committees of the board · and livelihood training for the economically and socially disadvantaged,...
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COMMITTEES OF THE BOARD
Audit Committee
Deepak S. Parekh
Chairman
Nadir B. Godrej
M. M. Murugappan
R. K. Kulkarni
Remuneration/Compensation Committee
Narayanan Vaghul
Chairman
Keshub Mahindra
Nadir B. Godrej
M. M. Murugappan
Share Transfer and Shareholders/
Investors Grievance Committee
Keshub Mahindra
Chairman
Anand G. Mahindra
Bharat Doshi
A. K. Nanda
R. K. Kulkarni
Loans & Investment Committee
Keshub Mahindra
Chairman
Anand G. Mahindra
Bharat Doshi
A. K. Nanda
R. K. Kulkarni
Research & Development Committee
A. S. Ganguly
Chairman
Anand G. Mahindra
Nadir B. Godrej
M. M. Murugappan
Bharat Doshi
GROUP MANAGEMENT BOARD
Anand G. Mahindra
Vice-Chairman & Managing Director
Bharat Doshi
President - Trade & Financial Services Sector
A. K. Nanda
President – Infrastructure Development Sector
Anjanikumar Choudhari
President - Farm Equipment Sector
Rajeev Dubey
President – Human Resources & Corporate Services
Pawan Goenka
President – Automotive Sector
Hemant Luthra
President – Systems & Technologies Sector
Raghunath Murti
Managing Director – Mahindra Intertrade Limited
Uday Y. Phadke
President – Finance & Legal Affairs
Ulhas N. Yargop
President – Telecom & Software Sector
BOARD OF DIRECTORS
Keshub Mahindra
Chairman
Anand G. Mahindra
Vice-Chairman & Managing Director
Deepak S. Parekh
Nadir B. Godrej
M. M. Murugappan
Narayanan Vaghul
A. S. Ganguly
R. K. Kulkarni
Anupam Puri
Thomas Mathew T.
Nominee of Life Insurance Corporation of India
Bharat Doshi
Executive Director
A. K. Nanda
Executive Director & Secretary
1
“Every great business is built on friendship” according to
the great American retailer J.C.Penney. As far as the
Mahindra Group is concerned, truer words were never
spoken. For sixty years, Mahindra has grown and prospered
by making its customer its friend and partner in prosperity.
Who is the Mahindra customer? The Mahindra customer
has as many faces as India does. Our customer is the growing
family that needs a safe, comfortable and reliable car; the
farmer in the field; the rural taxi driver; the company
executive who wants to get away for the weekend; the lady
who buys Lego for her children; the young techie looking for
the latest telecom solution; the hard working family man
who wants to give his family a holiday; the ambitious engineer
who wants to design an engine for a European firm; the
newly married couple looking for a house; the grower of
grapes seeking an export market; the IT entrepreneur looking
for an SEZ to showcase his new venture; the small farmer
who needs a loan; the small trader looking for a genset
during power cuts. Mahindra customer is all these and more.
Our customer also has a global face. The European
businessman seeking new markets; the holiday farmer in the
US; the Chinese peasant near Nanchang; the young hot-
rodder in Spain; the safari enthusiast in South Africa –
these too are our customers. Urban and rural, high end and
budget, local and international – between our Group
companies, we serve them all.
With such a range and variety of customers, it’s no wonder
that the customer is always central to Mahindra’s thoughts
and actions. At Mahindra we go beyond customer service to
customer partnership. That means listening to the customer,
finding out what he wants, identifying what makes her happy,
and then incorporating it into our products. The new Scorpio
for example is literally the car the customer built.
We systematically captured customer feedback and
incorporated it to provide 43 new features. Similarly, in
housing, we don’t just give the customers a house – we give
them the healthy living that they crave. In rural finance, we
give the customer the conveniences that other banking
systems cannot – quick sanctions of loans without the rigidity
of a bank, the facility to pay back in the manner convenient
to him – even if it means accepting payments in small change
tied in a cloth bundle. For holidays, we give families what
they need– a memorable, hassle-free bonding opportunity in
beautiful surroundings. The Chinese farmer or the American
one gets an affordable tractor that is as good-looking as it
is hardworking.
We must be doing something right, because this year’s profits
are the highest ever, beating even last year’s record high. It
is increasingly obvious to us that if you look after your
customer, the customer will repay you with his loyalty,
patronage and endorsement. And since we operate in a wide
range of businesses, the customer of one business will turn
to us for the satisfaction of other needs as well. The satisfied
Scorpio buyer also trusts us to plan his vacations. The farmer
looks to us when he is ready to upgrade to a four-wheeler.
And if he is happy with us, he tells his friends and relations
as well.
We have found that it pays to make a fine art out of meeting
the customer’s needs. It makes for good business. But better
still, it makes for great friendships and a life long
relationship. The net result is that our employees are our
best advertisement and our customers are our best
ambassadors. We believe that J.C Penney was right. Our
customers are our friends because they are at the center of
our thoughts and actions. That is why, on the right hand
corner of the cover of our Annual report we have proudly
called ourselves a C3– a truly customer centric corporation.
A CUSTOMER CENTRIC CORPORATION
2
Contents
Directors’ Report ..................................................................................................... 5
Management Discussion and Analysis ..................................................................... 20
Corporate Governance ........................................................................................... 36
Accounts ............................................................................................................... 62
Statement pursuant to Section 212 ...................................................................... 115
Consolidated Accounts ......................................................................................... 117
Bankers
Bank of America N. T. & S.A.
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Limited
Standard Chartered Bank
State Bank of India
Union Bank of India
Auditors
A. F. Ferguson & Co., Allahabad Bank Buildings,
Bombay Samachar Marg, Mumbai 400 001.
Advocates
Khaitan & Co., Meher Chambers,
R K Marg, Ballard Estate, Mumbai 400 038.
Registered Office
Gateway Building, Apollo Bunder, Mumbai 400 001.
Branches
7, Dr. Ishaque Road (Old KYD Street), Kolkata 700 016.
Mahindra Towers, 2-A Bhikaji Cama Place, New Delhi 110 066.
Mahindra Towers, First Floor, 17/18, Pattulous Road, Chennai 600 002.
Raheja Chambers, First Floor, 12, Museum Road, Bangalore 560 001.
3
Dear Shareholder,
The debate continues all over the world as to what is the social responsibility of
Business. Corporations are redefining themselves seeking new identities. No one
has a clear answer since societies spread all over the world have different
traditions and culture and their needs vary from region to region. There cannot
be one model which can suit all societies. Business therefore has to be sensitive
enough to perceive the needs of the society in which they operate, and fashion
their strategy and objectives to meet them.
Indian business has always worked in tandem with the nation’s needs and has
been a part of the larger social fabric of the nation. During the freedom struggle,
Indian business participated whole-heartedly in the political revolution. In the
last decade it has been in the vanguard of the economic revolution. In fact, the
growth of Indian business has been a crucial component of the revolution of
rising aspirations that we are witnessing all around us. And philanthropy has
always been a part of the Indian business tradition.
Corporate Social Responsibility has been basic to our philosophy at the Mahindra
Group since our birth in 1945. It has been an intense but deliberately low
profile activity based on the belief that social responsibility is a privilege and
not a portal for publicity. Today, there is a clarion call for business to lend a
hand to tackle the social challenges that are being thrown into relief because of
our increasing prosperity.
It is our belief and conviction that India’s recent spectacular growth provides us
with an opportunity to redress some of the weaknesses that exist in our social
fabric. One cannot have a large section of a population denied even the basic
amenities like water, housing, health care and education. This is not an acceptable
situation. We are therefore convinced and believe that the weaker sections of
our society need help and support. We feel that the route to addressing their
problems is through education and training. We need to impart skills which
make it possible for them to be employed.
The focus of our CSR therefore is on appropriate education, vocational education
and livelihood training for the economically and socially disadvantaged, primary
education for the girl child and higher education for those who merit it.
We plan on setting up Mahindra Pride Schools that will provide youth from
socially disadvantaged sections of society with training to enable them to gain
employment based on their skills. Studies are currently on to decide the locations
of these schools. Concurrently, work has begun on curriculum development for
the courses that will be offered. Courses will be carefully designed based on the
requirements of industry, in terms of manpower and skills. Sunrise and booming
sectors with growth potential and shortage of skilled manpower will be targeted.
We hope this will lead to economic and social empowerment for many young
people who are, today, disadvantaged.
We will also support six government schools in Mumbai. The aim is to improve
the overall quality of education in these schools and to achieve improved learning
4
outcomes by working with teachers, children and the community. Again, the
main beneficiaries will be the children attending these schools.
In India only 3 girls out of every 10 who enroll in Std. I go on to complete Std.
X. To make a dent in this problem, the Group supports the education of 6,000
disadvantaged girl children through the Nanhi Kali project of the K. C. Mahindra
Education Trust. These girls belong to urban slums, backward and tribal areas
in rural India, where education is not a priority for girls. Through the Nanhi
Kali project they will not only receive education, but also get direct support in
the form of uniforms, clothes, stationery, etc. thus removing some of the barriers
to their completing school.
We are also doubling the number of Mahindra All India Talent Scholarships
from 300 to 600. These scholarships are given to students who wish to pursue
job-oriented diploma courses in recognized Government Polytechnics, enabling
them to qualify for employment. Scholarships are given to economically
disadvantaged and socially weaker strata in both rural and urban India.
Deafness is another kind of disadvantage that is rarely acknowledged in our
society. As a special gift to the hearing impaired, the Group will donate 60
Cochlear Implants over a 3-year period to beneficiaries below the age of 5
years. With training, this will enable 60 profoundly deaf children to lead a
normal life and realise their full potential. Each Cochlear Implant costs
approximately Rs. 5 lacs. So far 7 children, all from the lower socio-economic
strata, have received the implant.
Our employees believe that social responsibility does not end with the giving of
money. It is equally important to give of our time, and of ourselves. The Group
has launched a unique ESOPs (Employee Social Options) Plan, through which
its 24,000 strong workforce can choose from a menu of social options, and
participate in CSR activities by volunteering their time. Through this plan, on
any given day, Mahindra employees somewhere in the country will be contributing
directly to society.
In order to ensure that sufficient funds are available for us to undertake this
task in a modest manner, we as a Group have committed that one percent of our
Profits after Tax will be available on a continuing basis to support this CSR
initiative largely to benefit the socially and economically disadvantaged.
I shall be reporting to you on behalf of the Group from time to time.
Regards,
Yours sincerely,
Keshub Mahindra.
5
DIRECTORS’ REPORT TO THE SHAREHOLDERS
Your Directors present their Report together with the audited accounts of your Company for the year ended 31st
March,
2006.
Financial Highlights
(Rs. in lakhs)
2006 2005
Gross Income 945143 780409
Less: Excise Duty on Sales 112489 103504
Net Income 832654 676905
Profit before Depreciation, Interest, Provision for Contingencies,
Exceptional items and Taxation 107188 87943
Less : Depreciation /Amortisation 20001 18405
Profit before Interest, Provision for Contingencies,
Exceptional items and Taxation 87187 69538
Less : Interest (Net) (1840) (558)
Profit before Provision for Contingencies, Exceptional items and Taxation 89027 70096
Less : Provision for Contingencies 78 34
Profit before Exceptional items and Taxation 88949 70062
Add: Exceptional items 21001 1355
Profit before Taxation 109950 71417
Less : Provision for tax – Current tax (including Fringe Benefit Tax) 28540 21500
Less: Provision for tax – Deferred tax (Net) (4300) (1350)
Profit for the year 85710 51267
Balance of profit for earlier years 99640 74284
Add : Transfer from Debenture Redemption Reserve 44 1040
Investment Allowance Reserve Written Back - 245
Profit available for appropriation 185394 126836
Less : General Reserve 10000 10000
Dividend paid for the previous year
[Rs. Nil credit (previous year : Rs.0.23 lakhs credit)]
Income-tax on dividend paid
[Rs. Nil credit (previous year : Rs.0.03 lakhs credit)]
Proposed Dividends 24397 15081
Income-tax on Proposed Dividends 3422 2115
Balance carried forward 147575 99640
6
Performance Review
Automotive Sector:
The Automotive Sector of your Company continued its growth
in vehicle production and sales for the fourth consecutive
year. During the year under review, your Company produced
1,28,601 vehicles [i.e. multi utility vehicles (MUV) and
light commercial vehicles (LCV) including 2,705 LCV
produced for Mahindra International Limited (MIL)] and
22,317 three-wheelers as compared to 1,24,795 vehicles
and 23,230 three-wheelers in the previous year. Your
Company recorded sales of 1,27,005 vehicles (of which 1,833
LCV were sold by MIL) and 22,419 three-wheelers as
compared to 1,22,071 vehicles and 22,952 three-wheelers
in the previous year registering a growth of 4% in vehicles
sales.
Your Company’s domestic MUV sales volumes grew by 3%
as against the industry MUV sales growth of 6%. Your
Company’s LCV sales volumes were lower than the last year
by 14% as against the industry decline of 7% in this segment.
In the large three-wheeler segment, your Company’s sales
volumes declined by 21% against a 20% decline for the
industry as a whole. Your Company entered the small three-
wheeler segment during the year with the launch of a 0.5
MT payload cargo carrier named Champion Alfa in select
markets. By the end of the year under review, your Company
had sold 4,307 Champion Alfa in select markets. The Spare
Parts sales increased to Rs.236.00 crores (including Exports
of Rs.12.84 crores) during the year under review as compared
to the previous year figures of Rs.227.85 crores (including
Exports of Rs.34.04 crores).
Your Company has intensified its efforts to identify niche
markets for its automotive products throughout the world,
especially geographical areas that have similar sales,
distribution and marketing conditions as India. Over the
last three years, your Company’s vehicles have been
introduced in Europe, the Middle East, South America,
South-East Asia and Africa with a customised business model
for each country. These initiatives resulted in a quantum
increase in export volumes.
For the year under review, your Company sold 5,534 vehicles
in the overseas markets which is an increase of 82% over
the previous year.
Recently, the Scorpio range of pick-ups was launched for
the international markets in South Africa. This will drive
growth in the overseas markets.
Your Company commissioned a new plant in Haridwar in
the State of Uttaranchal for the manufacture of low end
products like three-wheelers.
Your Company launched a new version of the Scorpio in
March, 2006. It has been well received in the market and
would have a full impact in the current year.
The Automotive Sector plans to develop a family of new
generation engines to power the present and future Mahindra
vehicles. These engines would offer improved efficiency,
refinement and performance. New vehicle development,
including a new UV and the Logan passenger car is going
as per plan. These vehicles carry the promise of comfort,
economy, ruggedness and a pleasurable driving experience.
In an increasingly competitive market, the Sector banks on
its innovation to give it the edge. On the technology front,
the Sector is taking forward the research and development
on telematics, embedded system and promising alternative
energy technologies viz. Hydrogen, Biodiesel and Hybrids.
Further technology developments in the field of safety, nano-
materials and other innovations are expected to be introduced
into the product line soon.
With a view to effectively exploit the growth and business
opportunities of the Commercial Vehicles business, your
Company entered into a Joint Venture (JV) with International
Truck and Engine Corporation (ITEC) for manufacture of
commercial vehicles in India. Pursuant to the approval of
7
the shareholders obtained by Postal Ballot in July, 2005,
the LCV business of the Company was transferred to a Joint
Venture Company (JVC), Mahindra International Private
Limited (now Mahindra International Limited) with effect
from 1st
November, 2005, in which your Company has a
51% shareholding, the balance 49% being held by ITEC.
This JVC is engaged in the Light Commercial Vehicles
business. Going forward, this JVC will also enter the Medium
and Heavy Commercial Vehicle segments and participate to
a larger extent in the Indian commercial vehicles market.
In order to facilitate a meaningful comparison your
Company’s production and sales volumes include MIL
volumes.
Your Company’s Joint Venture with Renault s.a.s. of France
to introduce the Logan in India is progressing well and is on
target with respect to cost and time. The project is proposed
to be financed through an appropriate mix of Equity and
Debt and till date, both the Joint Venture Partners have
contributed Rs.51.5 crores into the Joint Venture Company
as equity in proportion to their shareholding.
Farm Equipment Sector:
For the third consecutive year, the Tractor Industry grew
substantially registering a growth of 18% for the year under
review. This was mainly on account of a good monsoon,
better availability of credit and focus on retail tractor
financing by the Banking Sector.
During the year, your Company sold 85,029 tractors as
against 65,390 tractors sold in the previous year recording
a significant growth of 30% and produced 87,075 tractors
as against 67,115 tractors produced in the previous year
recording a notable growth of 29.7%. Your Company
maintained its market leadership for the 23rd
consecutive
year in the domestic tractor market.
Last year your Company launched two new products - 235
DI and 245 DI - in the domestic market in the low HP
segment and new Arjun Ultra-1 range in the high HP
segment. These products have significantly strengthened your
Company’s position in these segments.
Your Company sold 14,692 engines during the year under
review as against 6,672 engines sold during the previous
year, registering a massive growth of 120%. The engine
business which started from a customer base of a single
client in 2002, has currently 22 corporate clients. Your
Company has also made a foray into the retail and non-
genset segments. Beginning from this year your Company
has also sold 1,084 Mahindra branded Diesel Generators
(DG Sets).
Your Company’s focus on exports continued with export
volumes growing by 29.6%. The major export markets are
USA, SAARC countries, Africa, Australia and China. Your
Company established a Joint Venture Company (JVC) in
China under the name of Mahindra (China) Tractor Company
Limited (MCTCL) in which a wholly owned subsidiary of
your Company, Mahindra Overseas Investment Company
(Mauritius) Limited, has a 80% shareholding, the balance
20% being held by Jiangling Motors Co., Group, China.
This JVC has a capacity of 12,000 tractors in 18-33 HP
range. This JVC became fully operational in July, 2005.
Your Company has also started its East European operations
by launching tractors in Serbia. Your Company sold spare
parts worth Rs.127.88 crores (including exports Rs.11.7
crores) during the year under review as compared to sales
of Rs.108.83 crores (including exports Rs.7.6 crores) in the
previous year, registering a healthy growth of 17.5%.
Your Company plans to offer various product solutions by
offering value for money and reliable products in domestic
market. This will help your Company expand its product
range in low HP segment. Apart from new products, it is
important to upgrade existing products with contemporary
features. Your Company will be introducing upgrades of
existing products in domestic market in a phased manner
8
over the next 3 years. For the export markets, the Sector
will expand its product range in compact segment and
introduce products in existing HP range which are economical
and rugged. Keeping in line with the growth plans, your
Company will be introducing new products in Engine
Application business segment.
Profits:
The Profit for the year before Depreciation, Interest,
Provision for Contingencies, Exceptional items and Taxation
was Rs.1,071.88 crores as against Rs.879.43 crores in the
previous year registering an increase of approximately
21.88%. Profit after tax was Rs.857.10 crores as against
Rs.512.67 crores in the previous year recording an increase
of approximately 67.18%. Your Company continues with its
rigorous cost restructuring exercises, which has resulted in
significant savings through value engineering, economising,
optimisation of plant capacity utilisation, cost
competitiveness and right sizing in almost all areas.
A detailed analysis of the Company’s performance is
contained in the Management Discussion and Analysis Report,
which forms part of this Annual Report.
Issue of Bonus Shares
Pursuant to the Resolution passed at the Annual General
Meeting of your Company held on 28th
July, 2005, your
Company has on 8th
September, 2005, allotted 11,60,08,899
Ordinary (Equity) Shares as fully paid-up Bonus Shares in
the ratio of one Bonus Share for every one existing Equity
Share of the Company held by shareholders as on the Record
Date i.e. 2nd
September, 2005.
Dividend
Your Directors have recommended a dividend of 75% and
a Special Dividend of 25% on the enhanced share capital
aggregating Rs.10 per share. The special dividend has been
recommended in light of the very successful listing of the
Mahindra & Mahindra Financial Services Limited equity
shares on the Stock Exchanges. The dividend, together
with the tax on distributed profits, will absorb a sum of
Rs.278.19 crores (previous year Rs.171.96 crores
comprising of a dividend of 100% and a special dividend
of 30%) and will be paid to those shareholders whose
names stand registered in the books of the Company as on
the book closure date.
Finance
Your Company follows a prudent financial policy, which has
resulted in improvement in its Capital structure and debt
protection levels. Your Company’s Debt to Equity ratio has
improved from 0.53 at the beginning of the year to 0.31 as
at 31st
March, 2006. Interest coverage ratio has improved
from 28.4 times as at 31st
March, 2005 to 29.9 times as at
31st
March, 2006.
In March, 2006 your Company exercised its Call option to
redeem high cost debentures of Rs.75 crores. Pursuant to
this, the debentures were redeemed in April/May.
During the year, both CRISIL Limited (CRISIL) and Fitch
Ratings India Private Limited (FITCH) reaffirmed the AA+
and AA+ positive rating assigned by them to your Company’s
outstanding debentures in the previous financial year. The
ratings indicate high safety on timely payment of interest
and principal and low expectation of credit risk.
Your Company in May, 2004, made a US$ 100 million
Foreign Currency Convertible Bonds (FCCBs) offering to
international investors. During the period upto 29th
May,
2006 several Bondholders exercised their conversion option
resulting into Bonds of value US $ 87.10 million getting
converted into 1,19,53,617 Equity Shares/GDRs each GDR
representing One Equity Share of the Company.
9
In April, 2006 your Company successfully completed its
US$ 200 million FCCBs offering to international investors.
The issue received an overwhelming response. The demand
was 3.22 times the issue size and was priced at Zero Coupon
for a five year tenure with a redemption price of 128.03%
to yield 5% till maturity. The conversion price was fixed at
Rs.922.04 at 40% premium to the then prevailing share
price of Rs.658.60. The issue proceeds will be used for
product development, modernisation and expansion of
existing manufacturing facilities and expansion by internal
growth as well as overseas acquisitions and for such purposes
as may be permitted from time to time under applicable
laws.
Stock Options
On the recommendation of the Remuneration/Compensation
Committee of your Company, the Trustees of the Mahindra
& Mahindra Employees’ Stock Option Trust have granted
15,67,144 Stock Options (after giving effect to the 1:1
Bonus Issue made in September, 2005) to Eligible Employees
during the year under review.
Details required to be provided under the Securities and
Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999
are set out in Annexure I to this Report.
Industrial Relations
Industrial Relations generally remained cordial throughout
the year. However during negotiations of the wage
agreement at the Company’s Zaheerabad plant, the
workmen’s Union issued an intent to strike notice. The
production was hampered for a few days, but did not have
any major impact on the Company’s operations. The
Management Discussion and Analysis gives an overview of
the developments in Human Resources/Industrial Relations
during the year.
Safety, Health and Environmental Performance
Your Company has a well-established Safety, Occupational
and Environmental Policy to ensure the optimum safety of
the employees, public, plant and equipment, which are
embedded in the core organisational values of your Company.
The Policy interalia necessitates necessary compliances with
all statutory rules and regulations, imparting training to
employees, carrying out safety audits of the various facilities
of the Company, conducting regular medical check up of its
employees and promoting eco-friendly activities. Your
Company’s Kandivli Plant of the Automotive Division and
Nagpur and Jaipur Plants of the Tractor Division have been
certified for Occupational Health and Safety Management
System (OHSAS 18001) certification which aims to eliminate
or minimise risk to employees and other parties who may be
exposed to Occupational Health and Safety risks associated
with the activities of your Company. Various safety promotion
campaigns and special initiatives were carried out in the
Plants. Your Company’s Nashik and Igatpuri Plants of the
Automotive Division and Kandivli, Nagpur and Jaipur Plants
of the Tractor Division have been certified with the amended
standards for Environmental Management System (ISO
14001:2004).
Directors
Mr. Alan E. Durante retired as the Executive Director of
the Company on 25th
September, 2005 and ceased to be a
Member of the Board of Directors of the Company with
effect from the same date. Mr. Durante also ceased to be a
Member of the Research & Development Committee and
Loans & Investment Committee of the Company. Mr. Durante
served the Company in various responsible positions since
1962 and also as an Executive Director since 1992 – a
career spanning over 43 illustrious years.
Unit Trust of India withdrew the nomination of Mr. V. K.
Chanana as a Nominee Director with effect from 22nd
March,
10
2006. Consequently, Mr. V. K. Chanana ceased to be a
Director of the Company and also ceased to be a Member of
the Audit Committee of the Company.
Mr. T. S. Vijayan had been appointed as an Additional
Director representing Life Insurance Corporation of India
(LIC) at the Meeting of the Board of Directors held on 28th
July, 2005. Subsequent to the year-end, LIC withdrew the
nomination of Mr. Vijayan as a Nominee Director and
nominated Mr. Thomas Mathew T. as LIC’s representative
as an Additional Director on the Board of Directors of the
Company with effect from 29th
May, 2006. He holds office
upto the date of the forthcoming Annual General Meeting.
A Notice has been duly received from a Member proposing
the candidature of Mr. Thomas Mathew T. for the office of
Director at the said Meeting.
The Board has placed on record its sincere appreciation of
the valuable services rendered by Mr. Alan E. Durante during
his tenure of service with the Company and Mr. V. K.
Chanana and Mr. T. S. Vijayan during their tenure as
Directors.
Mr. Deepak S. Parekh, Mr. N. Vaghul, Mr. A. K. Nanda and
Mr. Bharat Doshi retire by rotation and, being eligible,
offer themselves for re-appointment.
Directors’ Responsibility Statement
Pursuant to section 217(2AA) of the Companies Act, 1956,
your Directors, based on the representations received from
the Operating Management, and after due enquiry, confirm
that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) they have, in the selection of the accounting policies,
consulted the Statutory Auditors and these have been
applied consistently and reasonable and prudent
judgments and estimates have been made so as to give a
true and fair view of the state of affairs of the Company
as at 31st
March, 2006 and of the profit of the Company
for the year ended on that date;
(iii) proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities;
(iv) the annual accounts have been prepared on a going
concern basis.
Subsidiary Companies
During the year under review, Mahindra-BT Investment
Company (Mauritius) Limited, Mahindra (China) Tractor
Company Limited, Mahindra Automotive Steels Limited
(formerly Mahindra Automotive Steels Private Limited),
Mahindra Europe s.r.l., Mahindra Ugine Steel Company
Limited (MUSCO), Console Estate & Investments Limited
(since merged with MUSCO), Mahindra Renault Private
Limited, Mahindra World City (Jaipur) Limited, Mahindra
World City (Maharashtra) Limited (formerly Mahindra
Realty Limited), Mahindra International Limited (formerly
Mahindra International Private Limited), Tech Mahindra
(R&D Services) Limited, Tech Mahindra (R&D Services)
Inc., Tech Mahindra (R&D Services) Pte. Limited, Stokes
Group Limited, Jensand Limited, Stokes Forgings Limited,
Stokes Forgings Dudley Limited, Plexion Technologies
(India) Private Limited, Plexion Technologies (UK)
Limited, Plexion Technologies GmbH, Plexion Technologies
Inc., USA, Tech Mahindra (Thailand) Limited and Tech
Mahindra Foundation became subsidiaries of your
Company.
11
Your Directors are pleased to report that during the year
under review, your Company divested 99,91,450 Equity
Shares in Mahindra & Mahindra Financial Services Limited
(MMFSL) through an Offer for Sale as a part of the Initial
Public Offering (IPO) of MMFSL resulting in a gross
cash realisation of Rs.199.83 crores. The IPO of MMFSL
was for a sum of Rs.400 crores comprising a fresh issue of
one crore Equity Shares and an Offer for Sale of one crore
Equity Shares by the Company and certain other shareholders
of MMFSL at a price of Rs.200 per share. Post IPO, the
Company’s holding in MMFSL stands at 67.72%. The
Company continues to retain a majority stake in MMFSL in
view of its strategic importance to the Company’s
business. This divestment was made in line with the
Company’s policy of promoting investments in
appropriate businesses and monetizing the same at an
opportune moment for creating wealth for the Company’s
shareholders. MMFSL got itself listed on 17th
March, 2006
on National Stock Exchange of India Limited and Bombay
Stock Exchange Limited. The IPO received an overwhelming
response and was subscribed by 26.88 times.
Subsequent to the year-end, PT Tech Mahindra Indonesia
became a wholly owned subsidiary of Tech Mahindra Limited,
Mahindra Intermodal Transportation Private Limited became
a wholly owned subsidiary of Mahindra Gesco Developers
Limited which are subsidiaries of your Company and
Mahindra Automotive Steels Limited (formerly Mahindra
Automotive Steels Private Limited) ceased to be a subsidiary
of your Company.
The Statement pursuant to section 212 of the Companies
Act, 1956 containing details of the Company’s subsidiaries
is attached.
The Consolidated Financial Statements of the Company and
its subsidiaries, prepared in accordance with Accounting
Standard AS21 prescribed by The Institute of Chartered
Accountants of India, form part of the Annual Report and
Accounts.
In terms of approval granted by the Central Government
under section 212(8) of the Companies Act, 1956, copy of
the Balance Sheet, Profit and Loss Account, Reports of
the Board of Directors and Auditors of the subsidiaries
have not been attached with the Balance Sheet of the
Company. The Assistant Company Secretary will make these
documents available upon receipt of request from any
Member of the Company interested in obtaining the same.
However as directed by the Central Government, the
financial data of the subsidiaries have been separately
furnished forming part of the Annual Report. These
documents will also be available for inspection at the
Registered Office of the Company and the concerned
subsidiary companies, during working hours upto the date
of the Annual General Meeting. Further, pursuant to
Accounting Standard AS21 issued by The Institute of
Chartered Accountants of India, Consolidated Financial
Statements presented by the Company includes financial
information of its subsidiaries.
Auditors
Messrs. A. F. Ferguson & Co., Chartered Accountants, retire
as Auditors of the Company and have given their consent
for re-appointment. The shareholders will be required to
elect Auditors for the current year and fix their
remuneration.
As required under the provisions of section 224 of the
Companies Act, 1956, the Company has obtained a written
certificate from the above Auditors proposed to be re-
appointed to the effect that their re-appointment, if made,
would be in conformity with the limits specified in the said
section.
12
Public Deposits and Loans/Advances
Out of the total 4,593 deposits of Rs.843.06 lakhs from the
public and shareholders as at 31st
March, 2006, 376 deposits
amounting to Rs.66.31 lakhs, which had matured, had not
been claimed as at the end of the financial year. Since then,
149 number of these deposits of the value of Rs.27.89 lakhs
have been claimed.
The particulars of loans/advances and investment in its own
shares by listed companies, their subsidiaries, associates,
etc., required to be disclosed in the annual accounts of the
Company pursuant to Clause 32 of the Listing Agreement
are furnished separately.
Current Year
During the period 1st
April, 2006 to 28th
May, 2006, 21,237
vehicles were produced as against 21,800 vehicles and
20,828 vehicles were despatched as against 20,755 vehicles
during the corresponding period in the last year. 16,515
tractors were produced and 15,724 tractors despatched
during the same period as against 12,432 tractors produced
and 12,402 tractors despatched during the corresponding
period in the previous year.
Sustained and broad-based industrial growth, high prospects
of a good agricultural harvest following a good monsoon
and a very positive business sentiment have all led to a
strong GDP growth in the economy. Business confidence and
consumer sentiments are extremely positive. These augur
well for both the major Sectors of your Company. However
the uncertainty over global crude prices and exchange rate
volatility need to be carefully monitored. Your Company
looks forward to the rest of the year with cautious optimism.
Acquisitions and other matters
During the year, Systems & Technologies Sector of your
Company, made its foray into the forging business through
Mahindra Automotive Steels Limited [formerly Mahindra
Automotive Steels Private Limited (MASL)], a wholly
owned subsidiary of your Company under a Scheme of
Arrangement (Scheme) by way of demerger of the Chakan
Unit of Amforge Industries Limited (AIL) from AIL to
MASL. The Chakan Unit is the third largest manufacturer
of closed die forgings in India and manufactures
Crankshafts, Connecting rods and Stub axle forgings. MASL
has also set up a machining facility at Chakan for machining
of automotive forgings. The Scheme was approved by High
Court of Bombay on 21st
March, 2006 and the Chakan
Unit stands transferred and vested into MASL with effect
from 1st
April, 2005. Consequent upon allotment of Equity
Shares by MASL pursuant to the Scheme of Arrangement,
the shareholding of your Company stands at 47.11% of
MASL’s enlarged equity capital.
Further consolidating its presence in the forging business, in
January, 2006, your Company also acquired 98.6% of the
equity share capital of Stokes Group Limited (Stokes), the
largest automotive forging company in United Kingdom
(U.K.), engaged in manufacture of Ring Gears, Pinions,
Hubs/Wheel blanks and having manufacturing facilities at
Walsall and Dudley near Birmingham, U.K. Subsequent
to a rights issue of equity shares by Stokes, your
Company now holds 99.2% of the issued equity share capital
of Stokes.
During the year, your Company as part of its initiatives of
consolidating its engineering design businesses, acquired a
100% stake in Plexion Technologies (India) Private Limited
(Plexion), a Bangalore based high-end engineering design
services company, with a strong customer base in USA and
Europe. Plexion provides engineering design services to
aerospace and automotive industry and is also engaged in
design and fabrication of aircraft. The acquisition of
Plexion, combined with the manufacturing ability of
13
Systems & Technologies Sector, would enable your Company
to offer a range of Design to Delivery services for the
automotive and aerospace industries.
In February, 2006, a Scheme of Arrangement consisting of
merger of Pranay Sheetmetal Stampings Limited (PSSL),
Valueline Hotels & Resorts Limited (Valueline) and Console
Estate & Investments Limited (Console) with Mahindra Ugine
Steel Company Limited (MUSCO), a subsidiary of your
Company was approved by the High Court of Bombay.
Console was a wholly owned subsidiary of MUSCO. PSSL
was an Associate of MUSCO and MUSCO held significant
shareholding in Valueline. With this merger and the
consolidation of stamping operations with MUSCO,
management control systems are made more efficient and
cost effective, enabling harnessing of synergies and in addition
resulting in simplification of the group structure.
During the year, your Company entered into long term
agreements with International Truck and Engine Corporation
(ITEC) to provide Engineering Services and component
sourcing services directly to ITEC.
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 126 employees who were in receipt of
remuneration of not less than Rs.24,00,000 during the year
ended 31st
March, 2006 or not less than Rs.2,00,000 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 being sent to the shareholders
does not include this Annexure. Any shareholder interested
in obtaining a copy of the Annexure may write to the
Assistant Company Secretary at the Registered Office of the
Company.
For and on behalf of the Board
KESHUB MAHINDRA
Chairman
Mumbai, 29th
May, 2006
14
ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2006
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 granted 44,36,289
(b) 1st
Tranche 2nd
Tranche 3rd
Tranche 4th
Tranche 5th
Tranche
The pricing formula Average Average Discount Discount Average
price price of 5.13% of 4.85% price
preceding preceding on the on the preceding
the specified the average average the
date - 27th specified price price specified
September, date - 30th preceding the preceding date - 14th
2001 May, 2003 specified the specified September,
date - 31st date - 30th 2005
May, 2004 May, 2005
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
the 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 28,81,949 Options stand vested on 31st
March, 2006.
(d) Options exercised 23,50,231
(e) The total number of shares 23,50,231 equity shares of Rs.10 each. These were transferred from the Trust to the
arising as a result of Eligible Employees.
exercise of option
(f) Options lapsed 1,85,817
(g) Variation of terms of options Nil
(h) Money realised by exercise Rs.10,67,31,853. This amount was received by the Trust.
of options
(i) Total number of options 20,50,200
in force
(j) Employee-wise details of
options granted to:
(i) Senior managerial As per Statement attached
personnel
(ii) Any other employee Nil
who receives a grant in
any one year of option
amounting to 5% or
more of option granted
during that year
(iii) Identified employees Nil
who 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
15
(l) Where the company has calculated the
employee compensation cost using the intrinsic
value of the stock options, the difference
between the employee compensation 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.
The Company has calculated the employee compensation
cost using the intrinsic value of stock options. Had the
fair value method been used, in respect of stock options
granted on or after 30th
June, 2003, the employee
compensation cost would have been higher by Rs.2.98
crores, Profit after tax lower by Rs.2.98 crores and the
basic and diluted earnings per share would have been
lower by Re.0.13 & Re.0.12 respectively.
(m) Weighted-average exercise prices and
weighted-average fair values of options shall
be disclosed separately for options whose
exercise price either equals or exceeds or is
less than the market price of the stock.
Options Exercise Fair value
Grant Date price (Rs.) (Rs.)
14th
June,2005 227.00* 83.13
26th
October, 2005 361.00 83.86
* after giving effect to 1:1 Bonus
(n) A description of the method and significant
assumptions used during the year to estimate
the fair values of options, including the
following weighted-average information:
The fair-value of the stock options granted on 14th
June,
2005 and 26th
October, 2005 have been calculated using
Black-Scholes Options pricing Formula and the significant
assumptions made in this regard are as follows:
STATEMENT ATTACHED TO ANNEXURE I TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2006
Name of Senior Managerial Persons to whom Options granted in Options granted in
Stock Options have been granted December, 2001 June, 2005
Mr. Deepak S. Parekh 20,000* 5,000
Mr. Nadir B. Godrej 20,000* 5,000
Mr. M. M. Murugappan 20,000* 5,000
Mr. Narayanan Vaghul 20,000* 5,000
Dr. A. S. Ganguly 20,000* 5,000
Mr. R. K. Kulkarni 20,000* 5,000
Mr. Anupam Puri 20,000** 5,000
Mr. Alan Durante @ 1,00,000* 10,000
Mr. Bharat Doshi 1,00,000* 10,000
Mr. A. K. Nanda 1,00,000* 10,000
@ Retired on 25th
September, 2005
* All the above Options have been exercised.
** of which 13,332 Options have been exercised (including 6,668 Options on account of Bonus issue of the Company in September, 2005)
14th
June, 2005 26th
October, 2005
(i) risk-free interest rate, 6.27% 6.42%
(ii) expected life, 2.5 years 2.5 years
(iii) expected volatility, 36.84% 36.93%
(iv) expected dividends, and 3.84% 3.84%
(v) the price of the underlying share in
market at the time of option grant. Rs.274.80 Rs.361.40
(k) Diluted Earnings Per Share (EPS) pursuant
to issue of shares on exercise of option
calculated in accordance with Accounting
Standard (AS) 20 ‘Earnings per Share’
Rs. 34.93
16
A) Conservation of Energy
During the year, the Company has taken the following
initiatives for conservation of energy:
1. Engineering Initiatives
a) Installation of heat pump working on vapour
compression cycle and using atmospheric heat
for heating purpose in Engine PU at Kandivli.
b) Compact Fluorescent Lamp (CFL) tubes for
lighting, Electronic chokes for lighting over
regular bulbs.
c) Change over relay for street lights at Kandivli
and Igatpuri. Along with automatic on and off,
this provides for full illumination in working
hours and half illumination in non-working
hours.
d) Energy efficient screw compressor with Variable
Frequency Drive installed at Kandivli.
e) Effective Air-Conditioning system by automation
of chilled water system.
f) Automatic Power factor controller at all
locations to improve the power factor and
control the maximum demand.
g) Conversion of 90 KW horizontal oven from
electrical to Piped Natural Gas in Foundry.
h) Induction heating and press quenching of NGT
syncrosleeve instead of gas fired muffle furnace
at heat treatment Transmission PU. This has
resulted in eliminating use of one furnace.
ANNEXURE II TO THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2006
PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED
31ST
MARCH, 2006
i) Modification in Air compressor cooling water
circuit resulted in substantial reduction in
number of Pumps thereby reducing energy
requirement.
j) Reduction in maximum demand by 480 KVA
by Power factor improvement through
rationalisation of Capacitor banks transformer
wise, switchgear replacement/repairs,
monitoring and correction cycle.
k) Auto control of recalculation pump and cooling
tower fans at R&D Engine Test Lab with
Temperature controller application.
l) In Nagpur Power factor maintained close to
Unity throughout the year.
m) At Nagpur 50% of the street lights were
switched off during non working night shifts
through an Auto arrangement integrated with
the real time clock.
n) Light weight impeller pumps used in place of
old high weight impeller pumps resulted in
increasing the motor efficiency at Nagpur.
2. Through Process Improvement
a) Installation of Variable Frequency Drives for
pumps at Nashik, Kandivli, Zaheerabad resulted
in power saving.
b) Kaizens are implemented on continuous to
intermittent running of motors, Timers for
Blowers, Delta – Star conversion, Higher HP
to Lower HP motors.
17
c) Heat recovery from flue gases using
recuparators on the Carburising Furnace
resulting in thermal saving.
d) Effective insulation for thermic fluid lines in
Paint shop resulting in reduction of radiation
losses.
e) Optimize air fuel ratio in paint shop and heat
treatment.
f) Turbine Air Ventilators instead of Exhaust fans
in Paint Shop and Vehicle PU.
g) Rain water harvesting at Kandivli and Igatpuri.
h) By improving the quality of one cleaning
machine at Hydraulics Plant in Nagpur, the
double cleaning of components is eliminated
without effect on quality.
i) Interlocking of Inlet & Exhaust blowers with
respective spray pumps to avoid wastage of
power for Chasis Pre treatment booth at
Kandivli.
j) Interlocking of Hot air circulation fan with
temperature sensors to stop Top coat and CED
ovens at CED Paint shop in Kandivli, thus
reducing power requirements.
k) Disconnection of Chassis line Dry-off oven, flue
gas exhaust motors are replaced with direct
natural draft at Kandivli.
3. Awareness for Energy Conservation
a) Kaizens towards energy conservation are
encouraged. The Management provides
employees with all support in the Kaizen
execution phase.
b) Training sessions and seminars on energy
conservation were organized.
c) To increase Energy conservation awareness
further, slogan/suggestion/poster competition
was organised during 21st
June, 2005 to
28th
June, 2005.
d) Energy audits are an integral part of the drive
towards efficient energy management.
e) The Senior Management of the Company
demonstrates commitment to the energy
efficiency cause through Budget allocation for
incorporating use of non-conventional sources
of energy and alternate fuel sources.
f) Electrical Safety Audit process initiated for
entire Plant Distribution System to ensure
Electrical Safety of Plant Distribution Network
at Kandivli.
g) Reward and Recognition of Power saving
projects.
h) Staggering of start of major electrical load to
control maximum demand.
The Kandivli Plant of the Automotive Sector received
the special prize from the Ministry of Power,
Government of India in National Energy
Conservation Award Competition for the year 2005
for the third year in succession.
B) Technology Absorption
The Company spent Rs.12,658.63 lakhs on Research
and Development work during the year, which is
approximately 1.33% of the total turnover.
18
C) Imported Technology for the last 5 years
Technology Imported Year of Status
Import
I. Development of Transmission and Hydraulics for 2001 In the process of Absorption
Higher HP segment
II. MDI Engine upgradation 2002 Technology Absorbed
III. Design of 4 Wheel Drive 2002 Technology Absorbed
IV. Power shift transmission for higher HP tractors 2003 In the process of Absorption
V. NEF TCI 2004 Technology Absorbed
VI. NEF performance improvements 2004 Technology Absorbed
VII. MDI Engine upgradation 2004 Technology Absorbed
VIII. Antilock Braking System on utility vehicle 2004 In the process of Absorption
IX. Common Rail Diesel on utility vehicle 2004 In the process of Absorption
X. New CRDe Engine development 2004 In the process of Absorption
XI. Development of a new MPV 2004 In the process of Absorption
XII. Euro IV Emission development for exports 2004 Technology Absorbed
XIII. Multi Link Suspension for utility vehicle 2004 Technology Absorbed
XIV. Development of Air Bags on utility vehicle 2005 In the process of Absorption
XV. Development of Cruise control on Utility vehicle 2005 In the process of Absorption
XVI. Fatigue Lab and track design for MRV, Chennai 2005 In the process of Absorption
XVII. Sandwich material for noise absorption 2005 In the process of Absorption
XVIII. Development of Nano-technology for IP etc. 2005 In the process of Absorption
XIX. Climate control (Heated and Cooled) seats 2005 In the process of Absorption
XX. Bio-Diesel and Gas based engine 2005 In the process of Absorption
XXI. Transmission Design of Compact Tractor 2006 In the process of Absorption
Foreign Exchange Earnings and Outgo
The information on foreign exchange earnings and outgo is furnished in the Notes on Accounts.
For and on behalf of the Board
KESHUB MAHINDRA
Chairman
Mumbai, 29th
May, 2006
19
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.
Loans and advances in the nature of loans to subsidiaries:
Rupees in lakhs
Name of the Company Balances Maximum
as on outstanding
31st
March, during the
2006 year
Mahindra & Mahindra Financial Services Limited 400.00 400.00
Mahindra Holdings & Finance Limited 2,500.00 2,500.00
(including loans where the repayment schedule is more than seven years
and no interest) (2,500.00) (2,500.00)
Mahindra Intertrade Limited 713.50 1,013.50
(including loans where there is no interest) (713.50) (1,013.50)
Bristlecone India Limited 802.76 802.76
Mahindra Gujarat Tractor Limited 100.00 100.00
Mahindra Shubhlabh Services Limited 0.00 250.00
Mahindra Engineering Design & Development Company Limited 0.00 190.00
Mahindra International Limited 0.00 125.00
Plexion Technologies (India) Private Limited 75.00 75.00
Mahindra Ugine Steel Company Limited 200.00 900.00
(formerly Pranay Sheetmetal Stampings Limited,
since merged with Mahindra Ugine Steel Company Limited)
Loans and advances in the nature of loans to firms / companies in which Directors are Interested:
Rupees in lakhs
Name of the Company Balances Maximum
as on outstanding
31st
March, during the
2006 year
Housing Development Finance Corporation Limited 2,500.00 2,500.00
Except as indicated above, the Company has not made any loans and advances in the nature of loans to associates or loans
and advances in the nature of loans where there is no repayment schedule or repayment beyond seven years or no interest or
interest below section 372A of the Companies Act, 1956.
Investments by the Loanee in the shares of Subsidiary Company, when the Company has made loans or advances in the
nature of loan:
Investment in the shares of the Subsidiary Company
Rupees in lakhs
Name of the Company Balances Maximum
as on Investment
31st
March, during the
2006 year
Mahindra Holdings & Finance Limited 1,200.00 1,200.00
20
Industry Structure
The Automotive Sector
The Indian automotive industry is one of the
fastest growing automotive industries in the
world. It grew 30% in volumes in 2004 against
a growth of 6% globally (Source OICA). Vehicle
production in India has grown at a CAGR
of 20% over F-02 to F-06 (Source SIAM).
In F-06, vehicle production increased by 10%
over the last year (Source: SIAM). India also
provides the largest market in the world for
three-wheelers. The Automotive Sector of M&M
which is engaged in the Multi Utility Vehicle
(MUV), Light Commercial Vehicle (LCV) and
three-wheeler segments, has been a full participant
in the robust growth of the Indian industry.
MUVs are a family of vehicles having versatile
forms for various applications like passenger
transport or goods transport or a combination
of the two. The Company categorizes MUVs
further into soft tops, hard tops and pick-ups.
There are six manufacturers of MUVs in India.
M&M is the largest manufacturer of MUVs in
India, offering a range of over 20 models.
240,847 MUVs were sold in India in the year
F-06, a growth of 6% over F-05.
LCVs carrying 2MT to 4MT of payload are
commercial vehicles used mostly for intra-state
movement of goods. M&M competed in the upto
4 tons category of LCVs. Since November 1,
2005 the business has been transferred to a
joint venture with International Truck & Engine
Corporation, USA. In F-06 41,492 LCVs were
sold in India in this category – a decline of 7%
over F-05. There are six manufacturers in India
in this specific LCV segment.
360,187 three-wheelers were sold in India in
F-06 demonstrating a healthy growth of 17%.
M&M entered the large three-wheeler segment
i.e. three-wheelers with a gross vehicle weight
(GVW) of over 1MT in 2001. This segment
accounted for roughly 12% of the three-wheeler
market in volume terms in F-06. In F-06 M&M
also made an entry into the ‘smaller three-
wheeler category’ (which accounts for the larger
share of the market) with the launch of the
Champion Alfa three-wheeler in select markets.
The Farm Equipment Sector
The Indian Tractor market is the largest in the
world, in volume terms. In the year under review
262,621 tractors were sold in India and 30,339
tractors were exported.
The tractor market is segmented by horsepower
into the 25 HP (lower) segment, the mid segment
of 35 HP and the higher segment of beyond 45
HP. All major players cater to all the three
segments. However, their relative strengths and
market positions differ from segment to segment.
Many factors affect tractor sales including the
monsoon, government declared support prices
for crops, commodity prices, crop production
expenses (including fuel, fertilizer, pesticides and
other costs) and the credit policy announced by
banks. This last factor is relevant since more
than 90% of tractor sales are on credit.
M&M’s Farm Equipment Sector (FES), which
designs, develops, manufactures and market
MANAGEMENT DISCUSSION & ANALYSIS
21
tractors for Indian and overseas markets, is the
largest manufacturer of tractors in India and
has sustained its market leadership in the Indian
tractor market for over 23 years. FES is
globalising at a rapid rate. Mahindra tractors
are exported to U.S.A., China, Australia, African
countries and SAARC countries like Nepal,
Bangladesh and Sri Lanka, where they are sold
under the Mahindra brand name. This year
M&M made its foray into East Europe by
launching its tractors in Serbia.
Industry Developments
The Automotive Sector
Compared to the galloping 20% growth in
vehicle production seen in India over the last
four years, vehicle production increased by a
lower 10% in F-06. The much higher base, the
relative increase in prices of vehicles due to a
strong increase in raw material costs and some
taxes, significant increases in fuel prices and an
increase in interest rates were some of the
factors that contributed to this.
The total number of MUVs sold in India
increased by 6%. Within the MUV segment, the
pick-up market had shown a very high growth
of 38% in F-05, on the back of a 78% growth
in F-04. In F-06 it declined by 7%. The hard
top sub segment, which is the largest sub
segment in MUVs, enjoyed a volume increase of
15% in F-06. The soft tops sub segment that
has been declining significantly over the last
few years, continued to drop volumes and posted
a 22% reduction, in spite of some growth in
this segment per se, over the last 2 years.
The LCV segment had mixed fortunes. The 4-6
MT LCV segment grew 5%. The 2-4 MT LCV
segment saw volumes decline by 7%.
The large three-wheeler segment witnessed a
decline in volumes of 20% after a long period
of high growth. The small three-wheeler segment
grew 23%.
The Farm Equipment Sector
F-06 was an encouraging year for agriculture.
Going forward, due to a good monsoon and
water availability during the year, crop
production is expected to be higher by 2.5%
over last year. As a result of this, it is estimated
that the agricultural GDP of India will grow
by 3.2%.
Better availability of credit and focus on retail
tractor financing by the banking sector, also
boosted the growth of the tractor industry. As a
result, the growth witnessed in F-05 continued
into F-06. The domestic tractor industry showed
a growth of 16% in F-06 over and above the
29% growth seen in F-05. 262,621 tractors
were sold in India in F-06, compared to 226,114
in F-05. In addition, India exported 30,339
tractors in F-06, a growth of 43% over last
year. M&M led the growth in the domestic
industry.
The industry had to bear the impact of hikes in
the price of raw materials. Over the last three
years, the prices of important input materials
like steel, pig iron, and rubber have continuously
increased. The prices of crude oil increased
significantly. Margins therefore continued to be
under pressure, despite the upturn in the
industry.
22
M&M Performance
The Automotive Sector
In F-03, the production and sales volume of the
Automotive Sector reached a first time high of
87,088 and 86,890 respectively. In every
subsequent year, M&M vehicle production and
sales have bettered the record of the previous
year. In F-06, this record-breaking streak
continued for the fourth consecutive year.
1,50,918 vehicles and three-wheelers were
produced (including 2,705 produced for MIL).
1,43,890 (including 1,833 sold under MIL) were
sold in the domestic market and 5,534 vehicles
were exported in F-06. The domestic total sales
volume was higher by 1.3% than the F-05 record
of 1,41,977.
In the MUV segment, a record number of
114,694 MUVs were sold in the domestic
market in F-06 as against the sale of 111,138
MUVs in the previous year. M&M’s domestic
MUV sales volumes grew 3%. The success of
the Scorpio and the recent launch of a number
of new Bolero variants helped M&M grow by
13% in the hard top MUV sub segment. The
Scorpio story received international attention,
and has been developed into a case study by the
Harvard Business School. During this period,
the Bolero, along with its variants, was the
largest selling MUV brand in India, with sales
of 40,027 units (Source: Industry Sources,
SIAM March 2006 report).
In the pick-up sub segment, M&M volumes
declined 3%, which is less than the industry
segment decline of 7%. The soft top and pick-
up segments, where M&M has a larger market
share, under performed as compared to the hard
top category. This was one of the reasons why
the Company’s MUV market share declined from
49.0% in F-05 to 47.6% in F-06.
In the LCV segment, M&M has a presence only
in the lower GVW (< 4MT) sub segment of the
market. This LCV sub segment witnessed a
decline of 7% in F-06, while M&M’s LCV sales
declined 14%. This led to a decline in M&M’s
market share in this sub segment, from 17.7%
in F-05 to 16.3% in F-06.
During the year M&M’s LCV business was
transferred to the joint venture with
International Truck and Engine Corporation,
USA, Mahindra International Ltd. (with effect
from 1 Nov 2005). M & M continues to produce
and sell LCVs for MIL under a manufacturing
and a distribution contract for a fee. In order
to facilitate comparison your M&M’s production
and sales volumes include that done for MIL,
with a mention of the numbers included for your
reference. However discussions on the LCV
market and market share is done as if they
were all sold by M&M to facilitate a meaningful
comparison and analysis.
The large three-wheeler segment which had
witnessed rapid growth since 2001, declined for
the first time in F-06. M&M sold 22,112 large
three-wheelers against 22,953 in F-05, a decline
of 21% in line with a segment decline of 20%.
In August 2005, M&M entered the small
three-wheeler segment, with the launch of a
cargo three-wheeler named the Champion Alfa.
23
It has now been introduced in four states.
The market response has been encouraging.
4,307 Champion Alfa were sold in F-06. A new
plant that will focus on manufacturing three-
wheelers has been set up at Haridwar in
Uttaranchal.
The high growth of the Indian economy has led
to a significant growth in the demand for
commercial vehicles. This demand is likely to
be fuelled over the next several years by strong
economic growth. Hence M&M has strengthened
its presence in the commercial vehicle segment
through a joint venture with International Truck
and Engine Corporation of USA, for entering
the medium and heavy commercial vehicle
segments in India, through joint development.
The joint venture has been named Mahindra
International Ltd. (MIL). M&M also transferred
its existing LCV business to MIL effective 1st
Nov 2005. Hence MIL will now be the
Company’s focused initiative in India’s
commercial vehicle sector. M&M believes that
this strong focus will help to increase the
Mahindra presence, (which is currently rather
limited), in this segment. In order to enable
comparability, all the LCV sales figures
presented in this analysis have been shown as
M&M sales. However, due to the sale of the
LCV business to MIL during the year, out of the
6,777 LCVs sold under the Mahindra brand
during the year, 4944 were sold by M&M and
1833 by MIL.
Total domestic spare part sales during the year
under review increased to Rs.223.16 crores
compared to the previous year’s Rs.193.81
crores, a growth of 12%.
M&M’s joint venture with Renault, to introduce
the Logan in India is in the process of
operationalisation, and is on target with respect
to cost and time. The Logan has done exceedingly
well in the markets where it has been introduced
so far. M&M will launch the Logan in India in
2007. With this initiative, M&M expects to
expand its footprint in the Indian automotive
industry significantly.
In tune with its ambitious globalisation
aspirations, M&M has intensified its efforts to
identify niche markets for its automotive
products throughout the world, especially in
geographical areas that have similar sales,
distribution and marketing conditions as India.
Over the last three years M&M vehicles have
been introduced in Europe, the Middle East,
South America and South-East Asia and Africa
with a customized business model for each
country. The beachhead for Europe is a JV in
Italy that sells the Scorpio (called the Goa in
Europe) and the Bolero. The JV has now
introduced these vehicles into France and Spain
as part of a plan to cover Europe over a period
of time. In F-05 M&M commenced CKD
operations in Uruguay to address the Mercosur
and South American markets. The Bolero (called
the Mahindra Cimmaron in Uruguay) was the
President of Uruguay’s vehicle of choice to carry
him during his inauguration parade. Petrol
versions of the Scorpio have been launched in
the Middle East and Malaysia and these
have received an encouraging response.
A subsidiary was set up in F-05 in South Africa
as an entry point for the Southern African
continent.
24
These initiatives resulted in a quantum increase
in export volumes. After increasing 85% in
F-05, exports further increased by 82% in F-06
to 5534. In line with the Company’s objective
of promoting and establishing the “Mahindra”
brand across the globe, the entry into all these
new markets was under the “MAHINDRA”
brand name.
In the area of operations, the Company has set
up a new plant in Uttaranchal and focused on
rigorous cost reduction. The Automotive Sector’s
Kandivli plant was presented with the “National
Energy Conservation Award” for the third year
in succession. This is a very creditable
achievement, in view of the fact that Kandivli is
M&M’s oldest Automotive Sector plant.
The Farm Equipment Sector
FES sustained its leadership position for the
23rd consecutive year with a market share of
29.7% in the total tractor industry. It sold
85,029 tractors in F-06 as against 65,390
tractors sold during F-05. This includes export
of 6,981 tractors as against 5,385 tractors
exported last year.
In F-05 FES expanded its plant at Rudrapur as
a part of its manufacturing strategy. This year,
the Sector was able to quickly ramp up
production at Rudrapur to the installed capacity.
This plant has the lowest cost amongst the
various manufacturing facilities of FES. Thus
this will help bring down overall manufacturing
cost.
Last year M&M launched two new products -
235 DI and 245 DI - in the domestic market in
the low HP segment. These products, along with
the Arjun Ultra-1 range, have significantly
strengthened the company’s position in these
segments. The response to all these products
has been encouraging. M&M was ahead of most
tractor players in making its tractors BS-III
compliant in the month of April 05, ahead of
the extended Government deadline of October
2005. Apart from this, the company continued
to evolve new products and upgrade the
aesthetics, styling and ergonomics of existing
products.
The thrust on the engine business continued.
14,692 engines were sold in F-06 as against
6672 sold during F-05, a growth of 120%.
Starting from a customer base of a single
company in F-02, the engine business today has
22 corporate clients. FES also has made a foray
into the retail and non-genset segments. This
year FES started selling Mahindra branded
Diesel Generators (DG set) and sold 1084 DG
sets.
Mahindra USA’s retail grew significantly by
24%, in contrast to the tractor industry in the
USA, which was down by 2.5%. In consonance
with it’s global thrust, M&M has entered into a
Joint Venture with Jiangling Tractor Company
of China. The Mahindra China Tractor Company
Ltd. (MCTCL) has a capacity of 12,000 tractors
in the 18-33 HP range. M&M holds a majority
stake in the JV. Strategically, this JV offers
M&M a faster entry into China and a
complementary product range for China as well
as export markets. The JV was operational in
July 2005 and MCTCL was able to reach its
capacity by the year-end. The Australia
25
operations launched last year are doing
extremely well.
In F-04, FES won the Deming Award for Quality.
Lean Manufacturing and TPM practices are
being implemented at its plants. M&M was
awarded the BS7799 certification for
information security in F-06. The Sector filed
for 8 engineering patents in F-06.
FES continues to improve its supply chain by
reducing both dealer stock and outstandings.
FES believes that its dealer stocks and
outstandings, in number of days, are much lower
than other industry players.
Opportunities
The Indian economy has been growing between
6-8% p.a. for the last three years making it one
of the fastest growing large economies in the
world. There are concerted efforts being made
to achieve 10% growth. This kind of growth
focus, combined with M&M’s diligent expansion
of its technological and product development
capacities, its active search for overseas partners
and markets, and the major savings opportunities
arising from synergies of resources between the
Automotive and Farm Equipment Sectors,
especially for sourcing, augurs well for the
coming years.
The Automotive Sector is poised to take
advantage of India’s growth potential. India’s
automotive sector is one of the fastest growing
in the world. With the Indian economy on a
high growth path and with the consequent
increased disposable incomes of the population
at large, the Indian automotive industry is
expected to have significant growth
opportunities. The Indian Government is also
working on a plan to increase the growth
prospects of the Indian automobile industry so
as to double its contribution to the Indian
economy over the next ten years. With M&M’s
enhanced presence in the Indian automotive
industry through its joint ventures for CVs and
cars as well as with its entry into the smaller
three-wheeler category, it is well poised to garner
an increasing share of this fast growing segment
of the Indian economy.
In the Automotive Sector, M&M believes that
its core MUV market is likely to proportionately
increase in the light vehicles category because
the inherent versatility of MUVs makes them
ideal for a fast growing developing country. The
proportion of MUVs in India is relatively low
compared to corresponding figures in Asian
countries that share a similar or more developed
profile. In the long term, we believe that the
light vehicle market will expand at a fast clip in
India and that MUVs will take an increasing
share of this market. M&M’s entry into the car
market through its joint venture with Renault,
and its strong presence in the MUV segment,
will enable M&M to leverage the full range of
opportunities.
The ongoing WTO and Free Trade Area
negotiations with Thailand, ASEAN, SAARC
countries and the Mercosur countries are likely
to lead to lowered tariffs across many target
export markets. This could provide a significant
opportunity to generate larger volumes from
export sales and further M&M’s strategic
emphasis on globalisation and the development
of exports.
26
Given the current state of road infrastructure in
the interiors, as well as the extremely high cost
required for improvement, MUVs will continue
to be the most appropriate and economical
vehicles for transporting people in the interiors.
Rural public transportation is not as extensively
developed as in the urban areas, providing
further opportunities for MUVs and LCVs.
MUVs and CVs are preferred vehicles for
projects and construction sites like the golden
quadrilateral road project and the North, South,
East and West corridor project. A higher level
of industrial development generally leads to a
greater demand for MUVs and CVs. Hence if
the planned rate of GDP growth is achieved
over the next decade, the demand for MUVs
and CVs should increase commensurately.
Regulatory measures on compulsory scrapping
of vehicles beyond a particular vintage have been
mooted in some States. The adoption of these
norms could lead to higher demand due to a
surge in the replacement demand.
The pressing need of overseas automotive players
to cut costs has created an outsourcing
opportunity for India in the area of automotive
systems/aggregate production. India has a
competitive edge due to its strong base of highly
skilled (and relatively low cost) engineers.
M&M already has domain expertise in many of
the required areas and can offer global O.Es
and Tier 1 suppliers, products and services
across the chain, right from the sourcing of
steel to the design of systems. These capabilities
have been strategically integrated into a single
sector, the Systems and Technologies Sector. This
move is expected to result in further business
growth and to establish the Mahindra brand in
the global automotive arena. It will also partially
de-risk the cyclicality inherent in the Automotive
and Farm Equipment businesses.
For the FES, the external environment looks
favourable. Successive crop failures coupled with
limited financing options as well as surplus food
grain stocks during the period from 1998 to
2001 had led to a stagnation of demand, with
the sales numbers falling during the period from
2000 to 2002. However, with three consecutive
years of good monsoon seasons in India, the
tractor demand is increasing. In the year under
review the all-India monsoon was just 1% lower
than normal, and the water level in 71 reservoirs
across India was higher than last year by almost
29%. The second monsoon is good, creating
better prospects of Rabi crops. In addition, better
credit facilities coupled with the pro-farmer
policies of Central and State governments
enabled good growth in the industry this year.
In the event of a normal monsoon next year,
there would be further moderate growth over
and above last two years’ high growth. This
gives a market leader like M&M a good
opportunity to grow.
M&M spotted an opportunity at the lower HP
end of the tractor market, where there were not
enough products to serve customer needs. Hence,
new models 235 and 245 DI were introduced in
select domestic markets. The company has
successfully ramped up its production. This
expanded product portfolio will give an
opportunity to grow in the low HP segment.
27
There are certain states in India where the
opportunity for growth is high. FES will leverage
this opportunity by various marketing initiatives
such as brand building, creating stronger
franchises, restructuring dealers and the
introduction of new products.
The USA and China are among the top 3 tractor
markets in the world apart from India. FES
plans to continue its focus on these markets.
Mahindra USA plans to introduce a new series
of models in US markets that will open up new
customer segments. In China, M&M has
established the Mahindra (China) Tractor
Company Ltd as a JVC. This company has
already started selling tractors in the domestic
Chinese market. Its capacity has been ramped
up successfully, and M&M is well positioned to
exploit the Chinese market further. M&M is also
exploring various global tractor markets in
Africa, East Europe and Middle East.
Expansion at the Rudrapur plant and the China
manufacturing facility will ensure low cost
manufacturing bases for FES. China will also
serve as a low cost sourcing base.
Threats
For the Automotive Sector more stringent
regulatory norms are being introduced. For the
Farm Equipment Sector new emission norms
were introduced in October 2005 in India.
Similarly, USA has also announced new emission
norms for the coming 2 to 5 years. While these
measures are welcome, they may result in an
increase in manufacturing costs, which, in turn,
may affect margins or demand in a price
sensitive situation.
Import tariffs have been progressively reduced
and are expected to be reduced further in the
future in line with India’s obligations under the
WTO and its bilateral free trade agreements
with certain countries, with the possible eventual
elimination of import tariffs on imports from
these countries. This will increase competitive
pressures on vehicle manufacturers.
Exports, a strong thrust area, can be adversely
affected if the Rupee continues to appreciate.
Current trends indicate that interest rates for
vehicle and tractor loans given by NBFCs and
Banks in India are likely to increase over the
years and this may affect sales volumes.
The entry of new players has made the passenger
car and MUV markets much more competitive,
affecting the margins of all participants. M&M
is countering this threat by a stronger focus on
reducing costs and increasing efficiency of
operations. It also hopes to garner greater
economies of scale from its entry into the car
market through its joint venture with Renault.
Any reduction in the price differential between
petrol and diesel could increase demand for
petrol MUVs at the expense of diesel MUVs,
especially with the decontrol of fuel pricing.
M&M has petrol versions of some of its MUVs
like the Scorpio. However even after three years
of fuel price decontrol, a substantial differential
has been maintained.
Mandatory use of vehicles powered by alternative
energy sources could lead to a demand for
different types of vehicles. To minimise this risk,
M&M is developing products powered by
alternate energy like CNG and electricity to
28
provide less polluting products for a better
environment. Hence the Company is well placed
to move with the trend towards alternative
energy vehicles should it take place.
With M&M’s strong focus on globalisation, any
form of tariff/non-tariff barriers imposed by any
country where M&M has a significant presence
or has plans to grow will be a threat. As for all
exporters, any political, economic uncertainty/
natural calamity in the countries of export would
be a potential threat.
A major threat to both Sectors lies in the
escalation in raw material prices. Such price
hikes, especially for iron, steel and rubber are
likely to put pressure on prices and could affect
margins or demand.
Apart from this, a steep increase in crude oil
prices globally, has an inflationary impact on
the overall economy. Directly, high fuel prices
increase the running cost of vehicles, and may
therefore impact demand for automobiles. The
tractor industry may also be affected. Diesel
constitutes over 60% of the running cost of a
tractor. Thus the increasing price of diesel may
adversely impact input costs for farmers. If not
compensated by a crop price increase, this can
impact the availability of funds with farmers
and, in turn, the tractor demand.
Risks and Concerns
Stringent legislation on pollution and emission
requirements will increase the cost of the
Company’s products for the Automotive Sector.
To the extent that one is unable to pass on these
additional costs, there would be an impact on
the profitability. Price increases on the other
hand could impact volumes. If price rises in
commodities - especially oil and steel - continue
unabated, it could impact the predicted GDP
growth of the economy, with consequential effects
on profitability of all companies.
For the FES a weakening of the dollar could be
a risk. However, M&M, as a practice, is taking
appropriate steps to hedge currency exposure
thus limiting the impact of risk.
Domestically, about 90% of the farmers buy
tractors against loans. Continued delivery of
bank credit is therefore critical. Any slow down
in this could affect the tractor demand. Similarly,
interest rates for tractor loans tend to be higher
than for housing and car loans. Increases in
interest rates could impact the loan repayment
ability of the farmers, and are therefore a
concern. Apart from this, the farmer has to
mortgage both the tractor and his land; this is
a concern area for the tractor industry.
Rising input costs are also a concern. However
the encouraging rabi crop outlook, continued
credit support and a normal monsoon in F-07,
should enable the industry to continue to show
steady growth.
Excise
In 1991, an excise dispute arose at the Nashik
and Kandivili factories relating to the
Commander range of ten-seater vehicles. The
jurisdictional Central Excise authorities, after
due inquiry, approved the classification of these
vehicles as ten-seaters which attracted a lower
rate of excise duty under Tariff Entry 8702.
29
The Company successfully contested the
subsequent challenge by the excise authorities,
in two different fora. The Excise Department
accepted these decisions and the classification
of the vehicle as a ten-seater was consistently
approved by the authorities.
Inspite of the above, the Excise Department
subsequently disputed the classification on the
ground that classification of the Commander
under Tariff Entry 8702 as ten-seater did not
meet certain parameters of the Motor Vehicles
Act, 1988 and the Maharashtra Motor Vehicles
Rules, 1989, and demanded differential duty.
The Department’s stand was that the Commander
should be classified under Tariff Entry 8703,
attracting a higher rate of excise duty. The
Company challenged these demands by writ
petitions before the Bombay High Court, which
stayed the further proceedings unconditionally.
The High Court remanded these matters for
adjudication before the Excise authorities.
The Commissioner (Adjudication), Navi Mumbai
passed an order dated 30th March 2005
confirming the demand of Rs.216.03 crores and
imposed a penalty of Rs. 88.08 crores. The
Company has filed an appeal and a stay
application in the Tribunal challenging this order.
Initially, a bench of the Tribunal passed an order
(stay order) directing the Company to pay Rs.
54 crores and furnish bank guarantee of Rs. 54
crores as pre-deposit. The Company challenged
this before the Bombay High Court, which was
pleased to set aside this stay order and remand
the matter back to the Tribunal for hearing on
the stay application afresh. The matter is yet to
be heard.
In another concurrent proceeding, the Tribunal
passed an order in July 2005 holding that the
vehicles were appropriately classifiable under
Tariff Entry 8702 as ten-seaters. The
Department has challenged this order by filing
a Civil Appeal, before the Supreme Court, which
has been admitted. The matter is yet to be finally
heard.
The Company does not expect any liability on
this account as it has been advised that an
extraneous legislation like the Motor Vehicles
Act cannot be referred to for the purpose of
excise classification. The Excise Commissioners,
the Tribunal and various expert/statutory bodies
holding the vehicle to be a ten-seater have
accepted this stand.
Outlook
Both the Automotive and Farm Equipment
Sectors, with their updated product portfolios
and their exploration of global horizons, will
strive to maintain their leadership position and
should outperform the market. Simultaneously,
M&M will continue its focus on achieving cost
leadership in every way possible. Initiatives for
focused cost optimization, value engineering,
improved efficiency measures, supply chain
management, countrywide connectivity of all
suppliers and dealers and exploitation of
synergies between its Sectors, will enable M&M
to leverage all its strengths.
If the Indian economy continues to grow at a
high rate, demand conditions in the Automotive
Sector for the short to medium term are
expected to remain strong. Due to the high base
however, there is a possibility that the growth
30
in F-07 may also be relatively low similar to
that in F-06. In the longer term, given the high
correlation of the automotive industry to GDP
growth and the fact that the industry itself
accounts for about 4.5% of India’s GDP, the
outlook for the automotive industry on a GDP
growth forecast of more than 6% pa is quite
bright. Over the longer term, the Automotive
Sector will be increasing its participation in the
growth of the Indian auto industry by entering
into other segments like cars and M&HCVs
through its JVs.
The Indian tractor industry too has grown
significantly in F-06 and thus corrected its base.
In the mid term perspective, the industry may
grow at a moderate rate. The government’s
emphasis on development of the rural economy
and supporting the agriculture sector provides
excellent longer-term opportunities for faster
farm mechanisation. This offers FES a number
of possibilities and it is working on the
development of a number of new products,
particularly value for money solutions, for small
farmers.
Material developments in human resources/
industrial relations
With the objective of aligning its human capital
to its strategic plans, and achieving optimal
resource effectiveness, M&M has been focusing
on five major HR levers: organization structures,
the performance management system, a talent
management process, a reward & recognition
system and communication.
The Talent Management process saw the active
functioning of a network of Sector and
Functional Councils that seek to map and
manage talent, with a sharp focus on succession
planning for critical positions and job rotations
across Sectors and Functions.
Shadow Boards have been created across all
Sectors to give young managers an opportunity
to engage with issues normally handled by top
management, thus providing a platform for
grooming future leaders while simultaneously
getting out-of-the-box solutions to problems.
Creating the Global Manager is another major
initiative. The Company has joined an
international consortium of reputed Companies
from the U.S., Europe, China and India in a
Global Leadership Program. In addition, for the
second consecutive year, we have been recruiting
from Ivy League Universities in the U.S.A.
“Bodhivriksha”, the refurbished state-of-the-art
Mahindra Management Development Centre was
inaugurated at Nashik. It functions as a centre
for leadership development. The Mahindra
Institute for Quality has been set up in Nashik.
Regular 360-degree feedback for senior
management, the Gallup Employee Satisfaction
Survey conducted across Sectors and innovative
communication platforms like Reach Out, Town
Hall, Open House and skip-level meetings at
plant locations are other HR initiatives. Internal
communications have been further strengthened
using Mahindra Connect, web-based chats and
regular newsletters.
Industrial relations during the year were cordial
at all the plants and area offices of M&M.
A major wage-settlement was signed in the
31
Automotive Sector in March 2006. The
Company has also initiated a transformational
Industrial Relations process which seeks to
enhance employee involvement and emotional
connect through intensive structured
communication, innovative training and
development and re-looking at the collective
bargaining process.
The permanent employee strength of the
Company as on 31st March 2006 was 12089.
Internal Control Systems
The Company maintains adequate internal
control systems, which provide, among other
things, reasonable assurance of recording the
transactions of its operations in all material
respects and of providing protection against
significant misuse or loss of company assets.
The Company uses an Enterprise Resource
Planning (ERP) package, which enhances the
internal control mechanism. The Company has
a strong and independent internal audit function.
The Chief Internal Auditor reports directly to
the Chairman of the Board. Professionally
qualified technical and financial personnel of
the internal audit function conduct periodic
audits to ensure that the Company’s internal
control systems are adequate and are complied
with.
Discussion on Financial Performance with
respect to Operational Performance
Overview
The financial statements have been prepared in
compliance with the requirements of the
Companies Act, 1956, and Generally Accepted
Accounting Principles (GAAP) in India.
The Group’s consolidated financial statements
have been prepared in compliance with the
Standard AS 21 on Consolidation of Accounts
and presented in a separate section. The
Company has provided segment reporting on a
consolidated basis as per Standard AS 17 on
segment reporting. This information appears
along with the consolidated accounts.
A. Financial Information
1. Fixed Assets:
As at 31st March, 2006 the Gross Block of
Fixed Assets and Capital Work in Progress
increased to Rs. 3064.71 crores from Rs.
2810.44 crores as at 31st March, 2005. During
the year, the Company incurred capital
expenditure of Rs. 294.57 crores (previous year
Rs. 277.86 crores). The major items of capital
expenditure are for Capacity Enhancement, New
Product Development and Research &
Development. This includes purchase of
Intangible assets aggregating to Rs. 10.62 crores
(previous year Rs. 7.78 crores).
2. Inventories:
March 31, 2006 March 31, 2005
Raw materials and bought out components as a %
of consumption 5.52% 6.45%
Finished goods as a % of gross sales 4.70% 4.41%
32
Better inventory management has resulted in decrease in raw material as a percentage of consumption.
The marginal increase in finished goods inventory is in step with higher sales speed towards the end
of F-06.
3. Sundry Debtors:
Sundry debtors amount to Rs. 637.97 crores as at March 31, 2006, as compared with Rs. 511.53
crores as at March 31, 2005. Debtors as a percentage of gross sales and income from operations
are 6.82 % for the year ended March 31, 2006, as compared to 6.65 % for the previous year. The
marginal increase in sundry debtors as a percentage to gross sales and income from operations is
due to competitive pressures in the market.
B. RESULTS OF OPERATIONS
1. Income :(Rs. crores)
Particulars F – 2006 F – 2005 Inc./(Dec.)
Amount % Amount % %
Gross Sales/Income from operations 9347.57 113.68 7695.59 115.54 21.47
Less : Excise Duty on Sales 1124.89 13.68 1035.04 15.54 8.68
Net Sales/Income from operations 8222.68 100.00 6660.55 100.00 23.45
Other Income 103.86 1.26 108.50 1.63 (4.28)
Other Income:
Other income during F-06 at Rs. 103.86 crores was marginally lower than Rs. 108.50 crores
earned in the previous year. It comprises mainly of dividends from subsidiaries/ other companies,
income from surplus fund investments and other miscellaneous income.
2. Expenditure:(Rs. crores)
Particulars F – 2006 F – 2005 Inc./(Dec.)
Amount % to Net Amount % to Net %
Income Income
Raw materials, Finished and Semi-
finished Products 5713.77 69.49 4602.64 69.10 24.14
Personnel expenses 551.78 6.71 464.25 6.97 18.85
Interest, commitment and finance (18.40) (0.22) (5.58) (0.08) 229.75
charges
Depreciation 200.01 2.43 184.05 2.76 8.67
Other expenses 989.11 12.03 822.73 12.35 20.22
Provision for contingencies 0.78 0.01 0.34 0.01 129.41
Total Expenditure 7437.05 90.45 6068.43 91.11 22.55
33
Though the total expenditure has increased in
absolute amount, it has declined as a percentage
of Net sales / Income from Operations from
91.11 % last year to 90.45 % in the current
year.
Material Cost :
For the year ended March 31, 2006, material
cost as a percentage of net sales shows an
increase over the previous year mainly due to
increase in input costs, changes in product mix,
and compliance with regulatory norms relating
to pollution control. The impact of these was
partially offset through selling price increase
and continued cost-reengineering initiatives
undertaken by the Company.
Personnel Cost :
Personnel cost as a percentage of sales has
dropped marginally from 6.97 % to 6.71 %.
Increase in personnel cost in absolute value is
mainly due to increase in officers’ strength,
annual increments and the impact of wage
settlements.
Other Expenses :
Other expenses as a percentage of net sales
shows a decrease over the previous year due to
cost control measures undertaken by the
Company. The increase in other expenses in value
terms is mainly because of increase in variable
expenses on account of higher volumes.
Depreciation :
The depreciation for the year ended March 31,
2006 is at Rs. 200.01 crores as compared to
Rs. 184.05 crores in the previous year. The
increase is mainly on account of accelerated
depreciation for vehicles and tractors used for
research and development and obsolescence of
certain dies.
Interest (Net) :
The interest expense (net of interest income) for
the year ended March 31, 2006 is a net interest
income of Rs. 18.40 crores as against a net
interest income of Rs. 5.58 crores in the previous
year. Gross of interest income (F-06 Rs. 45.36
crores, F-05 Rs. 35.82 crores) the interest cost
for F-06 at Rs. 26.96 crores was lower than
Rs. 30.24 crores in the previous year due to
more efficient funds management.
Exceptional Items :
The profit on account of Exceptional items
during the year ended March 31, 2006 is
Rs. 210.01 crores as against Rs. 13.55 crores
last year. The profit in the current year is mainly
on account of profit on sale of shares of
Mahindra & Mahindra Financial Services
Limited offered as a part of that Company’s
Initial Public Offering and profit arising out of
the transfer of the right to carry on LCV business
along with congeries of rights therein and
intellectual property rights to the subsidiary
Mahindra International Limited .
Provision for taxation :
The provision for current tax, fringe benefit tax
and deferred tax for the year ended March 31,
2006 as a percentage to profit before tax is
lower than the previous year, due to lower
incidence of tax on the exceptional items
mentioned above and due to a deferred tax credit
on account of revaluation of deferred tax liability
34
as on April 1, 2005 due to change in the rate
of income tax from 36.59% to 33.66%.
Consolidated Financial Position of the M&M
Group
As required by the Accounting Standards, the
Company has published the consolidated Profit
and Loss Account and Balance Sheet for the
M&M Group as a whole. The Group comprises
of the flagship holding company, Mahindra &
Mahindra Limited, 56 Subsidiaries, 4 Joint
Ventures and 8 Associates engaged in various
businesses.
The Gross turnover for the year ended March
31, 2006 of Consolidated Mahindra Group is
Rs. 13908.4 crores as against Rs. 10635.3
crores for the previous year. The Group’s net
turnover grew by 32% to Rs. 12648.4 crores in
the current year from Rs. 9565.5 crores in F-
05. The profit before exceptional items and tax
for the current year is Rs. 1539.1 crores as
compared to Rs. 979.2 crores in the previous
year – a growth of 57%. This is due to the
excellent performance of the parent company
and group companies like Tech Mahindra
Limited, Mahindra & Mahindra Financial
Services Limited, Mahindra Holidays and
Resorts India Limited, Mahindra Gesco
Developers Limited, Mahindra Ugine Steel
Company Limited, Mahindra Intertrade Limited
and others. The consolidated group Profit after
Tax after including the share in profits of
Associates for F-06 is Rs. 1404.0 crores as
against Rs. 724.1 crores earned last year – a
growth of 94%.
Such a significant growth in profits could be
achieved due to the excellent performance by
some Group companies, a few of which are
mentioned here.
The Group’s Finance company, Mahindra &
Mahindra Financial Services Limited (MMFSL),
despite very stiff competition, achieved a 47 %
growth in its total income from Rs. 404.8 crores
to Rs. 596.4 crores. It continues to be a leading
NBFC in financing of four wheelers and its profit
after tax grew by 32 % from Rs. 82.3 crores in
the previous year to Rs. 108.3 crores in the
current year.
The Group’s trading subsidiary, Mahindra
Intertrade Limited, grew its total income by
41 % from Rs. 524.3 crores in F-05 to
Rs. 737.4 crores in F-06. The subsidiary is
engaged in imports, exports and domestic
trading, marketing and distribution activities for
a wide portfolio of products. The profit after
tax of the subsidiary increased to Rs. 25.1 crores
in the current year as compared to Rs. 21.2
crores last year – growth of 18%.
The Group’s major IT subsidiary, Tech Mahindra
Limited (Consolidated), witnessed a Revenue
growth of 34 % with total income increasing
from Rs. 954.2 crores last year to Rs. 1276.7
crores in the current year. The profit after tax
during the year was Rs. 235.4 crores as
compared to Rs. 102.4 crores in the previous
year – an increase of 130 %.
During the year, the Group increased its equity
interest in Mahindra Ugine Steel Compnay
Limited (MUSCO) thereby making it its
subsidiary. The Company is in the business of
steel and stampings. The total income of the
Company grew by 27% from Rs. 588 crores to
35
Rs. 748.6 crores and profit after tax for the
year increased by 35% from Rs. 48.2 crores to
Rs. 65.1 crores.
Mahindra Holidays and Resorts India Limited,
during the year under review, continued to grow
towards dominance in the Holiday Segment with
membership growing to 38691 nos. The total
income grew by 48% from Rs. 106.1 crores to
Rs. 156.7 crores. The profit after tax for the
year registered a growth of 126% from Rs. 9.2
crores in F-05 to Rs. 20.8 crores in F-06.
Mahindra Gesco Developers Limited (MGDL),
the Group’s subsidiary in the business of real
estate and infrastructure development showed
impressive growth during the year under review.
The demand for housing is buoyant and is
expected to remain so at least for the near
medium term. The Company (through its
subsidiary, Mahindra World City Developers
Limited) has successfully operationalised the
SEZ at Chennai and has responded to invitations
from the Governments of Rajasthan and
Maharashtra to partner them in their respective
states. The Company’s total income increased
from Rs. 95.0 crores to Rs. 124.1 crores – a
growth of 31% The profit after tax during the
year increased by 41% from Rs. 7.8 crores to
Rs. 11.0 crores.
Segment Results
The results achieved by major business segments of the Group are given below:
(Rs. crores)
Segments F-2006 F-2005
1. Automotive Segment 538.46 473.37
2. Farm Equipment Segment 308.28 191.39
3. Financial Services 150.87 131.59
4. IT Services 253.91 77.34
Certain statements in the Management Discussion and Analysis describing the Company’s objectives,
projections, estimates, expectations or predictions may be “forward-looking statements” within the
meaning of applicable securities laws and regulations. Actual results could differ from those expressed
or implied. Important factors that could make a difference to the Company’s operations include raw
material availability and prices, cyclical demand and pricing in the Company’s principal markets,
changes in Government regulations, tax regimes, economic developments within India and the
countries in which the Company conducts business and other incidental factors.
36
CORPORATE GOVERNANCE
Corporate Governance is reflected in the manner
in which the Company deals with its
shareholders, employees, customers as also
every other stakeholder including the society in
which the Company operates. Your Company is
committed towards transparency in all its
dealings, adhering to the corporate values and
leveraging the corporate resources in alignment
with the benefits to the stakeholders.
The Promoters of your Company are committed
to moulding Governance with the culture of the
Company that is built upon core values, beliefs
and ethics. All Mahindra Group Companies are
managed in a manner that meets not only
stakeholders’ aspirations but societal
expectations as well.
Your Company’s pursuit towards achieving good
governance is an ongoing process and it
continues to practise Corporate Governance of
the highest standard. A report on the compliance
with the Code of Corporate Governance as
prescribed by the Securities and Exchange
Board of India and incorporated in the Listing
Agreement is given below.
I. Board of Directors
The Company has a Non-Executive Chairman
and the number of Independent Directors is
more than 1/3rd of the total number of Directors.
The number of Non-Executive Directors is more
than 50% of the total number of Directors. The
composition of the Board is in conformity with
Clause 49 of the Listing Agreement.
The Company is managed by the Vice-Chairman
& Managing Director and the two Executive
Directors of the Company. The Board reviews
and approves strategy and oversees the results
of management to ensure that the long term
objectives of enhancing stakeholder value are
met.
Apart from reimbursements of expenses incurred
in the discharge of their duties, the remuneration
that these Directors would be entitled to under
the Companies Act, 1956 as Non-Executive
Directors and the remuneration that some of
the Directors may receive for professional
services rendered to the Company either in
individual capacity or through a firm in which
one of them is a partner, none of these Directors
has any other material pecuniary relationships
or transactions with the Company, its
Promoters, its Directors, its Senior Management
or its subsidiaries and Associates which in their
judgement would affect their independence.
Khaitan & Co., Advocates & Solicitors, in which
Mr. R. K. Kulkarni, Non-Executive Director is
a partner, received professional fees of
Rs. 155.87 lakhs.
The Senior Management have made disclosures
to the Board confirming that there are no
material, financial and/or commercial
transactions between them and the Company
which could have potential conflict of interest
with the Company at large.
A. Composition of the Board
The Company presently has twelve Directors.
The Vice-Chairman & Managing Director and
37
the two Executive Directors are Whole-time
Directors. The Chairman, who is a Non-
Executive Chairman and the Vice-Chairman
& Managing Director, though professional
Directors in their individual capacities, belong
to the Company’s promoter group. Unit Trust
of India (UTI) has withdrawn the nomination
of Mr. V. K. Chanana from the Board with
effect from 22nd March, 2006. Life Insurance
Corporation of India (LIC) had with effect from
28th July, 2005 nominated the then Managing
Director of LIC, Mr. T. S. Vijayan as a
Nominee Director on the Board. With effect
from 29th May, 2006, LIC withdrew the
nomination of Mr. T. S. Vijayan and nominated
Mr. Thomas Mathew T., its current Managing
Director as its representative on the Board in
his place with effect from the said date. The
remaining eight Non-Executive Directors
(including the Nominee Director) are
Independent Directors and professionals, with
expertise and experience in general corporate
management, finance, banking, insurance and
other allied fields.
The names and categories of Directors, the
number of Directorships and Committee
positions held by them in the companies are
given below. None of the Directors on the Board
is a Member on more than 10 Committees and
Chairman of more than 5 Committees (as
specified in Clause 49 of the Listing Agreement),
across all the companies in which he is a
Director.
Director Category Total number of Total number Total number ofCommittee of Chairmanships Directorships*memberships+ of Committees+ of publicof public companies of public companies companiesas on as on as on31st March, 2006 31st March, 2006 31st March, 2006
NON-EXECUTIVEMr. Keshub Mahindra Promoter 1 1 6(Chairman)
Mr. Deepak S. Parekh Independent 8 5 13
Mr. N. B. Godrej Independent 7 4 13
Mr. M. M. Murugappan Independent 4 3 10
Mr. Narayanan Vaghul Independent 4 1 11
Dr. A. S. Ganguly Independent 1 - 4
Mr. R. K. Kulkarni Independent 6 2 7
Mr. T. S. Vijayan@ Independent - - 4
Mr. Anupam Puri Independent 3 1 6
EXECUTIVEMr. Anand G. Mahindra Promoter 1 - 12(Vice-Chairman &Managing Director)
Mr. Bharat Doshi Non-independent 5 1 9(Executive Director)
Mr. A. K. Nanda Non-independent 7 4 13(Executive Director& Secretary)
* excludes Directorships in private limited companies, foreign companies, Section 25 companies andgovernment bodies but includes Directorship in Mahindra & Mahindra Limited
+ Committees considered are Audit Committee and Shareholders/Investors Grievance Committee, includingin Mahindra & Mahindra Limited
@ Resigned as Nominee Director of LIC with effect from 29th May, 2006
38
B. Board Procedure
A detailed Agenda folder is sent to each Director
in advance of Board and Committee Meetings.
To enable the Board to discharge its
responsibilities effectively, the Vice-Chairman
& Managing Director apprises the Board at
every Meeting of the overall performance of
the Company, followed by presentations by the
Sector Presidents. A detailed functional report
is also placed at Board Meetings. The Board
also reviews strategy and business plans, annual
operating and capital expenditure budgets,
investment and exposure limits, compliance
reports of all laws applicable to the Company,
as well as steps taken by the Company to rectify
instances of non-compliances, review of major
legal issues, minutes of the Board Meetings of
your Company’s unlisted subsidiary companies,
significant transactions and arrangements
entered into by the unlisted subsidiary
companies, adoption of quarterly/half-yearly/
annual results, significant labour issues,
transactions pertaining to purchase/ disposal
of property, major accounting provisions and
write-offs, corporate restructuring, minutes of
Meetings of the Audit and other Committees of
the Board, and information on recruitment of
Officers just below the Board level, including
the Compliance Officer.
C. Number of Board Meetings, attendance
record of the Directors at Meetings of the
Board and at the Annual General Meeting
Seven Board Meetings were held during the
period 1st April, 2005 to 31st March, 2006 on
the following dates – 30th May, 2005, 14th June,
2005, 28th July, 2005, 26th October, 2005, 31st
January, 2006, 14th February, 2006 and 22nd
March, 2006. The gap between two meetings
did not exceed four months. These were well
attended.
The fifty-ninth Annual General Meeting (AGM)
was held on 28th July, 2005.
The attendance of the Directors at these
Meetings is as under:
Director No. of Board Attendance at theMeetings Attended AGM
Mr. Keshub Mahindra 7 Yes
Mr. Anand G. Mahindra 6 Yes
Mr. Deepak S. Parekh 6 Yes
Mr. N. B. Godrej 6 Yes
Mr. M. M. Murugappan 4 No
Mr. Bharat Doshi 7 Yes
Mr. Alan E. Durante (1) 3 Yes
Mr. A. K. Nanda 7 Yes
Mr. T. S. Vijayan (2) 2 N.A.
Mr. Narayanan Vaghul 4 No
Dr. A. S. Ganguly 4 Yes
Mr. R. K. Kulkarni 7 Yes
Mr. Anupam Puri 2 No
Mr. V. K. Chanana (3) 6 No
(1) Retired with effect from 25th September, 2005
(2) Appointed as Nominee Director of Life Insurance Corporation of India (LIC) with effect from28th July, 2005 and resigned with effect from 29th May, 2006
(3) Resigned as Nominee Director of Unit Trust of India with effect from 22nd March, 2006
39
D. Directors seeking appointment/
re-appointment
Mr. Deepak S. Parekh, Mr. N. Vaghul, Mr. A.
K. Nanda and Mr. Bharat Doshi retire by
rotation and, being eligible, have offered
themselves for re-appointment. Mr. Thomas
Mathew T. has been nominated by Life Insurance
Corporation of India as an Additional Director
on the Board of the Company with effect from
29th May, 2006. He holds office upto the date
of the forthcoming Annual General Meeting. A
Notice has been duly received from a Member
proposing the candidature of Mr. Mathew for
the office of Director at the said Meeting.
Deepak S. Parekh
Mr. Deepak Parekh is a Fellow member of the
Institute of Chartered Accountants (England &
Wales). He has been a Director of the Company
since August, 1990. He is also the Executive
Chairman of Housing Development Finance
Corporation Limited (HDFC Limited) since
February, 1993.
Mr. Parekh is renowned in the fields of finance
and infrastructure and has been the recipient
of several awards, including the Qimpro
Platinum Award for Quality (for his contribution
to the services sector), the Businessman of the
Year 1996 Award from Business India, the JRD
Tata Corporate Leadership Award from the All
India Management Association, and the
Economic Times Lifetime Achievement Award
2003 and most recently i.e. in 2006, the
Padmabhushan by the Government of India.
Mr. Parekh has been a member of various
Committees set up by the Government of India,
the recent one being the Investment Commission
Committee.
Mr. Deepak Parekh is Chairman of
GlaxoSmithKline Pharmacueticals Limited,
HDFC Asset Management Co. Limited, HDFC
Chubb General Insurance Company Limited,
HDFC Standard Life Insurance Co. Limited,
Infrastructure Development Finance Company
Limited and Siemens Limited. He is a Director
of Castrol India Limited, Hindustan Lever
Limited, Hindustan Oil Exploration Co. Limited,
Lafarge India Private Limited, Motor Industries
Co. Limited, The Indian Hotels Company
Limited and an Alternate Director of Bharat
Bijlee Limited, Borax Morarji Limited, Exide
Industries Limited and Zodiac Clothing Co.
Limited.
Mr. Parekh holds 46,090 Ordinary (Equity)
shares in the Company.
Mr. Deepak Parekh is a member of the following
Board Committees:
Sr. No. Name of the Companies Name of the Position heldCommittee
1. The Indian Hotels Co. Limited Audit Committee Member
2. Siemens Limited Audit Committee Member
3. GlaxoSmithKline Audit Committee ChairmanPharmaceuticals Limited
4. Mahindra & Mahindra Limited Audit Committee Chairman
5. Castrol India Limited Audit Committee Chairman
6. Motor Industries Co. Limited Audit Committee Chairman
7. Hindustan Lever Limited Audit Committee Chairman
8. Motor Industries Co. Limited Investors Grievance MemberCommittee
9. Infrastructure Development Remuneration MemberFinance Company Limited Committee
10. Siemens Limited Remuneration MemberCommittee
40
Narayanan Vaghul
Mr. Narayanan Vaghul, currently Chairman of
the Board of ICICI Bank Limited, has been a
Director of your Company since 1996. He has
been associated with ICICI for several years as
its Chairman and CEO, and has served on the
Boards of the Central Bank of India and the
Bank of India. As the Chairman and a member
of several committees and task forces,
constituted by the Government and the Reserve
Bank of India, Mr. Vaghul has been closely
associated with policy formulation at a national
level. He has worked on several assignments
for the Asian Development Bank, the
International Finance Corporation and the
World Bank. For a brief period, he was the
Chairman of the Government’s Foreign
Investment Advisory Board.
Mr. Vaghul is Chairman of Asset Reconstruction
Company India Limited, Himatsingka Seide
Limited, ICICI Knowledge Park Limited,
Mahindra World City Developers Limited and
Pratham India Education Initiative and a
Director of Air India Air Transport Services
Limited, Air India Engineering Services
Limited, Air India Limited, Apollo Hospitals
Enterprise Limited, Azim Premji Foundation,
Hemogenomics Private Limited, Mittal Steel,
Carribean, Mittal Steel, N.V. Rotterdam, The
Netherlands, Nicholas Piramal India Limited
and Wipro Limited. He is a Member of the
Governing Body of National Institute of Public
Finance and Policy, and Member of the
Governing Council of LNM Institute of
Information Technology and a Trustee of LNM
Foundation, Pratham Mumbai, Pratham
Tamilnadu Education Initiative, Pratham, USA
and Chairman of GIVE Foundation and
Chairman of the Board of Governors of Institute
for Financial Management & Research India,
Chennai.
Mr. Vaghul holds 40,000 Ordinary (Equity)
shares in the Company.
Mr. N. Vaghul is a member of the following
Board Committees:
Sr. No. Name of the Companies Name of the Position heldCommittee
1. Wipro Limited Audit Committee Chairman
2. Mahindra & Mahindra Limited Remuneration/ ChairmanCompensation Committee
3. Nicholas Piramal India Limited Compensation Committee Chairman
4. ICICI Bank Limited Board Governance & ChairmanRemuneration Committee
5. Mahindra World City Audit Committee MemberDevelopers Limited
6. Mahindra World City Remuneration Committee MemberDevelopers Limited
7. Air India Limited Audit Committee Member
8. Nicholas Piramal India Limited Audit Committee Member
9. Apollo Hospitals Limited Compensation Committee Member
10. Wipro Limited Board Governance & MemberCompensation Committee
41
A. K. Nanda
Mr. A. K. Nanda is a Graduate in Commerce, a
fellow member of the Institute of Chartered
Accountants of India and a fellow member of
the Institute of Company Secretaries of India.
He has a Degree in Law from the University of
Calcutta. He has also participated in Senior
Executive Programme at the London Business
School.
Mr. Nanda joined the Group in 1973. He was
appointed Company Secretary of the Company
in 1987, before which he held several important
positions within the Group. He joined the Board
in August, 1992. He is also the President of
the Infrastructure Development Sector of the
Group, which deals with the Group’s involvement
in property development, special economic
zones, hotels, time-share and related activities.
Mr. Nanda is a member of various committees
of the Bombay Chamber of Commerce and
Industry and Confederation of Indian Industry.
He is currently the President of the Indo-French
Chamber of Commerce and Industry, a Member
of the Governing Board of The Council of EU
Chambers of Commerce in India and a Member
of the Governing Board of Bombay First. He
was the President of EU Chambers of Commerce
in India in the year 2004-05. He is the
Chairman of “CII National Committee on
Water” for 2006-07. He has chaired and spoken
at various international conferences organised
by the World Bank and UN sponsored agencies.
He is the Chairman of Mahindra Holidays &
Resorts (India) Limited, Owens Corning (India)
Limited, PSL Erickson Limited, Mahindra
Construction Company Limited, Mahindra Acres
Consulting Engineers Limited, Mahindra
Infrastructure Developers Limited and Mahindra
World City (Jaipur) Limited and the Vice-
Chairman of Mahindra Gesco Developers
Limited and Mahindra World City (Developers)
Limited.
He is also on the Board of Directors of
Mahindra Holdings & Finance Limited,
Mahindra Intertrade Limited, Mahindra (China)
Tractor Company Limited, ABN AMRO Asset
Management (India) Limited and Mahindra
Holidays and Resorts USA Inc. He is the
Member of the Advisory Board for Asia Pacific
in Barco Co. Limited.
Mr. A. K. Nanda is a member of the following
Board Committees:
42
Sr. No. Name of the Companies Name of the Position heldCommittee
1. Mahindra & Mahindra Limited Share Transfer and Member
Shareholders / Investors
Grievance Committee
2. Mahindra & Mahindra Limited Loans & Investment Member
Committee
3. Mahindra & Mahindra Limited Corporate Social Member
Responsibility Committee
4. Mahindra Holdings & Audit Committee Chairman
Finance Limited
5. Mahindra Holidays & Audit Committee Member
Resorts (India) Limited
6. Mahindra Holidays & Remuneration Committee Member
Resorts (India) Limited
7. Mahindra World City Audit Committee Member
Developers Limited
8. Owens Corning (India) Limited Audit Committee Chairman
9. ABN AMRO Asset Management Remuneration Committee Member
(India) Limited
10. ABN AMRO Asset Management Audit Committee Chairman
(India) Limited
11. Mahindra Construction Company Remuneration Committee Member
Limited
12. Mahindra Gesco Developers Shareholders & Investors Chairman
Limited Grievance Committee
13. Mahindra Gesco Developers Loans & Investment Chairman
Limited Committee
14. Mahindra Gesco Developers Remuneration Committee Member
Limited
Bharat N. Doshi
Mr. Bharat Doshi joined the Company in 1973
as an Executive. He is a fellow member of both
the Institute of Chartered Accountants of India
and the Institute of Company Secretaries of
India and has a Master’s Degree in Law from
the University of Bombay. He has participated
in the Program for Management Development
at the Harvard Business School.
Mr. Doshi was Executive Vice President
(Corporate Affairs) from July, 1991 to August,
1992. In August, 1992, he joined the Board as
Executive Director in charge of Finance and
Accounts, Corporate Affairs and Information
Technology. He has been the President of the
Trade and Financial Services Sector since
December, 1994. He is the Chairman of
Mahindra Steel Service Centre Limited and the
Vice-Chairman of Mahindra Intertrade Limited.
He is a Director of Tech Mahindra Limited,
Mahindra Holdings & Finance Limited,
43
Mahindra & Mahindra Financial Services
Limited, Mahindra International Limited,
Mahindra USA Inc., Bristlecone Limited and
Mahindra (China) Tractor Co. Limited. He is
also an Independent Director of Godrej
Consumer Products Limited, Franklin Templeton
Trustee Services Private Limited and NSE.IT
Limited. He is a Trustee of the Mahindra
Foundation and K.C. Mahindra Education Trust
and is also on the Board of Governors of The
Mahindra United World College of India and
the Indian Institute of Management, Kozhikode
and is a Member of the Managing Committee
of Bombay Chamber of Commerce & Industry.
He was also a Director on the Board of
Ford affiliate in India from May, 1997 to
March, 2005.
Mr. Doshi is a Fellow of the Salzburg Seminar
on “Asian Economies: Regional and Global
Relationships”, held in December, 2000. He has
addressed several seminars, both national and
international, on the Indian and Global
Economy and other related topics.
Mr. Bharat Doshi was adjudged “India’s Best
CFO” by the leading business fortnightly
‘Business Today’ in April, 2005. He was also
conferred the “CFO of the Year” Award,
honouring financial excellence, instituted by
IMA India, an associate of The Economist
Group, in December, 2005.
Mr. Doshi is a member of the following Board
Committees:
Sr. No. Name of the Companies Name of the Committee Position held
1. Mahindra & Mahindra Limited Share Transfer and Member
Shareholders/Investors
Grievance Committee
2. Mahindra & Mahindra Limited Loans & Investment Member
Committee
3. Mahindra & Mahindra Limited Corporate Social Member
Responsibility Committee
4. Mahindra & Mahindra Limited Research & Development Member
Committee
5. Mahindra Intertrade Limited Compensation Committee Member
6. Mahindra Steel Service Audit Committee Member
Centre Limited
7. Mahindra International Limited Audit Committee Chairman
8. Godrej Consumer Products Limited Audit Committee Chairman
9. Godrej Consumer Products Limited Human Resource Committee Member
10. Godrej Consumer Products Limited Nominations Committee Member
44
11. Mahindra & Mahindra Loans & Investment Member
Financial Services Limited Committee
12. Mahindra & Mahindra Financial Remuneration/ Member
Services Limited Compensation Committee
13. Bristlecone Limited Audit Committee Member
14. Bristlecone Limited Compensation Committee Member
15. Franklin Templeton Trustee Dividend Committee Member
Services Private Limited
Thomas Mathew T.
Mr. Thomas Mathew T., Managing Director, LIC
of India, is a Post-Graduate in Economics,
Graduate in Law, Post-Graduate Diploma in
Management (Marketing) and also an Associate
of the Insurance Institute of India. He joined
Life Insurance Corporation of India (LIC) in
December, 1977 as a Direct Recruit Officer. He
took over charge as Managing Director of LIC
on 24th March, 2006.
Mr. Thomas Mathew has held various important
assignments in LIC. He was the Zonal Manager
of Western Zone of LIC, Chief (Marketing and
International Operations) and Sr. Divisional
Manager-in-Charge of 3 major Divisions. He is
also Managing Director of LIC Housing Finance
Limited and a Director of LIC (Nepal) Limited.
Mr. Mathew has attended various seminars and
training sessions related to Insurance in India
and abroad.
Mr. Mathew does not hold any shares in the
Company.
Mr. Mathew is Chairman of the Executive
Committee of LIC Housing Finance Limited.
E. Codes of Conduct
The Board has laid down two separate Codes
of Conduct - one for Board Members and other
for Senior Management and employees of the
Company. These Codes have been posted on the
Company’s website www.mahindra.com. All
Board Members and Senior Management
Personnel have affirmed compliance with the
Codes of Conduct. A declaration signed by the
Vice - Chairman & Managing Director to this
effect is enclosed at the end of this report.
II. Remuneration to Directors
A. Remuneration Policy
While deciding on the remuneration for
Directors, the Board, Remuneration /
Compensation Committee (Committee) considers
the performance of the Company, the current
trends in the industry, the qualification of the
appointee(s), their experience, past performance
and other relevant factors. The Board /
Committee regularly keeps track of the market
trends in terms of compensation levels and
practices in relevant industries through
participation in structured surveys. This
information is used to review the Company’s
remuneration policies.
Sr. No. Name of the Companies Name of the Committee Position held
45
(Rs.in lakhs)
Director Commission for the year ended31st March, 2005, paidduring the current year
Mr. Keshub Mahindra 32.00
Late Mr. R. K. Pitamber* 8.00
Mr. Deepak S. Parekh 8.00
Mr. N. B. Godrej 8.00
Mr. M. M. Murugappan 8.00
Mr. V. K. Chanana (Nominee of UTI)** 8.00#
Mr. B. R. Gupta
Mr. R. N. Bhardwaj (Nominees of LIC) @6.55#
Mr. Narayanan Vaghul 8.00
Dr. A. S. Ganguly 8.00
Mr. R. K. Kulkarni 8.00
Mr. Anupam Puri 8.00
* Resigned with effect from 30th March, 2005
** Resigned with effect from 22nd March, 2006
# The Commission is payable to the Nominating Financial Institutions
@ Mr. B. R. Gupta resigned with effect from 29th April, 2004 as Nominee Director of LIC and in his place
Mr. R. N. Bhardwaj was appointed as Nominee Director of LIC with effect from the same date. Mr.
Bhardwaj ceased to be a Nominee Director with effect from 24th January, 2005.
B. Remuneration to Non-Executive
Directors for the year ended 31st March,
2006
The eligible Non-Executive Directors are paid
commission up to a maximum of 1% of the net
profits of the Company as specifically computed
for this purpose. A commission of Rs. 101.22
lakhs has been provided as payable to the
eligible Non-Executive Directors in the accounts
of the current year. The Directors are yet to
determine the distribution of this amount
between themselves on the basis of individual
Director’s contribution, guidance, etc.
During the year under review, the Non-Executive
Directors were paid a commission of Rs. 110.55
lakhs (provided in the accounts for the year
ended 31st March, 2005), distributed amongst
the Directors as under:
}
46
Non-Executive Directors are also paid a sitting
fee of Rs. 10,000 for every Meeting of the
Board or Committee attended. The fees paid to
Non-Executive Directors for the year ended
31st March, 2006 alongwith their shareholdings
are as under:
Director Sitting Fees for No. of Ordinary (Equity)Board and Committee shares held as onMeetings paid 31st March, 2006during the year(Rs. in lakhs)
Mr. Keshub Mahindra 1.20 2,01,148
Mr. Deepak S. Parekh 1.30 46,090
Mr. N. B. Godrej 1.50 50,000
Mr. M. M. Murugappan 0.90 40,000
Mr. V. K. Chanana 1.10 Nil
(Nominee of UTI) (1)
Mr. T. S. Vijayan 0.20 Nil
(Nominee of LIC) (2)
Mr. Narayanan Vaghul 0.70 40,000
Dr. A. S. Ganguly 0.50 40,000
Mr. R. K. Kulkarni 2.20 38,788
Mr. Anupam Puri 0.20 26,664
(1) Resigned with effect from 22nd March, 2006
(2) Appointed with effect from 28th July, 2005 as Nominee Director of Life Insurance Corporation of India(LIC) and resigned with effect from 29th May, 2006. Sitting Fees for Board Meetings were paid to LIC
1,60,000 Stock Options had been granted to
Non-Executive Directors under the Company’s
Stock Option Scheme on 6th December, 2001.
In June, 2005, 35,000 Stock Options have been
granted to the Non-Executive Directors. Details
of these are given in the Statement attached to
Annexure I to the Directors’ Report.
C. Remuneration paid/payable to Managing/
Executive Director(s) (Whole-time Directors)
for the year ended 31st March, 2006
Remuneration to Whole-time Directors is fixed
by the Remuneration/ Compensation Committee
and thereafter approved by shareholders at a
General Meeting.
47
Following is the remuneration paid/payable to the Whole-time Directors during the year ended
31st March, 2006.
(Rs.in lakhs)
Director Salary Com- Company’s Perquisites Total Contract No. of No. ofmission Contribu- and Period Options Options
tion to allowances granted $ granted $$Funds* in Dec., in June,
2001 2005
Mr. Anand G. 49.50 99.00 13.36 39.49 201.35 4th April, Nil NilMahindra 2002 to(Vice-Chairman 3rd April,& Managing 2007Director)
Mr. Bharat 38.50 57.75 10.40 18.40 125.05 28th 1,00,000 10,000Doshi August,(Executive 2002 toDirector) 27th
August,2007
Mr. Alan 17.50 26.25 57.77 17.94 119.46 28th 1,00,000 10,000E. Durante August,(Executive 2002 toDirector) @ 25th
September,2005
Mr. A. K. 38.50 57.75 10.39 17.36 124.00 28th 1,00,000 10,000Nanda August,(Executive 2002 toDirector & 27th August,Secretary) 2007
* Aggregate of the Company’s contributions to Superannuation Fund, Provident Fund, Gratuity Paid andPrivilege Leave Encashment
@ Retired as Executive Director with effect from 25th September, 2005
$ The Stock Options granted in December, 2001 have been exercised in full by Executive Directors
$$ Options granted in June, 2005 would vest in June, 2006. These options can be exercised in threetranches over a period of five years from the date of vesting at an Exercise Price of Rs. 227 per share
Notes:a) Notice period applicable to each of the Whole-time Directors – six months.
b) Commission is the only component of remuneration that is performance-linked. All othercomponents are fixed.
c) The overall remuneration to the Vice-Chairman & Managing Director and the ExecutiveDirectors is approved by the Remuneration/Compensation Committee.
III. Risk Management
Your Company has a well-defined risk
management framework in place. The risk
management framework adopted by the
Company is discussed in detail in the
Management Discussion and Analysis chapter
of this Annual Report. Your Company has
established procedures to periodically place
before the Board the risk assessment and
minimisation procedures being followed by the
Company and steps taken by it to mitigate these
risks.
IV. Committees of the Board
A. Remuneration/ Compensation Committee
The role of the Remuneration/Compensation
Committee is to review market practices and to
48
decide on remuneration packages applicable to
the Vice-Chairman & Managing Director, the
Executive Directors and Senior Executives of
the Company. During the course of its review,
the Committee also decides on the commission
and/or other incentives payable, taking into
account the individual’s performance as well
as that of the Company. The Committee has
formulated and administers the Mahindra &
Mahindra Limited Employees’ Stock Option
Scheme and also attends to such other matters
as may be prescribed from time to time.
Mr. N. Vaghul is the Chairman of the
Committee. Mr. Keshub Mahindra, Mr. N. B.
Godrej and Mr. M. M. Murugappan are the
other Members of the Committee. Three
Meetings were held during the year. All the
Meetings were attended by each Member.
B. Audit Committee
This Committee comprises solely of Independent
Directors. The Committee comprises Mr. Deepak
S. Parekh (Chairman of the Committee), Mr.
R. K. Kulkarni, Mr. V. K. Chanana (resigned
with effect from 22nd March, 2006), Mr. N. B.
Godrej and Mr. M. M. Murugappan (appointed
with effect from 29th May, 2006). Mr. A. K.
Nanda, the Company Secretary, acts as the
Secretary to the Audit Committee.
The terms of reference of this Committee are
very wide.
Besides having access to all the required
information from within the Company, the
Committee can obtain external professional
advice whenever required. The Committee acts
as a link between the Statutory and the Internal
Auditors and the Board of Directors of the
Company. It is authorised to select and establish
accounting policies, review reports of the
Statutory and the Internal Auditors and meet
with them to discuss their findings, suggestions
and other related matters. The Committee is
empowered to review the remuneration payable
to the Statutory Auditors and to recommend a
change in Auditors, if felt necessary. It is also
empowered to review Financial Statements and
investments of unlisted subsidiary companies,
Management Discussion & Analysis, material
individual transactions with related parties not
in normal course of business or which are not
on an arm’s length basis. Generally all items
listed in Clause 49 II D of the Listing Agreement
are covered in the terms of reference. The Audit
Committee has been granted powers as
prescribed under Clause 49 II C.
The Meetings of the Audit Committee are also
attended by the Vice-Chairman & Managing
Director, the Executive Director (Finance &
Corporate Affairs), the Executive Director &
Secretary, the President (Finance & Legal
Affairs), the Statutory Auditors, Chief Internal
Auditor and the Head-Secretarial, Compliance
Officer & Assistant Company Secretary. The
Chairman of the Audit Committee, Mr. Deepak
S. Parekh was present at the Annual General
Meeting of the Company held on 28th July,
2005.
The Committee met six times during the year
under review and the gap between two meetings
did not exceed four months. The meetings were
attended by all the members except Mr. V. K.
Chanana and Mr. R. K. Kulkarni who attended
five of these meetings.
49
C. Share Transfer and Shareholders/
Investors Grievance Committee
The Company’s Share Transfer and Shareholders/
Investors Grievance Committee functions under
the Chairmanship of Mr. Keshub Mahindra,
Chairman of the Board and a Non-Executive
Director. Mr. R. K. Kulkarni, Mr. Anand G.
Mahindra, Mr. Bharat Doshi and Mr. A. K. Nanda
are also on the Committee. Mr. Narayan Shankar,
Head- Secretarial & Assistant Company Secretary,
is the Compliance Officer of the Company.
The Committee meets as and when required, to
deal with matters relating to transfers/
transmissions of shares and monitors redressal
of complaints from shareholders relating to
transfers, non-receipt of balance-sheet, non-
receipt of dividends declared, etc. With a view
to expediting the process of share transfers,
the Executive Director & Secretary is authorised
to approve of transfers of shares below 5,000
in number.
The Committee held two meetings during the
year under review. Both the meetings were
attended by all its members except Mr. Anand
G. Mahindra who attended one meeting.
During the year, 73 letters/complaints were
received from the shareholders, all of which
have been attended to/resolved to date.
As of date, there are no pending share transfers
pertaining to the year under review.
D. Research & Development Committee
(a voluntary initiative of the Company)
The Research & Development (R&D) Committee,
which was constituted by the Board in 1998,
provides direction on the R&D mission and
strategy, and key R&D and technology issues.
The Committee also reviews and makes
recommendations on skills and competencies
required and the structure and the process
needed to ensure that the R&D initiatives result
in products that are in keeping with the business
needs.
Dr. A. S. Ganguly is the Chairman of the
Committee. Mr. Anand G. Mahindra, Mr. N. B.
Godrej (with effect from 26th October, 2005),
Mr. Bharat Doshi and Mr. M. M. Murugappan
are the other Members of the Committee.
Mr. Alan E. Durante ceased to be Member with
effect from 25th September, 2005. The
Committee held two meetings during the year
under review, which were well attended.
E. Loans & Investment Committee
(a voluntary initiative of the Company)
The Committee approves of the making of loans
and investment, borrowing moneys and related
aspects of fund management in accordance with
the guidelines prescribed by the Board. Mr. Keshub
Mahindra (Chairman), Mr. Anand G. Mahindra,
Mr. R. K. Kulkarni, Mr. Bharat Doshi and Mr. A.
K. Nanda are members of the Committee. Mr.
Alan E. Durante ceased to be Member with effect
from 25th September, 2005.
V. Subsidiary Companies
The revised Clause 49 defines a “material non-
listed Indian subsidiary” as an unlisted
subsidiary, incorporated in India, whose
turnover or net worth (i.e. paid-up capital and
free reserves) exceeds 20% of the consolidated
turnover or net worth respectively, of the listed
holding company and its subsidiaries in the
immediately preceding accounting year.
Under this definition, the Company has one
‘material non-listed Indian subsidiary’
50
i.e. Tech Mahindra Limited. Mr. Anupam Puri,
an Independent Director of your Company is
also a Director on the Board of Tech Mahindra
Limited.
VI. Management
A. Disclosures
During the financial year 2005-06, there were
no material significant transactions entered into
between the Company and its promoters,
Directors or the management, subsidiaries or
relatives, etc. that may have potential conflict
with the interests of the Company at large.
Further details of related party transactions are
presented in note no. 32 in Schedule XIV to
Annual Accounts of the Annual Report.
B. Disclosure of Accounting Treatment in
Preparation of Financial Statements
The Company has followed the Guidelines of
Accounting Standards laid down by the Institute
of Chartered Accountants of India (ICAI) in
preparation of its financial statements.
C. Code for Prevention of Insider Trading
Practices
In compliance with SEBI’s regulation on
prevention of insider trading, the Company has
instituted a comprehensive Code of Conduct for
prevention of Insider Trading for its designated
employees. The Code lays down Guidelines,
which advises them on procedures to be followed
and disclosures to be made, while dealing with
shares of the Company and cautioning them of
the consequences of violations.
VII. Shareholder Information
1. 60th Annual General Meeting
Date : 26th July, 2006
Time : 3.30 p.m.
Venue : Birla Matushri Sabhagar,
19, Sir Vithaldas
Thackersey Marg,
(New Marine Lines),
Mumbai - 400 020.
2. Dates of Book Closure
1st July, 2006 to 26th July, 2006, both days
inclusive.
3. Date of Dividend Payment
On or after 26th July, 2006.
4. Financial Year of the Company
The financial year covers the period from
1st April to 31st March.
Financial Reporting for :
Quarter ending
30th June, 2006 - End July, 2006
Half-year ending
30th September, 2006- End October, 2006
Quarter ending
31st December, 2006 - End January, 2007
Year ending
31st March, 2007 - End May, 2007
Note: The above dates are indicative
5. Registered Office
Gateway Building,
Apollo Bunder,
Mumbai - 400 001.
51
6. Listing of Ordinary (Equity) Shares &
Debentures on Stock Exchanges
The Company’s Shares are listed on the
Stock Exchanges at Bombay Stock
Exchange Limited (BSE) and National
Stock Exchange of India Limited (NSE).
The Company has applied for approval for
delisting its shares with The Calcutta Stock
Exchange Association Limited and the
approval for delisting of the shares is
awaited. The Global Depositary Receipts
(GDRs) of the Company are listed on the
Luxembourg Stock Exchange. The Zero
Coupon Foreign Currency Convertible Bonds
(FCCBs) due for redemption in 2009 are
listed at Singapore Exchange Securities
Trading Limited. The requisite listing fees
have been paid in full to all these Stock
Exchanges. Subsequent to the year-end, the
Company received the In-Principle approval
from BSE and NSE for issue and allotment
of equity shares which may arise out of
conversion of the US $ 200 Million FCCBs
due for redemption in 2011 into GDRs and/
or Equity Shares.
The Non-Convertible Debentures of the
Company are listed with National Stock
Exchange of India Limited and the
Company has paid the requisite listing fees
in full.
7. Stock Code
1. Bombay Stock Exchange Limited
(BSE) : 500520
2. National Stock Exchange of India
Limited (NSE) : M&M
3. Demat International Security
Identification Number in NSDL and
CDSL for equity shares -ISIN-
INE101A01018
8. Stock Performance
The performance of the Company’s shares
relative to the BSE Sensitive Index is given
in the chart below :
0
100
200
300
400
500
600
700
800
Mar-06
Feb-06
Jan-06
Dec-05
Nov-05
Oct-05
Sep-05
Aug-05
July-05
Jun-05
May-05
Apr-05
0
2000
4000
6000
8000
10000
12000
M&M on BSEBSE Index
Last Trading day of the month
BSE
Ind
ex
M&
M o
n B
SE
(ex-
bo
nu
s w
.e.f
. 1st
Sep
. 20
05
)
52
9. Stock Price Data
Equity Shares GDRs
Bombay Stock National Stock Luxembourg
Exchange Exchange of Stock
Limited India Limited Exchange
High Low High Low High Low
Rs. Rs. Rs. Rs. US $ US $
April, 2005 511.00 420.00 515.00 431.05 5.80 4.95
May, 2005 518.00 435.10 519.00 435.00 5.93 5.13
June, 2005 587.00 501.00 587.00 500.00 6.65 5.82
July, 2005 700.00 553.60 785.00 553.05 7.68 6.54
August, 2005 730.50 667.50 741.90 655.10 8.22 7.75
September, 2005* 380.00 345.00 387.90 345.00 8.65 8.02
October, 2005 411.95 351.00 411.90 351.00 9.15 8.00
November, 2005 481.80 353.20 484.95 353.00 10.35 7.83
December, 2005 524.45 450.00 524.50 449.15 11.27 10.05
January, 2006 561.70 503.20 561.95 504.00 12.53 11.43
February, 2006 627.00 553.80 626.90 552.00 13.70 12.53
March, 2006 651.00 544.00 651.45 576.65 14.15 13.40
* The share price became ex-bonus with effect from 1st September, 2005
10. Registrar and Transfer Agents
Sharepro Services (India) Private Limited
Unit: Mahindra & Mahindra Limited
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road,
Chakala, Andheri (East),
Mumbai - 400 099.
Telephone No. +91-22-28215168
Fax +91-22-28375646
Email: [email protected]
The Registrar and Transfer Agents also have an office at:
912, Raheja Centre,
Free Press Journal Road,
Nariman Point,
Mumbai - 400 021.
Telephone No.+91-22-22881569
Fax: +91-22-22825484
53
11. Share Transfer System
Trading in Ordinary (Equity) Shares of the
Company is permitted only in dematerialised
form.
Shares sent for transfer in physical form are
registered and returned within a period of thirty
days from the date of receipt of the documents,
provided the documents are valid and complete
in all respects. With a view to expediting the
process of share transfers, the Executive
Director and Secretary is authorised to approve
of transfers of shares below 5,000 in number.
The Share Transfer and Shareholders/ Investors
Grievance Committee meets as and when
required to consider the other transfer proposals
and attend to shareholder grievances.
12. Distribution of shareholding as on 31st March, 2006
Number of Number of Number of % of
Shares held Shareholders shares held Shareholding
1 to 500 93,517 77,85,350 3.23
501 to 1000 5,101 37,51,072 1.56
1001 to 5000 4,209 85,92,257 3.57
5001 to 10000 390 26,92,742 1.11
10001 and above 537 21,80,79,931 90.53
Total 1,03,754 24,09,01,352 100.00
Shareholding Pattern as on 31st March, 2006
Sr. No. Category of Shareholders Total Holdings Percentage
1 Indian Promoters 2,05,148 0.09
2 Persons acting in concert * 5,47,33,578 22.72
3 Mutual Funds 1,39,01,569 5.77
4 Banks, Financial
Institutions, Insurance
Companies (State Government) 3,78,64,229 15.72
5 FIIs/FFIs/FCs* 8,41,56,160 34.93
6 Private Corporate Bodies 79,58,172 3.30
7 Indian Public 2,52,69,815 10.49
8 NRIs/OCBs 21,89,080 0.91
9 Bank of New York (for GDR holders) 1,46,23,601 6.07
Total 24,09,01,352 100.00
* FIIs/FFIs/FCs does not include shareholding aggregating 1,17,50,000 shares representing
4.88% of the paid-up share capital of the Company held by a FII as the same is included under the
category of Persons acting in Concert
54
13. Dematerialisation of Shares
96.95% of the total Equity Capital is held
in a dematerialised form with National
Securities Depository Limited and Central
Depository Services (India) Limited as on
31st March, 2006. The market lot of the
share is one share as the trading in equity
shares of the Company is permitted only in
dematerialised form. Non-promoters’
holding is 77.19% and the stock is highly
liquid.
14. Outstanding GDRs/ ADRs /Warrants or
any Convertible Instruments, Conversion
date and likely impact on equity
1,46,23,601 GDRs were outstanding as at
31st March, 2006. Since the underlying
Ordinary (Equity) Shares represented by
GDRs have been allotted in full, the
outstanding GDRs have no impact on the
Equity of the Company.
1,00,000 Zero Coupon Convertible Bonds
(due 2009) of US$ 1000 each (FCCBs)
aggregating US$ 100 million issued in May,
2004, were at the option of the Bond holders
convertible into around 68,61,911 Equity
Shares / GDRs each GDR representing One
Equity Share of the Company at an initial
conversion price of Rs.647.05 per share at
any time between 7th June, 2004 and 8th
April, 2009. Consequent to the issue of
Bonus Equity Shares by the Company in the
ratio 1:1 in September, 2005, the initial
conversion price of Rs.647.05 per share was
adjusted to Rs. 323.52 per share with effect
from 3rd September, 2005 resulting into an
increase in the number of Equity Shares
underlying FCCBs to around 1,37,24,035.
During the year, FCCBs aggregating US$
6,47,30,000 were converted into 88,83,554
Equity Shares/GDRs. As at 31st March,
2006, FCCBs amounting to US$
3,52,70,000 convertible into around
48,40,467 Equity Shares/GDRs were
outstanding. Subsequent to 31st March,
2006 FCCBs aggregating US$ 2,23,70,000
have been converted into 30,70,063 Equity
Shares/GDRs and as of date FCCBs
amounting to US$ 1,29,00,000 convertible
into around 17,70,400 Equity Shares/GDRs
are outstanding.
2000 Zero Coupon Convertible Bonds (due
2011) of US$ 1,00,000 each aggregating
US$ 200 million issued subsequent to the
year-end in April, 2006, may, at the option
of the Bond holder, be converted into around
96,35,156 Equity Shares/GDRs at an initial
conversion price of Rs.922.04 at any time
between 7th May, 2006 and 7th March, 2011.
15. Plant Locations
The Company’s manufacturing facilities are
located at Kandivli, Nashik, Igatpuri,
Nagpur, Zaheerabad, Jaipur, Rudrapur,
Haridwar and Pune.
16. Address for correspondence
Shareholders may correspond with the
Registrar and Transfer Agents, at:
Sharepro Services (India) Private Limited
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road,
Chakala, Andheri (East),
Mumbai-400 099
Telephone No. +91-22-28215168
Fax +91-22-28375646
Email: [email protected]
on all matters relating to transfer/
dematerialisation of shares, payment of
55
dividend and any other query relating to
shares in or debentures of the Company.
Shareholders would have to correspond with
the respective Depositary Participants for
shares held in demat mode.
For all investor related matters, Head-
Secretarial, Compliance Officer & Assistant
Company Secretary can be contacted at
Mahindra Towers, 5th floor, Dr. G. M.
Bhosale Marg, Worli, Mumbai - 400 018.
Telephone No: +91-22-24905624,
+91-22-24975074
Fax: +91-22-24900833
e-mail: [email protected]
The Company can also be visited at its
website: http://www.mahindra.com
VIII. Other Disclosures
1. Details of General Meetings and Special Resolutions passed
Annual General Meetings held during the past 3 years and the Special Resolutions passed therein:
Year Date Time Special Resolutions passed
2003 28th July, 2003 3.30 p.m. 1. Appointment of Auditors.
2. Amendment of Object Clause of the
Memorandum of Association of the Company.
3. Approval for commencement of the new
businesses of the Company.
4. Maintaining of the Company’s Register of
Members, etc.
5. Delisting of securities.
2004 28th July, 2004 3.30 p.m. Allotment of further shares to Mahindra &
Mahindra Employees’ Stock Option Trust.
2005 28th July, 2005 3.30 p.m. 1. Payment of Commission to Non-wholetime
Directors including Non-Resident Directors.
2. Revision in the remuneration payable to Mr.
Anand G. Mahindra, Vice- Chairman &
Managing Director and the two Executive
Directors of the Company viz. Mr. Bharat
Doshi and Mr. A. K. Nanda.
3. Approval for commencement of new
businesses of the Company.
4. Increase in limit for holdings by FIIs from 35%
to 49% of the paid-up capital of the Company.
5. Alteration of Article 3 in the Articles of
Association of the Company.
56
Extraordinary General Meetings held during the past 3 years:
Year Date Time
2003 30th October, 2003 11.00 a.m.
2004 29th April, 2004 11.00 a.m.
All the Meetings were held at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg,
(New Marine Lines), Mumbai-400 020.
Details of Special Resolutions passed through postal ballot
Sr. No. Date of passing the Description % of Votes in favour
Special Resolution of the Special Resolution
1. 28th July, 2005 Amendment of 99.98
Object Clause of the
Memorandum of
Association.
2. 5th April, 2006 Issue of Securities in 93.51
International / Domestic
markets not exceeding
USD 200 Million.
The procedure for postal ballot is as per the provisions contained in this behalf in the Companies
Act, 1956 and rules made thereunder namely Companies (Passing of the Resolution by Postal
Ballot) Rules, 2001.
No Resolution is proposed to be passed through postal ballot.
2. Details of non-compliance etc.
The Company has complied with all the
requirements of regulatory authorities.
During the last three years, there were no
instances of non-compliance by the
Company and no penalty or strictures were
imposed on the Company by the Stock
Exchanges or SEBI or any statutory
authority, on any matter related to the
capital markets.
3. Means of Communication
The quarterly, half-yearly and yearly results
are published in Business Standard and
Sakal which are national and local dailies.
These are not sent individually to
the shareholders. The Company’s results
and official news releases are
displayed on the Company’s website
http://www.mahindra.com
Presentations are also made to international
and national institutional investors and
analysts.
The Company also regularly posts
information relating to its financial results
and shareholding pattern on the SEBI
EDIFAR Website at www.sebiedifar.nic.in
57
4. The Management Discussion and Analysis
Report (MDA) has been attached to the
Directors’ Report and forms part of this
Annual Report.
5. Office of the Chairman, etc.
[non-mandatory but adopted]
The Company has provided the Chairman
(Non-Executive) with a full-fledged office,
the expenses of which are borne by the
Company. The Chairman is reimbursed all
expenses incurred in the performance of
his duties.
6. Compliance with Mandatory & non-
mandatory requirements
The Company has complied with all the
mandatory requirements of Clause 49 of
the Listing Agreement relating to Corporate
Governance. Further, the Company has
adopted the following non-mandatory
requirements of the Clause:
• The Company has set up the
Re m u n e r a t i o n / C o m p e n s a t i o n
Committee long before application of
Clause 49.
• The financial statements of the
Company are unqualified.
The Company has not adopted the other
non-mandatory requirements as specified
in Annexure ID of the Clause 49.
Mumbai, 29th May, 2006
58
DECLARATION BY THE MANAGING DIRECTOR UNDER CLAUSE 49
OF THE LISTING AGREEMENT
To
The Members of Mahindra & Mahindra Limited
I, Anand G. Mahindra, Vice-Chairman & Managing Director of Mahindra & Mahindra Limited
declare that all the Members of the Board of Directors and Senior Management Personnel have
affirmed compliance with the Codes of Conduct.
Anand G. Mahindra
Vice-Chairman & Managing Director
Mumbai, 29th May, 2006
CERTIFICATE
To
The Members of Mahindra & Mahindra Limited
We have examined the compliance of conditions of Corporate Governance by Mahindra & Mahindra
Limited, for the year ended on 31st March, 2006, as stipulated in Clause 49 of the Listing
Agreement of the said company with stock exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the management.
Our examination was limited to procedures and implementation thereof, adopted by the company
for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit
nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, we
certify that the company has complied with the conditions of Corporate Governance as stipulated
in the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the company nor
the efficiency or effectiveness with which the management has conducted the affairs of the company.
For A. F. Ferguson & Co.
Chartered Accountants
R. A. Banga
(Partner)
Membership Number: 37915
Mumbai, 29th May, 2006
59
Financial Position at a Glance(Rupees in lakhs)
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
Gross Fixed Assets 306471 281044 255927 248913 241677 223148 185892 161464 142653 114642
Net Fixed Assets 155445 147488 139160 146609 153723 148252 123199 109861 101741 81011
Investments 166909 118979 111115 86227 80013 71000 82299 81030 65596 60934
Inventories 87874 75983 49970 45675 46904 55253 51554 43697 51485 44716
Debtors 63797 51153 40048 51708 64778 63201 46158 59207 51657 20805
Other Current Assets #124469 #102820 62476 63964 61554 52911 68373 80381 72998 72926
Misc. Expenditure not
written off 1805 2438 964 3972 - 22361 15516 9684 5988 3623
BorrowingsLong-term 83717 94140 65203 107190 119180 79088 84481 133457 115147 95847
Short-term 4621 11122 7778 6794 18526 34304 10886 13162 18363 6924
Current Liabilities and
Provisions #206398 #175971 132924 109478 105074 92704 90021 87027 81623 71559
Deferred Tax Liability (Net) 14675 18975 20325 17710 13790 - - - - -
Equity Capital #23340 #11165 11601 11601 11601 11049 11049 10337 10337 10179
Reserves #267547 #187488 165902 145382 138801 195833 190662 139877 123995 99506
Net Worth #290887 #198653 177503 156983 150402 206882 201711 150214 134332 109685
Book Value Per Share (Rupees) *123.29 174.46 150.89 130.56 128.26 165.50 166.90 134.14 122.29 102.20
* Book value per share is shown after giving effect to a 1:1 bonus issue in September, 2005
Book value per share is calculated after reducing Miscellaneous Expenditure not written off and Revaluation Reserve from Net worth.
# After giving effect of the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India.
MAHINDRA & MAHINDRA LIMITED
60
Summary of Operations(Rupees in lakhs)
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
Income @ 945143 780409 600123 459679 399675 435290 440918 416697 405265 356111
MaterialsDirect 571377 460264 335287 250022 211723 235858 221023 222739 215135 196881
Indirect 6824 5987 4323 3939 3173 4893 4550 4307 4906 4413
Excise Duty (Net) 113650 105482 95543 78501 67644 75537 77324 65364 63983 50073
Personnel 55257 46459 42087 38516 37471 40063 39683 37729 38344 33607
Interest (Net) @ (1840) (558) 5159 8690 8267 6216 7463 9384 4758 2115
Depreciation (Net) 20001 18405 16520 16544 13938 14009 12327 11198 9929 6296
Other Expenses 90925 74308 60333 49529 47621 44337 42606 37163 34858 29333
Exceptional items (21001) (1355) (2948) (5765) 1729 1522 1252 805 405 560
Extra-ordinary items - - - - - - (358) - - -
Profit before tax for the year 109950 71417 43819 19703 8109 12855 35048 28008 32947 32833
Tax for the year - Current 28540 21500 6350 1230 360 800 8700 5150 7800 11900
Deferred Tax Liability / (Asset) (4300) (1350) 2615 3920 (2520) - - - - -
Adj. pertaining to Prev. Years - - - - 578 - - 267 - -
Balance profit 85710 51267 34854 14553 9691 12055 26348 22591 25147 20933
Dividends #+27819 +17196 +11779 +7198 5621 +6697 +6745 +6311 +6254 +5599
Equity Dividend (%) #100.00 130.00 90.00 55.00 50.00 55.00 55.00 55.00 55.00 50.00
Earnings per Share (Rupees) * 38.07 23.04 15.02 6.28 4.31 5.46 11.93 10.93 12.17 10.28
Vehicles produced ** (Units) ^148213 148025 117670 87088 66256 63146 76983 70639 77510 74653
Vehicles sold ** (Units) §147591 145024 117399 86890 65338 62927 76437 70548 76954 75568
Tractors produced (Units) 87075 67115 50102 45183 54524 80261 73222 66211 71468 58028
Tractors sold (Units) 85029 65390 49576 47028 58006 79237 70571 69362 67780 57379
@ Interest income netted off in
interest expense 4536 3582 2535 2900 3297 5057 6682 5802 7530 5936
# Proposed Dividend.
+ Including Income tax on Proposed Dividend / Dividends.
* Basic Earnings per share is calculated on effective capital during the year and after giving effect to 1:1 bonus issue in September 2005, for all the
periods above. F2006 and F2005 Earnings per Share is after giving effect of the Guidance Note on Accounting for Employee Share-based Payments
issued by the Institute of Chartered Accountants of India.
** Including CKD packs.
^ Excluding 2705 nos LCV’s produced for Mahindra International Limited
§ Excluding 1833 nos LCV’s sold by Mahindra International Limited under the Mahindra brand name.
MAHINDRA & MAHINDRA LIMITED
61
Financial Highlights
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
20062005200420030
200
400
600
800
1000
3811
5057
6769
8327
146
349
513
857
PAT and Net Income (Rupees Crores)N
et In
com
e
PAT
Net Income PAT
Basic Earnings Per Share (Rupees)
0
10
20
30
40
50
2006200520042003
6.28
15.02
23.04
38.07
Net Segment Revenue F-2006
Others1.8%
Automotive63.7%
FarmEquipment
34.5%
Debt / Equity Ratio
0.00
0.25
0.50
0.75
1.00
2006200520042003
0.75
0.42
0.53
0.31
62
MAHINDRA & MAHINDRA LIMITED
1. We have audited the attached balance sheet of Mahindra &Mahindra Limited as at 31st March, 2006 and also the profitand loss account and the cash flow statement for the yearended on that date annexed thereto. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.
2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by the management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.
3. As required by the Companies (Auditor’s Report) Order,2003 issued by the Central Government of India in terms ofsub-section (4A) of section 227 of the Companies Act, 1956,we enclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that:
(i) we have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required bylaw have been kept by the company so far as appearsfrom our examination of those books;
(iii) the balance sheet, profit and loss account and cashflow statement dealt with by this report are in agreementwith the books of account;
(iv) in our opinion, the balance sheet, profit and loss accountand cash flow statement dealt with by this report complywith the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956;
(v) on the basis of the written representations receivedfrom the directors, as on 31st March, 2006, and takenon record by the Board of Directors, we report thatnone of the directors is disqualified as on 31st March,2006 from being appointed as a director in terms ofclause (g) of sub-section (1) of section 274 of theCompanies Act, 1956;
(vi) in our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by theCompanies Act, 1956, in the manner so required andgive a true and fair view in conformity with theaccounting principles generally accepted in India:-
(a) in the case of the balance sheet, of the state ofaffairs of the company as at 31st March, 2006;
(b) in the case of the profit and loss account of theprofit for the year ended on that date;
and
(c) in the case of the cash flow statement, of thecash flows for the year ended on that date.
For A.F. Ferguson & Co.Chartered Accountants
R.A. Banga(Partner)
Membership Number: 37915Mumbai, 29th May, 2006
Report of the Auditors to the Shareholders
63
MAHINDRA & MAHINDRA LIMITED
(i) (a) The company is maintaining proper records showingfull particulars, including quantitative details and unitwise situation of fixed assets.
(b) The fixed assets have not been physically verified bythe management during the year but the company hasa system of verifying the fixed assets once every threeyears. In our opinion the frequency of verification is atreasonable intervals.
(c) During the year, in our opinion, a substantial part offixed assets has not been disposed off by the company.
(ii) (a) The inventory of the company has been physicallyverified by the management during the year and at orafter the year end. In respect of stocks lying with thirdparties, a substantial portion was physically verified orhas been confirmed by third parties during the year orat the year end. In our opinion the frequency ofverification is reasonable.
(b) In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventory followed by the managementwere found reasonable and adequate in relation to thesize of the company and the nature of its business.
(c) On the basis of our examination of records of inventory,in our opinion, the company has maintained properrecords of inventory and the discrepancies noticed onphysical verification between the physical stocks andthe book records were not material in relation to theoperations of the company.
(iii) (a) In our opinion and according to the information andexplanations given to us, the company has grantedunsecured loans to six companies/parties covered inthe register maintained under section 301 of theCompanies Act, 1956. The maximum amount of loansduring the year was Rs. 6909.77 lakhs (including loansaggregating Rs. 4409.77 lakhs which were at call) andthe year end balance of loans granted to suchcompanies/parties was Rs. 4712.77 lakhs out of whichRs. 2212.77 lakhs, are at call.
(b) In our opinion and according to the information andexplanations given to us, the rates of interest and otherterms and conditions on which loans have been grantedto companies, firms or other parties covered in theregister maintained under section 301 of the CompaniesAct, 1956 are not, prima facie, prejudicial to the interestof the company.
(c) In respect of loans granted where stipulations havebeen made, the parties are repaying the principalamount and paying the interest as stipulated or asrescheduled except in respect of a loan of Rs. 459.42lakhs which is at call and has been fully provided for in
Annexure to the Report of the Auditors to the Shareholders of Mahindra & Mahindra Limited for the year ended31st March, 2006.
(Referred to in paragraph 3 thereof)
an earlier year. As a matter of prudence, interest onthe same is not recognised during the year.
(d) In our opinion and according to the information andexplanations given to us, other than the item referredto in (c) above, there is no overdue amount of morethan rupees one lakh.
(e) In our opinion and according to the information andexplanations given to us, the company has not takenany loan secured or unsecured from companies/partiescovered in the register maintained under section 301of the Companies Act, 1956 and accordingly paragraph(iii) (f) and (g) of the said Order are not applicable.
(iv) In our opinion and according to the information andexplanations given to us, having regard to the explanationthat many of the items are of a special nature and theirprices cannot be compared with alternative quotations, thereis an adequate internal control system commensurate withthe size of the company and the nature of its business forthe purchase of inventory and fixed assets and for the saleof goods and services. Further, on the basis of ourexamination and according to information and explanationsgiven to us, we have neither come across nor have webeen informed of any instance of major weaknesses in theaforesaid internal control system.
(v) (a) In our opinion and according to the information andexplanations given to us, the particulars of contracts orarrangements referred to in section 301 of theCompanies Act, 1956 have been entered in the registerrequired to be maintained under that section.
(b) In our opinion and according to the information andexplanations given to us, having regard to thecomments in (iv) above, the transactions made inpursuance of such contracts or arrangements andexceeding the value of rupees five lakhs in respect ofany party during the year have been made at prices,which are reasonable having regard to the prevailingmarket prices at the relevant time.
(vi) In our opinion and according to the information andexplanations given to us, the company has complied withthe provisions of Section 58A, 58AA and any other relevantprovisions of the Companies Act, 1956 and the Companies(Acceptance of Deposits) Rules, 1975, as applicable, withregard to the deposits accepted from the public. Accordingto the information and explanations given to us, no orderunder the aforesaid Sections has been passed by theCompany Law Board or National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal,on the company.
(vii) In our opinion, the company has an internal audit systemcommensurate with its size and nature of its business.
64
MAHINDRA & MAHINDRA LIMITED
(viii) We have broadly reviewed the books of account maintainedby the company relating to the manufacture of motor vehiclesand tractors pursuant to the rules made by the CentralGovernment for the maintenance of cost records undersection 209 (1) (d) of the Companies Act, 1956 and we areof the opinion that prima facie the prescribed accounts andrecords have been maintained and are being made up. Wehave not, however, made a detailed examination of therecords with a view of determining whether they are accurateor complete. To the best of our knowledge and accordingto the information given to us, the Central Government hasnot prescribed the maintenance of cost records undersection 209 (1) (d) of the Companies Act, 1956, for anyother products of the company.
(ix) (a) According to the information and explanations given tous and according to the books and records as producedand examined by us, in our opinion, the undisputed
statutory dues including provident fund, investoreducation and protection fund, employees’ stateinsurance, income tax, sales tax, wealth tax, servicetax, customs duty, excise duty, cess and other materialstatutory dues as applicable have generally beenregularly deposited by the company during the yearwith the appropriate authorities. According to theinformation and explanations given to us, there are noarrears of outstanding statutory dues as mentionedabove as at 31st March, 2006 for a period of morethan six months from the date they became payable.
(b) As at 31st March, 2006 according to the records ofthe company and the information and explanations givento us, the following are the particulars of dues onaccount of income tax, sales tax, wealth tax, servicetax, customs duty, excise duty and cess matters thathave not been deposited on account of any dispute:
Name of the Nature of Amount Period to which Forum where pendingstatute the dues Rs. in lakhs the amount relates
Various yearscovering the period
Income Tax Laws Income Tax 3.26 1998-1999 Appellate Authority - uptoCommissioner level
80.78 1997-1999 Appellate Authority -Tribunal level
Sales Tax Laws Sales Tax 501.21 1988-2005 Appellate Authority - uptoCommissioner level
15.11 1986-2002 Appellate Authority - Tribunal
265.75 1985-2003 High Court
Wealth Tax Laws Wealth Tax 33.42 1998-2000 Appellate Authority - uptoCommissioner level
Service Tax Laws Service Tax 45.48 2001-2003 Appellate Authority - uptoCommissioner level
Excise Duty Laws Excise Duty 1070.20 1994-2005 Appellate Authority - uptoCommissioner level
41084.43 1991-2006 Appellate Authority - Tribunal
Out of the above amounts aggregating Rs. 43099.64 lakhs, Rs.2168.77 lakhs have been stayed for recovery by the relevantauthorities.
(x) The company does not have accumulated losses as at31st March, 2006 and has not incurred cash losses duringthe financial year ended on that date and in the immediatelypreceding financial year.
(xi) In our opinion and according to the information andexplanations given to us, the company has not defaultedin repayment of dues to a financial institution, bank or todebenture holders during the year.
(xii) In our opinion and according to the information andexplanations given to us, the company has not grantedany loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified underClause (xiii) of the Order are not applicable to the company.
(xiv) In our opinion and according to the information andexplanations given to us, the company is not a dealer ortrader in securities.
(xv) According to the information and explanations given to us,the company has not given any guarantees for loans taken
65
MAHINDRA & MAHINDRA LIMITED
by others from banks or financial institutions, the termsand conditions, whereof, in our opinion, are prejudicial tothe interest of the company.
(xvi) In our opinion and according to the information andexplanations given to us, the term loans were applied forthe purpose for which the loans were obtained.
(xvii) Based on the information and explanations given to usand on an overall examination of the balance sheet of thecompany, in our opinion, there are no funds raised on ashort term basis which have been used for long terminvestments.
(xviii) The company has not made any preferential allotment ofshares to parties and companies covered in the registermaintained under section 301 of the Companies Act, 1956during the year.
(xix) In our opinion and according to the information andexplanations given to us, as the company has not issuedany debentures during the year, Clause (xix) of the Order isnot applicable to the company.
(xx) The company has not raised any money by public issueduring the year.
(xxi) During the course of our examination of the books andrecords of the company, carried out in accordance withthe generally accepted auditing practices in India, andaccording to the information and explanations given to us,we have neither come across any instance of materialfraud on or by the company, noticed or reported duringthe year nor have we been informed of such case by themanagement.
For A.F. Ferguson & Co.Chartered Accountants
R.A. Banga(Partner)
Membership Number: 37915Mumbai, 29th May, 2006
66
MAHINDRA & MAHINDRA LIMITED
Balance Sheet as at 31st March, 20062006 2005
Schedule Rupees Rupees Rupeeslakhs lakhs lakhs
I. SOURCES OF FUNDS :
SHAREHOLDERS’ FUNDS :
Capital ................................................................................... I 233,39.96 111,64.79
Employee Stock Options Outstanding ................................ 1,58.73 2,11.06
Reserves and Surplus .......................................................... II 2,673,88.40 1,872,77.09
2,908,87.09 1,986,52.94
LOAN FUNDS ....................................................................... III 883,38.22 1,052,61.95
DEFERRED TAX LIABILITY (Net) .......................................... 146,75.00 189,75.00
Total.......... 3,939,00.31 3,228,89.89
II. APPLICATION OF FUNDS :
FIXED ASSETS ..................................................................... IV 1,375,25.93 1,364,15.23
CAPITAL WORK-IN-PROGRESS ......................................... 179,18.60 110,72.79
1,554,44.53 1,474,88.02
INVESTMENTS ..................................................................... V 1,669,08.84 1,189,78.90
NET CURRENT ASSETS :
Current Assets, Loans and Advances .......................... VI 2,761,39.88 2,299,56.30
Less : Current Liabilities and Provisions ...................... VII 2,063,98.40 1,759,70.90
697,41.48 539,85.40
MISCELLANEOUS EXPENDITURE (TO THEEXTENT NOT WRITTEN OFF OR ADJUSTED) ................... VIII 18,05.46 24,37.57
Total.......... 3,939,00.31 3,228,89.89
NOTES ON ACCOUNTS ............................................................ XIV
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
67
MAHINDRA & MAHINDRA LIMITED
Profit and Loss Account for the year ended 31st March, 20062006 2005
Schedule Rupees Rupeeslakhs lakhs
SALES - Traded and Manufactured Goods [Note 11(a)] ....................................... 9,113,66.15 7,565,78.17Less : Excise Duty on Sales (Net) ............................................................................ 1,124,89.36 1,035,04.06
Net Sales ................................................................................................................ 7,988,76.79 6,530,74.11Income from Operations and Other Income ............................................................ IX 337,77.15 238,31.32
Net Income ............................................................................................................ 8,326,53.94 6,769,05.43
EXPENDITURE :Raw Materials, Finished and Semi-finished Products ...................................... X 5,713,76.57 4,602,63.66Excise Duty ........................................................................................................ 11,61.05 19,78.08Personnel ........................................................................................................... XI 551,78.39 464,25.17Interest, Commitment and Finance Charges (Net) ........................................... XII (18,40.16) (5,57.56)Depreciation / Amortisation [Note 5(g)(i)] .......................................................... 200,00.53 184,05.45Other Expenses ................................................................................................. XIII 1,004,03.20 834,79.05
7,462,79.58 6,099,93.85Less : Cost of Manufactured Products capitalised ................................................. 26,53.40 31,84.40
7,436,26.18 6,068,09.45Profit before provision for contingencies, exceptional items and taxation .............. 890,27.76 700,95.98Less : Provision for contingencies [Note 10 (b) & (c)] ............................................ 78.45 33.99
Profit before exceptional items and taxation ........................................................... 889,49.31 700,61.99Add : Exceptional Items (Note 24) .......................................................................... 210,01.18 13,55.16
Profit before taxation ................................................................................................ 1,099,50.49 714,17.15Less : Provision for Tax — Current tax (including Fringe Benefit Tax) .................. 285,40.00 215,00.00
— Deferred tax (Net) (Note 25) ...................................... (43,00.00) (13,50.00)
Profit for the year ...................................................................................................... 857,10.49 512,67.15
Balance of Profit for earlier years ............................................................................. 996,39.74 742,84.48Add: Transferred from Debenture Redemption Reserve (Net) ................................ 43.39 10,39.53
Investment Allowance Reserve Written Back ................................................ — 2,45.00
996,83.13 755,69.01
Total of Profit and Loss Account balances shown above ....................................... 1,853,93.62 1,268,36.16Deduct : General Reserve ...................................................................................... 100,00.00 100,00.00
: Dividends Paid ......................................................................................... — (0.23): Income tax on Dividend Paid .................................................................. — (0.03): Proposed Dividends - See Directors’ Report ......................................... 243,97.41 150,81.50: Income tax on Proposed Dividends ........................................................ 34,21.74 21,15.18
Balance for 2005-2006 and earlier years carried to Balance Sheet ...................... 1,475,74.47 996,39.74
EARNINGS PER SHARE (Note 26) :(Face value Rs. 10/- per share) (Rupees)
Basic .................................................................................................................. 38.07 23.04Diluted ................................................................................................................ 34.93 20.72
NOTES ON ACCOUNTS ......................................................................................... XIV
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
68
MAHINDRA & MAHINDRA LIMITED
Cash Flow Statement for the year ended 31st March, 20062006 2005
Rupees Rupees Rupeeslakhs lakhs lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before exceptional items and taxation .................................... 889,49.31 700,61.99
Adjustments for :
Depreciation/Amortisation ................................................................. 200,00.53 184,05.45
Unrealised Profit on Exchange (Net) ................................................. (4,02.81) (98.71)
Investment and Interest Income ....................................................... (94,46.56) (110,46.99)
Interest, Commitment and Finance charges .................................... 26,95.61 30,24.13
Amortisation of Expenses ................................................................. 7,57.61 1,76.63
Profit on sale of Investments (Net) ................................................... (8,27.00) (84.00)
(Profit)/Loss on fixed assets sold/scrapped/written off (Net) ........... (17,89.78) 1,57.41
Excess of cost over fair value of current investments (Net) ............ 68.55 (79.07)
Provision for diminution in the value of long term investments (Net) (22,17.50) (6,57.46)
88,38.65 97,97.39
Operating Profit before Working Capital changes ................................... 977,87.96 798,59.38
Changes in:
Trade and other receivables ............................................................. (160,38.43) (148,09.25)
Inventories ......................................................................................... (118,91.41) (260,12.80)
Trade and other payables ................................................................. 274,28.66 249,02.35
(5,01.18) (159,19.70)
Miscellaneous Expenditure (to the extent not written offor adjusted) incurred during the year ...................................................... (75.81) (17,05.42)
Cash generated from operations ............................................................. 972,10.97 622,34.26
Income taxes paid (net of refunds) .......................................................... (285,20.71) (208,30.71)
NET CASH FROM OPERATING ACTIVITIES ........................................... 686,90.26 414,03.55
69
MAHINDRA & MAHINDRA LIMITED
B. CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of fixed assets .......................................................................... (294,26.21) (269,26.21)
Sale of fixed assets .................................................................................. 19,59.46 6,14.54
Purchase of investments .......................................................................... (4,790,29.20) (3,611,14.37)
Sale of investments .................................................................................. 4,309,87.03 3,514,35.78
Interest received ....................................................................................... 55,25.01 31,50.15
Dividends received ................................................................................... 37,48.99 70,50.74
Inter corporate deposits (Net) .................................................................. (27,93.70) 48,76.51
Exceptional Items :
Sales Proceeds (Net) on sale of Long Term Investments ....................... 187,62.82 —
NET CASH USED IN INVESTING ACTIVITIES ........................................ (502,65.80) (209,12.86)
C. CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from borrowings ....................................................................... 249,35.86 559,36.59
Repayments of borrowings (including premium on prepayments) .......... (140,47.10) (216,08.48)
Dividends paid [including income tax on dividends Rs. 2115.18 lakhs(2005: Rs. 1337.79 lakhs)] ....................................................................... (171,49.73) (117,58.10)
Interest, Commitment and Finance charges paid ................................... (27,16.81) (33,25.18)
NET CASH FROM / (USED IN) FINANCING ACTIVITIES ........................ (89,77.78) 192,44.83
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS..... 94,46.68 397,35.52
CASH AND CASH EQUIVALENTS (Note 1) :
Opening Balance ...................................................................................... 630,68.57 233,33.05
Closing Balance ........................................................................................ 725,15.25 630,68.57
See Notes attached.
Cash Flow Statement (Contd.)2006 2005
Rupees Rupeeslakhs lakhs
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
70
MAHINDRA & MAHINDRA LIMITED
Notes to the Cash Flow Statement for the year ended 31st March, 2006
2006 2005Rupees Rupees
lakhs lakhs
1. Cash and cash equivalents include :
Cash, cheques and stamps on hand .............................................................................. 182,59.56 162,34.17
Balances with scheduled banks :
On current account ................................................................................................... 72,00.32 30,87.59
On fixed deposit account ......................................................................................... 471,71.02 425,85.63
On margin account ................................................................................................... 5.42 5.42
Balances with non-scheduled banks :
On current and fixed deposit account ..................................................................... 3,94.28 4,85.04
730,30.60 623,97.85
Unrealised translation (gain)/loss on foreign currency cash and cash equivalents ........ (5,15.37) 6,70.72
725,15.25 630,68.57
2 During the year, the Company has acquired the following subsidiaries :
a) Mahindra Automotive Steels Limited Rs. 1.01 lakhs.
b) Mahindra Renault Private Limited Rs. 1.00 lakh.
c) Mahindra International Limited Rs. 1.00 lakh.
d) Stokes Group Limited Rs. 2665.91 lakhs.
e) Plexion Technologies (India) Private Limited Rs. 3727.85 lakhs.
3 During the year, the Company has transferred the right to carry on LCV business alongwith the congeries of rights therein andintellectual property rights to its subsidiary Mahindra International Limited for a consideration of Rs. 4840.00 lakhs. This being anon cash transaction does not form part of the Cash Flow.
4 Previous year’s figures have been regrouped/ restated wherever necessary.
71
MAHINDRA & MAHINDRA LIMITED
SCHEDULE I2006 2005
Share Capital (Note 2): Rupees Rupeeslakhs lakhs
Authorised :
27,50,00,000 (2005 - 17,50,00,000) Ordinary (Equity) Shares of Rs.10 each ......................... 275,00.00 175,00.00
25,00,000 Unclassified shares of Rs.100 each .................................................................... 25,00.00 25,00.00
Total ............... 300,00.00 200,00.00
Issued and Subscribed :
24,09,01,352 (2005 - 11,60,08,599) Ordinary (Equity) Shares of Rs.10 each fully paid up .... 240,90.14 116,00.86
240,90.14 116,00.86Less :
75,01,768 (2005 - 43,60,672) Ordinary (Equity) Shares of Rs.10 each fully paid up issued to ESOP Trust but not allotted to employees ........................................ 7,50.18 4,36.07
Adjusted : Issued and Subscribed Share Capital ........................................................................ 233,39.96 111,64.79
SCHEDULE II2005 Additions Deductions 2006
Reserves and Surplus : Rupees Rupees Rupees Rupeeslakhs lakhs lakhs lakhs
1 Capital Reserve .................................................................... 11,50.08 — — 11,50.0811,50.08 — — 11,50.08
2 Securities Premium Account [Note 3(a)(i)] ........................... 171,45.21 347,22.85 2,47.82 516,20.24252,08.16 2,04.70 82,67.65 171,45.21
Less: Premium on shares issued to ESOP Trustbut not allotted to employees .............................................. 21,36.73 — 2,98.80 18,37.93
24,23.31 — 2,86.58 21,36.73
150,08.48 347,22.85 (50.98) 497,82.31227,84.85 2,04.70 79,81.07 150,08.48
3 Revaluation Reserve [Note 3(a)(ii)] ........................................ 14,31.52 — 98.06 13,33.4614,87.82 — 56.30 14,31.52
4 Investment Allowance Reserve Account ............................. — — — —2,45.00 — 2,45.00 ***** —
5 General Reserve ................................................................... 620,82.98 100,00.00 < 116,00.89 • 604,82.09520,82.98 100,00.00 < — 620,82.98
Add: Bonus shares issued to ESOP Trustbut not allotted to employees .............................................. — 3,75.09 — 3,75.09
620,82.98 103,75.09 116,00.89 608,57.18520,82.98 100,00.00 — 620,82.98
6 Debenture Redemption Reserve .......................................... 17,22.26 — 43.39+ 16,78.8727,61.79 — 10,39.53+ 17,22.26
7 Investment Fluctuation Reserve (Notes 28 & 29) ................ 62,42.03 — 12,30.00 50,12.0383,73.52 — 21,31.49 62,42.03
876,37.35 450,97.94 129,21.36 1,198,13.93888,86.04 102,04.70 114,53.39 876,37.35
8 Balance for 2005-2006 and earlier years as perProfit and Loss Account ...................................................... 1,475,74.47
996,39.74
Total ............... 2,673,88.401,872,77.09
<Transfer from Profit and Loss Account Rs. 10000.00 lakhs (2005: Rs. 10000.00 lakhs)• Utilised for issue of Bonus Shares+ Transfer to Profit and Loss Account net of charge created during the year Rs. 331.61 lakhs (2005: Rs. 239.58 lakhs)***** Transfer to Profit and Loss Account
72
MAHINDRA & MAHINDRA LIMITED
SCHEDULE III2006 2005
Rupees Rupees Rupeeslakhs lakhs lakhs
Loan Funds (Note 4) :
(A) Secured:
(1) Debentures/Bonds ............................................................................ 90,50.67 105,50.73
(2) Foreign Currency Loans from Banks ................................................ 92,40.48 150,58.56
(3) Loans and Advances on cash credit account from Banks ............. 33,76.45 80,73.09
216,67.60 336,82.38
(B) Unsecured :
(1) Fixed Deposits .................................................................................. 8,43.06 24,77.04
(2) Short-term Loans :
From Banks ....................................................................................... 3,96.15 3,59.24
From Companies ............................................................................... 5.00 2,13.00
4,01.15 5,72.24(3) Other Loans:
(a) From Financial Institutions ......................................................... 320,95.79 247,84.79
(b) Foreign Currency Loan from a Bank ......................................... 175,85.91 —
(c) Zero Coupon Convertible Bonds .............................................. 157,41.00 437,40.00
(d) From Others [including interest accrued and due Rs. 2.03lakhs (2005 : Rs. 2.03 lakhs)] ................................................... 3.71 5.50
654,26.41 685,30.29
666,70.62 715,79.57
Total ............. 883,38.22 1,052,61.95
73
MAHINDRA & MAHINDRA LIMITED
SCHEDULE IV
Fixed Assets (Note 5) :
Description of Assets Cost/ Additions Deduc- Cost/Pro- Deprecia- Deprecia- Deductions Deprecia- Net NetProfessional and tions fessional tion/Amor- tion / and tion / Balance Balance
valuation adjust- and valuation tisation Amor- adjust- Amortisa- as at as atas at 31st ments adjust- as at 31st to 31st tisation ments tion 31st 31st
March, during the ments March, March, for 2005- of Depre- to 31st March, March,2005 year during 2006 2005 2006 ciation / March, 2006 2005
the year Amorti- 2006sation
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupeeslakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs
Technical Knowhow ................... 76.55 — 76.55 — 76.55 — 76.55 — — —
Development Expenditure .......... 23,06.29 8,99.34 5,78.00 26,27.63 5,17.69 4,78.20 — 9,95.89 16,31.74 17,88.60
Software Expenditure ................. 5,46.28 1,62.45 1,76.85 5,31.88 2,77.53 2,34.59 1,76.85 3,35.27 1,96.61 2,68.75
Land ............................................ 52,12.14 44,40.27 54.83 95,97.58 84.44 19.69 — 1,04.13 94,93.45 51,27.70
Buildings ..................................... 347,27.16 30,50.50 2,36.43 375,41.23 86,77.22 9,98.43 62.55 96,13.10 279,28.13 260,49.94
Plant and Machinery .................. 2,142,23.08 117,56.49 23,38.06 2,236,41.51 1,186,32.90 169,38.10 19,18.59 1,336,52.41 899,89.10 955,90.18
Furniture and Fittings ................. 65,44.83 6,50.66 43.24 71,52.25 28,94.30 4,06.65 21.69 32,79.26 38,72.99 36,50.53
Vehicles, Cycles, etc .................. 63,35.29 16,50.36 5,25.19 74,60.46 23,95.76 9,71.25 3,20.46 30,46.55 44,13.91 39,39.53
Total.......... 2,699,71.62 226,10.07 40,29.15 2,885,52.54 1,335,56.39 200,46.91 25,76.69 1,510,26.61 1,375,25.93 1,364,15.232,520,86.27 205,53.96 26,68.61 2,699,71.62 1,167,67.46 185,22.95 17,34.02 1,335,56.39 1,364,15.23
74
MAHINDRA & MAHINDRA LIMITED
SCHEDULE VInvestments (At Cost, unless otherwise specified) :
Note 2006 2005
Face Value Long Term Current Long Term CurrentPer Unit Rupees Rupees Rupees Rupees
Number Rupees lakhs lakhs lakhs lakhsShares (Non-trade and fully paid-up unless otherwise specified) :Unquoted :(a) In Subsidiary Companies :
(i) Equity Shares :53,78,235 10 Mahindra Engineering & Chemical Products Limited ................ 5,63.88 — 5,63.88 —
2,71,00,006 10 Mahindra Intertrade Limited [including 1,50,00,000 sharespartly paid-up] ............................................................................. 16,60.00 — 16,60.00 —
37,23,874 10 Mahindra Steel Service Centre Limited ..................................... 6,38.38 — 6,38.38 —12,16,00,593 10 Mahindra Holdings & Finance Limited ....................................... 121,60.06 — 121,60.06 —
— 10 Mahindra & Mahindra Financial Services Limited(transferred to Quoted during the year) ..................................... (b) — — 176,79.83 —
4,50,00,000 US $ 0.10 Mahindra USA Incorporated ....................................................... 19,37.89 — 19,37.89 —91,81,188 10 Mahindra Gujarat Tractor Limited .............................................. 19,36.39 — 19,36.39 —
1,76,39,665 10 Mahindra Shubhlabh Services Limited ...................................... (b) 19,21.52 — 19,21.52 —5,76,00,060 2 Tech Mahindra Limited (formerly known as Mahindra-British
Telecom Limited) ......................................................................... 205,45.15 — 205,45.15 —74,46,658 10 Automartindia Limited ................................................................. (b) 14,03.46 — 14,03.46 —
1,24,50,000 10 Mahindra Logisoft Business Solutions Limited .......................... (c)(1)(2) 11,33.00 — 6,83.00 —1,00,00,000 10 Mahindra Ashtech Limited .......................................................... 10,00.00 — 10,00.00 —
42,22,250 US $ .001 Bristlecone Limited ..................................................................... 19,26.19 — 19,26.19 —35,70,000 ZAR 1 Mahindra & Mahindra South Africa (Proprietary) Limited .......... (b) 2,49.20 — 2,49.20 —70,50,000 10 Mahindra Engineering Design & Development Company
Limited ......................................................................................... (c) (3) 7,05.01 — 5,55.01 —5,20,000 US $ 1 Mahindra Overseas Investment Company (Mauritius) Limited . (c) (4) 2,26.32 — 4.36 —
31,25,739 10 Mahindra SAR Transmission Private Limited ............................. 14,62.85 — 14,62.85 —82,21,926 10 Mahindra Automotive Steels Limited ......................................... (c) (5) 80,01.01 — — —
2,62,65,000 10 Mahindra Renault Private Limited .............................................. (c) (6) 26,26.50 — — —5,03,75,600 10 Mahindra International Limited ................................................... (c)(7)(8) 52,34.11 — — —
14,65,310 GBP £ 0.10 Stokes Group Limited ................................................................. (c)(9)(10) 29,09.77 — — —45,03,011 10 Plexion Technologies (India) Private Limited .............................. (c) (11) 37,27.85 — — —18,75,000 100 (ii) 7.25% Cumulative Redeemable Preference Shares :
Mahindra Intertrade Limited ....................................................... 18,75.00 — 18,75.00 —11,00,000 100 (iii) 8.50% Cumulative Redeemable Preference Shares :
Mahindra Ashtech Limited .......................................................... (c) (12) 11,00.00 — 10,00.00 —55,00,000 100 (iv) 13.10% Non-Cumulative Redeemable Preference Shares :
Mahindra Gesco Developers Limited ......................................... 55,00.00 — 55,00.00 —70,00,000 US $ .001 (v) Series’A’ Preference Shares: Bristlecone Limited ..................... 31,71.84 — 31,71.84 —69,20,000 US $ .001 (vi) Series’B’ Preference Shares: Bristlecone Limited ..................... (c) (13) 15,12.40 — — —
851,27.78 — 778,74.01 —
(b) In Other Companies :(i) Equity Shares :
312 100 Montreal Engineering International Limited ................................ 0.11 — 0.11 —8,55,646 10 Machinery Manufacturers Corporation Limited ......................... (b) 94.25 — 94.25 —1,00,000 10 Judricks (India) Private Limited .................................................. 10.00 — 10.00 —
35,000 10 Mahindra & Mahindra Contech Limited ..................................... 3.50 — 3.50 —75,000 10 NTTF Industries Limited ............................................................. 15.00 — 15.00 —
— 10 Ford Credit Kotak Mahindra Limited ......................................... (c) (14) — — 6,00.00 —1 10 Jayem Automotives Limited ....................................................... — — — —
7,49,997 10 Officemartindia.com Limited ....................................................... 22.52 — 22.52 —50,000 10 Indian NGOs.com Private Limited .............................................. 6.19 — 6.19 —20,000 10 Sixth Sense Studios Private Limited .......................................... 2.00 — 2.00 —
2,85,000 10 Utility Engineers (India) Limited .................................................. 28.50 — 28.50 —Others .......................................................................................... (a) — — — —
2,296 100 (ii) 4% Tax-free Cumulative Preference Shares:Machinery Manufacturers Corporation Limited ......................... (b) 2.25 — 2.25 —
1,78,000 100 (iii) 11% Redeemable Preference Shares:Sixth Sense Studios Private Limited .......................................... 1,78.00 — 1,78.00 —
3,62.32 — 9,62.32 —
75
MAHINDRA & MAHINDRA LIMITED
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
Note 2006 2005
Face Value Long Term Current Long Term CurrentPer Unit Rupees Rupees Rupees Rupees
Number Rupees lakhs lakhs lakhs lakhs
Quoted :(a) In Subsidiary Companies :
(i) Equity Shares :1,25,66,126 10 Mahindra Gesco Developers Limited ......................................... (b) 67,21.29 — 67,21.29 —5,82,41,532 10 Mahindra & Mahindra Financial Services Limited
(transferred from Unquoted during the year) ............................. (b)(c)(16) 150,90.95 — — —
218,12.24 — 67,21.29 —
(b) In Non-Subsidiary Companies :(i) Equity Shares :
13,91,860 10 + Fairfield Atlas Limited ................................................................. 1,39.18 — 1,39.18 —— 10 Industrial Development Bank of India ........................................ (c) (15) — — — 3,49.18
1,39.18 — 1,39.18 3,49.18Debentures / Bonds (Non-trade & fully paid-up) :Unquoted :(a) In Subsidiary Companies :
25,00,000 100 0% Mahindra Holdings & Finance Limited .......................................... 25,00.00 — 25,00.00 —4 1,00,00,000 11.19% Mahindra & Mahindra Financial Services Limited ................. 4,00.00 — 4,00.00 —
200 10,00,000 7.50% Mahindra & Mahindra Financial Services Limited ................... (d) (1) — 20,22.28 — —— 1,00,00,000 8.80% Mahindra & Mahindra Financial Services Limited ................... (d) (2) — — — 15,52.46
(b) In Other Companies :13 100 0.50% The East India Clinic Limited ................................................... 0.01 — 0.01 —
13,21,500 100 9.00% Jayem Automotives Limited ..................................................... (d) (3) 13,21.50 — 13,68.00 —
42,21.51 20,22.28 42,68.01 15,52.46
Quoted :(a) In Subsidiary Companies :
20 1,00,00,000 6.90% Mahindra & Mahindra Financial Services Limited ................... (d) (4) — 19,95.08 — 20,31.67(b) In Other Companies :
7,75,000 100 6.75% Tax Free US-64 Bonds ............................................................ (d) (5) — 8,09.36 — 4,72.7718 10,00,000 7.00% Power Finance Corporation Limited (2011) Series XXII .......... — 1,80.00 — 1,80.00
— 29,84.44 — 26,84.44
42,21.51 50,06.72 42,68.01 42,36.90
Less: Excess of cost over fair value of current investmentsof Debentures/Bonds ........................................................................... — (1,20.01) — (61.19)
42,21.51 48,86.71 42,68.01 41,75.71
Other Investments :Government Securities :Unquoted :
— 29,000 § 6 Years National Savings Certificates ........................................................... (e) (1) 0.29 — 3.27 —
0.29 — 3.27 —
Quoted :— — § Treasury Bills .................................................................................................. (e) (2) — — — 68,99.44—1,93,00,000 § Government of India Securities ..................................................................... (e) (3) — 2,01.56 — —
— 2,01.56 — 68,99.44
0.29 2,01.56 3.27 68,99.44
Less: Excess of cost over fair value of current investmentsof Government Securities .................................................................... — (9.73) — —
0.29 1,91.83 3.27 68,99.44
+ Trade Investments
§ Total face value
76
MAHINDRA & MAHINDRA LIMITED
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
Note 2006 2005
Face Value Long Term Current Long Term CurrentPer Unit Rupees Rupees Rupees Rupees
Number Rupees lakhs lakhs lakhs lakhs
Units :Unquoted :
— 10 ABN AMRO Mutual Fund - Cash Fund Institutional Daily Dividend .................. (f) (1) — — — 5,00.001,50,29,793 10 ABN AMRO Mutual Fund - Cash Fund Institutional Plus Daily Dividend ......... (f) (2) — 15,02.99 — —
50,41,868 10 ABN AMRO Mutual Fund - Flexi Debt Regular Daily Dividend ......................... (f) (3) — 5,04.19 — —50,24,694 10 ABN AMRO Mutual Fund - Fixed Term Plan Series 2 Quarterly Plan A
Dividend ............................................................................................................... (f) (4) — 5,02.47 — —1,58,04,867 10 Birla Mutual Fund - Cash Fund Institutional Premium Daily Dividend .............. (f) (6) — 15,83.57 — —
50,00,000 10 Birla Mutual Fund - Fixed Maturity Plan Quarterly Series 2 Dividend Payout .. (f) (7) — 5,00.00 — —1,00,00,000 10 Chola Mutual Fund - Fixed Maturity Plan Series 2 (Qtrly Plan -I)-Dividend ..... (f) (10) — 10,00.00 — —1,00,00,000 10 Chola Mutual Fund - Fixed Maturity Plan Series 3 (Qtrly Plan -I)-Dividend ..... (f) (11) — 10,00.00 — —1,07,39,965 10 Deutsche Mutual Fund - Insta Cash Plus Institutional Plan Daily Dividend ...... (f) (13) — 10,76.09 — —
40,00,000 10 Deutsche Mutual Fund - Fixed Term Series 9 Growth Option .......................... (f) (15) — 4,00.00 — —50,00,000 10 Deutsche Mutual Fund - Money Plus Dividend Option ..................................... (f) (16) — 5,00.00 — —
50,204 1,000 DSP Merrill Lynch Mutual Fund - Fixed Term Plan Series IB Dividend ............ (f) (19) — 5,02.04 — —70,705 1,000 DSP Merrill Lynch Mutual Fund - Fixed Term Plan Series IC Dividend ............ (f) (20) — 7,07.05 — —
50,00,000 10 Franklin Templeton Fixed Tenure Fund Series V 13 Months Plan Growth ....... (f) (23) — 5,00.00 — —— 1,000 Franklin Templeton India Treasury Management Institutional Daily Dividend .... (f) (26) — — — 20,00.54
93,03,447 10 HDFC Mutual Fund - Cash Management Fund Savings Plan Daily Dividend .. (f) (29) — 9,89.55 — 22,00.4850,00,000 10 HDFC Mutual Fund - Multiple Yield Fund - Plan 2005 Growth ........................ (f) (30) — 5,00.00 — —
9,39,022 10 HDFC Mutual Fund - Multiple Yield Fund - Growth .......................................... (f) (31) — 1,03.86 — —2,35,03,021 10 HDFC Mutual Fund - Cash Management Fund Call Plan Daily Dividend ......... (f) (32) — 24,50.57 — —1,00,00,000 10 HDFC Mutual Fund - FMP 3M March 2006(1) Institutional Plan Dividend ....... (f) (33) — 10,00.00 — —1,00,00,000 10 HDFC Mutual Fund - FMP 13M March 2006(1) Institutional Plan Growth ....... (f) (34) — 10,00.00 — —1,38,08,825 10 HSBC Mutual Fund - Cash Fund Institutional Plus Daily Dividend ................... (f) (35) — 13,81.66 — 6,25.61
— 10 HSBC Mutual Fund - Floating Rate Fund Short Term Institutional OptionDaily Dividend ...................................................................................................... (f) (36) — — — 5,05.03
50,29,510 10 HSBC Mutual Fund - Fixed Term Series -7-Dividend ........................................ (f) (37) — 5,02.95 — —50,00,000 10 HSBC Mutual Fund - Fixed Term Series -8-Dividend ........................................ (f) (38) — 5,00.00 — —
— 10 JM Financial Mutual Fund - Floater Fund Short Term Plan Dividend Option ... (f) (39) — — — 5,02.9250,00,000 10 JM Financial Mutual Fund - Fixed Maturity Fund - Series II Qtrly Plan QSA
Dividend ............................................................................................................... (f) (40) — 5,00.00 — —1,92,06,376 10 Kotak Mahindra Mutual Fund - Liquid Institutional Premium Plan Daily
Dividend ............................................................................................................... (f) (42) — 23,48.57 — 8,00.00— 10 Kotak Mahindra Mutual Fund - Floater Short Term Weekly Dividend ............... (f) (43) — — — 5,03.39
50,00,000 10 Kotak Mahindra Mutual Fund - Fixed Maturity Plan Series XVIII –Dividend ..... (f) (44) — 5,00.00 — —50,00,000 10 Kotak Mahindra Mutual Fund - Fixed Maturity Plan Series 19 Dividend .......... (f) (45) — 5,00.00 — —
1,00,00,000 10 Kotak Mahindra Mutual Fund - Fixed Maturity Plan Series 23 Dividend .......... (f) (46) — 10,00.00 — —— 10 Kotak Mahindra Mutual Fund - Fixed Maturity Plan Growth ............................. (f) (49) — — — 5,00.00— 10 Principal Mutual Fund - MIP Dividend Payout Monthly ..................................... (f) (51) — — — 1,00.00
80,39,444 10 Principal Mutual Fund - Cash Management Fund Liquid Option InstitutionalPremium Plan Daily Dividend .............................................................................. (f) (52) — 8,04.00 — 15,07.23
1,00,63,874 10 Principal Mutual Fund - Fixed Maturity Plan 91 Days Dividend Payout ........... (f) (53) — 10,06.39 — —50,49,182 10 Principal Mutual Fund - Fixed Maturity Plan 91 Days Series I .......................... (f) (54) — 5,04.92 — —50,00,000 10 Principal Mutual Fund - Fixed Maturity Plan 91 Days Series III ........................ (f) (55) — 5,00.00 — —
— 10 Prudential ICICI Mutual Fund - Liquid Plan Institutional Plus Daily Dividend ... (f) (58) — — — 11,00.18— 10 Prudential ICICI Mutual Fund – Fixed Maturity Plan Yearly Growth .................. (f) (59) — — — 5,00.00
1,42,67,715 10 Prudential ICICI Mutual Fund – Super Institutional Daily Dividend .................... (f) (60) — 14,26.77 — —50,98,384 10 Prudential ICICI Mutual Fund – Blended Plan B Institutional Dividend ............. (f) (61) — 5,11.50 — —
1,01,34,800 10 Prudential ICICI Mutual Fund – FMP Yearly Series XXV Dividend .................... (f) (62) — 10,13.48 — —50,00,000 10 Prudential ICICI Mutual Fund – FMP Monthly Plan Dividend XXVII .................. (f) (63) — 5,00.00 — —50,00,000 10 Reliance Fixed Maturity Fund Quarterly Plan III - Series II Dividend Option .... (f) (69) — 5,00.00 — —
1,35,96,207 10 SBI Mutual Fund – Magnum Institutional Income Savings Dividend ................. (f) (74) — 13,64.04 — 1,29.181,00,00,000 10 SBI Mutual Fund – Magnum Debt Fund Series 13 Months Growth Option ..... — 10,00.00 — 10,00.00
50,00,000 10 Standard Chartered Mutual Fund - Grindlays Fixed Maturity 19th PlanDividend ............................................................................................................... (f) (75) — 5,00.00 — —
50,00,000 10 Standard Chartered Mutual Fund - Grindlays Fixed Maturity 21st PlanDividend ............................................................................................................... (f) (76) — 5,00.00 — —
— 10 Standard Chartered Mutual Fund – Grindlays Cash Fund SuperInstitutional Plan Daily Dividend .......................................................................... (f) (77) — — — 11,00.53
— 10 Standard Chartered Mutual Fund – Grindlays Short Term InstitutionalPlan Monthly Dividend ......................................................................................... (f) (78) — — — 0.01
— 10 Standard Chartered Mutual Fund – Grindlays Fixed Maturity Annual PlanGrowth .................................................................................................................. (f) (79) — — — 5,00.00
13,00,206 10 Standard Chartered Mutual Fund – Liquidity Manager Daily Dividend ............. (f) (80) — 1,30.03 — —
77
MAHINDRA & MAHINDRA LIMITED
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
Note 2006 2005
Face Value Long Term Current Long Term CurrentPer Unit Rupees Rupees Rupees Rupees
Number Rupees lakhs lakhs lakhs lakhs50,00,000 10 Standard Chartered Mutual Fund – Fixed Maturity 3rd Plan Dividend ....... (f) (81) — 5,00.00 — —50,00,000 10 Standard Chartered Mutual Fund – Fixed Maturity 2nd Plan Dividend ...... (f) (82) — 5,00.00 — —
80,048 1,000 Standard Chartered Mutual Fund – Liquidity Manager Plus Daily Dividend (f) (83) — 8,00.48 — —81,46,618 10 Sundaram Money Fund Super Institutional Daily Dividend .......................... (f) (88) — 8,22.43 — —50,00,000 10 Sundaram Fixed Term Plan Series 1 Feb 06 (100 days) Dividend Plan ..... (f) (89) — 5,00.00 — —51,23,151 10 Tata Fixed Horizon Fund Series 3 Scheme A – Dividend ........................... (f) (91) — 5,12.32 — —
1,57,380 1,000 Tata Liquidity Management Fund - Daily Dividend ...................................... (f) (92) — 15,77.07 — —50,00,000 10 Tata Fixed Horizon Fund Series 5 Scheme A – Dividend ........................... (f) (93) — 5,00.00 — —
— 1,000 Tata Mutual Fund - Liquid Super High Investment Fund Daily Dividend .... (f) (94) — — — 8,00.30— 10 Tata Mutual Fund - Monthly Income Fund Dividend .................................... (f) (95) — — — 1,00.15— 10 Tata Mutual Fund - Floating Rate Short Term Institutional Plan Daily
Dividend ......................................................................................................... (f) (96) — — — 6,03.75— 10 Tata Mutual Fund - Gilt Securities Fund Bonus ........................................... (f) (97) — — — 2,50.00
50,00,000 10 UTI Mutual Fund - Fixed Maturity Plan QFMP 106/11 Dividend Plan ........ (f) (101) — 5,00.00 — —50,05,250 10 UTI Mutual Fund - Fixed Maturity Plan QFMP Growth Plan ....................... (f) (102) — 5,00.53 — —
1,04,46,381 10 UTI Mutual Fund - Money Market Fund Daily Dividend Option .................. (f) (104) — 18,20.49 — —— 10 UTI Mutual Fund - Fixed Maturity Plan QFMP Dividend Plan ..................... (f) (107) — — — 8,00.11
— 423,50.01 — 166,29.41
Others :Commercial PaperUnquoted :
20,00,00,000 § Export Import Bank of India .......................................................................... (g) (4) — 19,47.00 — —
— 19,47.00 — —
Certificate of DepositUnquoted :
5,00,00,000 § State Bank of Travancore .............................................................................. (h) (1) — 4,94.37 — —10,00,00,000 § ICICI Bank Limited ......................................................................................... (h) (2) — 9,83.87 — 9,57.08
5,00,00,000 § ABN AMRO Bank .......................................................................................... (h) (3) — 4,89.91 — —15,00,00,000 § State Bank of Mysore .................................................................................... (h) (4) — 14,70.27 — —15,00,00,000 § Allahabad Bank .............................................................................................. (h) (5) — 14,70.09 — —10,00,00,000 § Kotak Mahindra Bank Limited ....................................................................... (h) (6) — 9,61.46 — —
— 58,69.97 — 9,57.08
1,116,63.32 552,45.52 899,68.08 290,10.82
Total......... 1,669,08.84 1,189,78.90
Cost (net of amounts written off) of Unquoted Investments ....................... 1,419,01.16 1,022,46.56Cost of Quoted Investments ......................................................................... 251,37.42 167,93.53
1,670,38.58 1,190,40.09Less : Excess of cost over fair value of Current Investments (Net) ............ (1,29.74) (61.19)
1,669,08.84 1,189,78.90
Market Value of Quoted Investments ........................................................... 2,030,84.89 260,92.69
Notes : 2006 2005Face Value
Per Unit Long Term Long TermNumber Rupees Rupees Rupees
(a) Shares (unquoted) in other companies comprise :21 100 * The United Spices Importers Limited (Equity “B” Shares) .............. 1 174 16,667 * Engineering & Metal Works, Tehran .................................................. 1 1
(Rials)
Total.......... 2 2
* Written off to Re.1
(b) Equity investments in these companies carry certain restrictions on transfer of sharesin terms of funds raised by these companies from financial institutions/ banks.
§ Total Face Value
78
MAHINDRA & MAHINDRA LIMITED
(c) The following are the movements in Shares during the year :
Equity Shares Preference Shares
Acquired Sold Acquired/(Redeemed/Sold)
Nos. Nos. Nos.(1) Mahindra Logisoft Business Solutions Limited 4,80,000 — —(2) Mahindra Logisoft Business Solutions Limited 45,00,000* — —(3) Mahindra Engineering Design & Development Company Limited 15,00,000* — —(4) Mahindra Overseas Investment Company (Mauritius) Limited 5,10,000 — —(5) Mahindra Automotive Steels Limited 82,21,926 — —(6) Mahindra Renault Private Limited 2,62,65,000 — —(7) Mahindra International Limited 19,75,600 — —(8) Mahindra International Limited 4,84,00,000# — —(9) Stokes Group Limited 8,37,320 — —
(10) Stokes Group Limited 6,27,990* — —(11) Plexion Technologies (India) Private Limited 45,03,011 — —(12) Mahindra Ashtech Limited — — 1,00,000*(13) Bristlecone Limited — — 69,20,000(14) Ford Credit Kotak Mahindra Limited — 60,00,000 —(15) Industrial Development Bank of India — 4,28,160 —(16) Mahindra & Mahindra Financial Services Limited — 99,91,450 —(17) Mahindra Ugine Steel Company Limited — — 11,00,000(18) Mahindra Ugine Steel Company Limited — — (11,00,000)
* Subscribed to on a rights basis# Consideration other than Cash
(d) The following are the movements in Debentures / Bonds during the year :
Acquired Sold MaturedNos. Rs. lakhs Nos. Nos.
(1) Mahindra & Mahindra Financial Services Limited 7.50% 200 20,22.28 — —(2) Mahindra & Mahindra Financial Services Limited 8.80% — — 15 —(3) Jayem Automotives Limited 9.00% — — — 46,500(4) Mahindra & Mahindra Financial Services Limited 6.90% 20 19,95.08 20 —(5) UTI Bonds 6.75% 3,25,000 3,36.59 — —(6) Indian Oil Corporation 7.15% 100 10,02.92 100 —(7) Housing Development Finance Corporation Limited 0.00% 100 9,90.17 — 100(8) Infrastructure Development Finance Company Limited 0.00% 150 13,24.65 150 —(9) ICICI Securities Limited. 6.00% 300 15,00.00 — 300
(e) Government Securities :
(1) Of face value Rs. 0.02 lakhsRs. 0.02 lakhsRs. 0.02 lakhsRs. 0.02 lakhsRs. 0.02 lakhs (2005 : Rs. Nil) were purchased and of face value Rs. 3.00 lakhsRs. 3.00 lakhsRs. 3.00 lakhsRs. 3.00 lakhsRs. 3.00 lakhs matured during the year. Facevalue of Rs. 0.29 lakhs (2005 : Rs.3.27 lakhs) were lodged as security deposit.
(2) Treasury Bills of the face value of Rs. 17000.00 lakhs (2005 : Rs.40427.00 lakhs) were purchased and those of the face valueof Rs. 24000.00 lakhs (2005 : Rs. 38119.00 lakhs) were sold / matured during the year.
(3) Government of India Securities of the face value Rs. 193 lakhs (2005 : Rs. Nil ) were purchased and of the face value of Rs. Nil(2005 : Rs. 3500.00 lakhs) were sold during the year.
(f) The following are the movements in Units during the year :
Acquired Sold
Nos. Rs. lakhs Nos.
(1) ABN AMRO Mutual Fund - Cash Fund Institutional Daily Dividend ................ 8,04,58,018 80,45.75 8,54,58,018
(2) ABN AMRO Mutual Fund - Cash Fund Institutional Plus Daily Dividend ........ 2,00,48,511 20,04.87 50,18,718
(3) ABN AMRO Mutual Fund - Flexi Debt Regular Daily Dividend ........................ 50,41,868 5,04.19 —
(4) ABN AMRO Mutual Fund - Fixed Term Plan Series 2 Quarterly Plan A Dividend .... 50,24,694 5,02.47 —
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
79
MAHINDRA & MAHINDRA LIMITED
(5) ABN AMRO Mutual Fund - Long Term Floating Rate Fund InstitutionalWeekly Dividend ............................................................................................... 1,01,67,369 10,16.74 1,01,67,369
(6) Birla Mutual Fund - Cash Fund Institutional Premium Daily Dividend ............ 16,36,74,094 163,99.33 14,78,69,227
(7) Birla Mutual Fund - Fixed Maturity Plan Quarterly Series 2 DividendPayout ............................................................................................................... 50,00,000 5,00.00 —
(8) Birla Mutual Fund - Cash Plus Institutional Daily Dividend ............................. 92,97,795 10,04.41 92,97,795
(9) Birla Mutual Fund - Floating Short Term Weekly Dividend ............................. 58,83,240 6,10.50 58,83,240
(10) Chola Mutual Fund - Fixed Maturity Plan Series 2 (Qtrly Plan -I)-Dividend ... 1,00,00,000 10,00.00 —
(11) Chola Mutual Fund - Fixed Maturity Plan Series 3 (Qtrly Plan -I)-Dividend ... 1,00,00,000 10,00.00 —
(12) Chola Mutual Fund - Liquid Institutional Dividend .......................................... 6,22,73,669 62,38.04 6,22,73,669
(13) Deutsche Mutual Fund - Insta Cash Plus Institutional Plan Daily Dividend ... 14,36,26,701 143,90.68 13,28,86,736
(14) Deutsche Mutual Fund - Fixed Term Series 7 Dividend Option ..................... 1,03,69,800 10,36.98 1,03,69,800
(15) Deutsche Mutual Fund - Fixed Term Series 9 Growth Option ....................... 40,00,000 4,00.00 —
(16) Deutsche Mutual Fund - Money Plus Dividend Option ................................... 50,00,000 5,00.00 —
(17) Deutsche Mutual Fund - Floating Rate Regular Plan Growth ........................ 1,49,02,449 16,08.50 1,49,02,449
(18) Deutsche Mutual Fund - Floating Rate Regular Plan Weekly Dividend ......... 49,29,883 5,06.39 49,29,883
(19) DSP Merrill Lynch Mutual Fund- Fixed Term Plan Series IB Dividend ........... 50,204 5,02.04 —
(20) DSP Merrill Lynch Mutual Fund- Fixed Term Plan Series IC Dividend ........... 70,705 7,07.05 —
(21) DSP Merrill Lynch Mutual Fund- Floating Institutional Plan Daily Dividend .... 20,396 2,03.96 20,396
(22) DSP Merrill Lynch Mutual Fund- Liquidity Institutional Daily Dividend ........... 1,00,286 10,03.06 1,00,286
(23) Franklin Templeton Fixed Tenure Fund Series V 13 Months Plan Growth ..... 50,00,000 5,00.00 —
(24) Franklin Templeton Monthly Income Plan A Monthly Dividend Payout .......... 16,42,124 2,00.00 16,42,124
(25) Franklin Templeton Short Term Income Plan Weekly Dividend ...................... 47,345 5,16.26 47,345
(26) Franklin Templeton India Treasury Management Institutional Daily Dividend . 14,75,457 147,55.22 16,75,504
(27) Franklin Templeton Floating Rate Income Fund Short Term Plan .................. 1,00,08,102 10,03.33 1,00,08,102
(28) Franklin Templeton India Treasury Management Super InstitutionalDaily Dividend ................................................................................................... 18,00,500 180,07.32 18,00,500
(29) HDFC Mutual Fund - Cash Management Fund Savings Plan Daily Dividend 38,42,73,239 408,72.84 39,56,58,079
(30) HDFC Mutual Fund - Multiple Yield Fund-Plan 2005 Growth ........................ 50,00,000 5,00.00 —
(31) HDFC Mutual Fund - Multiple Yield Fund- Growth ......................................... 27,12,355 3,00.00 17,73,333
(32) HDFC Mutual Fund - Cash Management Fund Call Plan Daily Dividend ...... 4,54,74,979 47,41.49 2,19,71,958
(33) HDFC Mutual Fund - FMP 3M March 2006(1) Institutional Plan Dividend ..... 1,00,00,000 10,00.00 —
(34) HDFC Mutual Fund - FMP 13M March 2006(1) Institutional Plan Growth ..... 1,00,00,000 10,00.00 —
(35) HSBC Mutual Fund - Cash Fund Institutional Plus Daily Dividend ................ 17,76,04,869 177,70.43 17,00,48,653
(36) HSBC Mutual Fund – Floating Rate Fund Short Term Institutional OptionDaily Dividend ................................................................................................... 1,64,98,910 16,52.07 2,15,42,586
(37) HSBC Mutual Fund – Fixed Term Series -7-Dividend .................................... 50,29,510 5,02.95 —
(38) HSBC Mutual Fund – Fixed Term Series -8-Dividend .................................... 50,00,000 5,00.00 —
(39) JM Financial Mutual Fund - Floater Fund Short Term Plan Dividend Option . 51,11,431 5,14.41 1,01,12,873
(40) JM Financial Mutual Fund - Fixed Maturity Fund -Series II Qtrly PlanQSA Dividend ................................................................................................... 50,00,000 5,00.00 —
(41) JM Financial Mutual Fund - Liquidity Fund Super Institutional Daily Dividend 50,02,950 5,01.12 50,02,950
(42) Kotak Mahindra Mutual Fund – Liquid Institutional Premium Plan DailyDividend ............................................................................................................ 30,95,61,741 378,53.51 29,68,97,673
(43) Kotak Mahindra Mutual Fund – Floater Short Term Weekly Dividend ............ 1,86,91,900 18,70.95 2,37,22,766
(44) Kotak Mahindra Mutual Fund – Fixed Maturity Plan Series XVIII –Dividend .. 50,00,000 5,00.00 —
(45) Kotak Mahindra Mutual Fund – Fixed Maturity Plan Series 19 Dividend ....... 50,00,000 5,00.00 —
(46) Kotak Mahindra Mutual Fund – Fixed Maturity Plan Series 23 Dividend ....... 1,00,00,000 10,00.00 —
(47) Kotak Mahindra Mutual Fund – Flexi Debt Scheme Dividend ........................ 49,78,196 5,00.00 49,78,196
(48) Kotak Mahindra Mutual Fund – Fixed Maturity Plan Series XII Dividend ....... 50,00,000 5,00.00 50,00,000
(49) Kotak Mahindra Mutual Fund – Fixed Maturity Plan Growth .......................... — — 50,00,000
(50) Kotak Mahindra Mutual Fund – Short Term Monthly Dividend ....................... 49,98,683 5,03.30 49,98,683
Acquired Sold
Nos. Rs. lakhs Nos.
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
80
MAHINDRA & MAHINDRA LIMITED
(51) Principal Mutual Fund – MIP Dividend Payout Monthly .................................. — — 9,19,726
(52) Principal Mutual Fund – Cash Management Fund Liquid Option InstitutionalPremium Plan Daily Dividend ........................................................................... 16,19,52,764 161,96.40 16,89,84,745
(53) Principal Mutual Fund – Fixed Maturity Plan 91 Days Dividend Payout ........ 1,00,63,874 10,06.39 —
(54) Principal Mutual Fund – Fixed Maturity Plan 91 Days Series I ...................... 50,49,182 5,04.92 —
(55) Principal Mutual Fund – Fixed Maturity Plan 91 Days Series III ..................... 50,00,000 5,00.00 —
(56) Principal Mutual Fund – FMP Institutional Option - Weekly Dividend ............ 1,39,67,096 13,97.07 1,39,67,096
(57) Principal Mutual Fund – SMP Institutional Option - Daily Dividend ............... 1,38,44,414 13,84.54 1,38,44,414
(58) Prudential ICICI Mutual Fund – Liquid Plan Institutional Plus Daily Dividend 15,36,54,357 182,10.35 16,29,37,371
(59) Prudential ICICI Mutual Fund – Fixed Maturity Plan Yearly Growth ............... — — 50,00,000
(60) Prudential ICICI Mutual Fund – Super Institutional Daily Dividend ................. 18,29,40,949 182,94.09 16,86,73,234
(61) Prudential ICICI Mutual Fund – Blended Plan B Institutional Dividend .......... 50,98,384 5,11.50 —
(62) Prudential ICICI Mutual Fund – FMP Yearly Series XXV Dividend .................. 101,34,800 10,13.48 —
(63) Prudential ICICI Mutual Fund – FMP Monthly Plan Dividend XXVII ................ 50,00,000 5,00.00 —
(64) Prudential ICICI Mutual Fund – Blended Plan B Dividend .............................. 50,93,662 5,09.39 50,93,662
(65) Prudential ICICI Mutual Fund – Floating Rate Plan C Daily Dividend ............ 51,22,335 5,12.30 51,22,335
(66) Prudential ICICI Mutual Fund - Institutional Short Term PlanCumulative Options .......................................................................................... 39,39,862 5,00.00 39,39,862
(67) Prudential ICICI Mutual Fund – Floating Rate Plan D Daily Dividend ............ 2,01,86,203 20,18.62 2,01,86,203
(68) Prudential ICICI Mutual Fund – Institutional Short Term Plan DR Fortnightly 47,45,241 5,18.83 47,45,241
(69) Reliance Fixed Maturity Fund Quarterly Plan III -Series II Dividend Option ... 50,00,000 5,00.00 —
(70) Reliance Fixed Maturity Fund Monthly Plan X Series II Dividend Option ....... 50,00,000 5,00.00 50,00,000
(71) Reliance Fixed Maturity Fund Quarterly Plan II -Series II Dividend Option .... 50,00,000 5,00.00 50,00,000
(72) Reliance Mutual Fund -Liquid Cash Plan Daily Dividend ................................ 1,35,55,904 15,10.28 1,35,55,904
(73) Reliance Mutual Fund -Liquidity Daily Dividend .............................................. 1,00,66,232 10,06.90 1,00,66,232
(74) SBI Mutual Fund – Magnum Institutional Income Savings Dividend .............. 27,23,46,603 273,23.17 26,00,38,031
(75) Standard Chartered Mutual Fund -Grindlays Fixed Maturity 19th PlanDividend ............................................................................................................ 50,00,000 5,00.00 —
(76) Standard Chartered Mutual Fund – Grindlays Fixed Maturity 21st PlanDividend ............................................................................................................ 50,00,000 5,00.00 —
(77) Standard Chartered Mutual Fund – Grindlays Cash Fund Super InstitutionalPlan Daily Dividend .......................................................................................... 31,44,21,947 314,42.19 32,54,27,264
(78) Standard Chartered Mutual Fund – Grindlays Short Term Institutional PlanMonthly Dividend .............................................................................................. 1,00,31,477 10,07.44 1,00,31,527
(79) Standard Chartered Mutual Fund – Grindlays Fixed Maturity Annual PlanGrowth .............................................................................................................. — — 50,00,000
(80) Standard Chartered Mutual Fund – Liquidity Manager Daily Dividend .......... 12,50,00,692 125,01.20 12,37,00,486
(81) Standard Chartered Mutual Fund – Fixed Maturity 3rd Plan Dividend .......... 50,00,000 5,00.00 —
(82) Standard Chartered Mutual Fund – Fixed Maturity 2nd Plan Dividend .......... 50,00,000 5,00.00 —
(83) Standard Chartered Mutual Fund – Liquidity Manager Plus Daily Dividend .. 80,048 8,00.48 —
(84) Standard Chartered Mutual Fund – Short Term Plan C Monthly Dividend .... 1,01,50,954 10,16.50 1,01,50,954
(85) Standard Chartered Mutual Fund – Fixed Maturity 11th Plan Dividend ......... 1,00,00,000 10,00.00 1,00,00,000
(86) Standard Chartered Mutual Fund – Grindlays Fixed Maturity 18th PlanDividend ............................................................................................................ 50,00,000 5,00.00 50,00,000
(87) Standard Chartered Mutual Fund – Floating Rate ST Super InstitutionalPlan C Dividend ................................................................................................ 1,00,71,754 10,07.18 1,00,71,754
(88) Sundaram Money Fund Super Institutional Daily Dividend ............................. 2,83,06,783 28,57.65 2,01,60,165
(89) Sundaram Fixed Term Plan Series 1 Feb 06 (100 days) Dividend Plan. ....... 50,00,000 5,00.00 —
(90) Sundaram Money Fund Institutional Daily Dividend ........................................ 79,93,136 8,06.93 79,93,136
(91) Tata Fixed Horizon Fund Series 3 Scheme A –Dividend ................................ 51,23,151 5,12.32 —
(92) Tata Liquidity Management Fund - Daily Dividend .......................................... 2,07,267 20,76.94 49,887
(93) Tata Fixed Horizon Fund Series 5 Scheme A – Dividend ............................... 50,00,000 5,00.00 —
(94) Tata Mutual Fund - Liquid Super High Investment Fund Daily Dividend ....... 17,04,974 190,02.01 17,76,781
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
Acquired Sold
Nos. Rs. lakhs Nos.
81
MAHINDRA & MAHINDRA LIMITED
(95) Tata Mutual Fund - Monthly Income Fund Dividend ....................................... — — 8,72,490(96) Tata Mutual Fund - Floating Rate Short Term Institutional Plan Daily Dividend 81,33,352 8,14.18 1,41,64,503
(97) Tata Mutual Fund - Gilt Securities Fund Bonus .............................................. — — 23,72,806
(98) Tata Mutual Fund - Dynamic Bond Option B Dividend .................................. 48,56,538 5,00.00 48,56,538
(99) Tata Mutual Fund - Floater Fund Daily Dividend ............................................. 50,88,697 5,08.87 50,88,697
(100) Tata Mutual Fund - Short Term Bond Fund Dividend ..................................... 46,69,660 5,06.38 46,69,660
(101) UTI Mutual Fund - Fixed Maturity Plan QFMP 106/11 Dividend Plan ............ 50,00,000 5,00.00 —
(102) UTI Mutual Fund - Fixed Maturity Plan QFMP Growth Plan ........................... 50,05,250 5,00.53 —
(103) UTI Mutual Fund - Fixed Maturity Plan QFMP 1105/11 Dividend Option ...... 50,00,000 5,00.00 50,00,000
(104) UTI Mutual Fund - Money Market Fund Daily Dividend Option ...................... 2,13,57,014 37,21.89 1,09,10,633
(105) UTI Mutual Fund - Liquid Cash Plan Institutional Daily Income Option ......... 14,87,466 151,07.83 14,87,466
(106) UTI Mutual Fund - Floating Rate Fund Short Term Plan Dividend Option ..... 2,40,52,627 24,24.27 2,40,52,627
(107) UTI Mutual Fund - Fixed Maturity Plan QFMP Dividend Plan 50,00,000 5,00.00 1,30,01,073
(g) The following are the movements in Commercial Paper during the year :
Acquired Sold Matured
Face Value Total Value Total Value Face ValueRs. (in lakhs) Rs. (in lakhs) Rs. (in lakhs) Rs. (in lakhs)
(1) Rabo India Finance Limited ....................................... 30,00.00 29,76.79 — 30,00.00
(2) GE Capital Services Limited ...................................... 10,00.00 9,97.24 — 10,00.00
(3) Housing Development Finance Corporation Limited . 30,00.00 29,82.16 15,00.00 15,00.00
(4) Export Import Bank of India ....................................... 20,00.00 19,47.00 — —
(5) Power Finance Corporation Limited .......................... 10,00.00 9,94.27 — 10,00.00
(h) The following are the movements in Certificate of Deposits during the year :
Acquired Sold Matured
Face Value Total Value Total Value Face ValueRs. (in lakhs) Rs. (in lakhs) Rs. (in lakhs) Rs. (in lakhs)
(1) State Bank of Travancore .......................................... 5,00.00 4,94.37 — —
(2) ICICI Bank Limited ..................................................... 10,00.00 9,83.87 10,00.00 —
(3) ABN AMRO Bank ....................................................... 5,00.00 4,89.91 — —
(4) State Bank of Mysore ................................................ 15,00.00 14,70.27 — —
(5) Allahabad Bank .......................................................... 40,00.00 39,56.08 — 25,00.00
(6) Kotak Mahindra Bank Limited ................................... 20,00.00 19,53.58 10,00.00 —
(7) UTI Bank ..................................................................... 10,00.00 9,92.42 10,00.00 —
(8) Yes Bank ..................................................................... 15,00.00 14,79.21 15,00.00 —
Acquired Sold
Nos. Rs. lakhs Nos.
SCHEDULE V (Contd.)Investments (At Cost, unless otherwise specified) :
82
MAHINDRA & MAHINDRA LIMITED
SCHEDULE VI 2006 2005Rupees Rupees Rupees
Current Assets, Loans and Advances : lakhs lakhs lakhs
(A) Current Assets :Interest accrued on investments ...................................................................... 3,00.02 2,20.01Stores and Spares (at cost or net realisable value whichever is lower) ............ 18,78.79 15,08.79Tools ................................................................................................................. 18,09.26 15,32.10Stock in Trade and Work-in-Progress (at cost or net realisable valuewhichever is lower) :
(i) Finished Products produced and purchased for sale ......................... 427,95.22 333,46.82(ii) Contracts and Work-in Progress ........................................................ 47,31.69 47,29.92(iii) Manufactured Components ................................................................ 49,89.18 41,19.17(iv) Raw Materials and Bought-out Components ..................................... 308,27.38 295,37.39(v) Property Development Activity - Work-in-Progress [including
completed flats and premises Rs.726.14 lakhs (2005 : Rs.944.88lakhs)] [Note 11(b)] .............................................................................. 8,42.85 12,08.77
841,86.32 729,42.07Plant and Machinery and other assets held for sale (at cost or netrealisable value whichever is lower) .................................................................. 14.10 14.10Sundry Debtors (Note 6) :
Unsecured unless otherwise stated :Outstanding over six months : Considered good ............................. 61,38.45 58,52.82
: Considered doubtful ......................... 35,67.16 36,21.66
97,05.61 94,74.48
Other Debts : Considered good ............................. 576,58.44 45,275.31: Considered doubtful ......................... 5,95.73 2,25.84
582,54.17 455,01.15
679,59.78 549,75.63Less : Provision for Doubtful Debts .................................................... 41,62.89 38,22.80
637,96.89 511,52.83Cash and Bank Balances :
Cash, cheques and stamps on hand ......................................................... 182,59.56 162,34.17Balances with Scheduled Banks :(i) On Current Account ........................................................................... 72,00.32 30,87.59(ii) On Fixed Deposit Account` ................................................................. 471,71.02 425,85.63(iii) On Margin Account ............................................................................ 5.42 5.42
543,76.76 456,78.64Balances with Non-Scheduled Banks (Note 7) :(i) On Current Account ........................................................................... 3,78.70 4,85.04(ii) On Fixed Deposit Account ................................................................. 15.58 —
3,94.28 4,85.04(B) Loans and Advances (Note 8) :
(Unsecured, considered good unless otherwise stated) :Advances and Loans to subsidiaries :
Considered good ........................................................................................ 124,14.75 61,92.88Considered doubtful ................................................................................... 7,27.01 10,95.23
131,41.76 72,88.11Less: Provision for doubtful Advances and Loans ...................................... 1,61.66 1,61.66
129,80.10 71,26.45Bills of exchange, considered doubtful ............................................................ 1,55.04 1,55.04Less: Provision for doubtful bills ....................................................................... 1,55.04 1,55.04
— —Advances recoverable in cash or in kind or for value to be received :
Considered good ........................................................................................ 274,02.18 216,88.43Considered doubtful ................................................................................... 53,03.99 52,38.05
327,06.17 269,26.48Less : Provision for Doubtful Advances ...................................................... 46,35.27 45,48.96
280,70.90 223,77.52Payments towards Income tax and Surtax [Note 21(d)] .................................. 100,10.15 106,53.11Balances - Customs, Port Trust, Excise, etc. .................................................. 62.75 31.47
Total..... 2,761,39.88 2,299,56.30
83
MAHINDRA & MAHINDRA LIMITED
SCHEDULE VII 2006 2005Rupees Rupees Rupees
Current Liabilities and Provisions : lakhs lakhs lakhs
(A) Current Liabilities * :
Acceptances ................................................................................................. 132,57.00 139,65.88
Sundry Creditors :
(i) Total outstanding dues of small scale industrial undertakings [Note 9] 57,81.15 65,24.84
(ii) Total outstanding dues of creditors other than small scale industrialundertakings [including Rs. 4630.45 lakhs (2005 : Rs. 4800.54 lakhs)being advance payments for which value has still to be given] ........... 1,288,88.24 1,029,98.61
(iii) Dues to Subsidiaries .............................................................................. 23,98.58 7,52.17
1,370,67.97 1,102,75.62
Dividend payable .......................................................................................... 2,75.99 2,29.04
Balances on Directors’ Current Accounts .................................................... 2,15.86 2,41.30
Interest accrued but not due on loans ......................................................... 12,67.23 12,88.43
(B) Provisions :
Proposed Dividends - See Directors’ Report ............................................... 243,97.41 150,81.50
Provision for Tax on Proposed Dividend ....................................................... 34,21.74 21,15.18
Provision for diminution in value of long term investments .......................... 5,73.43 5,73.43
Provision for premium payable on redemption of convertible bonds ........... 10,07.52 76,54.50
Provision for Contingencies [Note 10 (b) & (c)] ............................................. 78.45 33.99
Provision for diminution in value of investments and other assets [Note 27] 77,52.70 90,85.49
Provision for leave encashable at retirement/cessation ................................ 56,72.44 48,86.63
Provision for Taxation .................................................................................... 31,08.17 37,31.84
Provision : Others [Note 10 (a) & (c)] ............................................................ 83,02.49 68,08.07
Total..... 2,063,98.40 1,759,70.90
* There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund.
SCHEDULE VIII 2006 2005Rupees Rupees
Miscellaneous Expenditure : lakhs lakhs(to the extent not written off or adjusted) :
(a) Finance Charges ........................................................................................... 2,19.38 3,30.65
(b) Separation and Other Costs ......................................................................... 15,86.08 21,06.92
Total..... 18,05.46 24,37.57
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SCHEDULE IX 2006 2005Rupees Rupees
Income from Operations and Other Income : lakhs lakhs
Income from services rendered .................................................................. 152,39.32 70,24.38
Property Development Activity-Property ..................................................... 7,03.58 13,48.93
Dividends on Investments in subsidiaries-Gross ......................................... 36,44.41 69,83.20
Dividends on other Investments-Gross [Note 12(a)] ................................... 12,66.38 4,82.10
Rent received .............................................................................................. 3,39.68 5,25.25
Miscellaneous Income ................................................................................. 99,67.00 73,83.46
Profit on sale of Fixed Assets sold/scrapped/written off (Net) [Note 16] .... 17,89.78 —
Profit on sale of Investments (Net) [Note 12(d)] .......................................... 8,27.00 84.00
Total ........ 337,77.15 238,31.32
SCHEDULE X 2006 2005Rupees Rupees Rupees
Raw Materials, Finished and Semi-Finished Products : lakhs lakhs lakhs
(A) Decrease/(Increase) in Stock of Finished Goods,Work-in-Progress and Manufactured Components :
Opening Stock :
(i) Finished Products produced and purchased for sale .................. 333,46.82 185,78.64
(ii) Contracts and Work-in-Progress .................................................. 47,29.92 33,32.88
(iii) Manufactured Components .......................................................... 41,19.17 28,78.96
421,95.91 247,90.48Less: Closing Stock :
(i) Finished Products produced and purchased for sale .................. 427,95.22 333,46.82
(ii) Contracts and Work-in-Progress .................................................. 47,31.69 47,29.92
(iii) Manufactured Components .......................................................... 49,89.18 41,19.17
525,16.09 421,95.91
Decrease/(Increase) in Stock ............................................................... (103,20.18) (174,05.43)
(B) Consumption of Raw Materials and Bought-out Components :
Opening Stock ..................................................................................... 295,37.39 201,31.42
Add :Purchases [including outside processing chargesRs. 24147.45 lakhs (2005 : Rs. 21658.25 lakhs)] ..................... 5,601,39.57 4,673,15.72
5,896,76.96 4,874,47.14
Less : Closing Stock ............................................................................ 308,27.38 295,37.39
5,588,49.58 4,579,09.75
(C) Purchases of Finished Products for sale ........................................ 228,47.17 197,59.34
Total .......... 5,713,76.57 4,602,63.66
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SCHEDULE XI 2006 2005Rupees Rupees
Personnel : lakhs lakhs
Salaries, Wages, Bonus, etc ................................................................................ 446,85.32 377,01.13
Contribution to Provident and other funds .......................................................... 31,95.12 27,50.14
Gratuity .............................................................................................................. 16,38.34 13,40.75
Welfare .............................................................................................................. 56,59.61 46,33.15
Total .......... 551,78.39 464,25.17
SCHEDULE XII 2006 2005Rupees Rupees
Interest, Commitment and Finance Charges : lakhs lakhs
On Term Loans and Debentures .......................................................................... 24,95.65 27,76.94
On Others (Net) .................................................................................................... 1,99.96 2,47.19
26,95.61 30,24.13
Less: Interest Income:
Interest on Government Securities, Debentures and Bonds - Gross[Note 12(b)] ................................................................................................. 4,37.69 5,04.30
Interest - Others - Gross [Note 12(c)] ........................................................ 40,98.08 30,77.39
Total .......... (18,40.16) (5,57.56)
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SCHEDULE XIII 2006 2005Rupees Rupees Rupees
Other Expenses : lakhs lakhs lakhs
Stores consumed [Note 13] ........................................................................ 54,09.31 46,42.50
Tools consumed .......................................................................................... 14,14.63 13,43.98
Power and Fuel [Note 13] ........................................................................... 57,46.36 52,64.03
Rent including lease rentals ........................................................................ 18,26.69 13,03.65
Rates and Taxes ......................................................................................... 24,67.71 18,75.55
Insurance ..................................................................................................... 9,41.21 8,12.07
Repairs and Maintenance [Note 14]:
Buildings .............................................................................................. 17,86.07 14,21.95
Machinery ............................................................................................ 54,43.72 48,01.34
Others .................................................................................................. 16,10.86 12,34.76
88,40.65 74,58.05
Advertisement ............................................................................................. 54,86.82 57,61.15
Commission on sales/contracts (Net) ......................................................... 57,04.36 52,44.61
Discount allowed ......................................................................................... 1,87.05 2,61.92
Freight outward ........................................................................................... 260,64.43 168,04.10
Sales Promotion Expenses ......................................................................... 83,89.06 89,00.28
Miscellaneous Expenses [Note 15] ............................................................. 294,06.41 228,02.53
Amortisation of expenses [Note 1(E)(a)] ...................................................... 27.99 15.37
Directors’ fees ............................................................................................. 9.80 10.30
Donations and contributions ....................................................................... 5,48.56 4,25.43
Loss on Fixed Assets sold/scrapped/written off (Net) [Note 16] ................ - 1,57.41
Excess of cost over fair value of Current Investments (Net) ....................... 68.55 (79.07)
Provision for doubtful debts/advances (Net) [Note 27 & 28] ...................... 81.11 11,32.65
Provision for diminution in value of Long term investments (Net)[Note 27 & 29] ............................................................................................ (22,17.50) (6,57.46)
Total ........... 1,004,03.20 834,79.05
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SCHEDULE XIV
Notes on Accounts for the year ended 31st March, 2006
1. Significant Accounting Policies :
(A) Fixed Assets :
(a) (i) All Fixed Assets are carried at cost less depreciation except as stated in (ii) below. Cost includes financing cost relating toborrowed funds attributable to the construction or acquisition of fixed assets upto the date the asset is ready for use. In case ofborrowed funds and liabilities in foreign currencies for the acquisition of fixed assets from a country outside India, the exchangedifferences are adjusted to the cost of such asset.
When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of accountand resultant profit (including capital profit) or loss, if any, is reflected in the Profit and Loss Account.
(ii) Land and Buildings, had been revalued as at 31st October, 1984 at depreciated replacement values on the basis of a valuationmade by a firm of Chartered Surveyors & Valuers. The indices, if any, used are not stated in the valuation.
(b) (i) Leasehold land is amortised over the period of the lease.
(ii) Depreciation on assets is calculated on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to theCompanies Act, 1956, except for :
(1) certain items of Plant & Machinery individually costing more than Rs. 5,000 - over their useful lives (2 years,3 years, 5 yearsor 7 years, as the case may be) as determined by the Company.
(2) Cars and Vehicles - at 15% of cost.
(iii) Depreciation charge for each year is after deducting the amount representing the depreciation on the increase due to revaluationof Land and Buildings, transferred from the Revaluation Reserve.
(B) Intangible Assets :
All Intangible Assets are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits areconsumed.
(a) Technical Knowhow :
The expenditure incurred is amortised over the estimated period of benefit, not exceeding six years commencing with the year ofpurchase of the technology.
(b) Development Expenditure :
The expenditure incurred on technical services and other project/product related expenses are amortised over the estimated periodof benefit, not exceeding five years.
(c) Software Expenditure :
The expenditure incurred is amortised over three financial years equally commencing from the year in which the expenditure isincurred.
(C) Investments :
All long term investments are carried at cost less provision, if any, for decline other than temporary, in value of such investments. Currentinvestments are valued at the lower of cost and fair value, determined by category of investment.
(D) Inventories :
Inventories are stated at cost or net realisable value, whichever is lower. Cost is arrived at on a weighted average method and includes,where appropriate, manufacturing overheads and excise duty. Long term contracts in progress are valued at cost.
(E) Miscellaneous Expenditure (to the extent not written off or adjusted) :
Expenditure carried forward under this head is being amortised as follows :
(a) Finance charges :
The expenditure incurred in raising long term borrowings is amortised over the period of the borrowings. On early buyback,conversion or repayment of borrowings, any unamortised expenditure is fully written off in that year.
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(b) Separation and Other Costs :
Special Payments/Pensions under Voluntary Retirement Schemes.
The liability inclusive of retirement benefits such as gratuity and leave encashment is amortised over a period of five years from themonth in which the liability is incurred.
(F) Foreign Exchange Transactions :
All foreign currency monetary items are translated at the relevant rates of exchange prevailing at the year end. In respect of forwardexchange contracts the premium or discount arising at the inception of such a contract is amortised as expense or income over the life ofthe contract.
In case of monetary items (other than those for acquisition of fixed assets from a country outside India) the exchange differences arerecognised in the Profit and Loss Account.
In the case of monetary items incurred for the acquisition of fixed assets and technical know-how from a country outside India, theexchange differences are adjusted to the cost of such assets.
(G) Revenue Recognition :
Sales of products and services are recognised when the products are shipped or services rendered. In respect of sale of property (concerningproperty development activity), the Company accounts for the income on the percentage to completion basis. [Refer paragraph (H) below].
Dividend from investments are recognised in the Profit and Loss Account when the right to receive payment is established.
(H) Property Development Activity :
The Company accounts for income on the percentage to completion basis which necessarily involves technical estimates of the percentageof completion, and costs to completion of the activity, on the basis of which profits/losses are accounted. Such estimates, made by theCompany and certified to the auditors, have been relied upon by them, as these are of a technical nature.
(I) Government Grants :
The Company is entitled to various incentives from a State Government, such as grants by way of refund of octroi duty paid by theCompany for its manufacturing unit located in a developing region. In view of the uncertainty in respect to the collection of these grants,such grants are accounted for as and when the disbursements are received.
(J) Retirement Benefits :
Retirement Benefits in respect of gratuity and leave encashable at retirement/cessation are provided for based on valuations, as at theBalance Sheet date, made by independent actuaries.
(K) Redemption Premium :
Premium payable on redemption of Bonds / Debentures is fully provided and charged to Securities Premium Account in the year of issue.
(L) Product Warranty :
In respect of warranties given by the Company on sale of certain products, the estimated costs of these warranties are accrued at the timeof sale. The estimates for accounting of warranties are reviewed and revisions are made as required.
(M) Leases :
The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns,computer hardware etc.). The leasing arrangements, which are not non-cancellable, range between eleven months and three yearsgenerally, and are usually renewable by mutual consent on agreed terms. The aggregate lease rentals payable are charged as rentincluding lease rentals.
(N) Taxes on Income :
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subject toconsideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbeddepreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincing evidencethat sufficient future tax income will be available against which such deferred tax assets can be realised.
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2. Share Capital :
(a) Issued and Subscribed Capital include :
(i) 1,66,809 Ordinary Shares allotted as fully paid-up pursuant to a contract without payment having been received in cash.
(ii) 17,06,07,504 (2005: 5,45,98,605) Ordinary Shares allotted as fully paid-up by way of Bonus Shares by capitalisation of SecuritiesPremium Account and Reserves.
(iii) 12,56,562 Ordinary Shares issued consequent to the Scheme of Amalgamation with the Union Bank of India Limited. Of these,13,737 Ordinary Shares were issued on conversion of 41,211 8% Bonds.
(iv) 12,98,202 Ordinary Shares issued consequent to the Scheme of Amalgamation with International Tractor Company of India Limitedwithout payment having been received in cash.
(v) 1,88,166 Ordinary Shares issued consequent to the Scheme of Amalgamation with Mahindra Spicer Limited without payment havingbeen received in cash.
(vi) 9,73,200 Ordinary Shares issued consequent to the Scheme of Amalgamation with Mahindra Nissan Allwyn Limited without paymenthaving been received in cash.
3. Reserves and Surplus :2006 2005
Rupees Rupeeslakhs lakhs
(a) Movements during the year :
(i) Securities Premium Account :
Additions, arising out of exercise of options ............................................. 2,03.95 2,04.70
Premium on conversion of Debentures and Bonds .................................. 278,51.83 —
Reversal of premium on redemption of Zero Coupon ConvertibleBonds pursuant to conversion ................................................................... 66,67.07 —
347,22.85 2,04.70
Applied, in accordance with Section 78 of the Companies Act, 1956,towards :
Writing-off of share and debenture issue expenses .................................. 2,27.73 69.57
Premium on redemption/buyback of debentures and Zero CouponConvertible Bonds ...................................................................................... 20.09 81,98.08
2,47.82 82,67.65
(ii) Revaluation Reserve :
Adjusted against depreciation for the year [Note 1 (A)(b) (iii)] ................... 43.28 54.22
Adjusted in respect of revalued Land and Buildings sold/demolished ............ 54.78 2.08
98.06 56.30
(b) During the year, the Institute of Chartered Accountants of India has issued a Guidance Note on Accounting for Employee Share-basedPayments which requires that shares allotted to a trust but not transferred to the employees be reduced from the Share Capital andReserves. Accordingly the Company has reduced the Share Capital by Rs. 375.09 lakhs (2005: Rs. 436.07 lakhs), Securities Premium byRs. 1837.93 lakhs (2005: Rs. 2136.73 lakhs) for the 37,50,884 shares (2005: 43,60,672 shares) held by the trust pending transfer to theeligible employees. The amount receivable from the ESOP Trust, net of the above monies which is treated as advance received from it, isincluded under current liabilities.
The Share Capital of the Company has also been reduced and the General Reserve increased by Rs. 375.09 lakhs (2005: Rs. Nil) for thebonus shares issued by the Company in September 2005 to the trust but not yet transferred by the trust to the employees.
The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share for the current andprevious year.
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4. Loans :
(a) Debentures are redeemable at par as follows –
(i) Rs. 4000 lakhs on 27th April, 2006. (pursuant to exercise of call option)
(ii) Rs. 3500 lakhs on 3rd May, 2006. (pursuant to exercise of call option)
(iii) Rs. 1000 lakhs on 28th August, 2006. (pursuant to exercise of call option)
(iv) Rs. 500 lakhs on 16th July, 2008.
(v) Rs. 50 lakhs on 22nd May, 2011.
(vi) Also refer Note 4 (c) below
(b) All Debentures of Rs. 9050.67 lakhs and certain Foreign Currency Loans from Banks of Rs. 9240.48 lakhs are secured by a pari-passucharge on immovable properties of the Company both present and future, subject to certain exclusions and are also secured by pari-passu charge on the movable properties of the Company including movable machinery, machinery spares, tools and accessories, bothpresent and future.
(c) Debentures of the face value of Rs. 110 each and Zero Interest Bonds of the face value of Rs. 90 each were both compulsorily andautomatically fully converted into two equity shares of Rs.10 each at a premium of Rs. 45 per share and Rs. 35 per share respectively on1st April, 1991, 1st October, 1991 and 18th July, 1992. The balance amount of Rs. 0.67 lakhs will be converted, into appropriate numberof equity shares, on receipt of the balance amount due on allotment.
(d) The following amounts are repayable by 31st March, 2007:
(i) Debentures / Bonds ........................................................................ : Rs. 8500.00 lakhs (2005 : Rs. 1500.00 lakhs)
(ii) Foreign currency loans from Banks ................................................ : Rs. 5715.12 lakhs (2005 : Rs. 5818.08 lakhs)
(iii) Fixed Deposit holders ..................................................................... : Rs. 516.10 lakhs (2005 : Rs. 1887.95 lakhs)
(iv) Rupee Loans :-
(a) from others .............................................................................. : Rs. Nil (2005 : Rs. 1.09 lakhs )
(b) from financial institutions ......................................................... : Rs. 204.16 lakhs (2005 : Rs. Nil)
The Company had issued during the year ended 31st March, 2005, Zero Coupon Foreign Currency Convertible Bonds (Bonds) aggregatingto US $ 100 million, at par. Out of these upto 31st March, 2006, Bonds aggregating to US $ 64.73 million have been converted into equityshares / GDRs. Subsequent to the year end, Bonds aggregating to US $ 22.37 million have been converted into equity shares / GDRs.
Premium payable on redemption of Bonds had been fully provided in the previous year by debiting the same to Securities PremiumAccount (SPA). In view of the above, premium aggregating to Rs. 6667.07 lakhs no longer payable on bonds converted into equity shares/ GDRs has been credited back to SPA during the year.
The proceeds of the Bonds (net of conversion into equity shares/GDRs) have been utilised towards expansion of manufacturing facilitiesand overseas acquisitions.
5. (a) Land includes leaseholds at professional valuation/cost Rs. 5536.30 lakhs (2005 : Rs. 1299.96 lakhs).
(b) Land includes a sum of Rs. 129.98 lakhs (2005 : Rs. 782.27 lakhs) for which the conveyance is pending receipt of approval from theappropriate authorities.
(c) The Company has filed the necessary return under Section 6 of the Urban Land (Ceiling and Regulation) Act, 1976, in respect of vacantland held by it and has also applied to the Government of Maharashtra under Section 20 of the said Act requesting for exemption of thesaid vacant land from the ceiling restrictions of the Act.
(d) Buildings include leasehold at professional valuation/cost Rs. Nil (2005 : Rs. 27.04 lakhs).
(e) Buildings include Rs. 0.04 lakhs (2005 : Rs. 0.04 lakhs) being the value of shares in co-operative housing societies.
(f) Additions to Plant and Machinery include Rs. 16.86 lakhs (credit) (Net) [2005 : Rs. 8.15 lakhs (credit) (Net)] on account of foreignexchange fluctuation.
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(g) (i) The depreciation charge for the year excludes :
(a) An amount of Rs. 43.28 lakhs (2005 : Rs. 54.22 lakhs), representing depreciation on the increase due to revaluation of Landand Buildings transferred from the Revaluation Reserve.
(b) An amount of Rs. 3.10 lakhs (2005 : Rs. 63.28 lakhs), representing depreciation on assets used for development work. Thisexpenditure is transferred to Development Expenditure and is appropriately amortised.
(ii) The Revaluation Reserve is also adjusted for an amount of Rs. 54.78 lakhs (2005 : Rs. 2.08 lakhs) in respect of revalued Land andBuildings sold/demolished during the year.
(iii) The net credit to the Profit and Loss Account consequent to the above adjustments to the Revaluation Reserve is Rs. 98.06 lakhs(2005 : Rs. 56.30 lakhs).
6. Sundry Debtors others include Rs. 5432.65 lakhs (2005 : Rs. 2618.31 lakhs), which, in accordance with the terms of the contracts, were notdue for payment as at 31st March, 2006.
7. Cash and Bank Balances include balances lying with non-scheduled banks :
a) In Current AccountRupees lakhs
Bank Tejarat, Bank of Australia Bank of China The MunicipalTehran Co-op. Bank Ltd
Balance as at 31st March, 2006 0.06 2,54.26 7.84 1,16.54
Balance as at 31st March, 2005 0.06 3,16.88 3.63 1,64.47
Maximum balance during the year 0.06 5,24.51 19.41 2,35.94
Maximum balance during the previous year 0.06 4,95.63 5.62 2,43.22
b) In Deposit Account
Rupees lakhs
Bank of Australia
Balance as at 31st March, 2006 15.58
Balance as at 31st March, 2005 —
Maximum balance during the year 15.58
Maximum balance during the previous year —
8. Loans and Advances include :
(i) Fixed/Call deposits with/loans to limited companies Rs. 7551.96 lakhs (2005 : Rs. 4208.26 lakhs) including Rs. 2876.26 lakhs (2005 :Rs. 2611.26 lakhs) with/to subsidiaries.
(ii) Amounts paid towards joint development of property Rs. 154.05 lakhs (2005 : Rs. 154.05 lakhs).
(iii) Amount due from Directors of the Company Rs. Nil (2005 : Rs. 82.26 lakhs), maximum amount due during the yearRs. 83.43 lakhs (2005: Rs. 128.06 lakhs)
(iv) Share Application money pending allotment Rs. 8469.66 lakhs (2005 : Rs. 4186.06 lakhs) to subsidiaries.
9. The identification of suppliers as Small Scale Industrial undertaking (SSIs) has been done on the basis of the information to the extent providedby the suppliers to the Company. On this basis, the disclosure of total outstanding dues of SSIs and the names of SSIs shown in Schedule XVIIhas been made.
10. a) Provision – Others Rs. 8302.49 lakhs (2005 : Rs. 6808.07 lakhs) includes provision for warranty Rs. 6321.48 lakhs (2005:Rs. 4702.40 lakhs). This relates to warranty provision made in respect of sale of certain products, the estimated costs of which is accruedat the time of sale. The products are generally covered under a free warranty period ranging from 1 year to 3 years.
b) Provision for Contingencies Rs. 78.45 lakhs (2005 : Rs. 33.99 lakhs) is in respect of labour demands under negotiations at certainlocations of the Company. The ultimate settlement is contingent on the conclusion of negotiations.
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c) The movement in above provisions is as follows :
Warranty ContingencyRupees lakhs Rupees lakhs
Provisions 2006 2005 2006 2005
Balance as at 1st April, 47,02.40 33,83.24 33.99 3,42.00
Add : Provision made during the year 44,20.09 37,41.07 78.45 33.99
Less : Utilisation during the year 28,01.01 24,21.91 33.99 3,42.00
Balance as at 31st March, 63,21.48 47,02.40 78.45 33.99
11. (a) Sales include :
(i) Export benefits Rs. 3135.78 lakhs (2005 : Rs. 171.24 lakhs)
(ii) Cost of items given for sales promotion/as donations Rs. 18.35 lakhs (2005 : Rs. 13.04 lakhs).
(b) Stock-in-Trade, Property Development Activity, includes completed premises Rs. 407.03 lakhs (2005 : Rs. 625.76 lakhs), which, pendingsale, have been given out on leave and licence basis for which fresh agreement is under negotiation.
12. (a) Dividends on other investments Rs. 1266.38 lakhs (2005 : Rs. 482.10 lakhs) is in respect of current investments.
(b) Interest on Government Securities, Debentures and Bonds includes tax deducted at source Rs. 88.59 lakhs (2005 : Rs. 82.12 lakhs) andcomprise Rs. 158.53 lakhs (2005 : Rs. 118.32 lakhs) and Rs. 279.16 lakhs (2005 : Rs. 385.98 lakhs) in respect of long term and currentinvestments respectively.
(c) Interest received - others includes tax deducted at source Rs. 474.80 lakhs (2005 : Rs. 286.86 lakhs).
(d) Profit on sale of investments (net) includes profit on disposal of current investments (net) Rs. 569.96 lakhs (2005 : Rs. 119.02 lakhs), andprofit on disposal of long term investments (net) Rs. 257.04 lakhs (2005 : Rs. 35.02 lakhs [Loss]).
13. Stores consumed includes consumption for power and fuel (amount not ascertained).
14. Repairs and Maintenance includes machinery spares consumed Rs. 1905.59 lakhs (2005 : Rs. 1429.53 lakhs) but does not include itemsincluded under Consumption of Raw Materials and Bought-out Components and amounts charged to salaries and wages (amounts notascertained).
15. Miscellaneous Expenses include :
(a) Amounts paid/payable to Auditors (net of service tax where applicable):
Statutory Auditors Cost AuditorsRupees lakhs Rupees lakhs
(i) Audit Fees .................................................................................................. 65.00 1.8050.00 1.80
(ii) Company Law matters ............................................................................... 0.20 —0.20 —
(iii) Other Services ............................................................................................ 22.56* —48.74 —
(iv) Reimbursement of expenses :As auditor ................................................................................................... 1.34 0.22
1.33 0.24
89.10 2.021,00.27 2.04
* Net of service tax of Rs. 8.41 lakhs pertaining to an earlier year.
The above amounts exclude Rs. Nil (2005 : Rs. 22.00 lakhs) paid to the Statutory Auditors which is being adjusted against SecuritiesPremium Account being Bond issue expenses.
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(b) An amount of Rs. 101.22 lakhs (2005 : Rs. 110.55 lakhs) payable as commission to non-wholetime Directors - Note 17 andSchedule XV.
(c) The cost of property sold including movement in work-in-progress in respect of property development activity are as under:
2006 2005Rupees lakhs Rupees lakhs
Opening balance as on 1st April ........................................................................ 5,76.55 17,78.17
Add: Construction Cost .................................................................................... 57.95 0.17
6,34.50 17,78.34
Less: Flats Capitalised ....................................................................................... — 2,81.77
Less: Cost of Property Development Activity – Work – in – Progressas at 31st March ................................................................................................ 1,68.66 5,76.55
1,68.66 8,58.32
4,65.84 9,20.02
16. Profit/Loss on fixed assets sold/scrapped/written off (net) includes an aggregate capital profit of Rs. 2356.64 lakhs(2005 : Rs. 83.46 lakhs).
17. Managerial remuneration for Directors included in the Profit and Loss Account is Rs. 688.79 lakhs (2005 : Rs. 694.29 lakhs) including Directors’fees of Rs. 9.80 lakhs (2005 : Rs. 10.30 lakhs), perquisites Rs. 193.03 lakhs (2005 : Rs. 191.88 lakhs) and commission Rs. 341.97 lakhs(2005 : Rs. 347.28 lakhs) (See Schedule XV) and excluding charge for gratuity and provision for leave encashable on separation as separateactuarial valuation figures are not available. The above perquisites include amortisation of Employees Stock Options amounting to Rs. 16.30lakhs (2005 : Rs. 30.85 lakhs)
18. The Company had allotted 55,24,219 ordinary (equity) shares in the year ended 31st March, 2002, to the Mahindra & Mahindra Employees’Stock Option Trust set up by the Company. The trust holds these shares for the benefit of the employees and issues them to the eligibleemployees as per the recommendation of the Compensation Committee.
The equity settled options vest one year from the date of the grant and are exercisable on specified dates in 3 tranches within a period of 5years from the date of vesting. The number of options exercisable in each tranche is between the minimum of 100 and a maximum of 1/3rd ofthe options vested, except in case of the last date of exercise, where the employee can exercise all the options vested but not exercised till thatdate.
The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.
Summary of Stock Options No. of stock options Weighted averageexercise price (Rs.)
Options outstanding on 1st April, 2005 8,75,647 103.90
Options granted during the year 8,00,628 450.04
Additional options pursuant to bonus issue 16,02,869 134.77
Options forfeited/lapsed during the year 42,260 261.39
Options exercised during the year 11,86,684 32.09
Options outstanding on 31st March, 2006 20,50,200 196.16
Options vested but not exercised on 31st March, 2006 5,31,718 99.49
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MAHINDRA & MAHINDRA LIMITED
Average Share price on the date of exercise of the option are as under
Date of exercise Average share price (Rs.)
31st May, 2005 507.30
6th December, 2005* 470.65
* After adjustment in number of shares and share prices pursuant to the issue of bonus shares in September 2005.
Information in respect of options outstanding as at 31st March, 2006.
Range of exercise price Number of options Weighted averageremaining life
Rs. 29.50 - Rs. 61.50 3,55,408 2.27 yrs
Rs. 215.00 - Rs. 227.00 16,60,680 5.10 yrs
Rs. 361.00 34,112 5.57 yrs
The fair value of options granted during the year on 14th June, 2005 & 26th October, 2005 is Rs. 83.13 and Rs. 83.86 per share respectively.
The fair value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are asfollows :
Grant dated Grant dated14th June, 2005 26th October, 2005
Risk free interest rate 6.27% 6.42%
Expected life 2.5 years 2.5 years
Expected volatility 36.84% 36.93%
Expected dividend yield 3.84% 3.84%
Exercise price Rs. 227.00 Rs. 361.00
Stock Price Rs. 274.80 Rs. 361.40
In respect of Options granted under the Employee Stock Options plan, in accordance with guidelines issued by SEBI, the accounting value ofthe options is accounted as deferred employee compensation, which is amortised on a straight line basis over the period between the date ofgrant of options and eligible dates for conversion into equity shares. Consequently, salaries, wages, bonus, etc. includes Rs. 151.62 lakhs(2005 : Rs 107.11 lakhs) being the amortisation of deferred employee compensation, after adjusting for reversals on account of options lapsed.
Had the Company adopted fair value method in respect of options granted on or after 1st April, 2005, the employee compensation cost wouldhave been higher by Rs. 265.86 lakhs, Profit after tax lower by Rs. 265.86 lakhs and the basic and diluted earning per share would have beenlower by Re. 0.12 & Re. 0.11 respectively.
The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issuedby the Institute of Chartered Accountants of India in the year 2005 and applicable for the periods on or after 1st April, 2005.
19. The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March, 2006 isRs. 22616.53 lakhs (2005 : Rs. 9042.71 lakhs).
20. The Commissioner of Central Excise (Adjudication), Navi Mumbai, passed an order on 30th March, 2005, which was received by the Companyon 4th April, 2005, confirming the demand made on the Company for payment of differential excise duty (including penalty) of Rs. 30411.00lakhs in connection with the classification of Company’s Commander range of vehicles, during the years 1991-1996. Whilst the Company hadclassified the Commander range of vehicles as 10-seater attracting a lower rate of excise duty, the Commissioner of Central Excise (Adjudication),Navi Mumbai, has held that these vehicles could not be classified as 10-seaters and as such attracted a higher rate of excise duty. In earlierproceedings, the Collector of Central Excise, Mumbai as also the Collector Central Excise (Appeals), Mumbai had upheld the classification ofthese vehicles as 10-seaters. Similarly, certain statutory/expert bodies have also confirmed the concerned vehicles to be 10-seater vehicles.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has also by its order dated 19th July, 2005 upheld this classification. Thedepartment’s Statutory Appeal against this order has been admitted by the Supreme Court.
The Company has been legally advised that the order dated 30th March, 2005 passed by the Commissioner is unsustainable in law and hasfiled an appeal against this order, along with stay application, before the CESTAT. The Company is confident that it would succeed in the case
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MAHINDRA & MAHINDRA LIMITED
and the Company’s stand that the Commander Vehicles are 10-seater vehicles would be upheld. As such, the Company does not expect anyliability on this account.
21. Contingent Liability :
(a) Guarantees given by the Company :
Amount of guarantees Outstanding amountsagainst the guarantees
2006 2005 2006 2005
Rupees lakhs Rupees lakhs Rupees lakhs Rupees lakhs
For employees .................................. 1,05.00 1,05.00 0.35 0.35
For other companies ........................ 52,70.00 59,00.00 27,17.00 47,83.96
(b) Claims against the Company not acknowledged as debts comprise of :
(i) Excise Duty, Sales Tax and Service Tax claims disputed by the Company relating to issues of applicability and classificationaggregating to Rs. 13356.24 lakhs (Net of Tax : Rs. 9915.99 lakhs) [2005 : Rs. 4088.58 lakhs (Net of tax : Rs. 3290.71 lakhs)].
(ii) Other Matters (excluding claims where amounts are not ascertainable) : Rs. 545.32 lakhs (Net of Tax : Rs. 367.76 lakhs))))) [2005 : Rs.353.30 lakhs (Net of Tax : Rs. 230.53 lakhs)]
(iii) Claims on capital account : Rs. 118.20 lakhs (2005 : Rs. 118.20 lakhs)
(c) Uncalled liability on equity shares partly paid Rs. 1050.00 lakhs (2005 : Rs. 1050.00 lakhs).
(d) Taxation matters :
(i) Demands against the Company not acknowledged as debts and not provided for, relating to issues of deductibility and taxability inrespect of which the Company is in appeal and exclusive of the effect of similar matters in respect of assessments remaining to becompleted :
- Income tax : Rs. 11317.07 lakhs (2005 : Rs. 10039.99 lakhs).
(ii) Items in respect of which the Company has succeeded in appeal, but the Income tax Department is pursuing/likely to pursue inappeal/reference and exclusive of the effect of similar matters in respect of assessments remaining to be completed :
- Income tax matters : Rs. 4962.35 lakhs (2005 : Rs. 4723.00 lakhs)
- Surtax matters : Rs. 12.80 lakhs (2005 : Rs. 12.80 lakhs)
(e) Bills discounted not matured Rs. 8696.91 lakhs (2005 : Rs. 12239.72 lakhs).
22. Research and Development expenditure debited to the Profit and Loss Account, including certain expenditure based on allocations made bythe Company, aggregate Rs. 11535.83 lakhs (2005 : Rs. 9229.04 lakhs) [excluding depreciation Rs. 2427.53 lakhs (2005 : Rs. 1829.39lakhs)].
23. The net difference in foreign exchange credited to the Profit and Loss Account is Rs. 171.23 lakhs (2005 : Rs. 309.92 lakhs). The debit onaccount of exchange differences in respect of forward exchange contracts, to be recognised in the Profit and Loss Account or capitalised insubsequent accounting periods is Rs. 40.90 lakhs (2005 : Rs. 46.18 lakhs).
24. Exceptional items of Rs. 21001.18 lakhs (2005 : Rs. 1355.16 lakhs) comprise of :
(a) Profit on sale of certain long term investments Rs. 16757.83 lakhs (2005 : Rs. 582.12 lakhs)
(b) A profit of Rs. 4840.00 lakhs arising out of the transfer of the right to carry on LCV business alongwith the congeries of rights therein andintellectual property rights to its subsidiary Mahindra International Limited for a consideration of Rs. 4840.00 lakhs.
(c) Amortisation of l iabil ity and other retirement benefits made under Voluntary Retirement Schemes aggregating toRs. 596.65 lakhs (2005 : Rs. 526.05 lakhs)
(d) Benefit of Rs. Nil (2005 : Rs. 2125.13 lakhs) arising out of early repayment of Sales tax Loan.
(e) Provision for diminution in value of certain assets substantially retired from active use Rs. Nil (2005: Rs. 826.04 lakhs)
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25. The components of Deferred tax liability and assets as at 31st March, 2006 are as under :
2006 2005Rupees lakhs Rupees lakhs
Deferred tax liability:
(i) On fiscal allowances on fixed assets ................................................................. 187,44.00 223,64.00
(ii) Others ................................................................................................................. 2,95.00 5,14.00
190,39.00 228,78.00Deferred tax assets:
(i) Provision for leave encashable at retirement/cessation ..................................... 18,16.00 16,41.00
(ii) Provision for Doubtful debts /Advances ............................................................ 17,96.00 18,02.00
(iii) Others ................................................................................................................. 7,52.00 4,60.00
43,64.00 39,03.00
Net Deferred tax liability ............................................................................................. 146,75.00 189,75.00
26. Earnings per Share :2006 2005
Amount used as the numerator – Balance of profit for 2005-2006 (Rupees lakhs) ....................... 857,10.49 512,67.15
(Gain)/Loss on difference in exchange on bonds (Rupees lakhs) ................................................... 1,18.93 (6,47.62)
Amount used as the numerator for diluted earnings per share (Rupees lakhs) ............................. 858,29.42 506,19.53
Weighted average number of equity shares used in computing basic earnings per share ............ 22,51,11,765 22,24,99,782
Effect of potential ordinary (equity) shares on conversion of bonds/debentures ............................ 2,06,32,529 2,18,34,008
Weighted average number of equity shares used in computing diluted earnings per share .......... 24,57,44,294 24,43,33,790
Basic Earnings per share (Rs.) (Face value of Rs. 10 per share) .................................................... 38.07 23.04
Diluted Earnings per share (Rs.) ....................................................................................................... 34.93 20.72
In the computation of earnings per share for the periods above, the Company has considered the bonus shares issued by it in September 2005and given effect to the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants ofIndia.
27. Credit to “Provision for diminution in value of Investments and Other assets” pursuant to the Schemes of Arrangement approved by the Hon’bleHigh Court consists of :
2006 2005Rupees lakhs Rupees lakhs
Provision for diminution in value of investments # ........................................................................... 65,18.56 74,38.13
Provision for diminution in value of other assets # .......................................................................... 12,34.14 16,47.36
Total ........................ 77,52.70 90,85.49
# Of the above, Provision for diminution in value of investments of Rs. 2217.50 lakhs (2005 : Rs. 647.00 lakhs) and Provision for diminution invalue of other assets Rs. 345.29 lakhs (2005 : Rs. 630.85 lakhs) have been written back during the year.
# Of the above, Provision for diminution in value of investments of Rs. 1230.00 lakhs (2005 : Rs. 2000.00 lakhs) and Provision for diminution inthe value of other assets Rs. Nil (2005 : Rs. 131.49 lakhs) has been set up during the year.
During the year Rs. 67.93 lakhs (2005 : Rs. 362.86 lakhs) has been regrouped from Provision for diminution in value of other assets to Provisionfor diminution in value of investments
28. Provision for doubtful debts and advances include :2006 2005
Rupees lakhs Rupees lakhs
Provision for doubtful debts & advances/diminution in value of other assets made during the year (Net) 81.11 12,64.14
Less: Transfer from Investment Fluctuation Reserve ....................................................................... — 1,31.49
Total ........................ 81.11 11,32.65
29. Provision for diminution in the value of long term investments include :2006 2005
Rupees lakhs Rupees lakhs
Provision for diminution in value of investments, made during the year (Net) ................................ (9,87.50) 13,42.54
Less: Transfer from Investment Fluctuation Reserve ....................................................................... 12,30.00 20,00.00
Total ........................ (22,17.50) (6,57.46)
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30. Donations and Contributions include contributions to:(a) All India Congress Committee : Rs. Nil (2005 : Rs. 75.00 lakhs)(b) Bhartiya Janata Party : Rs. Nil (2005 : Rs. 75.00 lakhs)(c) Shiv Sena : Rs. Nil (2005 : Rs. 20.00 lakhs)(d) Telugu Desam Party : Rs. Nil (2005 : Rs. 10.00 lakhs)
31. The outstanding derivative instruments as on 31st March, 2006 :The Company has taken forward contracts to hedge exposures arising out of trade payables in foreign currency. Such outstanding forwardcontracts have been booked for fixing of exchange rates between Cross currencies like Euro/JPY and the USD. The amounts hedged andoutstanding are JPY 2500 lakhs and Euro 35 lakhs.The Exports receivables of the Company have been hedged in part by forward contracts (US $ 305 lakhs) and partly (US $ 120 lakhs) by aderivative structure in the form of “Range Forward”.The Company has outstanding borrowings of JPY 56864 lakhs and US $ 100 lakhs under the External Commercial Borrowing facility. TheseForeign Currency Loans have been completely hedged using a currency swap structure converting the liability into a full fledged Rupee liability.The Company has made an issue of US $ 1000 lakhs in the form of Foreign Currency Convertible Bonds in May, 2004. Out of the said issue,Bonds of value US $ 647.30 lakhs have been converted into equity as at 31st March, 2006. The balance outstanding of US $ 352.70 lakhs hasnot been hedged.The Foreign Currency Exposures not hedged by a derivative instrument or otherwise as on 31st March, 2006 are – Receivables of EURO 4.94lakhs, GBP 1.87 lakhs, AUD 12.87 lakhs, CHF 0.14 lakhs, SEK 1.42 lakhs and Payables of USD 135.80 lakhs, AUD 0.14 lakhs, DKK 0.43 lakhsand SGD 0.15 lakhs.The above disclosure has been made consequent to an announcement by the Institute of Chartered Accountants of India in December 2005,which is applicable to financial periods ending on or before 31st March, 2006. Therefore, the corresponding figures for the previous year havenot been disclosed.
32. Related Party Transactions :
(a) Related parties where control exist :
(i) Subsidiaries :
Sl. No. Name of the Company Sl. No. Name of the Company
1. Mahindra Intertrade Limited 29. Mahindra Engineering & Chemical Products Limited2. Mahindra Holdings & Finance Limited 30. Mahindra Steel Service Centre Limited3. Mahindra Acres Consulting Engineers Limited 31. Mahindra Gesco Developers Limited4. Mahindra Holidays & Resorts India Limited 32. Mahindra Infrastructure Developers Limited5. Mahindra & Mahindra Financial Services Limited 33. Mahindra Ashtech Limited6. Tech Mahindra Limited 34. NBS International Limited7. Bristlecone (Singapore) Pte. Limited 35. Mahindra World City Developers Limited.8. Tech Mahindra GmbH 36. Tech Mahindra (Singapore) Pte. Limited9. Mahindra Logisoft Business Solutions Limited 37. Tech Mahindra (Americas) Incorporated
10. Mahindra SAR Transmission Private Limited 38. Bristlecone India Limited11. Bristlecone UK Limited 39. Automartindia Limited12. Mahindra Shubhlabh Services Limited 40. Mahindra USA Incorporated13. Bristlecone Limited 41. Mahindra Gujarat Tractor Limited14. Bristlecone Incorporated 42. Mahindra Insurance Brokers Limited15. Mahindra Holidays and Resorts USA Incorporated 43. Bristlecone GmbH16. Mahindra Middleeast Electrical Steel Service Centre (FZC) 44. Mahindra & Mahindra South Africa (Pty) Limited.17. Mahindra Engineering Design & Development Company Limited 45. Mahindra Renault Private Limited (w.e.f. 5th August, 2005).18. Mahindra (China) Tractor Company Limited (w.e.f. 13th May, 2005) 46. Mahindra Europe s.r.l. (w.e.f. 31st May, 2005)19. Mahindra Automotive Steels Limited (w.e.f. 27th May, 2005) 47. Mahindra Ugine Steel Company Limited (w.e.f. 21st June, 2005)20. Mahindra-BT Investment Company (Mauritius) Limited 48. Mahindra Overseas Investment Company (Mauritius) Ltd
(w.e.f. 9th May, 2005)21. Tech Mahindra (R & D Services) Limited 49. Mahindra World City (Jaipur) Limited (w.e.f. 26th August, 2005)
(w.e.f. 28th November, 2005)22. Tech Mahindra (R & D Services) Incorporated 50. Tech Mahindra (R & D Services) Pte Limited
(w.e.f. 28th November, 2005) (w.e.f. 28th November, 2005)23. Mahindra World City (Maharashtra) Limited (formerly known as
Mahindra Realty Limited) (w.e.f. 21st September, 2005) 51. Mahindra International Limited (w.e.f. 1st November, 2005)24. Stokes Group Limited (w.e.f. 3rd January, 2006) 52. Tech Mahindra (Thailand) Limited (w.e.f. 21st February, 2006)25. Stokes Forgings Dudley Limited (w.e.f. 3rd January, 2006) 53. Jensand Limited (w.e.f. 3rd January, 2006)26. Plexion Technologies (India) Private Limited 54. Stokes Forgings Limited (w.e.f. 3rd January, 2006)
(w.e.f. 15th February, 2006)27. Plexion Technologies (UK) Limited (w.e.f. 15th February, 2006) 55. Plexion Technologies GmbH (w.e.f. 15th February, 2006)28. Tech Mahindra Foundation (w.e.f. 22nd February, 2006) 56. Plexion Technologies Incorporated (w.e.f. 15th February, 2006)
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(b) Other parties with whom transactions have taken place during the year.
(i) Associates :
Sl No Name of the Company Sl. No Name of the Company
1. Siroplast Limited 4. Owens Cornings (India) Limited
2. Mahindra Ugine Steel Company Limited. (upto 20th June, 2005) 5. Mahindra Water Utilities Limited
3. Mahindra Construction Company Limited
(ii) Joint Ventures
Sl No Name of the Company
1. Mahindra Sona Limited
(iii) Key Management Personnel :
Vice Chairman and Managing Director .................. Mr. Anand Mahindra
Executive Directors ................................................. Mr. B.N. Doshi
Mr. A.K. Nanda
Mr. A.E. Durante (upto 25th September, 2005)
(c) The related party transactions are as under :Rupees lakhs
Sl. No. Nature of Transactions Subsidiaries Associate Joint Ventures Key ManagementCompanies Personnel
1. Purchases :
Goods ........................................................... 253,28.62 5,65.70 45,86.66 —(88,30.15) (11,44.21) (49,52.51) (—)
Fixed Assets ................................................. 41,36.55 25.69 — —(39.19) (—) (—) (—)
Services ........................................................ 68,08.12 — — —(18,08.23) (8,07.27) (—) (—)
2. Sales :
Goods ........................................................... 439,55.89 — 0.39 —(233,42.28) (7.40) (—) (—)
Fixed Assets ................................................. 29,28.89 — — —(0.11) (—) (—) (—)
Services ........................................................ 13,13.24 — 0.15 —(2,12.60) (—) (—) (—)
3. Investments :Purchase ...................................................... 244,52.14 — — —
(143,01.09) (—) (—) (—)
Sales/Redemption ........................................ 16,61.76 — — —(42,64.69) (—) (—) (—)
4. Share Application Money (Net) ............................. 42,83.60 — — —(41,86.06) (—) (—) (—)
5. Deputation of Personnel :
From Related Parties ................................... 68.70 — — —(21.77) (—) (—) (—)
To Related Parties ........................................ 3,86.27 2.66 — —(1,32.84) (16.74) (—) (—)
6. Write Back of Provision for doubtful debts andadvances .............................................................. — — — —
(0.73) (—) (—) (—)
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(c) The related party transactions are as under : (Contd.)Rupees lakhs
Sl. No. Nature of Transactions Subsidiaries Associate Joint Ventures Key ManagementCompanies Personnel
7. Provision for diminution in value of other assets . — — — —(1,31.49) (—) (—) (—)
8. Provision for diminution in value of other assetswritten back .......................................................... 3,00.29 45.00 — —
(5,32.32) (98.53) (—) (—)
9. Finance :
Inter Corporate Deposits given .................... 6,90.00 — — —(30,45.00) (—) (8,61.22) (—)
Inter Corporate Deposits refunded byparties ........................................................... 9,75.00 45.00 — —
(41,71.50) (5,00.00) (12,02.77) (—)
Interest received ........................................... 5,35.39 31.63 — 1.17(6,18.22) (48.20) (12.89) (—)
Dividend received ......................................... 36,44.41 — — —(69,83.20) (—) (—) (—)
Dividend distributed ..................................... 3.25 — — —(—) (—) (—) (—)
Security Deposits Accepted ........................ 1,81.43 — — —(—) (—) (—) (—)
Security Deposits Placed ............................. — — — —(1,46.01) (—) (—) (—)
10. Guarantees & Collaterals given ............................ 8,70.00 — — —(—) (—) (—) (—)
11. Other Transactions :
Other Income ............................................... 2,47.11 1.20 4.32 —(3,15.22) (8.31) (2.60) (—)
Other Expenses ............................................ 5,01.51 — — —(16,52.32) (1.37) (11.67) (—)
Reimbursements received from parties ....... 47,20.41 1,32.31 2.68 —(37,64.37) (2,08.59) (16.74) (—)
Reimbursements made to parties ................ 11,63.74 0.43 — —(1,67.17) (23.86) (0.38) (—)
Advance given by group company .............. 2,35.00 — — —(—) (—) (—) (—)
Advance refunded by group company ........ 6,50.00 2,00.00 — —(—) (—) (—) (—)
12. Outstandings :
Payable ......................................................... 23,98.58 — 8,37.20 2,15.86(7,52.17) (1,22.35) (10,56.76) (2,41.30)
Receivable .................................................... 187,16.45 2,39.61 3.25 —(141,75.57) (2,72.39) (—) (82.26)
Inter Corporate Deposits given .................... 18,33.76 4,59.42 — —(21,18.76) (5,04.42) (—) (—)
Guarantees & Collaterals given .................... 27,17.00 — — —(—) (47,83.96) (—) (—)
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(c) The related party transactions are as under : (Contd.)Rupees lakhs
Sl. No. Nature of Transactions Subsidiaries Associate Joint Ventures Key ManagementCompanies Personnel
13. Managerial Remuneration ....................................... — — — 5,61.47(—) (—) (—) (5,42.59)
14. Dividends ................................................................ — — — 33.08(—) (—) (—) (22.47)
15. Provision for diminution in value of other assets ... 5,65.43 6,68.71 — —(9,33.65) (7,13.71) (—) (—)
16. Provision for doubtful debts/advances .................. 1,61.66 8.32 — —(1,61.66) (8.32) (—) (—)
17. Share Application Money ....................................... 84,69.66 — — —(41,86.06) (—) (—) (—)
18. Stock Options ........................................................ — — — 8.38(—) (—) (—) (22.04)
19. Loan Given to Key Management Personnel .......... — — — —(—) (—) (—) (1,25.00)
20. Loan Refunded by Key Management Personnel ... — — — 80.00(—) (—) (—) (45.00)
Previous year’s figures are given in brackets.The previous year figures are suitably regrouped.
The significant related party transactions are as under
Rupees lakhs
Nature of Transactions Subsidiaries Amount Associate Companies Amount Joint Ventures Amount
1. Purchase – Goods Mahindra Intertrade Ltd. 167,26.85 Mahindra Ugine 4,16.07 Mahindra 45,86.66(81,03.37) Steel Company Ltd. (9,25.66) Sona Ltd. (49,52.51)
Mahindra Automotive 36,57.22 Siroplast Ltd. 1,49.63Steels Ltd. (—) (2,18.56)
Mahindra SAR Transmission 31,65.52Pvt. Ltd. (—)
2. Sale – Goods Mahindra USA Inc. 194,00.72 Mahindra Ugine — Mahindra 0.39(163,72.71) Steel Company Ltd. (7.40) Sona Ltd. (—)
Mahindra International Ltd. 44,62.63(—)
Mahindra & Mahindra South 119,56.10Africa (Pty) Ltd. (25,43.72)
NBS International Ltd. —(38,89.29)
3. Investment – Purchase Mahindra 52,33.12International Ltd. (—)
Mahindra Renault 26,25.50Pvt. Ltd. (—)
Mahindra Automotive 80,00.00Steels Ltd. (—)
Stokes Group Ltd. 28,96.55(—)
Plexion Technologies (India) 32,61.61Pvt. Ltd. (—)
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MAHINDRA & MAHINDRA LIMITED
The significant related party transactions are as under (Contd.)Rupees lakhs
Nature of Transactions Subsidiaries Amount Associate Companies Amount Joint Ventures Amount
Bristlecone Ltd. —(50,98.03)
Mahindra & Mahindra —Finanical Services Ltd. (47,05.72)
Mahindra SAR Transmission —Pvt. Ltd. (14,62.85)
4. Investments – Sales Bristlecone Ltd. —(19,26.19)
5. Investments – Redemption Mahindra Ugine 16,61.76Steel Company Ltd. (—)
Mahindra Gesco —Developers Ltd. (23,34.58)
6. Share Application Money(Net) Bristlecone Ltd. —(6,99.22)
Mahindra Automotive 48,50.00Steels Ltd. (—)
Mahindra Overseas Investment 1,32.82Company (Mauritius) Ltd. (34,86.84)
7. Provision for diminution Mahindra Ashtech Ltd. —in value of other Assets (1,31.49)
8. Write Back of Provision Mahindra Logisoft —for Doubtful debt/Advances Business Solutions Ltd. (0.73)
9. Inter Corporate Mahindra Shubhlabh 2,50.00 Jayem —Deposits given Services Ltd. (—) Automotives Ltd. (8,61.22)
Mahindra International Ltd. 1,25.00(—)
Mahindra Engineering 2,40.00Design & Development (—)
Company Ltd.
Plexion Technologies 75.00(India) Pvt. Ltd. (—)
Mahindra Holdings —& Finance Ltd. (27,22.00)
10. Inter Corporate Deposits Mahindra Intertrade Ltd. 1,50.00 Mahindra Construction 45.00 Jayem Auto— —refunded by parties (—) Company Ltd (—) motives Ltd. (12,02.77)
Mahindra Holdings 2,10.00 Mahindra Ugine —& Finance Ltd. (32,38.50) Steel Company Ltd (5,00.00)
Mahindra Shubhlabh Services Ltd. 2,50.00(—)
Mahindra International Ltd. 1,25.00(—)
Mahindra Engineering Design & 2,40.00Development Company Ltd. (—)
Automartindia Ltd. —(5,50.00)
11. Guarantees given Mahindra Overseas Investment 8,70.00 Company (Mauritius) Ltd. (—)
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MAHINDRA & MAHINDRA LIMITED
33. Joint Venture Disclosure
i) Jointly Controlled Entities by the Company :
Name of the Entity Country of Incorporation % Holding
a) Mahindra Sona Limited * ............................................................................ India 29.77 %
b) PSL Erickson Limited* ................................................................................ India 18.06 %
* Shareholding is through a subsidiary, Mahindra Holdings & Finance Limited.
ii) Interests in the Assets, Liabilities, Income and Expenses with respect to Jointly Controlled Entities.
2006 2005Rupees lakhs Rupees lakhs
I ASSETS
1 Fixed Assets ............................................................................................................. 4,78.32 4,20.15
2 Investment ................................................................................................................ 3.38 —
3 Current Assets, Loans and Advances
a Inventories ........................................................................................................ 3,86.71 5,05.53
b Sundry Debtors ................................................................................................ 10,58.97 10,71.82
c Cash and Bank Balances ................................................................................ 1,67.32 33.88
d Loans and Advances ....................................................................................... 1,25.51 1,38.63
4 Deferred Tax – Net ................................................................................................... 23.84 4.16
II LIABILITIES
1 Loan Funds
a Secured Loans ................................................................................................. 3,19.63 2,69.06
b Unsecured Loans ............................................................................................. 50.48 50.48
2 Current Liabilities and Provisions
a Liabilities ........................................................................................................... 6,15.18 8,40.18
b Provisions ......................................................................................................... 2,51.06 2,55.97
III INCOME
1 Sales ......................................................................................................................... 41,39.19 41,30.21
2 Other Income ........................................................................................................... 1,20.68 1,46.31
IV EXPENSES
1 Raw Materials, Finished and Semi Finished Products ............................................ 24,57.74 24,44.79
2 Excise Duties ............................................................................................................ 3,38.88 3,48.40
3 Manufacturing, Selling Expenses, etc ...................................................................... 8,39.14 9,31.63
4 Depreciation ............................................................................................................. 52.23 68.29
5 Provision for Taxation ............................................................................................... 1,94.83 2,22.77
V OTHER MATTERS
1 Contingent Liabilities ................................................................................................ 2,82.09 3,35.66
2 Capital Commitments ............................................................................................... 1.56 42.84
34. Additional information pursuant to the provisions of paragraphs 3(i)(a) and (ii), 4C and 4D of Part II of Schedule VI to the Companies Act, 1956- See Schedule XVI. Previous year’s figures are indicated below the current year’s figures.
35. Additional information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956 - See Schedule XVIII.
36. Previous year’s figures have been regrouped/restated wherever necessary.
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SCHEDULE XV
Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956 for the year ended 31st March, 2006
2006 2005Rupees Rupees Rupees
lakhs lakhs lakhs
Profit before Taxation as per Profit and Loss Account .................................................................. 1,099,50.49 714,17.15
Add : Depreciation charged in the Accounts ........................................................................... 192,87.74 177,17.03
: Directors’ Remuneration including Directors’ fees ......................................................... 6,88.79 6,94.29
: Provision for doubtful debts and advances (Net) .......................................................... 81.11 11,32.65
: Net reduction in the fair value of current investments ................................................... 68.55 (79.07)
: Voluntary Retirement Schemes amortisation included in Exceptional Item ................... 5,96.65 5,26.05
: Provision for diminution in value of long term investments (Net) ................................... (22,17.50) (6,57.46)
185,05.34 193,33.49
1,284,55.83 907,50.64
Less : Depreciation under Section 350 of the Companies Act, 1956 ..................................... 171,68.98 173,29.13
: Profit on sale of Investments (Net) ................................................................................. 175,84.83 6,66.12
: Profit on sale, etc. of Fixed Assets (Net) ....................................................................... 17,89.78 (1,57.41)
: Loss on sale of Fixed Assets as per Section 349 (3)(d) of the Companies Act, 1956 (Net) 1,34.40 1,41.95
: Bad Debts and Advances written off / adjusted against provision ............................... 16,43.47 —
: Profit on sale of LCV business together with congeries of rights ................................. 48,40.00 —
431,61.46 179,79.79
Total........ 852,94.37 727,70.85
Commission payable to the wholetime Directors restricted to ...................................... 2,40.75 2,36.73
Commission payable to the non-wholetime Directors restricted to .............................. 1,01.22 1,10.55
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MAHINDRA & MAHINDRA LIMITED
SCHEDULE XVI
Additional Information pursuant to the prAdditional Information pursuant to the prAdditional Information pursuant to the prAdditional Information pursuant to the prAdditional Information pursuant to the provisions of Paragraph 3(i) (a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.ovisions of Paragraph 3(i) (a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.ovisions of Paragraph 3(i) (a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.ovisions of Paragraph 3(i) (a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.ovisions of Paragraph 3(i) (a) and (ii), 4C and 4D, of Part II of Schedule VI to the Companies Act, 1956.
(A) P(A) P(A) P(A) P(A) PARARARARARTICULARS IN RESPECT OF GOODS MANUFTICULARS IN RESPECT OF GOODS MANUFTICULARS IN RESPECT OF GOODS MANUFTICULARS IN RESPECT OF GOODS MANUFTICULARS IN RESPECT OF GOODS MANUFACTURED :ACTURED :ACTURED :ACTURED :ACTURED :
Sl. Class of Goods Unit of Licensed Installed ActualNo. Measurement Capacity per Capacity per Production
annum [Note (i)] annum [Note (i)] [Notes (ii) & (iii)(a)]
1. a. On Road Automobiles having four ormore wheels such as light, medium andheavy commercial vehicles, jeep typevehicles and passenger cars coveredunder sub heading (5) of Heading (7) ofFirst Schedule [Note (iv) below] .............. Nos. 2,21,000 1,56,000 1,25,896
2,21,000 1,50,000 1,24,795b. Three Wheelers ....................................... Nos. 80,000 36,000 22,317
64,000 30,000 23,2302. a. Agricultural Tractors [Note (vi) below] ..... Nos. 1,69,000 1,35,500 83,708
2,12,000 1,35,500 64,453b. Tractor Skids ........................................... These are 3,367
manufactured 2,662against spare capacity
under 2(a)3. Manufactured and Purchased Parts and
Accessories for sale [Notes (iii)(a) and (b)below] ............................................................. Nos. These are 2,10,141
manufactured 1,73,910against spare
capacity under1 and 2 above
4. Internal Combustion Piston Engines .............. Nos. 1,10,000 1,02,000 92,2651,10,000 75,000 76,124
5. Petrol/Diesel Engines 15 HP to 80 HP [Note (i)(c) below] ..................................................... Nos. — — 438
— — 2796. Industrial Petrol Engines ................................. Nos. 500 500 —
500 500 —7. Agricultural Implements .................................. Nos. 2,38,000 — —
2,38,000 — —8. Parts and accessories of motor vehicles ....... Nos. 5,00,000 1,25,000 1,05,378
5,00,000 1,25,000 1,01,9719. Internal Combustion Engine ........................... Nos. 50,000 33,600 27,278
50,000 33,600 89110. D.G. Sets ....................................................... Nos. Assembly at 1,085
3rd Party Locations —11. Export benefits ................................................
* Used for Captive Consumption
Notes :
(i) (a) The installed capacity has been certified by Presidents, which the auditors have relied on without verification as this is a technical matter.
(b) The licensed capacities include / represent, as the case may be, registrations granted and Industrial Entrepreneur Memorandum filed with,and duly acknowledged by, the Government pursuant to the schemes of de-licensing. [Also see note (vi) below].
(c) Within the overall licensed capacity in item 1 above, the Company is permitted to manufacture for outside sale 10000 petrol / dieselengines and 4000 tonnes grey iron castings. The information given against item 5 is in respect of such petrol/diesel engines transferred tothe Marketing Unit for sale.
(d) Bullet proof work and fabrication on base vehicles has been carried out at third party facilities. 172172172172172 (2005 : 39) Vehicles were produced andsold using such third party facilities and are included in item (A) 1(a).
(e) The installed capacity mentioned against item (A) 1(a) above includes 1800018000180001800018000 (2005 : Nil) for production of vehicles for a third party.
(ii) Actual Production includes production for captive consumption.
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MAHINDRA & MAHINDRA LIMITED
Opening Stock Closing Stock Sales
Quantity Value Quantity Value Quantity Value
RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupeeslakhslakhslakhslakhslakhs lakhslakhslakhslakhslakhs lakhs lakhs lakhs lakhs lakhs
5,186 178,39.25 5,869 204,48.53 1,24,997 5,646,23.422,735 88,14.54 5,186 178,39.25 1,22,071 4,914,39.381,302 16,17.66 1,157 15,59.94 22,419 318,57.481,027 12,21.10 1,302 16,17.66 22,953 336,13.163,720 85,54.95 5,846 132,67.43 81,556 2,415,02.002,015 46,04.45 3,720 85,54.95 62,727 1,794,40.75
63 2,79.97 120 5,80.12 3,306 137,58.4444 1,78.72 63 2,79.97 2,643 115,69.93
— 45,38.94 — 62,81.18 — 522,19.39— 35,15.68 — 45,38.94 — 370,87.38
335 2,93.60 379 3,74.11 281 2,48.86163 1,09.76 335 2,93.60 2,844 22,43.65
28 9.47 — — — —25 7.44 28 9.47 — —— — — — — —— — — — — —— — — — — —— — — — — —
290 9.81 6 0.52 2,354 3,38.21281 9.98 290 9.81 2,343 3,20.09179 —* 66 —* — —
— — 179 — — —— — 1 1.29 1,084 16,75.31— — — — — —
31,35.761,71.24
Total .... 9,093,58.877,558,85.58
(iii) (a) The actual production disclosed against manufactured components / sub-assemblies / steel blanks is the number of such componentstransferred during the year to the Marketing Unit / Spare Parts Stores for sale or sold otherwise.
(b) The Opening and Closing Stocks and Sales of goods shown under item 3 above consist of manufactured and purchased parts. Thebifurcation of stocks / sales into manufactured and bought-out parts is not practicable.
(iv) Production figures include “jeep type vehicles” at a stage without body, and light commercial vehicles at cowl & chassis stage. Closing stocksinclude 14 (2005 : 106) vehicles valued at Rs. 31.27 lakhs (2005 : Rs. 228.59 lakhs) on which body-building work was in progress as at theyear end.
(v) With regard to clause 3(ii) of Part II of Schedule VI to the Companies Act,1956, the Company is of the view that, in respect of the propertydevelopment activity, the Company is not a ‘manufacturing’, a ‘trading’ or a ‘service’ company falling under sub-clause (a), (b) and (c) thereof,but it is an ‘other’ company falling under sub-clause (e) thereof.
(vi) Licensed capacity in respect of Agricultural Tractor includes a Letter of Intent from the Government of India for expansion of the manufacturingcapacity from 25,000 to 60,000 tractors at Mumbai subject to fulfillment of conditions mentioned therein; an Industrial License will be issued onfulfillment of the conditions mentioned in the Letter of Intent.
SCHEDULE XVI (Contd.)
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MAHINDRA & MAHINDRA LIMITED
SCHEDULE XVI (Contd.)
(B) PARTICULARS IN RESPECT OF GOODS TRADED :
Purchases Opening Stock Closing Stock Sales
Sl. Unit ofNo. Class of Goods Measurement Quantity Value Quantity Value Quantity Value Quantity Value
RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupees RupeesRupeesRupeesRupeesRupeeslakhslakhslakhslakhslakhs lakhslakhslakhslakhslakhs lakhslakhslakhslakhslakhs lakhslakhslakhslakhslakhs
1. Tractors ................................................. Nos. 194 5,38.13 15 48.67 41 1,25.54 167 6,83.7335 2,10.86 — — 15 48.67 20 1,07.10
2. Agricultural Implements ........................ Nos. 3,847 6,44.39 1,003 1,54.51 1,006 1,56.56 3,759 6,99.972,219 5,02.99 955 1,16.97 1,003 1,54.51 2,172 5,46.29
3. Light Commercial Vehicles .................... Nos. 175 5,86.75 — — — — 175 6,20.60— — — — — — — —
4. Bought—out Spares for Resale[Note (iii)(b) to item “A”] ........................ 210,74.92 — — —
190,07.50 — — —
5. Others ................................................... 2.98 — — 2.9837.99 — — 39.20
Total .... 228,47.17 2,03.18 2,82.10 20,07.28197,59.34 1,16.97 2,03.18 6,92.59
Note (v) to item (A).
(C) PARTICULARS OF RAW MATERIALS AND COMPONENTS CONSUMED :
Sl. Unit of ValueNo. Description Measurement Quantity Rupees lakhs
1. Steel Items (Sheets, Tubes, etc.) ............................................................................ Nos. 1,83,0501,29,803
Sq.Feet — 204,74.8811 164,01.56
Metric Tonnes 52,82547,887
2. Aluminium Sections and Other Aluminium Items .................................................... Metric Tonnes 512 5,47.03934 8,78.43
3. Other Metals (Steel Shots, Lead, Tin, etc.) ............................................................. Metric Tonnes 69 22.16119 36.89
4. Paints ....................................................................................................................... Nos. 86,21228,215
Kgs. 17,25,723 54,44.7518,98,709 52,04.20
Litres 25,32,94725,71,675
5. Steel Scrap .............................................................................................................. Metric Tonnes 5,413 8,18.566,884 9,23.47
6. Pig Iron ..................................................................................................................... Metric Tonnes 2,094 3,17.212,337 4,17.48
}
}
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MAHINDRA & MAHINDRA LIMITED
}SCHEDULE XVI (Contd.)
(C) PARTICULARS OF RAW MATERIALS AND COMPONENTS CONSUMED (Contd.) :
Sl. Unit of ValueNo. Description Measurement Quantity Rupees lakhs
7. Miscellaneous Foundry Materials ............................................................................. Nos. 13,37,92114,61,695
Metric Tonnes 7,733 5,27.168,728 5,10.60
Litres 2,20,96574,849
8. Other Materials (Direct Stores, patterns, Oils, etc.) ................................................ Not practicable *43,42.66to give *25,94.71quantitative details
9. Tyres and Tubes ....................................................................................................... Nos. *20,82,052 *264,99.71*19,75,254 *208,68.31
10. CKD Components for Light Commercial Vehicles .................................................. Nos. 1,909 3,73.9468 1,16.40
11. Components other than Tyres and Tubes (including processing charges) ............. *4,750,56.96*3,899,53.37
12. Material handling and transportation charges, etc. incurred on the above items .. 244,24.56not separately allocable ........................................................................................... 199,99.93
Total .... 5,588,49.584,579,09.75
* Includes items used for other than production, amounts not ascertained.
Notes :
(i) The consumption in value has been ascertained on the basis of opening stock plus purchases less closing stock and includes the adjustmentof excesses and shortages as ascertained on physical count and write—off of obsolete and unserviceable raw materials and components.
(ii) The consumption in value shown against item 11 is a balancing figure based on the total consumption shown in the Profit and Loss Account.
(D) VALUE OF IMPORTS ON C.I.F. BASIS ACCOUNTED FOR DURING THE YEAR :2006 2005
Rupees lakhs Rupees lakhs1. Raw Materials (including CKD Components for Light Commercial Vehicles) . 36,85.66 15,74.762. Components, Spare Parts, etc. ...................................................................... 97,86.94 81,07.143. Capital Goods .................................................................................................. 29,07.16 42,05.814. Items imported for Resale ............................................................................... 9,21.39 2,40.69
Total .... 173,01.15 141,28.40
Notes :(i) Credits, if any, recoverable in respect of short landings, etc. are not considered.(ii) The value of imports shown above includes :
(a) Imports on C&F basis as per suppliers’ invoices Rs. 2269.74 lakhs (2005 : Rs. 1263.98 lakhs).(b) Imports on ‘cost’ basis Rs. 12197.97 lakhs (2005 : Rs. 8209.62 lakhs).
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MAHINDRA & MAHINDRA LIMITED
SCHEDULE XVI (Contd.)
(E) EXPENDITURE IN FOREIGN CURRENCIES (SUBJECT TO DEDUCTION OF TAX WHERE APPLICABLE) :
2006 2005Rupees lakhs Rupees lakhs
1. Professional and Consultancy Fees [including Rs. 19.42 lakhs (2005 :Rs. 9.26 lakhs) capitalised] ..................................................................................... 5,65.41 14,84.99
2. Commission on Exports .......................................................................................... 14,49.00 16,99.403. Royalty ..................................................................................................................... 1.14 12.564. Others ...................................................................................................................... 25,78.97 19,75.85
Total .... 45,94.52 51,72.80
Notes :(1) Fee for use of technology, development expenditure and software expenditure [refer to Note 1 (B)] :
(a) written off during the year Rs.15.36 lakhs (2005 : Rs. 40.88 lakhs); and(b) amount remitted during the year Rs. 428.43 lakhs (2005 : Rs. 56.29 lakhs) net of tax deducted at source Rs. 11.12 lakhs (2005 : Rs.
4.92 lakhs) are not included in the above figures.
(F) REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDENDS TO NON-RESIDENT SHAREHOLDERS :
Number of Amount remitted Dividend relating to
Shareholders Equity shares
Rupees lakhs
2006 : 2 2,43,393 31.64 Year ended 31st March, 2005
2005 : 3 62,19,849 5,59.79 Year ended 31st March, 2004
(G) EARNINGS IN FOREIGN EXCHANGE :
2006 2005Rupees lakhs Rupees lakhs
1. Export of goods on F.O.B. basis ............................................................................. 465,10.26 312,42.46
2. Interest ..................................................................................................................... 11,15.75 6,81.96
3. Others (freight, etc.) ................................................................................................. 31,81.71 19,81.69
Total .... 508,07.72 339,06.11
Notes :F.O.B. value of exports includes local sales which qualify for export benefits and for which payment is receivable in foreign currency and local / exportsales under rupee credit which qualify for export benefits.
(H) VALUE OF IMPORTED AND INDIGENOUS CONSUMPTION :*Raw Materials and Components
Rupees lakhs %1. Imported .................................................................................................................. 103,98.47 1.86
110,48.84 2.412. Indigenously obtained .............................................................................................. 5,484,51.11 98.14
4,468,55.91 97.59
Total .... 5,588,49.58 100.004,579,09.75 100.00
* Includes items used for other than production, amount not ascertained.
Notes :(1) Items purchased through canalising agencies have been considered as imported.(2) See Note (i) to item (C).(3) In giving the above information the Company has taken the view that spares and components as referred to in paragraph 4 (D)(c) of Part II of
Schedule VI covers only such items as go directly into production.
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MAHINDRA & MAHINDRA LIMITED
1 A. R. INDUSTRIES PVT LTD2 A.J.AUTO PVT.LTD.3 A.R.CORPORATION4 A-1 PRODUCTS5 AAKASH ENGINEERS6 ABHIJAT ENGINEERS7 ACCURATE ENGG CO.PVT LTD8 ACCURATE SPRINGS9 ACEY ENGG PVT LTD
10 ACRO11 AEROCOM AUTOMOTIVES PVT.LTD.12 AGROFAB MACHINERIES INDIA PVT. LTD.13 AHUJA ENGG WORKS14 AJANTA AGENCIES.15 AJIT ENGINEERING CO16 AKAR INDUSTRY17 ALF ENGINEERING CO18 ALFA TOOLS PVT LTD19 ALLIED SPARES AND AUTO20 ALMATS PRINT PACK PVT LTD21 ALPUMP PVT LTD22 AMAR AUTO AGENCY23 AMARDEEP ENGINEERS24 AMEYA ENGINEERING WORKS25 AMIT ENGINEERS26 AMUL INDUSTRIES LTD27 ANANDJI HARIDAS AND CO.PVT.LTD.28 ANDREW ENGINEERING CORPOR29 ANILUX COATED PRODUCTS PVT. LTD30 ARCHIT INDUSTRIES31 ARISTO PRECI MACHINES P LTD32 ARMATECH ASSOCIATES33 ASHA ENGG WORK34 ASHRA FILTRATION SOLUTIONS PVT LTD35 ASIA AUTOMOTIVE LTD36 ATAI AUTO ANCILLARIES37 ATIT ENGINEERING COMPANY38 ATOP PRODUCTS PRIVATE LIMITED39 AUTO GEMS (INDIA)40 AUTO MECH41 AUTO SHELL FOUNDRY42 AUTO TURN INDUSTRIES43 AUTOCOMP CORPORATION44 AUTOFORMS45 AUTOMOTION OF INDIA.46 AUTOMOTIVE ENGG WORKS47 AUTOMOTIVE INDUSTRIES48 AUTOSILENCERS INDIA49 AUXI AUTO50 AVADHUT INDUSTRIES51 AVCON CONTROLS PVT LTD52 AVDEL INDIA LTD.53 AVESTA ENTERPRISES PVT LTD.54 AWON AUTO ANCILLARIES PVT.LTD.55 BADAL ENTERPRISES56 BAJAJ SPRING UDYOG
57 BALA INDUSTRIES58 BEHZAD ENGINEERING PVT. LTD.59 BEMCO INDIA60 BENTEX ENGINEERING PRIVATE LIMITED61 BHAGYASHREE ENG P LTD62 BHAGYASHREE INDUSTRIES63 BHAGYASHRI HOME APPL P LTD64 BHARANI WIRING SYSTEMS65 BHARAT KUMAR & CO66 BHPL AUTO ENGINEERS PVT. LTD67 BHUKHANWALA DIAMOND TOOLS LTD68 BHUSHAN ENGINEERING WORKS69 BILL INDUSTRIES70 BLOW RUBBER INDUSTRIES71 BOBSON ENGINEERS AND
CONTRACTORS72 BOLTMASTER INDIA PVT. LTD.73 BOMBAY COMMERCIAL SYNDICATE74 BOMBAY TRPT ELECT COMPONENT
PVT LTD75 BRAHANS RUBBER PVT. LTD.76 C M SMITH AND SONS LIMITED77 C P FOUNDRY WORKS78 CAMATA ENTERPRISES79 CARLINE PRESSINGS PVT. LTD.80 CASPRO METAL INDUSTRIES PVT LTD81 CAST METAL INDUSTRIES P.LTD82 CASTALL INDUSTRIES83 CASTWEL AUTOPARTS PVT. LTD84 CASTWEL ENGINEERING SERVICES85 CASTWEL METAL INDUSTRIES86 CENLUB SYSTEMS87 CENTURY ALLOY INDUSTRIES88 CHAMP ENGINEEING WORKS89 CHANDAN ENTERPRISE.90 CHANDRA ENGINEERS91 CHISTY ENGINEERS PVT LTD92 CHOICE PRECITECH INDIA (P) LTD93 CHOPDA AUTO PARTS94 CHOPRA ENGINEERING COMPANY95 CHOUGULE INDUSTRIES96 CIRCLIPS INDIA (P) LTD.97 CONAL INTERNATIONAL98 CONSUMMATE MATERIALS TESTING &
ENGG99 D C ENGINEERING INDUSTRIE
100 D G CORPORATION101 D.V.S. INDUSTRIES (PVT) LTD.102 DANCAL INDIA PVT LTD103 DELITE PLASTICS104 DELUX ENGINEERING105 DESHPANDE AUTOMECH PVT LTD106 DEVI ENTERPRISES107 DEVKI AUTO INDUSTRIES PVT LTD.108 DHAM FASTENERS109 DIES & TOOLS LTD
110 DIESEL POWER111 DURGESH ENTERPRISE112 EAGLE ENTERPRISES113 EASTMAN CAST & FORGE LIMITED114 EATA PLAST FABRICS115 ECHJAY INDUSTRIES LTD116 EHARA ENGINEERING PVT LTD117 EHARA INDUSTRIES118 ELECTROMAGS AUTOMOTIVE
PRODUCTS119 ELFAB INDUSTRIES120 EMDET ENGINEERS PVT.LTD.121 ENGINETECH SYSTEMS INDIA PVT LTD122 ENPY METALFORM PVT LTD.123 EROS METAL WORK PVT. LTD.124 ESOOFALI ESMAILJI KARACHIWALLA &
CO125 ESWARI ENTERPRISES126 EVER SHINE ENGINEERS127 EXCEL AUTO INDUSTRIES128 FIBRE GLASS AUTO PRODUCTS129 FLEDON ENGINEERING WORKS130 FLEX CHEMIE INDUSTRIES131 FLUID-METAL132 FORMATIC ENGINEERING WORKS133 FORTUNA ENGINEERING (NASIK)
PRIVATE LTD134 FORTUNA INDUSTRIES135 FOSAN COMPANY136 FOURESS ENTERPRISES137 FREE FIELD ENGINEER138 FRIENDS AUTO INDUSTRIES139 FRIENDS ENGG.WORKS140 FRIENDS INDUSTRIAL WORKS141 FRONTLINE ROLLFORM LTD142 FUTURA CONVEYOR SYSTEMS PVT.
LTD.143 G V J ENGINEERING144 GAIN MAX FERROCAST UNIT NO.2145 GAINMAX FERRO CAST PVT. LTD146 GAMMA INDUSTRIES147 GANESH ENGINEERING148 GAUTAM CASTING INDS. PVT LTD149 GAUTAM TECHNOCAST150 GEETA PUMPS PVT LTD151 GENUINE MANUFACTURING CO.152 GLOBE METAL INDUSTRY153 GOLD SEAL - SAARGUMMI INDIA (P)154 GOLD SEAL ENGINEERING PRODUCTS
LTD155 GOLE PRECISION TOOLS PVT LTD156 GUINDY TECHNOCRAFTS157 GUJARAT GEARS INDUSTRIES.158 GUJARAT STEEL INDUSTRIES159 H N ENTERPRISES160 H.S.N. PLASTICS
Sr. No. Name of the SSIs Sr. No. Name of the SSIs Sr. No. Name of the SSIs
SCHEDULE XVII
Following are the names of Small Scale Industrial Undertakings (SSIs) to whom the Company owes and which are outstandingfor more than 30 days as on 31st March, 2006.
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MAHINDRA & MAHINDRA LIMITED
161 HARKO METAL PVT LTD.162 HIMSONS STEEL PVT. LTD.163 HIND AUTO CRANKS PVT. LTD.164 HINDUSTAN ENGINEERS.165 HINDUSTAN FASTENERS PVT LTD166 HINDUSTAN GEARS167 HINDUSTAN MILTEK INDUSTRIAL
PRODUCT168 HINDUSTAN SPRING MFG. CO.169 HIPRO TOOLS PVT LTD170 HI-TECH FABRICATORS & ENG171 HYDERABAD GENERAL ENGG.WORKS172 HYDERABAD INDUSTRIAL PRODUCT173 HYDERABAD PRESS PRODUCTS174 I M I MACHINS TOOLS LTD.175 IMI MACHINE TOOLS PVT LTD176 IMPERIAL AUTO INDUSTRIES LTD.177 IMPRESSIVE IMPRESSIONS178 INDEX TOOLS.179 INDIAN ENGINEERING CO180 INDIAN PRESS TOOLS MFG181 INDMECH INDUSTRIAL CORPN182 INDU ENGINEERS183 INDUSTRIAL ENGG SYNDICATE184 INDUSTRIAL ENGINEERING WORKS185 INDUSTRIAL ENTERPRENEURS186 INDUSTRIAL ENTERPRISES187 INDUSTRIAL RUBBER PRODUCTS188 INDUSTRIAL SPRINGS MFG.CO.189 INNOVA RUBBERS PVT. LTD.190 INNOVATIVE INDUSTRIES191 INSULATION AND ELECTRICAL
PRODUCTS192 INTERFACE MICROSYSTEMS193 INVENTA ELECTRONICS PVT LTD194 J B INDUSTRIES195 J B TOOLS196 J K ENGINEERING197 J M INDUSTRIES198 JAI JALARAM ENGG COMPANY199 JAY INDUSTRIES200 JAYESS INDUSTRIES201 JAYKAY ENGG ENTERPRISES202 JITESH ENTERPRISES203 JMCO RUBBER PRODUCTS204 JTC ENGINEERING PVT LTD205 K T INDUSTRIES.206 KALA METALS207 KARISHMA ENGG WORKS208 KAY KAY FLUID SEALS LTD209 KINETIC GEARS210 KISHORE ENGINEERING WORKS211 KLIPCO PRIVATE LTD212 KRISHNA INDUSTRIES213 KYM ASSEMBLERS &
MANUFACTURERS
214 LAKSHMI ENGINEERING WORKS215 LAKSHMI PRECISION TOOLS LTD216 LAL ENGINEERING WORKS217 LALIT METAL INDUSTRIES218 LATA PLASTIC WORKS219 M B AUTO INDUSTRIES220 M G INDUSTRIES221 M NAGARAJ INDUSTRIES222 M.D. INDUSTRIES223 MAC STEEL PRIVATE LIMITED224 MACK SPRINGS PVT LTD225 MAGNA INDUSTRIES226 MAHABAL METALS PVT. LTD.227 MAHARASHTRA ENGINEERING228 MAHARASHTRA UDYOG229 MAHESH ENTERPRISES230 MAHNOT ENGINEERING INDUSTRIES231 MALATI FOUNDERS PRIVATE LIMITED232 MALHAR AUTO INDUSTRIES233 MANBAR INDUSTRIES234 MANE INDUSTRIES235 MANGIRISH PLASTIC WORKS236 MAS ALUMINIUM PVT. LTD.237 MAYA POLYPLAST PVT LTD238 MAYURESH ENGINEERING WORKS239 MAYURI ENTERPRISES240 MECHACHEM INDUSTRIES241 MECHOLIGHT COMPONENTS242 MECHPART243 MEENA ELASTOMERS244 MEERA ENGINEERING WORKS245 MEERA INDUSTRIES246 MEGHA PLASTICS247 METAL BRIGHT ENGINEERS248 METAL FORMING & AUTO INDUSTRIES249 METAL GOODS MANUFACTURING CO.250 METAL SHINE INDUSTRIES251 METALAGE INDUSTRIES252 MICRO TURNERS253 MINDA INDUSTRIES LTD254 MINI IRON & STEEL (P) LIMITED255 MITTER ENTERPRISES256 MITTER FASTENERS257 MODEL FASTENERS P LTD258 MONARCH ENGG WORKS259 MOONLIGHT AUTO PVT LTD.260 MOREX INDUSTRIAL CORPORATION261 MRUNAL INDUSTRIES262 MUNGI BROTHERS263 MYSORE AMMONIA PVT LTD264 NANDI FASTENERS265 NARMADA DRILL TUBE COMPANY266 NARMADA ENGINEERING CO. PVT LTD.267 NATIONAL INDUSRTIES268 NATIONAL RUBBER PRODUCTS269 NEEL CONTROLS
270 NEEMA FORGE PRESS P. LTD.271 NEETA INSTRUMENTS272 NEOLITE INDUSTRIES273 NETALKAR ENGG WORKS274 NETALKAR POWER TRANSMISSION.275 NEW ALLENBERRY WORKS276 NEW ERA BEARING INDUSTRIES277 NEW KRISHNA METAL ARTS278 NEW RANDHIR PRESS TOOLS279 NIPA RUBBER PRODUCTS280 OSWAL POLY RUBBERS281 P M ENTERPRISES282 P S ENGINEERING WORKS283 PAI AUTOMOBILES PVT. LTD.284 PAI BROTHERS285 PAI BROTHERS ENGINEERS PV286 PALANPUR ENGINEERING FABR287 PANCHAL ENGINEERS288 PANCHAL ROLL FORMING289 PANETRICAL ENGINEERS PVT. LTD290 PANORAMA AUTOMOTIVE PVT LTD291 PARTH ENGINEERS.292 PAULSON INDUSTRIES293 PERFECT DIES WORKS294 PERFECT ENGINEERING PRODUCTS
PVT LT295 PHIROZE SETHNA P LTD296 PIONEER SURGICALS297 POLAR AUTO & ENGG.IND.PVT.LTD.298 POPULAR FOUNDERS299 POWERFLEX INDUSTRIES300 PRABHA ENGINEERING PVT. LTD.301 PRAGA DIE CASTING & METAL302 PRAMUKH ENGINEERS303 PRANAV INDUSTRIES304 PRAVIN ANCILLARY PRODUCTS PVT
LTD305 PRAVIN AUTO ENGG PVT. LTD.306 PRAVIN WIPERS & ANCILLARIES
PVT.LTD307 PRAYAG ENGINEERING INDUSTRIES308 PRECI-METCUT TOOLINGS PVT. LTD.309 PRECISE INDUSTRIES.310 PRECISION311 PRECISION AUTOWARES (P) LTD312 PRECISION ENGG WORKS313 PRECISION FORGING & STAMPING314 PRECISION INDUSTRIAL CORPN315 PRECISION TOOL CRAFTERS316 PREMIER FILTERS PVT LTD317 PREMIER FREIGHT SYSTEM318 PREMIER SEALS INDIA PVT. LTD319 PRESS COMPONENTS320 PRESS-O-FAB INDUSTRIES321 PRIMA INDUSTRIES322 PRINCE METAL WORKS
Sr. No. Name of the SSIs Sr. No. Name of the SSIs Sr. No. Name of the SSIs
SCHEDULE XVII
Following are the names of Small Scale Industrial Undertakings (SSIs) to whom the Company owes and which are outstandingfor more than 30 days as on 31st March, 2006.
111
MAHINDRA & MAHINDRA LIMITED
323 PROFILE ENGG. CO.324 PROFILOFORMS325 PROGRESSIVE
ENGG.WORKS.(CHINCHANI).326 PROGRESSIVE ENGINEERING WORKS327 PURVI INDUSTRIES328 PUSHKAR ALLOY CASTINGS PVT.LTD.329 Q TECH SYSTEMS330 R ENGINEERING331 R K ENGINEERING WORKS332 R M INDUSTRIES333 R S FASTENERS334 R. K. AGRO INDUSTRIES335 RADHE ENTERPRISE336 RADHEYA MACHINING LIMITED337 RADIX ELECTROSYSTEMS PVT LTD338 RAINA ENGINEERING339 RAINBOW INDUSTRIES340 RAJ PLASTICS341 RAKSHA INDUSTRIES342 RAMKRISHNA IRON WORKS PVT LTD343 RASE ENGINEERING WORKS344 RATHOD INDUSTRIES345 RAVI & CO346 RAVI INDUSTRIES PVT.LTD.347 RELIABLE AUTOTECH PVT LTD.348 RELIABLE TECHNOCRATS P LTD349 RIGHT-TIGHT FASTENERS PVT LTD350 ROHTAS AUTO INDUSTRIES351 ROLON SEALS352 RUKMINI ENTERPRISES353 S & M INDUCTION354 S K P INDUSTRIES,355 S P INDUSTRIES356 S P TECHNOCRATS357 S S ENGINEERING INDUSTRIES.358 S S INDUSTRIES359 S.E.A. CO.360 S.S.ENGINEERING WORKS.361 SAGAR ENGINEERING CO.362 SAIEASH ENGG WORKS PVT LTD363 SAJ TEST PLANT PRIVATE LTD.364 SAKI AUTO PRODUCTS PVT.LTD.365 SAMEER AUTO PVT LTD366 SANDEEP PLASTIC INDUSTRIES367 SANDHYA GRINDING WORKS368 SANE STEEL WORKS369 SANG FASTERNERS PVT LTD370 SANIYA INDUSTRIAL COMP P LTD.371 SANJYOT METAL INDUSTRIES372 SARNA AUTOTEX PVT LTD373 SATISH INDL PLASTICS374 SATPUDA ENGG PVT LTD375 SATYAY INDUSTRY (INDIA)376 SAVITA AUTO INDUSTRIES377 SEACO ENGINEERING WORKS378 SEALEXCEL (INDIA)PVT.LTD.
379 SEAM ENGINEERS380 SEIMITSU CNC TECHNOLOGIES PVT.
LTD.381 SHAH AUTO INDUSTRIES382 SHAH CONCABS PVT. LTD383 SHAH UDYOG384 SHAKTI AUTOMOBILES385 SHAREEN AUTO PVT LTD386 SHEAR BEND MECHANICAL WORKS387 SHEEL METAL INDUSTRIES388 SHEKAR INDUSTRIES389 SHILP ENTERPRISES390 SHIVAM OXYGEN PVT.LTD.391 SHIVAM PAINTS PVT LTD392 SHIVSHAKTI INDUSTRIES393 SHRADDHA INDUSTRIES394 SHREE ENGINEERING WORKS395 SHREE INDUSTRY396 SHREE PLASTIC INDUSTRIES397 SHREE PRODUCTS398 SHREE SAI ENGINEERING399 SHREE SAINATH INDUSTRIES400 SHREEKRIPA ENTERPRISES401 SHRI PADMAVATI INDUSTRIES402 SHRI RADHA POLYMERS403 SHRIJAY UDYOG404 SHROFF TEXTILES LIMITED405 SIDDHI FORGE PVT. LTD.406 SIDDHIVINAYAK FOUNDERS &407 SIP TOOLS408 SIZER INDIA.409 SLIDEWELL410 SOUTHERN AUTO CASTINGS PVT LTD411 SPARK AUTOMECH PVT LTD.412 SPEED CONTROL ENGINEERS413 SPENCER ENTERPRISES414 SPRING INDIA415 SR FIBREGLASS AUTO PVT. LTD416 SREE RAJESWARI ENGG. WORKS417 SRI ARCHANA INDUSTRIES418 SRI BALAJI CASTINGS PVT LTD.419 SRI GURUKRUPA ENTERPRISES420 SRI MANOJ ENGG. ENTP.421 SRIATOS422 SRIKANTH INDUSTRIES423 SRIRAVI ENPTERPRISES424 STANDARD ENGG.PRODUCTS425 STANDARD ENGINEERING INDU426 STANDARD SPRINGS & METAL PRESS
WORK427 STAR AUTO INDUSTRIES PVT. LTD.428 STAR INDUSTRIES429 STERLING INDUSTRIES430 SUDHIR FASTENERS431 SUDTRAC LINKAGES PVT LTD432 SUJAN INDUSTRIES433 SUMATI ENGINEERING CO. PVT. LTD
434 SUMO AUTO-TECH PVT LTD435 SUNITA ELECTRO ENGINEERINGS436 SUNITHA ENTERPRISES437 SUPER COIL SPRING MFG.CO.PVT.LTD.438 SUPREME PRESSFAB PVT LTD439 SUSHIL TRADERS440 SUSIRA INDUSTRIES441 SUVIDH ENGINEERING INDUSTRIES442 SUYOG RUBBER (INDIA) PVT LTD443 SWASTIK METAL WORKS PVT.LTD.444 TAJ AUTO ACCESSORIES445 TAYSONS INDUSTRIES446 TECH SERVICES447 TECHNOCRATS INDIA448 THACKER BROTHERS449 THAKKARSONS AUTO450 THREAD LINES INDIA451 TIDKE PRINTING PRESS452 TIGON PIPE BENDERS PVT. LTD.453 TISA ENTERPRISES454 TOOL CONCEPT455 TOYO METALLURGICAL LTD456 TRIJAMA FILTERALL PVT LTD457 TRIVEDI UDYOG458 TRUSA ENGINEERING PVT LTD.459 TUSHAR AUTO PARTS PVT. LT460 TUSHAR INDUSTRY461 UCAL PRODUCTS P LTD462 UNI AUTO PARTS463 UNIPARTS INDIA LTD.464 UNIQUE MANUFACTURING CORPN.465 UNITECH ENGINEERS PVT.LTD.466 UNITED ENTPERPRISES467 UNITED METACHEM PVT LTD468 UNITED RUBBER INDUSTRIES469 UNITY BUSHES AND TOOLS CO470 UNITY GUAGE & TOOLS CO. PVT. LTD.471 UNITY INDUSTRIES472 UNIVERSAL AUTO & DAIRY PRODUCT473 UNIVERSAL ENGINEERING474 V R INDUSTRIES475 V R V MACHINE TOOLS476 VARUN ALUMINIUM INDUSTRIES LTD.477 VEENA CASTINGS & COMP PVT LTD478 VEERESHA CASTINGS PVT.LTD479 VELTECH FORGING PVT. LTD.480 VERSATILE ENGINEERS481 VERSATILE EQUIPMENTS PVT LTD482 VIBRONICS PVT LTD483 VICO FORGE PRIVATE LIMITED484 VICTORY LUMINAIRES485 VIDARBHA GAS VESSELS PVT. LTD.486 VIDHARBHA AGRO INDUSTRIES
PVT.LTD.487 VIJAY ENGINEERING488 VIJAY ROLLING MILLS489 VIJAY TRADE CENTRE
Sr. No. Name of the SSIs Sr. No. Name of the SSIs Sr. No. Name of the SSIs
SCHEDULE XVII
Following are the names of Small Scale Industrial Undertakings (SSIs) to whom the Company owes and which are outstandingfor more than 30 days as on 31st March, 2006.
112
MAHINDRA & MAHINDRA LIMITED
490 VIJETHA INDUSTRIES491 VIKAS AUTOMATIC FASTENERS PVT
LTD.492 VIKMAN STEEL BALL INDUSTRIES493 VIKRANT AUTO INDUSTRIES494 VIKRANT AUTO SUSPENSIONS495 VINAYA ENTERPRISES496 VIRAJ ENGINEERING CO.497 VIRAL ENGINEERS498 VIRDI BROTHERS.499 VIREN SALES CORPORATION
Sr. No. Name of the SSIs Sr. No. Name of the SSIs Sr. No. Name of the SSIs
SCHEDULE XVII
Following are the names of Small Scale Industrial Undertakings (SSIs) to whom the Company owes and which are outstandingfor more than 30 days as on 31st March, 2006.
500 VISHAL ENGINEERING501 VISHAL INDUSTRIAL PRODUCT502 VISHAL INDUSTRIES503 VI-SON CABLES PVT. LTD.504 VIT-RUKH ENGINEERING505 VIVIBICHU AUTO INDUSTRIES506 VORA INDUSTRIES507 VRC PLASTOMOULD (I ) PRIVATE
LIMITED508 WELLPACK ENTERPRISES509 WELSET ENGINEERS
510 WESTERN AUTO SPARES511 WIMSON ELECTRONICS PRIVATE
LIMITED512 WINDALS AUTO PVT LTD.513 WINDALS PRECISION PVT. LTD.514 WOOD & COMPOSITE WOOD PORD.515 ZOROASTRIAN AUTOMOBILES PVT LTD.
113
MAHINDRA & MAHINDRA LIMITED
SCHEDULE XVIII
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956.
Balance Sheet Abstract & Company’s General Business Profile :
I. Registration Details :
Registration No. State Code
Balance Sheet Date
Date Month Year
II. Capital Raised during the Year (Amount in Rs. Thousands) :
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands) :
Total Liabilities including Shareholders’ Funds Total Assets
Sources of Funds :
Paid-up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Deferred Tax Liability (Net)
Application of Funds :
Net Fixed Assets
Investments Net Current Assets
Miscellaneous Expenditure Accumulated Losses
IV. Performance of Company (Amount in Rs. Thousands) :
Turnover (Sales & Other Income)★ Total Expenditure ◆
+ - Profit / Loss Before Tax + - Profit / Loss After Tax
(Please tick appropriate box + for Profit - for Loss)Earnings per Share in Rupees ▲
Basic Diluted Dividend Rate %
(Refer Note 26)
4 5 5 8
N I L
1 1 6 0 0 8 9 N I L
6 0 4 6 6 2 7 1 6 0 4 6 6 2 7 1
2 3 3 3 9 9 6 2 6 7 5 4 7 1 3
2 1 6 6 7 6 0 6 6 6 7 0 6 2
1 5 5 4 4 4 5 3
1 6 6 9 0 8 8 4 6 9 7 4 1 4 8
9 7 1 2 7 6 9 0 8 6 1 3 2 6 4 1
1 0 9 9 5 0 4 9 8 5 7 1 0 4 9
Rs. 38.07
N I L
1 1
3 1 0 3 2 0 0 6
!
1 4 6 7 5 0 0
1 8 0 5 4 6 N I L
1 0 0 . 0 0
!
Rs. 34.93
114
MAHINDRA & MAHINDRA LIMITED
V. Generic Names of Three Principal Products / Services of Company (as per monetary terms) :
Item Code No. (ITC Code) 8 7 0 1
Product Description Tractors
Item Code No. (ITC Code) 8 7 0 2
Product Description Motor Vehicles for the transport of more than six persons , excluding the driver
Item Code No. (ITC Code) 8 7 0 3
Product Description Other motor vehicles principally designed for the transport of persons
◆ after considering the provision for contingencies and exceptional items.
★ after considering exceptional items
▲ computed on the basis of the weighted average number of shares outstanding during the year.
Signatures to Schedules I to XVIII
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
115
MAHINDRA & MAHINDRA LIMITED
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6
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies
For Current Financial Year For Previous Financial Years
Name of the Subsidiary Companies Dealt with in Not dealt Dealt with in Not dealtthe accounts with in the the accounts with in the
of Mahindra & accounts of of Mahindra & accounts ofMahindra Mahindra & Mahindra Mahindra &
Limited for Mahindra Limited for Mahindrathe year Limited for the year Limited for
Equity Extent ended 31st the year ended 31st the year of March, 2006 ended 31st March, 2006 ended 31st
holding March, 2006 March, 2006
Nos. % Rupees lakhs Rupees lakhs Rupees lakhs Rupees lakhsMahindra Engineering & Chemical ProductsLimited ..................................................................... 53,78,235 100.00% — 6,14.55 — 58,86.84Mahindra Intertrade Limited ................................. 2,71,00,006 100.00% 3,81.80 19,19.67 87.98 18,52.16@ Mahindra Middleeast Electrical Steel Service
Centre (FZC) ....................................................... — 90.00% — 90.89 — (2.52)Mahindra Steel Service Centre Limited ............... 37,23,874 61.00% — 2,43.68 48.41 2,70.61Mahindra Holdings & Finance Limited ................ 12,16,00,593 100.00% — 98,22.31 — 76,48.61
Mahindra Acres Consulting Engineers Limited ... — 51.00% — 0.59 — 31.14Mahindra Holidays & Resorts India Limited ....... — 99.99% — 20,83.32 — 12,71.19
• Mahindra Holidays & Resorts USA Incorporated — 99.99% — (2.14) — —NBS International Limited ................................... — 100.00% — 11.92 — 70.89Mahindra Ugine Steel Company Limited ............ — 50.69% — 4,237.13 — 21,64.59
Mahindra Ashtech Limited .................................... 1,00,00,000 100.00% — 44.80 — (27,33.08)Mahindra Gesco Developers Limited .................. 1,25,66,126 55.00% — 87.33 — 9,08.86
Mahindra Infrastructure Developers Limited ....... — 44.00% — 19.18 — (6.64)Mahindra World City Developers Limited(formerly known as Mahindra IndustrialPark Limited ) ..................................................... — 54.38% — 1,16.37 — (10,56.60)Mahindra World City (Jaipur) Limited ................. — 55.00% — (0.13) — —Mahindra World City (Maharastra) Limited(formerly known as Mahindra Realty Limited) .... — 54.84% — (0.21) — —
Mahindra & Mahindra Financial ServicesLimited ..................................................................... 5,82,41,532 #67.72% 10,23.49 59,35.31 10,59.72 110,82.42
Mahindra Insurance Brokers Limited .................. #67.72% — 1,95.24 — 1,19.45Tech Mahindra Limited (formerly known asMahindra-British Telecom Limited) ...................... 5,76,00,060 56.26% 6,91.20 1,15,95.88 — 252,35.14
Tech Mahindra (Americas) Incorporated (formerlyknown as MBT International Incorporated) ........ — 56.26% — 1,99.18 — (9,69.03)Tech Mahindra GmbH (formerly known asMBT GmbH) ........................................................ — 56.26% — 95.95 — (19,38.74)Tech Mahindra Singapore Pte. Limited (formerlyknown as MBT Software Technologies Pte.Limited) ............................................................... — 56.26% — (23.94) — 62.75Tech Mahindra (Thailand) Limited ....................... — 56.25% — (21.98) — —Tech Mahindra (R&D Services) Limited .............. — 56.24% — 5,67.12 — —Tech Mahindra (R&D Services) Incorporated ..... — 56.24% — 68.70 — —Tech Mahindra (R&D Services) Pte. Limited ...... — 56.24% — (0.16) — —Tech Mahindra Foundation ................................. — 56.25% — (0.20) — —
Bristlecone Limited ................................................ 42,22,250 86.54% — (97.70) — (94.46)Bristlecone Incorporated .................................... — 86.54% — (1,68.09) — (6,14.08)Bristlecone India Limited .................................... — 86.54% — 3,85.17 — (3,96.62)Bristlecone (Singapore) Pte. Limited .................. — 86.54% — 9.18 — 15.02Bristlecone GmbH .............................................. — 86.54% — 22.11 — 46.69Bristlecone UK Limited ....................................... — 86.54% — 0.21 — (93.04)
Mahindra Logisoft Business Solutions Limited .. 1,24,50,000 100.00% — 80.61 — (8,29.95)Automartindia Limited ........................................... 74,46,658 75.97% — 67.04 — (11,09.23)Mahindra USA Incorporated .................................. 4,50,00,000 100.00% — 2,75.35 — 15,67.06Mahindra Gujarat Tractor Limited ........................ 91,81,188 60.00% — (91.64) — (15,96.61)
# After considering shares issued by MMFSL to its ESOP Trust but not allotted to its employees.
Number ofShares in the
SubsidiaryCompany heldby Mahindra &
MahindraLimited at thefinancial yearending date
The net aggregate of profits/(losses) of the SubsidiaryCompanies so far as they concern the members of Mahindra
& Mahindra Limited
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6
116
MAHINDRA & MAHINDRA LIMITED
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies
For Current Financial Year For Previous Financial Years
Name of the Subsidiary Companies Dealt with in Not dealt Dealt with in Not dealtthe accounts with in the the accounts with in the
of Mahindra & accounts of of Mahindra & accounts ofMahindra Mahindra & Mahindra Mahindra &
Limited for Mahindra Limited for Mahindrathe year Limited for the year Limited for
Equity Extent ended 31st the year ended 31st the year of March, 2006 ended 31st March, 2006 ended 31st
holding March, 2006 March, 2006
Nos. % Rupees lakhs Rupees lakhs Rupees lakhs Rupees lakhs
Number ofShares in the
SubsidiaryCompany heldby Mahindra &
MahindraLimited at thefinancial yearending date
The net aggregate of profits/(losses) of the SubsidiaryCompanies so far as they concern the members of Mahindra
& Mahindra Limited
Mahindra Shubhlabh Services Limited ................ 1,76,39,665 72.77% — (2,72.75) — (16,22.95)Mahindra & Mahindra South Africa (Proprietary)Limited ..................................................................... 35,70,000 51.00% — 7,05.42 16.59 1,82.81Mahindra Engineering Design & DevelopmentCompany Limited ................................................... 70,50,000 100.00% — 4,44.47 — (42.76)Mahindra Overseas Investment Company(Mauritius) Limited ................................................. 5,20,000 100.00% — 52.07 — 15.57
Mahindra (China) Tractor Company Limited ....... — 80.00% — (9,34.54) — —Mahindra-BT Investment Company (Mauritius)Limited ................................................................ — 57.00% — 4.37 — —Mahindra Europe s.r.l .......................................... — 80.00% — (45.57) — —
Mahindra SAR Transmission Private Limited ...... 31,25,739 51.00% — 37.27 — 11.86Plexion Technologies (India) Private Limited ...... 45,03,011 100.00% — (15.77) — —
Plexion Technologies (UK) Limited ...................... — 100.00% — 3.38 — —Plexion Technologies GmbH ............................... — 100.00% — 1.14 — —Plexion Technologies Incorporated ..................... — 100.00% — (25.86) — —
Stokes Group Limited ............................................ 14,65,310 99.20% — — — —Stokes Forgings Dudley Limited ......................... — 99.20% — 16.71 — —Jensand Limited ................................................. — 99.20% — 1.13 — —Stokes Forgings Limited ..................................... — 99.20% — (1,58.21) — —
Mahindra Renault Private Limited ........................ 2,62,65,000 51.00% — (5,97.00) — —Mahindra Automotive Steels Limited ................... 82,21,926 100.00% — (11,94.73) — —Mahindra International Limited ............................. 5,03,75,600 51.00% — (16.82) — —
@ a subsidiary of Mahindra Intertrade Limited a subsidiary of Bristlecone Limiteda subsidiary of Mahindra Holdings & Finance Limited a subsidiary of Bristlecone India Limited
• a subsidiary of Mahindra Holidays & Resorts India Limited a subsidiary of Mahindra Overseas Investment Companya subsidiary of Mahindra Gesco Developers Limited (Mauritius) Limiteda subsidiary of Mahindra & Mahindra Financial Services Limited a subsidiary of Plexion Technologies (India) Private Limiteda subsidiary of Tech Mahindra Limited a subsidiary of Stokes Group Limiteda subsidiary of Tech Mahindra (R & D Services) Limited a subsidiary of Jensand Limited
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
117
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
furnished to us, and our opinion in so far as it relates tothe amounts included in respect of these subsidiaries,joint ventures and associates, is based solely on the reportof the other auditors.
4. We report that the consolidated financial statements havebeen prepared by Mahindra & Mahindra Limited’smanagement in accordance with the requirements ofAccounting Standard 21, Consolidated FinancialStatements, Accounting Standard 23, Accounting forInvestments in Associates in Consolidated FinancialStatements and Accounting Standard 27, FinancialReporting of Interests in Joint Ventures, issued by theInstitute of Chartered Accountants of India.
5. Based on our audit and on consideration of the reportsof other auditors on separate financial statements and onthe other financial information of the components, in ouropinion and to the best of our information and accordingto the explanations given to us, the attached consolidatedfinancial statements give a true and fair view in conformitywith the accounting principles generally accepted in India:
a) in the case of the consolidated balance sheet, of thestate of affairs of Mahindra & Mahindra Limited Groupas at 31st March, 2006;
b) in the case of the consolidated profit and lossaccount, of the profit for the year ended on that date;and
c) in the case of the consolidated cash flow statement,of the cash flows for the year ended on that date.
For A. F. Ferguson & Co.Chartered Accountants
R. A. Banga(Partner)
Mumbai, 29th May, 2006 Membership Number: 37915
Report of the Auditors to the Board of Directors of Mahindra & Mahindra Limited
1. We have audited the attached consolidated balance sheetof Mahindra & Mahindra Limited and its subsidiaries (theGroup) as at 31st March, 2006, and also the consolidatedprofit and loss account and the consolidated cash flowstatement for the year ended on that date, annexedthereto. These consolidated financial statements are theresponsibility of Mahindra & Mahindra Limited’smanagement and have been prepared by themanagement on the basis of separate financial statementsand other financial information regarding components.Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit.
2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.
3. We did not audit the financial statements of certainsubsidiaries and joint ventures, whose financial statementsreflect Group’s share of total assets of Rs. 833728.33lakhs as at 31st March, 2006 and Group’s share of totalrevenues of Rs. 386684.64 lakhs for the year ended onthat date and Group’s share of net cash outflow ofRs. 1040.50 lakhs for the year ended on that date andassociates whose financial statements reflect the Group’sshare of profit (net) upto 31st March, 2006 of Rs. 642.22lakhs and the Group’s share of loss (net) of Rs. 251.31lakhs for the year ended on that date as considered inthe consolidated financial statements. These financialstatements and other financial information have beenaudited by other auditors whose reports have been
118
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Consolidated Balance Sheet as at 31st March, 20062006 2005
Schedule Rupees Rupeeslakhs lakhs
I. SOURCES OF FUNDS :
SHAREHOLDERS’ FUNDS :
Capital ........................................................................................ I 233,39.96 111,64.79
Employee Stock Options Outstanding ....................................... 2,13.84 2,11.06
Reserves and Surplus ................................................................ II 3,486,08.79 2,271,21.99
3,721,62.59 2,384,97.84
MINORITY INTEREST ................................................................ 852,50.68 363,41.56
LOAN FUNDS ............................................................................ III 5,271,34.40 3,794,52.43
DEFERRED TAX LIABILITY (Net) ................................................ 115,65.70 135,33.96
DEFERRED INCOME :
Advance towards Club Mahindra members’ facilities ................ 222,09.64 160,30.92
Total ............ 10,183,23.01 6,838,56.71
II. APPLICATION OF FUNDS :
FIXED ASSETS ........................................................................... IV 2,294,82.42 1,895,58.37
CAPITAL WORK-IN-PROGRESS ............................................... 310,71.67 126,65.65
2,605,54.09 2,022,24.02
INVESTMENTS ........................................................................... V 1,180,32.71 595,31.41
NET CURRENT ASSETS :
Current Assets, Loans and Advances ................................ VI 9,731,97.62 6,701,35.81
Less : Current Liabilities and Provisions ............................. VII 3,359,05.31 2,513,65.67
6,372,92.31 4,187,70.14
MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOTWRITTEN OFF OR ADJUSTED) ................................................. VIII 24,43.90 33,31.14
Total ............ 10,183,23.01 6,838,56.71
NOTES ON ACCOUNTS .......................................................... XIV
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
119
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Consolidated Profit and Loss Account for the year ended 31st March, 2006
2006 2005Schedule Rupees Rupees
lakhs lakhsSALES (Note 21) ....................................................................................................... 11,067,29.75 8,706,42.57Less: Excise Duty on Sales (Note 21) ....................................................................... 1,259,95.96 1,069,76.63
Net Sales ................................................................................................................... 9,807,33.79 7,636,65.94Income from Operations & Other Income ................................................................. IX 2,841,07.17 1,928,85.62
12,648,40.96 9,565,51.56EXPENDITURE :Raw Materials, Finished and Semi-finished Products ............................................... X 6,912,15.69 5,425,39.58Personnel .................................................................................................................. XI 1,399,38.47 1,047,07.84Interest, Commitment and Finance Charges (Net) .................................................... XII 219,37.48 136,06.04Depreciation / Amortisation (Notes 6 and 21) ........................................................... 283,30.69 239,09.87Other Expenses ......................................................................................................... XIII 2,352,39.34 1,770,45.69
11,166,61.67 8,618,09.02Less : Cost of Manufactured / Purchased Products capitalised .............................. 61,75.10 32,07.34
11,104,86.57 8,586,01.68Profit before provision for contingencies, exceptional items and taxation ................ 1,543,54.39 979,49.88Less : Provision for contingencies ............................................................................. 4,43.75 33.99Profit before exceptional items and taxation ............................................................. 1,539,10.64 979,15.89Add : Exceptional Items (Note 15) ........................................................................... 263,40.42 15,03.15Profit before taxation ................................................................................................. 1,802,51.06 994,19.04Less : Provision for Tax - Current tax including Fringe Benefit Tax (Note 21) ......... 439,08.86 315,87.06
- Deferred tax (Net) (Notes 14 and 21) .............................. (36,15.04) (13,13.80)Profit for the year before prior year adjustments ...................................................... 1,399,57.24 691,45.78Less : Adjustments pertaining to previous years (Note 16) ...................................... 23.11 1,60.40Balance of profit for 2005-2006 before share of profit / loss of Associatesand Minority Interests ................................................................................................ 1,399,34.13 689,85.38Add : Share of Profit of Associates for the year ...................................................... 4,66.69 34,22.19Balance of profit before Minority Interests ................................................................ 1,404,00.82 724,07.57Minority Share in Profits for 2005-2006 .................................................................... 134,29.16 42,53.79
1,269,71.66 681,53.78Balance of profit for earlier years .............................................................................. 1,137,29.67 774,38.66Add : Transfer from Debenture Redemption Reserve (Net) ................................ 55.25 10,16.27
Transfer from Investment Allowance Reserve .......................................... – 2,45.001,137,84.92 786,99.93
Total of Profit and Loss Account balances shown above ......................................... 2,407,56.58 1,468,53.71Deduct : Statutory Reserve ..................................................................................... 34,86.77 28,41.96
General Reserve (Net) .............................................................................. 146,96.72 120,18.54Dividends Paid .......................................................................................... – (0.23)Income tax on Dividends. ......................................................................... 6,58.08 10,67.09Proposed Dividends on Equity Shares ..................................................... 243,97.41 150,81.50Income tax on Proposed Dividends ......................................................... 34,21.74 21,15.18
Balance for 2005-2006 and earlier years carried to Balance Sheet ........................ 1,940,95.86 1,137,29.67
EARNINGS PER SHARE : (Note 19)(Face value Rs 10/- per share) (Rupees)Basic ......................................................................................................................... 56.40 30.63Diluted ....................................................................................................................... 51.72 27.63NOTES ON ACCOUNTS .......................................................................................... XIV
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
}Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
120
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Consolidated Cash Flow statement for the year ended 31st March, 2006
2006 2006 2005Rupees lakhs Rupees lakhs Rupees lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before exceptional items, taxation and adjustments pertaining toprevious years .................................................................................................... 1,539,10.64 979,15.89
Adjustments for :
Depreciation/Amortisation .................................................................................. 283,30.69 239,09.87
Unrealised Profit on Exchange (Net) .................................................................. (6,13.94) (10,19.47)
Investment and Interest Income (Excluding Rs. 365.05 lakhs (2005 :
Rs. 134.33 lakhs) in respect of financial enterprises consolidated) .................. (87,84.73) (56,64.64)
Interest, Commitment and Finance charges (Excluding Rs. 21082.59 lakhs(2005 : Rs. 12516.64 lakhs) in respect of financial enterprises consolidated) .... 73,53.06 61,59.53
Amortisation of Miscellaneous Expenditure ....................................................... 9,51.00 3,28.53
(Profit)/Loss on sale of Investments (Net) .......................................................... (105,60.48) (56,30.51)
(Profit)/Loss on fixed assets sold/scrapped/written off (Net) ............................. (4,03.91) 81.70
Provision for diminution in value of long term investments (Net) ...................... (25.12) (76.40)
Excess of cost over fair value of current investments (Net) .............................. 71.23 (77.52)
163,17.80 180,11.09
Operating Profit before Working Capital changes ............................................. 1,702,28.44 1,159,26.98
Changes in: Stock on hire ............................................................................... 1,24.86 75,97.04
Leased assets ............................................................................. – 1,70.40
Deferred income – advances towards membership fees ........... 61,78.72 39,20.35
Trade and other receivables ........................................................ (570,26.11) (319,92.27)
Loans against Assets * ............................................................... (1,376,57.77) (1,037,17.75)
Inventories ................................................................................... (290,41.17) (436,22.00)
Trade and other payables ........................................................... 433,02.22 500,28.60
(1,741,19.25) (1,176,15.63)
Miscellaneous Expenditure (to the extent not written off or adjusted) incurredduring the year ................................................................................................... (86.38) (17,25.42)
Cash generated from operations ....................................................................... (39,77.19) (34,14.07)
Income taxes paid (net of refunds) .................................................................... (419,10.18) (300,92.70)
NET CASH (USED) / FROM OPERATING ACTIVITIES ...................................... (458,87.37) (335,06.77)
B. CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of fixed assets .................................................................................... (525,29.14) (437,20.14)
Sale of fixed assets ............................................................................................ 17,39.62 19,17.49
Purchase of investments .................................................................................... (5,396,42.80) (3,629,53.15)
Sale of investments ............................................................................................ 4,771,53.68 3,566,47.50
Interest received ................................................................................................. 64,40.11 53,19.33
Dividends received ............................................................................................. 11,24.94 3,67.59
Inter corporate deposits (Net) ............................................................................ (119,12.57) 35,76.66
Purchase consideration paid on acquisition of interest in subsidiaries ............. (248,75.07) (5,69.53)
Sales Proceeds (Net) received on divesture of interest in subsidiaries ............. 543,19.57 84,45.76
Purchase of a Business undertaking ................................................................. – (7,50.00)
NET CASH USED IN INVESTING ACTIVITIES ................................................... (881,81.66) (317,18.49)
* In respect of financial enterprises consolidated
121
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
C. CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from borrowings ................................................................................. 7,319,53.17 3,702,97.85
Repayments of borrowings [including premium on repayment] ........................ (5,621,82.80) (2,302,61.45)
Dividends paid .................................................................................................... (178,07.81) (128,25.22)
Interest, Commitment and Finance charges paid .............................................. (51,41.93) (46,30.19)
NET CASH (USED IN) / FROM FINANCING ACTIVITIES .................................. 1,468,20.63 1,225,80.99
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A + B + C) .. 127,51.60 573,55.73
CASH AND CASH EQUIVALENTS (Note (a))
Opening Balance ................................................................................................ 1,013,72.53 440,16.80
Cash & Bank Balance Acquired on Acquisition of Subsidiaries ........................ 38,79.12 –
Closing Balance .................................................................................................. 1,180,03.25 1,013,72.53
See Notes attached.
Consolidated Cash Flow statement (Contd.)
2006 2005Rupees lakhs Rupees lakhs
Notes to the Consolidated Cash Flow Statement for the year ended 31st March, 20062006 2005
Rupees lakhs Rupees lakhs
(a) Cash and cash equivalents include :
Cash, cheques and stamps on hand ....................................................... 226,06.75 176,17.01
Balances with scheduled banks :
On current account ................................................................................... 255,42.34 197,69.22
On fixed deposit account ......................................................................... 675,17.39 625,87.03
On margin account .................................................................................... 6,65.06 47.45
Balances with non-scheduled banks :
On current and fixed deposit account ..................................................... 21,30.43 11,19.56
Group share in cash and bank balances of joint ventures ............................ 2,57.57 97.81
1,187,18.54 1,012,38.08Unrealised (Net) translation (gain)/loss on foreign currency cash and cashequivalents ......................................................................................................... (7,15.29) 1,34.45
1,180,03.25 1,013,72.53
(b) Previous year’s figures have been regrouped / restated wherever necessary.
Per our report attached
For A. F. Ferguson & Co.Chartered Accountants
R. A. BangaPartner
Mumbai, 29th May, 2006
Keshub Mahindra Chairman
Anand G. Mahindra Vice Chairman & Managing Director
Bharat Doshi Executive Director
A. K. Nanda Executive Director & Secretary
Mumbai, 29th May, 2006
Deepak S. Parekh
M. M. Murugappan
N. Vaghul
R. K. Kulkarni DirectorsA. S. Ganguly
A. P. Puri
Thomas Mathew T.
}
122
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE I2006 2005
Share Capital : Rupees Rupeeslakhs lakhs
Authorised :27,50,00,000 (2005 - 17,50,00,000) Ordinary (Equity) Shares of Rs.10 each ........................ 275,00.00 175,00.00
25,00,000 Unclassified shares of Rs.100 each .................................................................. 25,00.00 25,00.00
Total ........................... 300,00.00 200,00.00
Issued and Subscribed :24,09,01,352 (2005 - 11,60,08,599) Ordinary (Equity) Shares of Rs.10 each fully paid up .... 240,90.14 116,00.86
240,90.14 116,00.86Less:Less:Less:Less:Less:
75,01,768 (2005 - 43,60,672) Ordinary (Equity) Shares of Rs.10 each fully paid upissued to ESOP Trust but not allotted to employees ........................................ 7,50.18 4,36.07
Adjusted : Issued and Subscribed Share Capital ....................................................................... 233,39.96 111,64.79
SCHEDULE II2005 Additions Deductions 2006
Reserves and Surplus : Rupees Rupees Rupees Rupeeslakhs lakhs lakhs lakhs
1 Capital Reserve ................................................................... 23,08.56 34.31 – 23,42.8723,26.01 – 17.45 23,08.56
2 Capital Reserve on consolidation ........................................ 40,92.16 48.16 – 41,40.3250,82.88 – 9,90.72 40,92.16
3 Securities Premium Account (Note 4) ................................. 234,77.92 347,37.86 2,55.42 579,60.36315,36.44 2,90.85 83,49.37 234,77.92
Less: Premium on shares issued to ESOP Trust but notallotted to employees .......................................................... 21,36.73 – 2,98.80 18,37.93
24,23.31 – 2,86.58 21,36.73
213,41.19 347,37.86 (43.38) 561,22.43291,13.13 2,90.85 80,62.79 213,41.19
4 Revaluation Reserve ............................................................ 14,31.52 – 98.06 13,33.4614,87.82 – 56.30 14,31.52
5 Investment Allowance Reserve Account ............................. – – – –2,45.00 – 2,45.00 –
6 General Reserve (Note 4) .................................................... 683,19.32 @ 159,26.72 116,00.89 726,45.15552,34.67 @ 141,50.03 10,65.38 683,19.32
Add: Bonus shares issued to ESOP Trust but not allottedto employees ...................................................................... – 3,75.09 – 3,75.09
683,19.32 163,01.81 116,00.89 730,20.24552,34.67 141,50.03 10,65.38 683,19.32
7 Debenture Redemption Reserve ......................................... 17,91.46 – 55.25 17,36.2128,07.73 – 10,16.27 17,91.46
8 Investment Fluctuation Reserve .......................................... 53,59.64 – # 12,30.00 41,29.6474,91.13 – # 21,31.49 53,59.64
9 Special Reserve (As per Section 45 IC of the RBI Act) ...... 85,86.11 34,86.77 – 120,72.8857,44.15 28,41.96 – 85,86.11
10 Foreign Exchange Fluctuation Reserve ............................... 1,62.36 – 5,47.48 (3,85.12)17.71 1,44.65 – 1,62.36
1,133,92.32 546,08.91 134,88.30 * 1,545,12.93
1,095,50.23 174,27.49 135,85.40 1,133,92.32*[including Group Share in Joint Ventures Rs.250.37 lakhs (2004-2005: Rs.211.67 lakhs)]
11 Balance for 2005-2006 and earlier years as per Profit andLoss Account ...................................................................... 1,928,53.76
1,130,28.39Group Share in Joint Ventures ............................................ 12,42.10
7,01.28
Total 3,486,08.79
2,271,21.99
@ includes transfer of Rs.1230.00 lakhs (2004-2005: Rs.2131.49 lakhs) from Investment Fluctuation Reserve per contra pursuantto the Scheme of Arrangement.
# includes transfer of Rs.1230.00 lakhs (2004-2005: Rs.2131.49 lakhs) to General Reserve per contra pursuant to the Scheme ofArrangement (Note 3).
123
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE III
Loan Funds : 2006 2006 2005Rupees Rupees Rupees
lakhs lakhs lakhs(A) Secured: (Note 5)
(1) Debentures/Bonds .......................................................................... 2,690,50.67 1,761,85.73
(2) Foreign Currency Loans from Banks .............................................. 149,99.43 208,74.68
(3) Rupee Loans :
(a) From Financial Institutions ....................................................... 53.83 –
(b) From Banks ............................................................................. 675,44.81 338,00.00
(c) From Others ............................................................................. 105,91.95 174,98.97
781,90.59 512,98.97
(4) Loans and Advances on cash credit account from Banks ............ 416,60.26 273,60.89
4,039,00.95 2,757,20.27
Group Share in Joint Ventures ........................................................ 3,19.67 2,69.08
4,042,20.62 2,759,89.35
(B) Unsecured :
(1) Fixed Deposits ................................................................................ 26,48.99 54,10.78
(2) Short-term Loans :
(a) From Banks ............................................................................. 213,41.10 100,10.91
(b) From Others ............................................................................. 2,17.00 5,03.00
215,58.10 105,13.91
(3) Other Loans:
(a) From Financial Institutions ....................................................... 373,24.12 263,74.39
(b) Zero Coupon Convertible bonds ............................................. 157,41.00 437,40.00
(c) Debentures / Bonds ................................................................ 261,08.30 165,00.00
(d) From Government of Gujarat ................................................... 8,87.63 8,57.94
(e) From Banks ............................................................................. 185,85.91 –
(f) From Others ............................................................................. 9.24 15.57
986,56.20 874,87.90
1,228,63.29 1,034,12.59Group Share in Joint Ventures ........................................................ 50.49 50.49
1,229,13.78 1,034,63.08
Total ........................ 5,271,34.40 3,794,52.43
124
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE IV
Fixed Assets :
Description of Assets Cost/ Additions Deduc- Cost/Pro- Deprecia- Deprecia- Deductions Deprecia- Net NetProfessional and tions fessional tion/Amor- tion / and adjust- tion / Balance Balance
valuation adjust- and valuation tisation Amor- ments Amortisa- as at as atas at 31st ments adjust- as at 31st to 31st tisation of Depre- tion 31st 31st
March, during the ments March, March, for 2005- ciation / to 31st March, March,2005 year during 2006 2005 2006 Amorti- March, 2006 2005
the year sation 2006
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupeeslakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs lakhs
A : Assets on Lease
Plant and Machinery ................. – 7,63.62 – 7,63.62 – 18.70 – 18.70 7,44.92 –
Vehicles ..................................... 9,54.60 1,08.89 2,23.46 8,40.03 2,24.77 1,88.06 1,01.75 3,11.08 5,28.95 7,29.83
Computers ................................ 11.09 – 9.32 1.77 7.69 1.99 8.39 1.29 0.48 3.40
Sub Total A ............................... 9,65.69 8,72.51 2,32.78 16,05.42 2,32.46 2,08.75 1,10.14 3,31.07 12,74.35 7,33.23
B : Owned Assets
Technical Knowhow .................. 93.53 – – 93.53 44.61 10.57 – 55.18 38.35 48.92
Development Expenditure ......... 23,06.30 10,17.21 5,78.00 27,45.51 5,17.68 5,02.64 – 10,20.32 17,25.19 17,88.62
Software Expenditure ................ 11,09.54 11,25.85 1,80.72 20,54.67 6,33.94 7,35.57 1,78.67 11,90.84 8,63.83 4,75.60
Websites ................................... 3,73.74 – – 3,73.74 3,73.74 – – 3,73.74 – –
Non-Compete Fees ................... – 23.25 – 23.25 – – – – 23.25 –
Time share weeks ..................... 62.28 – – 62.28 18.69 6.23 – 24.92 37.36 43.59
Trademarks ............................... – 32.53 – 32.53 – 2.73 – 2.73 29.80 –
Goodwill + ................................. 66,18.20 151,23.30 – 217,41.50 – – – – 217,41.50 66,18.20
Land .......................................... 69,33.74 56,40.07 54.33 125,19.48 80.87 19.69 – 1,00.56 124,18.92 68,52.87
Land - Leasehold ...................... 19.50 6,04.07 – 6,23.57 3.14 13.17 – 16.31 6,07.26 16.36
Buildings .................................... 648,71.84 136,62.90 4,95.17 780,39.57 127,02.04 44,26.33 1,40.36 169,88.01 610,51.56 521,69.80
Plant and Machinery ................. 2,381,46.26 489,67.66 25,13.44 2,846,00.48 1,303,94.35 416,30.57 20,48.12 1,699,76.80 1,146,23.68 1,077,51.91
Furniture and Fittings ................ 138,73.93 36,57.93 2,82.38 172,49.48 63,90.84 29,41.84 2,14.77 91,17.91 81,31.57 74,83.09
Vehicles, Cycles, etc. ................ 80,44.03 29,23.22 7,95.24 101,72.01 29,53.53 15,35.73 4,73.53 40,15.73 61,56.28 50,90.50
Property - Leasehold ................ 4,57.97 1,38.35 – 5,96.32 1,78.96 18.23 – 1,97.19 3,99.13 2,79.01
Sub Total B ............................... 3,429,10.86 929,16.34 48,99.28 4,309,27.92 1,542,92.39 518,43.30 30,55.45 2,030,80.24 2,278,47.68 1,886,18.47
C: Group Share in Joint Ventures 7,60.85 2,17.15 3.51 9,74.49 5,54.18 61.55 1.63 6,14.10 3,60.39 2,06.67
TOTAL (A+B+C) ....................... 3,446,37.40 940,06.00 51,35.57 4,335,07.83 1,550,79.03 521,13.60 31,67.22 2,040,25.41 2,294,82.42 1,895,58.37
3,108,22.48 389,93.79 51,78.87 3,446,37.40 1,335,59.84 243,61.78 28,42.59 1,550,79.03 1,895,58.37
+ Goodwill arising on consolidation.
Refer Note 6 (b)
125
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE V
Investments (At Cost; unless otherwise specified) :2006 2006 2005 2005
Long Term Current Long Term CurrentRupees Rupees Rupees Rupees
lakhs lakhs lakhs lakhs
Shares (Non-trade and fully paid-up unless otherwise specified) :
Unquoted :
(a) Equity Shares ................................................................ 30,78.42 – 34,31.95 –
(b) Equity Shares - Associates (Note 1(c) & Note 20) ........ 116,70.83 – 39,53.42 –
(c) Preference Shares ......................................................... 3,53.75 – 3,58.75 –
(d) Preference Shares - Associates .................................... 5,63.85 – 11,09.85 –
156,66.85 – 88,53.97 –
Quoted :(a) Equity Shares ................................................................ 3,30.05 0.14 8,68.56 3,75.35(b) Equity Shares - Associates (Note 1(c) & Note 20) ........ 3,94.58 – 60,35.44 –
7,24.63 0.14 69,04.00 3,75.35
163,91.48 0.14 157,57.97 3,75.35
Debentures / Bonds (Non Trade & fully paid-up) :(a) Unquoted ...................................................................... 13,21.51 – 13,45.20 –(b) Quoted .......................................................................... 33.23 9,89.36 – 6,52.77
13,54.74 9,89.36 13,45.20 6,52.77
Other Investments :Government Securities (including Treasury Bills):(a) Unquoted ...................................................................... 1.13 – 4.11 –(b) Quoted .......................................................................... – 4,57.42 – 74,27.13
1.13 4,57.42 4.11 74,27.13
Units :(a) Unquoted ...................................................................... 2,49.98 904,76.03 65.37 330,04.53
2,49.98 904,76.03 65.37 330,04.53
Investment in the Capital of Partnership :(a) Unquoted ...................................................................... 4,21.41 – – –
4,21.41 – – –
Others :(a) Unquoted ...................................................................... 0.03 78,21.58 0.03 9,61.69
0.03 78,21.58 0.03 9,61.69
184,18.77 997,44.53 171,72.68 424,21.47
1,181,63.30 595,94.15Group Share in Investments of Joint Ventures ..................... 3.38 -
Total ............................ 1,181,66.68 595,94.15
Cost (net of amounts written off) of Unquoted Investments .. 1,159,61.90 442,34.90
Cost / Carrying Value of Quoted Investments ..................... 22,04.78 153,59.25
1,181,66.68 595,94.15Less : Excess of cost over fair value of Current Investments (Net) 1,33.97 62.74
1,180,32.71 595,31.41
Market value of Quoted Investments ................................... 62,38.26 311,60.11
126
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE VI
Current Assets, Loans and Advances : 2006 2006 2005Rupees Rupees Rupees
lakhs lakhs lakhs
(A) Current Assets :Interest accrued on investments ....................................................... 2,14.35 1,56.47Stores and Spares (at cost or net realisable value whichever is lower) 44,92.71 15,90.97Tools .................................................................................................. 28,09.04 17,37.80Stock in Trade and Work-in-Progress (at cost or net realisable valuewhichever is lower) :(i) Finished Products produced and purchased for sale ................ 670,32.38 503,30.39(ii) Contracts and Work-in-Progress ............................................... 115,59.44 58,19.59(iii) Manufactured Components ....................................................... 49,91.53 41,20.89(iv) Raw Materials and Bought-out Components ............................ 487,98.32 397,09.19(v) Work-in-Progress – Property Development Activity and Long
Term Contracts .......................................................................... 261,59.15 221,62.93(vi) Food, Beverages, Smokes and Operating Supplies .................. 87.23 61.88
1,586,28.05 1,222,04.87
1,661,44.15 1,256,90.11Group Share in Inventories of Joint Ventures ................................... 3,86.74 5,05.59Plant & Machinery and other assets held for sale ............................ 18.15 28.49(at cost or estimated net realisable value, whichever is lower)
Sundry Debtors:Unsecured unless otherwise stated :
Outstanding over six months : Considered good ............... 128,93.80 94,28.79: Considered doubtful .......... 64,50.92 63,47.72
193,44.72 157,76.51
Other Debts : Considered good ......................................... 1,721,35.00 977,62.09: Considered doubtful ..................................... 6,64.18 2,25.80
1,727,99.18 979,87.89
1,921,43.90 1,137,64.40Less : Unmatured Finance Charges ..................................... 11,83.91 4,15.76Less : Provision for Doubtful Debts ...................................... 71,15.10 65,48.82
1,838,44.89 1,067,99.82Group Share in Debtors of Joint Ventures ........................................ 13,18.85 11,92.18
Cash and Bank Balances :Cash, cheques and stamps on hand ........................................ 226,05.75 176,17.01Balances with Scheduled Banks :(i) On Current Account ........................................................... 255,42.34 197,69.22(ii) On Fixed Deposit Account ................................................. 675,17.39 625,87.03(iii) On Margin Account ............................................................ 6,65.06 47.45
937,24.79 824,03.70Balances with Non-Scheduled Banks :
On Current and Fixed Deposit Account .................................... 21,30.43 11,19.56
1,184,60.97 1,011,40.27Group Share in Cash and Bank Balances of Joint Ventures ............ 2,57.57 97.81Stock on Hire .................................................................................... 84.34 10,00.01Less : Unmatured Finance Charges ................................................. 17.55 7,60.77
66.79 2,39.24Less: Provision for Non Performing Assets and Doubtful Debts ...... 14.40 61.99
52.39 1,77.25
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE VI (Contd.)
2006 2006 2005Rupees Rupees Rupees
(B) Loans and Advances : lakhs lakhs lakhs
(Unsecured, considered good unless otherwise stated) :
Bills of exchange, considered good .................................................. 4,62.93 1,82.63
Bills of exchange, considered doubtful ............................................. 2,13.09 2,13.09
6,76.02 3,95.72
Less: Provision for doubtful debts .................................................... 2,13.09 2,13.09
4,62.93 1,82.63
Advances recoverable in cash or in kind or for value to be received :
Considered good ....................................................................... 859,09.35 538,28.35
Considered doubtful ................................................................... 90,68.03 95,57.03
949,77.38 633,85.38
Less : Provision for Doubtful Advances ..................................... 83,99.33 88,68.02
865,78.05 545,17.36
Loans against assets / Retained Interest in SecuritisedAssets (Secured):
Considered good ....................................................................... 3,984,22.61 2,635,45.31
Considered doubtful ................................................................... 225,73.26 156,60.98
4,209,95.87 2,792,06.29
Less : Provision for Doubtful Advances ..................................... 86,45.04 45,13.23
4,123,50.83 2,746,93.06
Payments towards Income tax and Surtax (net of provisions) ......... 28,46.52 48,68.31
Balances - Customs, Port Trust, Excise, etc .................................... 3,93.04 1,70.07
5,026,31.37 3,344,31.43
Group Share in Loans and Advances of Joint Ventures ................... 82.54 72.86
Total ................... 9,731,97.62 6,701,35.81
128
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE VII 2006 2006 2005Current Liabilities and Provisions : Rupees Rupees Rupees
lakhs lakhs lakhs
(A) Current Liabilities :
Acceptances .................................................................................... 304,45.81 245,97.64
Sundry Creditors :
(i) Total outstanding dues of small scale industrial undertakings ... 60,36.82 67,50.42
(ii) Total outstanding dues of creditors other than small scaleindustrial undertakings ............................................................... 2,079,48.58 1,444,26.60
2,139,85.40 1,511,77.02
Dividend payable ............................................................................... 2,75.99 2,29.04
Balances on Directors’ Current Accounts ......................................... 2,15.86 2,41.30
Interest accrued but not due on loans ............................................. 94,66.04 72,54.91
Deposits/Advances received against hire purchase/leaseagreements ....................................................................................... 49,05.53 53,01.16
Other current liabilities ....................................................................... 192,56.32 151,58.70
2,785,50.95 2,039,59.77
Group Share in Current Liabilities of Joint Ventures ......................... 7,41.54 9,76.43
(B) Provisions :
Proposed Dividends .......................................................................... 243,97.41 150,81.50
Provision for Tax on Proposed Dividend ........................................... 34,21.74 21,15.18
Provision for diminution in value of long term investments ............... 12,21.03 12,46.15
Provision for diminution in value of investments & other assets ....... 14,11.67 14,56.67
Provision for premium payable on redemption of convertible bonds 10,07.53 76,54.50
Provision for Contingencies (Note 11) ............................................... 4,43.75 33.99
Provision for leave encashable at retirement/cessation .................... 91,41.40 67,80.83
Provision for Estimated Loss/Expenses on Securitisation ................ 47,17.93 39,30.49
Provision : Others .............................................................................. 107,84.97 80,52.56
565,47.43 463,51.87
Group Share in Provisions of Joint Ventures .................................... 65.39 77.60
Total ................... 3,359,05.31 2,513,65.67
SCHEDULE VIII 2006 2005Miscellaneous Expenditure Rupees Rupees(to the extent not written off or adjusted) : lakhs lakhs
(a) Finance Charges ............................................................................... 2,19.38 3,30.65
(b) Separation and other costs .............................................................. 21,76.60 28,73.91
(c) Others ............................................................................................... 47.92 1,26.58
24,43.90 33,31.14
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE IX 2006 2005Income from Operations and Other Income : Rupees Rupees
lakhs lakhsIncome from services rendered ........................................................ 1,715,24.31 1,216,06.04Income from long term contracts ..................................................... 164,64.00 107,83.54Income from Project Management, etc ............................................ 13,50.40 11,98.50Hire Purchase income, Lease income and other rentals .................. 58,67.60 42,98.36Income from Loan, Retained Interest in securitised assets &securitisation ..................................................................................... 568,40.93 371,82.44Commission ...................................................................................... 8,62.16 7,21.36Dividends on other Investments ........................................................ 26,51.61 9,16.48Rent received .................................................................................... 3,52.19 4,13.54Miscellaneous Income ....................................................................... 163,60.60 93,06.53Profit on sale of Investments ............................................................ 105,60.48 56,30.51Profit on sale of Fixed assets ............................................................ 4,03.91 -
2,832,38.19 1,920,57.30Group Share in Joint Ventures .......................................................... 8,68.98 8,28.32
Total ..................... 2,841,07.17 1,928,85.62
SCHEDULE X 2006 2006 2005Raw Materials, Finished and Semi-Finished Products : Rupees Rupees Rupees
lakhs lakhs lakhs
(A) (Increase)/Decrease in Stock of Finished Goods,Work-in-Progress and Manufactured Components :Opening Stock :(i) Finished Products produced and purchased for sale ................ 503,30.39 291,61.81(ii) Contracts and Work-in-Progress ............................................... 58,19.59 35,99.50(iii) Manufactured Components ....................................................... 41,20.89 28,83.11
602,70.87 356,44.42
Add: Stock taken over on acquisition :(i) Finished Products produced and purchased for sale ................ 1,15.00 26.62(ii) Contracts and Work-in-Progress ............................................... 40,62.84 4,96.81
41,77.84 5,23.43Less : Closing Stock :(i) Finished Products produced and purchased for sale ................ 670,32.38 503,30.39(ii) Contracts and Work-in-Progress ............................................... 115,59.44 58,19.59(iii) Manufactured Components ....................................................... 49,91.53 41,20.89
835,83.35 602,70.87
(Increase)/Decrease in Stock ............................................................ (191,34.64) (241,03.02)
(B) Consumption of Raw Materials and Bought-out Components :Opening Stock .................................................................................. 397,09.19 273,39.62Add : Purchases ............................................................................... 6,164,35.80 4,871,85.58
6,561,44.99 5,145,25.20Add: Stock taken over on acquisition ............................................... 43,35.03 38.72Less : Closing Stock ......................................................................... 487,98.32 397,09.19
6,116,81.70 4,748,54.73(C) Purchases of Finished Products for sale ..................................... 962,10.63 897,39.42
6,887,57.69 5,404,91.13Group Share in Joint Ventures ................................................................. 24,58.00 20,48.45
Total ................... 6,912,15.69 5,425,39.58
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE XI 2006 2005Personnel : Rupees Rupees
lakhs lakhs
Salaries, Wages, Bonus, etc ............................................................. 1,191,53.12 887,52.29
Contribution to Provident and other funds ....................................... 77,53.21 62,68.63
Gratuity .............................................................................................. 27,23.21 21,08.04
Welfare .............................................................................................. 98,31.31 70,77.08
1,394,60.85 1,042,06.04Group Share in Joint Ventures .......................................................... 4,77.62 5,01.80
Total ................... 1,399,38.47 1,047,07.84
SCHEDULE XII 2006 2005Interest, Commitment and Finance Charges : Rupees Rupees
lakhs lakhs
On Term Loans and Debentures ....................................................... 236,75.40 150,32.20
On Others (Net) ................................................................................. 39,72.84 27,00.28
Finance charges ................................................................................ 7,53.43 6,76.92
284,01.67 184,09.40
Group Share in Joint Ventures .......................................................... 33.98 2,66.77
Total ................... 284,35.65 186,76.17
Less: Interest Income:
Interest on Government Securities, Debentures and Bonds - Gross 1,99.77 2,14.48
Interest - Others - Gross .................................................................. 62,93.27 48,48.04
64,93.04 50,62.52Group Share in Joint Ventures .......................................................... 5.13 7.61
64,98.17 50,70.13
Total ................... 219,37.48 136,06.04
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE XIII 2006 2006 2005Other Expenses : Rupees Rupees Rupees
lakhs lakhs lakhs
Stores consumed .............................................................................. 92,81.70 48,15.69
Tools consumed ................................................................................ 18,48.23 14,24.79
Power and Fuel ................................................................................. 145,67.37 68,73.21
Rent including lease rentals .............................................................. 57,05.57 44,65.43
Rates and Taxes ............................................................................... 50,83.27 46,83.55
Insurance.. ......................................................................................... 20,70.63 15,90.82
Repairs & Maintenance :
Buildings .................................................................................... 28,02.69 19,87.43
Machinery .................................................................................. 69,37.48 51,70.78
Others ........................................................................................ 30,00.84 19,57.99
127,41.01 91,16.20
Advertisement ................................................................................... 97,65.95 98,67.11
Commission on sales/contracts (Net) ............................................... 108,07.12 85,27.34
Discount allowed ............................................................................... 7,17.46 5,31.75
Freight outward ................................................................................. 300,08.61 190,19.82
Sales Promotion Expenses ............................................................... 109,88.82 99,66.24
Travelling Expenses ........................................................................... 266,19.14 276,68.56
Cost of Projects, Property etc .......................................................... 145,27.12 68,20.55
Miscellaneous Expenses ................................................................... 741,43.78 567,85.97
Amortisation of expenses .................................................................. 1,42.58 1,67.27
Directors’ fees ................................................................................... 9.80 10.30
Donations and contributions ............................................................. 21,78.33 4,84.44
Loss on Fixed Assets sold/scrapped/written off ............................... – 81.70
Provision for diminution in value of Long Term investments ............. (25.12) (76.40)
Excess of cost over fair value of Current Investments (Net) ............. 71.23 (77.52)
Provision for doubtful debts/advances (Net) ..................................... 32,24.91 28,31.24
2,344,77.51 1,755,78.06Group Share in Joint Ventures .......................................................... 7,61.83 14,67.63
Total ................... 2,352,39.34 1,770,45.69
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
SCHEDULE XIV
Notes on the Consolidated Accounts for the year ended 31st March, 2006
1. The Consolidated Financial Statements relate to Mahindra & Mahindra Limited (M&M, the Company) and its subsidiary companies. TheConsolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) “Consolidated Financial Statements”,Accounting Standard 23 (AS 23) “Accounting for Investment in Associates in Consolidated Financial Statements” and Accounting Standard 27(AS 27) “Financial Reporting of Interests in Joint Ventures” issued by The Institute of Chartered Accountants of India. The Consolidated FinancialStatements have been prepared on the following basis:
(a) Investments in Subsidiaries :
i) The Financial Statements of the Company and its subsidiary companies have been combined on a line by line basis by addingtogether the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group balances and intragroup transactions resulting in unrealised profits or losses.
ii) The difference between the cost of investment in the subsidiaries over the Company’s portion of equity of the subsidiary is recognisedin the financial statements as Goodwill or Capital Reserve.
iii) The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilitiesas of date of disposal is recognised in the Profit and Loss Account as profit or loss on disposal of investment in subsidiary.
iv) Minority Interest in the net assets of consolidated subsidiaries consist of :
a) the amount of equity attributable to minorities at the date on which investment in a subsidiary is made and
b) the minorities’ share of movements in equity since the date the parent subsidiary relationship comes into existence.
v) The Financial Statements of the subsidiaries are drawn upto 31st March, 2006.
The subsidiaries (which along with Mahindra & Mahindra Limited, the parent, constitute the group) considered in the presentation of theseconsolidated financial statements are :
Name of the Subsidiary Company Country of Percentage of Percentage ofIncorporation ownership interest ownership interest
as at 31-03-2006 as at 31-03-2005
Automartindia Limited ...................................................................... India 75.97% 75.97%
Mahindra Gesco Developers Limited .............................................. India 55.00% 55.00%
Mahindra Acres Consulting Engineers Limited ................................ India 51.00% 51.00%
Mahindra Ashtech Limited ............................................................... India 100.00% 100.00%
Tech Mahindra Limited (formerly known as Mahindra-BritishTelecom Limited) .............................................................................. India 56.26% 56.62%
Tech Mahindra GmbH (formerly known as MBT GmbH) ................ Germany 56.26% 56.62%
Tech Mahindra (Americas) Incorporated (formerly known as MBTInternational Incorporated) ............................................................... U.S.A. 56.26% 56.62%
Tech Mahindra Pte. Limited (formerly known as MBT SoftwareTechnologies Pte. Limited) ............................................................... Singapore 56.26% 56.62%
Bristlecone India Limited ................................................................. India 86.54% 80.25%
Bristlecone Singapore Pte. Limited ................................................. Singapore 86.54% 80.25%
Bristlecone GmbH ........................................................................... Germany 86.54% 80.25%
Mahindra Engineering & Chemical Products Limited ...................... India 100.00% 100.00%
Mahindra Gujarat Tractor Limited .................................................... India 60.00% 60.00%
Mahindra Holdings & Finance Limited ............................................. India 100.00% 100.00%
Mahindra Holidays & Resorts India Limited .................................... India 99.99% 99.99%
Mahindra Infrastructure Developers Limited .................................... India 44.00% 44.00%
Mahindra Intertrade Limited ............................................................ India 100.00% 100.00%
Bristlecone UK Limited .................................................................... U.K. 86.54% 80.25%
Mahindra Logisoft Business Solutions Limited ............................... India 100.00% 100.00%
Mahindra & Mahindra Financial Services Limited ............................ India 69.91%* 97.26%
Mahindra Steel Service Centre Limited ........................................... India 61.00% 61.00%
Mahindra Shubhlabh Services Limited ............................................ India 72.77% 72.77%
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Name of the Subsidiary Company Country of Percentage of Percentage ofIncorporation ownership interest ownership interest
as at 31-03-2006 as at 31-03-2005
Mahindra USA Incorporated ................................................................ U.S.A. 100.00% 100.00%
NBS International Limited .................................................................... India 100.00% 100.00%
Bristlecone Limited .............................................................................. Cayman Islands 86.54% 80.25%
Bristlecone Incorporated ..................................................................... U.S.A. 86.54% 80.25%
Mahindra Insurance Brokers Limited ................................................... India 69.91%* 97.26%
Mahindra & Mahindra South Africa (Proprietary) Limited .................... South Africa 51.00% 51.00%
Mahindra Engineering Design & Development Company Limited ...... India 100.00% 100.00%
Mahindra Middleeast Electrical Steel Service Centre (FZC) .................... Sharjah 90.00% 100.00%
Mahindra Overseas Investment Company (Mauritius) Limited .................... Mauritius 100.00% 100.00%
Mahindra Holidays & Resorts USA Incorporated ................................ U.S.A. 99.99% 99.99%
Mahindra World City Developers Limited (formerly knownas Mahindra Industrial Park Limited ) .................................................. India 54.38% 54.38%
Mahindra SAR Transmission Private Limited ....................................... India 51.00% 51.00%
Mahindra-BT Investment Company (Mauritius) Limited(w.e.f. 9th May, 2005) ........................................................................... Mauritius 57.00% —
Tech Mahindra (Thailand) Limited (w.e.f. 21st February, 2006) .................. Thailand 56.25% —
Mahindra (China) Tractor Company Limited (w.e.f. 13th May, 2005) ... China 80.00% —
Mahindra Europe s.r.l. (w.e.f. 30th May, 2005) ..................................... Italy 80.00% —
Mahindra International Limited (w.e.f. 1st November, 2005) .................. India 51.00% —
Mahindra World City (Maharashtra) Limited (formerly knownas Mahindra Realty Limited) (w.e.f. 21st September, 2005) ...................... India 54.84% —Mahindra Renault Private Limited (w.e.f. 5th August, 2005) ................ India 51.00% —
Mahindra Ugine Steel Company Limited (w.e.f. 21st June, 2005) ............... India 50.69% —
Mahindra World City (Jaipur) Limited (w.e.f. 26th August, 2005) ............... India 55.00% —
Tech Mahindra (R & D Services) Limited (w.e.f. 28th November, 2005) ... India 56.24% —
Tech Mahindra (R & D Services) Incorporated (w.e.f. 28th November, 2005) U.S.A. 56.24% —
Tech Mahindra (R & D Services) Pte. Limited (w.e.f. 28th November, 2005) Singapore 56.24% —
Stokes Group Limited (w.e.f. 3rd January, 2006) ................................. U.K. 99.20% —
Stokes Forgings Dudley Limited (w.e.f. 3rd January, 2006) ................. U.K. 99.20% —
Jensand Limited (w.e.f. 3rd January, 2006) ......................................... U.K. 99.20% —
Stokes Forgings Limited (w.e.f. 3rd January, 2006) ............................. U.K. 99.20% —
Plexion Technologies (India) Private Limited (w.e.f. 15th February, 2006) . India 100.00% —
Plexion Technologies (UK) Limited (w.e.f. 15th February, 2006) ................. U.K. 100.00% —
Plexion Technologies GmbH (w.e.f. 15th February, 2006) ................... Germany 100.00% —
Plexion Technologies Incorporated (w.e.f. 15th February, 2006) ................ U.S.A. 100.00% —
*excluding shares issued by Mahindra & Mahindra Financial Services Limited to its ESOP trust but not allotted to its employees; as per theGuidance Note on Accounting for Employee Share-based Payments issued by The Institute of Chartered Accountants of India.
Note: Tech Mahindra Foundation which became a subsidiary of the Company w.e.f. 22nd February, 2006 is not consolidated as a subsidiary asit can apply its income for charitable objects only and cannot pay dividend or transfer funds to its parent.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
(b) Interests in Joint Ventures
The Group’s interests in jointly controlled entities of the Group are :
Name of the Entity Country of Percentage of Percentage ofIncorporation ownership interest ownership interest
as at 31-03-2006 as at 31-03-2005
a) Mahindra Sona Limited * ......................................................... India 29.77% 29.77%
b) PSL Erickson Limited * ............................................................ India 18.06% 18.06%
c) Mahindra Water Utilities Limited $ .......................................... India 50.00% 50.00%
d) Mahindra Inframan Water Utilities Private Limited $ ............... India 50.00% 50.00%
* Shareholding is through a subsidiary, Mahindra Holdings & Finance Limited
$ Shareholding is through a subsidiary, Mahindra Infrastructure Developers Limited
The financial statements of all the Joint Ventures are drawn upto 31st March, 2006.
(c) Investment in Associates
The Group’s Associates are :
Name of the Entity Country of Percentage of Percentage ofIncorporation ownership interest ownership interest
as at 31-03-2006 as at 31-03-2005
Mahindra Ugine Steel Company Limited(upto 20th June, 2005) ............................................................. India — 49.28%
Owens Corning (India) Limited ........................................................ India 21.50% 21.50%
Mahindra Construction Company Limited ....................................... India 37.49% 49.99%
Officemartindia.com Limited ............................................................ India 50.00% 50.00%
Rathna Bhoomi Enterprises Private Limited .................................... India 22.00% 22.00%
Kota Farm Services Limited ............................................................ India 32.74% 32.74%
Mriyalguda Farm Solution Limited ................................................... India 32.74% 32.74%
Mega One Stop Farm Services Limited .......................................... India 32.74% 32.74%
Mahindra Automotive Steels Limited (Note 20 (a)) ......................... India 47.11% —
Siroplast Limited .............................................................................. India 30.56% 29.25%
The financial statements of all the Associates are drawn upto 31st March, 2006 other than for Owens Corning (India) Limited where it is upto 31st
December, 2005.
2. Accounting Policies:
(A) Fixed Assets:
(a) (i) All Fixed Assets are carried at cost less depreciation except as stated in (ii) below. Cost includes financing cost relating toborrowed funds attributable to the construction or acquisition of fixed assets upto the date the asset is ready for use. In case ofborrowed funds and liabilities in foreign currencies for the acquisition of fixed assets from a country outside India, the exchangedifferences are adjusted to the cost of such asset.
When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of accountand resultant profit (including capital profit) or loss, if any, is reflected in the Profit and Loss Account.
(ii) Land and Buildings, of the parent company had been re-valued as at 31st October, 1984 at depreciated replacement values onthe basis of a valuation made by a firm of Chartered Surveyors & Valuers. The indices, if any, used are not stated in the valuation.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
(b) (i) Leasehold land is amortised over the period of the lease.
(ii) Depreciation on assets is calculated on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule XIVto the Companies Act, 1956, except :
(a) for the following class of assets where depreciation is calculated at rates, based on useful life of the assets, which are in nocase lower than the rates specified in Schedule XIV to the Companies Act, 1956 :
Building (at sites) : at 25.00 % to 100.00 %
Building (others) : at 2.56 % to 6.67 %
Plant & Machinery : at 14.29 % to 33.33 %
Furniture & Fixture : at 7.69 % to 33.33 %
Vehicles : at 10.00 % to 50.00 %
(b) Fixed Assets of Mahindra Gujarat Tractor Limited is depreciated on Written Down Value Method (WDV). The differencebetween the SLM and WDV basis is however not significant.
(iii) Depreciation charge for each year is after deducting the amount representing the depreciation on the increase due to revaluationof Land and Buildings, transferred from the Revaluation Reserve.
(B) Intangible Assets:
All Intangible Assets are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits areconsumed:
(a) Technical Knowhow :
The expenditure incurred is amortised over the estimated period of benefit, not exceeding six years commencing with the year ofpurchase of the technology.
(b) Development Expenditure :
The expenditure incurred on technical services and other project related expenses are amortised on the completion of the developmentwork over the estimated period of benefit not exceeding five years.
(c) Software Expenditure :
The expenditure incurred is amortised over three financial years equally commencing from the year in which the expenditure isincurred.
(d) Websites:
The expenditure incurred is amortised over the estimated period of benefit, not exceeding five years.
(e) Time Share Weeks :
Intangible assets representing ‘time share weeks’ are amortised over a period of ten years.
(f) Trademarks :
The expenditure incurred is amortised over the estimated period of benefit, not exceeding ten years.
(g) Non Compete Fees :
Non compete fees are amortised equally over the estimated period of benefit, not exceeding ten years.
(C) Investments :
All long term investments, other than in Associates, are carried at cost less provision, if any, for decline other than temporary, in value ofsuch investments. Current investments are valued at the lower of cost and fair value, determined by category of investment.
(D) Inventories :
Inventories are stated at cost or net realisable value, whichever is lower. Cost is arrived at on a weighted average method and includes,where appropriate, manufacturing overheads and excise duty. Cost of the inventory, includes interest, where appropriate, for long termprojects.
(E) Miscellaneous Expenditure (to the extent not written off or adjusted) :
Expenditure carried forward under this head is amortised as follows :
(a) Finance Charges :
The expenditure incurred in raising long term borrowings is amortised over the period of the borrowings. On early buyback,conversion or repayment of borrowings, any unamortised expenditure is fully written off in that year.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
(b) Special Payments/Pensions under Voluntary Retirement Schemes :
The liability inclusive of retirement benefits such as gratuity and leave encashment is amortised over a period of five years from themonth in which the liability is incurred.
(c) Preliminary expenses are written off over a period of five years from the date of incurring such expenditure.
(F) Foreign Exchange Transactions :
All foreign currency monetary items are translated at the relevant rates of exchange prevailing at the year end. In respect of forwardexchange contracts the premium or discount arising at the inception of such a contract is amortised as expense or income over the life ofthe contract.
In the case of monetary items (other than those for acquisition of fixed assets from a country outside India) the exchange differences arerecognised in the Profit and Loss Account.
In the case of monetary items incurred for the acquisition of fixed assets from a country outside India, the exchange differences areadjusted to the cost of such assets.
In respect of non-integral foreign operations, the assets and liabilities, both monetary and non-monetary are translated at the closing ratesand income and expenses are translated at exchange rates at the dates of transaction and all the resulting exchange differences areaccumulated in foreign exchange fluctuation reserve until the disposal of the net investment.
(G) Revenue Recognition :
(a) Sales of products and services are recognised when the products are shipped or services rendered. Income from long term contractsand sale of property (concerning property development activity) is, accounted for on percentage to completion basis. [Refer paragraph(H) below].
(b) Dividends from investments are recognised in the Profit and Loss Account when the right to receive payment is established.
(H) Long term contracts and Property Development Activity :
Income on long term contracts and property development activity is accounted on the percentage to completion basis which necessarilyinvolves technical estimates of the percentage of completion of each contract/activity, and costs to completion of the contract/activity, onthe basis of which profits/losses are accounted. Such estimates, made by the management and certified to the auditors, have been reliedupon by them, as these are of a technical nature.
Project management Fees receivable on fixed period contracts is accounted over the tenure of the contract/ agreement. Where themanagement fee is linked to the input costs, revenue is recognised as a proportion of the work completed based on progress claimsubmitted. Where the management fees are linked to the revenue generation from the project, revenue is recognised on the percentage ofcompletion basis.
(I) Income from Lease/Hire Purchase :
Finance earnings on lease transactions are calculated by applying the interest rate implicit in the lease, to the investment in the leasedassets, as reduced by the net present value of the lease instalments falling due.
Income from hire purchase contracts entered prior to 1st April, 2001 is accounted for on equated basis in accordance with the terms of thecontract (except in some cases in which it is accounted for by applying the interest rate implicit in such contracts). For hire purchasetransactions entered on or after 1st April, 2001 the income is accounted for by applying the interest rate implicit in such contracts.
(J) Government Grants :
The Company is entitled to various incentives from a State Government, such as grants by way of refund of octroi duty paid by theCompany for its manufacturing unit located in a developing region. In view of the uncertainty in respect to the collection of these grants,such grants are accounted for as and when the disbursements are received.
(K) Time Share Business :
The activity of selling Timeshare and providing holiday facilities to members for a specified period each year, over a number of years, forwhich membership fee is collected either in full up front, or on a deferred payment basis. Upto 30th September, 2005 out of the totalmembership fee, relevant portion reasonably attributable towards cost required to market Timeshare, which is assessed and revisedperiodically, is recognised as Timeshare income in the year in which the purchaser of Timeshare becomes a member and the balancerepresenting ‘Advance towards members’ facilities’ is being recognised as Timeshare income equally over a period for which holidayfacilities are provided commencing from the year in which the member is entitled to benefits of membership under the scheme.
With effect from 1st October, 2005 in accordance with the new membership rules, admission fee, which is non-refundable, is recognised asincome on admission of a member. Entitlement fee, which entitles the time share member for the timeshare facilities over the membershipusage period, is recognised as income equally over the usage period.
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(L) Retirement Benefits :
Retirement Benefits in respect of gratuity and leave encashable at retirement/cessation are provided for based on valuations, as at theBalance Sheet date, made by independent actuaries.
(M) Product Warranty :
In respect of warranties on sale of certain products, the estimated costs of these warranties are accrued at the time of sale. The estimatesfor accounting of warranties are reviewed and revisions are made as required.
(N) Leases :
The Group’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godowns, etc.). Theleasing arrangements which are not non-cancellable range between 11 months and three years generally, and are usually renewable bymutual consent on agreed terms. The aggregate lease rentals payable are charged as Rent including lease rentals.
(O) Segment Reporting :
The accounting policies adopted for segment reporting are in line with the accounting policies of the Group. Segments are identified havingregard to the dominant source and nature of risks and returns and internal organisation and management structure.
Revenues and expenses have been identified to the segments based on their relationship to the business activity of the segment. Income/ Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to business segments are reflected as unallocatedcorporate income / expenses. Inter-segment transfers are at prices which are generally market led.
(P) Taxes on Income :
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subject toconsideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbeddepreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincing evidencethat sufficient future tax income will be available against which such deferred tax assets can be realised.
(Q) Income from Securitisation and Assignment :
Securitised assets are derecognised as the contractual rights therein are transferred to the special purpose vehicle or buyers as the casemay be. On derecognition, the difference between book value of the securitised asset and consideration received as reduced by theestimated provision for loss/expense and incidental expenses related to the transaction is recognised as gain or loss arising on securitisation.
In case of assignment of receivables the assets are derecognised as all the rights, titles, future receivables & interest thereof are assignedto the purchaser. On derecognising, the difference between book value of the receivables assigned and consideration received as reducedby the estimated provision for loss/expenses & incidental expenses related to the transaction is recognised as gain or loss arising onassignment.
3. In the Consolidated Accounts, the Investment Fluctuation Reserve account is reflected with a corresponding adjustment to ‘General Reserve’.In accordance with the Scheme of Arrangement, the Investment Fluctuation Reserve has been utilised against diminution in value of certaininvestments and other assets in the accounts of the Company. Accordingly, an amount of Rs. 1230.00 lakhs (2005 : Rs. 2131.49 lakhs) wasutilised for provision for investment in subsidiaries and other amounts recoverable from subsidiaries in the standalone accounts of the Company,and not set up in the consolidated accounts, has been transferred from Investment Fluctuation Reserve to General Reserve.
4. During the year, the Institute of Chartered Accountants of India has issued a Guidance Note on Accounting for Employee Share-basedPayments which requires that shares allotted to a trust but not transferred to the employees be reduced from the Share Capital and Reserves.Accordingly, the Company has reduced the Share Capital by Rs. 375.09 lakhs (2005 : Rs. 436.07 lakhs), Securities Premium by Rs. 1837.93lakhs (2005 : Rs. 2136.73 lakhs) for the 37,50,884 shares (2005 : 43,60,672 shares) held by the trust pending transfer to the eligibleemployees. The amount receivable from the ESOP Trust, net of the above moneys which is treated as advance received from it, is includedunder current liabilities.
The Share Capital of the Company has also been reduced and the General Reserve increased by Rs. 375.09 lakhs (2005 : Rs. Nil) for thebonus shares issued by the Company in September 2005 to the trust but not yet transferred by the trust to the employees.
The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share for the current and previous year.
5. Loans :
(a) Secured borrowings are secured by a pari-passu charge on immovable properties of the entities both present and future, subject tocertain exclusions and are also secured by pari-passu charge on the movable properties of the Entities including movable Machinery,Machinery Spares, Tools and Accessories, both present and future, subject to certain exclusions.
(b) Loans and Advances from Banks are secured by a first charge on whole of the current assets namely inventories, certain book debts,outstanding monies, receivables, claims, etc. both present and future.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
6. (a) The depreciation charge for the year excludes :
(i) An amount of Rs. 43.28 lakhs (2005 : Rs. 54.22 lakhs), representing depreciation on the increase due to revaluation of Land andBuildings transferred from the Revaluation Reserve.
(ii) An amount of Rs. 3.10 lakhs (2005 : Rs. 63.28 lakhs), representing depreciation on assets used for development work. Thisexpenditure is transferred to Development Expenditure and is appropriately amortised.
(b) Additions to assets include assets taken over due to acquisition of subsidiaries :
Rupees Lakhs
Description of Assets Cost / Professional Depreciation /Valuation Amortisation
Land .................................................................................................................................... 10,20.16 —
Land-Leasehold .................................................................................................................. 61.64 4.51
Building ............................................................................................................................... 66,30.06 18,59.69
Plant & Machinery .............................................................................................................. 291,55.38 200,74.99
Plant & Machinery-Lease ................................................................................................... 7,63.62 14.03
Furniture & Fittings ............................................................................................................. 17,42.42 13,42.19
Vehicles, Cycles, etc. ......................................................................................................... 3,90.19 2,39.20
Software Expenditure ......................................................................................................... 2,68.66 2,01.92
Total .................................................................................................................................... 400,32.13 237,36.53
(c) The depreciation charge for the year includes an amount of Rs. 0.50 lakhs (2005 : Rs. 24.52 lakhs) representing lease terminal adjustmentfor the year.
7. (a) During the year ended 31st March, 2006, Mahindra & Mahindra Financial Services Limited has without recourse securitised/assigned loanreceivables of Rs. 22644.00 lakhs (2005 : Rs. 22490.00 lakhs) contracts amounting to Rs. 55630.58 lakhs (2005 : Rs. 45277.68 lakhs)(including future interest receivable) for a consideration of Rs. 51468.22 lakhs (2005 : Rs. 42429.84 lakhs). As the income booked inrespect of securitisation/assignment of receivables include certain amount towards cost of future servicing of the securitised/assignedpool, a matching amount has been provided for. The income booked on securitisation/assignment of receivables during the year isRs. 5718.00 lakhs (2005 : Rs. 3252.67 lakhs) and provision for estimated loss/expenses is Rs. 2082.66 lakhs (2005 : Rs. 1256.02 lakhs).
(b) During the year ended 31st March, 2006, Mahindra Holidays & Resorts India Limited has with recourse securitised receivables ofRs. 2369.32 lakhs (2005 : Rs. 3189.16 lakhs).
8. The Company had issued during the year ended 31st March, 2005, Zero Coupon Foreign Currency Convertible Bonds (Bonds) aggregating toUS $ 100 million, at par. Out of these upto 31st March, 2006, Bonds aggregating to US $ 64.73 million have been converted into equity shares/ GDRs. Subsequent to the year end, Bonds aggregating to US $ 22.37 million have been converted into equity shares / GDRs.
Premium payable on redemption of Bonds had been fully provided in the previous year by debiting the same to Securities Premium Account(SPA). In view of the above, premium aggregating to Rs. 6667.07 lakhs no longer payable on bonds converted into equity shares / GDRs hasbeen credited back to SPA during the year.
The proceeds of the Bonds (net of conversion into equity shares/GDRs) have been utilised towards expansion of manufacturing facilities andoverseas acquisitions.
9. The Commissioner of Central Excise (Adjudication), Navi Mumbai, passed an order on 30th March, 2005, which was received by the Companyon 4th April, 2005, confirming the demand made on the Company for payment of differential excise duty (including penalty) of Rs. 30411 lakhsin connection with the classification of Company’s Commander range of vehicles, during the years 1991-1996. Whilst the Company hadclassified the Commander range of vehicles as 10-seater attracting a lower rate of excise duty, the Commissioner of Central Excise (Adjudication),Navi Mumbai, has held that these vehicles could not be classified as 10-seaters and as such attracted a higher rate of excise duty. In earlierproceedings, the Collector of Central Excise, Mumbai as also the Collector Central Excise (Appeals), Mumbai had upheld the classification ofthese vehicles as 10-seaters. Similarly, certain statutory/expert bodies have also confirmed the concerned vehicles to be 10-seater vehicles.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has also by its order dated 19th July, 2005 upheld this classification. Thedepartment’s statutory Appeal against this order has been admitted by the Supreme Court.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
The Company has been legally advised that the order dated 30th March, 2005 passed by the Commissioner is unsustainable in law and has filedan appeal against this order, along with stay application, before the CESTAT. The Company is confident that it would succeed in the case andthe Company’s stand that the Commander Vehicles are 10-seater vehicles would be upheld. As such, the Company does not expect anyliability on this account.
10. Contingent Liability:
(a) Guarantees given :
Amount of guarantees
2006 2005Rupees lakhs Rupees lakhs
For employees ............................................................................................................................... 10.40 11.92
For other companies ..................................................................................................................... 2,00.00 62,05.59
For others ...................................................................................................................................... 14,98.68 3,42.36
(b) Claims against the Company not acknowledged as debts comprise of :
(i) Excise Duty, Sales tax and Service tax claims disputed by the Company relating to issues of applicability and classification aggregatingto Rs. 14242.00 lakhs (Net of Tax : Rs. 10503.60 lakhs) (2005 : Rs. 5490.78 lakhs (Net of tax : Rs. 4283.40 lakhs)).
(ii) Other Matters (excluding claims where amounts are not ascertainable) : Rs. 12686.77 lakhs (Net of Tax : Rs. 8422.40 lakhs)(2005 : Rs. 1175.79 lakhs (Net of Tax : Rs. 759.78 lakhs))
(iii) On capital account : Rs. 118.20 lakhs (2005 : Rs. 118.20 lakhs)
(iv) Group Share in Joint Ventures Rs. 0.88 lakhs (2005 : Rs. 1.27 lakhs)
(c) Taxation matters :
(i) Demands not acknowledged as debts and not provided for, relating to issues of deductibility and taxability in respect of which thematters are in appeal and exclusive of the effect of similar matters in respect of assessments remaining to be completed :
- Income tax : Rs. 15126.09 lakhs (2005 : Rs. 12903.93 lakhs)
- Group Share in Joint Ventures : Rs. 0.88 lakhs (2005 : Rs. 335.65 lakhs)
(ii) Items which have succeeded in appeal, but the Income tax Department is pursuing/likely to pursue in appeal/reference and exclusiveof the effect of similar matters in respect of assessments remaining to be completed:
- Income tax matters : Rs. 5186.54 lakhs (2005 : Rs. 4723.00 lakhs)
- Surtax matters : Rs. 12.80 lakhs (2005 : Rs. 12.80 lakhs)
(d) Bills discounted not matured Rs. 1491.64 lakhs (2005 : Rs. 4158.70 lakhs).
(e) In respect of contracts for design, manufacture, supply, erection and commissioning of plant and equipment placed by various customers,the committed dates of completion had expired and, hence, strictly in terms of the relative contracts, the liability for liquidated damages/penalties, the amount of which is estimated at a ceiling of Rs. 946.71 lakhs (2005 : Rs. 769.53 lakhs) - Net of tax Rs. 628.05 lakhs(2005 : Rs. 487.94 lakhs). However, it is expected to have the liquidated damages/penalties waived, as in the past.
(f) During the year, vide Share Purchase Agreement dated 15th November, 2005, Tech Mahindra Limited (formerly known as Mahindra -BritishTelecom Limited) has acquired Tech Mahindra (R&D services) Limited (TMRDL) for a initial consideration of Rs. 17550.60 lakhs (includingstamp duty). As a result, TMRDL and its two wholly owned subsidiaries have become subsidiaries / step subsidiaries of the Company witheffect from the date of acquisition i.e. 28th November, 2005.
The terms of purchase also provide for payment of contingent consideration to all the selling shareholders, payable over three years andcalculated based on achievement of specific targets. The contingent consideration is payable in cash and cannot exceed Rs. 6407.80lakhs. The consideration so payable would be accounted in the books of account in the year of achieving the milestones under theAgreement. Accordingly Rs. 328.29 lakhs has been accounted for as at the year end, as additional cost of acquisition.
11. (a) Provision - Others Rs. 10784.97 lakhs (2005 : Rs. 8052.56 lakhs) includes :
(i) Provision for warranty Rs. 6321.48 lakhs (2005 : Rs. 4702.40 lakhs). This relates to warranty provision made in respect of sale ofcertain products, the estimated costs of which is accrued at the time of sale. The products are generally covered under a freewarranty period ranging from 1 year to 3 years.
(ii) Provision for Contingencies Rs. 443.75 lakhs (2005 : Rs. 33.99 lakhs) is in respect of labour demands under negotiations at certainlocations of the Company. The ultimate settlement is contingent on the conclusion of negotiations.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
(b) The movement in above provisions is as follows :
Rupees lakhs
Warranty Contingency
Provisions 2006 2005 2006 2005
Balance as at 1st April, ....................................................................................... 47,02.40 33,83.24 33.99 3,42.00
Add : Provision made during the year ............................................................... 44,20.09 37,41.07 4,43.75 33.99
Less : Utilisation during the year ........................................................................ 28,01.01 24,21.91 33.99 3,42.00
Balance as at 31st March, ............................................................................... 63,21.48 47,02.40 4,43.75 33.99
12. The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March, 2006 is Rs. 60977.14lakhs (2005 : Rs. 10326.80 lakhs).
Group Share in Joint Ventures: Rs. 1.56 lakhs (2005 : Rs. 55.40 lakhs).
13. Research and Development expenditure debited to the Profit and Loss Account, including certain expenditure based on allocations madeaggregate Rs. 11584.72 lakhs (2005 : Rs. 9246.68 lakhs).
Group Share in Joint Ventures: Rs. 4.52 lakhs (2005 : Rs. 0.76 lakhs)
14. The components of Deferred tax liability and assets as at 31st March, 2006 are as under:2006 2005
Rupees lakhs Rupees lakhsDeferred tax liability :
(i) On fiscal allowances on fixed assets ....................................................................................... 212,05.76 253,08.39
(ii) Others ....................................................................................................................................... 21,29.52 5,46.00
Group Share in Joint Ventures ................................................................................................. 53.81 32.59
233,89.09 258,86.98
Deferred tax assets :
(i) Provision for leave encashable at retirement/cessation ........................................................... 20,21.81 17,23.43
(ii) Provision for Doubtful debts/Advances .................................................................................... 66,90.27 53,86.28
(iii) Unabsorbed depreciation carried forward # ............................................................................ 2,75.27 11,46.87
(iv) Others ....................................................................................................................................... 27,57.59 40,60.20
Group Share in Joint Ventures ................................................................................................. 78.45 36.24
118,23.39 123,53.02
Net Deferred tax liability ................................................................................................................... 115,65.70 135,33.96
# (considered, as there are compensatory timing differences the reversal of which, will result in sufficient future taxable income against whichthis can be realised).
15. Exceptional items of Rs. 26340.42 lakhs (credit) [2005 : Rs. 1503.15 lakhs (credit)], comprise of the following :
2006 2005Rupees lakhs Rupees lakhs
1. Profit on divesture of Long Term Investments .............................................................................. 275,79.06 9,30.15
2. Amortisation of liability and other retirement benefits made under Voluntary Retirement Schemes .. (8,34.07) (7,26.10)
3. Premium on redemption of preference shares ............................................................................. (4,04.57) —
4. Provision for diminution in value of certain assets substantially retired from active use ............. — (8,26.03)
5. Benefit arising out of early repayment of sales tax loan ............................................................... — 21,25.13
Total ............ 263,40.42 15,03.15
Figures in brackets signify charge to Profit and Loss Account
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
16. Adjustments pertaining to previous years, net of current and deferred tax, comprise of the following :
2006 2005Rupees lakhs Rupees lakhs
1. Excess / short provision of Income Tax in respect of previous years. .................................... 20.59 1,60.212. Other Adjustment ..................................................................................................................... 2.52 –3. Group share in Joint Ventures .................................................................................................. – 0.19
Total ............. 23.11 1,60.40
17. Work-in-progress – Property Development Activity and Long Term Contracts and Advances recoverable in cash or kind or for value to bereceived includes Group’s share of Rs. 4762.18 lakhs on account of certain projects, the commencement of which has been delayed pendingresolution of certain matter including receipt of approvals and outcome of court cases.
18. Related Party Transactions :
(a) Names of related parties where transactions have taken place during the year :
Subsidiaries :
Sl. No. Name of the Company Sl. No. Name of the Company
1. Tech Mahindra Foundation 2. Mahindra Automotive Steels Limited (Note 20 (a))
Associates :
Sl. No. Name of the Company Sl. No. Name of the Company
1. Mahindra Ugine Steel Company Limited 5. Kota Farm Services Limited(upto 20thJune, 2005)
2. Owens Corning (India) Limited 6. Mriyalguda Farm Solution Limited
3. Rathna Bhoomi Enterprises Private Limited 7. Mega One Stop Farm Services Limited
4. Siroplast Limited 8. Mahindra Construction Company Limited
Joint Ventures :
Sl. No. Name of the Company Sl. No. Name of the Company
1. Mahindra Sona Limited 3. Mahindra Inframan Water Utilities Private Limited
2. Mahindra Water Utilities Limited
Key Management Personnel :
Vice Chairman and Managing Director ........................................... Mr. Anand MahindraExecutive Directors .......................................................................... Mr. B.N. Doshi
Mr. A.K. NandaMr. A.E. Durante(upto 25th September, 2005)
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
(b) The related party transactions are as under:Rupees lakhs
Sl. Nature of Transactions Subsidiary Associate Joint KeyNo. Companies* Companies Ventures Management
Personnel
1. PurchasesGoods .......................................................................................... 36,57.22 29,18.14 46,51.49 –
(–) (96,86.54) (49,52.51) (–)
Fixed Assets ................................................................................ – 25.69 – –(–) (–) (–) (–)
Services ....................................................................................... – – – –(–) (8,07.27) (–) (–)
2. SalesGoods .......................................................................................... – 42,92.30 0.39 –
(–) (88,42.73) (–) (–)
Fixed Assets ................................................................................ 16,28.89 – – –(–) (–) (–) (–)
Services ....................................................................................... 39.80 3.56 90.45 –(–) (3,62.73) (37.08) (–)
3. InvestmentsPurchase ...................................................................................... 80,00.00 – – –
(–) (–) (2.00) (–)
4. Share Application Money paid .................................................... 48,50.00 – – –(–) (–) (–) (–)
5. Deputation of PersonnelFrom Related Parties ................................................................... – 2.80 – –
(–) (–) (–) (–)
To Related Parties ....................................................................... 40.05 2.66 – –(–) (17.09) (–) (–)
6. Provisions for :Doubtful Advances during the year ............................................. – 20.03 – –
(–) (15.18) (–) (–)
Diminution in value of other assets written back ........................ – 45.00 – –(–) (98.53) (–) (–)
7. Write Off of Receivables .............................................................. – – – –(–) (10.00) (–) (–)
8. FinanceInter Corporate Deposits given ................................................... 6,00.00 – – –
(–) (15.18) (8,64.22) (–)
Inter Corporate Deposits refunded by parties ............................ 6,00.00 1,25.19 – –(–) (5,00.00) (12,07.77) (–)
Interest received .......................................................................... 21.28 1,18.10 – 1.17(–) (2,77.09) (13.10) (–)
Dividend received ........................................................................ – 19.25 91.70 –(–) (19.25) (66.49) (–)
Stock on hire ............................................................................... – – – –(–) (19.91) (–) (–)
Cash discount received ............................................................... – – – –(–) (6.85) (–) (–)
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Rupees lakhs
Sl. Nature of Transactions Subsidiary Associate Joint KeyNo. Companies* Companies Ventures Management
Personnel
Interest on Hire Purchase ............................................................ – – – –(–) (1.95) (–) (–)
9. Other TransactionsOther Income ............................................................................... – 3,29.15 4.32 –
(–) (2,65.72) (2.60) (–)
Other Expenses ........................................................................... 15,00.00 – – –(–) (2.04) (13.05) (–)
Reimbursements received from parties ....................................... 1,23.64 1,84.05 3.22 –(–) (4,81.93) (18.70) (–)
Reimbursements made to parties ............................................... – 59.21 – –(–) (23.86) (3.00) (–)
Advance given by group company ............................................. – 20.03 – –(–) (–) (–) (–)
Advance refunded by group company ........................................ – 2,00.00 – –(–) (–) (–) (–)
10. OutstandingsPayable ........................................................................................ 2,87.54 – 8,49.18 2,15.86
(–) (9,47.71) (10,68.57) (2,41.30)
Receivable ................................................................................... 1,51.82 19,34.48 64.41 –(–) (47,10.39) (19.10) (82.26)
Inter Corporate Deposits given ................................................... – 5,72.80 – –(–) (6,32.98) (–) (–)
Guarantees and Collaterals given ............................................... – – 9,00.00 –(–) (47,83.96) (9,01.92) (–)
Deferred payment under hire purchase ...................................... – – – –(–) (1.71) (–) (–)
11. Provision for Diminution in value of other related assets ............ – 6,68.71 – –(–) (7,13.71) (–) (–)
Provision for Doubtful debts /advances ...................................... – 5,04.71 – –(–) (12,22.69) (–) (–)
12. Share Application Money ............................................................. 48,50.00 – – –(–) (–) (–) (–)
13. Managerial Remuneration ............................................................ – – – 5,61.47(–) (–) (–) (5,42.59)
14. Dividends ..................................................................................... – – – 33.08(–) (–) (–) (22.47)
15. Stock Options .............................................................................. – – – 8.38(–) (–) (–) (22.04)
16. Loan given to Key Management Personnel ................................ – – – –(–) (–) (–) (1,25.00)
17. Loan Refunded by Key Management Personnel ........................ – – – 80.00(–) (–) (–) (45.00)
Previous year’s figures are in brackets.
* Amounts pertain to Mahindra Automotive Steels Ltd. except other expenses of Rs.1500.00 lakhs (2005 : Rs. Nil) relating to Tech MahindraFoundation.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Significant related party transactions are as under :Rupees lakhs
Nature of Transactions Associate Companies Amount Joint Ventures Amount
1. Purchase – Goods Mahindra Ugine Steel Company Limited 27,10.95 Mahindra Sona Limited 46,51.49(94,58.31) (49,52.51)
2. Sale – Goods Mahindra Ugine Steel Company Limited 42,71.90 Mahindra Sona Limited 0.39(88,07.99) (–)
3. Investment – Purchase Mahindra Inframan Water –Utilities Private Limited (2.00)
4. Provision for Mega One Stop Farm Services Limited 19.86Doubtful Advance (11.24)
Mriyalguda Farm Solution Limited 0.17(3.94)
5. Inter Corporate Mega One Stop Farm Services Limited – Jayem Automotives Limited –Deposits given (11.24) (8,61.22)
Mriyalguda Farm Solution Limited –(3.94)
6. Inter Corporate Mahindra Ugine Steel Company Limited 80.19 Jayem Automotives Limited –Deposits refunded (5,00.00) (12,02.77)by parties
Mahindra Construction Company Limited 45.00(–)
Previous year’s figures are in brackets
19. Earnings per Share :2006 2005
Amount used as the numerator – Balance of profit for 2005-2006 (Rupees lakhs) .................................... 1,269,71.66 681,53.78
(Gain)/Loss on difference in exchange on bonds ......................................................................................... 1,18.93 (6,47.62)
Amount used as the numerator for diluted earnings per share (Rupees lakhs) .......................................... 1,270,90.59 675,06.16
Weighted average number of equity shares used in computing basic earnings per share ......................... 22,51,11,765 22,24,99,782
Effect of potential ordinary (equity) shares on conversion of bonds/debentures ......................................... 2,06,32,529 2,18,34,008
Weighted average number of equity shares used in computing diluted earnings per share ....................... 24,57,44,294 24,43,33,790
Basic Earnings per share (Rs.) (Face value of Rs. 10 per share) ................................................................. 56.40 30.63
Diluted Earnings per share (Rs.) .................................................................................................................... 51.72 27.63
In the computation of earnings per share for the periods above, the Company has considered the bonus shares issued by it in September 2005and given effect to the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants ofIndia.
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MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
20. Investment in Associates
No. of Equity % of Cost of Goodwill/ Share in Carryingshares held Holding Investments Capital accumulated Cost
(Equity reserve Profit/(Loss)/Shares) Reserves
(Nos.) (Rupees lakhs)Unquoted :Owens Corning (India) Limited ......................... 2,81,24,794 21.50% 28,12.48 (7,63.78) 12,79.46 40,91.95
2,81,24,794 21.50% 28,12.48 (7,63.78) 11,40.94 39,53.42
Mahindra Construction Company Limited ........ 9,00,000 37.49% 96.88 – (96.88) –12,00,000 49.99% 1,29.17 – (1,29.17) –
Officemartindia.com Limited ............................. 14,99,997 50.00% 22.00 – (22.00) –14,99,997 50.00% 22.00 – (22.00) –
Rathna Bhoomi Enterprises Private Limited ..... 500 22.00% 0.05 – (0.05) –500 22.00% 0.05 – (0.05) –
Kota Farm Services Limited .............................. 2,73,420 32.74% 27.34 – (27.34) –2,73,420 32.74% 27.34 – (27.34) –
Mriyalguda Farm Solution Limited .................... 3,37,500 32.74% 33.75 – (33.75) –3,37,500 32.74% 33.75 – (33.75) –
Mega One Stop Farm Services Limited ........... 3,51,000 32.74% 35.10 2.52 (35.10) –3,51,000 32.74% 35.10 2.52 (35.10) –
Mahindra Automotive Steels Limited(Refer (a) below) ................................................ 82,21,936 47.11% 80,01.00 43,72.44 (4,22.12) 75,78.88
– – – – – –
Total .................................................................. 116,70.8339,53.42
Quoted :Mahindra Ugine Steel Company Limited .......... – – – – – –
1,52,41,885 49.28% 63,44.04 22,67.09 (6,43.88) 57,00.16
Siroplast Limited ............................................... 13,41,203 30.56% 290.13 54.92 104.45 3,94.5812,83,480 29.25% 256.51 35.25 78.77 3,35.28
Total .................................................................. 3,94.5860,35.44
(a) During the year the Company acquired 82,21,936 shares of Mahindra Automotive Steels Limited (MASL). MASL has since acquired thebusiness of Amforge Industries Limited effective 1st April, 2005 as a result of which 1,48,20,206 shares are to be issued to shareholders ofAmforge Industries Limited and further shares are to be issued to Mahindra & Mahindra Limited. Accordingly, on post issuance of such shares,which will be effective 1st April, 2005, MASL will be an associate of the Company.
21. Joint Ventures Disclosure :Group’s Share in Joint Ventures with respect to other items :
2006 2005Rupees LakhsRupees LakhsRupees LakhsRupees LakhsRupees Lakhs Rupees Lakhs
a) Sales ............................................................................................................................................................... 41,39.62 41,30.64
b) Excise Duty ..................................................................................................................................................... (3,38.92) (3,48.44)
c) Depreciation / Amortisation ............................................................................................................................ (61.55) (73.70)
d) Provision for Current Tax including Fringe Benefit Tax .................................................................................. (3,22.52) (2,74.18)
e) Provision for Deferred Tax (Net) ..................................................................................................................... 20.99 15.21
Figures in brackets signify charge to Profit and Loss Account.
146
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
22. Segment Information:
Segment Report for the year ended 31st March, 2006.
Primary Segment Disclosure - Business SegmentRupees lakhs
Automotive Farm IT Services Financial Other Eliminations ConsolidatedSegment Equipment Services Segments Total
Segment
REVENUE
Gross External Revenue ............. 6,450,23.55 3,462,07.70 1,388,51.53 583,21.40 1,963,99.46 – 13,848,03.645,549,21.63 2,585,53.42 1,027,72.92 399,88.48 1,045,89.07 – 10,608,25.52
Less : Excise Duty on Sales ...... 1,111,83.05 20,25.42 – – 127,87.49 – 1,259,95.96964,62.16 71,58.19 – – 33,56.28 – 1,069,76.63
Net External Revenue ................. 5,338,40.50 3,441,82.28 1,388,51.53 583,21.40 1,836,11.97 – 12,588,07.684,584,59.47 2,513,95.23 1,027,72.92 399,88.48 1,012,32.79 – 9,538,48.89
Inter Segment Revenue .............. 5,73.79 44,52.15 18,13.93 1,92.42 534,58.42 (604,90.71) –4,68.98 20,07.50 16,81.56 4,82.60 227,57.39 (273,98.03) –
Total Revenue ............................ 5,344,14.29 3,486,34.43 1,406,65.46 585,13.82 2,370,70.39 (604,90.71) 12,588,07.684,589,28.45 2,534,02.73 1,044,54.48 404,71.08 1,239,90.18 (273,98.03) 9,538,48.89
RESULT
Segment result before 541,01.05 311,69.48 253,90.61 150,86.95 + 336,93.80 – 1,594,41.89exceptional items ........................ 484,02.10 194,25.98 77,34.38 131,59.14 + 170,45.76 – 1,057,67.36
Exceptional items (2,54.76) (3,41.89) – – (2,37.42) – (8,34.07)allocated to Segments ................ (10,65.52) (2,86.56) – – (37.81) – (13,89.89)
Segment result after 538,46.29 308,27.59 253,90.61 150,86.95 + 334,56.38 – 1,586,07.82exceptional items ........................ 473,36.58 191,39.42 77,34.38 131,59.14 + 170,07.95 – 1,043,77.47
Unallocable Corporate 50,82.08expenses (net of income) 65,29.09
Operating Profit 1,535,25.74978,48.38
Less : Interest expense not allocable to segments 67,67.4457,65.25
Add : Interest Income not allocable to segments 63,18.2750,61.02
Add : Exceptional Items Unallocable to segment 271,74.4922,74.89
Profit before Tax 1,802,51.06994,19.04
Less : Income Taxes – Current Tax including Fringe benefit Tax 439,08.86315,87.06
– Deferred Tax (36,15.04)(13,13.80)
Profit for the year before prior year adjustments 1,399,57.24691,45.78
Less : Adjustments pertaining to previous years 23.111,60.40
Balance of Profit for the year before Share of Profit of Associates 1,399,34.13689,85.38
Share of Profit of Associates 4,66.6934,22.19
Profit for the year 1,404,00.82724,07.57
+ In line with Accounting Standard 17 on Segment Reporting, results of “Financial Services” segment are computed after charge of interest costas segment expense.
147
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Segment Information (Contd.): Rupees lakhs
Automotive Farm IT Services Financial Other Eliminations ConsolidatedSegment Equipment Services Segments Total
Segment
OTHER INFORMATIONSegment Assets ................................ 2,446,87.29 1,451,99.58 822,09.69 4,604,01.66 1,910,99.30 – 11,235,97.52
2,005,38.84 1,177,16.28 570,18.17 3,038,68.76 1,261,04.32 – 8,052,46.37Unallocable Corporate Assets .......... 2,400,10.29
1,407,79.74
Total Assets ..................................... 13,636,07.819,460,26.11
Segment Liabilities ............................ 1,163,37.89 711,63.58 262,53.70 4,145,39.03 * 767,84.16 7,050,78.36951,60.24 519,72.20 149,24.85 2,649,59.51 * 475,17.69 4,745,34.49
Unallocable Corporate Liabilities ...... 2,035,60.081,974,10.56
Total Liabilities ................................. 9,086,38.446,719,45.05
Capital Expenditure ........................... 346,14.30 91,51.74 40,70.84 12,70.76 117,47.04182,56.15 52,91.14 57,94.75 10,15.77 69,61.82
Depreciation / Amortisation .............. 134,35.36 60,54.06 41,37.82 5,17.33 32,36.49123,35.44 54,70.26 34,05.94 3,84.86 12,42.94
Non cash expenditure other than 5,20.79 10,65.28 – – 6,38.45depreciation ...................................... 2,39.48 4,22.66 – – 1,69.46
* In line with Accounting Standard 17 on Segment Reporting, segment liabilities of “Financial Services” segment include the related interestbearing liabilities.
Secondary Segment Disclosure - Geographical SegmentRupees lakhs
Domestic Overseas Total
Revenue From External Customers ............................. 11,248,15.25 2,599,88.39 13,848,03.648,784,23.28 1,824,02.24 10,608,25.52
Segment Assets ........................................................... 10,506,22.08 729,75.44 11,235,97.527,676,42.94 376,03.43 8,052,46.37
Capital Expenditure ...................................................... 559,94.01 48,60.67 608,54.68369,44.61 3,75.02 373,19.63
Notes :
1. Business Segments
The Group has considered business segments as the primary segment for disclosure.
The segments have been identified taking into account the organisational structure as well as the differing risks and returns of these segments.
Automotive Segment comprises of sales of automobiles, spare parts and related services.
Farm Equipment Segment comprises of sales of Tractors, spare parts and related services.
IT Services comprise of services rendered for IT and Telecom.
Financial Services comprise of services relating to financing, leasing and hire purchase of automobiles and tractors.
Others comprise of Steel trading, Project management, Investment, Automotive components, Power plant, Timesharing, etc.
2. Secondary Segments
The geographical segments are considered for disclosure as secondary segment.
Domestic segment includes sales to customers located in India and service income accrued in India.
Overseas segment includes sales and services rendered to customers located outside India.
148
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)
Segment Revenue comprises of :2006 2005
Rupees lakhs Rupees lakhs
Sales ................................................................................................................................... 11,067,29.75 8,706,42.57
Income from Services rendered .......................................................................................... 1,713,19.73 1,214,14.23
Income from long term contracts ....................................................................................... 172,12.46 114,60.37
Income from project management ..................................................................................... 13,50.40 11,98.50
Hire purchase and lease income ........................................................................................ 58,67.60 42,98.36
Income from Loan, Retained Interest in Securitised Assets & Securitisation .................... 568,40.93 371,82.44
Other allocable income * .................................................................................................... 254,82.77 146,29.05
Total .......................... 13,848,03.64 10,608,25.52
2006 2005Rupees lakhs Rupees lakhs
*Other allocable income includes :
Interest Income ................................................................................................................... 5,13.69 3,71.57
Scrap Sales ......................................................................................................................... 55,02.91 37,19.54
Commission ........................................................................................................................ 6,11.79 4,28.39
Dividend .............................................................................................................................. 2,73.17 1,34.33
Profit on Sale of Long Term Investments ........................................................................... 87,22.68 55,00.95
Others ................................................................................................................................. 98,58.53 44,74.27
Total .......................... 254,82.77 146,29.05
23. Previous year’s figures have been regrouped/restated wherever necessary.
149
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)D
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150
MAHINDRA & MAHINDRA LIMITED (CONSOLIDATED)D
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axaf
ter T
axTa
x th
ereo
n
Mah
ind
ra &
Mah
ind
ra S
ou
th A
fric
a (P
rop
riet
ary)
Lim
ited
#5,
06.1
017
,45.
9390
,39.
5190
,39.
51-
202,
76.2
319
,55.
295,
72.1
113
,83.
18-
Mah
ind
ra E
ng
inee
rin
g D
esig
n &
Dev
elo
pm
ent
Co
mp
any
Lim
ited
7,05
.00
3,65
.85
15,6
6.61
15,6
6.61
1,00
.40
23,8
0.20
4,76
.41
31.9
44,
44.4
7-
Mah
ind
ra O
vers
eas
Inve
stm
ent
Co
mp
any
(Mau
riti
us)
Lim
ited
#39
,34.
5467
.95
46,9
7.08
46,9
7.08
-86
.29
52.1
90.
1252
.07
-
Mah
ind
ra (C
hin
a) T
ract
or
Co
mp
any
Lim
ited
#41
,55.
12(1
1,25
.27)
51,1
3.73
51,1
3.73
-29
,68.
82(1
1,68
.18)
-(1
1,68
.18)
-
Mah
ind
ra-B
T In
vest
men
t C
om
pan
y (M
auri
tiu
s) L
imit
ed #
10,7
1.84
7.66
10,8
2.68
10,8
2.68
-13
.90
7.66
-7.
66-
Mah
ind
ra E
uro
pe
s.r.l
. #5,
43.2
4(6
6.04
)13
,62.
3313
,62.
33-
3,96
.50
(58.
67)
-(5
8.67
)-
Mah
ind
ra S
AR
Tran
smis
sio
n P
riva
te L
imit
ed6,
12.8
912
,33.
7853
,53.
5153
,53.
51-
46,6
6.17
1,33
.94
60.8
573
.09
-
Plex
ion
Tec
hn
olo
gie
s (In
dia
) Pri
vate
Lim
ited
4,50
.30
(74.
92)
8,87
.78
8,87
.78
2.00
10,7
5.70
(20.
67)
4.81
(25.
48)
-
Plex
ion
Tec
hn
olo
gie
s (U
K) L
imit
ed #
50.6
534
.31
2,03
.78
2,03
.78
-2,
12.8
25.
802.
423.
38-
Plex
ion
Tec
hn
olo
gie
s G
mb
H #
32.0
53.
5651
.82
51.8
2-
36.4
52.
060.
921.
14-
Plex
ion
Tec
hn
olo
gie
s In
corp
ora
ted
#2,
63.4
9(1
,74.
51)
1,49
.69
1,49
.69
-86
.00
(25.
86)
-(2
5.86
)-
Sto
kes
Gro
up
Lim
ited
#1,
15.1
116
,56.
3522
,77.
8022
,77.
80-
--
--
-
Sto
kes
Forg
ing
s D
ud
ley
Lim
ited
#0.
00(1
1.31
)21
,89.
3621
,89.
36-
14,0
7.81
19.5
52.
7116
.84
-
Jen
san
d L
imit
ed #
46.7
519
,22.
4731
,20.
0831
,20.
08-
-1.
14-
1.14
-
Sto
kes
Forg
ing
s Li
mit
ed #
46.7
55,
36.3
385
,73.
7985
,73.
79-
41,0
2.08
(1,0
4.78
)54
.70
(1,5
9.48
)-
Mah
ind
ra R
enau
lt P
riva
te L
imit
ed51
,50.
00(1
1,70
.59)
96,0
9.50
96,0
9.50
-97
.09
(11,
26.6
2)43
.97
(11,
70.5
9)-
Mah
ind
ra A
uto
mo
tive
Ste
els
Lim
ited
117,
48.4
559
,84.
0831
6,05
.05
316,
05.0
52,
75.7
323
6,94
.50
(11,
82.4
0)12
.33
(11,
94.7
3)-
Mah
ind
ra In
tern
atio
nal
Lim
ited
98,7
7.56
49,8
8.66
218,
51.8
321
8,51
.83
2,00
.00
89,3
2.62
(8.4
4)24
.55
(32.
99)
-
# Th
e fin
anci
al s
tate
men
ts o
f th
e Fo
reig
n S
ub
sid
iari
es h
ave
bee
n c
onv
erte
d in
to In
dia
n R
up
ees
at a
n a
pp
rop
riat
e ex
chan
ge
rate
.
(Ru
pee
s La
kh
s)
INFO
MED
IA I
ND
IA L
IMIT
ED