..................................................... 615.02615.02615.02615.02615.02 ----- ----- -----

(125.82) (-) (-) (-)

4. Share Application Money (Net) ................................. 9.339.339.339.339.33 ----- ----- -----

(15.72) (-) (-) (-)

5. Deputation of Personnel :

From Related Parties ................................................. 1.191.191.191.191.19 ----- ----- -----

(0.29) (-) (-) (-)

To Related Parties ...................................................... 11.2111.2111.2111.2111.21 0.390.390.390.390.39 ----- -----

(2.11) (-) (-) (-)


100

6. Provision for diminution in value of other assetswritten back ............................................................. ----- ----- ----- -----

(0.03) (-) (-) (-)

7. Finance :

Inter Corporate Deposits given ................................. 56.1756.1756.1756.1756.17 ----- ----- -----

(38.80) (-) (-) (-)

Inter Corporate Deposits refunded by parties ........... 8.168.168.168.168.16 ----- ----- -----

(40.05) (-) (-) (-)

Inter Corporate Deposits taken ................................. 25.0025.0025.0025.0025.00 ----- ----- -----

(-) (-) (-) (-)

Inter Corporate Deposits refunded to parties ........... 25.0025.0025.0025.0025.00 ----- ----- -----

(-) (-) (-) (-)

Interest received ....................................................... 9.599.599.599.599.59 ----- ----- -----

(9.03) (-) (-) (-)

Interest Paid .............................................................. 1.321.321.321.321.32 ----- ----- -----

(-) (-) (-) (-)

Dividend received ..................................................... 65.2465.2465.2465.2465.24 ----- ----- -----

(114.10) (-) (-) (-)

Security Deposits Accepted ....................................... 0.570.570.570.570.57 ----- ----- -----

(-) (-) (-) (-)

Security Deposits Paid ............................................... 3.003.003.003.003.00 ----- ----- -----

(-) (-) (-) (-)

8. Guarantees & Collaterals given ................................. ----- ----- ----- -----

(32.25) (-) (-) (-)

9. Other Transactions :

Other Income ........................................................... 6.806.806.806.806.80 ----- 0.020.020.020.020.02 -----

(5.61) (6.17) (0.05) (-)

Other Expenses ......................................................... 8.218.218.218.218.21 ----- ----- -----

(11.89) (1.73) (*) (-)

Reimbursements received from parties ..................... 315.68315.68315.68315.68315.68 0.020.020.020.020.02 0.060.060.060.060.06 -----

(24.67) (0.34) (0.03) (-)

Reimbursements made to parties ............................. 174.37174.37174.37174.37174.37 ----- ----- -----

(19.17) (0.19) (-) (-)

Advance given .......................................................... 4.844.844.844.844.84 ----- ----- -----

(237.53) (-) (-) (-)

Advance refunded .................................................... 236.55236.55236.55236.55236.55 ----- ----- -----

(9.00) (-) (-) (-)


Rupees crores



101

10. Outstandings :

Payable ..................................................................... 70.7070.7070.7070.7070.70 0.650.650.650.650.65 8.978.978.978.978.97 2.462.462.462.462.46

(28.57) (3.95) (9.23) (2.46)

Receivable ................................................................. 180.37180.37180.37180.37180.37 3.093.093.093.093.09 0.020.020.020.020.02 -----

(321.24) (2.97) (0.02) (-)

Debenture issued by parties ..................................... 30.0030.0030.0030.0030.00 ----- ----- -----

(30.00) (-) (-) (-)

Inter Corporate Deposits given ................................. 64.9564.9564.9564.9564.95 4.594.594.594.594.59 ----- -----

(17.09) (4.59) (-) (-)

Guarantees & Collaterals given ................................. 34.3734.3734.3734.3734.37 ----- ----- -----

(46.94) (-) (-) (-)

Security Deposit Paid ................................................ 3.003.003.003.003.00 ----- ----- -----

(0.05) - - -

11. Managerial Remuneration ......................................... ----- ----- ----- 5.395.395.395.395.39

(-) (-) (-) (4.98)

12. Dividends .................................................................. ----- ----- ----- 0.170.170.170.170.17

(-) (-) (-) (0.77)

13. Provision for diminution in value of other assets ..... 4.374.374.374.374.37 6.696.696.696.696.69 ----- -----

(5.62) (6.69) (-) (-)

14. Provision for doubtful debts/advances ...................... 1.621.621.621.621.62 ----- ----- -----

(1.62) (-) (-) (-)

15. Share Application Money ......................................... 9.339.339.339.339.33 ----- ----- -----

(15.72) (-) (-) (-)

16. Stock Options ........................................................... ----- ----- ----- 0.050.050.050.050.05

(-) (-) (-) (0.05)

Previous year’s figures are given in brackets.

The previous year figures are suitably regrouped.

Rupees crores


102

The significant related party transactions are as underRupees crores

AssociateAssociateAssociateAssociateAssociateNature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions SubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiaries AmountAmountAmountAmountAmount CompaniesCompaniesCompaniesCompaniesCompanies AmountAmountAmountAmountAmount Joint VJoint VJoint VJoint VJoint Venturesenturesenturesenturesentures AmountAmountAmountAmountAmount

1. Purchase – Goods Mahindra Intertrade 232.20232.20232.20232.20232.20 Mahindra Composites 1.581.581.581.581.58 Mahindra Sona 50.5150.5150.5150.5150.51Limited (159.05) Limited (-) Limited (39.27)

Mahindra SAR ----- Mahindra -----Transmission Pvt. Limited (29.19) Forgings Limited (53.62)

Mahindra Hinoday 46.9846.9846.9846.9846.98Industries Limited (-)

Mahindra Forgings 60.3660.3660.3660.3660.36Limited (-)

2. Sale – Goods Mahindra USA 178.05178.05178.05178.05178.05Incorporated (175.69)

Mahindra International 98.3098.3098.3098.3098.30Limited (114.92)

Mahindra & Mahindra 100.99100.99100.99100.99100.99South Africa (Proprietary) Limited (196.19)

Mahindra Europe s.r.l. 115.65115.65115.65115.65115.65(-)

3. Sale – Services Mahindra International 47.7647.7647.7647.7647.76 Swaraj Automotive ***** Mahindra Sona 0.040.040.040.040.04Limited (7.08) Limited (-) Limited (0.02)

Mahindra Renault 114.37114.37114.37114.37114.37 Swaraj Engines 0.010.010.010.010.01Private Limited (11.37) Limited (-)

4. Investment – Purchase Mahindra Forgings 688.61688.61688.61688.61688.61 Mahindra Forgings -----Limited (-) Limited (48.50)

Mahindra Renault ----- Mahindra Lifespace -----Private Limited (103.21) Developers Limited (134.21)

Mahindra Automotive 124.75124.75124.75124.75124.75 Mahindra Renault Nissan 3.003.003.003.003.00Limited (-) Automotive Private Limited (-)

Mahindra Forgings -----Overseas Limited (286.50)

Mahindra Forgings -----Mauritius Limited (78.16)

Mahindra Holdings & -----Finance Limited (25.00)

5. Investments – Sales Mahindra Holdings & -----Finance Limited (4.97)

Mahindra Stokes -----Holding Company Limited (40.86)

Mahindra Forgings 468.54468.54468.54468.54468.54Limited (-)

Mahindra Castings 105.20105.20105.20105.20105.20Private Limited (-)

6. Investments – Mahindra & Mahindra 4.004.004.004.004.00Redemption Financial Services Limited (-)

Mahindra Lifespace -----Developers Limited (55.00)

Mahindra Holdings & -----Finance Limited (25.00)

*denotes amounts less than Rs. 50,000


103

Rupees crores

AssociateAssociateAssociateAssociateAssociateNature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions SubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiaries AmountAmountAmountAmountAmount CompaniesCompaniesCompaniesCompaniesCompanies AmountAmountAmountAmountAmount Joint VJoint VJoint VJoint VJoint Venturesenturesenturesenturesentures AmountAmountAmountAmountAmount

7. Share Application Mahindra Overseas -----Money (Net) Investment Company (15.72)

(Mauritius) Limited

Mahindra Automotive 5.505.505.505.505.50Limited (-)

Mahindra Navistar 3.833.833.833.833.83Engines Private Limited (-)

8. Advances Given Mahindra Forgings -----Overseas Limited (119.38)

Mahindra Forgings -----Mauritius Limited (118.16)

Mahindra Renault 0.750.750.750.750.75Private Limited (-)

Mahindra Ugine Steel 4.094.094.094.094.09Company Limited (-)

9. Inter Corporate Mahindra Overseas -----Deposits given Investment Company (32.80)

(Mauritius) Limited

Bristlecone Limited 40.8240.8240.8240.8240.82(-)

Mahindra Shubhlabh 8.258.258.258.258.25Services Limited (-)

10. Inter Corporate Mahindra Intertrade 1.561.561.561.561.56Deposits refunded by Limited (-)parties

Mahindra Overseas -----Investment Company (32.80)(Mauritius) Limited

Mahindra Ashtech Limited 6.506.506.506.506.50(-)

11. Guarantees given Mahindra Overseas -----Investment Company (32.25)(Mauritius) Limited

30.30.30.30.30. Joint VJoint VJoint VJoint VJoint Venture Disclosureenture Disclosureenture Disclosureenture Disclosureenture Disclosure

i) Jointly Controlled Entities by the Company :

Name of the EntityName of the EntityName of the EntityName of the EntityName of the Entity Country ofCountry ofCountry ofCountry ofCountry ofIncorporationIncorporationIncorporationIncorporationIncorporation % Holding% Holding% Holding% Holding% Holding

a) Mahindra Sona Limited* ................................................................ India 29.77 %

b) PSL Erickson Limited* ..................................................................... India 18.06 %

* Shareholding is through a subsidiary, Mahindra Holdings & Finance Limited.

104

ii) Interests in the Assets, Liabilities, Income and Expenses with respect to Jointly Controlled Entities.

Rupees crores

20082008200820082008 2007

I.I.I.I.I. ASASASASASSETSSETSSETSSETSSETS

1. Fixed Assets ............................................................................................ 6.546.546.546.546.54 4.87

2. Investment ............................................................................................. 0.050.050.050.050.05 0.03

3. Current Assets, Loans and Advances

a) Inventories ..................................................................................... 5.975.975.975.975.97 4.06

b) Sundry Debtors .............................................................................. 11.2111.2111.2111.2111.21 11.91

c) Cash and Bank Balances ................................................................ 2.062.062.062.062.06 2.42

d) Loans and Advances ...................................................................... 1.301.301.301.301.30 1.15

4. Deferred Tax – Net ................................................................................. 0.320.320.320.320.32 0.41

II.II.II.II.II. LIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIES

1. Loan Funds

a) Secured Loans ................................................................................ 1.881.881.881.881.88 2.23

b) Unsecured Loans ............................................................................ ----- 0.50

2. Current Liabilities and Provisions

a) Liabilities ........................................................................................ 8.078.078.078.078.07 6.09

b) Provisions ....................................................................................... 1.961.961.961.961.96 2.68

III.III.III.III.III. INCOMEINCOMEINCOMEINCOMEINCOME

1. Sales ...................................................................................................... 46.9546.9546.9546.9546.95 49.92

2. Other Income ......................................................................................... 1.601.601.601.601.60 1.14

IVIVIVIVIV..... EXPENSESEXPENSESEXPENSESEXPENSESEXPENSES

1. Raw Materials, Finished and Semi Finished Products ............................. 27.3027.3027.3027.3027.30 28.55

2. Excise Duties .......................................................................................... 5.005.005.005.005.00 4.11

3. Manufacturing, Selling Expenses, etc. .................................................... 10.5110.5110.5110.5110.51 10.51

4. Depreciation/Amortisation ...................................................................... 0.600.600.600.600.60 0.57

5. Provision for Taxation ............................................................................. 1.881.881.881.881.88 2.40

VVVVV..... OTHER MAOTHER MAOTHER MAOTHER MAOTHER MATTTTTTERSTERSTERSTERSTERS

1. Contingent Liabilities .............................................................................. 3.533.533.533.533.53 3.39

2. Capital Commitments ............................................................................ 0.600.600.600.600.60 0.12

31. Additional information pursuant to the provisions of paragraphs 3(i)(a) and (ii), 4C and 4D of Part II of Schedule VI to the Companies Act, 1956- See Schedule XVI. Previous year’s figures are indicated below the current year’s figures.

32. Additional information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956 - See Schedule XVII.

33. Previous year’s figures have been regrouped/restated wherever necessary.


105

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XV XV XV XV XVComputation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2008Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2008Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2008Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2008Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2008

Rupees crores

20082008200820082008 2007

Profit before Taxation as per Profit and Loss Account ...................................................... 1,406.771,406.771,406.771,406.771,406.77 1,437.68

Add : Depreciation charged in the Accounts ................................................................. 238.66238.66238.66238.66238.66 209.59

: Directors’ Remuneration including Directors’ fees ............................................... 6.786.786.786.786.78 6.15

: Provision for doubtful debts and advances (Net) ................................................. (23.59)(23.59)(23.59)(23.59)(23.59) 7.71

: Profit on sale of Fixed Assets as per Section 349 (3)(d) of theCompanies Act, 1956 (Net) ................................................................................. ----- 0.04

: Loss on sale, etc. of Fixed Assets (Net) ................................................................ 2.822.822.822.822.82 1.73

: Net reduction in the fair value of current investments ........................................ (1.74)(1.74)(1.74)(1.74)(1.74) 2.36

: Voluntary Retirement Schemes amortisation included in Exceptional Item .......... 7.537.537.537.537.53 6.37

: Provision for diminution in value of long term investments (Net) ....................... (5.40)(5.40)(5.40)(5.40)(5.40) -

225.06225.06225.06225.06225.06 233.95

1,631.831,631.831,631.831,631.831,631.83 1,671.63

Less : Depreciation under Section 350 of the Companies Act, 1956 ............................ 192.01192.01192.01192.01192.01 175.90

: Amortisation of Intangibles ................................................................................. 19.3719.3719.3719.3719.37 12.29

: Profit on sale of Investments (Net) ...................................................................... 28.9428.9428.9428.9428.94 133.98

: Prior Period Adjustments Gross of Tax (Refer Note 16) ........................................ ----- 28.93

: Profit arising on merger between Company’s Subsidiaries (Refer Note 23 (b)) ... 172.73172.73172.73172.73172.73 -

: Loss on sale of Fixed Assets as per Section 349 (3)(d) of theCompanies Act, 1956 (Net) ................................................................................. 1.711.711.711.711.71 -

414.76414.76414.76414.76414.76 351.10

Total...... ................................................................................................................. 1,217.071,217.071,217.071,217.071,217.07 1,320.53

Commission payable to the wholetime Directors restricted to ............................... 2.452.452.452.452.45 2.45

Commission payable to the non-wholetime Directors restricted to ........................ 1.201.201.201.201.20 0.96

106

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XVI XVI XVI XVI XVI

Additional Information pursuant to the Provisions of PAdditional Information pursuant to the Provisions of PAdditional Information pursuant to the Provisions of PAdditional Information pursuant to the Provisions of PAdditional Information pursuant to the Provisions of Paragraphs 3 (i)(a) and (ii), 4C and 4D, of Paragraphs 3 (i)(a) and (ii), 4C and 4D, of Paragraphs 3 (i)(a) and (ii), 4C and 4D, of Paragraphs 3 (i)(a) and (ii), 4C and 4D, of Paragraphs 3 (i)(a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.art II of Schedule VI to the Companies Act, 1956.art II of Schedule VI to the Companies Act, 1956.art II of Schedule VI to the Companies Act, 1956.art II of Schedule VI to the Companies Act, 1956.

(A)(A)(A)(A)(A) PPPPPARTICULARS IN RESPECT OF GOODS MANUFARTICULARS IN RESPECT OF GOODS MANUFARTICULARS IN RESPECT OF GOODS MANUFARTICULARS IN RESPECT OF GOODS MANUFARTICULARS IN RESPECT OF GOODS MANUFACTURED :ACTURED :ACTURED :ACTURED :ACTURED :

Sl. Class of Goods Unit of Licensed Installed ActualNo. Measurement Capacity Capacity Production

per annum per annum [Notes (ii)[Note (i)] [Note (i)] & (iii)(a)]

1. a. On Road Automobiles having four ormore wheels such as light, medium andheavy commercial vehicles, jeep typevehicles and passenger cars coveredunder sub heading (5) of Heading (7)of First Schedule Nos.Nos.Nos.Nos.Nos. 2,76,0002,76,0002,76,0002,76,0002,76,000 2,29,0002,29,0002,29,0002,29,0002,29,000 1,62,4001,62,4001,62,4001,62,4001,62,400

2,76,000 1,92,000 1,34,665b. Three Wheelers Nos.Nos.Nos.Nos.Nos. 1,11,0001,11,0001,11,0001,11,0001,11,000 54,00054,00054,00054,00054,000 34,55634,55634,55634,55634,556

80,000 54,000 34,8922. a. Agricultural Tractors [Note (v) below] Nos.Nos.Nos.Nos.Nos. 1,89,0001,89,0001,89,0001,89,0001,89,000 1,73,0001,73,0001,73,0001,73,0001,73,000 95,30195,30195,30195,30195,301

1,69,000 1,58,000 1,01,202b. Tractor Skids These are

manufacturedagainst spare

capacity under 2(a) 3,6163,6163,6163,6163,6162,645

3. Manufactured and Purchased Parts Nos.Nos.Nos.Nos.Nos. These areand Accessories for sale [Notes (iii)(a) manufacturedand (b) below] against spare

capacity under1 and 2 above 2,42,7092,42,7092,42,7092,42,7092,42,709

1,64,2254. Internal Combustion Piston Engines Nos.Nos.Nos.Nos.Nos. 1,75,0001,75,0001,75,0001,75,0001,75,000 1,36,0001,36,0001,36,0001,36,0001,36,000 1,29,2361,29,2361,29,2361,29,2361,29,236

1,10,000 1,10,000 1,00,0765. Parts and accessories of motor vehicles Nos.Nos.Nos.Nos.Nos. 5,00,0005,00,0005,00,0005,00,0005,00,000 1,25,0001,25,0001,25,0001,25,0001,25,000 80,96780,96780,96780,96780,967

5,00,000 1,25,000 104,9716. Internal Combustion Engine Nos.Nos.Nos.Nos.Nos. 60,00060,00060,00060,00060,000 54,00054,00054,00054,00054,000 47,59747,59747,59747,59747,597

50,000 39,000 36,9737. D.G. Sets Nos.Nos.Nos.Nos.Nos. 24,00024,00024,00024,00024,000 Assembly at 16,94316,94316,94316,94316,943

24,000 3rd Party Locations 8,877

8. Engines Nos.Nos.Nos.Nos.Nos. These aremanufacturedagainst spare

capacity under 2(a) 15,12915,12915,12915,12915,12915,180

9. Export benefits


(i) (a) The installed capacity has been certified by Presidents, which the auditors have relied on without verification as this is a technical matter.

(b) The licensed capacities include/represent, as the case may be, registrations granted and Industrial Entrepreneur Memorandum filed with,and duly acknowledged by, the Government pursuant to the schemes of de-licensing. [Also see note (v) below].

(c) Within the overall licensed capacity in item 1 above, the Company is permitted to manufacture for outside sale 10,000 petrol/diesel enginesand 4,000 tonnes grey iron castings.

(d) Bullet proof work and fabrication on base vehicles has been carried out at third party facilities. 3838383838 (2007 : 190) vehicles were produced andsold using such third party facilities and are included in item (A) 1(a).

(e) The installed capacity mentioned against item no. (A) 1(a) above includes 48,00048,00048,00048,00048,000 (2007 : 42,000) for production of vehicles for thirdparties.


107

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XVI XVI XVI XVI XVI (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Opening Stock Closing Stock Sales

Quantity Value Quantity Value Quantity ValueRupees crores Rupees crores Rupees crores

4,4734,4734,4734,4734,473 179.74179.74179.74179.74179.74 5,8265,8265,8265,8265,826 256.52256.52256.52256.52256.52 1,60,6361,60,6361,60,6361,60,6361,60,636 7,409.927,409.927,409.927,409.927,409.925,869 204.49 4,473 179.74 1,35,707 6,373.482,3122,3122,3122,3122,312 26.6326.6326.6326.6326.63 2,7532,7532,7532,7532,753 29.2829.2829.2829.2829.28 34,07634,07634,07634,07634,076 398.98398.98398.98398.98398.981,157 15.60 2,312 26.63 33,718 405.727,1637,1637,1637,1637,163 164.73164.73164.73164.73164.73 7,0537,0537,0537,0537,053 187.26187.26187.26187.26187.26 95,37095,37095,37095,37095,370 3,133.963,133.963,133.963,133.963,133.965,846 132.67 7,163 164.73 99,797 3,093.00

119119119119119 4.224.224.224.224.22 168168168168168 6.616.616.616.616.61 3,5463,5463,5463,5463,546 133.55133.55133.55133.55133.55120 5.80 119 4.22 2,637 120.16

----- 62.9762.9762.9762.9762.97 ----- 82.0182.0182.0182.0182.01 ----- 576.86576.86576.86576.86576.86- 61.12 - 62.97 - 451.95

917917917917917 2.922.922.922.922.92 1,1621,1621,1621,1621,162 8.158.158.158.158.15 13,83613,83613,83613,83613,836 125.85125.85125.85125.85125.85379 3.74 917 2.92 11,411 106.80

7070707070 0.030.030.030.030.03 1212121212 0.020.020.020.020.02 1,5191,5191,5191,5191,519 2.022.022.022.022.026 0.01 70 0.03 2,532 3.53

9090909090 ----- 107107107107107 ----- ----- -----66 - 90 - - -9797979797 1.231.231.231.231.23 115115115115115 2.042.042.042.042.04 16,92516,92516,92516,92516,925 367.08367.08367.08367.08367.08

1 0.01 97 1.23 8,781 175.19

226226226226226 1.241.241.241.241.24 439439439439439 2.792.792.792.792.79 14,91614,91614,91614,91614,916 140.35140.35140.35140.35140.35310 1.69 226 1.24 15,264 123.38

28.6428.6428.6428.6428.6448.49

Total..... 12,317.2112,317.2112,317.2112,317.2112,317.2110,901.70

(ii) Actual Production includes production for captive consumption.

(iii) (a) The actual production disclosed against manufactured components/sub-assemblies/steel blanks is the number of such components transferredduring the year to the Marketing Unit/Spare Parts Stores for sale or sold otherwise.

(b) The Opening and Closing Stocks and Sales of goods shown under item 3 above consist of manufactured and purchased parts. Thebifurcation of stocks/sales into manufactured and bought-out parts is not practicable.

(iv) With regard to clause 3(ii) of Part II of Schedule VI to the Companies Act,1956, the Company is of the view that, in respect of the propertydevelopment activity, the Company is not a ‘manufacturing’, a ‘trading’ or a ‘service’ company falling under sub-clause (a), (b) and (c) thereof,but it is an ‘other’ company falling under sub-clause (e) thereof.

(v) Licensed capacity in respect of Agricultural Tractor includes a Letter of Intent from the Government of India for expansion of the manufacturingcapacity from 25,000 to 60,000 tractors at Mumbai subject to fulfillment of conditions mentioned therein; an Industrial License will be issuedon fulfillment of the conditions mentioned in the Letter of Intent.

108


(B)(B)(B)(B)(B) PPPPPARTICULARS IN RESPECT OF GOODS TRADED :ARTICULARS IN RESPECT OF GOODS TRADED :ARTICULARS IN RESPECT OF GOODS TRADED :ARTICULARS IN RESPECT OF GOODS TRADED :ARTICULARS IN RESPECT OF GOODS TRADED :

PurchasesPurchasesPurchasesPurchasesPurchases Opening StockOpening StockOpening StockOpening StockOpening Stock Closing StockClosing StockClosing StockClosing StockClosing Stock SalesSalesSalesSalesSales

Sl. Unit ofNo. Class of Goods Measurement Quantity Value Quantity Value Quantity Value Quantity Value

RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupeescrorescrorescrorescrorescrores crores crores crores crores crores crores crores crores crores crores crorescrorescrorescrorescrores

1. Tractors ............................................... Nos.Nos.Nos.Nos.Nos. 113113113113113 2.992.992.992.992.99 3333333333 1.131.131.131.131.13 3636363636 1.131.131.131.131.13 110110110110110 4.644.644.644.644.64109 3.88 41 1.26 33 1.13 97 4.61

2. Agricultural Implements ...................... Nos.Nos.Nos.Nos.Nos. 9,5859,5859,5859,5859,585 24.7924.7924.7924.7924.79 1,6451,6451,6451,6451,645 3.503.503.503.503.50 2,2302,2302,2302,2302,230 3.623.623.623.623.62 9,0009,0009,0009,0009,000 30.5330.5330.5330.5330.536,588 17.67 1,006 1.56 1,645 3.50 5,860 22.24

3 Light Commercial Vehicles .................. Nos.Nos.Nos.Nos.Nos. 365365365365365 13.6313.6313.6313.6313.63 ----- ----- ----- ----- 365365365365365 16.0716.0716.0716.0716.07254 9.61 - - - - 254 10.94

4. Bought-out Spares for Resale[Note (iii)(b) to item ‘A’] ...................... 275.88275.88275.88275.88275.88 ----- ----- -----

217.94 - - -

5. Others ................................................. 1.901.901.901.901.90 ----- ----- 2.582.582.582.582.580.70 - - 1.01

Total .... 319.19319.19319.19319.19319.19 4.634.634.634.634.63 4.754.754.754.754.75 53.8253.8253.8253.8253.82249.80 2.82 4.63 38.80

Note (v) to item (A).

(C)(C)(C)(C)(C) PPPPPARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MATERIALS AND COMPONENTS CONSUMED :TERIALS AND COMPONENTS CONSUMED :TERIALS AND COMPONENTS CONSUMED :TERIALS AND COMPONENTS CONSUMED :TERIALS AND COMPONENTS CONSUMED :

Sl. Unit of ValueNo. Description Measurement Quantity Rupees crores

1. Steel Items (Sheets, Tubes, etc.) ............................................................................. Nos.Nos.Nos.Nos.Nos. 73,44473,44473,44473,44473,444

77,909

Sq.FSq.FSq.FSq.FSq.Feeteeteeteeteet 6262626262 206.56206.56206.56206.56206.56

76 213.87

Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 53,35553,35553,35553,35553,355

56,693

2. Aluminium Sections and Other Aluminium Items .................................................. Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 0.030.030.030.030.03

13 1.271.271.271.271.27

Kgs.Kgs.Kgs.Kgs.Kgs. 93,75793,75793,75793,75793,757 1.34

88,533

3. Other Metals (Steel Shots, Lead, Tin, etc.) ............................................................. Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 95.3895.3895.3895.3895.38 0.310.310.310.310.31

66.63 0.27

4. Paints ..................................................................................................................... Nos.Nos.Nos.Nos.Nos. 5,26,0155,26,0155,26,0155,26,0155,26,015

34,936

Kgs.Kgs.Kgs.Kgs.Kgs. 2,071,3382,071,3382,071,3382,071,3382,071,338 62.2762.2762.2762.2762.27

1,624,099 58.39

LitresLitresLitresLitresLitres 2,687,0542,687,0542,687,0542,687,0542,687,054

2,672,994

5. Steel Scrap ............................................................................................................. Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 6,0266,0266,0266,0266,026 11.8711.8711.8711.8711.87

4,398 7.17

}}

}


109

6. Pig Iron .................................................................................................................. Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 2,7872,7872,7872,7872,787 5.185.185.185.185.18

1,839 2.74

7. Miscellaneous Foundry Materials ............................................................................ Nos.Nos.Nos.Nos.Nos. 1,545,0421,545,0421,545,0421,545,0421,545,042

1,205,714Metric TMetric TMetric TMetric TMetric Tonnesonnesonnesonnesonnes 9,4009,4009,4009,4009,400 7.897.897.897.897.89

6,678 4.87LitresLitresLitresLitresLitres 3,07,2093,07,2093,07,2093,07,2093,07,209

1,90,194

8. Other Materials (Direct Stores, Patterns, Oils, etc.) ................................................ Not practicable to giveNot practicable to giveNot practicable to giveNot practicable to giveNot practicable to givequantitative detailsquantitative detailsquantitative detailsquantitative detailsquantitative details *61.67*61.67*61.67*61.67*61.67

*57.18

9. Tyres and Tubes ...................................................................................................... Nos.Nos.Nos.Nos.Nos. *2,469,329*2,469,329*2,469,329*2,469,329*2,469,329 *393.28*393.28*393.28*393.28*393.28

*2,240,763 *357.55

10. Components other than Tyres and Tubes (including processing charges) .............. *6,488.63*6,488.63*6,488.63*6,488.63*6,488.63

*5,598.0411. Material handling and transportation charges, etc. incurred

on the above items not separately allocable .......................................................... 316.90316.90316.90316.90316.90

283.11

Total ... 7,555.837,555.837,555.837,555.837,555.83

6,584.53

* Includes items used for other than production, amounts not ascertained.


(i) The consumption in value has been ascertained on the basis of opening stock plus purchases less closing stock and includes the adjustment ofexcesses and shortages as ascertained on physical count and write-off of obsolete and unserviceable raw materials and components.

(ii) The consumption in value shown against item 10 is a balancing figure based on the total consumption shown in the Profit and Loss Account.

(D)(D)(D)(D)(D) VVVVVALALALALALUE OF IMPORTS ON C.I.FUE OF IMPORTS ON C.I.FUE OF IMPORTS ON C.I.FUE OF IMPORTS ON C.I.FUE OF IMPORTS ON C.I.F. BASIS ACCOUNTED FOR DURING THE YEAR :. BASIS ACCOUNTED FOR DURING THE YEAR :. BASIS ACCOUNTED FOR DURING THE YEAR :. BASIS ACCOUNTED FOR DURING THE YEAR :. BASIS ACCOUNTED FOR DURING THE YEAR :Rupees crores

20082008200820082008 2007

1. Raw Materials ................................................................................................ 4.634.634.634.634.63 17.96

2. Components, Spare Parts, etc. ....................................................................... 121.11121.11121.11121.11121.11 107.46

3. Capital Goods ................................................................................................ 144.70144.70144.70144.70144.70 82.72

4. Items imported for Resale .............................................................................. 8.578.578.578.578.57 8.00

Total….. 279.01279.01279.01279.01279.01 216.14

Notes :Notes :Notes :Notes :Notes :(i) Credits, if any, recoverable in respect of short landings, etc. are not considered.(ii) The value of imports shown above includes :

(a) Imports on C&F basis as per suppliers’ invoices Rs. 2.91 croresRs. 2.91 croresRs. 2.91 croresRs. 2.91 croresRs. 2.91 crores (2007 : Rs. 16.01 crores)(b) Imports on ‘cost’ basis Rs. 184.17 croresRs. 184.17 croresRs. 184.17 croresRs. 184.17 croresRs. 184.17 crores (2007 : Rs. 130.58 crores)

Sl. Unit of ValueNo. Description Measurement Quantity Rupees crores

}


(C)(C)(C)(C)(C) PPPPPARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MAARTICULARS OF RAW MATERIALS AND COMPONENTS CONSUMED TERIALS AND COMPONENTS CONSUMED TERIALS AND COMPONENTS CONSUMED TERIALS AND COMPONENTS CONSUMED TERIALS AND COMPONENTS CONSUMED (Contd.)(Contd.)(Contd.)(Contd.)(Contd.) : : : : :

110

(E)(E)(E)(E)(E) EXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TEXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TEXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TEXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TEXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TAX WHERE APPLICABLE) :AX WHERE APPLICABLE) :AX WHERE APPLICABLE) :AX WHERE APPLICABLE) :AX WHERE APPLICABLE) :Rupees crores

20082008200820082008 2007

1. Professional and Consultancy Fees[including Rs. 2.30 croresRs. 2.30 croresRs. 2.30 croresRs. 2.30 croresRs. 2.30 crores (2007 : Rs.0.40 crores) capitalised] ...................... 26.2426.2426.2426.2426.24 18.59

2. Commission on Exports ................................................................................. 22.7622.7622.7622.7622.76 15.543. Royalty ........................................................................................................... 0.060.060.060.060.06 0.074. Interest ........................................................................................................... 46.6546.6546.6546.6546.65 15.985. Others ............................................................................................................ 57.7157.7157.7157.7157.71 46.93

Total ... 153.42153.42153.42153.42153.42 97.11


(1) Fee for use of technology, development expenditure and software expenditure [refer to in Note 1 (B)] :

(a) written off during the year Rs. 9.05 crores Rs. 9.05 crores Rs. 9.05 crores Rs. 9.05 crores Rs. 9.05 crores (2007 : Rs. 2.65 crores); and

(b) amount remitted during the year Rs. 31.23 crores Rs. 31.23 crores Rs. 31.23 crores Rs. 31.23 crores Rs. 31.23 crores (2007 : Rs. 18.45 crores) net of tax deducted at source Rs. 1.33 croresRs. 1.33 croresRs. 1.33 croresRs. 1.33 croresRs. 1.33 crores (2007 :Rs. 1.82 crores) are not included in the above figures.

(F)(F)(F)(F)(F) REMITREMITREMITREMITREMITTTTTTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :ANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :ANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :ANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :ANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :

Number of Amount remitted Dividend relating to

Shareholders Equity shares

Rupees crores

2008 : 42008 : 42008 : 42008 : 42008 : 4 1,3181,3181,3181,3181,318 ***** YYYYYear ended 31st March, 2007ear ended 31st March, 2007ear ended 31st March, 2007ear ended 31st March, 2007ear ended 31st March, 2007

2007 : 5 4,87,984 0.49 Year ended 31st March, 2006

(G)(G)(G)(G)(G) EARNINGS IN FOREIGN EXEARNINGS IN FOREIGN EXEARNINGS IN FOREIGN EXEARNINGS IN FOREIGN EXEARNINGS IN FOREIGN EXCHANGE :CHANGE :CHANGE :CHANGE :CHANGE :Rupees crores

20082008200820082008 2007

1. Export of goods on F.O.B. basis ..................................................................... 795.38795.38795.38795.38795.38 614.96

2. Interest ........................................................................................................... 38.9038.9038.9038.9038.90 51.86

3. Others (freight, etc.) ...................................................................................... 49.2849.2849.2849.2849.28 46.05

Total ... 883.56883.56883.56883.56883.56 712.87


F.O.B. value of exports includes local sales which qualify for export benefits and for which payment is receivable in foreign currency and local/export sales under rupee credit which qualify for export benefits.

(H)(H)(H)(H)(H) VVVVVALALALALALUE OF IMPORTED AND INDIGENOUS CONSUMPTION :UE OF IMPORTED AND INDIGENOUS CONSUMPTION :UE OF IMPORTED AND INDIGENOUS CONSUMPTION :UE OF IMPORTED AND INDIGENOUS CONSUMPTION :UE OF IMPORTED AND INDIGENOUS CONSUMPTION :^Raw Materials and Components^Raw Materials and Components^Raw Materials and Components^Raw Materials and Components^Raw Materials and Components

Rupees croresRupees croresRupees croresRupees croresRupees crores %%%%%

1. Imported ..................................... 120.88120.88120.88120.88120.88 1.601.601.601.601.60

134.56 2.04

2. Indigenously obtained ................ 7,434.957,434.957,434.957,434.957,434.95 98.4098.4098.4098.4098.40

6,449.97 97.96

Total .... 7,555.837,555.837,555.837,555.837,555.83 100.00100.00100.00100.00100.006,584.53 100.00

^ Includes items used for other than production, amount not ascertained.

Notes :Notes :Notes :Notes :Notes :(1) Items purchased through canalising agencies have been considered as imported.(2) See Note (i) to item (C).(3) In giving the above information the Company has taken the view that spares and components as referred to in paragraph 4 (D)(c) of Part II

of Schedule VI covers only such items as go directly into production.* denotes amounts less than Rs. 50,000



111

I.I.I.I.I. Registration Details :Registration Details :Registration Details :Registration Details :Registration Details :

Registration No. State Code

Balance Sheet Date

Date Month Year

II.II.II.II.II. Capital raised during the YCapital raised during the YCapital raised during the YCapital raised during the YCapital raised during the Year (Amount in Rs. Thousands) :ear (Amount in Rs. Thousands) :ear (Amount in Rs. Thousands) :ear (Amount in Rs. Thousands) :ear (Amount in Rs. Thousands) :

Public Issue Rights Issue

Bonus Issue Private Placement

III.III.III.III.III. PPPPPosition of Mobilisation and Deployment of Fosition of Mobilisation and Deployment of Fosition of Mobilisation and Deployment of Fosition of Mobilisation and Deployment of Fosition of Mobilisation and Deployment of Funds (Amount in Rs. Thousands) :unds (Amount in Rs. Thousands) :unds (Amount in Rs. Thousands) :unds (Amount in Rs. Thousands) :unds (Amount in Rs. Thousands) :

Total Liabilities including Shareholders’ Funds Total Assets

Sources of FSources of FSources of FSources of FSources of Funds :unds :unds :unds :unds :

Paid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Deferred Tax Liability (Net)

Application of FApplication of FApplication of FApplication of FApplication of Funds :unds :unds :unds :unds :

Net Fixed Assets

Investments Net Current Assets

Miscellaneous Expenditure Accumulated Losses

IVIVIVIVIV..... PPPPPerformance of Company (Amount in Rs. Thousands) :erformance of Company (Amount in Rs. Thousands) :erformance of Company (Amount in Rs. Thousands) :erformance of Company (Amount in Rs. Thousands) :erformance of Company (Amount in Rs. Thousands) :

Turnover (Sales & Other Income)★ Total Expenditure ◆

+ - Profit/Loss Before Tax + - Profit/Loss After Tax

Earnings per Share in Rupees ▲

Basic Diluted Dividend Rate %

(Refer Note 25)

4 5 5 8

N I L

N I L N I L

1 0 4 0 5 9 0 1 7 1 0 4 0 5 9 0 1 7

2 3 9 0 7 3 4 4 1 1 0 9 9 8 1

6 1 7 2 5 3 3 1 9 6 9 8 0 1 4

4 2 1 5 0 6 1 5 4 0 4 3 6 3 8

1 3 4 7 4 1 0 8 5 1 2 0 6 7 3 3 4 8

1 4 0 6 7 7 3 7 1 1 0 3 3 7 3 7

Rs. 46.24

N I L

1 1

3 1 0 3 2 0 0 8

2 3 6 0 8 9 8 6

1 3 5 2 9 0 N I L

Rs. 41.52

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XVII XVII XVII XVII XVIIADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956.

Balance Sheet Abstract & Company’s General Business Profile :Balance Sheet Abstract & Company’s General Business Profile :Balance Sheet Abstract & Company’s General Business Profile :Balance Sheet Abstract & Company’s General Business Profile :Balance Sheet Abstract & Company’s General Business Profile :

5 6 7 2 6 7

1 1 5

112

}

VVVVV..... Generic Names of Three Principal Products/Services of Company (as per monetary terms) :Generic Names of Three Principal Products/Services of Company (as per monetary terms) :Generic Names of Three Principal Products/Services of Company (as per monetary terms) :Generic Names of Three Principal Products/Services of Company (as per monetary terms) :Generic Names of Three Principal Products/Services of Company (as per monetary terms) :

Item Code No. (ITC Code)

Product Description Tractors


Product Description Motor Vehicles for the transport of more than six persons, excluding the driver


Product Description Other motor vehicles principally designed for the transport of persons

★ after considering exceptional item

◆ after considering the provision for contingencies and exceptional item.

▲ computed on the basis of, the weighted average number of shares outstanding during the year.

Signatures to Schedules I to XVIISignatures to Schedules I to XVIISignatures to Schedules I to XVIISignatures to Schedules I to XVIISignatures to Schedules I to XVII

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XVII (Contd.) XVII (Contd.) XVII (Contd.) XVII (Contd.) XVII (Contd.)

Deepak S. PDeepak S. PDeepak S. PDeepak S. PDeepak S. Parekharekharekharekharekh KKKKKeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindra ChairmanN. VN. VN. VN. VN. Vaghulaghulaghulaghulaghul


AAAAA. P. P. P. P. P. Puri. Puri. Puri. Puri. Puri Bharat DoshiBharat DoshiBharat DoshiBharat DoshiBharat DoshiN. B. GodrejN. B. GodrejN. B. GodrejN. B. GodrejN. B. Godrej AAAAA. K. Nanda. K. Nanda. K. Nanda. K. Nanda. K. Nanda Executive Directors



}}}}}

8 7 0 1

8 7 0 2

8 7 0 3


113

Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies

For Current Financial Year For Previous Financial Years

Name of the Subsidiary Companies Dealt with in Not dealt Dealt with in Not dealtthe accounts with in the the accounts with in the

of Mahindra & accounts of of Mahindra & accounts ofMahindra Mahindra & Mahindra Mahindra &

Limited for Mahindra Limited for Mahindrathe year Limited for the year Limited for

Equity Extent ended 31st the year ended 31st the year of March, 2008 ended 31st March, 2008 ended 31st

holding March, 2008 March, 2008

Nos. % Rupees crores Rupees crores Rupees crores Rupees crores

Number ofShares in the

SubsidiaryCompany held

by Mahindra & MahindraLimited at thefinancial yearending date

The net aggregate of profits/(losses) of theSubsidiary Companies so far as they concern the members of

Mahindra & Mahindra Limited

Mahindra Engineering and Chemical Products LimitedMahindra Engineering and Chemical Products LimitedMahindra Engineering and Chemical Products LimitedMahindra Engineering and Chemical Products LimitedMahindra Engineering and Chemical Products Limited 53,78,235 100.00% - 10.12 24.04 57.64

Mahindra Retail Private Limited .......................... - 100.00% - (10.58) - -

Mahindra Intertrade LimitedMahindra Intertrade LimitedMahindra Intertrade LimitedMahindra Intertrade LimitedMahindra Intertrade Limited .......................................................................................................................................................................... 2,71,00,006 100.00% - 45.09 0.83 53.61

@ Mahindra Middleeast Electrical Steel ServiceCentre (FZC) ....................................................... - 90.00% - 4.42 - 1.26

Mahindra Steel Service Centre LimitedMahindra Steel Service Centre LimitedMahindra Steel Service Centre LimitedMahindra Steel Service Centre LimitedMahindra Steel Service Centre Limited ............................................................................................... 37,23,874 61.00% - 2.54 0.67 6.38

Mahindra Holdings & Finance LimitedMahindra Holdings & Finance LimitedMahindra Holdings & Finance LimitedMahindra Holdings & Finance LimitedMahindra Holdings & Finance Limited ............................................................................................... 14,66,00,593 100.00% 21.99 106.98 - 198.89

★ Mahindra Consulting Engineers Limited ............. - 51.00% - 0.36 - 0.46

★ Mahindra Holidays and Resorts India Limited .... - #93.64% - 75.40 - 70.52

+ MHR Hotel Management GmbH ........................ - #70.23% - (0.02) - -

+ Mahindra Holidays and Resorts USA Incorporated - #93.64% - 3.20 - 0.44

+ Mahindra Hotels and Residences India Limited .. - #93.64% - (0.01) - -

+ Heritage Bird (M) SDN.BHD ............................... - #93.64% - - - -

★ NBS International Limited .................................. - 100.00% - (0.09) - 1.05

★ Mahindra Ugine Steel Company Limited ............ - 50.69% - 14.94 - 86.78

★ Mahindra Holdings Limited ................................ - 100.00% - 0.01 - -

Mahindra Lifespace Developers LimitedMahindra Lifespace Developers LimitedMahindra Lifespace Developers LimitedMahindra Lifespace Developers LimitedMahindra Lifespace Developers Limited(formerly known as Mahindra Gesco(formerly known as Mahindra Gesco(formerly known as Mahindra Gesco(formerly known as Mahindra Gesco(formerly known as Mahindra GescoDevelopers Limited)Developers Limited)Developers Limited)Developers Limited)Developers Limited) ........................................................................................................................................................................................................................................... 1,54,01,126 51.08% - 33.40 2.31 12.14

✪ Mahindra Infrastructure Developers Limited ...... - 40.87% - (0.10) - 0.22

✪ Mahindra World City Developers Limited ........... - 42.21% - 4.82 - 6.64

✪ Mahindra World City (Jaipur) Limited ................ - 37.80% - (0.30) - (0.83)

✪ Mahindra Integrated Township Limited ............. - 48.78% - (0.09) - (0.21)

Mahindra Residential Developers Limited ........... - 48.77% - (0.01) - -

✪ Mahindra World City (Maharashtra) Limited ...... - 51.08% - * - (0.03)

✪ Mahindra Technology Park Limited .................... - 51.08% - (0.10) - -

Mahindra & Mahindra Financial Services LimitedMahindra & Mahindra Financial Services LimitedMahindra & Mahindra Financial Services LimitedMahindra & Mahindra Financial Services LimitedMahindra & Mahindra Financial Services Limited ............... 5,82,41,532 #60.10% - 106.39 11.65 196.11

Mahindra Insurance Brokers Limited .................. - #60.10% - 2.98 - 5.10

Mahindra Rural Housing Finance Limited ........... - #60.10% - (0.36) - -

* denotes amount less than Rs. 50,000

114

Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companiesStatement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)








TTTTTech Mahindra Limitedech Mahindra Limitedech Mahindra Limitedech Mahindra Limitedech Mahindra Limited .................................................................................................................................................................................................................. 5,37,76,252 48.97% - 167.55 - 304.41

✼ Tech Mahindra (Americas) Incorporated ............ - 48.97% - 5.14 - (3.34)

✼ Tech Mahindra GmbH ........................................ - 48.97% - 0.99 - (15.04)

✼ Tech Mahindra Singapore Pte. Limited ............... - 48.97% - 0.66 - 1.70

✼ Tech Mahindra (Thailand) Limited ...................... - 48.97% - 0.26 - 0.04

✼ PT Tech Mahindra Indonesia .............................. - 48.97% - 0.53 - -

✼ Tech Mahindra (R&D Services) Limited ............... - 48.97% - (2.95) - 9.50

o Tech Mahindra (R&D Services) Incorporated ...... - 48.97% - 0.49 - 1.10

✼ CanvasM Technologies Limited ........................... - 39.23% - (0.95) - 0.17

CanvasM (Americas) Incorporated ...................... - 39.23% - 0.06 - -

✼ iPolicy Network Limited ...................................... - 48.97% - (1.99) - (2.09)

✼ Tech Mahindra Foundation ................................ - 48.97% - (0.41) - 0.41

✼ Tech Mahindra (Malaysia) SDN.BHD ................... - 48.97% - 0.02 - -

✼ Tech Mahindra (Beijing) IT Services Limited ........ - 48.97% - (0.12) - -

Bristlecone Limited……………………………………..Bristlecone Limited……………………………………..Bristlecone Limited……………………………………..Bristlecone Limited……………………………………..Bristlecone Limited…………………………………….. 42,22,250 82.08% - (2.49) - (3.38)

Bristlecone Incorporated .................................... - 82.08% - (20.89) - (7.67)

Bristlecone India Limited .................................... - 82.08% - 0.11 - 4.40

Bristlecone (Singapore) Pte. Limited ................... - 82.08% - (0.94) - (0.24)

Bristlecone GmbH .............................................. - 82.08% - (1.13) - 0.84

Bristlecone UK Limited ....................................... - 82.08% - (5.15) - (0.69)

Bristlecone (Malaysia) SDN.BHD ......................... - 82.08% - 0.48 - -

Mahindra Logisoft Business Solutions LimitedMahindra Logisoft Business Solutions LimitedMahindra Logisoft Business Solutions LimitedMahindra Logisoft Business Solutions LimitedMahindra Logisoft Business Solutions Limited ................................... 63,49,500 100.00% - 1.48 - (5.08)

FirstChoice Wheels LimitedFirstChoice Wheels LimitedFirstChoice Wheels LimitedFirstChoice Wheels LimitedFirstChoice Wheels Limited(formerly known as Automartindia Limited)(formerly known as Automartindia Limited)(formerly known as Automartindia Limited)(formerly known as Automartindia Limited)(formerly known as Automartindia Limited) .................................................. 2,26,25,348 #72.28% - (15.75) - (15.40)

Mahindra USA IncorporatedMahindra USA IncorporatedMahindra USA IncorporatedMahindra USA IncorporatedMahindra USA Incorporated .......................................................................................................................................................................... 4,50,00,000 100.00% - 1.70 - 22.23

Mahindra Gujarat TMahindra Gujarat TMahindra Gujarat TMahindra Gujarat TMahindra Gujarat Tractor Limitedractor Limitedractor Limitedractor Limitedractor Limited .................................................................................................................................. 16,83,218 60.00% - 0.74 - (16.78)

Mahindra Shubhlabh Services LimitedMahindra Shubhlabh Services LimitedMahindra Shubhlabh Services LimitedMahindra Shubhlabh Services LimitedMahindra Shubhlabh Services Limited ............................................................................................... 1,48,33,793 77.31% - (1.44) - (19.98)

Mahindra & Mahindra South Africa (Proprietary)Mahindra & Mahindra South Africa (Proprietary)Mahindra & Mahindra South Africa (Proprietary)Mahindra & Mahindra South Africa (Proprietary)Mahindra & Mahindra South Africa (Proprietary)LimitedLimitedLimitedLimitedLimited .......................................................................................................................................................................................................................................................................................................................................... 35,70,000 51.00% 1.04 (3.73) - 11.02







115














Mahindra Overseas Investment Company (Mauritius)Mahindra Overseas Investment Company (Mauritius)Mahindra Overseas Investment Company (Mauritius)Mahindra Overseas Investment Company (Mauritius)Mahindra Overseas Investment Company (Mauritius)LimitedLimitedLimitedLimitedLimited .......................................................................................................................................................................................................................................................................................................................................... 2,23,40,000 100.00% - (1.29) - (1.31)

✠ Mahindra (China) Tractor Company Limited ....... - 83.74% - (12.89) - (24.92)

✠ Mahindra-BT Investment Company (Mauritius)Limited ............................................................... - 57.00% - 0.02 - 1.94

✠ Mahindra Europe s.r.l. ....................................... - 80.00% - 1.66 - 0.18

✠ Mahindra Graphic Research Design s.r.l. ............ - 100.00% - (0.44) - -

Mahindra SAR TMahindra SAR TMahindra SAR TMahindra SAR TMahindra SAR Transmission Private Limitedransmission Private Limitedransmission Private Limitedransmission Private Limitedransmission Private Limited ....................................................... 45,53,739 60.26% - 0.46 - 0.13

Mahindra Engineering Design & DevelopmentMahindra Engineering Design & DevelopmentMahindra Engineering Design & DevelopmentMahindra Engineering Design & DevelopmentMahindra Engineering Design & DevelopmentCompany LimitedCompany LimitedCompany LimitedCompany LimitedCompany Limited ............................................................................................................................................................................................................................................................... 81,26,218 100.00% - 23.13 - 21.13

Plexion Technologies (UK) Limited ...................... - 100.00% - 1.92 - 0.30

Plexion Technologies GmbH ............................... - 100.00% - 0.02 - (0.09)

Plexion Technologies Incorporated ..................... - 100.00% - (0.49) - (0.58)

Mahindra FMahindra FMahindra FMahindra FMahindra Forgings Limitedorgings Limitedorgings Limitedorgings Limitedorgings Limited .................................................................................................................................................................................... 4,15,26,329 60.56% - (8.58) - -

£££££ Stokes Group Limited……………………………..……………………………..……………………………..……………………………..…………………………….. - 60.43% - - - 0.01

✟ Stokes Forgings Dudley Limited ......................... - 60.43% - 0.93 - (0.19)

✟ Jensand Limited ................................................. - 60.43% - (0.05) - (0.27)

Stokes Forgings Limited ..................................... - 60.43% - (5.11) - (4.25)

£££££ Mahindra Forgings Global Limited………………. - 60.56% - (1.07) - (1.10)

Schöneweiss & Co. GmbH ................................. - 60.56% - 13.85 - 0.82

£££££ Mahindra Forgings International Limited ........... - 60.56% - (10.50) - (2.21)

Mahindra Forgings Europe AG(formerly known as JECO Holdings AG) ............. - 60.56% - 9.02 - 0.14

• Gesenkschmiede Schneider GmbH ..................... - 60.56% - 0.98 - 8.13

• JECO-Jellinghaus GmbH ..................................... - 60.56% - 5.52 - 2.03

• Falkenroth Umformtechnik GmbH ..................... - 60.56% - 6.97 - 1.22

Mahindra Renault Private LimitedMahindra Renault Private LimitedMahindra Renault Private LimitedMahindra Renault Private LimitedMahindra Renault Private Limited .................................................................................................................................. 10,16,24,232 51.00% - (21.75) - (24.36)

Mahindra International LimitedMahindra International LimitedMahindra International LimitedMahindra International LimitedMahindra International Limited ................................................................................................................................................. 5,03,75,600 51.00% - (2.22) - (1.86)

Mahindra Castings Private LimitedMahindra Castings Private LimitedMahindra Castings Private LimitedMahindra Castings Private LimitedMahindra Castings Private Limited ............................................................................................................................. 1,64,87,602 65.00% - 0.77 - -

Mahindra Hinoday Industries Limited(formerly known as DGP Hinoday Industries Limited) - #42.96% - (5.40) 0.75 0.04

116

# after considering shares issued to its ESOP Trust but not allotted to its employees.a subsidiary of Mahindra Engineering and Chemical Products Limited

@ a subsidiary of Mahindra Intertrade Limited★ a subsidiary of Mahindra Holdings & Finance Limited+ a subsidiary of Mahindra Holidays and Resorts India Limited✪ a subsidiary of Mahindra Lifespace Developers Limited

a subsidiary of Mahindra Integrated Township Limiteda subsidiary of Mahindra & Mahindra Financial Services Limited

✼ a subsidiary of Tech Mahindra Limitedo a subsidiary of Tech Mahindra (R&D Services) Limited

a subsidiary of CanvasM Technologies Limiteda subsidiary of Bristlecone Limiteda subsidiary of Bristlecone India Limited

✠ a subsidiary of Mahindra Overseas Investment Company (Mauritius) Limiteda subsidiary of Mahindra Engineering Design & Development Company Limited

£ a subsidiary of Mahindra Forgings Limited✟ a subsidiary of Stokes Group Limited

a subsidiary of Jensand Limiteda subsidiary of Mahindra Forgings Global Limiteda subsidiary of Mahindra Forgings International Limited

• a subsidiary of Mahindra Forgings Europe AG (formerly known as JECO Holdings AG)a subsidiary of Mahindra Castings Private Limited

Note :Note :Note :Note :Note :The financial year of all subsidiaries ended on 31st March, 2008, except for Heritage Bird (M) SDN.BHD whose first financial year would be from7th July, 2007 to 30th June, 2008 and Mahindra First Choice Services Limited whose first financial year would be from 24th March, 2008 to 31st March, 2009.

Mahindra Automotive LimitedMahindra Automotive LimitedMahindra Automotive LimitedMahindra Automotive LimitedMahindra Automotive Limited ........................................................................................................................................................... 12,48,00,000 100.00% - (2.32) - -

Punjab TPunjab TPunjab TPunjab TPunjab Tractor Limitedractor Limitedractor Limitedractor Limitedractor Limited ....................................................................................................................................................................................................................... 3,84,76,510 64.64% - 39.97 - -

Mahindra Logistics LimitedMahindra Logistics LimitedMahindra Logistics LimitedMahindra Logistics LimitedMahindra Logistics Limited .................................................................................................................................................................................... 50,000 100.00% - (0.01) - -

Mahindra Navistar Engines Private LimitedMahindra Navistar Engines Private LimitedMahindra Navistar Engines Private LimitedMahindra Navistar Engines Private LimitedMahindra Navistar Engines Private Limited(formerly known as MIM Engines India Private Limited)(formerly known as MIM Engines India Private Limited)(formerly known as MIM Engines India Private Limited)(formerly known as MIM Engines India Private Limited)(formerly known as MIM Engines India Private Limited) 5,10,000 51.00% - (0.08) - -

Mahindra Aerospace Private LimitedMahindra Aerospace Private LimitedMahindra Aerospace Private LimitedMahindra Aerospace Private LimitedMahindra Aerospace Private Limited .............................................................................................................. 50,000 100.00% - (0.12) - -

Mahindra First Choice Services LimitedMahindra First Choice Services LimitedMahindra First Choice Services LimitedMahindra First Choice Services LimitedMahindra First Choice Services Limited .......................................................................................... 50,000 100.00% - - - -














Deepak S. PDeepak S. PDeepak S. PDeepak S. PDeepak S. Parekharekharekharekharekh KKKKKeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindraeshub Mahindra ChairmanN. VN. VN. VN. VN. Vaghulaghulaghulaghulaghul


AAAAA. P. P. P. P. P. Puri. Puri. Puri. Puri. Puri Bharat DoshiBharat DoshiBharat DoshiBharat DoshiBharat DoshiN. B. GodrejN. B. GodrejN. B. GodrejN. B. GodrejN. B. Godrej AAAAA. K. Nanda. K. Nanda. K. Nanda. K. Nanda. K. Nanda Executive Directors



} }}}}}

MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)

117

Report of the Auditors to the Board of Directors of Mahindra & Mahindra LimitedReport of the Auditors to the Board of Directors of Mahindra & Mahindra LimitedReport of the Auditors to the Board of Directors of Mahindra & Mahindra LimitedReport of the Auditors to the Board of Directors of Mahindra & Mahindra LimitedReport of the Auditors to the Board of Directors of Mahindra & Mahindra Limited

1. We have audited the attached consolidated balance sheetof Mahindra & Mahindra Limited and its subsidiaries (theGroup) as at 31st March, 2008, and also the consolidatedprofit and loss account and the consolidated cash flowstatement for the year ended on that date, annexed thereto.These consolidated financial statements are the responsibilityof Mahindra & Mahindra Limited’s management and havebeen prepared by the management on the basis of separatefinancial statements and other financial informationregarding components. Our responsibility is to express anopinion on these consolidated financial statements basedon our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

3. We did not audit the financial statements of certainsubsidiaries and joint ventures, whose financial statementsreflect Group’s share of total assets of Rs. 16,569.67 croresas at 31st March, 2008 and Group’s share of total revenuesof Rs. 8,663.18 crores for the year ended on that date andGroup’s share of net cash inflow of Rs. 66.17 crores for theyear ended on that date and associates whose financialstatements reflect the Group’s share of profit (net) upto31st March, 2008 of Rs. 24.08 crores and the Group’s shareof profit (net) of Rs. 10.00 crores for the year ended onthat date as considered in the consolidated financialstatements. These financial statements and other financialinformation have been audited by other auditors whosereports have been furnished to us, and our opinion in so far

as it relates to the amounts included in respect of thesesubsidiaries, joint ventures and associates, is based solelyon the report of the other auditors.

4. We report that the consolidated financial statements havebeen prepared by Mahindra & Mahindra Limited’smanagement in accordance with the requirements ofAccounting Standard 21, Consolidated Financial Statements,Accounting Standard 23, Accounting for Investments inAssociates in Consolidated Financial Statements andAccounting Standard 27, Financial Reporting of Interests inJoint Ventures, notified by the Companies (AccountingStandards) Rules, 2006.

5. Based on our audit and on consideration of the reports ofother auditors on separate financial statements and on theother financial information of the components, in ouropinion and to the best of our information and accordingto the explanations given to us, the attached consolidatedfinancial statements give a true and fair view in conformitywith the accounting principles generally accepted in India:

a) in the case of the consolidated balance sheet, of thestate of affairs of Mahindra & Mahindra Limited Groupas at 31st March, 2008;

b) in the case of the consolidated profit and loss account,of the profit for the year ended on that date; and

c) in the case of the consolidated cash flow statement, ofthe cash flows for the year ended on that date.



Membership Number: 34382Mumbai, 28th May, 2008

118

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Consolidated Balance SheetConsolidated Balance SheetConsolidated Balance SheetConsolidated Balance SheetConsolidated Balance Sheet as at 31st March, 2008 as at 31st March, 2008 as at 31st March, 2008 as at 31st March, 2008 as at 31st March, 2008

Rupees crores


I.I.I.I.I. SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SOURCES OF FUNDS :SHAREHOLDERS’ FUNDS :Capital ........................................................................................ IIIII 239.07239.07239.07239.07239.07 238.03Employee Stock Options Outstanding ........................................ 4.004.004.004.004.00 3.18Reserves and Surplus .................................................................. IIIIIIIIII 5,921.705,921.705,921.705,921.705,921.70 4,613.54

6,164.776,164.776,164.776,164.776,164.77 4,854.75MINORITY INTEREST ................................................................... 2,734.522,734.522,734.522,734.522,734.52 1,659.48LOAN FUNDS :(a) Secured Loans ....................................................................... III AIII AIII AIII AIII A 6,981.886,981.886,981.886,981.886,981.88 5,619.35(b) Unsecured Loans ................................................................... III BIII BIII BIII BIII B 2,899.132,899.132,899.132,899.132,899.13 2,209.68

9,881.019,881.019,881.019,881.019,881.01 7,829.03DEFERRED INCOME :Advance towards Club Mahindra members’ facilities ................ 477.95477.95477.95477.95477.95 319.51

Total ............ 19,258.2519,258.2519,258.2519,258.2519,258.25 14,662.77

II.II.II.II.II. APPLICAAPPLICAAPPLICAAPPLICAAPPLICATION OF FUNDS :TION OF FUNDS :TION OF FUNDS :TION OF FUNDS :TION OF FUNDS :FIXED ASSETS ::::: IVIVIVIVIVGross Block ................................................................................. 10,690.3610,690.3610,690.3610,690.3610,690.36 7,818.72Less : Depreciation ..................................................................... 4,219.024,219.024,219.024,219.024,219.02 3,591.27

Net Block .................................................................................... 6,471.346,471.346,471.346,471.346,471.34 4,227.45CAPITAL WORK-IN-PROGRESS ..................................................... 1,154.171,154.171,154.171,154.171,154.17 559.30

7,625.517,625.517,625.517,625.517,625.51 4,786.75INVESTMENTS ............................................................................. VVVVV 1,354.721,354.721,354.721,354.721,354.72 1,003.30DEFERRED TAX ASSETS (Net) ...................................................... 17.5717.5717.5717.5717.57 14.71CURRENT ASSETS, LOANS AND ADVANCES :(a) Inventories ............................................................................. VI AVI AVI AVI AVI A 3,275.423,275.423,275.423,275.423,275.42 2,428.61(b) Sundry Debtors ..................................................................... VI BVI BVI BVI BVI B 3,767.833,767.833,767.833,767.833,767.83 2,702.69(c) Cash and Bank Balances ........................................................ VI CVI CVI CVI CVI C 1,727.991,727.991,727.991,727.991,727.99 2,045.12(d) Other Current Assets ............................................................. VI DVI DVI DVI DVI D 15.6515.6515.6515.6515.65 2.97(e) Loans and Advances .............................................................. VI EVI EVI EVI EVI E 8,141.648,141.648,141.648,141.648,141.64 6,860.31

16,928.5316,928.5316,928.5316,928.5316,928.53 14,039.70

LESS : CURRENT LIABILITIES AND PROVISIONS :(a) Current Liabilities .................................................................. VII AVII AVII AVII AVII A 5,291.245,291.245,291.245,291.245,291.24 4,270.08(b) Provisions .............................................................................. VII BVII BVII BVII BVII B 1,391.021,391.021,391.021,391.021,391.02 930.61

6,682.266,682.266,682.266,682.266,682.26 5,200.69

NET CURRENT ASSETS ................................................................ 10,246.2710,246.2710,246.2710,246.2710,246.27 8,839.01MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOTWRITTEN OFF OR ADJUSTED) ..................................................... VIIIVIIIVIIIVIIIVIII 14.1814.1814.1814.1814.18 19.00

Total ............ 19,258.2519,258.2519,258.2519,258.2519,258.25 14,662.77

NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS ............................................................... XIVXIVXIVXIVXIV








119







}

Consolidated Profit and Loss AccountConsolidated Profit and Loss AccountConsolidated Profit and Loss AccountConsolidated Profit and Loss AccountConsolidated Profit and Loss Account for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008Rupees crores


SALESSALESSALESSALESSALES [Note 25] ......................................................................................................... 19,774.3719,774.3719,774.3719,774.3719,774.37 14,439.52Less : Excise Duty on Sales [Note 25] ......................................................................... 2,154.822,154.822,154.822,154.822,154.82 1,548.52

Net Sales ..................................................................................................................... 17,619.5517,619.5517,619.5517,619.5517,619.55 12,891.00Income from Operations & Other Income .................................................................. IXIXIXIXIX 6,825.746,825.746,825.746,825.746,825.74 4,977.93

24,445.2924,445.2924,445.2924,445.2924,445.29 17,868.93EXPENDITURE :EXPENDITURE :EXPENDITURE :EXPENDITURE :EXPENDITURE :Raw Materials, Finished and Semi-finished Products .................................................. XXXXX 11,629.1511,629.1511,629.1511,629.1511,629.15 8,961.24Personnel .................................................................................................................... XIXIXIXIXI 3,613.733,613.733,613.733,613.733,613.73 2,388.40Interest, Commitment and Finance Charges (Net) ...................................................... XIIXIIXIIXIIXII 589.52589.52589.52589.52589.52 299.20Depreciation/Amortisation [Notes 8 and 25] .............................................................. 582.24582.24582.24582.24582.24 379.86Other Expenses ........................................................................................................... XIIIXIIIXIIIXIIIXIII 5,373.635,373.635,373.635,373.635,373.63 3,597.59

21,788.2721,788.2721,788.2721,788.2721,788.27 15,626.29Less :Less :Less :Less :Less : Cost of Manufactured/Purchased Products capitalised ..................................... 157.64157.64157.64157.64157.64 78.79

21,630.6321,630.6321,630.6321,630.6321,630.63 15,547.50Profit before provision for contingencies, exceptional item and taxation .................. 2,814.662,814.662,814.662,814.662,814.66 2,321.43Less :Less :Less :Less :Less : Provision for contingencies ............................................................................... 8.168.168.168.168.16 1.74

Profit before exceptional item and taxation ............................................................... 2,806.502,806.502,806.502,806.502,806.50 2,319.69Add :Add :Add :Add :Add : Exceptional Items [Note 18] ............................................................................. (302.51)(302.51)(302.51)(302.51)(302.51) (117.29)

Profit before taxation ................................................................................................. 2,503.992,503.992,503.992,503.992,503.99 2,202.40Less :Less :Less :Less :Less : Provision for Tax - Current Tax including Fringe Benefit Tax [Note 25] ......... 691.84691.84691.84691.84691.84 624.34

- Deferred Tax (Net) [Notes 17 and 25] . ........................... (34.64)(34.64)(34.64)(34.64)(34.64) (28.63)

Profit for the year before prior year adjustments ....................................................... 1,846.791,846.791,846.791,846.791,846.79 1,606.69Less :Less :Less :Less :Less : Adjustments pertaining to previous years [Note 19] ........................................ 2.222.222.222.222.22 (15.18)

Balance of profit for 2007-2008 before share of Profit/Loss of Associates andMinority Interests ........................................................................................................ 1,844.571,844.571,844.571,844.571,844.57 1,621.87AddAddAddAddAdd : Share of Profit of Associates for the year ........................................................ 10.0010.0010.0010.0010.00 16.38

Profit before Minority Interests ................................................................................... 1,854.571,854.571,854.571,854.571,854.57 1,638.25Minority Share in Profits for 2007-2008 .................................................................... 283.45283.45283.45283.45283.45 141.10

Net Profit .................................................................................................................... 1,571.121,571.121,571.121,571.121,571.12 1,497.15Balance of profit for earlier years ............................................................................... 2,945.132,945.132,945.132,945.132,945.13 1,940.96Less : Less : Less : Less : Less : Charge on adoption of Accounting Standard -15 (revised) ............................. ––––– 0.69(Less)/Add :(Less)/Add :(Less)/Add :(Less)/Add :(Less)/Add : Transfer (to)/from Debenture Redemption Reserve (Net) ........................ (16.88)(16.88)(16.88)(16.88)(16.88) 16.00

2,928.252,928.252,928.252,928.252,928.25 1,956.27

Total of Profit and Loss Account balances shown above ........................................... 4,499.374,499.374,499.374,499.374,499.37 3,453.42DeductDeductDeductDeductDeduct ::::: Statutory Reserve .......................................................................................... 49.0449.0449.0449.0449.04 24.74

::::: General Reserve (Net) ................................................................................... 242.33242.33242.33242.33242.33 140.04::::: Interim Dividends Paid ................................................................................. ––––– 184.03::::: Income Tax on Dividends ............................................................................. 13.7113.7113.7113.7113.71 44.59::::: Proposed Dividend on Equity Shares ............................................................ 282.61282.61282.61282.61282.61 98.20::::: Income Tax on Proposed Dividend ............................................................... 38.4838.4838.4838.4838.48 16.69

Balance for 2007-2008 and earlier years carried to Balance Sheet ............................ 3,873.203,873.203,873.203,873.203,873.20 2,945.13EARNINGS PER SHARE : EARNINGS PER SHARE : EARNINGS PER SHARE : EARNINGS PER SHARE : EARNINGS PER SHARE : [Note 23](Face value Rs.10/- per share) (Rupees)Basic. .......................................................................................................................... 65.8465.8465.8465.8465.84 63.28Diluted ........................................................................................................................ 59.8459.8459.8459.8459.84 57.75NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS ............................................................................................... XIVXIVXIVXIVXIV

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120

Consolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow Statement for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008for the year ended 31st March, 2008

Rupees crores

20082008200820082008 2007

AAAAA..... CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERATING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :TING ACTIVITIES :Net Profit before exceptional item, taxation and adjustments pertaining toprevious years .............................................................................................. 2,806.502,806.502,806.502,806.502,806.50 2,319.69Adjustments for :Depreciation/Amortisation ........................................................................... 582.24582.24582.24582.24582.24 379.86Profit on Exchange (Net) ............................................................................. (30.61)(30.61)(30.61)(30.61)(30.61) (3.40)Investment and Interest Income (Excluding Rs. 5.93 croresRs. 5.93 croresRs. 5.93 croresRs. 5.93 croresRs. 5.93 crores(2007 : Rs. 7.85 crores) in respect of financial enterprises consolidated) ... (170.85)(170.85)(170.85)(170.85)(170.85) (154.03)Interest, Commitment and Finance charges (Excluding Rs. 453.06 croresRs. 453.06 croresRs. 453.06 croresRs. 453.06 croresRs. 453.06 crores(2007 : Rs. 314.38 crores) in respect of financial enterprises consolidated) 262.51262.51262.51262.51262.51 95.39Amortisation of Expenses ............................................................................ 4.394.394.394.394.39 9.29Profit on sale of Investments (Net) .............................................................. (180.00)(180.00)(180.00)(180.00)(180.00) (12.80)(Profit)/Loss on fixed assets sold/scrapped/written off (Net) ........................ (19.83)(19.83)(19.83)(19.83)(19.83) 3.72Provision for diminution in value of long term investments (Net) .............. 4.334.334.334.334.33 2.14(Increase)/Decrease of cost over fair value of current investments (Net) ..... (1.74)(1.74)(1.74)(1.74)(1.74) 2.37

450.44450.44450.44450.44450.44 322.54

Operating Profit before Working Capital changes ....................................... 3,256.943,256.943,256.943,256.943,256.94 2,642.23

Changes in : Stock on hire ........................................................................ ----- 0.52

Deferred income – advances towards membership fees ...... 158.44158.44158.44158.44158.44 97.42

Trade and other receivables .................................................. (1,091.40)(1,091.40)(1,091.40)(1,091.40)(1,091.40) (997.81)

Loans against Assets * .......................................................... (808.55)(808.55)(808.55)(808.55)(808.55) (1,501.07)

Inventories ............................................................................ (703.34)(703.34)(703.34)(703.34)(703.34) (446.16)

Trade and other payables ..................................................... 1,094.401,094.401,094.401,094.401,094.40 1,135.78

(1,350.45)(1,350.45)(1,350.45)(1,350.45)(1,350.45) (1,711.32)Exceptional Items :Upfront payment to a customer ................................................................. (440.12)(440.12)(440.12)(440.12)(440.12) (524.94)Miscellaneous Expenditure (to the extent not written off or adjusted)incurred during the year ............................................................................. (5.18)(5.18)(5.18)(5.18)(5.18) (15.43)

Cash generated/(used) from operations ...................................................... 1,461.191,461.191,461.191,461.191,461.19 390.54Income Taxes paid (Net of refunds including for prior years) ..................... (762.32)(762.32)(762.32)(762.32)(762.32) (552.97)

NET CASH FROM/(USED IN) OPERATING ACTIVITIES ................................... 698.87698.87698.87698.87698.87 (162.43)* In respect of financial enterprises consolidated.

B.B.B.B.B. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :OW FROM INVESTING ACTIVITIES :Purchase of fixed assets .............................................................................. (1,972.30)(1,972.30)(1,972.30)(1,972.30)(1,972.30) (1,374.59)Sale of fixed assets ...................................................................................... 45.4045.4045.4045.4045.40 58.57Purchase of investments .............................................................................. (16,307.27)(16,307.27)(16,307.27)(16,307.27)(16,307.27) (9,752.50)Sale of investments ..................................................................................... 15,937.0015,937.0015,937.0015,937.0015,937.00 9,929.66Interest received .......................................................................................... 124.81124.81124.81124.81124.81 109.89Dividends received ....................................................................................... 30.1630.1630.1630.1630.16 16.45Inter corporate deposits (Net) ..................................................................... 8.418.418.418.418.41 67.06Purchase consideration paid on acquisition of interest in subsidiaries ....... (1,311.48)(1,311.48)(1,311.48)(1,311.48)(1,311.48) (936.18)Sales Proceeds (Net) received on divesture of interest in subsidiaries ......... 675.68675.68675.68675.68675.68 727.74Exceptional Item :Sale of a Business undertaking .................................................................... ----- 32.41

NET CASH USED IN INVESTING ACTIVITIES ................................................. (2,769.59)(2,769.59)(2,769.59)(2,769.59)(2,769.59) (1,121.49)


121

Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 2008Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 2008Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 2008Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 2008Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 2008

Rupees crores

20082008200820082008 2007

(a) Cash and Bank Balances .............................................................................. 1,727.991,727.991,727.991,727.991,727.99 2,045.12Unrealised (Net) translation loss on foreign currency cash and cashequivalents .................................................................................................. 57.6857.6857.6857.6857.68 40.04

Total cash and cash equivalent .................................................................... 1,785.671,785.671,785.671,785.671,785.67 2,085.16

(b) The following non-cash transactions do not form part of Cash Flow :(i) During the year the Company has consolidated its business interest in Mahindra Hinoday Industries Limited by swapping the

shares held by the Company in Mahindra Hinoday Industries Limited for shares of Mahindra Casting Private Limited.(ii) Arising out of the scheme of arrangement for the merger between company’s subsidiaries Mahindra Stokes Holding

Company Limited, Mahindra Forgings Overseas Limited, Mahindra Forgings Mauritius Limited with Mahindra ForgingsLimited, the Company received shares of Mahindra Forgings Limited.

(iii) Arising out of the scheme of arrangement for the merger between company’s subsidiaries Plexion Technologies (India)Private Limited with Mahindra Engineering Design & Development Company Limited the Company received shares ofMahindra Engineering Design & Development Company Limited.

(c) Previous year’s figures have been regrouped/restated wherever necessary.

Consolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow StatementConsolidated Cash Flow Statement (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Rupees crores

20082008200820082008 2007

C.C.C.C.C. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :OW FROM FINANCING ACTIVITIES :

Proceeds from borrowings .......................................................................... 32,458.7632,458.7632,458.7632,458.7632,458.76 16,633.98

Repayments of borrowings (including premium on repayment) ................. (30,376.23)(30,376.23)(30,376.23)(30,376.23)(30,376.23) (13,944.80)

Dividends paid ............................................................................................. (131.72)(131.72)(131.72)(131.72)(131.72) (502.24)

Interest, Commitment and Finance charges paid ........................................ (260.65)(260.65)(260.65)(260.65)(260.65) (67.07)

NET CASH FROM FINANCING ACTIVITIES .................................................... 1,690.161,690.161,690.161,690.161,690.16 2,119.87

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (A + B + C) (380.56)(380.56)(380.56)(380.56)(380.56) 835.97

CASH AND EQUIVCASH AND EQUIVCASH AND EQUIVCASH AND EQUIVCASH AND EQUIVALENTS [Note (a)]ALENTS [Note (a)]ALENTS [Note (a)]ALENTS [Note (a)]ALENTS [Note (a)]

Opening Balance ......................................................................................... 2,085.162,085.162,085.162,085.162,085.16 1,180.03

Cash & Bank Balance Acquired on Acquisition of Subsidiaries ................... 81.0781.0781.0781.0781.07 69.17

Closing Balance ........................................................................................... 1,785.671,785.671,785.671,785.671,785.67 2,085.16







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122

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE I I I I I Rupees crores20082008200820082008 2007

Share Capital :Share Capital :Share Capital :Share Capital :Share Capital :Authorised :Authorised :Authorised :Authorised :Authorised :

37,50,00,00037,50,00,00037,50,00,00037,50,00,00037,50,00,000 (2007 - 27,50,00,000) Ordinary (Equity) Shares of Rs. 10 each 375.00375.00375.00375.00375.00 275.0025,00,00025,00,00025,00,00025,00,00025,00,000 Unclassified shares of Rs.100 each ............................................. 25.0025.0025.0025.0025.00 25.00

Total .............. 400.00400.00400.00400.00400.00 300.00Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :Issued and Subscribed :

24,57,41,81324,57,41,81324,57,41,81324,57,41,81324,57,41,813 (2007 - 24,53,71,265) Ordinary (Equity) Shares of Rs.10 eachfully paid up ............................................................................... 245.74245.74245.74245.74245.74 245.37

245.74245.74245.74245.74245.74 245.37Less :Less :Less :Less :Less :

66,68,43166,68,43166,68,43166,68,43166,68,431 (2007 - 73,38,558) Ordinary (Equity) Shares of Rs.10 each fullypaid up issued to ESOP Trust but not allotted to employees 6.676.676.676.676.67 7.34

Adjusted : Adjusted : Adjusted : Adjusted : Adjusted : Issued and Subscribed Share Capital ...................................................... 239.07239.07239.07239.07239.07 238.03

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE II II II II II Rupees crores20072007200720072007 AdditionsAdditionsAdditionsAdditionsAdditions DeductionsDeductionsDeductionsDeductionsDeductions 20082008200820082008

Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :Reserves and Surplus :1 Capital Reserve .................................................................... 23.4323.4323.4323.4323.43 0.050.050.050.050.05 ----- 23.4823.4823.4823.4823.48

23.43 - - 23.432 Capital Reserve on consolidation ......................................... 138.55138.55138.55138.55138.55 ----- ----- 138.55138.55138.55138.55138.55

41.40 161.98 64.83 138.553 Securities Premium Account [Note 5] .................................. 554.03554.03554.03554.03554.03 27.1527.1527.1527.1527.15 2.152.152.152.152.15 579.03579.03579.03579.03579.03

579.60 148.95 174.52 554.03Less : Premium on shares issued to ESOP Trust but notallotted to employees [Note 5] ............................................ 17.9817.9817.9817.9817.98 ----- 1.641.641.641.641.64 16.3416.3416.3416.3416.34

18.38 - 0.40 17.98

536.05536.05536.05536.05536.05 27.1527.1527.1527.1527.15 0.510.510.510.510.51 562.69562.69562.69562.69562.69561.22 148.95 174.12 536.05

4 Revaluation Reserve ............................................................. 12.8612.8612.8612.8612.86 ----- 0.390.390.390.390.39 12.4712.4712.4712.4712.4713.33 - 0.47 12.86

5 General Reserve [Note 5] ..................................................... 742.98742.98742.98742.98742.98 [email protected]@[email protected]@242.33@ 13.47**13.47**13.47**13.47**13.47** 971.84971.84971.84971.84971.84............................................................................................................................................................................................................................................................................................................................................................................................................................... 726.45 150.73@ 134.20** 742.98

Add : Bonus shares issued to ESOP Trust but notallotted to employees [Note 5] ............................................ 3.673.673.673.673.67 ----- 0.340.340.340.340.34 3.333.333.333.333.33

3.75 - 0.08 3.67

746.65746.65746.65746.65746.65 242.33242.33242.33242.33242.33 13.8113.8113.8113.8113.81 975.17975.17975.17975.17975.17730.20 150.73 134.28 746.65

6 Debenture Redemption Reserve ........................................... 1.361.361.361.361.36 16.88$16.88$16.88$16.88$16.88$ ----- 18.2418.2418.2418.2418.2417.36 - 16.00 1.36

7 Investment Fluctuation Reserve ........................................... 30.6130.6130.6130.6130.61 ----- -#-#-#-#-# 30.6130.6130.6130.6130.61............................................................................................................................................................................................................................................................................................................................................................................................................................... 41.30 - 10.69# 30.61

8 Capital Redemption Reserve ................................................ 50.0050.0050.0050.0050.00 -***-***-***-***-*** ----- 50.0050.0050.0050.0050.00............................................................................................................................................................................................................................................................................................................................................................................................................................... - 50.00*** - 50.00

9 Special Reserve (As per Section 45 IC of the RBI Act) ......... 145.47145.47145.47145.47145.47 49.0449.0449.0449.0449.04 ----- 194.51194.51194.51194.51194.51120.73 24.74 - 145.47

10 Hedging Reserve Account [Note 6] ..................................... ----- 41.7041.7041.7041.7041.70 12.9212.9212.9212.9212.92 28.7828.7828.7828.7828.78- - -

11 Foreign Exchange Fluctuation Reserve ................................. (16.57)(16.57)(16.57)(16.57)(16.57) 30.5730.5730.5730.5730.57 ----- 14.0014.0014.0014.0014.00(3.85) - 12.72 (16.57)

1,668.411,668.411,668.411,668.411,668.41 407.72407.72407.72407.72407.72 27.6327.6327.6327.6327.63 2,048.50*2,048.50*2,048.50*2,048.50*2,048.50*1,545.12 536.40 413.11 1,668.41*

*{including Group Share in Joint Ventures Rs. 3.30 croresRs. 3.30 croresRs. 3.30 croresRs. 3.30 croresRs. 3.30 crores (2007 : Rs. 2.88 crores)}12 Balance for 2007-2008 and earlier years as per Profit and Loss Account 3,851.123,851.123,851.123,851.123,851.12

2,928.47Group Share in Joint Ventures 22.0822.0822.0822.0822.08

16.66

Total ............... 5,921.705,921.705,921.705,921.705,921.704,613.54

@ includes transfer of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 10.69 crores) from Investment Fluctuation Reserve per contra pursuant to the Scheme of Arrangementapproved by the Hon’ble High Court of Bombay on 12th December, 2003.

** includes transfer of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 50.00 crores) to Capital Redemption Reserve and Adjustment on adoption of Accounting Standard -15(revised 2005) Employee benefits [Refer Note 11].

# transfer of Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. 10.69 crores) to General Reserve per contra pursuant to the above Scheme of Arrangement [Note 4]*** transfer of Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 50.00 crores) from General Reserve.$ transfer from Profit & Loss Account Rs. 16.88 crores Rs. 16.88 crores Rs. 16.88 crores Rs. 16.88 crores Rs. 16.88 crores ( 2007 : Rs. Nil).


123

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE III III III III III Rupees crores

20082008200820082008 2007

Loan FLoan FLoan FLoan FLoan Funds :unds :unds :unds :unds :

(A)(A)(A)(A)(A) Secured : [Note 7]Secured : [Note 7]Secured : [Note 7]Secured : [Note 7]Secured : [Note 7]

(1) Debentures/Bonds ........................................................ 3,585.513,585.513,585.513,585.513,585.51 3,067.51

(2) Foreign Currency Loans from Banks ............................. 748.10748.10748.10748.10748.10 264.03

(3) Rupee Loans :

(a) From Financial Institutions ...................................... 6.056.056.056.056.05 -

(b) From Banks ............................................................. 1,638.591,638.591,638.591,638.591,638.59 1,281.14

(c) From Others ............................................................ 62.4062.4062.4062.4062.40 35.30

1,707.041,707.041,707.041,707.041,707.04 1,316.44(4) Loans and Advances on cash credit account from Banks.. 655.29655.29655.29655.29655.29 963.43

(5) Short-term Foreign Currency Loans from Banks ........... 284.06284.06284.06284.06284.06 5.71

6,980.006,980.006,980.006,980.006,980.00 5,617.12

Group Share in Joint Ventures ............................................ 1.881.881.881.881.88 2.23

Total .......... 6,981.886,981.886,981.886,981.886,981.88 5,619.35

(B)(B)(B)(B)(B) Unsecured :Unsecured :Unsecured :Unsecured :Unsecured :

(1) Fixed Deposits .............................................................. 8.448.448.448.448.44 11.04

(2) Short-term Loans :

(a) From Banks ............................................................. 476.02476.02476.02476.02476.02 86.42

(b) From Others ............................................................ ----- 58.89

476.02476.02476.02476.02476.02 145.31

(3) Other Loans :

(a) From Financial Institutions ...................................... 573.98573.98573.98573.98573.98 388.29

(b) Foreign Currency Loans from Banks ....................... 491.02491.02491.02491.02491.02 262.63

(c) Zero Coupon Convertible Bonds ............................. 802.60802.60802.60802.60802.60 879.41

(d) Debentures/Bonds ................................................... 331.20331.20331.20331.20331.20 291.40

(e) From Government of Gujarat .................................. 9.409.409.409.409.40 9.26

(f) From Banks .............................................................. 161.28161.28161.28161.28161.28 96.71

(g) From Others ............................................................ 45.1945.1945.1945.1945.19 125.12

2,414.672,414.672,414.672,414.672,414.67 2,052.82

2,899.132,899.132,899.132,899.132,899.13 2,209.17

Group Share in Joint Ventures ............................................ ----- 0.51

Total .......... 2,899.132,899.132,899.132,899.132,899.13 2,209.68

Total .......... 9,881.019,881.019,881.019,881.019,881.01 7,829.03

124

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE IV IV IV IV IV

Fixed Assets :Fixed Assets :Fixed Assets :Fixed Assets :Fixed Assets :

Rupees crores

Description of Assets Cost/ AdditionsAdditionsAdditionsAdditionsAdditions Deduc-Deduc-Deduc-Deduc-Deduc- Cost/Pro-Cost/Pro-Cost/Pro-Cost/Pro-Cost/Pro- Deprecia- Deprecia-Deprecia-Deprecia-Deprecia-Deprecia- DeductionsDeductionsDeductionsDeductionsDeductions Deprecia-Deprecia-Deprecia-Deprecia-Deprecia- NetNetNetNetNet NetProfessional andandandandand tionstionstionstionstions fessionalfessionalfessionalfessionalfessional tion/Amor- tion/tion/tion/tion/tion/ and adjust-and adjust-and adjust-and adjust-and adjust- tion/tion/tion/tion/tion/ BalanceBalanceBalanceBalanceBalance Balance

valuation adjust-adjust-adjust-adjust-adjust- andandandandand valuationvaluationvaluationvaluationvaluation tisation AmorAmorAmorAmorAmor----- mentsmentsmentsmentsments Amortisa-Amortisa-Amortisa-Amortisa-Amortisa- as atas atas atas atas at as atas at 31st mentsmentsmentsmentsments adjust-adjust-adjust-adjust-adjust- as at 31stas at 31stas at 31stas at 31stas at 31st to 31st tisationtisationtisationtisationtisation of Depre-of Depre-of Depre-of Depre-of Depre- tiontiontiontiontion 31st 31st 31st 31st 31st 31st

March, during theduring theduring theduring theduring the mentsmentsmentsmentsments March,March,March,March,March, March, for 2007-for 2007-for 2007-for 2007-for 2007- ciation/ciation/ciation/ciation/ciation/ to 31stto 31stto 31stto 31stto 31st March,March,March,March,March, March,2007 year #year #year #year #year # duringduringduringduringduring 20082008200820082008 2007 2008 #2008 #2008 #2008 #2008 # Amorti-Amorti-Amorti-Amorti-Amorti- March,March,March,March,March, 20082008200820082008 2007

the yearthe yearthe yearthe yearthe year sationsationsationsationsation 20082008200820082008

AAAAA ::::: Assets on LeaseAssets on LeaseAssets on LeaseAssets on LeaseAssets on Lease

Plant and Machinery ....................... 7.64 ----- - 7.647.647.647.647.64 0.19 ----- ----- 0.190.190.190.190.19 7.457.457.457.457.45 7.45

Vehicles ........................................... 8.63 0.360.360.360.360.36 1.821.821.821.821.82 7.177.177.177.177.17 4.07 1.361.361.361.361.36 1.291.291.291.291.29 4.144.144.144.144.14 3.033.033.033.033.03 4.56

Sub Total A ..................................... 16.27 0.360.360.360.360.36 1.821.821.821.821.82 14.8114.8114.8114.8114.81 4.26 1.361.361.361.361.36 1.291.291.291.291.29 4.334.334.334.334.33 10.4810.4810.4810.4810.48 12.01

B : Owned AssetsB : Owned AssetsB : Owned AssetsB : Owned AssetsB : Owned Assets

Land - Freehold ............................... 114.17 28.2528.2528.2528.2528.25 0.200.200.200.200.20 137.99137.99137.99137.99137.99 - ----- ----- ----- 137.99137.99137.99137.99137.99 114.17

Land - Leasehold ............................. 98.60 216.74216.74216.74216.74216.74 ----- 319.57319.57319.57319.57319.57 2.25 1.991.991.991.991.99 ----- 4.244.244.244.244.24 315.33315.33315.33315.33315.33 96.35

Buildings - Freehold ........................ 1,120.88 198.71198.71198.71198.71198.71 24.3624.3624.3624.3624.36 1,295.231,295.231,295.231,295.231,295.23 348.33 57.4757.4757.4757.4757.47 5.415.415.415.415.41 400.39400.39400.39400.39400.39 894.84894.84894.84894.84894.84 772.55

Buildings - Leasehold ...................... 15.86 26.2726.2726.2726.2726.27 0.020.020.020.020.02 42.1142.1142.1142.1142.11 2.91 6.716.716.716.716.71 ----- 9.629.629.629.629.62 32.4932.4932.4932.4932.49 12.95

Plant and Machinery ....................... 4,662.15 1,134.541,134.541,134.541,134.541,134.54 109.29109.29109.29109.29109.29 5,687.405,687.405,687.405,687.405,687.40 2,815.51 615.81615.81615.81615.81615.81 109.53109.53109.53109.53109.53 3,321.793,321.793,321.793,321.793,321.79 2,365.612,365.612,365.612,365.612,365.61 1,846.64

Furniture and Fittings ...................... 464.27 111.14111.14111.14111.14111.14 71.5071.5071.5071.5071.50 503.91503.91503.91503.91503.91 282.42 61.4161.4161.4161.4161.41 77.0577.0577.0577.0577.05 266.78266.78266.78266.78266.78 237.13237.13237.13237.13237.13 181.85

Vehicles, Cycles, etc. ....................... 142.11 49.6149.6149.6149.6149.61 11.8411.8411.8411.8411.84 179.88179.88179.88179.88179.88 62.54 26.6226.6226.6226.6226.62 6.516.516.516.516.51 82.6582.6582.6582.6582.65 97.2397.2397.2397.2397.23 79.57

Technical Knowhow ........................ 99.08 ----- ----- 99.0899.0899.0899.0899.08 3.79 19.6819.6819.6819.6819.68 ----- 23.4723.4723.4723.4723.47 75.6175.6175.6175.6175.61 95.29

Development Expenditure ............... 64.94 98.1398.1398.1398.1398.13 0.450.450.450.450.45 162.62162.62162.62162.62162.62 16.57 9.059.059.059.059.05 ----- 25.6225.6225.6225.6225.62 137.00137.00137.00137.00137.00 48.37

Software Expenditure ...................... 58.72 42.7742.7742.7742.7742.77 0.920.920.920.920.92 100.57100.57100.57100.57100.57 35.00 25.3525.3525.3525.3525.35 0.240.240.240.240.24 60.1160.1160.1160.1160.11 40.4640.4640.4640.4640.46 23.72

Websites .......................................... 3.74 ----- ----- 3.743.743.743.743.74 3.74 ----- ----- 3.743.743.743.743.74 ----- -

Non-Compete Fees .......................... 0.23 2.002.002.002.002.00 ----- 2.232.232.232.232.23 - 0.500.500.500.500.50 ----- 0.500.500.500.500.50 1.731.731.731.731.73 0.23

Timeshare weeks ............................. 0.62 ----- ----- 0.620.620.620.620.62 0.31 0.060.060.060.060.06 ----- 0.370.370.370.370.37 0.250.250.250.250.25 0.31

Trademarks ...................................... 16.21 0.490.490.490.490.49 (0.06)(0.06)(0.06)(0.06)(0.06) 16.7616.7616.7616.7616.76 6.95 1.431.431.431.431.43 ----- 8.388.388.388.388.38 8.388.388.388.388.38 9.26

Other Intangible .............................. - 0.580.580.580.580.58 ----- 0.580.580.580.580.58 - 0.010.010.010.010.01 ----- 0.010.010.010.010.01 0.570.570.570.570.57 -

Goodwill + ..................................... 930.61 1,187.841,187.841,187.841,187.841,187.84 5.955.955.955.955.95 2,112.502,112.502,112.502,112.502,112.50 - ----- ----- ----- 2,112.502,112.502,112.502,112.502,112.50 930.61

Sub Total B ...................................... 7,792.19 3,097.073,097.073,097.073,097.073,097.07 224.47224.47224.47224.47224.47 10,664.7910,664.7910,664.7910,664.7910,664.79 3,580.32 826.09826.09826.09826.09826.09 198.74198.74198.74198.74198.74 4,207.674,207.674,207.674,207.674,207.67 6,457.126,457.126,457.126,457.126,457.12 4,211.87

C :C :C :C :C : Group Share in Joint VGroup Share in Joint VGroup Share in Joint VGroup Share in Joint VGroup Share in Joint Venturesenturesenturesenturesentures 10.26 0.860.860.860.860.86 0.360.360.360.360.36 10.7610.7610.7610.7610.76 6.69 0.690.690.690.690.69 0.360.360.360.360.36 7.027.027.027.027.02 3.743.743.743.743.74 3.57

TOTAL (A+B+C) .............................. 7,818.72 3,098.293,098.293,098.293,098.293,098.29 226.65226.65226.65226.65226.65 10,690.3610,690.3610,690.3610,690.3610,690.36 3,591.27 828.14828.14828.14828.14828.14 200.39200.39200.39200.39200.39 4,219.024,219.024,219.024,219.024,219.02 6,471.346,471.346,471.346,471.346,471.34 4,227.454,335.08 3,655.33 171.69 7,818.72 2,040.25 1,656.47 105.45 3,591.27 4,227.45

+ Goodwill arising on consolidation.

# Refer Note 8 (b)


125

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE V V V V V Rupees crores

20082008200820082008 20082008200820082008 2007 2007Long TLong TLong TLong TLong Termermermermerm CurrentCurrentCurrentCurrentCurrent Long Term Current

Investments (At Cost unless otherwise specified) :Investments (At Cost unless otherwise specified) :Investments (At Cost unless otherwise specified) :Investments (At Cost unless otherwise specified) :Investments (At Cost unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Shares (Non-trade and fully paid-up unless otherwise specified) :Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :(a) Equity Shares ................................................................. 30.9330.9330.9330.9330.93 ----- 35.47 -(b) Equity Shares - Associates [Note 1(c) & Note 24] ......... 47.8947.8947.8947.8947.89 ----- 42.47 -(c) Preference Shares .......................................................... 26.2226.2226.2226.2226.22 ----- 17.76 -(d) Preference Shares - Associates ...................................... 5.645.645.645.645.64 ----- 5.64 -

110.68110.68110.68110.68110.68 ----- 101.34 -

Quoted :Quoted :Quoted :Quoted :Quoted :(a) Equity Shares ................................................................. 18.9918.9918.9918.9918.99 ----- 23.17 -(b) Equity Shares - Associates [Note 1(c) & Note 24] ......... 22.6622.6622.6622.6622.66 ----- 122.41 -

41.6541.6541.6541.6541.65 ----- 145.58 -

152.33152.33152.33152.33152.33 ----- 246.92 -

Debentures/Bonds (Non TDebentures/Bonds (Non TDebentures/Bonds (Non TDebentures/Bonds (Non TDebentures/Bonds (Non Trade & fully paid-up) :rade & fully paid-up) :rade & fully paid-up) :rade & fully paid-up) :rade & fully paid-up) :(a) Unquoted ...................................................................... ----- ----- 13.22 -(b) Quoted .......................................................................... 0.330.330.330.330.33 24.8924.8924.8924.8924.89 0.33 24.89

0.33 0.33 0.33 0.33 0.33 24.8924.8924.8924.8924.89 13.55 24.89

Other Investments :Other Investments :Other Investments :Other Investments :Other Investments :Government Securities (including Treasury Bills) :(a) Unquoted ...................................................................... 0.010.010.010.010.01 ----- 0.01 -(b) Quoted .......................................................................... ----- 17.9317.9317.9317.9317.93 - 3.36

0.010.010.010.010.01 17.9317.9317.9317.9317.93 0.01 3.36

Units :Units :Units :Units :Units :(a) Unquoted ...................................................................... 34.2234.2234.2234.2234.22 946.23946.23946.23946.23946.23 0.35 548.46

34.2234.2234.2234.2234.22 946.23946.23946.23946.23946.23 0.35 548.46

Investment in the Capital of PInvestment in the Capital of PInvestment in the Capital of PInvestment in the Capital of PInvestment in the Capital of Partnershipartnershipartnershipartnershipartnership(a) Unquoted ...................................................................... ----- ----- 4.21 -

----- ----- 4.21 -

Others :Others :Others :Others :Others :(a) Unquoted ...................................................................... 0.050.050.050.050.05 179.76179.76179.76179.76179.76 0.23 165.00

0.050.050.050.050.05 179.76179.76179.76179.76179.76 0.23 165.00

186.94186.94186.94186.94186.94 1,168.811,168.811,168.811,168.811,168.81 265.27 741.71

Total ......... 1,355.751,355.751,355.751,355.751,355.75 1,006.98Group Share in Investments of Joint Ventures ..................... 0.940.940.940.940.94 0.03

Total ......... 1,356.691,356.691,356.691,356.691,356.69 1,007.01

Cost (Net of amounts written off ) of Unquoted Investments. 1,271.891,271.891,271.891,271.891,271.89 832.85Cost/Carrying Value of Quoted Investments ......................... 84.8084.8084.8084.8084.80 174.16

1,356.691,356.691,356.691,356.691,356.69 1,007.01Less : Excess of cost over fair value of Current Investments (Net) 1.971.971.971.971.97 3.71

1,354.721,354.721,354.721,354.721,354.72 1,003.30

Market value of Quoted Investments ................................... 206.64206.64206.64206.64206.64 409.23

126

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VI VI VI VI VI Rupees crores

20082008200820082008 2007

Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :Current Assets, Loans and Advances :

(A)(A)(A)(A)(A) InventoriesInventoriesInventoriesInventoriesInventories (at cost or net realisable value whichever is lower) :

(i) Finished Products produced and purchased for sale ................. 1,013.201,013.201,013.201,013.201,013.20 786.54(ii) Contracts and Work-in-Progress ................................................. 725.26725.26725.26725.26725.26 279.94

(iii) Manufactured Components ....................................................... 48.1048.1048.1048.1048.10 45.00

(iv) Raw Materials and Bought-out Components ............................. 1,034.141,034.141,034.141,034.141,034.14 794.57

(v) Work-in-Progress – Property Development Activity and Long

Term Contracts ........................................................................... 335.42335.42335.42335.42335.42 428.86

(vi) Food, Beverages, Smokes and Operating Supplies ..................... 3.453.453.453.453.45 1.79

(vii) Stores and Spares ....................................................................... 70.2070.2070.2070.2070.20 54.70

(viii) Tools ........................................................................................... 39.6839.6839.6839.6839.68 33.15

3,269.45 3,269.45 3,269.45 3,269.45 3,269.45 2,424.55Group Share in Inventories of Joint Ventures .................................... 5.975.975.975.975.97 4.06

Total .......... 3,275.423,275.423,275.423,275.423,275.42 2,428.61

(B)(B)(B)(B)(B) Sundry Debtors :Sundry Debtors :Sundry Debtors :Sundry Debtors :Sundry Debtors :

Unsecured unless otherwise stated :

Outstanding over six months : Considered good ........................... 393.37393.37393.37393.37393.37 210.69

: Considered doubtful ...................... 78.0378.0378.0378.0378.03 82.38

471.40471.40471.40471.40471.40 293.07

Other Debts : Considered good ...................................................... 3,424.743,424.743,424.743,424.743,424.74 2,499.41

: Considered doubtful ................................................ 1.931.931.931.931.93 8.10

3,426.67 3,426.67 3,426.67 3,426.67 3,426.67 2,507.51

3,898.073,898.073,898.073,898.073,898.07 2,800.58

Less : Unmatured finance charges .................................................... 66.6666.6666.6666.6666.66 25.45

Less : Provision for doubtful debts .................................................... 78.5278.5278.5278.5278.52 86.84

3,752.89 3,752.89 3,752.89 3,752.89 3,752.89 2,688.29

Group Share in Debtors of Joint Ventures ........................................ 14.9414.9414.9414.9414.94 14.40

Total .......... 3,767.833,767.833,767.833,767.833,767.83 2,702.69

(C)(C)(C)(C)(C) Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :Cash and Bank Balances :

Cash, cheques and stamps on hand ................................................. 241.51241.51241.51241.51241.51 384.72

Balances with Banks :

(i) On Current Account ............................................................ 531.22531.22531.22531.22531.22 339.87

(ii) On Fixed Deposit Account .................................................. 946.65946.65946.65946.65946.65 1,313.45

(iii) On Margin Account ............................................................ 2.442.442.442.442.44 0.60

1,480.311,480.311,480.311,480.311,480.31 1,653.92

1,721.821,721.821,721.821,721.821,721.82 2,038.64

Group Share in Cash and Bank Balances of Joint Ventures .............. 6.176.176.176.176.17 6.48

Total .......... 1,727.991,727.991,727.991,727.991,727.99 2,045.12


127

SCHEDULE VISCHEDULE VISCHEDULE VISCHEDULE VISCHEDULE VI (Contd.)(Contd.)(Contd.)(Contd.)(Contd.) Rupees crores

20082008200820082008 2007

(D)(D)(D)(D)(D) Other Current Assets :Other Current Assets :Other Current Assets :Other Current Assets :Other Current Assets :

Interest accrued on Investments ........................................................ 4.294.294.294.294.29 2.83

Others ................................................................................................ 11.1411.1411.1411.1411.14 0.14

15.4315.4315.4315.4315.43 2.97Group Share in Other Current Assets of Joint Ventures .................... 0.220.220.220.220.22 -

Total .......... 15.6515.6515.6515.6515.65 2.97

(E)(E)(E)(E)(E) Loans and Advances :Loans and Advances :Loans and Advances :Loans and Advances :Loans and Advances :

(Unsecured, considered good unless otherwise stated) :

Bills of exchange, considered good ................................................... 13.6013.6013.6013.6013.60 4.91

Bills of exchange, considered doubtful ............................................. 1.021.021.021.021.02 2.05

14.6214.6214.6214.6214.62 6.96

Less : Provision for doubtful debts .................................................... 1.021.021.021.021.02 2.05

13.6013.6013.6013.6013.60 4.91

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

Considered good ............................................................................... 1,548.861,548.861,548.861,548.861,548.86 1,197.72

Considered doubtful .......................................................................... 78.1578.1578.1578.1578.15 83.32

1,627.011,627.011,627.011,627.011,627.01 1,281.04

Less : Provision for doubtful advances .............................................. 71.7771.7771.7771.7771.77 83.32

1,555.241,555.241,555.241,555.241,555.24 1,197.72

Loans against assets/Retained Interest in Securitised Assets(Secured) :

Considered good ............................................................................... 6,157.636,157.636,157.636,157.636,157.63 5,428.26

Considered doubtful .......................................................................... 545.15545.15545.15545.15545.15 345.42

6,702.786,702.786,702.786,702.786,702.78 5,773.68

Less : Provision for doubtful advances .............................................. 269.68269.68269.68269.68269.68 149.13

6,433.10 6,433.10 6,433.10 6,433.10 6,433.10 5,624.55

Payments towards Income Tax and Surtax (Net of provisions) .......... 98.6498.6498.6498.6498.64 15.13

Balances - Customs, Port Trust, Excise, etc. ....................................... 39.7339.7339.7339.7339.73 16.77

8,140.318,140.318,140.318,140.318,140.31 6,859.08

Group Share in Loans and Advances of Joint Ventures .................... 1.331.331.331.331.33 1.23

Total .......... 8,141.648,141.648,141.648,141.648,141.64 6,860.31

Total .......... 16,928.5316,928.5316,928.5316,928.5316,928.53 14,039.70

128

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VII VII VII VII VII Rupees crores

20082008200820082008 2007

Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :

(A)(A)(A)(A)(A) Current Liabilities :Current Liabilities :Current Liabilities :Current Liabilities :Current Liabilities :

Acceptances ....................................................................................... 354.29354.29354.29354.29354.29 340.84

Sundry Creditors :

(i) Total outstanding dues of micro and small enterprises ............. 4.974.974.974.974.97 3.60

(ii) Total outstanding dues of creditors other than micro

and small enterprises ................................................................. 3,700.273,700.273,700.273,700.273,700.27 3,328.86

3,705.243,705.243,705.243,705.243,705.24 3,332.46

Dividend payable ............................................................................... 4.214.214.214.214.21 7.33

Balances on Directors’ Current Accounts .......................................... 2.462.462.462.462.46 2.46

Interest accrued but not due on loans .............................................. 185.93185.93185.93185.93185.93 123.26

Deposits/Advances received against hire purchase/lease agreements 56.1156.1156.1156.1156.11 34.41

Other current liabilities ...................................................................... 972.99972.99972.99972.99972.99 421.27

5,281.23 5,281.23 5,281.23 5,281.23 5,281.23 4,262.03

Group Share in Current Liabilities of Joint Ventures ......................... 10.0110.0110.0110.0110.01 8.05

Total .......... 5,291.245,291.245,291.245,291.245,291.24 4,270.08

(B)(B)(B)(B)(B) Provisions :Provisions :Provisions :Provisions :Provisions :

Proposed Dividends ........................................................................... 282.61282.61282.61282.61282.61 98.20

Provision for Tax on Proposed Dividend ............................................ 38.4838.4838.4838.4838.48 16.69

Provision for diminution in value of long term investments ............. 28.1128.1128.1128.1128.11 23.23

Provision for premium payable on redemption of convertible bonds 224.97224.97224.97224.97224.97 244.58

Provision for Contingencies [Note 14 (b)] ......................................... 9.559.559.559.559.55 3.46

Provision for compensated absences ................................................. 388.93388.93388.93388.93388.93 278.82

Provision for Estimated Loss/Expenses on Securitisation ................... 93.1993.1993.1993.1993.19 67.43

Provision : Others [Note 14 (a)] ........................................................ 324.55324.55324.55324.55324.55 196.98

1,390.391,390.391,390.391,390.391,390.39 929.39

Group Share in Provisions of Joint Ventures ..................................... 0.630.630.630.630.63 1.22

Total .......... 1,391.021,391.021,391.021,391.021,391.02 930.61

Total .......... 6,682.266,682.266,682.266,682.266,682.26 5,200.69

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE VIII VIII VIII VIII VIII Rupees crores

20082008200820082008 2007

Miscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous ExpenditureMiscellaneous Expenditure(to the extent not written off or adjusted) :

(a) Finance Charges ......................................................................... 5.735.735.735.735.73 5.34

(b) Separation and other costs ........................................................ 7.997.997.997.997.99 13.20

(c) Others ........................................................................................ 0.460.460.460.460.46 0.46

Total .......... 14.1814.1814.1814.1814.18 19.00


129

SCHEDULE IXSCHEDULE IXSCHEDULE IXSCHEDULE IXSCHEDULE IX Rupees crores

20082008200820082008 2007

Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :Income from Operations and Other Income :

Income from services rendered ......................................................... 4,759.094,759.094,759.094,759.094,759.09 3,685.19Income from long term contracts ..................................................... 158.58158.58158.58158.58158.58 135.81Income from Project Management, etc. ............................................ 0.380.380.380.380.38 2.03Hire Purchase income, Lease income and other rentals .................... 38.3938.3938.3938.3938.39 54.23Income from Loan, Retained Interest in securitised assets &securitisation ..................................................................................... 1,198.811,198.811,198.811,198.811,198.81 821.06Commission ....................................................................................... 14.9114.9114.9114.9114.91 7.41Dividends on other Investments [Note 20 (a)] .................................. 50.7350.7350.7350.7350.73 51.30Rent received ..................................................................................... 5.515.515.515.515.51 4.62Miscellaneous Income ....................................................................... 389.65389.65389.65389.65389.65 198.10Profit on sale of Investments (Net) [Note 20 (c)] .............................. 180.00180.00180.00180.00180.00 12.80Profit on sale of Fixed assets (Net) .................................................... 19.8319.8319.8319.8319.83 -

6,815.886,815.886,815.886,815.886,815.88 4,972.55Group Share in Joint Ventures .......................................................... 9.869.869.869.869.86 5.38

Total ....... 6,825.746,825.746,825.746,825.746,825.74 4,977.93

SCHEDULE XSCHEDULE XSCHEDULE XSCHEDULE XSCHEDULE X Rupees crores

20082008200820082008 2007

Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :Raw Materials, Finished and Semi-Finished Products :(A)(A)(A)(A)(A) (Increase)/Decrease in Stock of Finished Goods,(Increase)/Decrease in Stock of Finished Goods,(Increase)/Decrease in Stock of Finished Goods,(Increase)/Decrease in Stock of Finished Goods,(Increase)/Decrease in Stock of Finished Goods,

WWWWWork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :ork-in-Progress and Manufactured Components :Opening Stock :

(i) Finished Products produced and purchased for sale ................. 786.54786.54786.54786.54786.54 670.32(ii) Contracts and Work-in-Progress ................................................. 279.94279.94279.94279.94279.94 115.59(iii) Manufactured Components ....................................................... 45.0045.0045.0045.0045.00 49.92

1,111.481,111.481,111.481,111.481,111.48 835.83Add : Stock taken over on acquisition .......................................

(i) Finished Products produced and purchased for sale ................. 38.7038.7038.7038.7038.70 64.40(ii) Contracts and Work-in-Progress ................................................. 18.0218.0218.0218.0218.02 157.00

56.7256.7256.7256.7256.72 221.40Less : Closing Stock :

(i) Finished Products produced and purchased for sale ................. 1,013.201,013.201,013.201,013.201,013.20 786.54(ii) Contracts and Work-in-Progress ................................................. 725.26725.26725.26725.26725.26 279.94(iii) Manufactured Components ....................................................... 48.1048.1048.1048.1048.10 45.00

1,786.561,786.561,786.561,786.561,786.56 1,111.48

(Increase)/Decrease in Stock .............................................................. (618.36)(618.36)(618.36)(618.36)(618.36) (54.25)

(B)(B)(B)(B)(B) Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Consumption of Raw Materials and Bought-out Components :Opening Stock. .................................................................................. 794.57794.57794.57794.57794.57 487.98Add : Purchases ................................................................................. 11,242.4511,242.4511,242.4511,242.4511,242.45 8,134.63

12,037.0212,037.0212,037.0212,037.0212,037.02 8,622.61Add : Stock taken over on acquisition .............................................. 777772.112.112.112.112.11 75.66Less : Closing Stock ........................................................................... 1,034.141,034.141,034.141,034.141,034.14 794.57

11,074.9911,074.9911,074.9911,074.9911,074.99 7,903.70(C)(C)(C)(C)(C) Purchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for salePurchases of Finished Products for sale ............................................ 1,145.1,145.1,145.1,145.1,145.2222222222 1,083.24

11,601.8511,601.8511,601.8511,601.8511,601.85 8,932.69Group Share in Joint Ventures .......................................................... 27.3027.3027.3027.3027.30 28.55

Total ....... 11,629.1511,629.1511,629.1511,629.1511,629.15 8,961.24

130

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XI XI XI XI XI Rupees crores

20082008200820082008 2007

PPPPPersonnel :ersonnel :ersonnel :ersonnel :ersonnel :

Salaries, Wages, Bonus, etc. .............................................................. 3,164.033,164.033,164.033,164.033,164.03 2,129.89

Contribution to Provident and other funds ....................................... 210.93210.93210.93210.93210.93 127.58

Welfare .............................................................................................. 232.26232.26232.26232.26232.26 125.56

3,607.223,607.223,607.223,607.223,607.22 2,383.03

Group Share in Joint Ventures .......................................................... 6.516.516.516.516.51 5.37

Total ....... 3,613.733,613.733,613.733,613.733,613.73 2,388.40

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XII XII XII XII XII Rupees crores

20082008200820082008 2007

Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :Interest, Commitment and Finance Charges :

On Term Loans and Debentures ........................................................ 571.33571.33571.33571.33571.33 340.54

On Others (Net) ................................................................................. 125.26125.26125.26125.26125.26 60.11

Finance charges ................................................................................. 18.8418.8418.8418.8418.84 16.19

715.43715.43715.43715.43715.43 416.84


Total ....... 715.57715.57715.57715.57715.57 417.11

Less : Interest Income :

Interest on Government Securities, Debentures and Bonds -

Gross [Note 20 (b)] ............................................................... 2.382.382.382.382.38 2.52

Interest - Others - Gross ........................................................ 123.16123.16123.16123.16123.16 115.29

125.54125.54125.54125.54125.54 117.81


Total ....... 126.05126.05126.05126.05126.05 117.91

589.52589.52589.52589.52589.52 299.20


131

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XIII XIII XIII XIII XIII Rupees crores

20082008200820082008 2007


Stores consumed ............................................................................... 172.78172.78172.78172.78172.78 120.62

Tools consumed ................................................................................. 38.4638.4638.4638.4638.46 25.04

Power and Fuel .................................................................................. 437.95437.95437.95437.95437.95 252.91

Rent including lease rentals ............................................................... 184.46184.46184.46184.46184.46 117.51

Rates and Taxes ................................................................................. 74.1574.1574.1574.1574.15 50.23

Insurance ........................................................................................... 46.1346.1346.1346.1346.13 36.84

Repairs & Maintenance :

Buildings ..................................................................................... 29.3629.3629.3629.3629.36 28.35

Machinery ................................................................................... 190.91190.91190.91190.91190.91 125.04

Others ........................................................................................ 61.5261.5261.5261.5261.52 41.22

281.79281.79281.79281.79281.79 194.61

Postage, Telephone & Communication .............................................. 133.73133.73133.73133.73133.73 94.27

Software Charges .............................................................................. 97.8097.8097.8097.8097.80 126.12

Legal & Professional Charges ............................................................. 160.85160.85160.85160.85160.85 136.67

Advertisement .................................................................................... 207.44207.44207.44207.44207.44 148.43

Commission on sales/contracts (Net) ................................................. 165.92165.92165.92165.92165.92 119.08

Discount allowed ............................................................................... 24.7624.7624.7624.7624.76 13.07

Freight outward ................................................................................. 568.57568.57568.57568.57568.57 402.72

Sales Promotion Expenses ................................................................. 268.21268.21268.21268.21268.21 190.64

Travelling Expenses ............................................................................ 662.67662.67662.67662.67662.67 473.39

Cost of Projects, Property etc. ........................................................... 466.06466.06466.06466.06466.06 48.04

Subcontracting Charges .................................................................... 547.50547.50547.50547.50547.50 390.51

Miscellaneous Expenses ..................................................................... 545.01545.01545.01545.01545.01 481.13

Amortisation of expenses .................................................................. 0.780.780.780.780.78 1.44

Directors’ fees .................................................................................... 0.100.100.100.100.10 0.10

Donations and contributions ............................................................. 16.4616.4616.4616.4616.46 14.27

Loss on Fixed Assets sold/scrapped/written off (Net) ........................ ----- 3.72

Provision for diminution in value of Long Term investments (Net) ... 4.334.334.334.334.33 2.14

Net (Increase)/Decrease of cost over fair value of current investments (1.74)(1.74)(1.74)(1.74)(1.74) 2.37

Provision for doubtful debts/advances (Net) ..................................... 261.09261.09261.09261.09261.09 144.83

5,365.265,365.265,365.265,365.265,365.26 3,590.70Group Share in Joint Ventures 8.378.378.378.378.37 6.89

Total ....... 5,373.635,373.635,373.635,373.635,373.63 3,597.59

132

Proportion ofProportion ofProportion ofProportion ofProportion of Proportion of VProportion of VProportion of VProportion of VProportion of Votingotingotingotingoting

Name of the Subsidiary CompanyName of the Subsidiary CompanyName of the Subsidiary CompanyName of the Subsidiary CompanyName of the Subsidiary CompanyCountry ofCountry ofCountry ofCountry ofCountry of ownership interestownership interestownership interestownership interestownership interest PPPPPower where differentower where differentower where differentower where differentower where different

IncorporationIncorporationIncorporationIncorporationIncorporation as atas atas atas atas at as at as atas atas atas atas at as at31-03-200831-03-200831-03-200831-03-200831-03-2008 31-03-2007 31-03-200831-03-200831-03-200831-03-200831-03-2008 31-03-2007

Indian SubsidiariesIndian SubsidiariesIndian SubsidiariesIndian SubsidiariesIndian Subsidiaries

FirstChoice Wheels Limited (formely known as

Automartindia Limited)* India 75.89%75.89%75.89%75.89%75.89% 75.89% ----- -

Mahindra Life Space Developers Limited

(formerly known as Mahindra Gesco Developers Limited) India 51.08%51.08%51.08%51.08%51.08% 50.03% ----- -

Mahindra Consulting Engineers Limited India 51.00%51.00%51.00%51.00%51.00% 51.00% ----- -

Mahindra Ashtech Limited (up to 3rd January, 2008) India ----- 100.00% ----- -

Tech Mahindra Limited India 48.97%48.97%48.97%48.97%48.97% 49.03% 52.49%52.49%52.49%52.49%52.49% 52.56%

Bristlecone India Limited India 82.08%82.08%82.08%82.08%82.08% 82.20% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Engineering and Chemical Products Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra Gujarat Tractor Limited India 60.00%60.00%60.00%60.00%60.00% 60.00% ----- -

Mahindra Holdings & Finance Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra Holidays and Resorts India Limited * India 95.99%95.99%95.99%95.99%95.99% 99.99% ----- -

Mahindra Infrastructure Developers Limited India 40.87%40.87%40.87%40.87%40.87% 40.02% 80.00%80.00%80.00%80.00%80.00% 80.00%

Mahindra Intertrade Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

SCHEDULESCHEDULESCHEDULESCHEDULESCHEDULE XlVXlVXlVXlVXlV

Notes on the Consolidated Accounts for the year ended 31st March, 2008Notes on the Consolidated Accounts for the year ended 31st March, 2008Notes on the Consolidated Accounts for the year ended 31st March, 2008Notes on the Consolidated Accounts for the year ended 31st March, 2008Notes on the Consolidated Accounts for the year ended 31st March, 2008

1.1.1.1.1. The Consolidated Financial Statements relate to Mahindra & Mahindra Limited (M&M, the Company) and its subsidiaries, joint ventures andassociates. The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) “ConsolidatedFinancial Statements”, Accounting Standard 23 (AS 23) “Accounting for Investment in Associates in Consolidated Financial Statements” andAccounting Standard 27 (AS 27) “Financial Reporting of Interests in Joint Ventures” notified by the Companies (Accounting Standard) Rules,2006. The Consolidated Financial Statements have been prepared on the following basis :

(a)(a)(a)(a)(a) Investments in Subsidiaries :Investments in Subsidiaries :Investments in Subsidiaries :Investments in Subsidiaries :Investments in Subsidiaries :

i) The Financial Statements of the Company and its subsidiary companies have been combined on a line by line basis by adding togetherthe book values of like items of assets, liabilities, income and expenses. Intra group balances, intra group transactions and unrealisedprofits or losses have been fully eliminated.

ii) The difference between the costs of investment in the subsidiaries over the Company’s portion of equity of the subsidiary is recognisedin the financial statements as Goodwill or Capital Reserve.

iii) The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilities asof date of disposal is recognised in the Profit and Loss Account as profit or loss on disposal of investment in subsidiary.

iv) Minority Interest in the net assets of consolidated subsidiaries consists of :

a) the amount of equity attributable to minorities at the date on which investment in a subsidiary is made; and

b) the minorities’ share of movements in equity since the date the parent subsidiary relationship comes into existence.

v) The Financial Statements of the subsidiaries are drawn upto 31st March, 2008.

The subsidiaries (which along with Mahindra & Mahindra Limited, the parent, constitute the group) considered in the presentation of theseconsolidated financial statements are :


133

Mahindra Logisoft Business Solutions Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra & Mahindra Financial Services Limited * India 61.12%61.12%61.12%61.12%61.12% 69.32% ----- -

Mahindra Steel Service Centre Limited India 61.00%61.00%61.00%61.00%61.00% 61.00% ----- -

Mahindra Shubhlabh Services Limited India 77.31%77.31%77.31%77.31%77.31% 77.31% ----- -

NBS International Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra Insurance Brokers Limited India 61.12%61.12%61.12%61.12%61.12% 69.32% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Engineering Design & Development Company Limited India 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra World City Developers Limited India 42.21%42.21%42.21%42.21%42.21% 41.33% 82.62%82.62%82.62%82.62%82.62% 82.62%

Mahindra SAR Transmission Private Limited India 60.26%60.26%60.26%60.26%60.26% 51.00% ----- -

Mahindra International Limited India 51.00%51.00%51.00%51.00%51.00% 51.00% ----- -

Mahindra World City (Maharashtra) Limited India 51.08%51.08%51.08%51.08%51.08% 50.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Renault Private Limited India 51.00%51.00%51.00%51.00%51.00% 51.00% ----- -

Mahindra Ugine Steel Company Limited India 50.69%50.69%50.69%50.69%50.69% 50.69% ----- -

Mahindra World City (Jaipur) Limited India 37.80%37.80%37.80%37.80%37.80% 37.02% 74.00%74.00%74.00%74.00%74.00% 74.00%

Tech Mahindra (R & D Services) Limited India 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 99.99%

Plexion Technologies (India) Private Limited [Note 3(ii)] India ----- 100.00% ----- -

CanvasM Technologies Limited India 39.23%39.23%39.23%39.23%39.23% 39.27% 80.10%80.10%80.10%80.10%80.10% 80.10%

iPolicy Networks Limited India 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Hinoday Industries Limited

(formerly known as DGP Hinoday Industries Limited)* India 43.08%43.08%43.08%43.08%43.08% 66.36% 66.28%66.28%66.28%66.28%66.28% -

Mahindra Stokes Holding Company Limited [Note 3(i)] India ----- 100.00% ----- -

Mahindra Integrated Township Limited India 48.78%48.78%48.78%48.78%48.78% 47.77% 100.00%100.00%100.00%100.00%100.00% 100.00%

Ashtamudi Resorts Private Limited

(w.e.f. 9th May, 2007 upto 30th June, 2007) [Note 3 (iii)] India ----- - ----- -

Mahindra Automotive Limited (w.e.f. 25th May, 2007) India 100.00%100.00%100.00%100.00%100.00% - ----- -

Mahindra Castings Private Limited (w.e.f. 30th August, 2007) India 65.00%65.00%65.00%65.00%65.00% - ----- -

Mahindra Forgings Limited (appointed date 1st April, 2007) India 60.56%60.56%60.56%60.56%60.56% - ----- -

Mahindra Hotels and Residences India Limited

(w.e.f. 26th April, 2007) India 95.98%95.98%95.98%95.98%95.98% - 99.99%99.99%99.99%99.99%99.99% -

Mahindra Retail Private Limited (w.e.f. 3rd September, 2007) India 100.00%100.00%100.00%100.00%100.00% - ----- -

Mahindra Technology Park Limited (w.e.f. 28th September, 2007) India 51.08%51.08%51.08%51.08%51.08% - 100.00%100.00%100.00%100.00%100.00% -

Mahindra Holdings Limited (w.e.f. 2nd November, 2007) India 100.00%100.00%100.00%100.00%100.00% - ----- -




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Mahindra Logistics Limited (w.e.f. 12th December, 2007) India 100.00%100.00%100.00%100.00%100.00% - ----- -

Mahindra Rural Housing Finance Limited (w.e.f. 9th April, 2007) India 61.12%61.12%61.12%61.12%61.12% - 100.00%100.00%100.00%100.00%100.00% -

Punjab Tractors Limited (w.e.f. 6th July, 2007) India 64.64%64.64%64.64%64.64%64.64% - ----- -

Mahindra Residential Developers Limited

(w.e.f. 1st February, 2008) India 48.77%48.77%48.77%48.77%48.77% - 100.00%100.00%100.00%100.00%100.00% -

Mahindra Aerospace Private Limited (w.e.f. 28th February, 2008) India 100.00%100.00%100.00%100.00%100.00% - ----- -

Mahindra First Choice Services Limited (w.e.f. 24th March, 2008) India 100.00%100.00%100.00%100.00%100.00% - ----- -

Mahindra Navistar Engines Private Limited

(w.e.f. 31st January, 2008) (formerly known as MIM EnginesIndia Private Limited) India 51.00%51.00%51.00%51.00%51.00% - ----- -

FFFFForeign Subsidiariesoreign Subsidiariesoreign Subsidiariesoreign Subsidiariesoreign Subsidiaries

Bristlecone Limited Cayman Islands 82.08%82.08%82.08%82.08%82.08% 82.20% ----- -

Mahindra (China) Tractor Company Limited China 83.74%83.74%83.74%83.74%83.74% 80.00% ----- -

Tech Mahindra GmbH Germany 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Bristlecone GmbH Germany 82.08%82.08%82.08%82.08%82.08% 82.20% 100.00%100.00%100.00%100.00%100.00% 100.00%

Plexion Technologies GmbH Germany 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra Forgings Europe AG

(formerly known as JECO Holdings AG) Germany 60.56%60.56%60.56%60.56%60.56% 67.90% 100.00%100.00%100.00%100.00%100.00% 100.00%

Gesenkschmiede Schneider GmbH Germany 60.56%60.56%60.56%60.56%60.56% 67.90% 100.00%100.00%100.00%100.00%100.00% 100.00%

JECO-Jellinghaus GmbH Germany 60.56%60.56%60.56%60.56%60.56% 67.90% 100.00%100.00%100.00%100.00%100.00% 100.00%

Falkenroth Umformtechnik GmbH Germany 60.56%60.56%60.56%60.56%60.56% 67.90% 100.00%100.00%100.00%100.00%100.00% 100.00%

Falkenroth Grundstucksgesellschaft GmbH [Note 3(v)] Germany ----- 67.90% ----- 100.00%

Schöneweiss & Co. GmbH ** Germany 60.56%60.56%60.56%60.56%60.56% 100.00% 90.47%90.47%90.47%90.47%90.47% 90.47%

Fried. Hunninghaus GmbH [Note 3(iv)] Germany ----- 100.00% ----- -

Fried. Hunninghaus GmbH & Co. KG [Note 3(iv)] Germany ----- 100.00% ----- -

MHR Hotel Management GmbH Germany 71.99%71.99%71.99%71.99%71.99% 74.99% 75.00%75.00%75.00%75.00%75.00% 75.00%

PT Tech Mahindra Indonesia Indonesia 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Europe s.r.l. Italy 80.00%80.00%80.00%80.00%80.00% 80.00% ----- -

Mahindra Overseas Investment Company (Mauritius) Limited Mauritius 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Mahindra-BT Investment Company (Mauritius) Limited Mauritius 57.00%57.00%57.00%57.00%57.00% 57.00% ----- -

Mahindra Forgings Overseas Limited [Note 3(i)] Mauritius ----- 67.90% ----- -

Mahindra Forgings International Limited Mauritius 60.56%60.56%60.56%60.56%60.56% 67.90% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Forgings Mauritius Limited [Note 3(i)] Mauritius ----- 100.00% ----- -





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Mahindra Forgings Global Limited Mauritius 60.56%60.56%60.56%60.56%60.56% 100.00% 100.00%100.00%100.00%100.00%100.00% -

Mahindra Middleeast Electrical Steel Service Centre (FZC) Sharjah 90.00%90.00%90.00%90.00%90.00% 90.00% ----- -

Tech Mahindra (Singapore) Pte. Limited Singapore 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Bristlecone (Singapore) Pte. Limited Singapore 82.08%82.08%82.08%82.08%82.08% 82.20% 100.00%100.00%100.00%100.00%100.00% 100.00%

Tech Mahindra (R & D Services) Pte. Limited (upto 7th April, 2007) Singapore ----- 49.03% ----- 100.00%

Mahindra & Mahindra South Africa (Proprietary) Limited South Africa 51.00%51.00%51.00%51.00%51.00% 51.00% ----- -

Tech Mahindra (Thailand) Limited Thailand 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Bristlecone UK Limited U.K. 82.08%82.08%82.08%82.08%82.08% 82.20% 100.00%100.00%100.00%100.00%100.00% 100.00%

Stokes Group Limited U.K. 60.43%60.43%60.43%60.43%60.43% 99.52% 99.78%99.78%99.78%99.78%99.78% -

Stokes Forgings Dudley Limited U.K. 60.43%60.43%60.43%60.43%60.43% 99.52% 100.00%100.00%100.00%100.00%100.00% 100.00%

Jensand Limited U.K. 60.43%60.43%60.43%60.43%60.43% 99.52% 100.00%100.00%100.00%100.00%100.00% 100.00%

Stokes Forgings Limited U.K. 60.43%60.43%60.43%60.43%60.43% 99.52% 100.00%100.00%100.00%100.00%100.00% 100.00%

Plexion Technologies (UK) Limited U.K. 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Tech Mahindra (Americas) Incorporated U.S.A. 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra USA Incorporated U.S.A. 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

Bristlecone Incorporated U.S.A. 82.08%82.08%82.08%82.08%82.08% 82.20% 100.00%100.00%100.00%100.00%100.00% 100.00%

Mahindra Holidays and Resorts USA Incorporated U.S.A. 95.99%95.99%95.99%95.99%95.99% 99.99% 100.00%100.00%100.00%100.00%100.00% 100.00%

Tech Mahindra (R & D Services) Incorporated U.S.A. 48.97%48.97%48.97%48.97%48.97% 49.03% 100.00%100.00%100.00%100.00%100.00% 100.00%

Plexion Technologies Incorporated U.S.A. 100.00%100.00%100.00%100.00%100.00% 100.00% ----- -

CanvasM (Americas) Incorporated U.S.A. 39.23%39.23%39.23%39.23%39.23% 39.27% 100.00%100.00%100.00%100.00%100.00% 100.00%

Tech Mahindra (Beijing) IT Services Limited

(w.e.f. 21st December, 2007) China 48.97%48.97%48.97%48.97%48.97% - 100.00%100.00%100.00%100.00%100.00% -

Mahindra Graphic Research Design s.r.l.

(w.e.f. 20th February, 2008) Italy 100.00%100.00%100.00%100.00%100.00% - ----- -

Bristlecone (Malaysia) SDN.BHD (w.e.f. 30th May, 2007) Malaysia 82.08%82.08%82.08%82.08%82.08% - 100.00%100.00%100.00%100.00%100.00% -

Tech Mahindra (Malaysia) SDN.BHD. (w.e.f. 11th June, 2007) Malaysia 48.97%48.97%48.97%48.97%48.97% - 100.00%100.00%100.00%100.00%100.00% -

Heritage Bird (M) SDN.BHD. (w.e.f. 3rd March, 2008) Malaysia 95.99%95.99%95.99%95.99%95.99% - 100.00%100.00%100.00%100.00%100.00% -




* excluding shares issued to ESOP Trust but not allotted to employees as per the Guidance Note on Accounting for Employee Share-basedPayments issued by The Institute of Chartered Accountants of India.

** includes fundamental economic rights and administrative rights (including but not limited to voting rights, information rights and right toparticipate in shareholders meetings) in respect of 2.72% shares.

Note : Tech Mahindra Foundation is not consolidated as a subsidiary as it can apply its income for charitable objects only and cannot paydividend or transfer funds to its parent.

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(b)(b)(b)(b)(b) Interests in Joint VInterests in Joint VInterests in Joint VInterests in Joint VInterests in Joint Venturesenturesenturesenturesentures

The Group’s interests in jointly controlled entities of the Group are :

Name of the EntityName of the EntityName of the EntityName of the EntityName of the Entity Country ofCountry ofCountry ofCountry ofCountry of PPPPPercentage ofercentage ofercentage ofercentage ofercentage of Percentage ofIncorporationIncorporationIncorporationIncorporationIncorporation ownershipownershipownershipownershipownership ownership

interestinterestinterestinterestinterest interestas at 31-03-2008as at 31-03-2008as at 31-03-2008as at 31-03-2008as at 31-03-2008 as at 31-03-2007

a) Mahindra Sona Limited * India 29.77%29.77%29.77%29.77%29.77% 29.77%

b) PSL Erickson Limited * India 18.06%18.06%18.06%18.06%18.06% 18.06%

c) Mahindra Water Utilities Limited $ India 50.00%50.00%50.00%50.00%50.00% 50.00%

d) Mahindra Inframan Water Utilities Private Limited $ India 50.00%50.00%50.00%50.00%50.00% 50.00%

Interest in Joint Ventures are accounted for using Proportionate Consolidation Method.

* Shareholding is through a subsidiary, Mahindra Holdings & Finance Limited

$ Shareholding is through a subsidiary, Mahindra Infrastructure Developers Limited

The Financial Statements of all the Joint Ventures are drawn upto 31st March, 2008.

(c)(c)(c)(c)(c) Investment in AssociatesInvestment in AssociatesInvestment in AssociatesInvestment in AssociatesInvestment in Associates

The Group’s Associates are :

Name of the EntityName of the EntityName of the EntityName of the EntityName of the Entity Country ofCountry ofCountry ofCountry ofCountry of PPPPPercentage ofercentage ofercentage ofercentage ofercentage of Percentage ofIncorporationIncorporationIncorporationIncorporationIncorporation ownershipownershipownershipownershipownership ownership

interestinterestinterestinterestinterest interestas at 31-03-2008as at 31-03-2008as at 31-03-2008as at 31-03-2008as at 31-03-2008 as at 31-03-2007

Owens Corning (India) Limited India 21.50%21.50%21.50%21.50%21.50% 21.50%

Mahindra Construction Company Limited India 43.83%43.83%43.83%43.83%43.83% 43.83%

Officemartindia.com Limited India 50.00%50.00%50.00%50.00%50.00% 50.00%

Rathna Bhoomi Enterprises Private Limited India 20.43%20.43%20.43%20.43%20.43% 20.01%

Kota Farm Services Limited India 34.79%34.79%34.79%34.79%34.79% 34.79%

Mriyalguda Farm Solution Limited India 34.79%34.79%34.79%34.79%34.79% 34.79%

Mega One Stop Farm Services Limited India 34.79%34.79%34.79%34.79%34.79% 34.79%

Mahindra Forgings Limited(is a subsidiary of the Company w.e.f 1st April, 2007) India ----- 47.11%

Mahindra Composites Limited India 30.56%30.56%30.56%30.56%30.56% 30.56%

Mahindra Lifespace Developers Limited(formerly known as Mahindra Gesco Developers Limited)(upto 24th March, 2007) India ----- 46.09%

Mahindra Renault Nissan Automotive Private Limited(formerly known as Mahindra Renault Automotive Limited)(upto 9th March, 2008) India ----- 50.00%

Swaraj Automotives Limited (w.e.f 3rd July, 2007) India 35.64%35.64%35.64%35.64%35.64% -

Swaraj Engines Limited (w.e.f 6th July, 2007) India 21.49%21.49%21.49%21.49%21.49% -

The Financial Statements of all the Associates are drawn up to 31st March, 2008.

2.2.2.2.2. Accounting PAccounting PAccounting PAccounting PAccounting Policies :olicies :olicies :olicies :olicies :

(A) Fixed Assets :

(a) (i) Fixed Assets are carried at cost less depreciation except as stated in (iii) below. Cost includes financing cost relating to borrowedfunds attributable to the construction or acquisition of qualifying fixed assets upto the date the asset is ready for use.

(ii) When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of accountand resultant profit (including capital profit) or loss, if any, is reflected in the Profit and Loss Account.

(iii) Land and Buildings, of the parent company had been revalued as at 31st October, 1984 at depreciated replacement values on thebasis of a valuation made by a firm of Chartered Surveyors & Valuers. The indices, if any, used are not stated in the valuation.


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(b) (i) Leasehold land is amortised over the period of the lease.

(ii) Depreciation on assets is calculated on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule XIV tothe Companies Act, 1956, except :

For the following class of assets where depreciation is calculated at rates, based on useful life of the assets/local laws, which arein no case lower than the rates specified in Schedule XIV to the Companies Act, 1956 :

Building (at sites) : at 25.00 % to 100.00 %

Building (others) : at 2.56 % to 6.67 %

Plant & Machinery : at 14.29 % to 33.33 %

Furniture & Fixture : at 7.69 % to 33.33 %

Vehicles : at 10.00 % to 50.00 %

(iii) Depreciation charge for each year is after deducting the amount representing the depreciation on the increase due to revaluationof Land and Buildings, transferred from the Revaluation Reserve.

(B) Intangible Assets :

All Intangible Assets are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits areconsumed :

(a) Technical Knowhow :

The expenditure incurred is amortised over the estimated period of benefit, not exceeding six years commencing with the year ofpurchase of the technology.

(b) Development Expenditure :

The expenditure incurred on technical services and other project related expenses are amortised on the completion of the developmentwork over the estimated period of benefit not exceeding five years.

(c) Software Expenditure :

The expenditure incurred is amortised over three financial years equally commencing from the year in which the expenditure isincurred.

(d) Websites :

The expenditure incurred is amortised over the estimated period of benefit, not exceeding five years.

(e) Timeshare Weeks :

Intangible assets representing ‘timeshare weeks’ are amortised over a period of ten years.

(f) Trademarks :

The expenditure incurred is amortised over the estimated period of benefit, not exceeding ten years.

(g) Non-Compete Fees :

Non-compete payments are amortised equally over the estimated period of benefit, not exceeding ten years.

(C) Investments :

All long term investments, other than in Associates, are carried at cost. However, provision for diminution in value is made to recognise adecline other than temporary, in the value of investments. Current investments are valued at the lower of cost and fair value, determined bycategory of investment. Investments in Associates are accounted using the equity method.

(D) Inventories :

Inventories are stated at cost or net realisable value, whichever is lower. Cost is arrived at on a weighted average method and includes,where appropriate, manufacturing overheads and excise duty. Cost of the inventory, includes interest, where appropriate, for long termprojects.

(E) Miscellaneous Expenditure (to the extent not written off or adjusted) :

Expenditure carried forward under this head is amortised as follows :

(a) Finance Charges :

The expenditure incurred in raising long term borrowings is amortised over the period of the borrowings. On early buyback,conversion or repayment of borrowings, any unamortised expenditure is fully written off in that year.

138

(b) Separation and Other Costs :

Special Payments/Pensions under Voluntary Retirement Schemes.

The liability is amortised by the year ended March, 2010 from the month in which the liability is incurred.

(F) Foreign Exchange Transactions :

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated atthe year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also ontranslation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of a forward exchange contract is recognised as income or expense over the life of thecontract, except in the case where the contract is designated as a cash flow hedge.

(G) Derivative instruments and hedge accounting :

The Company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and highly probable forecast transactions. The Company does not hold derivative financial instrumentsfor speculative purposes. The Company has applied to all such contracts outstanding as on 31st March, 2008 the hedge accountingprinciples set out in Accounting Standard 30 “Financial Instruments : Recognition and Measurement” (AS 30) by marking them to market.

Changes in the fair value of the contracts that are designated and effective as hedges of future cash flow are recognised directly in theHedging Reserve Account and the ineffective portion is recognised immediately in the Profit and Loss Account.

(H) Revenue Recognition :

(a) Sales of products and services are recognised when the products are shipped or services rendered. Income from long term contractsand sale of property (concerning property development activity) is, accounted for on percentage of completion basis. [Refer paragraph(I) below].

(b) Dividends from investments are recognised in the Profit and Loss Account when the right to receive payment is established.

(I) Long term contracts and Property Development Activity :

Income on long term contracts and property development activity is accounted on the percentage of completion basis which necessarilyinvolves technical estimates of the percentage of completion of each contract/activity, and costs to completion of the contract/activity, onthe basis of which profits/losses are accounted. Such estimates, made by the management and certified to the auditors, have been reliedupon by them, as these are of a technical nature.

Project management fees receivable on fixed period contracts is accounted over the tenure of the contract/agreement. Where themanagement fee is linked to the input costs, revenue is recognised as a proportion of the work completed based on progress claimsubmitted. Where the management fees are linked to the revenue generation from the project, revenue is recognised on the percentage ofcompletion basis.

(J) Income from Lease/Hire Purchase :

Finance earnings on lease transactions are calculated by applying the interest rate implicit in the lease, to the investment in the leasedassets, as reduced by the net present value of the lease instalments falling due.

Income from hire purchase contracts entered prior to 1st April, 2001 is accounted for on equated basis in accordance with the terms of thecontract (except in some cases in which it is accounted for by applying the interest rate implicit in such contracts). For hire purchasetransactions entered on or after 1st April, 2001 the income is accounted for by applying the interest rate implicit in such contracts.

(K) Government Grants :

The Company is entitled to various incentives from a State Government, such as grants by way of refund of octroi duty paid by theCompany for its manufacturing unit located in a developing region. In view of the uncertainty in respect to the collection of these grants,such grants are accounted for as and when the disbursements are received.

(L) Timeshare Business :

The activity of selling Timeshare and providing holiday facilities to members for a specified period each year, over a number of years, forwhich membership fee is collected either in full up front, or on a deferred payment basis. Upto 30th September, 2005 out of the totalmembership fee, relevant portion reasonably attributable towards cost required to market Timeshare, which is assessed and revisedperiodically, is recognised as Timeshare income in the year in which the purchaser of Timeshare becomes a member and the balancerepresenting ‘Advance towards members’ facilities’ is being recognised as Timeshare income equally over a period for which holidayfacilities are provided commencing from the year in which the member is entitled to benefits of membership under the scheme.

With effect from 1st October, 2005 in accordance with the new membership rules, admission fee, which is non-refundable, is recognised asincome on admission of a member. Entitlement fee, which entitles the timeshare member for the timeshare facilities over the membershipusage period, is recognised as income equally over the usage period.


139

(M) Employee Benefits :

Defined Contribution Plan/Defined Benefit Plan/Long term compensated absences.

Group’s contributions paid/payable during the year to Superannuation Fund, ESIC and Labour Welfare Fund are recognised in the Profit andLoss Account.

Contributions to Provident Fund are made to a Trust administered by the Group and are charged to Profit and Loss Account as incurred.

The Company is liable for the contribution and any shortfall in interest between the amount of interest realised by the investment and theinterest payable to members at the rate declared by the Government of India.

Group’s liability towards gratuity, long term compensated absences and post retirement medical benefit schemes are determined byindependent actuaries, using the projected unit credit method. Past services are recognised on a straight line basis over the average perioduntil the benefits become vested. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account asincome or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determinedby reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bondsare consistent with the currency and estimated terms of the defined benefit obligation.

(N) Product Warranty :

In respect of warranties on sale of certain products, the estimated costs of these warranties are accrued at the time of sale. The estimatesfor accounting of warranties are reviewed and revisions are made as required.

(O) Leases :

The Group’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns, etc.). Theleasing arrangements which are not non-cancellable range between 11 months and three years generally, and are usually renewable bymutual consent on agreed terms. The aggregate lease rentals payable are charged as Rent including lease rentals.

(P) Segment Reporting :

The accounting policies adopted for segment reporting are in line with the accounting policies of the Group. Segments are identifiedhaving regard to the dominant source and nature of risks and returns and internal organisation and management structure.

Revenues and expenses have been identified to the segments based on their relationship to the business activity of the segment.

Income/Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to business segments are reflected asunallocated corporate income/expenses. Inter-segment transfers are at prices which are generally market led.

(Q) Taxes on Income :

Current Tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subject toconsideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbeddepreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincing evidencethat sufficient future tax income will be available against which such deferred tax assets can be realised.

(R) Income from Securitisation and Assignment :

Securitised assets are derecognised as the contractual rights therein are transferred to the special purpose vehicle or buyers as the case maybe. On derecognition, the difference between book value of the securitised asset and consideration received as reduced by the estimatedprovision for loss/expense and incidental expenses related to the transaction is recognised as gain or loss arising on securitisation.

In case of assignment of receivables the assets are derecognised as all the rights, titles, future receivables and interest thereof are assignedto the purchaser. On derecognising, the difference between book value of the receivables assigned and consideration received as reducedby the estimated provision for loss/expenses and incidental expenses related to the transaction is recognised as gain or loss arising onassignment.

3.3.3.3.3. Changes in Group Structure :Changes in Group Structure :Changes in Group Structure :Changes in Group Structure :Changes in Group Structure : During the year ended 31st March, 2008, the following changes in Group structure have taken place and the samehave been appropriately dealt with in the Consolidated Financial Statements.

i.i.i.i.i. Mahindra FMahindra FMahindra FMahindra FMahindra Forgings Ltd :orgings Ltd :orgings Ltd :orgings Ltd :orgings Ltd : In accordance with a scheme of amalgamation sanctioned by the Hon’ble High Court of Judicature, Bombay videits order dated 23rd November, 2007, the Company’s subsidiaries Mahindra Stokes Holding Company Ltd; Mahindra Forgings Overseas Ltd;and Mahindra Forgings Mauritius Ltd., have merged with Mahindra Forgings Ltd. Consequent to the merger, Mahindra Forgings Ltd, anassociate company as at 31st March, 2007 has with effect from 1st April, 2007,the appointed date of the merger, become a subsidiary ofthe Company.

The Company, as a part of its strategy to establish itself in the Forging business, had earlier acquired stakes in Mahindra Forgings Ltd (MFL),Stokes Forgings, U.K., Jeco, Germany, and in Schoneweiss, Germany. The acquisitions in the overseas companies were routed throughinvestment companies. In line with its strategy, the investment companies had issued fresh shares to external investors and through ascheme of arrangement sanctioned by the High Court of Bombay in November 2007 the investment companies were merged with MFLwith effect from the appointed date 1st April, 2007. Since the swap ratios determined by the court order were after considering the above

140

equity infusion, both the equity infusion and the merger were accounted for as on the appointed day 1st April, 2007. Upon giving effect tothe Scheme, the resulting loss on dilution of the Group’s interest in the forging business of Rs. 31.00 croresRs. 31.00 croresRs. 31.00 croresRs. 31.00 croresRs. 31.00 crores has been disclosed as anexceptional item under note 18.2.

ii.ii.ii.ii.ii. Mahindra Engineering Design & Development Company Ltd Mahindra Engineering Design & Development Company Ltd Mahindra Engineering Design & Development Company Ltd Mahindra Engineering Design & Development Company Ltd Mahindra Engineering Design & Development Company Ltd : In accordance with a scheme of amalgamation sanctioned by the Hon’bleHigh Court of Judicature, Bombay vide its order dated 14th March, 2008, the Company’s wholly owned subsidiary Plexion Technologies(India) Pvt. Ltd., has merged with effect from 1st April, 2007, the appointed date, with Mahindra Engineering Design & DevelopmentCompany Ltd., an existing wholly owned subsidiary of the Company.

iii.iii.iii.iii.iii. Mahindra Holidays & Resorts India Ltd Mahindra Holidays & Resorts India Ltd Mahindra Holidays & Resorts India Ltd Mahindra Holidays & Resorts India Ltd Mahindra Holidays & Resorts India Ltd : In accordance with a scheme of amalgamation sanctioned by the Hon’ble High Court ofJudicature, Madras vide its order dated 27th February, 2008, the Company’s wholly owned subsidiary Ashtamudi Resorts Pvt. Ltd., acquiredin May 2007, has merged with effect from 1st July, 2007, the appointed date.

iviviviviv..... Schoneweiss & Co.GmbH Schoneweiss & Co.GmbH Schoneweiss & Co.GmbH Schoneweiss & Co.GmbH Schoneweiss & Co.GmbH : In accordance with a scheme of amalgamation sanctioned by the Local Authority of Germany, vide its orderdated 8th November, 2007, the Company’s wholly owned subsidiaries Fried Hunninghaus GmbH and Fried Hunninghaus GmbH & Co. KG,both incorporated in Germany, have merged with effect from 1st April, 2007 with Schoneweiss & Co.GmbH., an existing wholly ownedsubsidiary of the Company.

vvvvv..... FFFFFalkenroth Umformtechnik GmbH alkenroth Umformtechnik GmbH alkenroth Umformtechnik GmbH alkenroth Umformtechnik GmbH alkenroth Umformtechnik GmbH : In accordance with a scheme of amalgamation sanctioned by the Local Authority of Germany, vide itsorder dated 21st August, 2007, the Company’s wholly owned subsidiary Falkenroth Grundstucksgesellschaft GmbH incorporated inGermany, has merged with effect from 1st April, 2007 with Falkenroth Umformtechnik GmbH., an existing wholly owned subsidiary of theCompany.

vi.vi.vi.vi.vi. Mahindra Holdings & Finance Ltd (MHFL) Mahindra Holdings & Finance Ltd (MHFL) Mahindra Holdings & Finance Ltd (MHFL) Mahindra Holdings & Finance Ltd (MHFL) Mahindra Holdings & Finance Ltd (MHFL) : In terms of the proposed Scheme of Amalgamation of MHFL, an existing wholly ownedsubsidiary, with the Company, the merger would be operative, pending statutory approvals, w.e.f 1st February, 2008. Pending the approvals,MHFL, an existing subsidiary has been considered to be a subsidiary as on the Balance Sheet date and the results of MHFL for the periodended 31st March, 2008 have been considered in the Consolidated Financial Statements.

4.4.4.4.4. In the Consolidated Accounts, the Investment Fluctuation Reserve account is reflected with a corresponding adjustment to ‘General Reserve’. Inaccordance with the Scheme of Arrangement approved by the Hon’ble High Court of Bombay on 12th December, 2003, the InvestmentFluctuation Reserve has been utilised against diminution in value of certain investments in the accounts of the Company. Accordingly, an amountof Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 10.69 crores) utilised for provision for investment in subsidiaries in the standalone accounts of the Company, and not setup in the consolidated accounts, has been transferred from Investment Fluctuation Reserve to General Reserve.

5.5.5.5.5. The Guidance Note on Accounting for Employee Share-based Payments issued by The Institute of Chartered Accountants of India requires thatshares allotted to a trust but not transferred to employees be reduced from Share Capital and Reserves. Accordingly, the Company has reducedthe Share Capital by Rs. 3.34 croresRs. 3.34 croresRs. 3.34 croresRs. 3.34 croresRs. 3.34 crores (2007 : Rs. 3.67 crores), Securities Premium by Rs. 16.34 croresRs. 16.34 croresRs. 16.34 croresRs. 16.34 croresRs. 16.34 crores (2007 : Rs. 17.98 crores) for the 33,34,21633,34,21633,34,21633,34,21633,34,216shares (2007 : 36,69,279 shares) held by the trust pending transfer to the eligible employees.

The Share Capital of the Company has also been reduced and the General Reserve increased by Rs. 3.33 croresRs. 3.33 croresRs. 3.33 croresRs. 3.33 croresRs. 3.33 crores (2007 : Rs. 3.67 crores) for thebonus shares issued by the Company in September 2005 to the trust but not yet transferred by the trust to the employees. The above monieswhich is treated as advance received from it, is included under Current Liabilities.

66666. Consequent to the announcement issued by The Institute of Chartered Accountants of India dated 29th March, 2008 in respect of forwardexchange contracts and currency and interest rate swaps, the Company has applied the Hedge Accounting principles set out in the AccountingStandard (AS) 30 “Financial Instruments : Recognition and Measurement” with effect from 31st March, 2008. Accordingly, all such contractsoutstanding as on 31st March, 2008 are marked to market and the net gain aggregating Rs. 28.78 croresRs. 28.78 croresRs. 28.78 croresRs. 28.78 croresRs. 28.78 crores arising consequently on contracts thatwere designated and effective as hedges of future cash flows has been recognised directly in the Hedging Reserve account.

Consequent to this change in accounting for such contracts, the profit for the year is lower and the Reserves and Surplus is higher byRs.Rs.Rs.Rs.Rs. 28.78 crores.28.78 crores.28.78 crores.28.78 crores.28.78 crores.

7.7.7.7.7. Loans :Loans :Loans :Loans :Loans :

(a) Secured borrowings are secured by a pari-passu charge on immovable properties of the entities both present and future, subject to certainexclusions and are also secured by pari-passu charge on the movable properties of the entities including movable Machinery, MachinerySpares, Tools and Accessories, both present and future, subject to certain exclusions.

(b) Loans and Advances from Banks are secured by a first charge on whole of the current assets namely inventories, certain book debts,outstanding monies, receivables, claims, etc. both present and future.

8.8.8.8.8. (a) The depreciation charge for the year excludes :

(i) An amount of Rs. 0.42 croresRs. 0.42 croresRs. 0.42 croresRs. 0.42 croresRs. 0.42 crores (2007 : Rs..... 0.43 crores), representing depreciation on the increase due to revaluation of Land andBuildings transferred from the Revaluation Reserve.

(ii) An amount of Rs. 1.70 crores Rs. 1.70 crores Rs. 1.70 crores Rs. 1.70 crores Rs. 1.70 crores (2007 : Rs. 0.03 crores), representing depreciation on assets used for development work. Thisexpenditure is transferred to Development Expenditure and is appropriately amortised.


141

(b) Additions to assets include assets taken over due to acquisition of subsidiaries :Rupees crores

Description of Assets Cost/Professional Depreciation/Valuation Amortisation

Land ....................................................................................................................................... 4.39 -

Building .................................................................................................................................. 54.73 18.21

Plant & Machinery .................................................................................................................. 335.25 215.19

Furniture & Fittings ................................................................................................................ 9.46 6.26

Vehicles, Cycles, etc ................................................................................................................ 7.39 4.40

Software Expenditure ............................................................................................................. 1.55 0.25

Non-Compete Fees ................................................................................................................. 2.00 -

TTTTTotalotalotalotalotal ....................................................................................................................................... 414.77414.77414.77414.77414.77 244.31244.31244.31244.31244.31

9.9.9.9.9. During the year, Mahindra & Mahindra Financial Services Limited has without recourse assigned loan receivables of Rs. 244.25 croresRs. 244.25 croresRs. 244.25 croresRs. 244.25 croresRs. 244.25 crores (2007 : Rs.218.37 crores) contracts amounting to Rs.809.86 croresRs.809.86 croresRs.809.86 croresRs.809.86 croresRs.809.86 crores (2007 : Rs. 609.96 crores) (including future interest receivable) for a consideration ofRs. 730.31 croresRs. 730.31 croresRs. 730.31 croresRs. 730.31 croresRs. 730.31 crores (2007 : Rs. 554.32 crores) and de-recognised the assets from the books. The income booked in respect of assignment ofreceivables includes certain amount towards cost of future servicing of the assigned pool and an appropriate amount has been providedtowards expenditure for future services. On assignment of receivables income is booked at Rs.133.45 croresRs.133.45 croresRs.133.45 croresRs.133.45 croresRs.133.45 crores (2007 : Rs.74.09 crores) andprovision for estimated loss/expenses of Rs.32.60 croresRs.32.60 croresRs.32.60 croresRs.32.60 croresRs.32.60 crores (2007 : Rs.27.35 crores). During the year provision in respect of securitisation ofRs. 6.84 crores Rs. 6.84 crores Rs. 6.84 crores Rs. 6.84 crores Rs. 6.84 crores (2007 : Rs.7.10 crores) considered no longer necessary has been written back.

10.10.10.10.10. The Company had issued during the year ended 31st March, 2005, Zero Coupon Foreign Currency Convertible Bonds (Bonds 2009) aggregatingUS $ 100 million, at par. Upto 31st March, 2008, those Bonds have been fully converted into equity shares/GDRs.

Premium payable on redemption of Bonds 2009 had been fully provided in the previous year by debiting the same to Securities PremiumAccount (SPA). Consequent to the conversion premium aggregating Rs. 1.37 crores no longer payable on bonds converted into equityshares/GDRs has been credited back to SPA during the year.

The Company had issued during the year ended 31st March, 2007, Zero Coupon Foreign Currency Convertible Bonds (Bonds 2011) aggregatingUS $ 200 million, at par. The bond holders have an option to convert these bonds into Equity Shares with full voting rights or Global DepositoryReceipts (GDRs) determined at an initial conversion price of Rs. 922.04 per share with fixed exchange rate of conversion of Rs. 44.42 = US $ 1,at any time on or after 7th May, 2006 upto 7th March, 2011.

The Bonds 2011 may be redeemed, in whole but not in part, at the option of the Company at any time on or after 13th April, 2008 subject tosatisfaction of certain conditions. Unless previously converted, redeemed or purchased and cancelled, the bonds fall due for redemption on 14th

April, 2011 at 128.03 per cent of their principal amount. Upto 31st March, 2008, none of the Bonds 2011 have been converted into equityshares/GDRs.

The net proceeds of Rs. 274.03Rs. 274.03Rs. 274.03Rs. 274.03Rs. 274.03 crores,crores,crores,crores,crores, unutilised as at 31st March, 2008, is disclosed under Cash and Bank balances.

11.11.11.11.11. Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :Employee Defined Benefits :

Defined benefit plans – as per Actuarial valuation on 31st March, 2008 Rupees crores

GratuityGratuityGratuityGratuityGratuity GratuityGratuityGratuityGratuityGratuity PPPPPost Retirementost Retirementost Retirementost Retirementost Retirement(F(F(F(F(Funded)unded)unded)unded)unded) (Unfunded)(Unfunded)(Unfunded)(Unfunded)(Unfunded) Medical BenefitsMedical BenefitsMedical BenefitsMedical BenefitsMedical Benefits

(Unfunded)(Unfunded)(Unfunded)(Unfunded)(Unfunded)

20082008200820082008 2007 20082008200820082008 2007 20082008200820082008 2007

AAAAA..... Expense recognised in the Statement ofExpense recognised in the Statement ofExpense recognised in the Statement ofExpense recognised in the Statement ofExpense recognised in the Statement ofProfit & Loss Account for the year ended 31st MarchProfit & Loss Account for the year ended 31st MarchProfit & Loss Account for the year ended 31st MarchProfit & Loss Account for the year ended 31st MarchProfit & Loss Account for the year ended 31st March

1. Current service cost 20.6520.6520.6520.6520.65 16.18 16.3916.3916.3916.3916.39 10.88 0.210.210.210.210.21 0.20

2. Interest cost 19.9919.9919.9919.9919.99 14.52 3.223.223.223.223.22 1.94 0.290.290.290.290.29 0.24

3. Expected return on plan assets (16.54)(16.54)(16.54)(16.54)(16.54) (12.03) ----- - ----- -

4. Actuarial (Gains)/Losses 2.392.392.392.392.39 (7.95) 2.742.742.742.742.74 (1.62) (0.70)(0.70)(0.70)(0.70)(0.70) (0.15)

5. Past Service cost 0.420.420.420.420.42 - 0.020.020.020.020.02 - ----- -

6. Settlement cost ----- - ----- - - -

7. Payments on account of employee transferred (1.73)(1.73)(1.73)(1.73)(1.73) 0.67 ----- - ----- -

8. Effect of the limit in Para 59(b) of the revised AS 15 0.010.010.010.010.01 - ----- - ----- -

9. Total expense 25.1925.1925.1925.1925.19 11.39 22.3722.3722.3722.3722.37 11.20 (0.20)(0.20)(0.20)(0.20)(0.20) 0.29

142

B.B.B.B.B. Net Asset/(Liability) recognised in the Balance SheetNet Asset/(Liability) recognised in the Balance SheetNet Asset/(Liability) recognised in the Balance SheetNet Asset/(Liability) recognised in the Balance SheetNet Asset/(Liability) recognised in the Balance Sheetas at 31st Marchas at 31st Marchas at 31st Marchas at 31st Marchas at 31st March

1. Present Value of Defined Benefit obligationas at 31st March 278.71278.71278.71278.71278.71 204.46 52.7552.7552.7552.7552.75 32.05 2.952.952.952.952.95 3.30

2. Fair value of plan assets as at 31st March 217.95217.95217.95217.95217.95 144.67 ----- - ----- -

3. Amount not recognised as an asset 0.010.010.010.010.01 - ----- - ----- -

4. Funded status [Surplus/(Deficit)] (60.77)(60.77)(60.77)(60.77)(60.77) (59.79) (52.75)(52.75)(52.75)(52.75)(52.75) (32.05) (2.95)(2.95)(2.95)(2.95)(2.95) (3.30)

5. Net Asset/(Liability) as at 31st March (60.77)(60.77)(60.77)(60.77)(60.77) (59.79) (52.75)(52.75)(52.75)(52.75)(52.75) (32.05) (2.95)(2.95)(2.95)(2.95)(2.95) (3.30)

C.C.C.C.C. Change in the obligations during the yearChange in the obligations during the yearChange in the obligations during the yearChange in the obligations during the yearChange in the obligations during the yearended 31st Marchended 31st Marchended 31st Marchended 31st Marchended 31st March

1. Present Value of Defined Benefit obligation at thebeginning of the year 204.46204.46204.46204.46204.46 190.07 32.0432.0432.0432.0432.04 22.96 3.303.303.303.303.30 3.17

2. Obligations arising on account of acquisitionsduring the year 45.6745.6745.6745.6745.67 - 0.680.680.680.680.68 - ----- -

3. Current service cost 20.6520.6520.6520.6520.65 16.18 16.3916.3916.3916.3916.39 10.88 0.210.210.210.210.21 0.20

4. Interest cost 19.9919.9919.9919.9919.99 14.52 3.223.223.223.223.22 1.94 0.290.290.290.290.29 0.24

5. Actuarial (Gains)/Losses 2.922.922.922.922.92 (8.29) 2.742.742.742.742.74 (1.62) (0.70)(0.70)(0.70)(0.70)(0.70) (0.15)

6. Liabilities settled on sale of business ----- - ----- - ----- -

7. Benefits paid (15.40)(15.40)(15.40)(15.40)(15.40) (8.02) (2.35)(2.35)(2.35)(2.35)(2.35) (2.11) (0.15)(0.15)(0.15)(0.15)(0.15) (0.16)

8. Past Service Cost 0.420.420.420.420.42 - 0.030.030.030.030.03 - ----- -

9. Present Value of Defined Benefit obligationat the end of the year 278.71278.71278.71278.71278.71 204.46 52.7552.7552.7552.7552.75 32.05 2.952.952.952.952.95 3.30

D.D.D.D.D. Change in the fair value of plan assets during theChange in the fair value of plan assets during theChange in the fair value of plan assets during theChange in the fair value of plan assets during theChange in the fair value of plan assets during theyear ended 31st Marchyear ended 31st Marchyear ended 31st Marchyear ended 31st Marchyear ended 31st March

1. Fair value of plan assets at the beginning of the year 144.67144.67144.67144.67144.67 125.53 ----- - ----- -

2. Fair value of plan assets arising on account ofacquisitions during the year 29.3729.3729.3729.3729.37 - ----- - ----- -

3. Expected return on plan assets 16.5416.5416.5416.5416.54 12.06 ----- - ----- -

4. Actuarial Gains/(Losses) 0.630.630.630.630.63 (0.34) ----- - ----- -

5. Contributions by employer 39.4139.4139.4139.4139.41 15.44 2.352.352.352.352.35 - 0.150.150.150.150.15 0.16

6. Asset distributed on sale of business ----- - ----- - ----- -

7. Actual Benefits paid (12.67)(12.67)(12.67)(12.67)(12.67) (8.02) (2.35)(2.35)(2.35)(2.35)(2.35) - (0.15)(0.15)(0.15)(0.15)(0.15) (0.16)

8. Fair value of plan assets at the end of the year 217.95217.95217.95217.95217.95 144.67 ----- - ----- -----

9. Actual return on plan assets 12.5012.5012.5012.5012.50 12.03 ----- - ----- -

E.E.E.E.E. Major category of plan assets as a percentage of total planMajor category of plan assets as a percentage of total planMajor category of plan assets as a percentage of total planMajor category of plan assets as a percentage of total planMajor category of plan assets as a percentage of total plan

Government of India securities 0.36%0.36%0.36%0.36%0.36%

Corporate Bonds 0.61%0.61%0.61%0.61%0.61%

Special Deposit Scheme 0.00%0.00%0.00%0.00%0.00%

Funded with LIC 98.37%98.37%98.37%98.37%98.37% 100%

Others 0.66%0.66%0.66%0.66%0.66%

Rupees crores



20082008200820082008 2007 20082008200820082008 2007 20082008200820082008 2007


143

Rupees crores



20082008200820082008 2007 20082008200820082008 2007 20082008200820082008 2007

FFFFF..... Actuarial AssumptionsActuarial AssumptionsActuarial AssumptionsActuarial AssumptionsActuarial Assumptions

1. Discount Rate (Basis - prevailing market yields of 7.507.507.507.507.50 %%%%% ----- 7.50 % ----- 7.507.507.507.507.50 %%%%% - 7.50 % ----- 8.208.208.208.208.20 %%%%% 8.20 %govt securities.) 8.508.508.508.508.50 %%%%% 8.35 % 8.508.508.508.508.50 %%%%% 8.35 % 8.258.258.258.258.25 %%%%%

2. Expected Rate of return on plan assets 7.507.507.507.507.50 %%%%% - 6.00 % -9.459.459.459.459.45 %%%%% 9.20 %

3. In-service Mortality Indian Assured Lives Mortality (1994-96) Modified ultimateIndian Assured Lives Mortality (1994-96) Modified ultimateIndian Assured Lives Mortality (1994-96) Modified ultimateIndian Assured Lives Mortality (1994-96) Modified ultimateIndian Assured Lives Mortality (1994-96) Modified ultimate

4. Turnover rate Age 21 toAge 21 toAge 21 toAge 21 toAge 21 to Age 21 toAge 21 toAge 21 toAge 21 toAge 21 to Age 21 toAge 21 toAge 21 toAge 21 toAge 21 to30 - 10%30 - 10%30 - 10%30 - 10%30 - 10% 30 - 10%30 - 10%30 - 10%30 - 10%30 - 10% 30 - 10%30 - 10%30 - 10%30 - 10%30 - 10%

Age 31 toAge 31 toAge 31 toAge 31 toAge 31 to Age 31 toAge 31 toAge 31 toAge 31 toAge 31 to Age 31 toAge 31 toAge 31 toAge 31 toAge 31 to40 - 5%40 - 5%40 - 5%40 - 5%40 - 5% 40 - 5%40 - 5%40 - 5%40 - 5%40 - 5% 40 - 5%40 - 5%40 - 5%40 - 5%40 - 5%

Age 41 toAge 41 toAge 41 toAge 41 toAge 41 to Age 21 to Age 41 toAge 41 toAge 41 toAge 41 toAge 41 to Age 21 to Age 41 toAge 41 toAge 41 toAge 41 toAge 41 to Age 21 to50 - 3%50 - 3%50 - 3%50 - 3%50 - 3% 44 – 2% 50 - 3%50 - 3%50 - 3%50 - 3%50 - 3% 44 – 2% 50 - 3%50 - 3%50 - 3%50 - 3%50 - 3% 44 – 2%

Age 51 &Age 51 &Age 51 &Age 51 &Age 51 & Age 45 to Age 51 &Age 51 &Age 51 &Age 51 &Age 51 & Age 45 to Age 51 &Age 51 &Age 51 &Age 51 &Age 51 & Age 45 toabove - 2%above - 2%above - 2%above - 2%above - 2% 60 – 1% above - 2%above - 2%above - 2%above - 2%above - 2% 60 – 1% above - 2%above - 2%above - 2%above - 2%above - 2% 60 – 1%

5. Medical Premium inflation 3.003.003.003.003.00 %%%%% ----- 3.00%6.006.006.006.006.00 %%%%%

One percentage point increase in One percentage point decreasemedical inflation rate in medical inflation rate

G.G.G.G.G. Effect of one percentage point change in the assumedEffect of one percentage point change in the assumedEffect of one percentage point change in the assumedEffect of one percentage point change in the assumedEffect of one percentage point change in the assumedmedical inflation ratemedical inflation ratemedical inflation ratemedical inflation ratemedical inflation rate

Current YCurrent YCurrent YCurrent YCurrent Yearearearearear

Effect on the aggregate service and interest cost ofPost Employment Medical benefits 0.05 (0.08)

Effect on the accumulated Post Employment Medicalbenefit obligations 0.40 (0.34)

Previous YPrevious YPrevious YPrevious YPrevious Yearearearearear

Effect on the aggregate service and interest cost ofPost Employment Medical benefits 0.09 (0.06)

Effect on the accumulated Post Employment Medicalbenefit obligations 0.43 (0.40)

Rupees crores



20082008200820082008 2007 20082008200820082008 2007 20082008200820082008 2007

H.H.H.H.H. Experience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience AdjustmentsExperience Adjustments

Defined Benefit obligation 278.71278.71278.71278.71278.71 204.46 52.7552.7552.7552.7552.75 32.05 2.952.952.952.952.95 3.30

(Deficit)/Surplus (60.77)(60.77)(60.77)(60.77)(60.77) (59.79) (52.75)(52.75)(52.75)(52.75)(52.75) (32.05) (2.95)(2.95)(2.95)(2.95)(2.95) (3.30)

Experience adjustments on plan liabilities 4.674.674.674.674.67 - - - (0.49)(0.49)(0.49)(0.49)(0.49) 0.07

Basis used to determine expected rate of return on assets :Based on expectation of the average long term rate of return expected on investment of the fund, during the estimated term of obligation.The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevantfactors, such as supply and demand in the employment market.Further, as at 31st March, 2008, Current Liabilities and Provisions include Pension liability of Rs. 119.72 crores Rs. 119.72 crores Rs. 119.72 crores Rs. 119.72 crores Rs. 119.72 crores (2007 : 95.26 crores) in respect offoreign subsidiaries.

144

In the previous year the Company had adopted Accounting Standard (AS) 15 (revised 2005) Employee Benefits, read with the AccountingStandard Board Guidance on implementing AS 15, Employee Benefits (revised 2005) issued by The Institute of Chartered Accountants of India inMay 2007, the Company had

(i) Accounted for (Net of Tax) Rs. 84.20 crores as a reduction from General Reserve and Rs 0.69 crores as a reduction from Profit and Lossaccount.

(ii) Accounted as prior period adjustment (Net of Tax) Rs. 19.19 crores being on account of Provision for Gratuity Rs. 25.85 crores Gross arisingfrom certain refinements in the actuarial assumptions and accrual of Post Retirement Medical Benefits on an actuarial basis Rs. 3.08 croresGross and the resultant tax credit thereon was Rs. 9.74 crores.

12.12.12.12.12. The Commissioner of Central Excise (Adjudication), Navi Mumbai, passed an order on 30th March, 2005, confirming the demand made on theCompany for payment of differential excise duty (including penalty) of Rs. 304.11 crores in connection with the classification of Company’sCommander range of vehicles, during the years 1991-1996. Whilst the Company had classified the Commander range of vehicles as 10-seaterattracting a lower rate of excise duty, the Commissioner of Central Excise (Adjudication), Navi Mumbai, has held that these vehicles could not beclassified as 10-seaters and as such attracted a higher rate of excise duty. In earlier proceedings, the Collector of Central Excise, Mumbai as alsothe Collector Central Excise (Appeals), Mumbai had upheld the classification of these vehicles as 10-seaters. Similarly, certain statutory/expertbodies have also confirmed the concerned vehicles to be 10-seater vehicles.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has also by its order dated 19th July, 2005 upheld this classification. Thedepartment’s Statutory Appeal against this order has been admitted by the Supreme Court.

The Commissioner of Central Excise, Nasik passed another order dated 20th March, 2006 confirming a demand of Rs. 24.75 crores in respect ofCompany’s Armada range of vehicles manufactured during the years 1992 – 1996, on the same grounds as adopted for Commander range ofvehicles.

The Company has been legally advised that the aforesaid orders dated 30th March, 2005 and 20th March, 2006 passed by the Commissioners areunsustainable in law. The Tribunal has also given an unconditional stay against both the aforesaid orders.

The final hearing in the above matters is awaited.

The Company is confident that it would succeed in the case and the Company’s stand that the Commander and Armada Vehicles are 10-seatervehicles would be upheld. As such, the Company does not expect any liability on this account.

13.13.13.13.13. Contingent Liability :Contingent Liability :Contingent Liability :Contingent Liability :Contingent Liability :

(a) Guarantees given :Rupees crores

Outstanding amounts against the guarantees

20082008200820082008 2007

For employees ............................................................................................................. 0.030.030.030.030.03 0.05

For other companies ................................................................................................... 5.415.415.415.415.41 -

Others ......................................................................................................................... 337.52337.52337.52337.52337.52 28.43

Group Share in Joint Ventures Rs. 0.35Rs. 0.35Rs. 0.35Rs. 0.35Rs. 0.35 crorescrorescrorescrorescrores (2007 : Rs. Nil)

(b) Claims against the Companies not acknowledged as debts comprise of :

(i) Excise Duty, Sales tax and Service tax claims disputed by the Company relating to issues of applicability and classification aggregatingto Rs. 206.41 crores (Net of TRs. 206.41 crores (Net of TRs. 206.41 crores (Net of TRs. 206.41 crores (Net of TRs. 206.41 crores (Net of Tax : Rs. 138.20 crores)ax : Rs. 138.20 crores)ax : Rs. 138.20 crores)ax : Rs. 138.20 crores)ax : Rs. 138.20 crores) {2007 : Rs. 62.85 crores (Net of Tax : Rs. 47.07 crores)}.

(ii) Other Matters (excluding claims where amounts are not ascertainable) : Rs. 146.23 crores (Net of TRs. 146.23 crores (Net of TRs. 146.23 crores (Net of TRs. 146.23 crores (Net of TRs. 146.23 crores (Net of Tax : Rs. 37.15 crores)ax : Rs. 37.15 crores)ax : Rs. 37.15 crores)ax : Rs. 37.15 crores)ax : Rs. 37.15 crores) {2007 :Rs. 95.75 crores (Net of Tax : Rs. 23.42 crores)}.

(iii) On Capital account : Rs. 1.18 croresRs. 1.18 croresRs. 1.18 croresRs. 1.18 croresRs. 1.18 crores (2007 : Rs. 1.18 crores).

(iv) Group Share in Joint Ventures Rs. 0.51 crores (Net of TRs. 0.51 crores (Net of TRs. 0.51 crores (Net of TRs. 0.51 crores (Net of TRs. 0.51 crores (Net of Tax : Rs. 0.38 crores) ax : Rs. 0.38 crores) ax : Rs. 0.38 crores) ax : Rs. 0.38 crores) ax : Rs. 0.38 crores) (2007 : Rs. 0.01 crores).

(c) Taxation matters :

(i) Demands not acknowledged as debts and not provided for, relating to issues of deductibility and taxability in respect of which thematters are in appeal and exclusive of the effect of similar matters in respect of assessments remaining to be completed :

- Income Tax : Rs. 229.23 crores Rs. 229.23 crores Rs. 229.23 crores Rs. 229.23 crores Rs. 229.23 crores (2007 : Rs. 205.28 crores)

- Group Share in Joint Ventures : Rs. 3.15 crores Rs. 3.15 crores Rs. 3.15 crores Rs. 3.15 crores Rs. 3.15 crores (2007 : Rs. 0.07 crores )


145

(ii) Items which have succeeded in appeal, but the Income Tax Department is pursuing/likely to pursue in appeal/reference and exclusiveof the effect of similar matters in respect of assessments remaining to be completed :

- Income Tax matters : Rs. 60.49 crores Rs. 60.49 crores Rs. 60.49 crores Rs. 60.49 crores Rs. 60.49 crores (2007 : Rs. 51.23 crores)

- Surtax matters : Rs. 0.13 croresRs. 0.13 croresRs. 0.13 croresRs. 0.13 croresRs. 0.13 crores (2007 : Rs. 0.13 crores)

(d) Bills discounted not matured Rs. 44.21 crores Rs. 44.21 crores Rs. 44.21 crores Rs. 44.21 crores Rs. 44.21 crores (2007 : Rs. 7.84 crores).

(e) In respect of contracts for design, manufacture, supply, erection and commissioning of plant and equipment placed by various customers, thecommitted dates of completion had expired and, hence, strictly in terms of the relative contracts, the liability for liquidated damages/penalties,the amount of which is estimated at a ceiling of Rs. Nil Rs. Nil Rs. Nil Rs. Nil Rs. Nil (2007 : Rs. 10.08 crores) (Net of TNet of TNet of TNet of TNet of Tax Rs. Nil) ax Rs. Nil) ax Rs. Nil) ax Rs. Nil) ax Rs. Nil) (2007 : Rs. 6.69 crores).

(f) The Company’s subsidiary, Tech Mahindra Limited, had acquired Tech Mahindra (R&D Services) Limited (TMRDL), vide Share Purchase Agreementdated 15th November, 2005, for a initial consideration of Rs. 175.51 crores (including stamp duty). As a result, TMRDL and its two wholly ownedsubsidiaries have become subsidiaries/step subsidiaries of the Company with effect from the date of acquisition i.e. 28th November, 2005.

The terms of purchase also provide for payment of contingent consideration to all the selling shareholders, payable over three years andcalculated based on achievement of specific targets. The contingent consideration is payable in cash and cannot exceed Rs. 64.08 crores Rs. 64.08 crores Rs. 64.08 crores Rs. 64.08 crores Rs. 64.08 crores Theconsideration so payable would be accounted in the books of account in the year of achieving the milestones under the Agreement. Accordingly,Rs. 2.06 crores Rs. 2.06 crores Rs. 2.06 crores Rs. 2.06 crores Rs. 2.06 crores (2007 : Rs. 10.12 crores) has been accounted for as at the year end, as additional cost of acquisition.

(g) Corporate undertaking on Securitisation/Assignment by Mahindra & Mahindra Financial Services Limited RsRsRsRsRs. 308.22308.22308.22308.22308.22 crores.crores.crores.crores.crores.

14.14.14.14.14. (a) Provision - Others Rs. 324.55 crores Rs. 324.55 crores Rs. 324.55 crores Rs. 324.55 crores Rs. 324.55 crores (2007 : Rs. 196.98 crores) includes provision for warranty Rs. 139.11 crores Rs. 139.11 crores Rs. 139.11 crores Rs. 139.11 crores Rs. 139.11 crores (2007 : Rs. 103.43crores). This relates to warranty provision made in respect of sale of certain products, the estimated costs of which is accrued at the timeof sale. The products are generally covered under a free warranty period ranging from 6 months to 3 years.

(b) Provision for Contingencies Rs. 9.55 croresRs. 9.55 croresRs. 9.55 croresRs. 9.55 croresRs. 9.55 crores (2007 : Rs. 3.46 crores) is in respect of labour demands under negotiations at certain locationsof the Company. The ultimate settlement is contingent on the conclusion of negotiations.

The movement in above provisions is as follows :

Rupees crores

WWWWWarrantyarrantyarrantyarrantyarranty ContingencyContingencyContingencyContingencyContingency

ProvisionsProvisionsProvisionsProvisionsProvisions 20082008200820082008 2007 20082008200820082008 2007

Balance as at 1st April ..................................................................................... 103.43103.43103.43103.43103.43 63.21 3.463.463.463.463.46 4.44

Add : Other entities ....................................................................................... ----- 11.21 1.391.391.391.391.39 -

Add : Provision made during the year ........................................................... 123.69123.69123.69123.69123.69 98.98 8.168.168.168.168.16 2.93

Less : Utilisation/Reversal during the year ....................................................... 88.0188.0188.0188.0188.01 69.97 3.463.463.463.463.46 3.91

Balance as at 31st MarchBalance as at 31st MarchBalance as at 31st MarchBalance as at 31st MarchBalance as at 31st March .............................................................................. 139.11139.11139.11139.11139.11 103.43 9.559.559.559.559.55 3.46

Group Share in Joint Venture : Rs. 15.93 crores : Rs. 15.93 crores : Rs. 15.93 crores : Rs. 15.93 crores : Rs. 15.93 crores (2007 : Rs.12.84 crores)

15.15.15.15.15. The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March, 2008 is Rs. 1259.60Rs. 1259.60Rs. 1259.60Rs. 1259.60Rs. 1259.60crorescrorescrorescrorescrores (2007 : Rs..... 648.19 crores).

Group Share in Joint Ventures : Rs. 0.60 crores Rs. 0.60 crores Rs. 0.60 crores Rs. 0.60 crores Rs. 0.60 crores (2007 : Rs. 0.12 crores).

16.16.16.16.16. Research and Development expenditure debited to the Profit and Loss Account, including certain expenditure based on allocations madeaggregate Rs. 205.13 crores Rs. 205.13 crores Rs. 205.13 crores Rs. 205.13 crores Rs. 205.13 crores (2007 : Rs. 149.37 crores).

Group Share in Joint Ventures : Rs. 0.02Rs. 0.02Rs. 0.02Rs. 0.02Rs. 0.02 crorescrorescrorescrorescrores (2007 : Rs. 0.03 crores).

146

17.17.17.17.17. The components of Deferred Tax Liability and Assets as at 31st March, 2008 are as under :Rupees crores

20082008200820082008 2007

Deferred Tax Liability :

(i) On fiscal allowances on Fixed Assets ..................................................................................... 340.95340.95340.95340.95340.95 260.67

(ii) Others .................................................................................................................................... 41.4341.4341.4341.4341.43 31.02

Group Share in Joint Ventures ............................................................................................... 0.460.460.460.460.46 0.43

382.84382.84382.84382.84382.84 292.12

Deferred Tax Assets :

(i) Provision for Compensated absences ..................................................................................... 79.3179.3179.3179.3179.31 60.88

(ii) Provision for Doubtful Debts/Advances .................................................................................. 141.64141.64141.64141.64141.64 96.06

(iii) Unabsorbed depreciation carried forward # ......................................................................... 64.7564.7564.7564.7564.75 30.68

(iv) Premium on Redemption of Zero Coupon Convertible Bonds ................................................ 48.6748.6748.6748.6748.67 67.61

(v) Provision for Gratuity ............................................................................................................. 16.2316.2316.2316.2316.23 13.53

(vi) Provision for Post Retirement Medical Expenses ..................................................................... 1.371.371.371.371.37 1.08

(vii) Others .................................................................................................................................... 47.4747.4747.4747.4747.47 36.02

Group Share in Joint Ventures ............................................................................................... 0.970.970.970.970.97 0.95

400.41400.41400.41400.41400.41 306.81

Net Deferred Tax Liability/(Assets) ................................................................................................... (17.57)(17.57)(17.57)(17.57)(17.57) (14.71)

# (considered, as there are compensatory timing differences the reversal of which, will result in sufficient future taxable income against whichthis can be realised).

1818181818. Exceptional items of Rs. 302.51 crores (Debit) Rs. 302.51 crores (Debit) Rs. 302.51 crores (Debit) Rs. 302.51 crores (Debit) Rs. 302.51 crores (Debit) {2007 : Rs.117.29 crores (Debit)}, comprise of the following :Rupees crores

20082008200820082008 2007

1. Profit on divesture of Long Term Investments (Net) ............................................................... 116.37116.37116.37116.37116.37 395.35

2. Loss on dilution of Group’s interest in Forging Business ....................................................... 31.0031.0031.0031.0031.00 -

3. Profit on sale of Discontinued Operation of a subsidiary ....................................................... ----- 20.02

4. Exclusivity Payment ................................................................................................................ (440.12)**(440.12)**(440.12)**(440.12)**(440.12)** (524.94)*

5. Amortisation of liability and other retirement benefits made under Voluntary Retirement

Schemes ................................................................................................................................. (8.23)(8.23)(8.23)(8.23)(8.23) (8.08)

6. Others .................................................................................................................................... (1.53)(1.53)(1.53)(1.53)(1.53) 0.36

Total ............ (302.51)(302.51)(302.51)(302.51)(302.51) (117.29)

Figures in brackets signify charge to Profit and Loss Account.

During January 2008, the Company has disposed of its entire holding in Mahindra Ashtech Limited (MAL), an erstwhile subsidiary. Thefinancial position of MAL for the period April 07 to January 08 is summarised hereunder :

Rupees crores

20082008200820082008 2007

Income ................................................................................................................................... 37.5037.5037.5037.5037.50 67.74

Expenses ................................................................................................................................ 42.2742.2742.2742.2742.27 68.73

Profit before Tax ..................................................................................................................... (4.77)(4.77)(4.77)(4.77)(4.77) (1.74)

Profit after Tax ....................................................................................................................... (4.83)(4.83)(4.83)(4.83)(4.83) (1.86)

** As per the terms of agreement entered into by a Group Subsidiary, it has made an exclusivity payment of Rs. 440.12 crores Rs. 440.12 crores Rs. 440.12 crores Rs. 440.12 crores Rs. 440.12 crores (2007 :Rs. 524.94 crores) to a customer which is unconditional, irrevocable and non-refundable. Accordingly, this payment has been disclosed asan exceptional item in the Profit and Loss Account.

* During the previous year, a Group Subsidiary has entered into Global Sourcing Agreement relating to the development of a global sourcingmodel for strategic outsourcing services, with a customer for a term of five years.


147

1919191919. Adjustments pertaining to previous years, net of current and deferred tax, comprise of the following : Rupees crores

20082008200820082008 2007

1. (Excess)/Short provision of Income Tax in respect of previous years ....................................... 0.370.370.370.370.37 (34.40)

2. Short provision of warranties ................................................................................................. 1.131.131.131.131.13 -

3. Gratuity and post retirement medical benefit ........................................................................ ----- 19.19

4. Other adjustments ................................................................................................................. 0.720.720.720.720.72 0.03

Total ................. 2.222.222.222.222.22 (15.18)

20.20.20.20.20. (a) Dividends on other investments Rs. 50.73 crores Rs. 50.73 crores Rs. 50.73 crores Rs. 50.73 crores Rs. 50.73 crores (2007 : Rs. 51.30 crores) is in respect of current investments.

(b) Interest on Government Securities, Debentures and Bonds comprise Rs. NilRs. NilRs. NilRs. NilRs. Nil (2007 : Rs. 1.00 crores) and Rs. 2.38 crores Rs. 2.38 crores Rs. 2.38 crores Rs. 2.38 crores Rs. 2.38 crores (2007 : Rs.1.52crores) in respect of long term and current investments respectively.

(c) Profit on sale of investments (Net) includes profit on disposal of current investments (Net) Rs. 26.60 croresRs. 26.60 croresRs. 26.60 croresRs. 26.60 croresRs. 26.60 crores (2007 : Rs. 7.84 crores), andprofit on disposal of long term investments (Net) Rs. 153.40 croresRs. 153.40 croresRs. 153.40 croresRs. 153.40 croresRs. 153.40 crores (2007 : Rs. 4.96 crores).

2121212121. Work-in-progress – Property Development Activity and Long Term Contracts and Advances recoverable in cash or kind or for value to be receivedincludes Rs. 68.73 crores Rs. 68.73 crores Rs. 68.73 crores Rs. 68.73 crores Rs. 68.73 crores (2007 : Rs. 76.13 crores) on account of certain projects, the commencement of which has been delayed pendingresolution of certain matters including receipt of approvals and outcome of court cases.

22.22.22.22.22. Related PRelated PRelated PRelated PRelated Party Tarty Tarty Tarty Tarty Transactions :ransactions :ransactions :ransactions :ransactions :

(a) Names of related parties where transactions have taken place during the year :

Where Control exists :Where Control exists :Where Control exists :Where Control exists :Where Control exists :

Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company

1. Tech Mahindra Foundation

Associates :Associates :Associates :Associates :Associates :


1. Owens Corning (India) Limited 7. Mega One Stop Farm Services Limited

2. Mahindra Construction Company Limited 8. Kota Farm Services Limited

3. Officemartindia.com Limited 9. Mriyalguda Farm Solution Limited

4. Rathna Bhoomi Enterprises Private Limited 10. Swaraj Automotives Limited (from 3rd July, 2007)

5. Mahindra Composites Limited 11. Swaraj Engines Limited (from 6th July, 2007)

6. Mahindra Renault Nissan Automotive PrivateLimited (upto 9th March, 2008)

Joint VJoint VJoint VJoint VJoint Ventures :entures :entures :entures :entures :


1. Mahindra Sona Limited 3. Mahindra Inframan Water Utilities Private Limited

2. Mahindra Water Utilities Limited 4. PSL Erickson Limited

KKKKKey Management Pey Management Pey Management Pey Management Pey Management Personnel :ersonnel :ersonnel :ersonnel :ersonnel :

Vice Chairman and Managing Director .......................... Mr. Anand Mahindra

Executive Directors ......................................................... Mr. B.N. DoshiMr. A.K. Nanda

148

(b) The related party transactions are as under :Rupees crores

Sl.Sl.Sl.Sl.Sl. Nature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions SubsidiarySubsidiarySubsidiarySubsidiarySubsidiary AssociateAssociateAssociateAssociateAssociate JointJointJointJointJoint KKKKKeyeyeyeyeyNo.No.No.No.No. CompaniesCompaniesCompaniesCompaniesCompanies CompaniesCompaniesCompaniesCompaniesCompanies V V V V Venturesenturesenturesenturesentures ManagementManagementManagementManagementManagement

PPPPPersonnelersonnelersonnelersonnelersonnel

1. Purchases :

Goods ........................................................................................ ----- 127.33127.33127.33127.33127.33 54.6454.6454.6454.6454.64 -----

(-) (71.17) (42.92) (-)

Fixed Assets ................................................................................ ----- 0.380.380.380.380.38 ----- -----

(-) @ @ (-)

Services ...................................................................................... ----- 0.320.320.320.320.32 ----- -----

(-) (-) (-) (-)

2. Sales :

Goods………………………………. ............................................ ----- 5.275.275.275.275.27 1.241.241.241.241.24 -----

(-) (39.04) (-) (-)

Fixed Assets ................................................................................ ----- 0.080.080.080.080.08 ----- -----

(-) (0.64) (-) (-)

Services ...................................................................................... ----- 1.951.951.951.951.95 0.040.040.040.040.04 -----

(-) (6.91) (0.50) (-)

3. Investments :

Purchase .................................................................................... ----- 3.003.003.003.003.00 ----- -----

(-) (182.71) (-) (-)

4. Deputation of Personnel :

From Related Parties .................................................................. ----- ----- ----- -----

(-) (0.03) (-) (-)

To Related Parties ....................................................................... ----- 0.390.390.390.390.39 - -----

(-) (0.07) (-) (-)

5. Provisions for :

Doubtful Advances during the year ........................................... ----- ----- ----- -

(-) (0.38) (-) (-)

Diminution in value of other assets written back ...................... ----- ----- ----- -----

(-) (0.06) (-) (-)

6. Finance :

Interest received ......................................................................... ----- 3.183.183.183.183.18 ----- -----

(-) (1.10) (-) (-)

Dividend Distributed………………… ......................................... ----- ----- 1.311.311.311.311.31 -----

(-) (0.13) (1.11) (-)

Cash discount received .............................................................. ----- ----- ----- -----

(-) (0.29) (-) (-)

@ denotes amounts less than Rs. 50,000


149

7. Other Transactions :

Other Income ............................................................................. ----- 9.519.519.519.519.51 0.020.020.020.020.02 -----

(-) (7.06) (0.05) (-)

Donation given .......................................................................... 7.57*7.57*7.57*7.57*7.57* ----- ----- -----

(-) (-) (-) (-)

Other Expenses ..................................................................... …. ----- ----- 0.050.050.050.050.05 -----

(5.57)* (1.74) @ (-)

Reimbursements received from parties .................................. …. ----- 0.020.020.020.020.02 0.060.060.060.060.06 -----

(-) (0.35) (0.03) (-)

Reimbursements made to parties ............................................... ----- ----- ----- -----

(-) (0.19) (-) (-)

Advance given by group company ............................................. ----- ----- ----- -----

(-) (0.13) (-) (-)

8. Outstandings :

Payable ....................................................................................... ----- 15.1615.1615.1615.1615.16 10.1910.1910.1910.1910.19 (2.46)(2.46)(2.46)(2.46)(2.46)

(-) (5.52) (9.73) (2.46)

Receivable .................................................................................. ----- 28.6828.6828.6828.6828.68 1.501.501.501.501.50 -----

(-) (30.41) (0.74) (-)

Inter Corporate Deposits given .................................................. ----- 5.735.735.735.735.73 ----- -----

(-) (5.73) (-) (-)

9. Provision for Diminution in value of other related assets ........... - 7.657.657.657.657.65 - -----

(-) (7.65) (-) (-)

10. Provision for Doubtful debts/advances ....................................... ----- 5.335.335.335.335.33 ----- -----

(-) (5.74) (-) (-)

11. Managerial Remuneration .......................................................... ----- ----- ----- 5.395.395.395.395.39

(-) (-) (-) (4.98)

12. Dividends ................................................................................... ----- ----- ----- 0.170.170.170.170.17

(-) (-) (-) (0.79)

13. Stock Options ............................................................................ ----- ----- ----- 0.050.050.050.050.05

(-) (-) (-) (0.05)

Previous year’s figures are in brackets.

*****Amount pertains to Tech Mahindra Foundation.


Rupees croresSl.Sl.Sl.Sl.Sl. Nature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions SubsidiarySubsidiarySubsidiarySubsidiarySubsidiary AssociateAssociateAssociateAssociateAssociate JointJointJointJointJoint KKKKKeyeyeyeyeyNo.No.No.No.No. CompaniesCompaniesCompaniesCompaniesCompanies CompaniesCompaniesCompaniesCompaniesCompanies V V V V Venturesenturesenturesenturesentures ManagementManagementManagementManagementManagement

PPPPPersonnelersonnelersonnelersonnelersonnel

150

Significant related party transactions are as under :

Rupees crores

Nature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions Associate CompaniesAssociate CompaniesAssociate CompaniesAssociate CompaniesAssociate Companies AmountAmountAmountAmountAmount Joint VJoint VJoint VJoint VJoint Venturesenturesenturesenturesentures AmountAmountAmountAmountAmount

1. Purchase - Goods ........................ Mahindra Composites Limited 1.581.581.581.581.58 Mahindra Sona Limited 54.6454.6454.6454.6454.64

(-) (42.92)

Swaraj Engines Limited 125.75125.75125.75125.75125.75

(-)

Mahindra Forgings Limited -----

(69.47)

2. Purchase – Fixed Assets……………. Mahindra Composites Limited 0.330.330.330.330.33 Mahindra Sona Limited -----

(-) @

Swaraj Engines Limited 0.010.010.010.010.01 Mahindra Inframan Utlities -----(-) Private Limited @

Kota Farm Services Limited -----

@

3. Purchase – Services ..................... Swaraj Engines Limited 0.320.320.320.320.32

(-)

4. Sale – Goods ............................... Swaraj Engines Limited 5.275.275.275.275.27 Mahindra Sona Limited 1.241.241.241.241.24

(-) (-)

Mahindra Forgings Limited -----

(39.04)

5. Sale – Fixed Assets ...................... Mahindra Forgings Limited -----

(0.64)


(-)

6. Sale – Services ............................. Swaraj Engines Limited 1.951.951.951.951.95 Mahindra Water -----(-) Utilities Limited (0.47)

Mahindra Sona Limited 0.040.040.040.040.04

(-)

7. Investment – Purchase ................ Mahindra Forgings Limited -----

(48.50)

Mahindra Gesco Developers Limited -----

(134.21)

8. Deputation of Personnel .............. Mahindra Composites Limited 0.390.390.390.390.39

(-)

9. Interest Received ......................... Owens Corning (India) Limited 3.183.183.183.183.18

(-)



151

10.Dividend Received ....................... ----- Mahindra Sona Limited 1.311.311.311.311.31

(-) (-)

11.Other Income .............................. Owens Corning (India) Limited 9.259.259.259.259.25 Mahindra Sona Limited 0.020.020.020.020.02

(-) (-)

Mahindra Composites Limited 0.250.250.250.250.25

(-)

12.Reimbursement received .............. Mahindra Composites Limited 0.010.010.010.010.01 Mahindra Sona Limited 0.040.040.040.040.04from parties (-) (-)

Mahindra Water 0.010.010.010.010.01Utilities Limited (-)

13.Payable ........................................ Mahindra Construction Company 0.110.110.110.110.11 Mahindra Sona Limited 10.1910.1910.1910.1910.19Limited (-) (-)


(-)


(-)

14.Receivables .................................. Owens Corning (India) Limited 20.8520.8520.8520.8520.85 Mahindra Sona Limited 1.501.501.501.501.50

(-) (-)

Mahindra Construction Company 6.076.076.076.076.07Limited (-)

Kota Farm Services Limited 0.250.250.250.250.25

(-)

Mriyalguda Farm Solution Limited 0.050.050.050.050.05

(-)

Mega One Stop Farm Services 0.540.540.540.540.54Limited (-)


(-)


(-)

Previous year’s figures are in brackets.

Rupees crores

Nature of TNature of TNature of TNature of TNature of Transactionsransactionsransactionsransactionsransactions Associate CompaniesAssociate CompaniesAssociate CompaniesAssociate CompaniesAssociate Companies AmountAmountAmountAmountAmount Joint VJoint VJoint VJoint VJoint Venturesenturesenturesenturesentures AmountAmountAmountAmountAmount

152

23.23.23.23.23. Earnings per Share :Earnings per Share :Earnings per Share :Earnings per Share :Earnings per Share :

20082008200820082008 2007

Amount used as the numerator – Net Profit (Rupees crores) ..................................................................... 1571.121571.121571.121571.121571.12 1,497.15

(Gain)/Loss on difference in exchange on bonds (Rupees crores) ............................................................... (42.97)(42.97)(42.97)(42.97)(42.97) (24.08)

Amount used as the numerator for diluted earnings per share (Rupees crores) ......................................... 1528.151528.151528.151528.151528.15 1,473.07

Weighted average number of equity shares used in computing basic earnings per share .......................... 23,86,22,36623,86,22,36623,86,22,36623,86,22,36623,86,22,366 23,66,06,170

Effect of potential ordinary (equity) shares on conversion of bonds/debentures ........................................ 1,67,57,2761,67,57,2761,67,57,2761,67,57,2761,67,57,276 1,84,52,109

Weighted average number of equity shares used in computing diluted earnings per share ....................... 25,53,79,64225,53,79,64225,53,79,64225,53,79,64225,53,79,642 25,50,58,279

Basic Earnings per share (Rs.) (Face value of Rs. 10 per share) ................................................................... 65.8465.8465.8465.8465.84 63.28

Diluted Earnings per share (Rs.) .................................................................................................................. 59.8459.8459.8459.8459.84 57.75

24.24.24.24.24. Investment in Associates :Investment in Associates :Investment in Associates :Investment in Associates :Investment in Associates :

No. of EquityNo. of EquityNo. of EquityNo. of EquityNo. of Equity % of% of% of% of% of Cost ofCost ofCost ofCost ofCost of Goodwill/ Goodwill/ Goodwill/ Goodwill/ Goodwill/ Share inShare inShare inShare inShare in CarryingCarryingCarryingCarryingCarryingshares heldshares heldshares heldshares heldshares held HoldingHoldingHoldingHoldingHolding InvestmentsInvestmentsInvestmentsInvestmentsInvestments (Capital(Capital(Capital(Capital(Capital accumulatedaccumulatedaccumulatedaccumulatedaccumulated Cost Cost Cost Cost Cost

(Equity(Equity(Equity(Equity(Equity reserve)reserve)reserve)reserve)reserve) Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Shares)Shares)Shares)Shares)Shares) ReservesReservesReservesReservesReserves

(Nos.) (Rupees crores)

Unquoted :Unquoted :Unquoted :Unquoted :Unquoted :

Owens Corning (India) Limited. ........................ 2,81,24,7942,81,24,7942,81,24,7942,81,24,7942,81,24,794 21.50%21.50%21.50%21.50%21.50% 28.1228.1228.1228.1228.12 (7.64)(7.64)(7.64)(7.64)(7.64) 19.7719.7719.7719.7719.77 47.8947.8947.8947.8947.89

2,81,24,794 21.50% 28.12 (7.64) 14.34 42.46

Mahindra Construction Company Limited ......... 9,00,0009,00,0009,00,0009,00,0009,00,000 43.83%43.83%43.83%43.83%43.83% 0.970.970.970.970.97 ----- (0.97)(0.97)(0.97)(0.97)(0.97) -----

9,00,000 43.83% 0.97 - (0.97) -

Officemartindia.com Limited. ............................ 7,499,977,499,977,499,977,499,977,499,97 50.00%50.00%50.00%50.00%50.00% 0.220.220.220.220.22 ----- (0.22)(0.22)(0.22)(0.22)(0.22) -----

7,499,97 50.00% 0.22 - (0.22) -

Rathna Bhoomi Enterprises Private Limited ....... 500500500500500 20.43%20.43%20.43%20.43%20.43% @@@@@ ----- @@@@@ -----

500 20.01% @ - @ -

Kota Farm Services Limited ................................ 2,73,4202,73,4202,73,4202,73,4202,73,420 34.79%34.79%34.79%34.79%34.79% 0.270.270.270.270.27 ----- (0.27)(0.27)(0.27)(0.27)(0.27) -----

2,73,420 34.79% 0.27 - (0.27) -

Mriyalguda Farm Solution Limited .................... 3,37,5003,37,5003,37,5003,37,5003,37,500 34.79%34.79%34.79%34.79%34.79% 0.340.340.340.340.34 ----- (0.34)(0.34)(0.34)(0.34)(0.34) -----

3,37,500 34.79% 0.34 - (0.34) -

Mega One Stop Farm Services Limited .............. 3,51,0003,51,0003,51,0003,51,0003,51,000 34.79%34.79%34.79%34.79%34.79% 0.350.350.350.350.35 0.030.030.030.030.03 (0.35)(0.35)(0.35)(0.35)(0.35) -----

3,51,000 34.79% 0.35 0.03 (0.35) -

Mahindra Renault Automotive Private Limited.

(upto 9th March, 2008) ..................................... ----- ----- ----- ----- ----- -----

5,000 50.00% 0.01 - - 0.01

TTTTTotalotalotalotalotal ............ 47.8947.8947.8947.8947.8942.47



153

Quoted :Quoted :Quoted :Quoted :Quoted :

Mahindra Composites Limited .......................... 13,41,20313,41,20313,41,20313,41,20313,41,203 30.56%30.56%30.56%30.56%30.56% 2.902.902.902.902.90 0.550.550.550.550.55 1.451.451.451.451.45 4.354.354.354.354.35

13,41,203 30.56% 2.90 0.55 1.11 4.01

Mahindra Forgings Limited(became subsidiary w.e.f. 1st April, 2007) ......... ----- ----- ----- ----- ----- -----

13,200,370 47.11% 128.52 43.72 (10.12) 118.39

Swaraj Engines Limited (w.e.f. 3rd July, 2007) ... 41,19,00041,19,00041,19,00041,19,00041,19,000 21.49%21.49%21.49%21.49%21.49% 1.631.631.631.631.63 ----- 2.702.702.702.702.70 4.334.334.334.334.33

- - - - - -

Swaraj Automotives Limited (w.e.f. 6th July, 2007) 10,59,54310,59,54310,59,54310,59,54310,59,543 35.64%35.64%35.64%35.64%35.64% 12.4512.4512.4512.4512.45 8.348.348.348.348.34 1.531.531.531.531.53 13.9813.9813.9813.9813.98

- - - - - -



25.25.25.25.25. Joint VJoint VJoint VJoint VJoint Ventures Disclosure :entures Disclosure :entures Disclosure :entures Disclosure :entures Disclosure :

Group’s Share in Joint Ventures with respect to other items :

Rupees crores

20082008200820082008 2007

a) Sales ....................................................................................................................................... 46.9546.9546.9546.9546.95 49.92

b) Excise Duty ............................................................................................................................. (5.00)(5.00)(5.00)(5.00)(5.00) (4.11)

c) Depreciation/Amortisation ...................................................................................................... (0.69)(0.69)(0.69)(0.69)(0.69) (0.60)

d) Provision for Current Tax including FBT .................................................................................. (3.37)(3.37)(3.37)(3.37)(3.37) (3.27)

e) Provision for Deferred Tax (Net) ............................................................................................. 0.030.030.030.030.03 0.13

Figures in brackets signify charge to Profit and Loss Account.

No. of EquityNo. of EquityNo. of EquityNo. of EquityNo. of Equity % of% of% of% of% of Cost ofCost ofCost ofCost ofCost of Goodwill/ Goodwill/ Goodwill/ Goodwill/ Goodwill/ Share inShare inShare inShare inShare in CarryingCarryingCarryingCarryingCarryingshares heldshares heldshares heldshares heldshares held HoldingHoldingHoldingHoldingHolding InvestmentsInvestmentsInvestmentsInvestmentsInvestments (Capital(Capital(Capital(Capital(Capital accumulatedaccumulatedaccumulatedaccumulatedaccumulated Cost Cost Cost Cost Cost

(Equity(Equity(Equity(Equity(Equity reserve)reserve)reserve)reserve)reserve) Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Profit/(Loss)/Shares)Shares)Shares)Shares)Shares) ReservesReservesReservesReservesReserves

(Nos.) (Rupees crores)

154

26.

26.

26.

26.

26.

Segm

ent

Info

rmat

ion

:Se

gmen

t In

form

atio

n :

Segm

ent

Info

rmat

ion

:Se

gmen

t In

form

atio

n :

Segm

ent

Info

rmat

ion

:

Segm

ent

Repo

rt f

or t

he y

ear

ende

d 31

st M

arch

, 20

08.

Prim

ary

Segm

ent

Dis

clos

ure

- Bu

sine

ss S

egm

ent

Prim

ary

Segm

ent

Dis

clos

ure

- Bu

sine

ss S

egm

ent

Prim

ary

Segm

ent

Dis

clos

ure

- Bu

sine

ss S

egm

ent

Prim

ary

Segm

ent

Dis

clos

ure

- Bu

sine

ss S

egm

ent

Prim

ary

Segm

ent

Dis

clos

ure

- Bu

sine

ss S

egm

ent

Rupe

es c

rore

sRu

pees

cro

res

Rupe

es c

rore

sRu

pees

cro

res

Rupe

es c

rore

s

Aut

omot

ive

Aut

omot

ive

Aut

omot

ive

Aut

omot

ive

Aut

omot

ive

FFFF F armarm

arm

arm

arm

IT S

ervi

ces

IT S

ervi

ces

IT S

ervi

ces

IT S

ervi

ces

IT S

ervi

ces

Fina

ncia

lFi

nanc

ial

Fina

ncia

lFi

nanc

ial

Fina

ncia

lTTTT T r

adin

gra

ding

radi

ngra

ding

radi

ngIn

fras

truc

ture

Infr

astr

uctu

reIn

fras

truc

ture

Infr

astr

uctu

reIn

fras

truc

ture

Hos

pita

lity

Hos

pita

lity

Hos

pita

lity

Hos

pita

lity

Hos

pita

lity

Syst

ech

Syst

ech

Syst

ech

Syst

ech

Syst

ech

Oth

ers

Oth

ers

Oth

ers

Oth

ers

Oth

ers

Elim

inat

ions

Elim

inat

ions

Elim

inat

ions

Elim

inat

ions

Elim

inat

ions

Con

solid

ated

Con

solid

ated

Con

solid

ated

Con

solid

ated

Con

solid

ated

Equi

pmen

tEq

uipm

ent

Equi

pmen

tEq

uipm

ent

Equi

pmen

tSe

rvic

esSe

rvic

esSe

rvic

esSe

rvic

esSe

rvic

esTTTT T o

tal

otal

otal

otal

otal

REV

ENU

ERE

VEN

UE

REV

ENU

ERE

VEN

UE

REV

ENU

EG

ross

Ext

erna

l Re

venu

e10

,308

.86

10,3

08.8

610

,308

.86

10,3

08.8

610

,308

.86

5,46

9.88

5,46

9.88

5,46

9.88

5,46

9.88

5,46

9.88

3,91

3.47

3,91

3.47

3,91

3.47

3,91

3.47

3,91

3.47

1,22

5.28

1,22

5.28

1,22

5.28

1,22

5.28

1,22

5.28

653.

4065

3.40

653.

4065

3.40

653.

4021

2.52

212.

5221

2.52

212.

5221

2.52

357.

6735

7.67

357.

6735

7.67

357.

673,

534.

093,

534.

093,

534.

093,

534.

093,

534.

0974

7.27

747.

2774

7.27

747.

2774

7.27

---- -26

,422

.44

26,4

22.4

426

,422

.44

26,4

22.4

426

,422

.44

7,79

8.72

4,40

1.72

3,11

7.22

839.

4656

4.67

131.

5223

2.50

1,70

8.71

571.

86-

19,3

66.3

8

Less

: E

xcis

e D

uty

on S

ales

1,78

3.11

1,78

3.11

1,78

3.11

1,78

3.11

1,78

3.11

118.

7511

8.75

118.

7511

8.75

118.

75---- -

32.8

032

.80

32.8

032

.80

32.8

0---- -

---- -20

5.49

205.

4920

5.49

205.

4920

5.49

14.6

714

.67

14.6

714

.67

14.6

7---- -

2,15

4.82

2,15

4.82

2,15

4.82

2,15

4.82

2,15

4.82

1,31

8.61

67.1

6-

24.9

2-

-12

2.54

15.2

9-

1,54

8.52

Net

Ext

erna

l Re

venu

e8,

525.

758,

525.

758,

525.

758,

525.

758,

525.

755,

351.

135,

351.

135,

351.

135,

351.

135,

351.

133,

913.

473,

913.

473,

913.

473,

913.

473,

913.

471,

225.

281,

225.

281,

225.

281,

225.

281,

225.

2862

0.60

620.

6062

0.60

620.

6062

0.60

212.

5221

2.52

212.

5221

2.52

212.

5235

7.67

357.

6735

7.67

357.

6735

7.67

3,32

8.60

3,32

8.60

3,32

8.60

3,32

8.60

3,32

8.60

732.

6073

2.60

732.

6073

2.60

732.

60---- -

24,2

67.6

224

,267

.62

24,2

67.6

224

,267

.62

24,2

67.6

26,

480.

114,

334.

563,

117.

2283

9.46

539.

7513

1.52

232.

501,

586.

1755

6.57

-17

,817

.86

Inte

r Se

gmen

t Re

venu

e4.

504.

504.

504.

504.

5024

.35

24.3

524

.35

24.3

524

.35

30.5

930

.59

30.5

930

.59

30.5

97.

027.

027.

027.

027.

0229

8.79

298.

7929

8.79

298.

7929

8.79

7.93

7.93

7.93

7.93

7.93

0.09

0.09

0.09

0.09

0.09

326.

3532

6.35

326.

3532

6.35

326.

3533

1.48

331.

4833

1.48

331.

4833

1.48

(1,0

31.1

0)(1

,031

.10)

(1,0

31.1

0)(1

,031

.10)

(1,0

31.1

0)---- -

10.2

729

.35

26.1

77.

2724

7.99

2.26

2.22

153.

8019

8.60

(677

.93)

-

TTTT T ota

l Re

venu

eot

al R

even

ueot

al R

even

ueot

al R

even

ueot

al R

even

ue8,

530.

258,

530.

258,

530.

258,

530.

258,

530.

255,

375.

485,

375.

485,

375.

485,

375.

485,

375.

483,

944.

063,

944.

063,

944.

063,

944.

063,

944.

061,

232.

301,

232.

301,

232.

301,

232.

301,

232.

3091

9.39

919.

3991

9.39

919.

3991

9.39

220.

4522

0.45

220.

4522

0.45

220.

4535

7.76

357.

7635

7.76

357.

7635

7.76

3,65

4.95

3,65

4.95

3,65

4.95

3,65

4.95

3,65

4.95

1,06

4.08

1,06

4.08

1,06

4.08

1,06

4.08

1,06

4.08

(1,0

31.1

0)(1

,031

.10)

(1,0

31.1

0)(1

,031

.10)

(1,0

31.1

0)24

,267

.62

24,2

67.6

224

,267

.62

24,2

67.6

224

,267

.62

6,49

0.38

4,36

3.91

3,14

3.39

846.

7378

7.74

133.

7823

4.72

1,73

9.97

755.

17(6

77.9

3)17

,817

.86

RESU

LRE

SUL

RESU

LRE

SUL

RESU

L TTTT TSe

gmen

t re

sult

befo

re74

5.56

745.

5674

5.56

745.

5674

5.56

607.

3660

7.36

607.

3660

7.36

607.

3680

2.25

802.

2580

2.25

802.

2580

2.25

279.

14+

279.

14+

279.

14+

279.

14+

279.

14+

89.0

289

.02

89.0

289

.02

89.0

275

.31

75.3

175

.31

75.3

175

.31

110.

8711

0.87

110.

8711

0.87

110.

8720

7.04

207.

0420

7.04

207.

0420

7.04

119.

7311

9.73

119.

7311

9.73

119.

73---- -

3,03

6.28

3,03

6.28

3,03

6.28

3,03

6.28

3,03

6.28

exce

ptio

nal

item

s65

5.99

502.

3668

6.17

207.

56+

49.2

89.

6263

.95

166.

6531

.39

-2,

372.

97

Exce

ptio

nal

item

allo

cate

d(4

.01)

(4.0

1)(4

.01)

(4.0

1)(4

.01)

(3.4

5)(3

.45)

(3.4

5)(3

.45)

(3.4

5)(4

40.1

2)(4

40.1

2)(4

40.1

2)(4

40.1

2)(4

40.1

2)---- -

---- ----- -

--- - -(2

.23)

(2.2

3)(2

.23)

(2.2

3)(2

.23)

---- ----- -

(449

.81)

(449

.81)

(449

.81)

(449

.81)

(449

.81)

to S

egm

ents

(2.9

6)(3

.43)

(524

.94)

--

--

(0.9

6)19

.27

-(5

13.0

2)

Segm

ent

resu

lt af

ter

741.

5574

1.55

741.

5574

1.55

741.

5560

3.91

603.

9160

3.91

603.

9160

3.91

362.

1336

2.13

362.

1336

2.13

362.

1327

9.14

279.

1427

9.14

279.

1427

9.14

89.0

289

.02

89.0

289

.02

89.0

275

.31

75.3

175

.31

75.3

175

.31

110.

8711

0.87

110.

8711

0.87

110.

8720

4.81

204.

8120

4.81

204.

8120

4.81

119.

7311

9.73

119.

7311

9.73

119.

73---- -

2,58

6.47

2,58

6.47

2,58

6.47

2,58

6.47

2,58

6.47

exce

ptio

nal

item

s65

3.03

498.

9316

1.23

207.

5649

.28

9.62

63.9

516

5.69

50.6

6-

1,85

9.95

Una

lloca

ble

Corp

orat

e ex

pens

es82

.39

82.3

982

.39

82.3

982

.39

(Net

of

Inco

me)

72.4

2O

pera

ting

Pro

fitO

pera

ting

Pro

fitO

pera

ting

Pro

fitO

pera

ting

Pro

fitO

pera

ting

Pro

fit2,

504.

082,

504.

082,

504.

082,

504.

082,

504.

081,

787.

53Le

ss :

Int

eres

t ex

pens

e no

t al

loca

ble

to s

egm

ents

283.

7228

3.72

283.

7228

3.72

283.

7285

.61

Add

: I

nter

est

Inco

me

not

allo

cabl

e to

seg

men

ts13

6.32

136.

3213

6.32

136.

3213

6.32

104.

77A

dd :

Exc

eptio

nal

Item

Una

lloca

ble

to s

egm

ent

147.

3114

7.31

147.

3114

7.31

147.

3139

5.71

Prof

it b

efor

e T

Prof

it b

efor

e T

Prof

it b

efor

e T

Prof

it b

efor

e T

Prof

it b

efor

e T a

xaxaxax ax2,

503.

992,

503.

992,

503.

992,

503.

992,

503.

992,

202.

40Le

ss :

Inc

ome

Taxe

s–

Curr

ent

Tax

incl

udin

g Fr

inge

Ben

efit

Tax

691.

8469

1.84

691.

8469

1.84

691.

8462

4.34

–D

efer

red

Tax

(34.

64)

(34.

64)

(34.

64)

(34.

64)

(34.

64)

(28.

63)

Prof

it f

or t

he y

ear

befo

re p

rior

yea

r ad

just

men

tsPr

ofit

for

the

yea

r be

fore

pri

or y

ear

adju

stm

ents

Prof

it f

or t

he y

ear

befo

re p

rior

yea

r ad

just

men

tsPr

ofit

for

the

yea

r be

fore

pri

or y

ear

adju

stm

ents

Prof

it f

or t

he y

ear

befo

re p

rior

yea

r ad

just

men

ts1,

846.

791,

846.

791,

846.

791,

846.

791,

846.

791,

606.

69Le

ss :

Adj

ustm

ents

per

tain

ing

to p

revi

ous

year

s2.

222.

222.

222.

222.

22(1

5.18

)

Bala

nce

of P

rofit

for

the

yea

r be

fore

Sha

re o

f Pr

ofit

of

Ass

ocia

tes

Bala

nce

of P

rofit

for

the

yea

r be

fore

Sha

re o

f Pr

ofit

of

Ass

ocia

tes

Bala

nce

of P

rofit

for

the

yea

r be

fore

Sha

re o

f Pr

ofit

of

Ass

ocia

tes

Bala

nce

of P

rofit

for

the

yea

r be

fore

Sha

re o

f Pr

ofit

of

Ass

ocia

tes

Bala

nce

of P

rofit

for

the

yea

r be

fore

Sha

re o

f Pr

ofit

of

Ass

ocia

tes

1,84

4.57

1,84

4.57

1,84

4.57

1,84

4.57

1,84

4.57

1,62

1.87

Shar

e of

Pro

fit o

f A

ssoc

iate

s10

.00

10.0

010

.00

10.0

010

.00

16.3

8

Prof

it fo

r th

e ye

ar b

efor

e M

inor

ity I

nter

ests

1,85

4.57

1,85

4.57

1,85

4.57

1,85

4.57

1,85

4.57

1,63

8.25

++++ + I

n lin

e w

ith A

ccou

ntin

g St

anda

rd 1

7 on

Seg

men

t Re

port

ing,

res

ults

of

“Fin

anci

al S

ervi

ces

Segm

ent”

are

com

pute

d af

ter

char

ge o

f in

tere

st c

ost

as s

egm

ent

expe

nse.

Not

e :

Segm

ent

Reve

nue

and

Segm

ent

Resu

lt fo

r F

2007

in

resp

ect

of I

nfra

stru

ctur

e Se

gmen

t is

for

a p

erio

d of

1st A

pril,

200

6 to

10th

Oct

ober

, 20

06.


155

Segm

ent

Info

rmat

ion

(Con

td.)

:Se

gmen

t In

form

atio

n (C

ontd

.) :

Segm

ent

Info

rmat

ion

(Con

td.)

:Se

gmen

t In

form

atio

n (C

ontd

.) :

Segm

ent

Info

rmat

ion

(Con

td.)

:

Rupe

es c

rore

sRu

pees

cro

res

Rupe

es c

rore

sRu

pees

cro

res

Rupe

es c

rore

s

Aut

omot

ive

Aut

omot

ive

Aut

omot

ive

Aut

omot

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156

Secondary Segment Disclosure - Geographical SegmentSecondary Segment Disclosure - Geographical SegmentSecondary Segment Disclosure - Geographical SegmentSecondary Segment Disclosure - Geographical SegmentSecondary Segment Disclosure - Geographical Segment

Rupees crores

DomesticDomesticDomesticDomesticDomestic OverseasOverseasOverseasOverseasOverseas TTTTTotalotalotalotalotal

Revenue From External Customers .............................. 18,761.0318,761.0318,761.0318,761.0318,761.03 7,661.417,661.417,661.417,661.417,661.41 26,422.4426,422.4426,422.4426,422.4426,422.4414,047.72 5,318.66 19,366.38

Segment Assets ........................................................... 19,649.7019,649.7019,649.7019,649.7019,649.70 2,060.832,060.832,060.832,060.832,060.83 21,710.5321,710.5321,710.5321,710.5321,710.5314,967.54 1,795.79 16,763.33

Capital Expenditure ..................................................... 1,921.021,921.021,921.021,921.021,921.02 236.57236.57236.57236.57236.57 2,157.592,157.592,157.592,157.592,157.592,143.29 46.47 2,189.76

Notes :

1. Business Segments

The Group has considered business segments as the primary segment for disclosure.

The segments have been identified taking into account the organisational structure as well as the differing risks and returns of these segments.

Automotive Segment comprises of sales of automobiles, spare parts and related services.

Farm Equipment Segment comprises of sales of Tractors, spare parts and related services.

IT Services comprises of services rendered for IT and Telecom.

Financial Services comprise of services relating to financing, leasing and hire purchase of automobiles and tractors.

Infrastructure comprise of operating of Commercial complexes, Project management and development.

Hospitality comprises of sale of Timeshare.

Systech comprises of Automotive components and other related products and services.

Others comprise of Investment, Transport solutions group etc.

2. Secondary Segments

The geographical segments are considered for disclosure as secondary segment.

Domestic segment includes sales to customers located in India and service income accrued in India.

Overseas segment includes sales and services rendered to customers located outside India.

Segment Revenue comprises of :

Rupees crores

20082008200820082008 2007

Sales .................................................................................................................................. 19,774.3719,774.3719,774.3719,774.3719,774.37 14,439.52

Income from Services rendered ......................................................................................... 4,759.474,759.474,759.474,759.474,759.47 3,689.34

Income from long term contracts ..................................................................................... 166.69166.69166.69166.69166.69 135.81

Income from project management ................................................................................... 0.380.380.380.380.38 2.02

Hire purchase and lease income ....................................................................................... 38.3938.3938.3938.3938.39 54.23

Income from Loan, Retained Interest in securitised Asset & Securitisation ....................... 1,198.811,198.811,198.811,198.811,198.81 821.06

Other allocable income * .................................................................................................. 484.33484.33484.33484.33484.33 224.40

TTTTTotalotalotalotalotal........ 26,422.4426,422.4426,422.4426,422.4426,422.44 19,366.38


157

Rupees crores

20082008200820082008 2007

*Other allocable income includes :

Interest Income ................................................................................................................. 13.2513.2513.2513.2513.25 5.22

Scrap Sales ........................................................................................................................ 110.76110.76110.76110.76110.76 82.67

Commission ...................................................................................................................... 14.9114.9114.9114.9114.91 7.42

Dividend ............................................................................................................................ 6.226.226.226.226.22 6.73

Profit on Sale of Long Term Investments .......................................................................... 132.77132.77132.77132.77132.77 7.27

Others ............................................................................................................................... 206.42206.42206.42206.42206.42 115.09

TTTTTotalotalotalotalotal........ 484.33484.33484.33484.33484.33 224.40

27.27.27.27.27. Previous year’s figures have been regrouped/restated wherever necessary.

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160

NotesNotesNotesNotesNotes

Awards 2007-08CorporateCorporateCorporateCorporateCorporate

• Mahindra was ranked among the top 10 Indian companiesby the US based Reputation Institute in its ‘Global 200: TheWorld’s Best Corporate Reputations’ list

• Mr. Keshub Mahindra, Chairman received the Ernst & YoungEntrepreneur of the Year ‘Lifetime Achievement’ award

• Mr. Anand Mahindra, Vice-Chairman & Managing Directorreceived the Business India Businessman of the Year award

• Mr. Arun Nanda, Executive Director & President received theChevalier de la Legion d’Honneur from the President of theFrench Republic

• Mr. Bharat Doshi, Executive Director & Group CFO, receivedthe CFO of the Year award and the Best Performing CFOaward in the Auto, Aviation and Auto Ancillaries Sector atthe HSBC CNBC CFO Awards

• Mr. Rajeev Dubey, President, HR & Corporate Services andMember of the Group Management Board, Mahindra &Mahindra received ‘The Outstanding HR Professional of theYear’ award at the Asia Pacific HRM Congress

• The company was awarded the ‘Excellence in Innovation’award at the Indira International Innovation Summit (3i’sSummit)

• The company was awarded the Bombay Chamber GoodCorporate Citizen Award

• The company was awarded the SAP ACE (Awards forCustomer Excellence) by SAP India in the category ‘BestAutomotive Sector Implementation – Large Enterprises’ forSAP Business Warehouse (BW) Implementation along withManagement Cockpit

HR Awards presented at the Asia PHR Awards presented at the Asia PHR Awards presented at the Asia PHR Awards presented at the Asia PHR Awards presented at the Asia Pacific HRM Congressacific HRM Congressacific HRM Congressacific HRM Congressacific HRM Congress

• Employer Brand of the Year

• Award for Best HR Strategy in line with Business

• Award for Talent Management

• Award for Continuous Innovation in HR Strategy at Work

• Award for Excellence in Training

• Award for Managing Health at Work

• Award for Global HR Strategy

• Award for Excellence in HR through Technology

• Award for Innovative Retention Strategy

Corporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social Responsibility

• Businessworld-FICCI-SEDF Corporate Social ResponsibilityAward

• Pegasus Corporate Social Responsibility Gold Award for theMahindra Lifeline Express and the Nanhi Kali programme

• BSE Business for Social Responsibility Award for BestCorporate Social Responsibility Practice

• Auto Monitor CSR Award for Mahindra Lifeline Express

SustainabilitySustainabilitySustainabilitySustainabilitySustainability

• Zaheerabad and Nashik plants won the first and secondprize respectively in the Automobile Industry category atthe National Energy Conservation Awards

Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

• ACL Impact Award – Mahindra’s Corporate ManagementServices (winners from Asia Pacific Region)

Automotive SectorAutomotive SectorAutomotive SectorAutomotive SectorAutomotive Sector

• Golden Peacock Award to the All New Mahindra Scorpiofor Innovative Product / Services in the Automobile segment

• Golden Peacock Eco-Innovation Award for the Bijlee, an allelectric zero emissions vehicle

• ‘Car of the Year from HT Cars & Bikes (supplement ofHindustan Times) to Mahindra Renault Logan

• ‘Business Standard Motoring Jury Award’ to MahindraRenault Logan

• ‘Best Entry Midsize Car in Initial Quality’ to Mahindra RenaultLogan - J.D. Power Asia Pacific India Initial Quality Study

• J.D. Power Asia Pacific Indian Automotive Performance,Execution and Layout Study (APEAL) to Mahindra RenaultLogan

• ‘Midsize Car of the Year Award’ to Mahindra Renault Logan- NDTV Profit Car India & Bike India Awards

• ‘Value for Money Car’ to Mahindra Renault Logan - TopGear

• TNS ‘Voice of the Customer Award’ for Mahindra Scorpioand Mahindra Renault Logan

• ‘Indigenous Design of the Year Award’ to Mahindra AXE -Annual Overdrive Awards

• Engineering Export Promotion Council All India Export Awardin the category ‘Star Performer Award: Motor Vehicles: LargeEnterprises’

FFFFFarm Equipment Sectorarm Equipment Sectorarm Equipment Sectorarm Equipment Sectorarm Equipment Sector

• Japan Quality Medal

• Golden Peacock National Quality Award for Excellence inQuality

• Golden Peacock Occupational Health & Safety Award forExcellence in Health and Safety Practices

• Indian Innovation Award for outstanding innovation in‘Reducing Time To Market In New Product Development ByBringing Field To Lab’

• Frost & Sullivan ‘Voice of Customer’ award to MahindraPowerol for the most preferred Genset Brand in the telecomsegment

• Amity Corporate Excellence Award to Punjab Tractors Limited(PTL) at Inbush, an international business summit organizedby Amity International Business School

• Greentech Safety Silver Award to Punjab Tractors Limited(PTL) for outstanding achievement in safety management,awarded by the Greentech Foundation

• All India Award for Export Excellence from the EngineeringExport Promotion Council (EEPC) for outstanding contributionto engineering exports in the field of agricultural machineryIn

fom

edia

Ind

ia L

imite

d

Registered Office:

Mahindra & Mahindra Ltd.

Gateway Building, Apollo Bunder, Mumbai 400 001

www.mahindra.com

A

PR

OD

UC

T •

info

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Mahindra cover 20.06.08:Cover - MarketScreener.com€¦ · MAHINDRA & MAHINDRA LIMITED COMMITTEES OF THE BOARD Audit Committee Deepak S. Parekh Chairman Nadir B. Godrej ... GROUP