Dear Shareholder,
 
 The debate continues all over the world as to what is the social
 responsibility of Business. Corporations are redefining themselves
 seeking new identities. No one has a clear answer since societies
 spread all over the world have different traditions and culture and
 their needs vary from region to region. There cannot be one model which
 can suit all societies. Business therefore has to be sensitive enough
 to perceive the needs of the society in which they operate, and fashion
 their strategy and objectives to meet them.
 
 Indian business has always worked in tandem with the nation's needs and
 has been a part of the larger social fabric of the nation. During the
 freedom struggle, Indian business participated whole-heartedly in the
 political revolution. In the last decade it has been in the vanguard of
 the economic revolution. In fact, the growth of Indian business has
 been a crucial component of the revolution of rising aspirations that
 we are witnessing all around us. And philanthropy has always been a
 part of the Indian business tradition.
 
 Corporate Social Responsibility has been basic to our philosophy at the
 Mahindra Group since our birth in 1945. It has been an intense but
 deliberately low profile activity based on the belief that social
 responsibility is a privilege and not a portal for publicity. Today,
 there is a clarion call for business to lend a hand to tackle the
 social challenges that are being thrown into relief because of our
 increasing prosperity.
 
 It is our belief and conviction that India's recent spectacular growth
 provides us with an opportunity to redress some of the weaknesses that
 exist in our social fabric. One cannot have a large section of a
 population denied even the basic amenities like water, housing, health
 care and education. This is not an acceptable situation. We are
 therefore convinced and believe that the weaker sections of our society
 need help and support. We feel that the route to addressing their
 problems is through education and training. We need to impart skills
 which make it possible for them to be employed.
 
 The focus of our CSR therefore is on appropriate education, vocational
 education and livelihood training for the economically and socially
 disadvantaged, primary education for the girl child and higher
 education for those who merit it.
 
 We plan on setting up Mahindra Pride Schools that will provide youth
 from socially disadvantaged sections of society with training to enable
 them to gain employment based on their skills. Studies are currently on
 to decide the locations of these schools. Concurrently, work has begun
 on curriculum development for the courses that will be offered. Courses
 will be carefully designed based on the requirements of industry, in
 terms of manpower and skills. Sunrise and booming sectors with growth
 potential and shortage of skilled manpower will be targeted.  We hope
 this will lead to economic and social empowerment for many young people
 who are, today, disadvantaged.
 
 We will also support six government schools in Mumbai. The aim is to
 improve the overall quality of education in these schools and to
 achieve improved learning outcomes by working with teachers, children
 and the community. Again, the main beneficiaries will be the children
 attending these schools.
 
 In India only 3 girls out of every 10 who enroll in Std. I go on to
 complete Std.  X. To make a dent in this problem, the Group supports
 the education of 6,000 disadvantaged girl children through the Nanhi
 Kali project of the K. C. Mahindra Education Trust. These girls belong
 to urban slums, backward and tribal areas in rural India, where
 education is not a priority for girls. Through the Nanhi Kali project
 they will not only receive education, but also get direct support in
 the form of uniforms, clothes, stationery, etc. thus removing some of
 the barriers to their completing school.
 
 We are also doubling the number of Mahindra All India Talent
 Scholarships from 300 to 600. These scholarships are given to students
 who wish to pursue job-oriented diploma courses in recognized
 Government Polytechnics, enabling them to qualify for employment.
 Scholarships are given to economically disadvantaged and socially
 weaker strata in both rural and urban India.
 
 Deafness is another kind of disadvantage that is rarely acknowledged in
 our society. As a special gift to the hearing impaired, the Group will
 donate 60 Cochlear Implants over a 3-year period to beneficiaries below
 the age of 5 years. With training, this will enable 60 profoundly deaf
 children to lead a normal life and realise their full potential. Each
 Cochlear Implant costs approximately Rs. 5 lacs. So far 7 children, all
 from the lower socio-economic strata, have received the implant.
 
 Our employees believe that social responsibility does not end with the
 giving of money. It is equally important to give of our time, and of
 ourselves. The Group has launched a unique ESOPs (Employee Social
 Options) Plan, through which its 24,000 strong workforce can choose
 from a menu of social options, and participate in CSR activities by
 volunteering their time. Through this plan, on any given day, Mahindra
 employees somewhere in the country will be contributing directly to
 society.
 
 In order to ensure that sufficient funds are available for us to
 undertake this task in a modest manner, we as a Group have committed
 that one percent of our Profits after Tax will be available on a
 continuing basis to support this CSR initiative largely to benefit the
 socially and economically disadvantaged.
 
 I shall be reporting to you on behalf of the Group from time to time.
 
 Regards,
 Yours sincerely,
 
 Keshub Mahindra.
 Chairman