The Directors present their Report together with the audited accounts
 of your Company for the year ended 31st March, 2011.
 
 Financial Highlights
 
                                                 (Rs. in crores)
 
                                                 2011         2010
 
 Gross Income                                   25,896       20,595
 
 Less: Excise Duty on Sales                      2,093        1,794
 
 Net Income                                     23,803       18,801
 
 Profit before Depreciation, Interest,           3,766        3,155
 Exceptional items and Taxation
 
 Less: Depreciation/Amortisation                   414          371
 
 Profit before Interest, Exceptional items       3,352        2,784
 and Taxation
 
 Less: Interest (Net)                             (50)           28
 
 Profit before Exceptional items and            3,402         2,756
 Taxation
 
 Add: Exceptional items                           118            91
 
 Profit before Taxation                         3,520         2,847
 
 Less: Provision for Tax - Current Tax            762           749
 (including Fringe Benefit Tax)
 
 Less: Provision for Tax - Deferred Tax (Net)      96            10
 
 Profit for the year                            2,662         2,088
 
 Balance of Profit for earlier years            4,588         3,365
 
 Add/(Less): Transfer from/(to) Debenture          36          (31)
 Redemption Reserve
 
 Profits available for appropriation            7,286         5,422
 
 Less: General Reserve                            275           210
 
 Proposed Dividends                               706           550
 
 Income-tax on Proposed Dividends                  96            74
 
 Balance carried forward                        6,209         4,588
 
 Indias economic performance in the Financial Year 2011 had both
 positive and negative elements to it. The economy grew a very
 creditable 8.5% backed by strong growth in all three Sectors -
 Agriculture, Industry and Services. However, despite signifcant
 monetary tightening by the Reserve Bank of India, infationary pressures
 persisted throughout the year, drawing attention to the factors and
 policies that continue to constrain productive capacities in the
 economy.
 
 Yields in the Agricultural Sector in India, for instance, are
 signifcantly lower than those in other countries, for a wide range of
 crops.  Recognising the criticality of ensuring food security, at
 afordable prices for all, the Government of India has taken a series of
 initiatives focused on enhancing the productive capacities of both
 farms and farmers. Mahindra Samriddhi, an initiative of the Farm
 Division of your Company, is making a small but signifcant contribution
 in this regard.
 
 Financial Performance
 
 In these challenging times, the Automotive and Farm Divisions of your
 Company have secured their best performance for the second year in a
 row refecting in substantial growth in the net income of the Company by
 26.60% to Rs. 23,803 crores in the year under review from Rs.18,801
 crores in the previous year.
 
 Consequent to this remarkable performance, the Profit for the year
 before Depreciation, Interest, Exceptional items and Taxation recorded
 an increase of 19.37% at Rs. 3,766 crores as against Rs. 3,155 crores
 in the previous year. Similarly, Profit after tax clocked an increase
 of 27.51% at Rs. 2,662 crores as against Rs. 2,088 crores in the
 previous year. Your Company continues with its rigorous cost
 restructuring exercises and efciency improvements which have resulted
 in signifcant savings through continued focus on cost controls, process
 efciencies and product innovations that exceed customer expectations in
 all areas thereby enabling the Company to maintain Profitable growth in
 the current economic scenario.
 
 Dividend
 
 Your Directors are pleased to recommend a dividend of Rs.10.50 per
 Ordinary (Equity) Share and also a Special Dividend of Re.1 per
 Ordinary (Equity) Share aggregating Rs.11.50 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 being recommended in view of the
 Profit made by the Company on the sale of its entire holdings in Owens
 Corning (India) Limited. The proposed dividend will be paid on an
 enlarged capital base of Rs.306.99 crores (as against Rs.289.21 crores
 in the previous year). The equity dividend outgo for the Financial Year
 2010-11, inclusive of tax on distributed Profits (after reducing the
 tax on distributed Profits of Rs.17.98 crores payable by the
 subsidiaries on the dividends receivable from them during the current
 Financial Year) would absorb a sum of Rs.802.64 crores (as against
 Rs.623.75 crores comprising the dividend of Rs.8.75 per Ordinary
 (Equity) Share and also a Special Dividend of Rs.0.75 per Ordinary
 (Equity) Share aggregating Rs.9.50 per Ordinary (Equity) Share of the
 face value of Rs.5 each paid for the previous year).
 
 Performance Review
 
 Automotive Division:
 
 Your Companys Automotive Division recorded total sales of 2,89,333
 vehicles and 64,740 three-wheelers as compared to 2,36,759 vehicles and
 45,360 three-wheelers in the previous year registering a growth of
 22.2% and 42.7% in vehicle sales and three-wheeler sales respectively.
 
 On the domestic sales front, your Company sold 2,74,793 vehicles
 [including 2,30,110 Multi Utility Vehicles (MUVs), 35,493 small
 4-wheelers 0.75 Ton cargo/passenger and 9,190 mini 4 wheelers 0.5 Ton
 cargo/passenger] registering a growth of 21% over the previous years
 volumes of 2,27,114 vehicles [including 2,14,128 MUVs, 3,722 small
 4-wheelers 0.75 Ton cargo and 9,264 mini 4 wheelers 0.5 Ton cargo]. The
 domestic sales volumes of 62,142 three-wheelers was higher by 39.8% as
 compared to the previous years volume of 44,438 three-wheelers.
 
 Your Companys MUV sales volume grew by 7.5% and your Company continued
 its leadership of the domestic MUV market by posting a market share of
 60.9%. All products of your Companys Passenger MUV portfolio performed
 very well. Bolero volumes grew by 17.8% over the previous year and
 Bolero is currently Indias largest selling MUV for fve consecutive
 years. Scorpio and Xylo volumes also posted an impressive growth of
 19.1% and 14.6% respectively.
 
 In February, 2010, your Company had launched Maxximo in a very
 competitive small 4-wheeler cargo segment (0.75 Ton). During the frst
 full year of sales, Maxximo has impressively established itself in the
 market, with a sales volume of 35,464 vehicles and a market share of
 19.1%.
 
 With an aim to strengthen its product portfolio and to ofer better
 products, your Company has launched four new products viz. Genio,
 Maxximo Mini Van, Compact Cab–Gio Passenger and Thar which have
 received good response from the customers.
 
 In the Overseas market, your Company registered a volume growth of
 62.2% 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 14,540 vehicles [including 305 vehicles sourced from
 Mahindra Navistar Automotives Limited (MNAL)] and 2,598
 three-wheelers in the Overseas market as compared to 10,567 vehicles
 [including 1,323 vehicles sourced from MNAL] and 922 three- wheelers in
 the previous year.
 
 Spare parts sales for the year stood at Rs.666.97 crores (including
 Exports of Rs.28.3 crores) as compared to Rs.514.96 crores (including
 Exports of Rs.22.4 crores) in the previous year, registering a growth
 of 29.5%.
 
 Farm Division:
 
 Your Companys Farm Division (including Swaraj Division) recorded sales
 of 2,14,325 tractors as against 1,75,196 tractors sold in the previous
 year, recording a signifcant growth of 22.3%.
 
 In the Financial Year 2011, the Indian tractor industry witnessed
 consecutive second year of high growth. The domestic market recorded
 sales of 4,80,377 tractors as compared to 4,00,203 tractors in the
 previous year, recording a growth of 20%.
 
 Your Company outperformed the tractor industry with domestic sales of
 2,02,513 tractors as compared to 1,66,359 tractors in the previous year
 recording a growth of 21.7%. This has also helped your Company to
 improve its market share which now stands at 42% as compared to 41.4%
 in the previous financial year, thus completing 28 years of leadership
 in the Indian tractor industry. Your Companys tractor exports grew by
 33.7% to reach 11,812 tractors as compared to 8,837 tractors exported
 in the previous year.
 
 Beyond agriculture, in the power generation space under the Mahindra
 Powerol Brand, your Company sold 27,748 engines in the current financial
 year as against 48,011 engines in the previous year.  Volumes were
 severely afected due to adverse market conditions in the Telecom
 Sector. Your Company, while retaining its leadership position in the
 genset market catering to the telecom space, has focused its presence
 in the retail segment and has also introduced new products like
 inverters.
 
 Mahindra Defence Systems Division (MDS):
 
 Mahindra Defence Systems (MDS), a Division of your Company is engaged
 in two businesses – a) Mahindra Defence Naval Systems (MDNS) and b)
 Mahindra Special Services Group (MSSG).
 
 In the Naval Systems business, your Company currently manufactures Sea
 Mines, Torpedo Launchers, Decoy Launchers and Composites for various
 Naval and other applications from its Plant based in Chinchwadgaon,
 Pune. MDNS has been servicing diverse customers by providing systems
 and sophisticated components. The Naval Systems business has
 considerable potential and is poised for a major growth in the feld of
 diferent types of Sea Mines, Torpedo Decoy Systems and Radar Systems.
 
 In the Special Services Group business, your Company provides corporate
 risk management consultancy services, assisting organisations in
 maintaining their competitive edge by protecting Information, Physical
 and Personnel Assets through implementing the security strategy
 encompassing people, process and technology.  During the year, MSSG has
 been successful in registering and maintaining the business growth
 across various industry verticals through a wide range of service
 oferings in the Corporate Security Risk landscape in India thereby
 enabling over 150 major corporate customers to secure their people,
 assets, information and reputation.
 
 MSSG has witnessed tremendous growth opportunities in the areas of
 Governance and Fraud Risk Management during the year. MSSGs marketing
 and brand promotion activities have been strengthened with increased
 manpower and as a result, MSSG has been able to make its brand visible
 in many cities across India.
 
 Management Discussion and Analysis Report
 
 A detailed analysis of the Companys 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 most of
 which were in place even before they were mandated. Your Company is
 committed to transparency in all its dealings and places high emphasis
 on business ethics. During the year, CRISIL has re-afrmed the highest
 level rating, (Level 1) for Governance and Value Creation for the ffth
 year in a row. 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 Corporate Governance alongwith a Certifcate from the
 Statutory Auditors of the Company regarding the compliance of
 conditions of Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement forms part of this Annual Report.
 
 Share Capital
 
 Increase in Share Capital
 
 During the year under review, your Company has allotted:
 
 1) 1,81,52,597 Ordinary (Equity) Shares of Rs.5 each upon conversion of
 Foreign Currency Convertible Bonds into Shares/Global Depositary
 Receipts (GDRs), each GDR represented by one Ordinary (Equity) Share of
 Rs.5 each, and
 
 2) 1,73,53,034 Ordinary (Equity) Shares of Rs.5 each to the Trustees of
 
 Mahindra & Mahindra Employees Stock Option Trust.
 
 Subsequent to the year end, your Company allotted 34,730 Ordinary
 (Equity) Shares of Rs.5 each to International Finance Corporation, the
 Shareholder of Mahindra Shubhlabh Services Limited (MSSL) in the
 share exchange ratio of 1 fully paid-up Ordinary (Equity) Share of Rs.5
 each for every 190 fully paid-up shares of Rs.10 each held in MSSL
 pursuant to the Scheme of Arrangement between MSSL and the Company and
 their respective Shareholders (the Scheme). The Scheme became
 efective on 15th April, 2011.
 
 Post allotment of Equity Shares as aforesaid, the issued, subscribed
 and paid-up Share Capital of the Company stands at Rs.307 crores
 comprising of 61,39,74,839 Ordinary (Equity) Shares of Rs.5 each fully
 paid-up.
 
 Finance
 
 The overall global growth showed traction in the Financial Year 2011
 with Financial Year 2012 promising further improvement, despite the
 temporary setback arising out of natural calamities in Japan. However
 globally, monetary and fscal policies are showing a tightening trend.
 The developments in Middle East and North Africa coupled with vagaries
 of global weather have resulted in oil and food prices casting a shadow
 over forecasts on growth, infation and policy actions. Indias growth
 during Financial Year 2011 was strong and various indicators of demand
 like auto sales, exports, credit oftake and cargo movements in recent
 months show continued upward trends. However, infation continues to be
 a worry for monetary and fscal policy makers. While the Government of
 India did not take any major adverse measures in Union Budget for
 Financial Year 2012, the Reserve Bank of India has since March, 2010
 raised key policy rates by 350 bps. For the Indian Economy, the
 Financial Year 2012 could be a challenging year as corporates face
 commodity price increase and demand gets threatened by rising interest
 rates.
 
 Your Company continued to focus on managing cash efciently and ensured
 that it had adequate liquidity and back up lines of credit.  During the
 year, your Company initiated suitable actions based on financial
 conditions, to facilitate conversion of debt into equity and raised
 fresh debt to fnance its growth plans.
 
 Your Company had outstanding Foreign Currency Convertible Bonds
 (FCCBs) aggregating USD 189.50 million at the beginning of the year.
 It issued a notice on 8th October, 2010 for early redemption of its
 outstanding FCCBs aggregating USD 141.20 million. Prior to the notice
 for early redemption, the bondholders had opted for conversion of FCCBs
 aggregating USD 48.30 million into Shares/GDRs. Your Companys call met
 with a resounding success with FCCBs aggregating USD 140.10 million
 representing 99.2% of the outstanding FCCBs of USD 141.20 million being
 converted into Shares/ GDRs.
 
 Consequently during the year, your Company has on conversion of FCCBs
 aggregating USD 188.40 million allotted 18.15 million Shares (including
 Shares underlying GDRs) to the bondholders, who exercised the option to
 convert these FCCBs into such Shares/ GDRs. Accordingly, your Companys
 FCCB debt of Rs.850.85 crores outstanding on its books as at the
 beginning of the financial year stands extinguished thereby
 strengthening the credit profle of your Company.
 
 Your Company has also repaid foreign currency loan aggregating Rs.176
 crores and Non-Convertible Redeemable Debentures (NCDs) of Rs.200
 crores during the year. It has successfully raised External Commercial
 Borrowings aggregating USD 150 million from banks at attractive terms
 and at benchmark pricing.
 
 Your Company follows a prudent financial policy and aims to maintain
 optimum financial gearing at all times. The Companys total Debt to
 Equity Ratio was 0.23 as at 31st March, 2011.
 
 Your Company has been rated by CRISIL, ICRA Limited (ICRA) and Credit
 Analysis & Research Limited (CARE) for its banking facilities under
 Basel II norms. During the year, CRISIL upgraded the rating for Long
 Term Banking facilities to AA+/Stable from the earlier AA/ Stable.
 During the year, ICRA and CARE have maintained a Long Term Rating of
 LAA+/Stable and CARE AA+ respectively.
 
 CRISIL, ICRA and CARE have all reafrmed the highest rating for your
 Companys Short Term facilities. Your Companys Bankers continue to
 rate your Company as a prime customer and extend facilities/services at
 prime rates.
 
 Acquisitions and other matters
 
 1) Acquisition of Ssangyong Motor Company Limited (SYMC)
 
 Your Company acquired SYMC, a premier manufacturer of sports utility
 vehicles (SUV) and recreational vehicles (RV) in Korea.  The total
 cost of acquisition of SYMC was KRW 5,22,50,00,00,000 (approximately
 US$ 463 million) with KRW 4,27,09,52,35,000 (approximately US$ 378
 million) payable for new stocks and KRW 95,40,47,65,000 (approximately
 US$ 85 million) in corporate bonds for an equity stake of around 70% in
 SYMC.
 
 SYMC was founded in 1954 and has been manufacturing automobiles for
 more than fve decades. SYMC has a strong domestic network of over 130
 dealers and exports to over 90 countries through over 1,200 dealers.
 
 SYMC has been undergoing a corporate rehabilitation process since
 February, 2009 and the court receivership has now concluded upon court
 approval and the corporate rehabilitation process has been terminated
 in March, 2011.
 
 This acquisition will help your Company to emerge as a competitive
 global utility vehicle player by leveraging on your Companys
 competence in sourcing and marketing strategy and SYMCs strong global
 presence. Your Company is committed to nurturing the Ssangyong brand in
 global markets while preserving its Korean heritage. It is intended
 that SYMC will continue to function as an independent entity with
 primarily a Korean Management.  The acquisition will ofer financial
 stability to SYMC and will work to further strengthen SYMCs product
 portfolio across the globe.
 
 The strong complementarities between SYMC and your Companys portfolio
 of products and technology provide an opportunity to create distinct
 positioning. The wide sales and distribution networks and complementary
 product lines will provide access to many overseas markets for both the
 companies.
 
 2) EPC Industrie Limited – The Farm Division of your Company has been
 working in the wider agriculture domain through Mahindra Shubhlabh
 Services Limited and through various Mahindra Samriddhi centres across
 the country. Farm Divisions vision is to Deliver FarmTech Prosperity
 and in line with this vision, your Company has decided to foray into
 the Micro-irrigation industry.  Micro-irrigation brings various
 Benefits to the farmer, such as reduced requirement of water,
 fertilizers, electricity, labour, etc.  with increase in productivity.
 Entry into the micro-irrigation business is an important step towards
 realisation of the Divisions vision. It also signifes your Companys
 commitment to conserve the most precious natural resource viz. Water.
 More than 80% of available water in India is consumed in agriculture.
 Micro irrigation is a water efcient irrigation technology which has
 been identifed as one of the major focus area by the Agricultural
 Department.
 
 Thus, keeping the opportunities in Agricultural Sector in mind, your
 Company has acquired 38% of the paid-up Equity Share Capital through a
 Preferential Allotment in EPC Industrie Limited (EPC), a company
 listed on the Bombay Stock Exchange Limited.  Pursuant to the above
 acquisition, the Company is in the process of making an Open Ofer under
 the Securities and Exchange Board of India (Substantial Acquisition of
 Shares and Takeovers) Regulations, 1997 (Takeover Code) to the
 Shareholders of EPC for 20% of the enhanced Share Capital of EPC as per
 the terms of the Takeover Code.
 
 EPC established in 1981 is based in Nasik, Maharashtra and is known for
 its quality products. EPC has grown as one of the top fve companies in
 India in the micro-irrigation space.
 
 Your Company already has a very strong presence in the Tractor and Farm
 machinery business and with the current entry in the micro – irrigation
 business, your Company would be in a position to serve the farmer in a
 much better way and create a strong diferentiation for the brand
 Mahindra.
 
 ) Demerger of the Non Fruit Business of Mahindra Shubhlabh Services
 Limited into your Company - The Honourable High Court of Judicature at
 Bombay has approved the Scheme of Arrangement between Mahindra
 Shubhlabh Services Limited (MSSL) and your Company and their
 respective Shareholders which inter alia envisages demerger of the Agri
 Inputs Business along with other common assets and liabilities (Non
 Fruit business) of MSSL into the Company.
 
 ) Strategic Sale of part of the Companys Shareholding in Mahindra
 Consulting Engineers Limited (MACE) to SAFEGE – a France based Multi
 Disciplinary Consultancy Company –
 
 MACE, a subsidiary of the Company is engaged in engineering, project
 advisory and infrastructure consulting activities covering urban
 infrastructure, water, wastewater, waste management, environment, urban
 planning, industrial infrastructure, transportation, rural
 infrastructure, etc.
 
 MACE entered into a strategic partnership with SAFEGE, France and post
 induction of the strategic partner, your Company holds 54.16% of the
 Equity Share Capital of MACE, whilst 30.83% is held by SAFEGE and
 balance 15.01% is held by Mahindra Consulting Engineers Employees Stock
 Option Trust and /or its benefciaries.
 
 SAFEGE activities are synergetic with thrust and growth areas identifed
 for Indian Engineering and Infrastructure consultancy.  MACE-SAFEGE
 partnership will be a strategic vehicle to develop business in India,
 neighbouring countries and the Middle East and Asia besides other
 international markets in identifed areas of activities. Through this
 strategic partnership, MACE will also ofer support to SAFEGEs
 International Assignments and MACE would be well poised to handle large
 domestic projects in India requiring international expertise.
 
 5) Joint Venture with Arabia Holdings Limited and Ras-Al-Khaimah
 Transport Investments Co. LLC - Through its Mahindra Defence Systems
 Division (MDS), your Company has over the past eight years acquired a
 leadership position in India in the feld of research, design,
 development and manufacture of armoured and light military vehicles. In
 order to address the large and growing market for uparmoured vehicles
 globally especially in West Asia, Central Asia and Africa, in June,
 2010, your Company had entered into a Joint Venture with Arabia
 Holdings Limited and Ras-Al- Khaimah Transport Investments Co. LLC
 through its wholly owned subsidiary Mahindra Overseas Investment
 Company (Mauritius) Limited to form a Joint Venture company viz.
 Mahindra Emirates Vehicle Armouring FZ LLC or MEVA in the Emirate
 of Ras-Al- Khaimah in the UAE for armouring of vehicles.
 
 Your Company holds a 51% stake in MEVA which would design and develop
 ballistic kits for vehicle protection. The other Joint Venture partners
 would provide necessary infrastructural support to MEVA for
 establishing the operations in the Emirate of Ras-Al-Khaimah.
 
 MEVA intends to launch a number of MDS armoured vehicles such as the
 Marksman, the uparmoured Scorpio, Cash in Transit Van, etc.  which have
 been very successful in India. MEVA will also be doing armouring of
 non-MDS vehicles such as Toyota, Nissan, etc.
 
 Stock Options
 
 Pursuant to the approval of the Members at the previous Annual General
 Meeting held on 28th July, 2010, your Company has adopted and
 introduced Mahindra & Mahindra Limited Employees Stock Option Scheme -
 2010 (New Scheme). On the recommendation of the
 Remuneration/Compensation Committee of your Company, the Trustees of
 the Mahindra & Mahindra Employees Stock Option Trust have granted
 32,16,758 Stock Options to Eligible Employees under the New Scheme.
 During the year under review, no new Options have 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
 
 Industrial Relations generally remained cordial and harmonious
 throughout the year, apart from a one day illegal tool down strike by
 the Nashik Plant Workmen to press for their demands for increase in
 wages and for upgradation for a section of workmen. The loss of
 production for that day was compensated within the same week and the
 Company did not sufer any loss. On the contrary, the highest ever
 production was recorded in the month of March, 2011.
 
 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, your Company
 has, during the year under review accepted Voluntary Retirement from
 146 employees at Kandivali Plant of the Farm Division. Your Company has
 set an example of harmonious industrial relationship by celebrating the
 40th Anniversary of uninterrupted existence of Union at Kandivali Plant
 of the Farm Division.
 
 Safety, Health and Environmental Performance
 
 Health and Safety
 
 Your Company continues to demonstrate a strong commitment towards
 Safety, Health and Environment and as a part of the same, following
 measures and actions were taken during the year under review. Your
 Company has a well-established Safety, Occupational Health &
 Environmental Policy. Objectives and Targets derived from the Policy
 are supported by Management Programs.
 
 The Safety & Occupational Health of its employees are embedded as core
 organisational values of the Company. The Policy inter alia covers and
 ensures safety of public, employees, plant and equipment, ensures
 compliance on a monthly basis, imparts training to all its employees as
 per training calendar, carries out statutory safety assurance and
 audits of its facilities as per legal requirements, conducts regular
 medical and occupational check-up of its employees and promotes
 health-friendly sustainable activities.
 
 Fire Service Day and Safety Week are being celebrated, Safety Audits/
 Inspection alongwith Safety awareness training with benchmarks on
 safety performance are conducted. Your Companys Plants continued their
 commitment to improve the well being of its employees and contract
 workmen by organising Occupational Health Examination Camps, medical
 check-ups, etc.
 
 Through stakeholders engagement and employees involvement, your
 Company demonstrates its road map on the fundamentals of Planet, People
 and Profit. Various path breaking projects have been implemented by
 your Company in the areas of Air Pollution Management, Water and Waste
 Water Management, Solid Waste Management and Greenbelt Development.
 
 New Certifcations
 
 The Sustainability Reporting System provides framework for your
 Companys environmental initiatives, sets objectives and targets and
 helps in continually improving its air quality by controlling
 emissions, water pollution and minimising waste from its processes. All
 Plants of the Automotive Division have been certifed with amended
 standard for ISO 14001: 2004 & OHSAS 18001:2007. Your Companys
 commitment to environment stems from the Mahindra Groups abiding
 concern for Stakeholder engagement in and around the Society. Its
 nature of operations has a low impact on the environment by
 implementing Environment Management System wherein a healthy work
 environment is provided to its employees and environment friendly
 businesses are conducted. Besides, to bring cross cultural sensitivity
 of the Companys business associates, promotional activity towards
 Green Supply Chain Management has also been initiated.
 
 Implementation of Occupational Health & Safety Management System
 standard has re-enforced the Companys commitment of Safety and
 Occupational Health to the highest levels. OHSAS 18001:2007 is the
 existing best safety practices standard which is implemented through
 the amended Management System and all Plants of the Automotive Division
 have been certifed during the year 2010-11. The OHSAS system aims to
 eliminate or minimise risk to employees and other interested parties
 who may be exposed to Occupational Safety risks associated with its
 activities. Sustainable development is promoted across the Division
 through sharing of best practices in the felds of Safety, Occupational
 Health & Environment.
 
 Corporate Social Responsibility
 
 Through its various Corporate Social Responsibility (CSR)
 initiatives, the Mahindra Group is enabling entire communities to
 RISE. With a vision of transforming the lives of youth from socially
 weaker and economically disadvantaged sections of society, the Mahindra
 Group has established various scholarships and other educational
 initiatives which help empower these communities. In addition, other
 CSR initiatives such as Project Hariyali in the area of environment and
 supporting Lifeline Express in the area of health continue to drive
 positive change in the lives of communities.
 
 CSR continues to be an integral part of the vision of the Mahindra
 Group and this year too, your Company has pledged 1% of its Profit
 after Tax for CSR initiatives, largely to Benefit the socially and
 economically disadvantaged sections of Society.
 
 Some of the major initiatives your Company has invested in are
 described below:
 
 A.  Nanhi Kali
 
 Nanhi Kali is a sponsorship program that supports the education of
 disadvantaged girl children in India. Through the Nanhi Kali
 sponsorship, underprivileged girls are provided not only academic
 support but also uniforms, school bags, shoes, etc. which allow the
 girls to attend school with dignity. Through the support of 8,000
 donors, the Nanhi Kali project is supporting the education of 70,000
 underprivileged girls in 9 states in India. The largest donor is the
 Mahindra Group which supports the education of 23,000 Nanhi Kalis.
 
 B.  Mahindra Pride Schools
 
 2,400 students from socially weaker sections of Society have been
 provided with livelihood training at Mahindra Pride School in Pune.
 The training is provided for those who wish to gain employment in the
 Hospitality Sector, Information Technology Sector for BPOs and KPOs and
 the Retail Sector. The composition of students consists of scheduled
 caste and scheduled tribe youth, most of whom have not even completed
 their education. After completing their training, 100% of the students
 have been placed in lucrative jobs. The second Mahindra Pride School
 was opened in Chennai early this year. This school would train
 approximately 600 students in a year.
 
 C.  Scholarships & Grants
 
 Mahindra All India Talent Scholarships was awarded to students from
 lower socio economic strata of society who wish to pursue job oriented
 Diploma Courses in Government Polytechnics. The K. C. Mahindra
 Scholarships for Post-Graduate studies abroad provide interest free
 loan scholarships to various deserving students. Your Company is also
 supporting 15 Mumbai Public
 
 Schools which provide quality English medium public education to
 students from lower socio economic strata of Society.
 
 Employee Social Options
 
 Your Company is tapping the potential hidden within each one of its
 employees to make a sustainable society; one which is healthier,
 cleaner, greener and more literate. The Mahindra Workforce is a
 powerhouse of inexhaustible energy where people work with passion in
 abundance and also for the betterment of the Society. Through your
 Companys Employee Social Options (ESOPs) program many Mahindra
 employees are contributing towards making diference to Society.
 
 Your Companys ESOPs program encourages employees in supporting
 volunteering projects based on the needs of underprivileged communities
 in and around their places of work. Employees generate ideas for
 projects, prepare annual activity plans, implement each activity and
 monitor results. To fund these Employee initiatives, each Sector
 donates 0.5 percent of its Profit after tax to the ESOPs Central CSR
 fund.
 
 During the year under review, 15,147 employees volunteered in various
 initiatives contributing 73,509 man-hours in various social initiatives
 in and around their local communities.
 
 Some of the notable ESOPs initiatives this year were the Lifeline
 Express in Farrukhabad for performing surgeries free of cost, Mahindra
 Hariyali for planting one million trees, ESOPs Awards – 2010, etc.
 
 Your Companys ESOPs activities also included initiatives in Education,
 Health, Environment and others having short term as well as long term
 impact on the benefciaries.
 
 Sustainability Initiative
 
 Your Company embarked on the sustainability journey in November, 2007
 and over these last four years has laid a foundation for developing a
 sustainable enterprise. Conscious eforts have been made to consider the
 impact of the Companys business on the environment and its
 responsibility towards the communities in which it operates, besides
 focussing on economic progress. During the year, your Companys triple
 bottom line performance for 2009-10 was published in accordance with
 the latest guidelines of the internationally accepted Global Reporting
 Initiative or the GRI standards and like in case of the previous two
 Reports, this Report was externally assured by Ernst & Young with an A+
 rating and GRI checked. The Report for the year 2010-11 is under
 preparation and will be released shortly.
 
 During the year 2009-10, a Carbon foot-printing exercise was undertaken
 to inventorise GHG emissions from all your Companys business
 operations under Scope I, II and III emissions as per internationally
 accepted standards. This has enabled the Company to establish a
 baseline on emissions. This will be an ongoing exercise and continuous
 reduction in the GHG intensity of all products and processes, will be
 the Companys constant endeavour.
 
 The focus all along has been on transparent and comprehensive
 reporting, due to which your Company has been ranked in the list of top
 10 companies in India by the Carbon Disclosure Leadership Index 2010
 and the Standard & Poor ESG India Index 2010. Your Company also secured
 a second place in the Green Business Leadership Awards 2010-11,
 instituted by Financial Express and Emergent Ventures.
 
 Being conscious of the fact that the Companys products touch many
 lives and livelihoods in many ways and that the progress of many
 communities is linked to the Companys success, with a continued use of
 the strategic approach of ALTERNATIVE THINKING, your Company is
 committed to creating a sustainable enterprise.
 
 Directors
 
 Mr. Anand G. Mahindra, Mr. Bharat Doshi, Mr. Nadir B. Godrej and Mr. M.
 M. Murugappan retire by rotation and, being eligible, ofer 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, confrm 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 afairs of the Company as at
 31st March, 2011 and of the Profit of the Company for the year ended on
 that date;
 
 (iii) proper and sufcient 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 38.49% growth in its
 consolidated Profits and Mahindra Lifespace Developers Limited with a
 37.81% 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.3,079.73 crores as against Rs. 2,478.56 crores earned in the
 previous year.
 
 During the year under review, Mahindra Aerospace Australia Pty.
 Limited, Aerostaf Australia Pty. Limited, Mahindra Reva Electric
 Vehicles Private Limited (earlier known as Reva Electric Car Company
 Private Limited), Bristlecone Consulting Limited, Anthurium Developers
 Limited, Watsonia Developers Limited, Gipp Aero Investments Pty.
 Limited, Gippsaero Pty. Limited, GA8 Airvan Pty. Limited, GA200 Pty.
 Limited, Airvan Flight Services Pty. Limited, Gipp Aero International
 Pty.  Limited, Nomad TC Pty. Limited, Mahindra Emirates Vehicle
 Armouring FZ-LLC, Mahindra Solar One Private Limited, Mahindra BPO
 Services Private Limited, Mahindra Aerostructures Private Limited,
 Ssangyong Motor Company Limited, Ssangyong European Parts Center B.V.,
 Ssangyong Motor (Shanghai) Co. Limited, Ssangyong (Yizheng) Auto Parts
 Manufacturing Co. Limited and Mahindra EPC Services Private Limited
 became subsidiaries of your Company.
 
 During the year under review, ID-EE S.r.l. and Mahindra Solar One
 Private Limited ceased to be subsidiaries of the Company.
 
 The Statement pursuant to Section 212 of the Companies Act, 1956
 containing details of the Companys subsidiaries is attached.
 
 In accordance with the General Circular issued by the Ministry of
 Corporate Afairs, Government of India, the Balance Sheet, Profit and
 Loss Account 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 Ofce of the Company and at the Ofce 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 AS21 form
 part of this Annual Report.
 
 The Consolidated Financial Statements presented by the Company include
 the financial results of its subsidiary companies, associates, joint
 ventures, etc.
 
 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(1B) of the Companies
 Act, 1956, the Company has obtained a written Certifcate from the above
 Auditors proposed to be re-appointed to the efect that their
 re-appointment, if made, would be in conformity with the limits
 specifed 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 fling of the Cost Audit Report with
 the Ministry of Corporate Afairs for the financial year ended 31st
 March, 2010 was 30th September, 2010. This Report was fled on 24th
 September, 2010. The Board of Directors of your Company has upon
 recommendation of the Audit Committee appointed M/s. N. I. Mehta & Co.,
 Cost Accountants to audit the cost accounts of the Company for the
 financial year ending 31st March, 2012, subject to the approval of the
 Central Government. As required under the provisions of Section 224(1B)
 of the Companies Act, 1956, the Company has obtained a written
 confrmation from M/s. N. I. Mehta & Co. to the efect that they are
 eligible for appointment as Cost Auditors under Section 233B of the
 Companies Act, 1956.
 
 Public Deposits and Loans/Advances
 
 Out of the total 14,047 deposits of Rs. 93.09 crores from the Public
 and Shareholders as at 31st March, 2011, 190 deposits amounting to Rs.
 0.82 crores had matured and had not been claimed as at the end of the
 Financial Year. Since then, 63 of these deposits of the value of Rs.
 0.45 crores 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, 2011 to 29th May, 2011, 50,216 vehicles
 were despatched as against 47,022 vehicles during the corresponding
 period in the previous year. During the same period, 40,971 tractors
 were despatched as against 30,302 tractors despatched during the
 corresponding period in the previous year.
 
 With both input costs and interest rates rising, the economic
 environment is signifcantly more challenging today than it was a year
 ago. However, the Company expects to meet these challenges, through its
 intense and continuous focus on cost controls, innovation, product
 quality and market diversifcation.
 
 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 113 employees who were in receipt of remuneration of
 not less than Rs. 60,00,000 during the year ended 31st March, 2011 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 of the Company.
 
 For and on behalf of the Board
 
 KESHUB MAHINDRA
 
 Chairman
 
 Mumbai, 30th May, 2011