3. MAHINDRA & MAHINDRA LIMITED
COMMITTEES OF THE BOARD BOARD OF DIRECTORS
Keshub Mahindra
Audit Committee Chairman
Deepak S. Parekh Anand G. Mahindra
Chairman Vice-Chairman & Managing Director
Nadir B. Godrej Deepak S. Parekh
M. M. Murugappan A. K. Nanda
R. K. Kulkarni Nadir B. Godrej
M. M. Murugappan
Share Transfer and Shareholders/ Narayanan Vaghul
Investors Grievance Committee A. S. Ganguly
Keshub Mahindra R. K. Kulkarni
Chairman Anupam Puri
Anand G. Mahindra Arun Kanti Dasgupta
Nominee of Life Insurance Corporation of India
Bharat Doshi
Bharat Doshi
A. K. Nanda
Executive Director
R. K. Kulkarni
Remuneration/Compensation Committee Narayan Shankar
Narayanan Vaghul Company Secretary
Chairman
Bankers
Keshub Mahindra Bank of America N.A.
Nadir B. Godrej Bank of Baroda
M. M. Murugappan Bank of India
Canara Bank
Loans & Investment Committee Central Bank of India
Keshub Mahindra HDFC Bank Limited
Chairman Standard Chartered Bank
State Bank of India
Anand G. Mahindra Union Bank of India
Bharat Doshi
Auditors
A. K. Nanda
Deloitte Haskins & Sells
R. K. Kulkarni 12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate,
Worli, Mumbai 400 018.
Research & Development Committee
Advocates
A. S. Ganguly
Chairman Khaitan & Co.,
One Indiabulls Centre,
Anand G. Mahindra 13th Floor, 841, Senapati Bapat Marg,
Nadir B. Godrej Elphinstone Road, Mumbai 400 013.
M. M. Murugappan Registered Office
Bharat Doshi Gateway Building, Apollo Bunder, Mumbai 400 001.
1

4. GROUP EXECUTIVE BOARD
Anand G. Mahindra Ramesh Iyer
Vice-Chairman & Managing Director Managing Director - Mahindra & Mahindra Financial Services
Limited
Bharat Doshi
Executive Director and Group Chief Financial Officer Rajesh Jejurikar
Chief Executive - Automotive Division (Automotive Sector)
Rajeev Dubey
President (HR, After-Market & Corporate Services) Sanjay Kalra
Chief Executive Officer - Tech Mahindra Limited
Pawan Goenka
President (Automotive & Farm Equipment Sectors) Harsh Kumar
Managing Director - Mahindra Intertrade Limited
Hemant Luthra
President (Systems & Technologies Sector) Romesh Kaul
Global Chief Executive Officer - Gears Business, Systech Sector
Anoop Mathur
President (Two-Wheeler Sector) Bishwambhar Mishra
Chief Executive Officer - Swaraj Division (Farm Equipment Sector)
Uday Y. Phadke
President (Finance, Legal & Financial Services Sector) Gautam Nagwekar
Chief Executive - Mahindra Division (Farm Equipment Sector)
Ulhas N. Yargop
President (Information Technology Sector) V. S. Parthasarathy
Executive Vice President - Finance, M&A and Group CIO
Anita Arjundas
Managing Director - Mahindra Lifespace Developers Limited & Ramesh Ramanathan
CEO Real Estate Sector Managing Director - Mahindra Holidays & Resorts India Limited
& CEO Hospitality Sector
Zhooben Bhiwandiwala
Executive Vice President & Managing Partner, Mahindra Partners Pravin Shah
Chief Executive - International Operations (Automotive & Farm
C. P. Gurnani Equipment Sectors)
Chief Executive Officer - Mahindra Satyam
Rajan Wadhera
Ruzbeh Irani Chief Executive - Technology, Product Development and
Executive Vice President - Corporate Strategy & Chief Brand Officer Sourcing (Automotive & Farm Equipment Sectors)
Contents
Directors’ Report .................................................................................................................................................. 3
Management Discussion and Analysis .................................................................................................................. 27
Corporate Governance ......................................................................................................................................... 47
Sustainability ........................................................................................................................................................ 73
Accounts .............................................................................................................................................................. 79
Statement pursuant to Section 212 ..................................................................................................................... 129
Consolidated Accounts ......................................................................................................................................... 133
2

5. MAHINDRA & MAHINDRA LIMITED
3

6. MAHINDRA & MAHINDRA LIMITED
Directors’ Report
Dear Shareholders
Your Directors present their Report together with the Inspite of the global financial crisis, India’s economic growth
audited accounts of your Company for the year ended is steadily gaining momentum, led by a very encouraging
st re-bound in industrial activity during the year. The sharp
31 March, 2010.
increase in consumer durables and capital goods production
Financial Highlights
(Rs. in crores) this fiscal is particularly heartening as it indicates
strengthening consumer and business confidence in the
2010 2009
Gross Income 20595 14983 country.
Less: Excise Duty on Sales 1794 1619
Agricultural GDP however, witnessed a decline this year
Net Income 18801 13364
Profit before Depreciation, Interest, due to the severe drought experienced during the kharif
Exceptional items and Taxation 3155 1363 season. Food prices as a consequence, rose alarmingly and
Less: Depreciation/Amortisation 371 292 food inflation in India has leapfrogged to challenging levels.
Profit before Interest,
Exceptional items and Taxation 2784 1071 In these challenging times, the Automotive and Farm
Less: Interest (Net) 28 45 Divisions of your Company have clocked one of their best
Profit before Exceptional
items and Taxation 2756 1026 performances reflecting in substantial growth in the net
Add: Exceptional items 91 10 income of the Company by 40.7% to Rs.18,801 crores in
Profit before Taxation 2847 1036 the year under review from Rs.13,364 crores in the Financial
Less: Provision for Tax - Current Tax Year 2009. Consequent to this commendable performance,
(including Fringe Benefit Tax) 749 58
Less: Provision for Tax - Deferred Tax (Net) 10 141 the profit after tax of the Company for the current year
Profit for the year 2088 837 was Rs.2,088 crores as against Rs.837 crores for the
Add: Profit of Mahindra Holdings & previous year.
Finance Limited for the period
1st February, 2008 to 31st March, 2008 - 31 Profits
Balance of profit for the year 2088 868
Balance of profit for earlier years 3365 2775 The Profit for the year before Depreciation, Interest,
Add: Amount transferred on Exceptional items and Taxation was Rs.3,154.59 crores as
Amalgamation of Mahindra Holdings &
Finance Limited - 160 against Rs.1,362.97 crores in the previous year, an increase
Less: Transfer to Debenture Redemption of 131.45%. Profit after tax was Rs.2,087.75 crores as
Reserve 31 30 against Rs.836.78 crores in the previous year clocking an
Profits available for appropriation 5422 3773
increase of 149.50%. Your Company continues with its
Less: General Reserve 210 100
Credit of Income-tax on Proposed rigorous cost restructuring exercises and efficiency
Dividend of previous year - (4) improvements which have resulted in significant savings
Proposed Dividends 550 279
through value engineering, economising, optimisation of
Income-tax on Proposed Dividends 74 33
Balance carried forward 4588 3365 plant capacity utilisation and cost competitiveness in almost
5

7. all areas thereby enabling the Company to take full over the previous year’s volume of 1,53,654 vehicles
advantage of the recovery in the economy. [includes 1,53,653 MUVs and 1 Light Commercial Vehicle
(“LCV”)]. The domestic sales volume of 44,438 three-
Dividend
wheelers was lower by 0.2% as compared to the previous
Your Directors are pleased to recommend a dividend of year’s volume of 44,533 three-wheelers.
Rs.8.75 per Ordinary (Equity) Share and also a Special
The Company’s domestic MUV sales volumes grew by
Dividend of Rs.0.75 per Ordinary (Equity) Share aggregating
39.4% as against the industry MUV sales growth of 26%.
Rs.9.50 per Ordinary (Equity) Share of the face value of
The Company strengthened its dominant position in the
Rs.5 each, payable to those Shareholders whose names
domestic MUV segment by increasing its market share to
appear in the Register of Members as on the Book Closure
63.3% over the previous year’s market share of 57.2%.
Date. The Special Dividend is being recommended in the
light of the very successful listing of Mahindra Holidays & Xylo, which was launched in January, 2009 has been very
Resorts India Limited Equity Shares on the Stock Exchanges. well accepted in the market. A total of 27,978 Xylos were
In recognition of the impressive performance of the sold in the year under review.
Company, a substantial increase is being made in the
In a very competitive small 4-wheeler cargo segment (0.75
proposed dividend as compared to the dividend of Rs.10
Ton), your Company has launched the Maxximo, a small 4
per Equity Share paid in the previous year. Also the
wheeler cargo vehicle, with 2-cylinder common rail engine,
proposed dividend will be paid on a slightly enlarged capital
in February, 2010. In the 0.5 Ton Truck load segment, your
base of Rs.289.21 crores (as against Rs.278.82 crores in
Company launched a compact Truck – Gio.
the previous year). The equity dividend outgo for the
Financial Year 2009-10, inclusive of tax on distributed profits In the Overseas market, despite difficult economic
(after reducing the tax on distributed profits of Rs.17.04 conditions, your Company registered superior growth.
crores payable by the subsidiaries on the dividends During the year under review, your Company sold 10,567
receivable from them during the current Financial Year) vehicles [including 1,323 vehicles sourced from Mahindra
would absorb a sum of Rs.623.75 crores (as against Navistar Automotives Limited (“MNAL”) and 922 three-
Rs.312.06 crores comprising the dividend of Rs.10 per wheelers] in the Overseas market as compared to 8,501
Equity Share of Rs.10 each paid for the previous year). vehicles [including 693 vehicles sourced from MNAL and
273 three-wheelers] in the previous year registering a
Automotive Division:
growth of 24.3%.
Your Company recorded total sales of 2,36,759 vehicles
Spare parts sales for the year stood at Rs. 514.96 crores
and 45,360 three-wheelers as compared to 1,61,882
(including Exports of Rs. 22.4 crores) as compared to
vehicles and 44,806 three-wheelers in the previous year
Rs. 362.75 crores (including Exports of Rs.27 crores) in the
registering a growth of 46.3% and 1.2% in vehicles sales
previous year, registering a growth of 42%.
and three-wheeler sales respectively.
Farm Division:
On the domestic sales front, your Company sold 2,27,114
vehicles [includes 2,14,128 Multi Utility Vehicles (MUVs), Your Company’s Farm Division recorded sales of 1,75,196
3,722 small 4 wheelers 0.75 Ton cargo and 9,264 mini 4 tractors as against 1,20,202 tractors sold in the previous
wheelers 0.5 Ton cargo] registering a growth of 47.8% year, recording a significant growth of 45.8%. For the
6

8. MAHINDRA & MAHINDRA LIMITED
previous year figures, the Company has taken into business has been hived-off into a wholly owned subsidiary
consideration, the merger of Punjab Tractors Limited with (Mahindra Defence Land Systems Private Limited – now
st
your Company, the appointed date of which was 1 August, rechristened as Defence Land Systems India Private Limited)
2008. with effect from 1st July, 2009. Your Company has further
signed a Joint Venture Agreement on 30th November, 2009
After 3 years of plateauing of the domestic tractor industry
with BAE Systems Plc. to form a 74:26 Joint Venture for
and despite one of the worst South-West monsoons, this
defence land systems products. Once this Joint Venture is
year saw a strong resurgence with the domestic industry
operational, it would further expand its product base to
clocking sales of 4,00,203 tractors registering a growth of
include manufacture of artillery products and combat
31.7% over the last year. Your Company outperformed the
vehicles in technical assistance with BAE Systems Plc.
industry with domestic sales of 1,66,359 tractors, a growth
of 46.9% as compared to 1,13,269 tractors sold in the In the Naval Systems business, your Company currently
previous year. This has also helped gain market share which manufactures Sea Mines, Decoy Launchers and composites
now stands at 41.4% as compared to 40.8% in the previous for various naval and other applications.
Financial Year, thus completing 27 years of leadership in
In the Special Services Group business, your Company
the Indian tractor industry.
provides corporate risk management consultancy services
With the slow recovery in international markets, especially and assists organisations in maintaining their competitive
in the US, tractor industry exports from India continued to edge by protecting Information, Physical and Personnel
be under strain. In contrast, your Company’s exports grew assets through implementing the security strategy
27.5% to reach 8,837 tractors as compared to 6,933 encompassing people, process and technology. MSSG has
tractors exported in the previous year. been integrated with the MDS Operating Group from
1st April, 2009 in order to synergise the efficiencies with
Beyond Agriculture, in the Powergen space under the
other businesses of MDS. During the year, this business
Mahindra Powerol Brand, your Company sold 48,011
has expanded to Northern and Southern India as well as
engines in this Financial Year, as against 52,350 engines in
some international markets.
the previous year. Your Company retained its leadership
position in the genset market catering to the telecom space, Management Discussion and Analysis Report
while strengthening its presence in the retail segment.
A detailed analysis of the Company’s performance is
Mahindra Defence Systems Division (MDS): discussed in the Management Discussion and Analysis
Report, which forms part of this Annual Report.
Your Company, through Mahindra Defence Systems (MDS)
Operating Group, is engaged in three defence related Corporate Governance
businesses – a) Land Systems b) Naval Systems and
Your Company is committed to transparency in all its
c) Mahindra Special Services Group (“MSSG”).
dealings and places high emphasis on business ethics. Your
In the Land Systems business, your Company provides Company received the Best Governed Company 2009
armouring solutions for light combat vehicles and SUVs as Award from the Indian Merchants Chamber and the Asian
well as high mobility vehicles for defence, police and Centre for Corporate Governance and Sustainability. During
paramilitary use. Pursuant to an approval accorded by the the year, CRISIL has re-affirmed the highest level rating,
th
Shareholders by way of Postal Ballot on 4 April, 2009 this (Level 1) for Governance and Value Creation for the fourth
7

9. year in a row. This rating indicates that the capability of Consequent to the Stock-split, a new International Securities
the Company with respect to wealth creation for all its Identification Number (ISIN) INE101A01026 has been
stakeholders while adopting strong Corporate Governance created by the Depositories for the Company’s Equity Shares
practices is the highest. A Report on Corporate Governance of the face value of Rs.5 each.
along with a Certificate from the Statutory Auditors of the
Company regarding the compliance of conditions of Finance
Corporate Governance as stipulated under Clause 49 of
Despite prolonged global challenges, the Indian economy
the Listing Agreement forms part of the Annual Report.
showed signs of recovery in most of the Sectors in the
Share Capital Financial Year 2009-10. The risk appetite returned to
Increase in Share Capital financial markets as equities and debt raising gained
During the year under review, your Company allotted: momentum on the back of abundant liquidity. Even though
things looked to be on an upswing, Corporates still faced
1) 10,00,000 Ordinary (Equity) Shares of Rs.10 each to
the task of sustaining growth amidst volatilities as well as
the Trustees of Mahindra & Mahindra Employees’ Stock
surging inflation.
Option Trust; and
2) 93,95,974 Ordinary (Equity) Shares of Rs.10 each to During the year, keeping in mind the volatile times, your
Golboot Holdings Limited upon compulsory conversion Company continued to focus on managing cash efficiently.
of 93,95,974 Fully and Compulsorily Convertible Even while financing its ongoing modernisation and growth
Debentures. initiatives, it was ensured that your Company had abundant
Sub-division (“Stock-split”) of Face Value of liquidity. Your Company did not need to tap the capital
Equity Shares market and in fact used its strong liquidity at its disposal
Pursuant to the approval received from the Members of to repay foreign currency loans aggregating USD 94.5
the Company by way of Postal Ballot on 11th March, 2010, million without the need for refinancing.
your Company has on 31st March, 2010, upon sub-division, As was reported in the previous year’s Director’s Report,
issued 2 (Two) Ordinary (Equity) Shares of Rs.5 each fully your Company had, in July, 2008, issued 9.25% p.a.
paid-up in the Equity Share Capital of the Company for Unsecured Fully and Compulsorily Convertible Debentures
every 1 (One) Ordinary (Equity) Share of the face value of (“FCD”), each FCD having a face value of Rs. 745 and
Rs.10 fully paid-up held by the Members in the Equity convertible into one Equity Share of Rs. 10 each in the
Share Capital of the Company as on the Record Date i.e. Company at a price of Rs. 745 per Share. In January,
30th March, 2010. 2010, in accordance with the terms of the issue, the FCDs
Post allotment of Equity Shares and sub-division of Equity were converted into Equity Shares of the Company and
Shares as aforesaid, the issued, subscribed and paid-up your Company allotted 93,95,974 Ordinary (Equity) Shares
Share Capital of the Company stands at Rs.289.21 crores of Rs.10 each, adding Rs. 700 crores to its Net Worth.
comprising of 57,84,34,478 Ordinary (Equity) Shares of
Rs.5 each fully paid-up and the Authorised Share Capital Your Company follows a prudent financial policy and aims
of the Company stands at Rs.625 crores comprising of to maintain optimum financial gearing at all times. The
1,20,00,00,000 Ordinary (Equity) Shares of Rs.5 each and Company’s total Debt to Equity Ratio was 0.37 as at
25,00,000 Unclassified Shares of Rs.100 each. 31st March, 2010.
8

10. MAHINDRA & MAHINDRA LIMITED
Your Company has been rated by CRISIL, ICRA Limited Your Company’s move into the Aerospace segment is
(ICRA) and Credit Analysis & Research Limited (CARE) for supported by a renewed demand for economical air
its Banking facilities under Basel II norms. During the year, transportation around the world. The Company’s
CRISIL reaffirmed its rating of “AA” and revised its rating investment in component capability addresses the
outlook to “AA/ Stable” from “AA/ Negative” for your growing needs of both the civil and defence markets
Company’s Long Term Facilities under Basel II. During the and in particular the offset opportunities that have
year, ICRA also reaffirmed its rating of “LAA+” for your triggered world wide interest in Indian Aerospace.
Company and also revised its rating outlook from “LAA+/
Negative” to “LAA+/Stable” and CARE has maintained a 2. Joint Venture with BAE Systems Plc.
Long Term Rating of “CARE AA+”.
Through various initiatives, your Company had
CRISIL, ICRA and CARE have all reaffirmed the highest
positioned itself to play a major role in the Indian
rating for your Company’s Short Term facilities. Your
Defence Sector for the manufacture and integration
Company’s Bankers continue to rate your Company as a
of weapon systems and platforms. Your Company had
prime customer and extend facilities/services at prime rates.
also been exploring opportunities for partnerships with
Acquisitions and other matters companies with globally proven high end defence
technologies. With this objective in mind, your
1. Acquisition of Aerostaff Australia and Gippsland
Company had evaluated various options and identified
Aeronautics
possibilities for forming separate Joint Ventures/alliances
Your Company decided to make a foray into Aerospace with strategic partners.
Sector with the intention of penetrating into global
aerospace supply chain as a credible registered As mentioned earlier in this Report, your Company
manufacturer of components and assemblies with the has entered into a Joint Venture with BAE Systems Plc.
leading players in Aerospace and also to become small (“BAE”). BAE is a premier global defence, security and
capacity aircraft manufacturer. To meet these goals, aerospace company delivering a full range of products
your Company has made 2 acquisitions in Australia as and services for air, land and naval forces, as well as
under: advanced electronics, security, information technology
solutions and customer support services.
Aerostaff Australia (“AA”) manufactures high-precision
close-tolerance aircraft components and assemblies
for large aerospace Original Equipment 3. Gear Vertical
Manufacturers (“OEMs“).
Mahindra Gears & Transmissions Private Limited
Gippsland Aeronautics (“GA”) is an established brand (“MGTPL”) is a subsidiary of your Company. With a
in general aviation and has delivered more than 200 view to derive optimum structuring and operational
FAR 23 certified planes in 32 countries. benefits and unlock value in MGTPL, your Company
NM5 is a 5-seater Aircraft designing and manufacturing divested 46.66% of the Equity Share Capital in MGTPL
project which is being developed by your Company in favour of ICICI Venture Fund during the year.
with Hindustan Aeronautics Limited. The NM5 initiative Subsequent to the divestment, the holding of your
compliments the product portfolio of GA. Company in MGTPL stands at 53.34%.

11. 4. Demerger of Non Fruit Business of Mahindra shall stand cancelled. Upon the Scheme becoming
Shubhlabh Services Limited into the Company effective, the Company shall issue and allot to the
Shareholder of MSSL (other than the Company and
Mahindra Shubhlabh Services Limited (“MSSL”),
MHL) as on the Record Date 34,730 fully paid-up Equity
a subsidiary of your Company, is in the business of
Shares of Rs.5 each of the Company. Currently, the
a) domestic sales and exports of fresh fruit products
Scheme is in process of being filed with the Stock
and b) production and distribution of Agri Inputs
Exchanges and the Honourable High Court of
namely Seeds, Seed Potato and Crop Care Products.
Judicature at Bombay for approval.
MSSL’s Fruits business is currently focused on exports
of grapes to Europe. MSSL proposes to expand its 5. Mahindra Forgings Limited Qualified Institutional
foray into other Fruits businesses. MSSL has till now Placement and issue of Warrants to the Company
steadily developed a footprint in Agri Input business, Mahindra Forgings Limited (“MFL”), a subsidiary of
which is strategically an important business to your the Company, raised capital by way of a Qualified
Company, as it directly relates with the farmer and Institutional Placement (“QIP”) to Qualified Institutional
Farm Tech Prosperity, essential for improving customer Buyers accompanied by a simultaneous issue of
bonding, customer loyalty and market penetration of Warrants to your Company, in terms of Securities and
your Company. Exchange Board of India (Issue of Capital and Disclosure
In view of the Agri Inputs business being a high Requirements) Regulations, 2009.
gestation business, MSSL now intends to streamline An amount of Rs.175 crores was raised through a QIP
its operations and wants to focus only on the Fruits by issue and allotment of Equity Shares of the face
Business and explore strategic options to grow this value of Rs.10 each at a price of Rs.107.75 per Equity
business domestically and globally in terms of scale Share to Qualified Institutional Buyers. MFL has also
and profitability and going forward, the Agri Inputs allotted 72,99,270 Warrants on a preferential basis to
business would be demerged into your Company owing your Company wherein each Warrant entitles the
to its strategic importance and funding resources Company to apply for and be allotted one Equity Share
required for the same. of MFL of the face value of Rs.10 each at a price of
To achieve the above objective, a Scheme of Rs.137 per share, in one or more tranches, at any
Arrangement between MSSL and your Company and time after the date of allotment of Warrants but on or
their respective Shareholders was announced by your before the expiry of 18 months from the date of
th
Company and MSSL on 30 March, 2010 which inter allotment of Warrants. The Company has made an
alia envisages demerger of the Agri Inputs Business upfront payment of 25% of the aggregate price
along with other common assets and liabilities (“Non amounting to approximately Rs.25 crores and has
Fruit business”) of MSSL into the Company under the exercised its option to convert 30,00,000 Warrants
provisions of sections 391 to 394 of the Companies into Equity Shares. The Company still has an option to
Act, 1956. The Appointed Date of the Scheme would convert the balance 42,99,270 Warrants into Equity
be 1st January, 2010 and pursuant to the Scheme, Shares by 3rd September, 2011. As a result of the
Shares held by the Company and its wholly owned above, the Company’s shareholding in MFL stands at
subsidiary, Mahindra Holdings Limited (“MHL”) in MSSL 50.68%.

12. MAHINDRA & MAHINDRA LIMITED
6. Acquisition of Shareholding of Renault s.a.s. in Space, your Company subsequent to the year end
Mahindra Renault Private Limited (“MRPL”) and take decided to acquire a majority stake in Reva Electric Car
over of the business of MRPL as a going concern Company Private Limited (“Reva”). Established in 1994,
Reva launched its first EV in 2001 under the ‘Reva’
The Company had entered into a Joint Venture with
brand and further extended it to London in 2004 under
Renault s.a.s. (“Renault”) for the manufacture and sale
the ‘G-Wiz’ brand. With the help of its strong
of the Logan sedan car principally for the Indian market
engineering team and frugal mindset, it has developed
in 2005. Mahindra Renault Private Limited (“MRPL”), a
significant proprietary technology which has enabled
subsidiary of the Company had commenced commercial
it to create a fleet of EVs worldwide with over 3,000
production of the car badged as Mahindra Renault
vehicles on the road in more than 20 countries
Logan from February, 2007.
including India, the United Kingdom and other
The Company had been in discussions with Renault to countries in Europe.
arrive at a long term solution to MRPL’s continuing This acquisition would help your Company to
losses and subsequent to the year end, your Company compliment its other clean energy initiatives on Hybrid,
signed a Framework Agreement with Renault to buyout Hydrogen and Bio-diesel which is an important element
Renault’s Shares in MRPL which would result in MRPL in the sustainable mobility strategy of the Company.
becoming a wholly owned subsidiary of your
Company. Renault would continue to support the Stock Options
Company and the Logan through a License Agreement
On the recommendation of the Remuneration/
and supply of key components. Through this
Compensation Committee of your Company, the Trustees
Agreement, your Company would strive to ensure
of the Mahindra & Mahindra Employees’ Stock Option
continuity and build on the positive customer equity
Trust have granted 4,01,770 Stock Options to Eligible
that exists for the Logan in India.
Employees during the year under review.
7. Going Green – Acquisition of Reva Electric Car Details required to be provided under the Securities and
Company Private Limited Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999
Given the concerns about environment, tighter
(“the Guidelines”) are set out in Annexure I to this Report.
regulation on emission, debate on greenhouse gases
and taxation on emission, the demand for electric- Mahindra & Mahindra Limited Employees Stock Option
vehicles (“EV”) is projected to increase many fold. Most Scheme - 2010
global OEMs are working on EV programs and are at
Your Company proposes to introduce a new Employee
least 1 to 2 years away from commercial production.
Stock Option Scheme known as ‘Mahindra & Mahindra
Your Company is of the view that it should be focused
Limited Employees Stock Option Scheme 2010’ (“New
on developing EV capabilities that would assist it to
Scheme”). The New Scheme will facilitate grant of Options
be ready to exploit this opportunity.
to the employees in the form of Stock Options and/ or
Keeping in mind the above opportunity and with a Restricted Stock Units (“RSU’s”) and /or other instruments
view to consolidate its presence in the Automotive (“Options”) exercisable into Equity Shares. It is proposed

13. that the Options can be exercised by the employees at a New Certifications
price equal to or not less than the face value of the Equity The Sustainability Reporting System of your Company
Shares of the Company. The necessary Resolutions seeking provides a framework for environmental initiatives,
consent of the Members are being sought as proposed in objectives & targets and helps in continually improving its
the Notice convening the Annual General Meeting. Air, Water and Waste Management performance. All Plants
of Automotive Division have been certified with amended
The New Scheme has been formulated in accordance with
standard for ISO 14001: 2004 & OHSAS 18001. Your
the Guidelines and other applicable laws.
Company’s commitment to environment stems from the
Group’s abiding concern for the Stakeholders engagement
Industrial Relations
in and around the society. Its nature of operations has a
Industrial Relations remained cordial and harmonious low impact on the environment due to implementation of
throughout the year. As mentioned in the last year’s Environment Management System which provides a healthy
Directors’ Report, the workmen at the Nashik plant of the work environment to its employees and ensures conduct
Automotive Division of the Company resorted to one illegal of environment friendly business.
strike in May, 2009. The Management Discussion and Implementation of Occupational Health & Safety
Analysis Report gives an overview of the developments in Management System Standard has re-enforced the
Human Resources/Industrial Relations during the year. Company’s commitment of Safety and Occupational Health
to high levels. OHSAS 18001:2007 is the best existing
Safety, Health and Environmental Performance safety practice which is implemented through the amended
management system and all the Plants of the Automotive
Health and Safety
Division have been certified during the year 2009-10. The
Your Company continues to demonstrate a strong individual operational Units of the Automotive Division i.e.
commitment towards Safety, Occupational Health and Kandivli, Nashik, Igatpuri, Zaheerabad and Haridwar are
Environment. Your Company has a well established Safety, also certified. The OHSAS system aims to eliminate or
Occupational & Environmental Policy (SH&E). The objectives minimise risk to employees and other interested parties
and targets derived from the Policy are supported by who may be exposed to Occupational Safety risks associated
Management Programs. with its activities.
Occupational Health Examination
The Safety, Occupational Health & Environment of its
Your Company’s Plants continued its commitment to improve
employees are embedded as core Organisational values of
the well being of the employees. During the year 2009-10,
the Company. The Policy inter alia covers and ensures safety
all employees in Hazardous operations were medically
of public, employees, plant and equipment, imparts training
examined once in six months and other employees from
to all its employees as per training calendar, carries out
Non-Hazardous operations were examined once in a year.
statutory safety assurance and audits of its facilities as per
Environmental Initiatives :
legal requirements, conducts regular medical and
occupational check-up of its employees and promotes Air Pollution Management
eco-friendly activities. With a clear view on sustaining green business growth,

14. MAHINDRA & MAHINDRA LIMITED
the need for clean environment was given a renewed focus. of the same. Your Company is conscious towards
By incorporation of new technological upgradations, your environment and ensures environment friendly disposal of
Company is now in the process of calculating carbon foot e-waste.
print of Plants location wise and is taking adequate
Greenbelt Development
measures to mitigate the causes attributing to it. The
Company also has a roadmap to reduce Green House Gas Your Company has community partners at each location
(“GHG”) emissions by curtailing travel of its employees to for green belt development. Mahindra Hariyali was one of
client locations for Meetings and discussions and this is the initiatives which was implemented at the Plants at
achieved by promoting the use of Video Conferencing. Mumbai and Kanhe and at dealers & distributors across
Your Company is constantly imbibing the major India. Your Company’s Plants at various locations have
environment sensitisation drives amongst its employees partnered with Non-Governmental Organisations and
through various events such as celebrations of World various academic institutions all located in and around
Environment Day, World Ozone Day alongwith active Mumbai, Nashik, Igatpuri, Zaheerabad and Haridwar.
participation of employee’s families. Your Company has Corporate Social Responsibility
also implemented ambient and work place air monitoring,
From educating a girl child in Udaipur, providing healthcare
increased green zones, alongwith effluent treatment and
to inaccessible areas in Uttarkhand, enabling socially
waste monitoring.
disadvantaged youth become self reliant in Pune, to
Water and Waste Water Management planting a million trees in India, your Company’s Corporate
Social Responsibility (“CSR”) initiatives continue to provide
Your Company is committed towards resource conservation
strategic interventions that help the Nation help itself.
and has taken various initiatives to achieve waste reduction
and resource conservation. Your Company has implemented At Mahindra we call it “Transform-nation”.
various water management methods such as recycling and CSR continues to be an integral part of the vision of the
re-use of treated waste water in process. The Company Mahindra Group and this year too, the Company has
has also introduced rainwater harvesting and recharging pledged 1% of its Profit after Tax for CSR initiatives, largely
within Plant premises and would extend it to other locations to benefit the socially and economically disadvantaged
as well. sections of Society.
Solid Waste Management Some of the major initiatives your Company has invested
in are described below:
Your Company’s Plants at Kandivli, Nashik, Igatpuri and
Mahindra Pride Schools:
Zaheerabad believe in responsible disposal of hazardous
and non-hazardous waste. The generation of waste to a Mahindra Pride Schools (“MPS”) unique partnership model
greater extent has been reduced at source and if adaptable, speeds its graduates’ integration into the workforce, where
it is recycled and reused. Your Company is aggressively they earn not only a salary but also the respect of their
working towards minimising waste disposal costs and is family and peers. Since inception in March, 2007, 1,720
executing various Management programmes at each students from socially disadvantaged communities have
location such as vermiculture, bio-gas Plants to convert completed the 3 month course at MPS. MPS provides
food waste to manure/cooking gas towards minimisation these youth with livelihood training in sunshine industries
3

15. i.e. Hospitality, Customer Relationship Management, Gifting Cochlear Implants:
Hardware & Networking and Call Centre Training. All
By gifting the power of sound through the donation of
students are required to undergo mandatory courses in
Cochlear Implants, the Mahindra Group has changed the
English, Life skills and computer applications. There has
life and future of 60 profoundly hearing-impaired,
been 100% placement of all students participating in the
underprivileged children till date. Operations are performed
placement process.
by Dr. Milind Kirtane, India’s leading ENT surgeon and his
Nanhi Kali: Team. All beneficiaries are hearing impaired children below
the age of 5, belonging to the lower socio-economic strata
Nanhi Kali, which supports the education of the
of Society.
disadvantaged girl child has been the flagship programme
of the K. C. Mahindra Education Trust. Nanhi Kali brings Bihar Rehabilitation Project:
about a complete transformation, by allowing the girls to The river Kosi wreaked havoc in Bihar in 2008 with floods
attend school and learn with dignity. Nanhi Kali sponsorship causing incalculable loss of life and property besides
provides not only academic support classes where concepts snatching away the livelihood of lakhs of people in the
of Maths, Science and language are taught to the girls but State. Following the same, Mahindra Foundation and
also provides uniforms, school bags, shoes, etc. which free Mahindra Consulting Engineers Limited (“MACE”), a
her family from hidden costs of education. The Mahindra subsidiary of the Company have entered into a
Group independently supports 11,000 girls across India. Memorandum of Understanding (“MOU”) with the
With support from thousands of individuals and Corporate Collector, Madhepura District, Bihar to support the
donors, Project Nanhi Kali now supports the education of rehabilitation and reconstruction activities in Pattori Gram
over 54,000 underprivileged girl children, in poor urban, Panchayat, Singheswar Block, Madhepura District of Bihar
remote rural and conflict afflicted tribal communities across for those ravaged by the Kosi floods in 2008. Under the
8 States of India. The goal of Nanhi Kali is to provide terms of the MOU, MACE would create the complete social
educational support to 1,00,000 underprivileged girls by infrastructure in Pattori Gram Panchayat. This
2011. comprehensive programme includes the construction of
Mahindra All India Talent Scholarships (MAITS): permanent houses with provision of basic infrastructural
facilities such as water supply and sanitation.
Instituted in 1995, MAITS are awarded to students from
Employee Social Options:
lower socio-economic strata to enable them to pursue a
job oriented diploma course at a recognised Government Employee Social Options (“ESOPs”) is the unique
Polytechnic Institute in India. Approximately 500 programme at the Mahindra Group where each employee
scholarships are given every year for students who undergo can do social work by volunteering in various CSR initiatives.
a three year course. As a result in the last Financial Year, Till date, 31,317 employees have volunteered in various
1,525 students all over India received financial support initiatives in their local communities. ESOPs were formally
through MAITS. Till date, 4,772 students have been MAITS launched in 3 new locations of Mahindra Group – Mahindra
Scholars. A survey of students who have graduated indicate Two Wheelers; Pune, Mahindra Two Wheelers; Pithampur
that they have got good jobs and the living standards and and Mahindra Retail; Bangalore.
economic status of their families have improved. Some of the notable ESOPs initiatives this year were:
4

16. MAHINDRA & MAHINDRA LIMITED
• The Lifeline Express in Wardha: This was jointly to appraise the Shareholders of the initiatives your Company
sponsored and organised by the Farm Division and had taken in reporting its ‘Sustainability’ performance for
Mahindra & Mahindra Financial Services Limited, a reviewing its commitments to the Environment and Society,
subsidiary of the Company. The Project was held at while generating profits.
Wardha and 1,153 surgeries were performed free of
During the year under review, the 2nd Sustainability Report
cost and 281 Hearing Aids were distributed. ESOPs
for the year 2008-09 was published, in accordance with
Volunteers spent 13,752 man hours in this activity
the latest Guidelines of the internationally accepted Global
and 30,575 man hours were spent by volunteers from
Reporting Initiative or the GRI standards. Again this year,
the Community, thus making it an ideal public-private
this Report was externally assured by Ernst & Young and
partnership initiative.
rated with the highest level of A+ and GRI checked. This
• Mahindra Hariyali : A Survey was conducted on the 2nd Report reflects that along with your Company’s business
survival rate of trees planted in the Financial Year growth, the Company’s responsibility to its stakeholders
2008-09. According to the Survey, the survival rate has also grown, expanded and intensified. Your Company’s
as on 31st May, 2009 of the trees planted during progression in this journey and its commitment to taking
the abovementioned period is 79.49%. a more responsible and holistic approach to business is
reflected by the facts that a) all commitments made in the
• ESOPs AWARDS 2009: is an internal Company award
first Report were satisfactorily met and b) a structured
and was institutionalised in 2008 to appreciate and
Sustainability road map over a 3 and 5 year time horizon
promote healthy competition amongst employees and
has been drawn, with clear targets for reducing
locations.
consumption of energy and water and reduction in GHG
Other ESOPs activities also included other initiatives in emission and waste. Details of this Group Level Road Map
Education, Health, Environment and Social arenas bringing and further information on various environment related
long-lasting impact. 27 initiatives were conducted in initiatives taken by your Company which would help in
Education (such as distributing educational material, IT/ achieving the targets in the Road Map, have been
vocational training, infrastructure development) impacting elaborated elswhere in the Annual Report.
24,664 lives. 54 Health initiatives such as medical camps,
During the year under review, a Carbon foot-printing
blood donation camps, Pulse Polio Campaigns, mobile
exercise was undertaken to inventorise GHG emissions from
dispensaries, etc. reached out to over 14,573 people. HIV/
all the Company’s business operations under Scope I, II &
AIDS awareness campaigns reached out to over 1,36,560
III emissions as per internationally accepted standards. This
people in Nashik. For taking care of the Environment,
would enable your Company to baseline data on its
1,14,862 trees were planted for Gap Filling in Financial
emissions and undertake initiatives towards improving
Year 2009-10. 71 Social initiatives were conducted such as
performance in this area. This would be reported in your
visiting Old Age Homes, interacting with children,
Company’s 3rd Sustainability Report, which would be
conducting Shraamdan, etc. which reached out to over
released shortly.
78,003 people.
Realising that the equation of business with Environment
‘Sustainability’ Initiative
and Society is undergoing a radical change, through its
In the last year’s Directors’ Report, a beginning was made strategic approach of ‘ALTERNATIVE THINKING’ your
5

17. Company is committed to integrate sustainable (i) in the preparation of the annual accounts, the
development for a sustainable business growth. For a applicable accounting standards have been followed;
detailed information on the Annual Sustainability Reports (ii) they have, in the selection of the accounting policies,
for the years 2007-08 to 2008-09 please log on to consulted the Statutory Auditors and these have been
www.mahindra.com/sustainability. applied consistently and reasonable and prudent
Directors judgments and estimates have been made so as to
give a true and fair view of the state of affairs of the
Mr. A. K. Nanda, Executive Director of the Company, after
Company as at 31st March, 2010 and of the profit of
37 illustrious years of service in the Mahindra Group of
the Company for the year ended on that date;
which 18 years were as an Executive Director decided to
(iii) proper and sufficient care has been taken for the
step down from his executive position with effect from the
maintenance of adequate accounting records in
close of 31st March, 2010.
accordance with the provisions of the Companies Act,
Considering his experience and expertise, Mr. A. K. Nanda 1956 for safeguarding the assets of the Company and
was appointed as an Additional Director of the Company for preventing and detecting fraud and other
with effect from 1st April, 2010 at the Meeting of the irregularities;
Board of Directors of the Company held on 30th March, (iv) the annual accounts have been prepared on a going
2010. concern basis.
The Board has placed on record its deep appreciation of Subsidiary Companies
Mr. Nanda’s immense contribution and valuable services
The subsidiary companies of your Company continue to
during his long association with the Company and
contribute to the overall growth of the Company. Major
acknowledged Mr. Nanda’s outstanding experience and
subsidiaries such as Mahindra & Mahindra Financial Services
expertise in serving the Mahindra Group since 1973
Limited with a 61.96% growth in its consolidated profits
including his contribution as Executive Director of the
and Mahindra Holidays & Resorts India Limited with a
Company from 1992 onwards.
46.86% growth in its consolidated profits deserve special
The Company has received a Notice from a Member mention. The consolidated Group Profit for the year after
signifying his intention to propose Mr. Nanda for the exceptional items, prior period adjustments and tax and
office of Director at the forthcoming Annual General after deducting minority interests is Rs.2,478.56 crores as
Meeting. against Rs.1,405.41 crores earned in the previous year.
Mr. Keshub Mahindra, Mr. Anupam Puri, Dr. A. S. Ganguly During the year under review, Mahindra Metal One Steel
and Mr. R. K. Kulkarni retire by rotation and, being eligible, Service Centre Limited, Raigad Industrial & Business Park
offer themselves for re-appointment. Limited, Retail Initiative Holdings Limited, Mahindra Retail
Private Limited, Mahindra Technologies Services Inc.,
Directors’ Responsibility Statement
Mahindra Punjab Tractors Private Limited, Mahindra
Pursuant to section 217(2AA) of the Companies Act, 1956, EcoNova Private Limited, Mahindra Conveyor Systems
your Directors, based on the representations received from Private Limited, Tech Mahindra (Nigeria) Limited, Tech
the Operating Management, and after due enquiry, confirm Mahindra Bahrain Limited S.P.C. and BAH Hotelanlagen
that: AG became subsidiaries of your Company.
6

18. MAHINDRA & MAHINDRA LIMITED
During the year under review, Mahindra Hinoday Industries wholly owned subsidiaries of Mahindra Aerospace Private
Limited, Metalcastello S.p.A., and Mahindra Technologies Limited which in turn is a subsidiary of your Company.
Inc., ceased to be subsidiaries of the Company. Reva Electric Car Company Private Limited also became a
subsidiary of your Company.
Further, pursuant to an Agreement dated 10th May, 2005,
signed between SBC International Inc. [now AT&T The Statement pursuant to section 212 of the Companies
International Inc.] (“AT&T”), Mahindra and Mahindra Act, 1956 containing details of the Company’s subsidiaries
Limited (“the Company”), British Telecommunications Plc., is attached.
Mahindra-BT Investment Company (Mauritius) Limited
The Consolidated Financial Statements of the Company
(“MBTM”) and Tech Mahindra Limited (“Tech Mahindra”)
and its subsidiaries, prepared in accordance with
which entitled AT&T to exercise certain Options over Equity
Accounting Standard AS21 form part of the Annual Report.
Shares of Tech Mahindra on achieving certain Milestones
by Tech Mahindra at a pre-determined price, AT&T exercised In terms of the approval granted by the Central Government
its Options and acquired 98,70,912 Equity Shares of Tech under section 212(8) of the Companies Act, 1956, copy of
Mahindra, aggregating 8.07% of the paid-up Equity Share the Balance Sheet, Profit and Loss Account, Reports of the
Capital of Tech Mahindra on 22nd March, 2010 from MBTM. Board of Directors and Auditors of the subsidiaries have
not been attached to the Balance Sheet of the Company.
Upon the exercise of Options by AT&T, the Shareholding
The Company Secretary would make these documents
of the Company alongwith its subsidiary MBTM in Tech
available upon receipt of request from any Member of the
Mahindra stands reduced to 44.01%, resulting in Tech
Company interested in obtaining the same. However, as
Mahindra ceasing to be a subsidiary of the Company with
directed by the Central Government, the financial data of
effect from 22nd March, 2010.
the subsidiaries have been separately furnished forming
Consequently, the subsidiaries of Tech Mahindra viz. part of the Annual Report. The accounts of the individual
Mahindra Logisoft Business Solutions Limited, Tech subsidiary companies shall be uploaded on the Website of
Mahindra (Americas) Inc., Tech Mahindra GmbH, Tech your Company. These documents would also be available
Mahindra (Singapore) Pte. Limited, Tech Mahindra for inspection at the Head Office of the Company and at
(Thailand) Limited, Tech Mahindra Foundation, PT Tech the Office of the respective subsidiary companies, during
Mahindra Indonesia, CanvasM Technologies Limited, working hours upto the date of the Annual General Meeting.
CanvasM (Americas) Inc., Tech Mahindra (Malaysia)
SDN.BHD, Tech Mahindra (Beijing) IT Services Limited, Tech Auditors
Mahindra (Nigeria) Limited, Tech Mahindra Bahrain Limited Messrs. Deloitte Haskins & Sells, Chartered Accountants,
S.P.C. and Venturbay Consultants Private Limited also ceased retire as Auditors of the Company and have given their
to be subsidiaries of the Company with effect from consent for re-appointment. The Shareholders would be
nd
22 March, 2010. required to elect Auditors for the current year and fix their
remuneration.
Subsequent to the year end, Mahindra Metal One Steel
Service Centre Limited has changed its name to Mahindra As required under the provisions of section 224(1B) of the
Electrical Steel Limited and Mahindra Aerospace Australia Companies Act, 1956, the Company has obtained a written
Pty. Limited and Aerostaff Australia Pty. Limited became Certificate from the above Auditors proposed to be
7

19. re-appointed to the effect that their re-appointment, if last few months, as indicated by the sharp rise in capital
made, would be in conformity with the limits specified in goods production and a normal monsoon forecast for the
the said section. current year, the prognosis for growth in the current fiscal is
positive.
Public Deposits and Loans/Advances
However, the rising cost of commodities and the supply
Out of the total 17,101 deposits of Rs.166.22 crores from
constraints on certain critical components are a source of
the Public and Shareholders as at 31st March, 2010, 205
considerable concern and your Company hopes to counter
deposits amounting to Rs.0.67 crores had matured and
this through an intensive and continuous focus on cost
had not been claimed as at the end of the Financial Year.
controls, product innovation and customer delight.
Since then, 93 of these deposits of the value of Rs.0.44
crores have been claimed. Energy Conservation, Technology Absorption
and Foreign Exchange Earnings and Outgo
The particulars of loans/advances and investment in its
own shares by listed companies, their subsidiaries, Particulars required to be disclosed under the Companies
associates, etc., required to be disclosed in the Annual (Disclosure of Particulars in the Report of Board of Directors)
Accounts of the Company pursuant to Clause 32 of the Rules, 1988 are set out in Annexure II to this Report.
Listing Agreement are furnished separately.
Particulars of Employees
Current Year
The Company had 426 employees who were in receipt of
st th
During the period 1 April, 2010 to 28 May, 2010, 45,821 remuneration of not less than Rs.24,00,000 during the
vehicles were despatched as against 34,797 vehicles during year ended 31st March, 2010 or not less than Rs.2,00,000
the corresponding period in the previous year. During the per month during any part of the said year. However, as
same period, 29,699 tractors were despatched as against per the provisions of section 219(1)(b)(iv) of the Companies
24,536 tractors despatched during the corresponding Act, 1956, the Directors’ Report and Accounts are being
period in the previous year. sent to all the Shareholders of the Company excluding the
Statement of particulars of employees. Any Shareholder
Economies in many parts of the world have started to
interested in obtaining a copy of the Statement may write
stabilise and recover either from recession or severe slow
to the Company Secretary of the Company.
down in the past two years. The Indian Economy has
displayed remarkable resilience over the course of the
downturn and is expected to grow strongly. The primary
driver of growth in the year under review was the Industrial
Sector. The index of industrial production grew 10.1% on a For and on behalf of the Board
year on year basis between April, 2009 to February, 2010
as compared to the 3.1% growth registered in the same KESHUB MAHINDRA
th
period in the last fiscal. With investments picking up in the Mumbai, 29 May, 2010 Chairman
8

20. MAHINDRA & MAHINDRA LIMITED
ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2010
Information to be disclosed under the Securities and Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999:
(a) Options 1,51,80,898
granted
(b) The pricing 1st Tranche 2nd Tranche 3rd Tranche 4th Tranche 5th Tranche 6th Tranche 7th Tranche 8th Tranche 9th Tranche 10th Tranche
formula
Average Average Discount Discount Average Discount Discount Discount Discount Discount
price price of 5.13% of 4.85% price of 5.02% of 4.89% of 4.97% of 5.03% of 4.97%
preceding preceding on the on the preceding on the on the on the on the on the
the the average average the average average average average average
specified specified price price specified price price price price price
date - 27th date - 30th preceding preceding date - 14th preceding preceding preceding preceding preceding
September, May, the the September, the the the the the
2001 2003 specified specified 2005 specified specified specified specified specified
date - 31st date - 30th date - 29th date - 13th date - 30th date - 4th date - 30th
May, 2004 May, 2005 May, 2006 September, July, 2007 August, July, 2009
2006 2008
Average price - Average of the daily high and low of the prices for the Company’s Equity Shares
quoted on Bombay Stock Exchange Limited during 15 days preceding the
specified date.
The specified date - Date on which the Remuneration/Compensation Committee decided to
recommend to the Mahindra & Mahindra Employees’ Stock Option Trust (Trust),
the grant of Options.
(c) Options vested 82,90,283
(d) Options exercised 45,88,703
(e) The total number of 45,88,703 Equity Shares of Rs.10 each. These were transferred from the Trust to the Eligible
shares arising as a Employees prior to sub-division of the Face Value of Equity Share from Rs.10 to Rs.5.
result of exercise of
option
(f) Options lapsed 7,57,165
(g) Variation of terms At the Sixty-first Annual General Meeting of the Company held on 30th July, 2007, the
of options Mahindra & Mahindra Limited Employees Stock Option Scheme was amended to provide for
recovery from Eligible Employees, the fringe benefit tax in respect of Options which are
granted to or vested or exercised by the Eligible Employees on or after 1st April, 2007.
(h) Money realised by Rs.79,24,98,738. This amount was received by the Trust.
exercise of options
(i) Total number 98,35,030
of options in force

21. (j) Employee-wise details of
options granted to:
(i) Senior managerial As per Statement attached
personnel
(ii) Any other employee who Names Options Names Options
receives a grant in any granted granted
one year of option during the during the
amounting to 5% or more year ended year ended
of option granted during 31st March, 31st March,
that year 2004* 2005*
Mr. Raghunath Murti 15,000 Mr. Pranab Datta 15,240
Mr. Hemant Luthra 15,240 Mr. Rajeev Dubey 15,000**
Mr. Ramesh lyer 25,920 Mr. Allen Sequeira 10,160
- - Mr. Prince M. Augustin 5,080
* The Options granted stand augmented by an equal number of Options and the
Exercise Price stands reduced to half on account of the 1:1 Bonus Issue made in
September, 2005.
** Out of these, the Options granted and outstanding as of 30th March 2010,
stands augmented by an equal number of Options and the Exercise Price
stands reduced to half on account of the sub-division of the Face Value of
Equity Share from Rs.10 to Rs.5.
(iii) Identified employees who Nil
were granted option,
during any one year,
equal to or exceeding 1%
of the issued capital
(excluding outstanding
warrants and conversions)
of the company at the
time of grant
(k) Diluted Earnings Per Share Rs.35.61
(EPS) pursuant to issue of
shares on exercise of option
calculated in accordance with
Accounting Standard (AS) 20
‘Earnings per Share’
(l) Where the company has The Company has calculated the employee compensation cost using the intrinsic
calculated the employee value of stock options. Had the fair value method been used, in respect of stock
compensation cost using the options granted on or after 30th June, 2003, the employee compensation cost
intrinsic value of the stock would have been higher by Rs.26.44 crores, Profit after tax lower by Rs.26.44
options, the difference between crores and the basic and diluted earnings per share would have been lower by
the employee compensation Rs.0.48 and Rs.0.44 respectively.
cost so computed and the
employee compensation cost
that shall have been recognised
if it had used the fair value of
the options, shall be disclosed.
The impact of this difference on
profits and on EPS of the
company shall also be disclosed.

22. MAHINDRA & MAHINDRA LIMITED
(m)Weighted-average exercise Options Grant Date Exercise price Fair value
prices and weighted-average
fair values of options shall be (Rs.) (Rs.)
disclosed separately for options
whose exercise price either 4th November, 2009 724.00 414.84
equals or exceeds or is less than
the market price of the stock.
(n) A description of the method The fair-value of the stock options granted on 4th November, 2009 have been
and significant assumptions calculated using Black-Scholes Options pricing Formula and the significant
used during the year to assumptions made in this regard are as follows:
estimate the fair values of
options, including the
following weighted-average
information:
(i) risk-free interest rate, 6.41%
(ii) expected life, 2.50 years
(iii) expected volatility, 53.56%
(iv) expected dividends, and 2.24%
(v) the price of the underlying Rs.929.50
share in market at the time
of option grant.
STATEMENT ATTACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2010
Name of Senior Managerial Options granted in Options granted in Options granted in Options granted in Options granted in
Persons to whom Stock December, 2001* June, 2005** September, 2006 July, 2007 August, 2008
Options have been granted
Mr. Deepak S. Parekh 20,000 5,000 Nil Nil Nil
Mr. Nadir B. Godrej 20,000 5,000 Nil Nil Nil
Mr. M. M. Murugappan 20,000 5,000 Nil Nil Nil
Mr. Narayanan Vaghul 20,000 5,000 Nil Nil Nil
Dr. A. S. Ganguly 20,000 5,000 Nil Nil Nil
Mr. R. K. Kulkarni 20,000 5,000 Nil Nil Nil
Mr. Anupam Puri 20,000 ***5,000 Nil Nil Nil
Mr. Bharat Doshi 1,00,000 ***10,000 ***11,345 ***8,362 ***29,039
Mr. A. K. Nanda 1,00,000 10,000 ***11,345 ***8,362 ***24,890
* All the above Options have been exercised.
** The Options granted stands augmented by an equal number of Options and the Exercise Price stands reduced to
half on account of the 1:1 Bonus Issue made in September, 2005.
*** Out of these, the Options granted and outstanding as on 30th March 2010, stands augmented by an equal number
of Options and the Exercise Price stands reduced to half on account of the sub-division of Face Value of Equity
Share from Rs.10 to Rs.5.

23. ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2010
PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF • Improving capacity utilisation of cylinder
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) head washing units.
RULES, 1988 AND FORMING PART OF THE DIRECTORS’
• Modifying furnace charging sequence.
REPORT FOR THE YEAR ENDED 31ST MARCH, 2010
• Optimising temperature settings of air
A) Conservation of Energy
conditioners considering seasonal
The Company has always been conscious of the need changes.
for conservation of energy and has been steadily
• Modification of Air Handling Ducts in
making progress towards this end. Energy
paint shop to optimise use of Air Blower
conservation initiatives have been implemented at all
power consumption.
the plants and offices of the Company by undertaking
numerous energy conservation projects. (iii) Initiatives Generating Awareness on Energy
Consumption
(a) During the year, the Company has taken the
following initiatives for conservation of energy: • Display of sustainability posters at
(i) Engineering Initiatives workplace.
• Modification in equipments like oil • Idea generation campaign for electrical
pumps and motors coupled with system energy saving.
optimisations to reduce energy • Celebration of Energy Conservation Day
consumption. on 14th December, 2009 followed by
• Replacement of higher HP motor with Energy Conservation Week between 14th
lower HP. December, 2009 to 21st December, 2009.
• Installation of heat pumps, metal halide • Setting up of Stalls inside the Plant
lamps instead of sodium and mercury premises for awareness of Energy
vapor lamps. Efficient and Renewable Energy Products.
• Installation of natural draft cooling • Reward and recognition for energy saving
towers instead of induced draft cooling projects.
systems. (b) Additional investments and proposals, if any,
• Installation of capacitor banks, automatic being implemented for reduction of consumption
timer circuits for lights and fans. of energy:
• Installation of heat recovery system at • Waste heat recovery projects in paint shops.
ED oven.
• Improvement in efficiency of central air
• Shift to LPG Heating from Electric Heating. conditioning units.
(ii) Process Improvement • Explore application of efficient lighting (LED,
Magnetic coupled).
• Cycle time reduction of various
manufacturing processes. • Use of renewable energy (Solar and Wind).

24. MAHINDRA & MAHINDRA LIMITED
(c) Impact of the measures at (a) & (b) above for for the Maxximo to give the pick-up segment
reduction of energy consumption and users a car like driving comfort.
consequent impact on the cost of production of Your Company has been working on developing
goods: the Scorpio Pick-UP for the US market and in the
The measures taken have resulted in lower energy process, has developed/attained significant
consumption. In the Automotive Division, the capabilities in the field of emission, safety, security
Specific Power consumption per equivalent vehicle and on board diagnostics. The Company has
improved by 15% over the previous year. For the confidence of complying to the latest FMVSS
same period, the Farm Equipment Sector achieved legislations for model year 2010 and further years.
an improvement of 3.21% per equivalent tractor. In the area of sustainable mobility, the Company
developed a Micro Hybrid application on the
The work done by your Company has received
Pick-UP. This was launched on the new Bolero
recognition in the form of a number of National
Maxi Truck and was received very well by the
and State level awards.
customers.
B) Technology Absorption
During the year under review, your Company’s
Research & Development: Automotive Division applied for 24 Patents and
8 Design Registrations.
1. Areas in which Research & Development is carried
out: Moving on to the Farm Equipment Sector, in the
During the year under review, the Automotive domestic market, the Farm Division, during the
Division focused technology development efforts year under review, developed and launched the
in core areas of engine technology, safety, value “Yuvraj 215”, a 15HP tractor, to meet the needs
engineering through the use of modern of the small and marginal farmers. The entire
manufacturing processes, alternate material and existing range of tractors, i.e. Bhoomiputra,
developing capabilities in automotive electronics. Sarpanch and the flagship Arjun range were
The Farm Equipment Sector too, focused on upgraded, offering better fuel efficiency, stability
improvement in engine technology and new and comfort. In the same period, the Swaraj
product development. Division developed and launched the Swaraj 843
2. Benefits derived as a result of the above efforts: XM (Xtra Mileage) tractor, the 1st new product
from the Swaraj stable after its merger with the
Some significant achievements for the year under
review include the C2 CRDe engine with DOHC Company.
which was launched on the Maxximo. The engine In the international space, in the US market, the
delivers higher power and better fuel efficiency, Compact series of tractors were launched across
thus delivering significant customer benefit and the country, offering advanced features like
competitive advantage to your Company. Your Hydrostatic Transmission, allowing the product to
Company also developed its first in-house be easily operated by all in the household. Your
Gasoline Engine which was launched on the Company developed an Integrated Cabin, which
Scorpio targeting the overseas markets. was also introduced in the US market. In China,
In the area of Suspension, a hydro-formed frame the 125 HP tractor was launched, significantly
and front independent suspension was developed expanding your Company’s tractor range.
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25. In the case of Mahindra Powerol, the product 4. Expenditure on R&D
range was increased to 320 kVA, at the higher
The Company spent Rs.664.86 crores (including
end. At the lower end, the 5kVA genset has been
Rs.390.72 crores on capital expenditure) on
developed and introduced. In AppliTrac, the
Research and Development work during the year
tracked type self propelled harvester was developed
which was approximately 3.23% of the total
and introduced in the southern rice belt.
turnover.
Keeping in view the future technology Technology Absorption, adaptation and innovation:
requirements, your Company’s tractor engines are
compliant with the upcoming BS (Trem) IIIA 1. Efforts, in brief, made towards technology
norms in India and has also undertaken a absorption, adaption and innovation
programme to meet the challenging Tier-IV The Company has continued its endeavor to
emission norms of USA. absorb advanced technologies for its product
range to meet the requirements of a globally
During the year in India, the Farm Equipment
Sector filed 12 New Patents and 2 New Design competitive market. All of the Company’s
Registration applications. Vehicles, Engines and Tractors are compliant with
the prevalent regulatory norms in India and also
3. Future plan of action in the countries to which they are exported. The
Your Company continues its focus on developing Company has also undertaken programs for
new products and technologies to meet the ever development of vehicles which would run on
growing customer needs, regulatory alternate fuels like CNG, Bio-diesel, Hydrogen and
requirements, competitive pressures and to Electric traction.
prepare for the future. Sustainable mobility 2. Benefits derived as a result of the above efforts
solutions are a key focus area and your Company
• Compliance with new emission norms
will continue to aggressively pursue technology
introduced in India with effect from 1st April,
development in this area. Some of the key thrust
2010.
areas in this direction are weight reduction, fuel
efficiency improvement and development of • Build a knowledge base for the Company.
alternative fuel powertrains. Further, safety related • Launch of Bolero Maxi Truck, Gio, Maxximo
technologies are another key area of focus for and Yuvraj.
your Company.
• Introduction of Micro Hybrid Technology on
On the Farm Equipment side, your Company a Pick-UP.
remains committed to improving farm • Development of C2 CRDe engine with DOHC.
productivity through a variety of product (Tractors
• Development of Electric Version of Maxximo.
and Implements) and non-product initiatives. The
focus will be on delivering new technology to • Development of Integrated Cabin for Tractor.
the customer for a multi-fold farm output. • Emphasis on value analysis/value engineering
Product upgrades, new products and implements and innovative cost reduction ideas to cut
will be focus areas. down costs.
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