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Mahindra and Mahindra
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Download Annual Report PDF Format 2013 | 2012 | 2011
Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors present their Report together with the audited accounts
 of your Company for the year ended 31st March, 2014.
 
 Financial Highlights
 
                                             (Rs. in crores)
 
                                             2014         2013
 
 Gross Income                               43,838       43,962
 
 Less: Excise Duty on Sales                  2,612        2,972
 
 Net Income                                 41,226       40,990
 
 Profit before Depreciation, Finance
 Costs, Exceptional items and Taxation       5,439        5,258
 
 Less: Depreciation/Amortisation               863          711
 
 Profit before Finance Costs,
 
 Exceptional items and Taxation              4,576        4,547
 
 Less: Finance Costs                           259          191
 
 Profit before Exceptional items
 and Taxation                                4,317        4,356
 
 Add: Exceptional items                         52           91
 
 Profit before Taxation                      4,369        4,447
 
 Less: Provision for Tax - Current Tax
 (including MAT credit entitlement)            350          933
 
 Less: Provision for Tax - Deferred
 Tax (Net)                                     261          161
 
 Profit for the year                         3,758        3,353
 
 Balance of profit for earlier years         9,952        7,905
 
 Less: Transfer to Debenture
 
 Redemption Reserve                             17           15
 
 Profits available for appropriation        13,693       11,243 
 
 Less: General
 Reserve                                       400          400
 
 Proposed Dividends                            862          798
 
 Income-tax on Proposed Dividend               104           93
 
 Dividend for 2012-13 paid on
 
 shares issued in June, 2013                    2           --
 
 Income-tax on Dividend Paid                    *           --
 
 Balance carried forward                    12,325        9,952
 
 * denotes amounts less than Rs. 50 lakhs
 
 India''s macroeconomic situation as it entered Financial Year 2014 was
 extremely weak. Growth had dropped to 4.5%, fiscal deficit and
 inflation were at uncomfortably high levels and the country''s current
 account deficit was at an alarming 4.8% of GDP leaving it extremely
 exposed to the global financial turbulence triggered by the US Fed''s
 ''taper'' announcement, in May, 2013. As fund managers scrambled for safe
 havens, portfolio flows to India, given its macro fragility, witnessed
 a sharp reversal. The rupee, as a consequence, plunged over 25% against
 the US dollar, stoking fears of a self-fulfilling balance of payments
 crisis. Swift, defensive actions by the Government and the RBI,
 however, helped turn the tide and by the year end the Indian Rupee had
 stabilised, the current account deficit had halved, the fiscal deficit
 was contained and inflation, while still high, had moved back to single
 digit levels.
 
 Domestic economic activity, though, remained weak and uninspiring
 through the year. While a robust monsoon season provided strong support
 to agricultural output and rural incomes, contra impact on demand
 stemming from fiscal contraction, rising interest rates, stalling
 infrastructure projects and, an increasingly uncertain business
 regulatory environment, weighed heavily on the economy.  Manufacturing
 activity, as a result, witnessed a contraction in 2013-14, its worst
 performance in over 20 years, and overall GDP growth dropped below 5%
 for a second successive fiscal year.
 
 Financial Performance
 
 In the challenging times that the Indian Auto Industry is currently
 passing through, with volumes shrinking, your Company has registered a
 marginal growth of 0.57% in the net income at Rs. 41,226 crores in the
 year under review as against Rs. 40,990 crores in the previous year on
 the back of a strong sales performance by its Farm Equipment Division.
 
 Consequent to this performance, the Profit for the year before
 Depreciation, Finance Costs, Exceptional items and Taxation recorded an
 increase of 3.44% at Rs. 5,439 crores as against Rs. 5,258 crores in
 the previous year. Similarly, Profit after tax clocked an increase of
 12.08% at Rs. 3,758 crores as against Rs. 3,353 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 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. 13.50 per
 Ordinary (Equity) Share and also a Special Dividend of Re. 0.50 per
 Ordinary (Equity) Share aggregating Rs. 14 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 long term investments of
 the Company. The equity dividend outgo for the Financial Year 2013-14,
 inclusive of tax on distributed profits (after reducing the tax on
 distributed profits of Rs. 42.97 crores on the dividends receivable
 from the subsidiaries during the current Financial Year) would absorb a
 sum of Rs. 965.81 crores [as against Rs. 894.11 crores comprising the
 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 and tax
 thereon paid for the previous year].
 
 Performance Review
 
 Automotive Division:
 
 Your Company''s Automotive Division recorded total sales of 4,34,505
 vehicles and 64,510 three-wheelers as compared to 4,83,734 vehicles and
 67,735 three-wheelers in the previous year registering a de-growth of
 10.2% in vehicle sales and a de-growth of 4.8% in three-wheeler sales.
 
 On the domestic sales front, your Company sold 2,54,344 Passenger
 Vehicles [including 2,19,421 Utility Vehicles (UVs), 25,189 Multi
 Purpose Vehicles (MPVs) and 9,734 Cars] which is a de-growth of 18.1%
 over the previous year''s volumes of 3,10,706 Passenger Vehicles
 [including 2,63,925 UVs, 31,437 MPVs and 15,344 Cars]. In the
 commercial vehicle segment, your Company sold 1,52,398 vehicles
 [including 29,223 vehicles < 2T
 
 GVW and 1,23,175 vehicles between 2-3.5T GVW] registering a growth of
 6.7% over the previous year''s volume of 1,42,797 commercial vehicles
 [including 39,911 vehicles < 2T GVW and 1,02,886 vehicles between
 2-3.5T GVW]. In the three-wheeler segment, your Company sold 62,614
 three-wheelers registering a de-growth of 4.4% over the previous year''s
 volume of 65,510 three-wheelers.
 
 The volume de-growth in most market segments is a reflection of the
 prolonged slow-down faced by the Indian Automotive Industry. In fact,
 the 9.6% de-growth of the Indian Automotive Industry (excluding
 two-wheeler) is the worst ever since 1976.
 
 Your Company''s UV sales volume de-grew by 16.9%, but your Company
 continued its leadership of the domestic UV market by posting a market
 share of 41.7%. During this year, Bolero once again crossed the
 milestone of 1 lakh sales in a year.  This is the third consecutive
 year that Bolero has achieved this milestone. Bolero also retained the
 title of India''s largest selling Sports Utility Vehicle (SUV) for the
 8th consecutive year. It is also the 5th highest selling passenger
 vehicle in India.  The Scorpio posted record sales since launch and
 strengthened its iconic status with sales of over 50,000 units for the
 third successive year. The XUV500 continued to be the customers'' choice
 with over 30,000 sales in the year.
 
 In the commercial vehicle segment, your Company strengthened its
 product portfolio with two highly successful launches in the Pik-Up
 truck segment - The Bolero Maxitruck Plus and the New Bolero Pik-Up.
 These successful launches resulted in a volume growth of 19.7% and your
 Company''s market share of the Pik-Up segment now stands at 63.9% (a
 gain of 9.9%).
 
 Pursuant to the approval of the Scheme of Arrangement between Mahindra
 Trucks and Buses Limited (MTBL), a wholly owned subsidiary of the
 Company and its Shareholders and Creditors and Mahindra & Mahindra
 Limited which has become effective from 30th March, 2014, the erstwhile
 Truck and Bus Division of MTBL has been demerged and transferred into
 the Company and now forms a Division of the Company.
 
 In the Overseas market, your Company''s volume de-grew 8.6% over the
 previous year. This de-growth was a result of the difficult market
 conditions in the key markets of Sri Lanka, South Africa and Chile.
 During the year under review, your Company sold 27,763 vehicles
 [including 452 vehicles sourced from the erstwhile Truck and Bus
 Division of MTBL] and 1,896 three-wheelers in the Overseas market as
 compared to 30,231 vehicles [including 209 vehicles sourced from the
 erstwhile
 
 Truck and Bus Division of MTBL] and 2,225 three-wheelers in the
 previous year.
 
 During the year under review, your Company sold 5,876 Light Commercial
 Vehicles (LCVs) and 2,285 Heavy Commercial Vehicles (HCVs)
 [comprising of the erstwhile Truck and Bus Division of MTBL] as
 compared to 8,925 LCVs and 2,977 HCVs in the previous year of the
 erstwhile Truck and Bus Division of MTBL. During the year under
 review, the overall Commercial Vehicle Industry (3.5 Tonne to 49 Tonne)
 was down by 23.2% and HCV Industry (25 Tonne to 49 Tonne) was down by
 24.2% as compared to the previous year.
 
 Spare parts sales for the year stood at Rs. 1,427.81 crores (including
 exports of Rs. 92.98 crores) as compared to Rs. 1,190.30 crores
 (including exports of Rs. 90.30 crores) in the previous year,
 registering a growth of 20%.
 
 Farm Division:
 
 Your Company''s Farm Division (including Swaraj Division) recorded sales
 of 2,68,487 tractors as against 2,24,844 tractors sold in the previous
 year, recording a growth of 19.4%.
 
 In the Financial Year 2013-14, the Indian tractor industry enjoyed good
 growth. The domestic market recorded sales of 6,33,656 tractors as
 compared to 5,27,384 tractors in the previous year, recording a growth
 of 20.2%.
 
 Your Company performed marginally better than the tractor industry with
 domestic sales of 2,58,339 tractors as compared to 2,12,555 tractors in
 the previous year recording a growth of 21.5%. Your Company''s domestic
 market share now stands at 40.6% as compared to 40.1% in the previous
 financial year, thus completing 31 years of leadership in the Indian
 tractor industry. Your Company exported 10,148 tractors which is a
 decline of 17.4% over the previous year.
 
 Beyond tractors, your Company has presence in crop care solutions and
 distribution of seeds. The focus of this business is to provide quality
 inputs and help improve farm productivity.  In the Financial Year
 2013-14, this business saw a good growth of 46% in terms of revenue.
 
 Beyond agriculture, in the power generation space under the Mahindra
 Powerol Brand, your Company earned a revenue of Rs. 775.5 crores in the
 current Financial Year as against Rs. 936.8 crores in the previous
 year. The decline in revenue has mainly been the result of an Industry
 slowdown. While retaining the leadership position in the genset market
 catering to the telecom space, your Company has improved its presence
 in the retail segment and also made its entry into the ''Energy
 Management Solutions'' space.
 
 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 forms part of this Annual Report.
 
 Share Capital
 
 During the year under review, your Company has allotted 19,11,628
 Ordinary (Equity) Shares of Rs. 5 each to the Trustees of Mahindra &
 Mahindra Employees'' Stock Option Trust. Consequently, the issued,
 subscribed and paid-up Share Capital of the Company stood at Rs. 308
 crores comprising of 61,58,92,384 Ordinary (Equity) Shares of Rs. 5
 each fully paid-up.
 
 Finance
 
 The Financial Year 2013-14 saw the global economy operating at
 differing speeds. While amongst the developed world, the USA showed
 signs of recovery leading to the tapering of Quantitative Easing,
 Europe witnessed signs of stabilisation.  The emerging economies which
 had experienced a slowdown in the previous year, encountered new
 domestic and international headwinds during the year 2013. While China
 embarked on a soft landing programme by curtailing credit led growth,
 countries like Brazil, Russia and South Africa faced problems in
 commodity led growth apart from political and social issues. The latest
 outlook published by IMF anticipates a continued recovery for the
 global economy in the Calendar Year 2014, showing upward growth for the
 developed world, while emerging economies as a whole are expected to
 record a moderate growth, less than the high growth rates they had
 witnessed until a couple of years ago.
 
 In the domestic front, tight liquidity conditions prevailed throughout
 the year, while interest rates remained high,
 mainly to contain inflationary pressures. During the year, to counter
 the inflationary pressures, Reserve Bank of India (RBI) increased
 repo rate by 50 bps (net). The year also witnessed high volatility in
 exchange rates, the impact of which RBI countered by effectively using
 the swap window and by interest rate management. By employing a
 combination of hikes in short term interest rates and restricting
 access to liquidity adjustment facility (LAF), RBI kept liquidity in
 the market on a tight leash. However, even in tight liquidity
 conditions, good companies with strong governance did not face a dearth
 of liquidity and finance was available to them at very competitive
 rates. Further, the current outlook on the domestic economy is turning
 positive, with drags on growth bottoming out, inflation moderating and
 reduction in current account deficit, auguring well for the financial
 markets.
 
 Your Company continued to focus on managing cash efficiently and
 ensured that it had adequate liquidity and back up lines of credit.
 During the course of the year, your Company repaid Rs. 474 crores of
 borrowings from internal accruals. The Company''s Bankers continue to
 rate your Company as a prime customer and extend facilities/services at
 prime rates.
 
 Your Company follows a prudent financial policy and aims not to exceed
 an optimum financial gearing at any time.  The Company''s total Debt to
 Equity Ratio was 0.24 as at 31st March, 2014. Your Company raised Rs.
 500 crores byway of private placement of 9.55%, Listed, Rated,
 Unsecured, Senior, Redeemable Non-Convertible Debentures with a 50
 years'' maturity, to part finance its various ongoing modernisation and
 expansion programmes. The debenture issuance by your Company was the
 first of its kind in the Indian debt market, creating a benchmark 50
 year debt instrument. The issue was dual rated by CRISIL Limited and
 ICRA Limited. CRISIL Limited and ICRA Limited have respectively
 assigned AA /Stable and [ICRA]AA  (stable) rating to these
 debentures indicating high credit quality.
 
 Your Company has been rated by CRISIL Limited, ICRA Limited (ICRA)
 and Credit Analysis & Research Limited (CARE) for its banking
 facilities under Basel II norms. While they have all re-affirmed the
 highest credit rating for your Company''s Short Term facilities, CRISIL
 maintained the rating for your Company''s Long Term Banking facilities
 at AA /Stable, ICRA maintained the Long Term Rating of [ICRA]AA 
 (stable) and CARE also maintained the rating CARE AA .
 
 Your Company was also rated by India Ratings and Research (Ind-Ra, a
 Fitch Group Company). Citing the resilience shown by the Company over
 multiple business cycles over the last 19 years as a key rating driver,
 India Ratings & Research has assigned your Company a Long-Term Issuer
 Rating of ''IND AAA'' with a Stable Outlook. The recent rating upgrade is
 an acknowledgement of the strong credit profile that the Company has
 maintained over the years thereby offering it flexibility to finance
 its future growth plans. The AAA rating indicates highest degree of
 safety regarding timely servicing of financial obligations and is also
 a vote of confidence reposed in your Company''s Management by the rating
 agency.
 
 During the year the innovative treasury initiatives taken by the
 Company earned recognition from the prestigious Treasury Management
 International (TMI).
 
 Investor Relations (IR)
 
 In the continuous search for excellence, your Company continued to
 engage with investors in many ways, including extensive one on one
 meetings, telepresence meetings, participations in investor
 conferences, quarterly earnings calls during the year and an annual
 analyst meet in May, 2013. Your Company interacted with 520 Indian and
 overseas investors and analysts in all (excluding quarterly earnings
 calls) during the year. Your Company continuously strove to improve IR
 engagement with International and Indian investors and has set up
 feedback mechanism to measure IR effectiveness. Structured concalls and
 periodic investor/analyst interactions with the Chairman & Managing
 Director and Business Heads were organised during the year. Your
 Company has introduced an IR App for Investor Relations which now can
 be conveniently accessed from hand- held devices. 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.  Demerger of the Truck and Bus Businesses of Mahindra Trucks and
 Buses Limited
 
 Mahindra Trucks and Buses Limited (MTBL), a wholly owned subsidiary
 of your Company was engaged in the businesses of designing, developing,
 marketing and distribution of Light Commercial Vehicles (LCVs) and
 Medium and Heavy Commercial Vehicles (M&HCVs) including but not
 limited to (a) vehicles such as trucks, buses, tippers and tractors and
 (b) license fees and marketing service charges for lubricants and
 trading in spare parts and accessories.
 
 MTBL, earlier known as Mahindra Navistar Automotives Limited, was a
 Joint Venture between Navistar Inc. and its affiliates (Navistar) and
 your Company. Navistar had entirely exited from the Joint Venture in
 February, 2013.
 
 Consequent to the divestment of Navistar from the Joint Venture, your
 Company had assumed full control over the activities of MTBL.
 
 Your Company is already dealing in all segments of automobile industry
 e.g. passenger vehicles, commercial vehicles and three-wheelers. M&HCVs
 and LCVs would be a perfect fit with the existing product portfolio of
 the Company.
 
 Due to the divestment of Navistar and in order to consolidate, it was
 proposed to demerge the Truck and Bus Businesses of MTBL into your
 Company. A Scheme of Arrangement has been approved by the Hon''ble High
 Court on 7th March, 2014 whereby MTBL would demerge the Truck and Bus
 Businesses into your Company. MTBL being a wholly owned subsidiary of
 your Company, the Hon''ble High Court dispensed with the requirement of
 filing an application by your Company and the consequent processes,
 including Shareholders'' Meeting. The demerger is effective from 30th
 March, 2014. The appointed date of the Scheme is 1st April, 2013. As
 per the Scheme, your Company''s investment cost in MTBL stands reduced
 proportionate to the net worth of Truck and Bus Businesses vis-a-vis
 total net worth of MTBL.
 
 2.  New Investors in Mahindra Two Wheelers Limited
 
 During the Financial Year 2013-14, your Company has sold 4,97,51,640
 shares in Mahindra Two Wheelers Limited (MTWL) to Kinetic Engineering
 Limited (KEL). As part of its strategy to focus on building its
 existing businesses, KEL has sold its entire stake to SAMENA Capital, a
 private equity investment group focused on Asia and the Middle East.
 Further, during the year, Emerging India Fund, a fund managed by ICICI
 Investment Management Company Limited participated in a preferential
 equity issuance by MTWL. Post the above two transactions, your Company
 now holds 88.46% in MTWL.
 
 3.  Buyout of minority stake in Mahindra Europe S.r.l.
 
 As a part of its strategy to expand its automotive operations in the
 European market, your Company had appointed Mahindra Europe S.r.l. (ME
 Sri) erstwhile Eurasia Motors in Italy, as a distributor of your
 Company''s vehicles. In December, 2005, your Company, through Mahindra
 Overseas Investment Company (Mauritius) Limited (MOICML) had acquired
 80% of the equity (''Quota'') capital of ME Sri. During the year under
 review, your Company through MOICML has acquired the balance equity
 (''Quota'') capital of 20% in ME Sri. Accordingly,
 
 MOICML, a wholly owned subsidiary of the Company, now holds 100% of the
 equity (''Quota'') capital of ME Sri.
 
 4.  Mahindra Group and CIE Automotive forms Global Alliance in Auto
 Components
 
 It had always been your Company''s stated intent to merge all of its
 Auto Component subsidiaries into one listed entity to provide size and
 scale and a one stop shop for its global customers. Your Company is
 now in the process of executing this vision much beyond the scale
 originally envisaged, by forging a Global alliance partnership with CIE
 Automotive S.A.  (CIE). An agreement for this purpose was entered
 into on 15th June, 2013. The transaction leverages your Company''s
 presence in India and Europe with that of CIE''s in Europe and Latin
 America with a complementary set of customers thus creating a Global
 Auto Component Alliance. The transaction has various stages of
 execution. On completion of these stages, your Company will hold
 21.78%* of the paid-up capital in the unified entity i.e. Mahindra CIE
 Automotive Limited (the erstwhile Mahindra Forgings Limited). Your
 Company through Mahindra Overseas Investment Company (Mauritius)
 Limited (MOICML) is also the second largest shareholder in CIE
 Automotive, S.A. of Spain, holding 13.5% of the Equity Share Capital.
 CIE, through Autometal S.A. (downstream listed entity in Brazil) will
 be indirectly holding 53.40%* of the paid-up capital in Mahindra CIE
 Automotive Limited (Mahindra CIE) on completion of the transaction.
 
 * Estimated as of 30th May, 2014 and subject to listing agreement
 regulations.
 
 This transaction being complex in nature, required your Company to also
 take some critical steps including:
 
 1.  Buyout of Mahindra Ugine Steel Company Limited''s (MUSCO) stake in
 Mahindra Sanyo Special Steel Private Limited (MSSPL) and additional
 land held by MUSCO.
 
 2.  Sale of Stake by the Company in Mahindra Forgings Limited
 (MFL)**, Mahindra Hinoday Industries Limited (MHIL) and Mahindra
 Composites Limited (MCL) to Participaciones Internacionales Autometal
 Dos, S.L. (PIA 2), a downstream subsidiary created by CIE Group.
 
 3.  Sale of stake by Mahindra Holdings Limited in MCL to PIA 2.
 
 4.  PIA 2 acquires 26% stake in MCL and MFL respectively via open
 offers to public shareholders.
 
 5.  Acquisition of 13.5% stake in CIE Automotive, S.A.
 
 6.  Schemes of Merger.
 
 ** M&M holds 0.32% of the paid-up share capital of Mahindra CIE as on
 30th May, 2014.
 
 In June, 2013, the Board of MCL approved the Scheme of Merger
 (Composites Scheme) involving merger of MCL with MFL. The approved
 share exchange ratio under the said scheme is 100 Equity Shares of MCL
 for every 90 Equity Shares of MFL.
 
 Additionally, the individual Boards of MFL, MHIL, MUSCO, Mahindra Gears
 International Limited (MGIL), Mahindra Investments (India) Private
 Limited (MIIPL) and Participaciones Internacionales Autometal Tres,
 S.L.  (PIA 3) approved an Integrated Scheme of Merger (Integrated
 Scheme) of the respective companies into MFL. The approved share
 exchange ratio of the said Scheme is as follows:
 
 (i) 110 Equity Shares of MFL for 100 Equity Shares of MHIL;
 
 (ii) 17 Equity Shares of MFL for 100 Equity Shares of MIIPL;
 
 (iii) 20 Equity Shares of MFL for 100 Equity Shares of MGIL;
 
 (iv) 284 Equity Shares of MFL for 100 Equity Shares of MUSCO;
 
 (v) 105 Equity Shares of MFL for 100 Equity Shares of PIA 3.
 
 The Appointed Date of the Schemes is proposed to be 1st October, 2013.
 
 These Schemes are subject to the approval of the Hon''ble High Court.
 
 All these investments have created value for all Shareholders,
 including (as your Company is particularly pleased to report) for all
 the minority Shareholders of all the constituent companies.
 
 5.  Mahindra Engineering Services Limited to merge with Tech Mahindra
 Limited to boost Engineering Prowess
 
 In order to create a unified engineering services Division within the
 Mahindra Group with very strong aerospace and automotive verticals,
 Mahindra Engineering Services Limited, a subsidiary of your Company
 agreed to merge with another Group Company, Tech Mahindra Limited on
 29th November, 2013. The combined Division under Tech
 
 Mahindra Limited would have benefits of operational synergies in terms
 of economies of scale, single ''go-to- market'' strategy, sourcing
 benefits, vendor rationalisation, more focused operational efforts and
 enhanced depth and breadth of capabilities, translating into increased
 business opportunities and reduced expenses. The approved share
 exchange ratio under the Scheme of Amalgamation is 5 Equity Shares of
 Tech Mahindra Limited for every 12 Equity Shares of Mahindra
 Engineering Services Limited held by your Company. The Appointed Date
 of the Scheme is proposed to be 1st April, 2013. The Scheme is subject
 to the approval of the Hon''ble High Court.
 
 Stock Options
 
 During the year under review, on the recommendation of the Governance,
 Nomination and Remuneration Committee (erstwhile Governance,
 Remuneration and Nomination Committee) of your Company, the Trustees of
 the Mahindra & Mahindra Employees'' Stock Option Trust have granted
 4,50,382 Stock Options to Eligible Employees under the Mahindra &
 Mahindra Limited Employees Stock Option Scheme - 2010. Further, no
 Stock 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
 
 On the Industrial Relations front, a major feat was accomplished by
 signing eight wage settlements across Plants for the Automotive and
 Farm Equipment Sectors. The Company was successful in maintaining a
 cordial industrial relations environment across its manufacturing
 units. A slight unrest was experienced at the Igatpuri Plant when the
 workmen went on a 13 day ''tool down'' from 9th—21st April, 2013.
 However, this did not affect the production schedule of the Plant.
 
 Employees have always been valuable assets of the Company and major
 focus was laid in propagating proactive and employee centric practices
 at the shop floor. There was a focus on ensuring transparent
 communication of overall business goals and efficient concern
 resolution mechanism. Over the past few years, your Company has adopted
 a more holistic approach to enhance capabilities of employees at the
 shop floor which goes beyond mere technical skills.
 
 Operators are trained and encouraged to generate ideas for resolving
 quality concerns, reducing cost, ensuring safety and improving
 productivity. For the year under review, the workmen generated about 20
 ideas per person.
 
 The proactive approach and quick response to situations benefited the
 Company with zero production loss in the Financial Year 2013-14 and a
 conducive work environment.
 
 Safety, Occupational Health and Environment
 
 The Safety and Occupational Health of its employees is embedded as a
 core organisational value through crusading initiatives of the Company.
 The Policy, inter alia, covers and ensures safety of all stakeholders
 i.e. employees, public, plant and machinery, ensures compliance on a
 monthly basis, imparts education and training to all its employees and
 stakeholders. External surveillance audits of its facilities as per
 legal and other statutory requirements are conducted regularly.
 Internal and external medical check-ups of its employees and
 contractors are conducted to promote healthy environment and
 sustainable activities.
 
 Your Company continues to demonstrate a strong commitment towards
 Safety, Health and Environment and as a part of the same, multiple
 measures and actions are implemented through Safety System
 Standardisation and Safety Culture and Focus initiatives. Your Company
 has a well-established Occupier''s Safety, Occupational Health &
 Environmental Policy. This is in line with the National Safety,
 Occupational Health & Environmental Policy. Objectives and Targets
 derived from the new amended Safety, Occupational Health &
 Environmental Policy (SH&E Policy) is duly signed by the new
 Executive Director & President and Occupier for the Automotive and Farm
 Equipment Sectors. This Policy is supported by various Management
 Programs. Hence there is a strong commitment towards statutory
 compliance.
 
 Road Safety Week, National Safety Day/Month and Fire Service Week,
 World Environment Day, Sustainability Month and Energy Conservation
 Week are being celebrated. Daily Work Management (DWM) includes
 review of Safety, Occupational Health & Environment systems,
 Behavioural Based Safety (BBS) observations, Plant Officers
 observations and Safety observations tours (SoT). Awareness (internal
 and external) on Safety, Occupational Health and Environment training
 with benchmarks on overall SH&E performance are conducted in line with
 the Policy. Your Company''s Plants continued their commitment to create
 a culture of safe environment, openness and improvement of the well
 being of its employees and contract workmen by organising Occupational
 Health
 
 Examination Camps, expert advice on health topics, special medical
 check-ups, consultation and counselling, etc.
 
 Through stakeholders'' engagement and employees'' involvement, your
 Company demonstrates tracking the objectives and targets as per the
 road map on the fundamentals of triple bottom line approach. Various
 green projects have been implemented by your Company in the areas of
 abatement of Air Pollution, elimination, recycling and reduction,
 conservation of water and solid waste management with the goal of
 inculcating world class green supply chain standards. Steps have been
 taken for reduction of Green House Gases (GHG) in the areas of
 Inbound and Outbound logistics.
 
 Certifications/Recertifications
 
 All Plants of the Automotive Division have been certified with amended
 Standard for ISO 14001: 2004 & OHSAS 18001:2007. Your Company''s
 commitment to the environment stems from the Mahindra Group''s abiding
 concern for social issues. A healthy work place is provided to its
 employees and environment friendly business is conducted. Besides, to
 create a safe culture focused initiatives are carried out with the
 underlying objective of risk free operations. Proactive sharing of
 information across the value chain has also been initiated to bring
 sensitivity to the Company''s supplier and dealer community.
 
 External surveillance audit for Safety, Occupational Health &
 Environment is conducted every year and all the Company''s Plants of the
 Automotive Division have been certified during the year.
 
 Safety, Occupational Health & Environment Management System is well
 established in your Company and the periodic structured reviews are
 undertaken to track the ongoing progress in performance.
 
 The Company has a Sustainability Reporting System on the lines of the
 framework of GRI G3.1 Guidelines. Balanced Score Cards are aligned to
 the goals, continuously reviewed and revised, thus helping to improve
 ambient air quality, recycled water and controlled waste.
 
 Safety, Occupational Health and Environment practices are followed by
 introducing Initiatives such as Human Error Prevention, Visitor
 Management, improving culture through education, training and
 communication. Standardisation is brought about through generic and
 specific signage''s and visuals at manufacturing facilities.
 
 Your Company has received several SH&E & Sustainability Awards and
 accolades for Safety Innovation.
 
 Corporate Social Responsibility
 
 Since its inception, the Company has been a socially responsible
 Corporate making investments in the community which go beyond any
 mandatory legal and statutory requirements. The ''Core Purpose'' of the
 Company is to challenge conventional thinking and innovatively use all
 our resources to drive positive change in the lives of our stakeholders
 and communities across the world, to enable them to RISE. In line with
 the Company''s Core purpose, the Corporate Social Responsibility (CSR)
 vision is to focus efforts within the constituencies of girls, youth
 and farmers by innovatively supporting them through programs in the
 domains of education, health and environment, while harnessing the
 power of technology. By investing in CSR efforts in these critical
 constituencies that contribute to nation building and the economy, the
 Company will enable its stakeholders and communities to RISE.
 
 Some of the major initiatives in which the Company has invested during
 the Financial Year 2013-14 are described below:
 
 A.  Project Nanhi Kali - for the Girl Child
 
 The Mahindra Group has supported the education of 36,248
 underprivileged girls through Project Nanhi Kali which was started by
 the K. C. Mahindra Education Trust (KCMET) in 1996 and is jointly
 managed by KCMET and Naandi Foundation since 2005. The Nanhi Kali
 sponsorship provides underprivileged girls not only with academic
 support classes where concepts of Maths, Science and Language are
 taught but also with material support comprising uniforms, school bags,
 shoes, socks, etc. which free their families from the hidden costs of
 education and enable them to attend school with dignity.  In the last
 Financial Year, KCMET garnered support from 8,289 individuals and
 Corporates resulting in 91,537 underprivileged girls accessing quality
 remedial classes across 9 States of India. The significant impact of
 this is evident from the fact that there was an 10% increase in
 learning outcomes across all project areas and 90% of girls remained in
 school to continue their education.
 
 B.  Mahindra Pride Schools - Skilling Program for Youth
 
 The Mahindra Pride Schools (MPS) through its one- of-a-kind
 livelihood training program continues to take forward its vision to not
 only train youth from socially and economically disadvantaged
 communities but also place them in high growth service sector careers
 after a 90 day intensive training course. In Financial Year 2013-14 a
 total of 2,233 Scheduled Caste/Scheduled Tribe students received
 training at the 5 MPSs in Pune, Chennai, Patna, Chandigarh and
 Srinagar, in one of the three areas of Hospitality Craft, Information
 Technology Enabled Services (ITES - for BPOs & KPOs) and CRM. The total
 number of MPs students trained since its inception is 8,677. Post
 training, the MPS students have been recruited by hospitality chains
 such as McDonald''s, Pizza Hut, KFC, Cafe Coffee Day, Marriott Group and
 Hotel Le Meridien, department stores such as Westside, Mom & Me, BPOs
 and KPOs such as Wipro, Capgemini, Syntel, HCL, TCS, Dell, Cognizant,
 Tech Mahindra and Mphasis.  The highlight of the placement process has
 been 100% placement of students in lucrative jobs and a consistent
 increase in average salary per batch to over Rs. 10,000 per month
 currently.
 
 C.  Scholarships and Grants
 
 7.  Mahindra All India Talent Scholarships - Vocational Education
 
 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 in India. Approximately 500 scholarships are given every
 year to students who undergo a three year course. In Financial Year
 2013-14, 550 students were awarded the MAITS and this scholarship has
 benefitted 6,904 students till date.
 
 2.  K. C. Mahindra Scholarships for Post Graduate Studies Abroad
 
 The K. C. Mahindra Scholarship for Post Graduate Studies Abroad is an
 interest free loan scholarship which is awarded to deserving graduates
 interested in pursuing their post graduate studies overseas.  This
 scholarship has been ongoing since 1956. In the Financial Year 2013-14,
 43 students were awarded this interest free loan scholarship of Rs. 2
 lakhs each and 3 students were awarded Rs. 8 lakhs each from the K. C.
 Mahindra Fellows Fund. These scholarships were given to students who
 gained admission in renowned Universities such as Harvard, Yale,
 Stanford, Massachusetts Institute of Technology, Carnegie Mellon,
 London School of Economics, across a wide variety of disciplines. The
 total number of scholarships awarded till date is 1,115.
 
 3.  K. C. Mahindra United World College Scholarships
 
 Till date 78 students have benefited from the K. C. Mahindra United
 World College Scholarships enabling them to study at the Mahindra
 United World College of India. During Financial Year 2013-14, 10
 students were given these scholarships.
 
 4.  Mahindra Search for Talent Scholarship
 
 This scholarship which rewards excellence in academics has been set up
 in 37 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.
 
 D.  Mumbai Public School Initiative
 
 The Mahindra Group supported 28 Mumbai Public Schools (BMC English
 medium schools run by Naandi Foundation) enabling 12,174 children to
 access quality education. In the last Financial Year, the project had a
 noteworthy impact including 13% increase in enrollment numbers, 50%
 increase in Government teacher recruitment and formation of 24 School
 Management Committees.
 
 E.  Disaster Relief and Rehabilitation
 
 In response to the catastrophic calamity caused by the incessant rain
 and flash floods which struck Uttarakhand in June, 2013, the Mahindra
 Group immediately responded to the appeal put forth by the Chief
 Minister and contributed Rs. 1 crore to the Chief Minister''s Relief
 Fund (Uttarakhand). Further, employees of the Mahindra Group donated
 one day''s salary to the Mahindra Foundation with a specific intent to
 donate Mahindra vehicles such as Scorpio, Trucks, Buses and Bolero
 Pik-Ups to support rehabilitation efforts being undertaken by the State
 Government of Uttarakhand. Apart from these vehicles, 300 solar
 lanterns, 150 solar street lights and a mobile DG set were also donated
 to the State of Uttarakhand on 30th December, 2013. Further, Rs. 1
 crore was donated to the ''Maharashtra Chief Minister''s Drought Relief
 Fund'' to support the Government in its efforts to counter the serious
 drought situation in the State of Maharashtra.
 
 The Company also supported the education of 1,000 underprivileged
 children in Udaipur and Rajsamand districts of Rajasthan, through the
 NGO partner Seva Mandir.
 
 Employee Social Options (Esops)
 
 Esops stands for Employee Social Options. At Mahindra, all employees
 are encouraged to contribute towards building a sustainable society;
 one which is healthier, cleaner, greener and more literate where people
 work with passion for social objectives. Through the Esops program many
 Mahindra employees are contributing towards making a difference to
 society.
 
 The Company''s Esops program supports employees in creating 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.
 
 Amongst the notable Esops initiatives this year was the Lifeline
 Express at Karad, Maharashtra where 2,614 patients were treated by
 performing surgeries, giving medicines and distribution of aids and
 appliances free of cost. The Company also over-achieved the one million
 tree plantation (per year) target of Mahindra Hariyali by planting more
 than 1.49 million trees in the Financial Year 2014. Accolades such as
 Esops Awards - 2013, Esops Star Performers Awards, Group level Esops
 Champions Meet, etc. recognised outstanding contributions from
 employees.
 
 The other Esops activities included numerous initiatives in the areas
 of Education, Health, Environment, etc. that have a short term as well
 as a long term social impact.
 
 Esops is also a culture that the Mahindra Group has cultivated as an
 ethic. Esops platforms and a set of structures and protocols are
 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 Sustainability Report for the year
 2012-13 was released. As in the earlier five years this Report was also
 externally assured by KPMG with GRI checked application level A .
 
 Your Company continued its ''Sustainability'' journey using resource
 efficiency and social commitment as important drivers of profitable
 growth. Retaining the focus on the Environmental, Social and Governance
 (ESG) parameters, initiatives of the previous years were consolidated
 and fresh ones were taken up.
 
 While energy conservation continued to hold center stage on the
 sustainability agenda, water, an equally essential resource was also
 retained on the radar. Relentless R&D on use of light weighting
 alternate materials, start-stop technology, low friction lubrication,
 downsizing engines to improve fuel efficiency of the products, coupled
 with a host of energy and water efficiency programs at the operations
 level, have resulted in improved trends in eco-efficiency. Taking the
 water conservation agenda beyond the organisation, your Company entered
 into a collaboration with the Government of Madhya Pradesh, to work on
 an Integrated Watershed Management Project at Damoh. This partnership
 is structured to offer holistic solutions for improving the quality of
 life of 20,000 Indians across 32 villages and while the project is
 still in progress, it is already showing positive impact in farm
 productivity, water availability and local employment.
 
 Your Company also believes in actively collaborating with other players
 in Indian Industry to respond to the country''s energy and water
 challenges. Hence, your Company has signed up to be a Member of the
 ''Working Group for developing an India Specific Water Measurement
 Tool'', led by World Business Council for Sustainable Development
 (WBCSD) and plans to be part of the ''India GHG Program'' initiated by
 World Resources Institute (WRI) in collaboration with CM and
 TERI-BCSD.
 
 Complete details of the Sustainability performance for 2013-14 will be
 elaborated in the GRI Report which is under preparation and will be
 ready for release shortly.
 
 Your Company''s consistent performance on the ESG dimensions was
 recognised during the year, by way of:
 
 — Retaining its position in top 10 in the India 200 Carbon Disclosure
 Leadership Index 2013.
 
 — Getting listed on the Dow Jones Sustainability Index - 2013 under the
 ''Emerging Market Index''.
 
 — The bestowal of the Sustainable Development Leadership Award 2014 on
 Mr. Anand G. Mahindra by The Energy & Research Institute (TERI) is a
 recognition of the leadership''s commitment to sustainable and
 responsible business growth.
 
 Business Responsibility Report
 
 Your Company has continued including ''Business Responsibility
 Report''(BRR) as a part of the Company''s Annual Report in the
 prescribed format in compliance with Clause 55 of the Listing
 Agreement, introduced by Securities and Exchange Board of India
 (SEBI) in August, 2012. This disclosure on certain non-
 financial parameters is a mandatory requirement for the top 100 listed
 companies (based on market capitalisation) on the National Stock
 Exchange of India Limited and BSE Limited.  The BRR of your Company for
 the year 2013-14 forms part of this Annual Report, in compliance with
 the requirement of SEBI.
 
 Your Company strongly believes that sustainable and inclusive growth is
 possible only when its performance on the environmental and social
 front is aligned to the performance on the economic front, ensuring
 continued growth and development in business. Your Company is committed
 to further leverage the ''Alternative Thinking'' mantra to achieve high
 shareholder returns through good governance, customer centricity,
 innovation, inclusive human development and by being environmentally
 conscious.
 
 Directors
 
 Mr. Bharat Doshi, Executive Director & Group Chief Financial Officer of
 the Company, after 40 illustrious years of service in the Mahindra
 Group (of which 21 years were as an Executive Director) decided to step
 down from his executive position with effect from the close of working
 hours on 13th November, 2013.
 
 The Board has placed on record its deep appreciation of Mr. Doshi''s
 immense contribution and valuable services during his long association
 with the Company and acknowledged Mr. Doshi''s outstanding experience
 and expertise in serving the Mahindra Group since 1973 including his
 contribution as an Executive Director of the Company from 1992 onwards.
 
 Considering his experience and expertise, Mr. Bharat Doshi, pursuant to
 the recommendation of the Governance, Nomination and Remuneration
 Committee (earlier known as Governance, Remuneration and Nomination
 Committee) was appointed as an Additional Director of the Company with
 effect from 14th November, 2013 at the Meeting of the Board of
 Directors of the Company held on 13th November, 2013.
 
 The Board of Directors has, pursuant to the recommendation of the
 Governance, Nomination and Remuneration Committee approved the
 appointment of Dr. Pawan Goenka as an Additional Director of the
 Company with effect from 23rd September, 2013 and also as the Executive
 Director for a period of 5 years from 23rd September, 2013 to 22nd
 September, 2018, subject to the approval of the Members to be obtained
 at the ensuing Annual General Meeting of the Company.
 
 Dr. Goenka joined the Company as General Manager (R&D) in the year
 1993. During his R&D tenure he led the development of the Scorpio SUV.
 He was appointed as COO (Automotive Sector) in April, 2003, President
 (Automotive Sector) in September, 2005 and President (Automotive & Farm
 Equipment Sectors) with effect from April, 2010.
 
 A brief resume of Dr. Goenka including his qualification, nature of his
 expertise and names of companies in which he holds Directorships and
 Memberships/Chairmanships of Board Committees and shareholding is
 provided in the Corporate Governance Report forming part of the Annual
 Report.
 
 As reported in the Annual Report for the Financial Year 2012-13, the
 Company received an intimation from Life Insurance Corporation of India
 (LIC) on 10th June, 2013, to the effect that Mrs. D. Vijayalakshmi
 had resigned from the Board of the Company with effect from 5th June,
 2013.
 
 Pursuant to the recommendation of the Governance, Nomination and
 Remuneration Committee, the Board at its Meeting held on 13th November,
 2013, appointed Mr. S. B.  Mainak as an Additional Director of the
 Company representing LIC with effect from 13th November, 2013, in place
 of Mrs. D.  Vijayalakshmi, such appointment to be valid upto the next
 Annual General Meeting of the Company.
 
 Mr. Mainak is a Chartered Accountant and is the Managing Director of
 LIC since 9th July, 2013 and is also on the Boards of various
 companies.
 
 Mr. Doshi, Dr. Goenka and Mr. Mainak hold office upto the date of the
 ensuing Annual General Meeting of the Company.
 
 The Company has received Notices in writing from Member(s) proposing
 Mr. Doshi, Dr. Goenka and Mr. Mainak for appointment to the office of
 Directors at the forthcoming Annual General Meeting.
 
 In terms of the Articles of Association of the Company, Mr. M. M.
 Murugappan, Mr. Narayanan Vaghul and Mr. A. K.  Nanda retire by
 rotation and are eligible for re-appointment.  However, Mr. Narayanan
 Vaghul and Mr. A. K. Nanda have expressed their desire not to seek
 re-appointment. It is proposed not to fill up the vacancies thereby
 caused.
 
 Mr. Vaghul was appointed as a Director on the Board of the Company with
 effect from 31st October, 1996 and has made notable contributions
 towards effective functioning of the Board. He has been acting as the
 Chairman of the Governance, Nomination and Remuneration Committee of
 the Company since 20th December, 2000.
 
 The Board placed on record its deep appreciation of the invaluable
 counsel rendered by Mr. Vaghul to the Company.  The 18 years that Mr.
 Vaghul was on the Board of the Company were critical years in the
 Company''s history.
 
 Mr. Vaghul''s immense knowledge and financial expertise helped the Board
 and the Company negotiate these sweeping changes with boldness while at
 the same time adhering strictly to sound financial discipline and
 ethical and corporate values of the highest order.
 
 Quote from Chairman Emeritus
 
 Mr. Narayanan Vaghul joined the Board of M&M in 1996 and has shared
 his vast knowledge and experience with us over many years. His
 unflinching adherence to the highest standard of ethics and integrity
 while seeking excellence were significant contributions by him as he
 chaired the Governance, Nomination and Remuneration Committee.
 
 Personally Mr. Vaghul is a valued and a trusted friend. His wise
 guidance on prudent fiscal management combined with his institution
 building instincts and formidable strategic skills were invaluable to
 us. While he retires, his offer of support to the management is most
 comforting. I wish him many years of good health and happiness.
 
 The Board placed on record its deep appreciation of the valuable
 services rendered by Mr. Nanda during his tenure as a Director of the
 Company.
 
 Mr. Nanda, who is stepping down from the Board of the Company after a
 total tenure of 22 years, brought to the Board an ebullient and
 entrepreneurial spirit and a flair for reasoned risk taking, combined
 with a strict adherence to values and ethics. This rare combination of
 qualities has added a valuable perspective and dimension to the
 deliberations and decision making authority of the Board.
 
 Although Mr. Nanda is retiring from the Board of the Company, he
 continues to be actively associated with several other initiatives of
 the Mahindra Group.
 
 Quote from Chairman Emeritus
 
 Mr Arun Nanda joined the Board of Directors in 1992, and served as
 Executive Director till 2010 and as Non-Executive Director thereafter.
 Through his entrepreneurial spirit, commercial acumen and strong ''hands
 on'' approach, he has imparted great value to the deliberations of the
 Board. During the many years he served as Company Secretary he built up
 an admirable rapport with our shareholders and served them diligently.
 / believe Arun embodies all that is best in the M&M culture.  Both as a
 Director and as a very long time employee and colleague, he has spotted
 opportunities where others see problems, and brought an innovative mind
 and a pioneering direction to the strategies of the Board and the
 companies on which he serves.
 
 We are fortunate that even though he is stepping down from the Board,
 he will continue to be associated with other areas of the Mahindra
 Group.
 
 In view of the provisions of section 149 of the Companies Act, 2013,
 the Board of your Company has proposed the appointment of Mr. M. M.
 Murugappan, Mr. Deepak S.  Parekh, Mr. Nadir B. Godrej, Mr. R. K.
 Kulkarni, Mr. Anupam Puri, Dr. Vishakha N. Desai and Mr. Vikram Singh
 Mehta as Independent Directors at the ensuing Annual General Meeting of
 the Company. The Company has received the requisite Notices in writing
 proposing the appointment of them as Independent Directors.
 
 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, 2014 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 and Associate Companies
 
 The Group Companies continue to contribute to the overall growth of the
 Company. Major subsidiaries such as the Group''s Korean subsidiary
 Ssangyong Motor Company turned in a significantly improved performance
 with a 20% growth in revenue and posted a profit in the Financial Year
 2013-14 as compared to a loss in the previous year.
 
 Tech Mahindra Limited, (TML) the Company''s flagship company in the IT
 Sector, has reported a consolidated revenue at Rs. 18,831.38 crores in
 the current year. During the year, Satyam Computer Services Limited
 (earlier an associate company) merged with TML. On a comparable basis,
 the consolidated revenue of TML grew by 31.4% and Profit after Tax grew
 by 54.9% as compared to the previous year.
 
 The Group''s finance company, Mahindra & Mahindra Financial Services
 Limited (MMFSL), maintained a healthy growth of business and profits
 despite slowdown in the auto industry and continuing high cost of
 borrowings through control of transaction cost and high collection
 efficiency levels.  It reported a total consolidated income of Rs.
 5,300.55 crores during the current year as compared to Rs. 4,112.96
 crores in the last year - a growth of 28.9%. The consolidated profit
 after tax of MMFSL for the Financial Year 2013-14 grew from Rs. 927.03
 crores in the previous year to Rs. 954.42 crores in the current year.
 
 The consolidated Group Profit for the year after exceptional items, tax
 and after deducting minority interests is Rs. 4,666.93 crores as
 against Rs. 4,099.20 crores earned in the previous year.
 
 During the year under review, Mahindra Investments (India) Private
 Limited, Mahindra Investments (International) Private Limited, Mahindra
 Offgrid Services Private Limited, Cleansolar Renewable Energy Private
 Limited, Brightsolar Renewable Energy Private Limited, Mahindra Auto
 Steel Private Limited, Mahindra North American Technical Center, Inc.
 and Mahindra ''Electoral Trust'' Company became wholly owned subsidiaries
 of your Company and Mahindra Telephonies Integrated Systems Limited,
 Mahindra Asset Management Company Private Limited, Mahindra Trustee
 Company Private Limited, Gateway Housing Finance Corporation Limited,
 Mahindra Construction Company Limited, became subsidiaries of your
 Company.
 
 During the year under review, Mahindra Homes Private Limited (earlier
 known as Watsonia Developers Private Limited and prior to that Watsonia
 Developers Limited), Mahindra Forgings Limited, Mahindra Hinoday
 Industries Limited, Mahindra Forgings International Limited, Mahindra
 Forgings Europe AG, Gesenkschmiede Schneider GmbH, Jeco-Jellinghaus
 GmbH, Falkenroth Umformtechnik, GmbH, Stokes Group Limited, Stokes
 Forgings Dudley Limited, Stokes Forgings Limited, Mahindra Forgings
 Global Limited, Schoeneweiss & Co. GmbH, Ssangyong (Yizheng) Auto Parts
 Manufacturing Company Limited, MHR Hotel Management GmbH, BAH
 Hotelanlagen AG, ceased to be subsidiaries of your Company.
 
 Subsequent to the year end, Gateway Housing Finance Corporation Limited
 and Mahindra Holidays and Resorts USA Inc. ceased to be subsidiaries of
 your Company.
 
 During the year, Mahindra Navistar Automotives Limited has changed its
 name to Mahindra Trucks and Buses Limited and Mahindra Navistar Engines
 Private Limited has changed its name to Mahindra Heavy Engines Private
 Limited.
 
 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 at the
 conclusion of the ensuing Annual General Meeting. They have been
 Statutory Auditors of the Company since Financial Year 2008 i.e. for a
 continuous period of 7 years including Financial Year 2014. In terms of
 the Companies Act, 2013 (the new Act) and the Rules framed
 thereunder, it is proposed to appoint them as Statutory Auditors of the
 Company to hold office from the conclusion of the ensuing Annual
 General Meeting, until the conclusion of the 71st Annual General
 Meeting of the Company to be held in the Year 2017 (subject to
 ratification of their appointment by the Members at every Annual
 General Meeting held after the ensuing Annual General Meeting).
 
 As required under the provisions of section 139(1) of the new Act, the
 Company has received a written consent from Messrs. Deloitte Haskins &
 Sells, Chartered Accountants to their appointment and a Certificate, to
 the effect that their re-appointment, if made, would be in accordance
 with the new Act and the Rules framed thereunder and that they satisfy
 the criteria provided in section 141 of the new Act.
 
 The Members are requested to elect Auditors as aforesaid and fix their
 remuneration.
 
 Cost Auditors
 
 As per the Order of the Central Government and in pursuance of section
 148 of the Companies Act, 2013, 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, 2013, was 180 days from the closure of the Company''s Financial
 Year. The combined Cost Audit Report for the Farm Equipment Sector and
 Motor Vehicles for the Financial Year ended 31st March, 2013 was filed
 on 26th September, 2013 in the XBRL format. The Central Government
 approved the appointment of M/s. N. I. Mehta & Co., Cost Accountants as
 Cost Auditors for conducting Cost Audit for the Financial Year 2013-14.
 
 Pursuant to section 148 of the Companies Act, 2013, 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 2014-15.  M/s. N. I. Mehta & Co. have
 confirmed that their appointment is within the limits of section 139(9)
 read with section 141 (3)(g) of the Companies Act, 2013 and have also
 certified that they are free from any disqualifications specified under
 sections 141(3) and 141(4) read with proviso to section 148(3) of the
 Companies Act, 2013.
 
 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 8,825 deposits of Rs. 7,075.63 lakhs from the Public
 and Shareholders as at 31st March, 2014, 104 deposits amounting to Rs.
 42.56 lakhs had matured and had not been claimed as at the end of the
 Financial Year. Since then, 18 of these deposits of the value of Rs.
 5.45 lakhs have been claimed.
 
 The Company has discontinued the Fixed Deposits Scheme for 36 months
 with effect from the close of office hours on 31st January, 2014 and
 has also discontinued acceptance of Fixed Deposits with effect from 1st
 April, 2014.
 
 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, 2014 to 29th May, 2014, 60,323 vehicles
 were despatched as against 60,067 vehicles during the corresponding
 period in the previous year. During the same period, 44,849 tractors
 were despatched as against 43,103 tractors despatched during the
 corresponding period in the previous year.
 
 Looking forward, your Company believes that the economy has weathered
 the worst and is now poised for a decisive, albeit gradual, turnaround
 in growth. There are several factors that underlie the current
 optimism. First, the country''s macro economic indicators are in
 far-better shape today than they were a year ago, making it much more
 resilient to risks emanating from US Fed''s monetary policy actions.
 Second, with economic recovery in developed countries gaining strength
 and the Indian Rupee more competitively valued than before, exports are
 likely to witness a robust pick-up in the current year. Last, but
 perhaps most important, given the strong mandate delivered by the
 recently concluded Lok Sabha elections, swifter and more decisive
 policy actions are expected to be undertaken by the Central Government
 in the coming months, with special attention being paid to reviving
 manufacturing activity and economic growth, as, seizing the historic
 opportunity before it, the Government strives to fulfill the
 ''development with jobs'' agenda laid out in its election manifesto.
 
 While El Nino risks cloud the immediate future, it is expected,
 premised on the reasons outlined above, that the economy will witness a
 nascent, infrastructure activity-led recovery in the current year,
 followed by stronger, more broad based consumption-led growth through
 Financial Year 2016, leading to a deeper, investment-led economic cycle
 taking root in 2016-17, with growth reverting to levels of 7% or more
 by the end of that year.
 
 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 265 employees who were in receipt of remuneration of
 not less than Rs. 60,00,000 during the year ended 31st March, 2014 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, 30th May, 2014
 
 
 
 
Source : Dion Global Solutions Limited
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