Mahindra Lifespace Developers

The Directors present their Ninth report together with the audited
 accounts of your Company for the year ended 31st March, 2003.
 Financial HIGHLIGHTS
 
                                                         (Rs. lakh)
                                                   2008           2007
 
 Operating Income                                 17,212        15,552
 Other Income                                      4,784           773
 Total Income                                     21,996        16,325
 Profit Before Depreciation, 
 Interest and Taxation                             8,584         2,801
 Less : Depreciation                                 197           224
 Profit Before Interest and Taxation               8,387         2,577
 Less : Interest                                       9           472
 Profit Before Taxation                            8,378         2,105 
 Less : Provision for Taxation Current Tax         1,359           434
 Deferred Tax (including MAT Credit)                 146            22
 Profit for the year After Tax                     6,873         1,649
 Less: Provision for tax for earlier year            334           232
 Profit After Tax                                  6,539         1,417
 Add : Balance of Profit for earlier years         2,091         1,968
 Amount available for appropriation                8,630         3,385
 Less : Proposed Dividend (including tax 
 on distributed profits)                           1,316           824
 Less : Transfer to General Reserve                  654            71
 Less : Transfer to Capital Redemption Reserve         -           399
 Balance carried forward                           6,660         2,091
 
 Dividend
 
 Your Directors have recommended a dividend of 25 per cent on the
 paid-up equity shares of face value of Rs.10 per share of the Company
 for the year 2007-08. The Directors have also recommended a dividend on
 1,000,000 - 10.50 per cent Non- Cumulative Redeemable Preference shares
 of Rs.100 each.  The total dividend payment (including tax on
 distributed profits) amounts to Rs. 1,316 lakh, and shall be paid out
 of profits for the current year.
 
 Operations
 
 India continues to be one of the fastest growing economies in the world
 with a Compounded Annual Growth Rate (CAGR) of 8.8 per cent during the
 last five years. The performance of the construction sector, which grew
 at a CAGR of 13.2 per cent during the last four years, has been even
 more impressive. The last few years have witnessed enormous capital
 inflows by way of IPOs, FDI and Private Equity into Indian real estate
 sector, which increased the competition from both the organised and
 unorganised segment. This had resulted in an unprecedented boom in the
 sector.
 
 However, the situation has somewhat changed during 2007- 08, especially
 in the latter half. First, the global economic outlook is softening
 primarily driven by fears of an impending slowdown in the US. Even as
 growth performance continues to be impressive in India, there are
 visible signs of marginal slowdown in economic activity, especially in
 the manufacturing and construction sector. Second, with the tightening
 of monetary policy to rein in inflation, an increase in the interest
 rates for home loans has had an adverse effect on demand for real
 estate. Moreover, there has been a severe scarcity of skilled labour
 and rising input costs such as steel and cement which have kept the
 margins under pressure.
 
 Despite the marginal softening in the macro-economic outlook for the
 sector, your-Company performed well during the year under review.
 During the year, the handing over of the possession started at the
 residential project namely the Woods, at Wakad, near Pune. The last
 phase of the prestigious project Central Park in Gurgaon, NCR was
 also completed during the year. The construction of Sylvan County at
 Mahindra World City, Chennai and of first phase of Mahind-a Eminente,
 Mumbai is at an advanced stage and is expected to be completed during
 the current year.
 
 In 2007-08, the Company forged ahead by obtaining necessary approvals
 for its projects. This enabled full-fledged launch of Mahindra
 Splendor in eastern suburbs of Mumbai, Mahindra Royale near Pimpri,
 Pune. During 2007-08, your Company sold the commercial premises at
 Great Eastern Plaza, Banglore and at World Trade Center, Mumbai and its
 investment in Knight Frank (India) Private Limited.
 
 In 2008-09, your Company is planning launch of second phase of
 Mahindra Eminente in western suburb of Mumbai, a commercial building
 in central suburb of Mumbai, a residential project at Palam Vihar, near
 Delhi, Mahindra Chloris at Faridabad, Haryana and a residential
 project each at Nagpur and Mahindra World City, New Chennai in separate
 joint ventures.
 
 Your Company is the first residential developer in the country to apply
 for LEED (Leadership in Energy and Environmental Design) - CS (Core &
 Shell) pre-certification for Green Buildings under the guideline of
 USGBC (United States Green Building Concept). Four of your projects
 namely Mahindra Eminente, Mumbai, Mahindra Splendour, Mumbai,
 Mahindra Royale, Pune, Mahindra Chloris, Faridabad are now
 registered for the prestigious LEED certification for Green Buildings.
 Your Company has signed a MoU with CM - IGBC (Confederation of Indian
 Industry-Indian Green Building Council) for feasibility study of all
 on-going and future Green Buildings of your Company.
 
 In the integrated infrastructure development segment, the land
 acquisition efforts for a 3000 acre project at Mahindra World City,
 Jaipur continued during the year. The acquisition process is
 progressing well and the Company has already acquired about 2500 acres
 of land and the Company hopes to acquire the balance 500 acres during
 2008-09.
 
 Your Company is planning to set up an Integrated Township spread over
 3000 acres in Maharasthra.
 
 During 2007-08, the Company also made its first international foray. A
 MoU was signed in Colombo, between the Board of Investments (BOI) of
 Sri Lanka, and your Company for developing a Special Economic Zone
 (SEZ) in Sri Lanka at Katunayeke. The SEZ will stretch over 52 acres,
 for a mixed- use development, including an IT Park having a strategic
 advantage of being located opposite the Bandarnayake International
 Airport. This SEZ would bring about development of around 3 million
 square feet of built space, and is expected to generate over 35,000
 jobs in the country.
 
 The Company through its subsidiary company Mahindra Residential
 Developers Limited has entered into a joint venture agreement for
 residential development with a private equity real estate fund, ARCH
 Capital Asian Partners, L.P., managed by ARCH Capital Management
 Company Limited, an affiliate of Ayala Land, the largest and most
 trusted real estate brand in Philippines, and Ayala Corporation. The
 joint venture will undertake the development of a gated residential
 community together with support, retail and recreational facilities in
 approximately 55 acres within Mahindra Lifespaces pioneering
 
 Special Economic Zone (SEZ) at Mahindra World City, New Chennai.
 
 The total income of your Company increased by 35 per cent from Rs.
 16,325 lakh in 2006-07 to Rs. 21,996 lakh in 2007-08.  Profit Before
 Tax (PBT) grew by 298 per cent from Rs. 2,105 lakh in 2006-07 to Rs.
 8,378 lakh in 2007-08, whereas Profit After Tax (PAT) grew by 361 per
 cent from Rs. 1,417 lakh to Rs. 6,539 lakh during the same period. The
 Company also received dividend income of Rs. 1,530 lakh from its
 subsidiary Mahindra World City Developers Limited.
 
 The consolidated total income of your Company increased from Rs. 22,399
 lakh in 2006-07 to Rs.26,460 lakh in 2007-08.  The consolidated Profit
 Before Tax (PBT) grew by 240 per cent from Rs. 2,723 lakh in 2006-07 to
 Rs. 9,265 lakh in 2007- 08, whereas consolidated Profit After Tax (PAT)
 grew by 271 per cent from Rs. 1,790 lakh to Rs. 6,641 lakh during the
 same period.
 
 Awards and Recognition
 
 Your Company received following awards in 2007-08:
 
 * American Society of Landscape Architects 2008 - Honour Award for
 Mahindra World City Master Plan (Residential Community Plan) and Award
 of Excellence in the Planning and Analysis Category (Mahindra World
 City Community Development Plan).
 
 * Economic Times Award for Best Employer Branding 2008.
 
 * AESA Gold Award, 2008 for The Woods, Wakad, Pune, The Best Project in
 Group Housing Category in Pune.
 
 * Accommodation Times Award, 2007 for The Woods, Wakad, Pune, Project
 of the Year, Pune.
 
 * First Prize from Pimpri Chinchwad Municipal Corporation, for Tree
 Plantation, Horticulture at The Woods, Wakad, Pune.
 
 * Golden Peacock National Quality Award- 2007 for Mahindra Royale
 Project, Pune.
 
 * CNBC Awaaz CRISIL Real Estate Awards 2007 for Most Transparent
 System.
 
 * Associations of Business Communicators of India awarded Bronze for
 Mahindra Eminente for the Best Multi Media CD ROM 2007.
 
 * Associations of Business Communicators of India awarded Silver to
 Sylvan County for Web Communication - Promotion of Micro Sites - 2007.
 
 * Maharashtra Chamber of Housing Industry- Property 2007 - Winner of
 Excellence in Stall Design.
 
 Capital
 
 On 4th August, 2006, the Company had allotted 3,780,000 warrants to its
 promoters convertible, at the option of the promoters within 18 months,
 into equal numbers of equity shares at a price of Rs.526 per share. The
 promoters on 30th March, 2007 and on 31st January, 2008 exercised their
 option to convert 2,919,000 and 861,000 warrants respectively into
 equity shares.
 
 As a result, the promoters shareholding in the Company, which was at
 50.03 per cent as on 31st March, 2007, has gone up to 51.08 per cent.
 Your Company continues to be a subsidiary company of Mahindra &
 Mahindra Limited.
 
 As a result of the conversion of 861,000 warrants into equity shares,
 there has been an increase of Rs. 4,076 lakh (90% of the issue price
 received during the current year, 10% being already received in the
 previous year) in the net worth of your Company. The part of the
 proceeds from the QIP issue and conversion of warrants were used
 inter-alia for re-payment of working capital facilities, pre-payment /
 re-payment of debt, QIP issue expenses, land purchases, real estate
 projects and investment in subsidiary companies for development of
 SEZs, and industrial townships. The Company has temporarily invested
 balance funds in credit worthy instruments, including money market,
 mutual funds and deposits with banks.
 
 The Shareholders at the 7th AGM had approved and authorised the
 Remuneration Committee to formulate and implement an Employee Stock
 Option Scheme for the benefit of the employees and Directors of the
 Company and of its holding and subsidiary companies. In accordance with
 the scheme and the authority conferred on it, the Remuneration
 Committee on 25th April, 2008 approved grant of 678,359 Stock Options
 at an exercise price of Rs. 428 per share. The Options granted shall
 vest in four equal installments of 25% each. No portion of these
 Options vested may be exercised after a period of five years from the
 respective date of each vesting.
 
 Change of Name
 
 At the 8th Annual General Meeting the change of name of the Company
 from Mahindra Gesco Developers Limited, to Mahindra Lifespace
 Developers Limited was approved.  Pursuant to the application of the
 Company, the Ministry of Corporate Affairs has on 25th October, 2007
 issued fresh Certificate of Incorporation approving the change of name
 of the Company to Mahindra Lifespace Developers Limited.
 
 Subsidiary Companies
 
 Mahindra World City Developers Limited (MWCDL) successfully implemented
 Indias first private sector SEZ near Chennai. The three
 sector-specific SEZs cater to three industry sectors namely IT
 (services and manufacturing), Apparel & Fashion Accessories, and Auto
 Ancillaries. The balance area in Mahindra World City is Domestic Tariff
 Area.
 
 Mahindra Integrated Township Limited (MITL), is engaged as a
 co-developer in developing an integrated township at Mahindra World
 City, Chennai.
 
 Mahindra World City (Jaipur) Limited (MWCJL), is developing a
 multi-product SEZ near Jaipur spread over approximately 3000 acres of
 land of which approximately 500 acres will be Domestic Tariff Area.
 During the year, the Company also signed MoUs with leading companies
 for setting up their operations in the IT/ITES, handicraft, light
 engineering and auto component zones in the SEZ. In the first stage of
 the project, the Company has already started development of the IT-SEZ.
 
 Mahindra World City (Maharashtra) Limited (MWCML), will be developing a
 multi-product SEZ at Karla, near Pune. During the year the company
 formalised its joint venture terms with Maharashtra Industrial
 Development Corporation (MIDC), a Government of Maharashtra
 undertaking. The land acquisition for this SEZ has not yet started.
 
 Mahindra Infrastructure Developers Limited (MIDL), is an equity
 participant in the project company namely, New Tirupur Area Development
 Corporation Limited (NTADCL) implementing the Tirupur Water Supply and
 Sewerage project.  It is a 50-50 joint venture with M/s. United
 Utilities International Limited. The design and construction phase of
 the 30 year Build, Own, Operate and Transfer (BOOT) concession
 project is complete and now the project is supplying high quality water
 to the consumers. The project also envisages setting up a sewage
 treatment plant of 15 million litres per day (MLD) capacity, which is
 in the construction stage.
 
 Mahindra Technology Park Limited (MTPL) was incorporated on 16th
 August, 2007. This company will be developing an Integrated Township
 stretching over approximately 3000 acres of land near Pune. Subject to
 requisite approvals the name of this company is proposed to be changed
 to Mahindra Knowledge City Limited.
 
 Mahindra Residential Developers Limited (MRDL), was incorporated on 1st
 February, 2008. MRDL has become a subsidiary, of MITL and consequently
 the subsidiary of your Company with effect from 5th February, 2008. A
 joint venture agreement for residential development was executed
 between MRDL and a private equity real estate fund, ARCH Capital Asian
 Partners, L.P., managed by ARCH Capital Management Company Limited, an
 affiliate of Ayala Land, the largest and most trusted real estate brand
 in Philippines, and Ayala Corporation. The joint venture will undertake
 the development of a gated residential community together with support,
 retail and recreational facilities in approximately 55 acres within
 Mahindra Lifespaces pioneering Special Economic Zone (SEZ) at Mahindra
 World City, New Chennai.
 
 The Statement pursuant to Section 212 of the Companies Act, 1956,
 containing details of the Companys subsidiaries, Mahindra World City
 Developers Limited, Mahindra Integrated Township Limited, Mahindra
 World City (Jaipur) Limited, Mahindra World City (Maharashtra) Limited,
 Mahindra Infrastructure Developers Limited, Mahindra Technology Park
 Limited and Mahindra Residential Developers Limited is attached. The
 consolidated financial statements of the Company prepared in accordance
 with Accounting Standard 21 prescribed by The Institute of Chartered
 Accountants of India, form part of the Annual Report and Accounts. Your
 Company has received approval from the Central Government granting
 exemption from attaching the copy of the Balance Sheet, Profit & Loss
 account, Report of Board of Directors, Report of the Auditors of its
 subsidiary companies namely, Mahindra World City Developers Limited,
 Mahindra Integrated Township Limited, Mahindra World City (Jaipur)
 Limited,
 
 Mahindra World City (Maharashtra) Limited, Mahindra Infrastructure
 Developers Limited, Mahindra Technology Park Limited and Mahindra
 Residential Developers Limited with the Balance Sheet of the Company.
 The Company Secretary will make these documents available upon receipt
 of a request from any member of the Company interested in obtaining the
 same. The summary of financial performance of the subsidiaries has been
 separately furnished forming part of the Annual Report. These documents
 will also be available for inspection at the registered office of your
 Company and the registered offices of the respective subsidiary
 companies during working hours up to the date of the Annual General
 Meeting.
 
 Management Discussion and Analysis Report
 
 The Management Discussion and Analysis Report, which gives a detailed
 account of operations of your Company forms a part of this Annual
 Report.
 
 Corporate Governance
 
 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 is annexed to this report.
 
 Corporate Social Responsibility (CSR)
 
 As a socially responsible citizen, the Mahindra Group has contributed
 not only to the economic well being of the communities it interacts
 with, but has also enhanced their social well being. Since its
 inception, the Mahindra Group has always been engaged in activities,
 which add value to the community around it.
 
 As a part of its commitment to CSR initiatives, your Company, during
 the year, through Mahindra Foundation — Central CSR fund, made
 available medical assistance, education assistance and awareness and
 education on family planning to economically disadvantaged and socially
 weaker sections of the society.
 
 During the year, your Company sponsored participation of children and
 staff of Committed Community Development Trust Shelter for children
 at the Mumbai Marathon. Your Company conducted health check-up camps
 for porters at Bandra and Mumbai Central Railway Stations, for workers
 at Mahindra Royale site at Pimpri, Pune, and for house keeping and
 security staff at Mahindra Towers, Delhi. A separate polio camp was
 conducted for children of workers at Mahindra Royale site at Pimpri,
 Pune. Your Company participated in Mahindra Hariyali — a project for
 Tree Plantation at MHASKAL-Titwala, organised job oriented training
 for 10 tribal girls and undertook repairs of the children section
 building of Asha Sadan, a rescue home run by Maharashtra State
 Womens Council.
 
 Directors
 
 Mr. Anil Harish, Mr. Anand G. Mahindra and Mr. Uday Y.  Phadke retire
 by rotation and being eligible offer themselves for re-appointment.
 None of the retiring directors, either on their own or for any other
 person on a beneficial basis, hold any share in the Company.
 
 Your Directors recommend their appointment.
 
 Very recently Mr. Arun Nanda, Vice-Chairman of your Company has been
 awarded with Chevalier de la Legion dHonneur (Knight of the Legion
 of Honour) by the President of the French Republic, Mr. Nicolas
 Sarkozy. It is the Frances highest decoration and was established by
 Napoleon Bonaparte, First Consul of the First Republic, on May 19,
 1802. This distinction comes as a recognition of his remarkable career
 in the business community in Mumbai, and for his performance as
 President of the Indo-French Chamber of Commerce and Industry and the
 efficiency he has restored in this association.
 
 Directors 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.
 
 Auditors
 
 M/s. Kalyaniwalla & Mistry, Chartered Accountants and M/s.  B. K. Khare
 & Co., Chartered Accountants, retire as joint auditors at the
 forthcoming Annual General Meeting. The members will be required to
 appoint auditors for the current year and fix their remuneration.
 
 As required under the provisions of Section 224 of the Companies Act,
 1956, the Company has received written certificates 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.
 
 Deposits and Loans/Advances
 
 Your Company has not accepted any deposits from the public or its
 employees during the year under review. The details of loans/advances,
 which are required to be disclosed in the annual accounts of the
 Company pursuant to Clause 32 of the Listing Agreement with the
 Company, are annexed.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo
 
 In view of the nature of activities which are being carried on by the
 Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988, concerning conservation
 of energy and technology absorption respectively, are not applicable to
 the Company.
 
 Details of foreign exchange earnings and outgo during the year under
 review are furnished in the Notes to Accounts.
 
 Particulars of Employees as required under Section 217(2A) of the
 Companies Act, 1956 and Rules made thereunder
 
 The Company had 10 employees who were in receipt of remuneration of not
 less than Rs. 2,400,000 during the year ended 31st March, 2008 or not
 less than Rs.200,000 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 being sent to the
 shareholders does not include this Annexure.  Any shareholder
 interested in obtaining a copy of the Annexure may write to the Company
 Secretary at the Registered Office of the Company.
 
 Acknowledgment
 
 The Directors would like to thank all shareholders, customers, bankers,
 contractors, suppliers and associates of you Company for the support
 received from them during the year, The Directors would also like to
 place on record their appreciation of the dedicated efforts put in by
 the employees of the Company.
 
                                       For and on behalf of the Board
 
                                                 Anand G. Mahindra
                                                      Chairman
 
 Mumbai, 25th April, 2008