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Mahindra and Mahindra
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Download Annual Report PDF Format 2013 | 2012 | 2011
Directors Report Year End : Mar '13    Mar 12
Dear Shareholders
 
 The Directors present their Report together with the audited
 accounts of your Company for the year ended 31st March 2013.
 
 Financial Highlights
 
                                                 (Rs. in crores)
 
                                                 2013        2012
 
 Gross Income                                  43,962      34,820
 
 Less: Excise Duty on Sales                     2,972       2,501
 
 Net Income                                    40,990      32,319 
 
 Profit before Depreciation, Finance
 Gosts, Exceptional item and Taxation           5,258       4,237
 
 Less: Depreciation/Amortisation                  711         576 
 
 Profit before Finance Costs,
 Exceptional item and Taxation                  4,547       3,661
 
 Less: Finance Costs                              191         163 
 
 Profit before Exceptional item and Taxation    4,356       3,498
 
 Add: Exceptional item                             91         108
 
 Profit before Taxation                         4,447       3,606 
 
 Less: Provision for Tax - Current Tax
 (including MAT credit entitlement)               933         538 
 
 Less: Provision for Tax - Deferred Tax (Net)     161         189
 
 Profit for the year                            3,353       2,879
 
 Balance of profit for earlier years            7,905       6,209 
 
 Less: Transfer to Debenture
 
 Redemption Reserve                                15          14
 
 Profits available for appropriation           11,243       9,074
 
 Less: General Reserve                            400         300
 
 Proposed Dividends                               798         768
 
 Income-tax on Proposed Dividend                   93         101
 
 Balance carried forward                        9,952       7,905
 
 The Indian economy performed poorly in the Financial Year 2012-13.
 Faced with economic turbulence abroad and an unsupportive policy
 environment at home, industrial activity slowed steadily through the
 year, critical infrastructural projects stalled and private corporate
 investments lost much of their dynamism. A weak south-west monsoon
 added further stress.  Food prices shot up, keeping inflation and
 interest rates high through most of the year, while rural incomes lost
 momentum.  Consumer demand, as a result, slowed sharply, impacting
 business performance and profitability across the board. The country''s
 current account deficit widened significantly, putting severe pressure
 on the rupee. At the same time, with domestic economic activity
 slowing, Government revenues lost buoyancy, worsening the already weak
 state of Government finances.
 
 With the economy under severe pressure and rating agencies threatening
 a downgrade, the Government finally swung into action in the second
 half of the year, announcing a series of critical reforms. These
 measures have, undoubtedly, improved the extant economic environment in
 the country but deeper structural and administrative reforms are needed
 for the economy to regain momentum and fully realise its long term
 potential.
 
 Financial Performance
 
 Against the backdrop of this challenging situation, the Automotive and
 Farm Divisions of your Company have shown good performance during the
 year, reflecting substantial growth in the net income of the Company by
 26.8% from Rs. 32,319 crores in the previous year to Rs. 40,990 crores
 in the year under review.
 
 Consequent to this commendable performance, the profit for the year
 before Depreciation, Finance Costs, Exceptional items and Taxation
 recorded an increase of 24.1% at Rs. 5,258 crores as against Rs. 4,237
 crores in the previous year. Similarly, profit after tax clocked an
 increase of 16.5% at Rs.  3,353 crores as against Rs. 2,879 crores in
 the previous year.  Your Company continues with its rigorous cost
 restructuring exercises and efficiency improvements which have resulted
 in significant savings through continued focus on cost controls,
 process efficiencies and product innovations thereby enabling the
 Company to maintain profitable growth in the current economic scenario.
 
 Dividend
 
 Your Directors are pleased to recommend a dividend of Rs. 12.50 per
 Ordinary (Equity) Share and also a Special Dividend of Re. 0.50 per
 Ordinary (Equity) Share aggregating Rs. 13.00 per Ordinary (Equity)
 Share of the face value of Rs. 5 each, payable to those Shareholders
 whose names appear in the Register of Members as on the Book Closure
 Date. The Special Dividend is recommended in view of the profit made by
 the Company on sale of part of its shareholding in Mahindra Holidays &
 Resorts India Limited, a subsidiary of the Company.  The equity
 dividend outgo for the Financial Year 2012-13, inclusive of tax on
 distributed profits (after reducing the tax on distributed profits of
 Rs. 42.67 crores on the dividends receivable from the subsidiaries
 during the current Financial Year) would absorb a sum of Rs. 891.15
 crores (as against Rs. 868.61 crores comprising the dividend of Rs.
 12.50 per Ordinary (Equity) Share of the face value of Rs. 5 each and
 tax thereon paid for the previous year).
 
 Performance Review
 
 Automotive Division:
 
 Your Company''s Automotive Division recorded total sales of 4,83,734
 vehicles and 67,735 three-wheelers as compared to 3,98,357 vehicles and
 70,988 three-wheelers in the previous year registering a growth of
 21.4% in vehicle sales and a de-growth of 4.6% in three-wheeler sales.
 
 On the domestic sales front, your Company sold 3,10,706 Passenger
 Vehicles [including 2,63,925 Utility Vehicles (UVs), 31,437 Multi
 Purpose Vehicles (MPVs) and 15,344 Cars] registering a growth of 26.5%
 over the previous year''s volumes of 2,45,700 Passenger Vehicles
 (including 2,02,217 UVs, 25,644 MPVs and 17,839 Cars). In the
 commercial vehicle segment, your Company sold 1,42,797 vehicles
 (including 39,911 vehicles < 2T GVW and 1,02,886 vehicles between
 2-3.5T GVW) registering a growth of 12.4% over the previous year''s
 volume of 1,27,029 commercial vehicles (including 53,895 vehicles < 2T
 GVW and 73,134 vehicles between 2-3.5T GVW). In the three-wheeler
 segment, your Company sold 65,510 three-wheelers registering de-growth
 of 2.9% over the previous year''s volume of 67,440 three-wheelers.
 
 Your Company''s UV sales volume grew by 30.5% and your Company continued
 to maintain its leadership position in the domestic UV market by
 posting a market share of 47.7%. During the year, the Bolero posted
 record sales of more than 1,00,000 units for the second consecutive
 year and the Scorpio also posted sales of over 50,000 units for the
 second successive year.
 
 After a very successful launch of the XUV500 last year, the Cheetah
 inspired XUV500 continues to win customer preference. The Company had
 more than 35,000 Cheetahs on the road within just one year of launch.
 
 Strengthening the UV portfolio, the Company launched two new products -
 Quanto and Rexton, marking entry into two new product segments. Both
 the products have been very well received by the market. Rexton is
 already the second largest selling product in its category.
 
 With the aim of strengthening its product portfolio and entering new
 segments, your Company has successfully launched many new products over
 the past three years. As a result, the Com pany''s share of the Indian
 Automotive market stood at 13.2% in 2012-13 as compared to 11.5% in the
 previous year.
 
 In the overseas market, your Company registered a volume growth of
 11.2% over the previous year. This growth was driven by volume growth
 in SAARC, Chile and South Africa.  During the year under review, your
 Company sold 30,231 vehicles [including 209 vehicles sourced from
 Mahindra Navistar Automotives Limited {renamed as Mahindra Trucks and
 Buses Limited (MTBL) with effect from 4th June 2013}] and 2,225
 three-wheelers in the overseas market as compared to 25,628 vehicles
 (including 157 vehicles sourced from MTBL) and 3,548 three-wheelers in
 the previous year.
 
 Spare parts sales for the year stood at Rs. 1,190.30 crores (including
 exports of Rs. 90.30 crores) as compared to Rs. 873.99 crores
 (including exports of Rs. 55.47 crores) in the previous year,
 registering a growth of 36.2%.
 
 Farm Division:
 
 Your Company''s Farm Division (including Swaraj Division) recorded sales
 of 2,24,844 tractors as against 2,36,666 tractors sold in the previous
 year, recording a decline of 5%.
 
 In the Financial Year 2013, there was a 1.7% decline in the domestic
 tractor industry, after three years of double digit growth. The
 domestic industry recorded sales of 5,25,970 tractors as compared to
 5,35,210 tractors in the previous year.
 
 The industry decline was greater in the Southern States, where your
 Company commands a comparatively greater market share. Against this
 background, your Company achieved domestic sales of 2,12,555 tractors
 as compared to 2,22,944 tractors in the previous year, a decline of
 4.7%. Your Company continues to enjoy a market share of 40.2% making it
 the market leader for the 30th consecutive year.
 
 Your Company achieved tractor exports of 12,289 tractors as compared to
 13,722 tractors exported in the previous year, which is 10.4% lower
 compared with the previous year. The decline was primarily on account
 of industry decline in markets of Sri Lanka and Bangladesh, with
 growing exports to Mahindra USA, Inc. and Africa bridging some of the
 shortfall.
 
 Beyond agriculture, in the power generation space under the Mahindra
 Powerol Brand, your Company achieved gross revenue of over Rs. 1,000
 crores. The last time that Mahindra Powerol crossed this threshold was
 in 2010, mainly on account of the growth in the telecom segment. This
 achievement in Financial Year 2013 was despite telecom segment DG sales
 accounting for only 19% of revenues currently, as compared with 58% in
 Financial Year 2010. While retaining its leadership position in the
 genset market catering to the telecom space, your Company has become
 the No. 2 player in retail for lower kVA.
 
 Mahindra Defence Systems (MDS) Division:
 
 Your Company, through Mahindra Defence Systems Division (MDS), is
 engaged in two businesses - a) Mahindra Defence Naval Systems
 (MDNS) and b) Mahindra Special Services Group (MSSG).
 
 Mahindra Defence Naval Systems:
 
 The MDNS provides weapons, sub-systems and components to the Navy,
 Ordnance Factories and the Defence Research & Development Organisation
 and Defence Public Sector Undertakings viz. Bharat Electronics
 Limited/Bharat Dynamics Limited. Among the major products being
 supplied are
 
 (i) the Triple Tube Torpedo Launcher which is fitted on board Indian
 Naval ships to counter attacking submarines by firing a torpedo at
 them, (ii) Anti Torpedo Decoy Launcher which launches a decoy to
 deceive an attacking torpedo and
 
 (iii) other components for the Ordnance Factories which go into Naval
 and Army weapon systems.
 
 Pursuant to an approval accorded by the Shareholders by way of Postal
 Ballot on 4th April 2009, this business has been hived off into a
 wholly owned subsidiary viz. Mahindra Defence Naval Systems Private
 Limited with effect from 1st June 2012.
 
 Mahindra Special Services Group:
 
 The Special Services Group business of your Company provides Corporate
 Security Risk Management Consultancy services, assisting organisations
 to maintain their competitive edge by protecting information, physical
 and personnel assets. During the year, the Special Services Group has
 posted growth in the areas of Governance & Fraud Risk Management
 vertical and also launched its training services vertical by setting up
 the Information Assurance and Homeland Security Academy which aims at
 providing functional training in these areas.
 
 Management 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 Governance
 
 Your Company has a rich legacy of ethical governance practices many of
 which were implemented by the Company, even before they were mandated
 by law. Your Company is committed to transparency in all its dealings
 and places high emphasis on business ethics.
 
 A Report on Corporate Governance alongwith a Certificate from the
 Statutory Auditors of the Company regarding compliance with the
 conditions of Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement form part of this Annual Report.
 
 Finance
 
 The headwinds of the previous year continued to slow global growth
 during the Financial Year 2012-13. The recovery was tentative in US and
 Europe continued to be under the overhang of recession, with a new
 banking crisis in Cyprus adding to the Eurozone troubles. The emerging
 markets also slowed down, causing concerns about a protracted low
 growth environment.
 
 On the domestic front, tight liquidity conditions prevailed throughout
 the year. Despite RBI cutting the Repo rate by 100 bps in several
 instalments, short term interest rates remained at elevated levels in
 view of shortfall in liquidity.
 
 Weak exports and Current Account Deficit worsened the situation,
 impacting the exchange rate scenario. As a result, the Indian Rupee
 continued to remain volatile during the period. In these difficult
 financial conditions, your Company, with its good credit standing and
 strong underlying Corporate Governance principles, enjoyed privileged
 access to liquidity and competitive pricing.
 
 Your Company continued to focus on managing cash efficiently and
 ensured that it had adequate liquidity in its books at all times, along
 with strong back up lines of credit. During the course of the year,
 your Company repaid long term loan instalments amounting to Rs. 380.73
 crores on due dates from internal accruals. The Consortium of Bankers
 continues to rate your Company as a prime customer and extends
 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 0.24 as at 31st March 2013.
 
 In an environment of financial stress and rating downgrades, your
 Company continues to enjoy prime credit rating with CRISIL Limited
 (CRISIL), ICRA Limited (ICRA) and Credit Analysis & Research
 Limited (CARE). These organisations have all re-affirmed the
 highest safety rating of A1  for your Company''s Short Term facilities
 and high safety rating for its Long Term Banking facilities. CRISIL
 maintains a rating of CRISIL AA /Stable, ICRA maintains a rating of
 [ICRA] AA  (stable) and CARE maintains a rating of CARE AA .
 
 Investor Relations
 
 In line with the best practices aimed at fostering improved investor
 relations, your Company engaged with investors in many ways, including
 one on one meetings, attendance at investor conferences, regular
 quarterly earnings calls and annual analyst meet during the year. New
 technology, including telepresence and webcasting enabled your Company
 to reach out to a large number of investors. Your Company interacted
 with over 550 Indian and overseas investors and analysts from a wide
 cross section of the investment universe during the year. Several
 investor/analyst interactions with the Chairman & Managing Director and
 Business Heads were organised during the year. Your Company won top
 awards/ ranking in various investor relations categories from Thomson
 Reuters Extel Survey for 2011 (awarded in June 2012) and from
 
 Institutional Investor, Asia, for the year 2012. A user friendly
 investor relations page on the Company''s Corporate Website ensures the
 benefit of easy access to relevant information for investors.
 
 Acquisitions and other matters
 
 (1) Buyout of Navistar Inc.''s stake in Truck and Engine Joint Venture
 
 In November 2005, your Company along with Navistar Inc. and its
 affiliates had entered into a Joint Venture Agreement and set up
 Mahindra Navistar Automotives Limited [renamed Mahindra Trucks and
 Buses Limited (MTBL) with effect from 4th June 2013] in which your
 Company held 51% of the Equity Share Capital. Navistar Inc. along with
 its affiliates held 49% of the Equity Share Capital. Additionally, in
 November 2007, your Company along with Navistar Inc. and its affiliates
 had entered into a Joint Venture Agreement and set up Mahindra Navistar
 Engines Private Limited [renamed Mahindra Heavy Engines Private Limited
 (MHEPL) with effect from 4th June 2013].  Here too your Company
 held 51% of the Equity Share Capital and Navistar Inc. along with its
 affiliates held 49% of the Equity Share Capital.
 
 As a part of its own strategy, Navistar Inc. decided to exit both its
 Joint Ventures in India. Given the strategic importance of these Joint
 Ventures, your Company decided to buy out the respective stakes of
 Navistar Inc.  and its affiliates in both MTBL and MHEPL for a total
 consideration of approximately Rs. 173 crores, thereby making MTBL and
 MHEPL wholly owned subsidiaries of your Company. These transactions
 were completed in February 2013.
 
 (2) Rights Issue of EPC Industrie'' Limited
 
 During the year, EPC Industrie'' Limited (EPC), a subsidiary of your
 Company engaged in the business of manufacturing and marketing micro
 irrigation systems, successfully completed its Rights Issue. The
 proceeds of the issue will be utilised towards funding the procurement
 of plant and machinery, working capital requirements and for general
 corporate purposes.
 
 (3) Buyout of BAE Systems Plc. stake in Land Systems Joint Venture
 
 Your Company had entered into a Joint Venture with BAE Systems Plc. in
 Defence Land Systems India Private Limited (DLSI) wherein the
 Company held 74% in the Equity Share Capital of DLSI and the balance
 26% was held by BAE Systems Plc.
 
 The scope of the Joint Venture included development of land systems
 technical capabilities and products for the Indian armed forces,
 para-military forces and homeland security. On account of developments
 in both the industry environment and customer procurement frameworks,
 Mahindra Defence Systems Limited, a wholly owned subsidiary of the
 Company, decided to purchase the entire shareholding of BAE Systems
 Plc. in DLSI, thereby making DLSI a wholly owned subsidiary of your
 Company.
 
 (4) Joint Venture with Telephonics Corporation
 
 Your Company, in venturing into the Defence Sector, had also been
 exploring opportunities for partnerships with companies with globally
 proven high end defence technologies. In pursuance of the same in
 August 2012 your Company entered into a Joint Venture Agreement with
 Telephonics Corporation, which will provide the Indian Ministry of
 Defence and the Indian Civil Sector with radar and surveillance
 systems, Identification Friend or Foe devices and communication
 systems. In addition, this Joint Venture intends to provide systems for
 Air Traffic Management services, Homeland Security and other emerging
 surveillance requirements. Telephonics Corporation, is a leading US
 based designer, developer and manufacturer of high-technology
 integrated information, communication and sensor system solutions to
 military and commercial markets worldwide and a subsidiary of Griffon
 Corporation. The Joint Venture company has been incorporated in this
 respect, named as ''Mahindra Telephonics Integrated Systems Limited'', in
 which your Company holds 74% stake through its wholly owned subsidiary
 company Mahindra Defence Systems Limited and the balance 26% is held by
 Telephonics Corporation.
 
 (5) ''Offer for Sale'' of shares held in Mahindra Holidays & Resorts
 India Limited
 
 The Department of Economic Affairs of the Ministry of Finance by its
 notifications dated 4th June 2010 and 9th August 2010, increased the
 minimum public holding requirement for listed companies from 10% to 25%
 of their total paid-up capital. All public listed companies in India
 (excluding public sector companies) were required to reduce their
 promoter holding to a minimum level of 75% by June 2013.
 
 Your Company held 82.69% in Mahindra Holidays & Resorts India Limited
 (MHRIL). In compliance with the above notification, your Company,
 as promoter and holding Company of MHRIL, sold an aggregate of
 34,00,000 Equity Shares of Rs. 10 each representing 4.02% of the then
 Equity Share Capital of MHRIL during the year under review. This was
 done through an ''Offer for Sale of Shares by Promoters through the
 Stock Exchange Mechanism'' on the separate window provided by the Stock
 Exchanges for this purpose, in accordance with the Securities and
 Exchange Board of India Circulars.
 
 After the end of the Financial Year, MHRIL allotted 41,41,084 Equity
 Shares of Rs. 10 each on 12th April 2013 to successful applicants under
 the Institutional Placement Programme in terms of Chapter VIII-A of the
 Securities and Exchange Board of India (Issue of Capital and Disclosure
 Requirements) Regulations, 2009, as amended.
 
 The shareholding of your Company in MHRIL therefore stands reduced to
 75%.
 
 (6) Further Equity Investment in Ssangyong Motor Company
 
 Subsequent to the year end, Ssangyong Motor Company, a subsidiary of
 the Company (SYMC) made a third party allotment by way of a
 Preferential Issue of 1,45,45,455 Equity Shares to your Company at an
 issue price of 5,500 Korean Won per share for an amount aggregating
 around 80 billion Korean Won, resulting into an increase in the
 shareholding of your Company in SYMC from 69.63% to 72.85%. The said
 issue will facilitate improvement of the financial structure of SYMC
 and proceeds of the issue will be utilised by SYMC for new product
 development and strengthening its competitiveness.
 
 Stock Options
 
 During the year under review, on the recommendation of the Governance,
 Remuneration and Nomination Committee of your Company, the Trustees of
 the Mahindra & Mahindra Employees'' Stock Option Trust have granted
 5,65,094 Stock Options to Eligible Employees under the Mahindra &
 Mahindra Limited Employees Stock Option Scheme - 2010.  Further, 20,000
 Stock Options have also been granted under the Mahindra & Mahindra
 Limited Employees Stock Option Scheme - 2000.
 
 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 Relations
 
 A cordial Industrial Relations environment prevailed at all the
 manufacturing units across the Company during the year under review
 except for a wrinkle, when workmen at the Igatpuri plant went on a
 ''tool down'' for 13 days starting from 9th April 2013 to 21st April
 2013. This however did not affect the production schedule of the plant.
 
 Employees are the Company''s vital and most valuable assets.  Your
 Company has focussed on propagating proactive and employee centric shop
 floor practices, quick grievance resolution mechanisms and alignment to
 overall business goals, thus ensuring that there was no loss of
 production in the Financial Year 2013. As a result of propagating
 employee engagement as a business imperative, Financial Year 2013
 recorded the highest production figures in the history of the Company.
 
 Over the last few years, your Company has placed significant emphasis
 on enhancing capabilities at the shop floor, beyond merely technical
 skills. Operators are trained and encouraged to generate ideas for
 resolving quality concerns, reducing cost, improving safety and
 efficiency. For the year under review, the workmen generated over 19
 ideas per person towards this cause.
 
 Safety, Occupational Health and Environment
 
 Your Company has a well-established Safety, Occupational Health &
 Environmental Policy (SH&E Policy) in line with the National
 Safety, Occupational Health & Environmental Policy.
 
 The safety and occupational health of employees is a major area of
 focus for the Company. The SH&E Policy, inter alia, covers the safety
 of all stakeholders, ensures compliance on a monthly basis and imparts
 necessary education and training to all employees and stakeholders.
 External surveillance audits of the facilities as per legal and other
 requirements are conducted regularly. Internal and external medical
 check-ups of employees and contractors are conducted.
 
 Road Safety Week, National Safety Week, Fire Service Day and World
 Environment Day are celebrated. Behavioural Based Safety (BBS)
 observations, small group working, Safety Inspection alongwith Safety
 awareness training with benchmarks on overall safety performance are
 conducted. Your Company''s plants organise Occupational Health
 Examination Camps, medical check-ups, consultation and counselling,
 etc.  for the employees'' well being.
 
 Your Company tracks the objectives and targets laid out in the road map
 of the triple bottom line approach. Various green projects have been
 implemented by your Company in the areas of abatement of air pollution,
 recycling and reduction of water and Solid Waste Management in
 accordance with world class Green supply chain standards. Your
 Company''s commitment to the environment stems from the Mahindra Group''s
 abiding concern for all stakeholders of society.
 
 All plants of the Automotive Division have been certified for ISO
 14001: 2004 & OHSAS 18001: 2007 (amended standards). An External
 Audit for Safety, Occupational Health and Environment is conducted
 every year and all the Company''s plants of the Automotive Division have
 been certified during the year 2012-13.
 
 Corporate Social Responsibility
 
 Mahindra''s Corporate Social Responsibility (CSR) is committed to
 ''building possibilities'' for socially and economically disadvantaged
 communities to enable them to ''RISE'' above their limiting
 circumstances.
 
 Some of the major initiatives the Company has undertaken in India
 during the Financial Year 2013 are described below:
 
 A.  Project 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 (KCMET) since 1996.  The Nanhi Kali sponsorship provides
 underprivileged girls with academic support classes where concepts of
 Maths, Science and Language are taught to the girls. In addition, the
 girls are provided with material support including uniforms, school
 bags, shoes, socks and stationery which allow them to attend school
 with dignity. In the Financial Year 2013, 7,414 individuals and
 corporates donated Rs. 22.65 crores to the Nanhi Kali Project, enabling
 the Project to support the education of 78,338 underprivileged girls
 across 9 states of India. The largest donor is the Mahindra Group,
 which supports the education of 29,702 Nanhi Kalis. This initiative has
 had a significant impact in terms of increase in learning outcomes by
 10% and curtailing drop out of girls from school to less than 10%.
 
 B.  Mahindra Pride Schools
 
 The Mahindra Pride Schools through their one-of-a-kind livelihood
 training programmes continue to take forward their vision to completely
 transform youth from socially disadvantaged communities by training and
 placing them in high growth service sector careers. The last Financial
 Year witnessed the setting up of the 5th Mahindra Pride School in
 Srinagar in October 2012, where the 1st batch of students braved
 extreme weather and socio-political unrest to complete their training
 and are now ready to be placed. In the Financial Year 2013, a total of
 2,605 Scheduled Caste/Scheduled Tribe students received intensive
 training at the 5 Mahindra Pride Schools in Pune, Chennai, Patna,
 Chandigarh and Srinagar. Areas of training included Hospitality Craft,
 Information Technology Enabled Services (ITES - for BPOs and KPOs) and
 Customer Relationship Management. The total number of Mahindra Pride
 School students trained till date is 5,666. Post training, the Mahindra
 Pride School students have been recruited by food chains such as
 McDonald''s, Pizza Hut, KFC and Cafe Coffee Day, 5 star Hotels such as
 Hotel Le Meridien, Department Stores such as Westside, Mom & Me and
 BPOs & KPOs such as Bajaj Allianz, Syntel, HCL, TCS, Dell, Cognizant,
 Tech Mahindra and Mphasis. There has been 100% placement of students in
 lucrative jobs and a consistent increase in average salary per batch.
 The average salary is currently over Rs. 10,000 per month.
 
 C.  Scholarships and Grants
 
 1.  Mahindra All India Talent Scholarships
 
 Instituted in 1995, Mahindra All India Talent Scholarships (MAITS)
 are awarded to students from lower socio economic strata to enable them
 to pursue a job oriented diploma course at a recognised Government
 Polytechnic Institute in India. Approximately 500 scholarships are
 given every year to students who undergo a three year course. In the
 Financial Year 2013, 550 students were awarded the MAITS leading to a
 disbursement of Rs. 91.43 lakhs. MAITS has been awarded to 6,354
 students till date.
 
 2.  K. C. Mahindra Scholarships for Post-Graduate studies abroad
 
 The K. C. Mahindra Scholarship for Post-Graduate studies abroad
 (instituted in the year 1956) is an interest free loan scholarship
 awarded to deserving graduates interested in pursuing their
 post-graduate studies overseas. In the Financial Year 2013, 44 students
 were awarded a scholarship of Rs. 2 lakhs each. Recipients will be
 doing their post-graduation in a wide range of subjects like Computer
 Science and Engineering, Mechanical Engineering, Electrical
 Engineering, Chemical Engineering, Economics and Law and had received
 admission in renowned universities like Harvard Business School, Yale,
 Stanford, Massachusetts Institute of Technology, Carnegie Mellon,
 London School of Economics, etc.  Further, the K. C. Mahindra Fellows
 Fund awarded scholarships of Rs. 24 lakhs to the top 3 candidates (a
 maximum scholarship of Rs. 8 lakhs each). The total number of
 scholarships given till date is 1,070.
 
 3.  K. C. Mahindra United World Colleges (UWC) Scholarships
 
 Till date 86 students have benefited from the K. C. Mahindra UWC
 Scholarship enabling them to study at the United World Colleges, and in
 particular, the Mahindra United World College. KCMET has disbursed a
 total of Rs. 655.31 lakhs in the form of these scholarships. During the
 Financial Year 2013, 12 students were given scholarships amounting to a
 disbursement of Rs. 69.31 lakhs.
 
 4.  Mahindra Search for Talent Scholarship
 
 This scholarship which rewards excellence in academics has been set up
 in 35 institutions in India. In addition, students who receive the
 Mahindra Search for Talent Scholarship for two consecutive years also
 receive the Honours Scholarship Award comprising a cash prize of Rs.
 5,000 and a citation from the Trust.
 
 Employee Social Options
 
 Esops stands for Employee Social Options. Esops is a platform offering
 employees a set of social work volunteering options.
 
 These options are created and implemented exclusively by employees
 themselves based on the needs of underprivileged communities in and
 around their areas of operation. In a way, it is each employee''s CSR
 initiative.
 
 Esops enables the workforce to collectively donate thousands of human
 hours for various social projects, in the three focussed areas of
 Education, Health and Environment, making social work an integral part
 of everyone''s lives. In this manner Esops enables our employees to give
 not just their wealth but also their time. To fund these employee
 initiatives, each Sector of the Company donates 0.5% of its profit
 after tax to the Central CSR fund and 0.5% to Esops.
 
 Some notable Esops initiatives during the year were the Lifeline
 Express at Puri in Odisha and at Naksalbari in West Bengal where a
 total of 4,219 patients were treated by performing surgeries, giving
 medicines and distribution of aids and appliances free of cost. Another
 notable initiative was Mahindra Hariyali where the 1 million tree
 plantation target was surpassed by planting more than 1.7 million
 trees. Esops Awards - 2012, Esops Star Performers Awards, Group level
 Esops Champions Meet were organised to motivate employees and ensure
 their maximum participation in Esops.
 
 The other Esops activities included numerous initiatives in the fields
 of Education, Health, Environment, etc. which had a short term as well
 as a long term impact on the beneficiaries and society at large.  b 5tg
 Esops is also a culture that the Mahindra Group has cultivated as an
 ethic. The Esops platform and a set of structures and protocols have
 been created, to make it easier and possible for every employee, who
 wishes to make a contribution to society, to do so.
 
 ''Sustainability'' Initiatives
 
 During the year under review, the 5th Sustainability Report for the
 year 2011-12 was released and it received a GRI rating of ''A '' (like
 the earlier four Reports). The external assurance of the Report was
 carried out by KPMG.
 
 Your Company is now five years into its ''Sustainability'' journey.
 Resource efficiency and social commitment continue to be important
 drivers of profitable growth. The focus on the Environmental, Social
 and Governance (ESG) parameters continues, and year on year,
 initiatives taken in the previous years are consolidated and new ones
 are taken up. Several projects for water management and conservation
 and continuous improvement in energy conservation were undertaken,
 resulting in reduced consumption of energy and water. The Carbon
 footprint of Scope I, II and III GHG emissions as per the GHG protocol
 developed by WBCSD and WRI, was further strengthened especially for
 tracking indirect emissions from inbound and outbound logistics. The
 targets taken under the Sustainability Road Map have been surpassed in
 four out of the seven parameters. Complete details of the
 Sustainability performance for 2012-13 will be elaborated in the GRI
 Report which is under preparation and will be ready for release
 shortly.
 
 During 2012-13, your Company''s consistent performance on the ESG
 dimensions has been recognised in the following ways.
 
 The Company :
 
  Retained its position in the top 10 Indian Companies in the
 CRISIL/Standard & Poor ESG Index 2012.
 
  Ranked 8th out of 750 companies in South East Asia and 2nd out of
 100 in India by The Asian Sustainability Rating, a Singapore based
 financial research agency.
 
  Achieved Sustainability Plus GOLD Rating by CII - a first of
 its kind Sustainability Labeling - to reflect ESG performance of
 leading Indian Companies.
 
  Received the FE-EVI Green Business Leadership Award 2011-12 for the
 Automobile Sector category.
 
  Ranked 2nd in the India 200 Carbon Disclosure Leadership Index in
 2012.
 
  Was invited to participate in the Dow Jones Sustainability Index
 2012 for the second time.
 
 Business Responsibility Report
 
 In August 2012, Securities and Exchange Board of India (SEBI)
 introduced Clause 55 of the Listing Agreement, which prescribes
 disclosures on certain non-financial parameters. The prescribed format
 is the ''Business Responsibility Report'' (BRR) which has to be a
 part of the Company''s Annual Report. This requirement is mandatory for
 the top 100 listed companies (based on market capitalisation) on the
 National Stock Exchange of India Limited and BSE Limited. In compliance
 with this requirement, the BRR for your Company for the year 2012-13
 forms part of this Annual Report.
 
 It is clear that balancing economic growth, optimising the ecological
 footprint and ensuring inclusive human development will be very
 critical for continued growth and development. Your Company strongly
 believes that sustainable growth is possible only if there is
 ecological well-being, social equity and transparency in business. By
 living with its ''Alternative Thinking'' mantra, your Company will
 continue to strive towards these goals.
 
 Directors
 
 As reported in the Annual Report for the Financial Year 2012, Mr.
 Keshub Mahindra relinquished his office as Chairman and Director of the
 Company at the conclusion of the 66th Annual General Meeting of the
 Shareholders held on 8th August 2012.  As a tribute to his unparalled
 contribution to the cause and growth of the organisation and his
 immense leadership qualities, Mr. Keshub Mahindra has been made the
 Company''s Chairman Emeritus.
 
 Consequent to the above mentioned Board level change, Mr. Anand G.
 Mahindra was elevated to the position of Chairman and designated as
 Chairman & Managing Director of the Company with effect from the
 conclusion of the 66th Annual General Meeting of the Shareholders held
 on 8th August 2012.
 
 Pursuant to the recommendation of the Governance, Remuneration and
 Nomination Committee, the Board at its Meeting held on 25th October
 2012 appointed Mrs. D. Vijayalakshmi, Executive Director Investment -
 Risk Management & Research of LIC, as an Additional Director of the
 Company representing Life Insurance Corporation of India (LIC), in
 place of Mr. Arun Kanti Dasgupta who ceased to be a Director of the
 Company with effect from 9th August 2011.  She was to hold the office
 of Director up to the date of the ensuing Annual General Meeting of the
 Company.
 
 However, the Company received an intimation from LIC on 10th June 2013,
 informing that Mrs. Vijayalakshmi has resigned from the Board of the
 Company with effect from 5th June 2013.
 
 The Board places on record its sincere appreciation of the valuable
 services rendered by Mrs. Vijayalakshmi during her tenure as a Director
 of the Company.
 
 Pursuant to the provisions of section 256 of the Companies Act, 1956,
 Dr. A. S. Ganguly, Director of the Company, retires by rotation at the
 forthcoming Annual General Meeting scheduled to be held on 13th August
 2013. Dr. Ganguly has expressed his desire not to seek re-appointment.
 It is proposed not to fill up the vacancy thereby caused.
 
 The Board placed on record its deep appreciation of the invaluable
 counsel rendered by Dr. Ganguly to the Company and his contribution in
 guiding and supporting the management during his tenure as an
 Independent Director on the Board of Directors of the Company. His
 inputs were valuable across all functions of the Company, but in
 particular, his mentoring of the Board''s Research & Development
 Committee was especially appreciated by the Company''s Management.
 
 Quote from Chairman Emeritus
 
 Dr. Ganguly joined the Board in August 1997. Ever since his induction
 on the Board, he has imparted considerable value to the deliberations
 at the Meetings of the Board and those of the Research & Development
 Committee, of which he was the Chairman and the Strategic Investment
 Committee, of which he was a Member.
 
 In his long association with the Mahindras, I reminisce of him having
 given a strong momentum to the Company''s R&D efforts, his persistence
 on having a clear R&D strategy and in guiding the management to have a
 brutal focus on new product design and development.
 
 These notable contributions have enabled the Company to keep itself in
 pace with the ever changing tastes and preferences of customers,
 outperform its peers and maintain a leadership position in the
 otherwise fiercely competitive auto industry.
 
 Mr. Anand G. Mahindra, Mr. Nadir B. Godrej and Mr. Anupam Puri retire
 by rotation and, being eligible, offer themselves for re-appointment.
 
 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 2013 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 Companies
 
 The subsidiary companies of your Company continue to contribute to the
 overall growth of the Company. Major subsidiaries such as Mahindra &
 Mahindra Financial Services Limited with a 44% growth in its
 consolidated profits and Mahindra Lifespace Developers Limited with a
 19% growth in its consolidated 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. 4,099.20 crores as against Rs. 3,126.66 crores earned in the
 previous year.
 
 During the year under review, Mahindra Defence Naval Systems Private
 Limited, Mahindra Defence Systems Limited, Divine Heritage Hotels
 Private Limited, Gables Promoters Private Limited, 2 x 2 Logistics
 Private Limited, Holiday on Hills Resorts Private Limited, Mahindra
 Tractor Assembly Inc., MH Boutique Hospitality Limited, Infinity
 Hospitality Group Company Limited, Jiangxi Mahindra Yueda Tractor
 Company Limited and Mahindra Housing Private Limited became
 subsidiaries of your Company.
 
 During the year under review, Mahindra (China) Tractor Company Limited
 and Jensand Limited ceased to be subsidiaries of your Company.
 
 Subsequent to the year end, Mahindra Telephonics Integrated Systems
 Limited, Mahindra Investments (India) Private Limited and Mahindra
 Investments (International) Private Limited were formed as subsidiaries
 of your Company.
 
 The Statement pursuant to section 212 of the Companies Act, 1956
 containing details of the Company''s subsidiaries is attached.
 
 In accordance with the General Circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet, Statement of
 Profit and Loss and other documents of the subsidiary companies are not
 being attached with the Balance Sheet of the Company. The Company will
 make available the Annual Accounts of the subsidiary companies and the
 related detailed information to any Member of the Company who may be
 interested in obtaining the same.  Further, the Annual Accounts of the
 subsidiaries would also be available for inspection by any Member at
 the Head Office of the Company and at the Office of the respective
 subsidiary companies, during working hours upto the date of the Annual
 General Meeting.
 
 Consolidated Financial Statements
 
 The Consolidated Financial Statements of the Company and its
 subsidiaries, prepared in accordance with Accounting Standard AS 21
 form part of this Annual Report.
 
 The Consolidated Financial Statements presented by the Company include
 the financial results of its subsidiary companies, associates and joint
 ventures.
 
 Auditors
 
 Messrs Deloitte Haskins & Sells, Chartered Accountants, retire as
 Auditors of the Company and have given their consent for
 re-appointment. The Members would be required to elect Auditors for the
 current year and fix their remuneration.
 
 As required under the provisions of section 224(1 B) 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.
 
 Cost Auditors
 
 As per the Order of the Central Government and in pursuance of section
 233B of the Companies Act, 1956, your Company carries out an audit of
 its cost records. The due date for filing of the Cost Audit Report with
 the Ministry of Corporate Affairs for the Financial Year ended 31st
 March 2012, was 180 days from the closure of the Company''s Financial
 Year or 28th February 2013, whichever is later. The combined Cost Audit
 Report for the Farm Equipment Sector and Motor Vehicles for the
 Financial Year ended 31st March 2012 was filed on 31st January 2013 in
 the XBRL format. The Central Government has approved the appointment of
 M/s. N. I. Mehta & Co., Cost Accountants as Cost Auditors for
 conducting Cost Audit for the Financial Year 2012-13.
 
 Pursuant to section 233B(2) of the Companies Act, 1956, the Board of
 Directors on the recommendation of the Audit Committee appointed M/s.
 N. I. Mehta & Co., Cost Accountants, as the Cost Auditors of the
 Company for the Financial Year 2013-14. M/s. N. I. Mehta & Co. have
 confirmed that their appointment is within the limits of section 224
 (1B) of the Companies Act, 1956 and have also certified that they are
 free from any disqualifications specified under section 233B(5) read
 with section 224 and sub section (3) and sub section (4) of section 226
 of the Companies Act, 1956.
 
 The Audit Committee has also received a Certificate from the Cost
 Auditors certifying their independence and arm''s length relationship
 with the Company.
 
 Public Deposits and Loans/Advances
 
 Out of the total 7,241 deposits of Rs. 5,295.39 lakhs from the Public
 and Shareholders as at 31st March 2013, 173 deposits amounting to Rs.
 70.15 lakhs had matured and had not been claimed as at the end of the
 Financial Year. Since then, 42 of these deposits of the value of Rs.
 15.48 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 Year
 
 During the period 1st April 2013 to 9th June 2013, 69,301 vehicles were
 despatched as against 65,063 vehicles during the corresponding period
 in the previous year. During the same period, 51,373 tractors were
 despatched as against 42,450 tractors despatched during the
 corresponding period in the previous year.
 
 Looking forward, your Company expects the Indian economy to stage a
 mild, consumption-led recovery in the current year. Subject to a normal
 monsoon, as forecast by the Indian Meteorological Department,
 agricultural growth is likely to see considerable improvement in
 2013-14, leading to a steady moderation in inflation and a bounce back
 in rural incomes, and consumer demand. At the same time, supported by a
 weakened currency and steady growth recovery in the US, export volumes
 may also gain momentum through the year.  Private investment demand,
 however, is likely to remain weak, with a significant pick up
 contingent on concerted policy action by the Government.
 
 Energy Conservation, Technology Absorption and Foreign 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.
 
 Particulars of Employees
 
 The Company had 229 employees who were in receipt of remuneration of
 not less than Rs. 60,00,000 during the year ended 31st March 2013 or
 not less than Rs. 5,00,000 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 Members of the Company excluding the Statement of
 particulars of employees. Any Member interested in obtaining a copy of
 the Statement may write to the Company Secretary, whereupon a copy
 would be sent.
 
                                   For and on behalf of the Board
 
                                                ANAND G. MAHINDRA
 
                                     Chairman & Managing Director
 
 Mumbai, 10th June 2013
Source : Dion Global Solutions Limited
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