MandMahindra Subsidiary AR F2014

MAHINDRA & MAHINDRA LTD.
SUBSIDIARY ANNUAL REPORT 2014

Subsidiary Companies
1 Mahindra Vehicle Manufacturers Limited...................................................................................................................... 1
2 Mahindra Automobile Distributor Private Limited ......................................................................................................... 22
3 Mahindra Trucks and Buses Limited ............................................................................................................................ 41
4 Mahindra Heavy Engines Private Limited ..................................................................................................................... 65
5 NBS International Limited .............................................................................................................................................. 85
6 Mahindra & Mahindra South Africa (Proprietary) Limited ............................................................................................ 102
7 Mahindra Automotive Australia Pty. Limited ................................................................................................................. 118
8 Mahindra Reva Electric Vehicles Private Limited ......................................................................................................... 129
9 Ssangyong Motor Company ......................................................................................................................................... 153
10 Ssangyong European Parts Center B.V. ....................................................................................................................... 190
11 Ssangyong Motor (Shanghai) Company Limited ......................................................................................................... 200
12 Mahindra USA Inc.......................................................................................................................................................... 221
13 Mahindra Tractor Assembly Inc. ................................................................................................................................... 230
14 Mahindra North American Technical Centre Inc. ......................................................................................................... 239
15 Mahindra Gujarat Tractor Limited ................................................................................................................................. 247
16 Mahindra Shubhlabh Services Limited ......................................................................................................................... 266
17 EPC Industrie Limited .................................................................................................................................................... 282
18 Swaraj Automotives Limited .......................................................................................................................................... 314
19 Mahindra Investments (International) Private Limited .................................................................................................. 331
20 Mahindra & Mahindra Financial Services Limited ........................................................................................................ 342
21 Mahindra Insurance Brokers Limited ............................................................................................................................ 403
22 Mahindra Rural Housing Finance Limited .................................................................................................................... 418
23 Mahindra Business & Consulting Services Private Limited ......................................................................................... 441
24 Mahindra Asset Management Company Private Limited ............................................................................................. 453
25 Mahindra Holidays & Resorts India Limited ................................................................................................................. 463
26 Mahindra Holidays and Resorts USA Inc. .................................................................................................................... 513
27 Mahindra Hotels and Residences India Limited .......................................................................................................... 519
28 Heritage Bird (M) Sdn. Bhd. ......................................................................................................................................... 527
29 Bell Tower Resorts Private Limited ............................................................................................................................... 537
30 Divine Heritage Hotels Private Limited ......................................................................................................................... 555
31 Gables Promoters Private Limited ................................................................................................................................ 573
32 Holiday on Hills Resorts Private Limited ...................................................................................................................... 581
33 MH Boutique Hospitality Limited .................................................................................................................................. 599
34 Innity Hospitality Group Company Limited ................................................................................................................. 605
35 Mahindra Lifespace Developers Limited....................................................................................................................... 614
36 Mahindra Infrastructure Developers Limited ................................................................................................................. 668
37 Mahindra World City Developers Limited ..................................................................................................................... 681
38 Mahindra World City (Jaipur) Limited ........................................................................................................................... 699
39 Mahindra Integrated Township Limited ......................................................................................................................... 717
40 Mahindra Residential Developers Limited .................................................................................................................... 731
41 Mahindra World City (Maharashtra) Limited ................................................................................................................. 745
42 Knowledge Township Limited ....................................................................................................................................... 758
43 Mahindra Bebanco Developers Limited ....................................................................................................................... 768
44 Raigad Industrial & Business Park Limited .................................................................................................................. 780
45 Industrial Township (Maharashtra) Limited ................................................................................................................... 789
46 Anthurium Developers Limited ...................................................................................................................................... 798
47 Mahindra Housing Private Limited ................................................................................................................................ 808
48 Mahindra Consulting Engineers Limited ...................................................................................................................... 817
49 Bristlecone Limited ........................................................................................................................................................ 838
50 Bristlecone Inc. .............................................................................................................................................................. 848
51 Bristlecone India Limited ............................................................................................................................................... 861
52 Bristlecone (Singapore) Pte. Limited ............................................................................................................................ 880
53 Bristlecone GmbH ......................................................................................................................................................... 890
54 Bristlecone UK Limited .................................................................................................................................................. 905
55 Bristlecone (Malaysia) Sdn. Bhd. .................................................................................................................................. 912
56 Bristlecone Consulting Limited ..................................................................................................................................... 925
57 Bristlecone International AG .......................................................................................................................................... 932
58 Mahindra Intertrade Limited .......................................................................................................................................... 937
59 Mahindra MiddleEast Electrical Steel Service Centre (FZC) ....................................................................................... 961
60 Mahindra Steel Service Centre Limited ........................................................................................................................ 977
61 Mahindra Electrical Steel Private Limited ..................................................................................................................... 996
62 Mahindra Auto Steel Private Limited ............................................................................................................................ 1006
63 Mahindra Ugine Steel Company Limited...................................................................................................................... 1016
64 Mahindra Sanyo Special Steel Private Limited ............................................................................................................ 1067
65 Mahindra Engineering Services Limited 1095
66 Mahindra Engineering Services (Europe) Limited ....................................................................................................... 1118
67 Mahindra Engineering GmbH ....................................................................................................................................... 1125
68 Mahindra Technologies Services Inc. ........................................................................................................................... 1135
69 Mahindra Aerospace Private Limited ............................................................................................................................ 1144
70 Mahindra Aerospace Australia Pty. Limited .................................................................................................................. 1164
71 Aerostaff Australia Pty. Limited ...................................................................................................................................... 1173
72 Gipp Aero Investments Pty. Limited.............................................................................................................................. 1184
73 Gippsaero Pty. Limited .................................................................................................................................................. 1193
74 GA8 Airvan Pty. Limited ................................................................................................................................................. 1205
75 GA200 Pty. Limited ........................................................................................................................................................ 1211
76 Airvan Flight Services Pty. Limited ................................................................................................................................ 1217
77 Nomad TC Pty. Limited ................................................................................................................................................. 1221
78 Mahindra Aerostructures Private Limited ...................................................................................................................... 1227
79 Mahindra Gears International Limited ........................................................................................................................... 1245
80 Mahindra Gears Global Limited .................................................................................................................................... 1257
81 Mahindra Gears Cyprus Limited ................................................................................................................................... 1269
82 Metalcastello S.p.A. ....................................................................................................................................................... 1276
83 Crest Geartech Private Limited ..................................................................................................................................... 1307
84 Mahindra Investments (India) Private Limited .............................................................................................................. 1325
85 Mahindra Gears & Transmissions Private Limited ....................................................................................................... 1335
86 Mahindra Engineering and Chemical Products Limited .............................................................................................. 1359
87 Retail Initiative Holdings Limited ................................................................................................................................... 1376
88 Mahindra Retail Private Limited .................................................................................................................................... 1388
89 Mahindra Conveyor Systems Private Limited............................................................................................................... 1406
90 Mahindra First Choice Wheels Limited ......................................................................................................................... 1426
91 Mahindra Logistics Limited ........................................................................................................................................... 1443
92 2 X 2 Logistics Private Limited ...................................................................................................................................... 1464
93 Mahindra First Choice Services Limited ....................................................................................................................... 1475
94 Mahindra Two Wheelers Limited ................................................................................................................................... 1492
95 Mahindra Holdings Limited ........................................................................................................................................... 1514
96 Mahindra United Football Club Private Limited............................................................................................................ 1529
97 Mahindra Punjab Tractors Private Limited .................................................................................................................... 1538
98 Mahindra Integrated Business Solutions Private Limited ............................................................................................ 1547
99 Mahindra Telecommunications Investment Private Limited ......................................................................................... 1562
100 Mahindra Namaste Private Limited ............................................................................................................................... 1575
101 Gateway Housing Finance Corporation Limited .......................................................................................................... 1587
102 Mahindra EPC Services Private Limited ....................................................................................................................... 1599
103 Mahindra Offgrid Services Private Limited ................................................................................................................... 1616
104 Brightsolar Renewable Energy Private Limited ............................................................................................................ 1626
105 Cleansolar Renewable Energy Private Limited ............................................................................................................ 1635
106 Mahindra Overseas Investment Company (Mauritius) Limited .................................................................................... 1644
107 Mahindra-BT Investment Company (Mauritius) Limited ............................................................................................... 1661
108 Mahindra Europe S.r.l. ................................................................................................................................................... 1674
109 Mahindra Graphic Research Design S.r.l. .................................................................................................................... 1695
110 Mahindra Yueda (Yancheng) Tractor Company Limited .............................................................................................. 1718
111 Mahindra Racing S.r.l. ................................................................................................................................................... 1755
112 Mahindra Emirates Vehicle Armouring FZ-LLC ............................................................................................................ 1762
113 Defence Land Systems India Private Limited ............................................................................................................... 1777
114 Mahindra Defence Systems Limited ............................................................................................................................. 1797
115 Mahindra Telephonics Integrated Systems Limited ..................................................................................................... 1816
116 Mahindra Defence Naval Systems Private Limited ...................................................................................................... 1832
117 Mahindra Construction Company Limited .................................................................................................................... 1848
MAHINDRA VEHICLE MANUFACTURERS LIMITED
1
DIRECTORS REPORT TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Seventh Report together with the Audited Accounts of your Company for the year
ended 31
st
March, 2014:
Financial Results
Particulars (Rs. in lakh)
For the Year Ended
31
st
March, 2014
For the Year Ended
31
st
March, 2013
Income ...................................................................................................................... 5,80,115 7,90,364
Prot/(Loss) before Depreciation Amortisation, Interest & Taxation ....................... 52,194 62,016
Depreciation & Amortisation .................................................................................... 11,266 10,699
Prot/(Loss) Before Interest & Taxation ................................................................... 40,928 51,317
Interest ...................................................................................................................... 8,017 8,264
Prot/(Loss) before Taxation..................................................................................... 32,911 43,053
Taxation ..................................................................................................................... 11,244 14,675
Prot/(Loss) for the year after Taxation .................................................................... 21,667 28,378
Balance of Prot/(Loss) from earlier years .............................................................. 24,576 11,627
Prot available for Appropriation .............................................................................. 46,243 40,005
Proposed Dividend on Equity Shares .............................................................. 5,522 7,000
Income-Tax on Proposed Dividend .................................................................. 944 1,190
Transfer to Debenture Redemption Reserve .................................................... 7,083 7,239
Balance carried to Balance Sheet ........................................................................... 32,664 24,576
Dividend
Your Directors recommended a dividend of Re. 0.577 per Equity
Share on 96,22,50,000 Fully Paid-Up Equity Shares, aggregating
Rs. 64,95,77,592 (including dividend distribution tax of Rs.
9,43,59,342/-).
The above Equity dividend, if approved by the shareholders at
the ensuing Annual General Meeting, will be paid to those Equity
shareholders whose names appear in the Register of Members
of the Company as on the record date xed for this purpose.
Operations
During the year 1,08,695 vehicles were produced as against
1,56,143 during the year 2012-13 (30.38% lesser than previous
year). This was due to slow down in overall economy and auto
industry as well.
The vehicles manufactured by your Company were exported to
a number of countries. 16,642 number of vehicles were exported
(through Mahindra & Mahindra Limited) as compared to 19,252
vehicles in FY13.
Your Company ensured that all expectations of customers were
met in terms of volume and quality.
With relentless focus on quality systems, your Company
underwent surveillance audits for ISO 9001-2008, EMS and
OSHAS recertication. Your Company also maintained a
constant focus on cost reduction and successfully maintained
costs below planned levels.
Your Company won several awards and recognitions during
the year. Some prominent ones amongst them included the
CII ITC Sustainability Award 2013 (Commendation Certicate
for Signicant Achievement on the journey towards Sustainable
Development), CII Environmental Best Practices Award 2013,
Mahindra Group Innovation Award for HRTS and Rain Water
Harvesting project, NCQC Award etc.
People
Your Company has over 4,300 people on its rolls as at the close
of the 2013-14. Your Company acknowledges its commitment to
regional development and improving the standard of living of the
people in this region.
Directors
Dr. Pawan Kumar Goenka and Mr. A. M. Choksey retire by
rotation and being eligible offer themselves for re-appointment
at the forthcoming Annual General Meeting of the Company.
Mr. Vijay Dhongde was appointed as the Whole-time Director
and Chief Executive Ofcer of the Company with effect from
1
st
April, 2014 in terms of the provisions of Section 203 of the
Companies Act, 2013.
Mr. L. P. Pereira resigned from the directorship of the Company
w. e. f. 17
th
April, 2014 due to personal reasons. The Board
places on record its sincere appreciation of the valuable advice
rendered by Mr. Pereira during his tenure as a director of the
Company.
2
Audit Committee
The Audit Committee at present comprises of Mr. S. Venkatraman
(Chairman), Dr. Pawan Kumar Goenka and Mr. A. M. Choksey.
The terms of reference of the Committee were amended as per
the provisions of Section 177 of the Companies Act, 2013 at the
Board meeting held on 28
th
March, 2014.The Audit Committee
met four times during the year under review.
Nomination and Remuneration Committee
The Remuneration Committee was re-named as the Nomination
and Remuneration Committee and its terms of reference were
amended as per the provisions of Section 178 of the Companies
Act, 2013 at the Board meeting held on 28
th
March, 2014. The
Committee comprises of Dr. Pawan Kumar Goenka (Chairman),
Mr. A. M. Choksey and Mr. S. Venkatraman. The Committee met
once during the year.
CSR Committee
At the Board meeting held on 28
th
March, 2014, a Corporate
Social Responsibility Committee was constituted. Mr. Pravin
Shah (Chairman), Mr. Vijay Dhongde and Mr. Ajay Choksey are
the members of the Committee. The Committee is yet to meet.
Directors Responsibility Statement
Pursuant to section 217(2AA) of the Companies Act, 1956,
your Directors, based on the representation received from the
Operating Management, and after due enquiry, conrm 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 31
st
March, 2014 and of the Prot of the Company for
the year ended on that date;
(iii) proper and sufcient care has been taken for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the
assets of the Company and for preventing and detecting
fraud and other irregularities;
(iv) The annual accounts have been prepared on a going
concern basis.
Auditors
Messrs. Deloitte Haskins & Sells, Chartered Accountants,
(Firm Registration No. 117365W) retire at the conclusion of
the forthcoming Annual General Meeting (AGM) and have
accorded their consent for re-appointment. The Members
would appoint Auditors to hold ofce from the conclusion of
the forthcoming AGM till the conclusion of the next AGM and
x their remuneration.
As required by the provisions of section 139 of the Companies
Act, 2013, your Company has obtained a written certicate from
Messrs. Deloitte Haskins & Sells, Chartered Accountants, to the
effect that their re-appointment, if made, would be in conformity
with the conditions and limits specied in the said section.
Public Deposits and Loans/Advances
Your Company has not accepted any deposits from the public or
its employees during the year under review.
Your Company has not made any loans/advances which are
required to be disclosed in the annual accounts of the Company
pursuant to Clause 32 of the Listing Agreement signed by the
parent company viz. Mahindra & Mahindra Limited.
Cost Auditors
Pursuant to the Companies (Cost Accounting Records) Rules,
2011, the Company had prepared a Cost Audit Report for the
nancial year ended 31
st
March, 2013 which was submitted by
M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune
which was led in XBRL format on 27
th
September, 2013. The
due date for ling the Cost Audit Report for the nancial year
2012-13 was 30
th
September, 2013.
The Board of Directors of your Company have upon
recommendation of the Audit Committee, appointed M/s.
Dhananjay V. Joshi & Associates, Cost Accountants, Pune to
carry out Audit of Cost Accounts maintained by the Company
for the nancial year ending 31
st
March, 2015, subject to the
approval of the Central Government.
The Company has obtained a written conrmation from M/s.
Dhananjay V. Joshi & Associates, Cost Accountants, Pune to
the effect that they are eligible for appointment as Cost Auditors
and that they are an independent rm of Cost Accountants and
have arms length relationship with your Company.
Conservation of Energy and Technology Absorption
The particulars relating to energy conservation, technology
absorption and foreign exchange earnings and outgo, as
required under Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 is given in Annexure I to
this Report.
Safety, Health and Environment
Your Company maintains a good health and safety record in
line with the Health and Wellness Policy. Your Company has
also set-up a well-equipped pathology lab in-house where all
routine tests can be conducted.
Over 43 re safety mock drills were held during the year under
review. There was no reportable re incidence.
The Company has rolled out a Policy for prevention of sexual
harassment in which it has formalised a free and fair enquiry
process with clear timelines. The Company has also constituted
an Internal Complaints Committee to which employees
can write their complaints. During the year under review no
complaints were received by the said Committee.
Corporate Social Responsibility (CSR)
Your Company acknowledges its Social Responsibility and has
initiated many projects that help the needy and under privileged
in the region. One of the prominent ones is the Bandhan
initiative which focuses on Mother & Child Development.
28 medical camps were held during FY14, beneting 2305
individuals.
3
With a view to create awareness about automotive and auto
passion in young age, a project called A World In Motion
(AWIM) was continued during the year and 1500 school students
were beneted due to this initiative.
Sustainability Initiative
With a view to support the environment, your Company had
commissioned High Rate Transpiration (HRTS) project during
last year, under which 4,800 trees with high transpiration rate
were planted. Due to this project, during the year under review,
Company could reduce the usage of high energy consuming
processes Reverse Osmosis and MEE etc.
As a step towards conserving water and becoming water
positive, your Company had initiated during last year, the Rain
Water Harvesting project under which an eight meter high Water
Retaining Structure was constructed across a gorge within the
Companys factory premises. Due to this project, during year
under review, about 30,000m3 of stored rainwater was used for
gardening purpose.
Particulars of Employees as required under section 217(2A)
of the Companies Act, 1956 and Rules framed there under
As required under section 217(2A) of the Companies Act, 1956
and Rules framed thereunder, a statement containing particulars
of the Companys employee who was in receipt of remuneration
of not less than Rs. 60,00,000 per annum during the year ended
31
st
March, 2014 or not les then Rs. 5,00,000 per month during
any part of the said year is given in Annexure II to this report.
For and on behalf of the Board
Dr. Pawan Kumar Goenka
Chairman
Mumbai, 23
rd
April, 2014
4
ANNEXURES TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
ANNEXURE - I
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 31
ST
MARCH, 2014.
A. CONSERVATION OF ENERGY
(a) Energy Conservation measures taken:
Your Company has right from inception strived for Green factory concept & has been consciously making efforts towards
conserving natural resources. Various energy efciency Improvement initiatives have been implemented by undertaking
number of energy conservation projects like Intelligent Flow Controller for Compressed Air Demand Side Management,
Second Extraction Waste Heat Recovery from ovens for ASU preheating, Sealer Oven Waste Heat Recovery, VFD tment
for Circulation Pumps, Torque reduction in Press Dies, etc.
(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:
Rs 1.87 Crore.
(c) Impact of the measures taken at (a) & (b) above for reduction of energy consumption and consequent impact on
the cost of production of goods:
The above measures have resulted in energy reduction.
(d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the
Rules in respect of Industries specied in the Schedule:
Not Applicable
B. TECHNOLOGY ABSORPTION
Research & Development (R & D)
Your Company does not have R&D activity of its own. So there is no money spent by the Company on R&D. During the year
under review, no technology was imported by your Company.
1. Areas in which Research & Development is carried out: None
2. Benets derived as a result of the above efforts: N.A.
3. Future plan of action: None
4. Expenditure on R&D: Nil
5. Technology absorption, adaptation and innovation: None
6. Imported Technology for the last 5 years: N.A.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company continues to strive to reduce its import outgo of foreign exchange. Total Foreign Exchange earnings and outgo
during the year under review is as follows:
Foreign Exchange earnings Rs. Nil (Rs. Nil in the previous year).
Foreign Exchange outgo - Rs. 29,374 lakh (Rs. 55,056 lakh in the previous year).
ANNEXURE II TO THE DIRECTORS REPORT
ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH
COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF THE DIRECTORS REPORT FOR
THE YEAR ENDED 31
ST
MARCH, 2014.
Name of the
Employee
Designation Remuneration
Received (Subject
to Income Tax) (Rs.)
Qualication Age
(Yrs)
Experience
(Yrs)
Date of
commencement
of employment
Last
employment
held
Nidamaluri
Nagesh
Head MES
Division
63,04,579.06 M.S. 65 37 09.07.2007 General Motors
(Chairman)
Mumbai, 23
rd
April, 2014
5
Report on the Financial Statements
We have audited the accompanying nancial statements of
Mahindra Vehicle Manufacturers Limited (the Company),
which comprise the Balance Sheet as at 31
st
March, 2014, the
Statement of Prot and Loss and the Cash Flow Statement
for the year then ended, and a summary of the signicant
accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Management is responsible for the preparation
of these nancial statements that give a true and fair view of the
nancial position, nancial performance and cash ows of the
Company in accordance with the Accounting Standards notied
under the Companies Act, 1956 (the Act) (which continue
to be applicable in respect of Section 133 of the Companies
Act, 2013 in terms of General Circular 15/2013 dated 13
th

September, 2013 of the Ministry of Corporate Affairs) and in
accordance with the accounting principles generally accepted
in India. This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation
and presentation of the nancial statements that give a true and
fair view and are free from material misstatement, whether due
to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these nancial
statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. Those Standards
require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether
the nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the nancial
statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material
misstatement of the nancial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers
internal control relevant to the Companys preparation and fair
presentation of the nancial statements in order to design audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness
of the Companys internal control. An audit also includes
evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by
the Management, as well as evaluating the overall presentation
of the nancial statements.
We believe that the audit evidence we have obtained is sufcient
and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid nancial
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF
statements give the information required by the Act in the
manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of
the Company as at 31
st
March, 2014;
(b) in the case of the Statement of Prot and Loss, of the prot
of the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash ows
of the Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order,
2003 (the Order) issued by the Central Government in
terms of Section 227(4A) of the Act, we give in the Annexure
a statement on the matters specied in paragraphs 4 and 5
of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The Balance Sheet, the Statement of Prot and Loss,
and the Cash Flow Statement dealt with by this Report
are in agreement with the books of account.
(d) In our opinion, the Balance Sheet, the Statement of
Prot and Loss, and the Cash Flow Statement comply
with the Accounting Standards notied under the Act
(which continue to be applicable in respect of Section
133 of the Companies Act, 2013 in terms of General
Circular 15/2013 dated 13
th
September, 2013 of the
Ministry of Corporate Affairs).
(e) On the basis of the written representations received
from the directors as on 31
st
March, 2014 taken on
record by the Board of Directors, none of the directors
is disqualied as on 31
st
March, 2014 from being
appointed as a director in terms of Section 274(1)(g)
of the Act.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firms Registration No. 117365W)
H. L. Shah
Partner
(Membership No.: 033590)
Place: Mumbai
Date: 23.04.2014
6
(i) (a) The Company has maintained proper records
showing full particulars including quantitative
details and situation of xed assets.
(b) The Company has a programme for physical
verication of xed assets whereby xed assets
are physically veried once every three years. In
accordance with the said programme, no physical
verication was planned/conducted in the current
year and accordingly, the question of reporting
on discrepancies on physical verication does not
arise. In our opinion, the frequency of physical
verication of xed assets is reasonable having
regard to the size of the Company and the nature
of the assets.
(c) The xed assets disposed off during the year, in
our opinion, do not constitute a substantial part of
the xed assets of the Company and such disposal
has, in our opinion, not affected the going concern
status of the Company.
(ii) (a) Inventories have been physically veried during
the year by the management. In our opinion, the
frequency of verication is reasonable.
(b) In our opinion, the procedures of physical verication
of inventory followed by the management are
reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company has maintained proper records of
inventory during the current year. The discrepancies
noticed on verication between physical stocks and
book stocks were not material having regard to the
size of operations of the Company and have been
properly dealt with in the books of accounts.
(iii) The Company has not granted or taken any loans,
secured or unsecured to/from companies, rms or other
parties covered in the register maintained under Section
301 of the Companies Act, 1956. Sub-clauses (b), (c),
(d), (f) and (g) of the Order are not applicable.
(iv) In our opinion and according to the information and
explanations given to us and having regard to the
explanation that most of the items purchased are of a
special nature and comparable alternative quotations
are not available, there is an adequate internal control
system commensurate with the size of the Company
and the nature of its business, with regard to purchase
of inventory and xed assets and for sale of goods
and services. During the course of our audit, no major
weakness has been noticed in the internal controls.
(v) Based upon the audit procedures performed and
according to the information and explanations given to
us, there are no contracts or arrangements that need to
be entered into the register maintained in pursuance of
section 301 of the Companies Act, 1956.
Sub-clause (b) is not applicable.
(vi) The Company has not accepted any deposit from public
to which the provisions of section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956
and the rules framed there under apply.
(vii) The Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the cost records maintained
by the Company pursuant to the Companies (Cost
Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that, prima
facie, the prescribed cost records have been maintained.
We have, however, not made a detailed examination of
the cost records with a view to determine whether they
are accurate or complete.
(ix) (a) According to the records of the company, the
Company has been generally regular in depositing
undisputed statutory dues including Provident
Fund, Employees State Insurance, Investor
Education and Protection Fund, Income tax,
Sales tax, Wealth tax, Service tax, Custom Duty,
Excise Duty, cess and other statutory dues with
the appropriate authorities. Based on our audit
procedures and according to the information and
explanations given to us, there are no arrears of
statutory dues which has remained outstanding as
at 31
st
March, 2014 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations
given to us and records of the company, there
are no dues of sales tax/income tax/custom duty/
wealth tax/ service tax/excise duty/cess, which have
not been deposited on account of any dispute.
(x) The Company does not have any accumulated losses
as at 31
st
March, 2014. The Company has not incurred
any cash losses during the nancial year covered by our
audit and the immediately preceding nancial year.
(xi) Based on our audit procedures and on the information
and explanations given by the management, the
Company has not defaulted in repayment of dues to
banks and nancial institution.
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even date)
7
(xii) The Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not in the business of chit fund, nidhi/
mutual benet fund and therefore the requirements
pertaining to such class of companies are not applicable.
(xiv) The Company is not dealing or trading in shares,
securities, debentures and other investments.
(xv) The Company has not given any guarantee for loans
taken by others from banks or nancial institutions.
(xvi) The Company has not raised any term loan during the
year.
(xvii) The funds raised on short-term basis have not been
used for long-term investments.
(xviii) The Company has not made any preferential allotment of
shares to parties and companies covered in the Register
maintained under section 301 of the Companies Act,
1956.
(xix) According to the information and explanations given to
us, the Company has during the year created charge/
security in respect of the debentures issued during the
previous years.
(xx) The Company has not made any public issue and
therefore the question of disclosing the end use of
money does not arise.
(xxi) Based upon the audit procedures performed and
according to the information and explanations given and
representations made by the management, we report
that no signicant fraud on the Company or fraud by the
Company had been noticed or reported during the year.
H. L. Shah
Partner
(Membership No. 033590)
Place: Mumbai
Date: 23.04.2014
8
BALANCE SHEET AS AT 31
ST
MARCH, 2014
Rupees in Lakhs
Particulars Note No.
As at
31
st
March, 2014
As at
31
st
March, 2013
I. EQUITY AND LIABILITIES
(1.) Shareholder's Funds
(a) Share capital .............................................. 2 96,225 96,225
(b) Reserves and surplus ................................ 3 47,346 32,175
143,571 128,400
(2.) Non-Current Liabilities
(a) Long-term borrowings ............................... 4 56,268 85,881
(b) Deferred tax liabilities (Net) ....................... 5 16,150 14,084
(c) Long term provisions ................................. 6 4,681 3,652
77,099 103,617
(3.) Current Liabilities
(a) Short-term borrowings ............................... 7 6,637
(b) Trade payables .......................................... 8 100,482 137,002
(c) Other current liabilities ............................... 9 44,430 27,243
(d) Short-term provisions ................................ 10 8,042 8,320
152,954 179,202
Total
373,624 411,219
II. ASSETS
(1.) Non-current assets
(a) Fixed assets ...............................................
(i) Tangible assets ................................... 11 191,664 185,939
(ii) Intangible assets ................................. 12 760 1,024
(iii) Capital work-in-progress .................... 12A 2,586 5,581
195,010 192,544
(b) Non-current investments ........................... 13 280 280
(c) Long term loans and advances ................ 14 32,766 47,428
228,056 240,252
(2.) Current assets
(a) Current investments ................................... 15 4,400 2,000
(b) Inventories .................................................. 16 37,761 66,105
(c) Trade receivables ....................................... 17 51,378 58,913
(d) Cash and bank balances 18 19,100 4,132
(e) Short-term loans and advances ................ 19 8,506 6,351
(f) Other current assets .................................. 20 24,423 33,466
145,568 170,967
Total 373,624 411,219
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board

H.L. Shah
Partner
Dr. Pawan Kumar Goenka Chairman
Pravin Shah
A.M Choksey
Vijay Dhongde
S. Venkatraman
}
Director
Date: 23
rd
April, 2014
Place: Mumbai
Date: 23
rd
April, 2014
Place: Mumbai
9
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31
ST
MARCH 2014
Rupees in Lakhs
For the
year ended
31
st
March 2014
For the
year ended
31
st
March 2013
I. Revenue from operations Gross .................... 695,009 966,049
Less: Excise Duty ................................................ (116,706) (177,741)
Revenue from operations Net ........................... 21 578,303 788,308
II. Other Income ....................................................... 22 1,812 2,056
III. Total Revenue (I +II)........................................... 580,115 790,364
IV. Expenses:
Cost of materials consumed ................................ 23 484,765 697,242
Changes in inventories of nished goods and
work-in-progress ................................................... 24 15,918 (814)
Employee benet expense ................................... 25 14,724 13,120
Finance costs ........................................................ 26 10,245 10,525
Depreciation and amortization expense .............. 10 & 11 11,266 10,699
Other expenses ..................................................... 27 10,286 16,539
Total Expenses..................................................... 547,204 747,311
V. Prot before tax (III - IV) .................................... 32,911 43,053
VI. Tax expense:
(1) Current tax .................................................... 9,178 8,610
Less: MAT credit entitlement ......................... (1,836)
9,178 6,774
(2) Deferred tax ................................................... 2,066 7,901
11,244 14,675
VII. Prot for the year (V - VI) .................................. 21,667 28,378
VIII. Basic/Diluted earning per equity share:
(Face Value per share Rs. 10) ........................... 2.25 2.95
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
In terms of our report attached to the Balance Sheet

H.L. Shah
Partner
Pravin Shah
A.M Choksey
Vijay Dhongde
S. Venkatraman
}
Director
Date: 23
rd
April, 2014
Place: Mumbai
Date: 23
rd
April, 2014
Place: Mumbai
10
CASH FLOW STATEMENT FOR THE YEAR ENDED 31
ST
MARCH, 2014
For the year ended
31
st
March 2014
For the year ended
31
st
March 2013
Rupees
in Lakhs
Rupees
in Lakhs
Rupees
in Lakhs
Rupees
in Lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES
Prot before tax ............................................................ 32,911 43,053
Adjustment for:
Depreciation/Amortisation ............................................ 11,266 10,699
Finance cost ................................................................. 10,245 10,525
Loss on sale of xed assets ........................................ 6 2
Prot on sale of investments ....................................... (352) (647)
Interest income ............................................................. (786) (616)
20,379 19,963
Operating prot before Working Capital changes ...... 53,290 63,016
Adjustments for changes in Working capital
Long term Loans and advances .................................. 7,203 (20,139)
Inventories ................................................................... 28,344 (9,930)
Trade Receivables ........................................................ 7,535 (13,959)
Short term Loans and advances ................................. 3,370 676
Other current assets ..................................................... 9,298 (8,516)
Long term Provisions ................................................... 323 312
Trade Payables ............................................................. (36,520) 3,975
Other current liabilities ................................................. (7,750) 2,559
Short term Provisions ................................................... 70 16
11,873 (45,006)
Cash generated from operations ................................. 65,163 18,010
Income taxes paid ........................................................ (5,721) (11,561)
Net Cash from Operating activities ............................. 59,442 6,449
B. CASH FLOW FROM INVESTING ACTIVITIES
Tangible and Intangible Assets:
Purchase ....................................................................... (12,337) (22,044)
Sale ............................................................................... 10 23
Investments:
Purchase ....................................................................... (141,150) (204,672)
Sale ............................................................................... 139,102 216,933
Inter Corporate deposit given ...................................... (2,500) (1,000)
Inter Corporate deposit recovered .............................. 4,000
Interest received ........................................................... 531 579
Net Cash from/used in investing activities .................. (16,344) (6,181)
11
For the year ended
31
st
March 2014
For the year ended
31
st
March 2013
C. CASH FLOW FROM FINANCING ACTIVITIES
Repayment of Long term borrowings ........................ (5,063) (5,226)
Proceeds from Short term borrowings ........................ 6,469
Repayment of Short term borrowings ......................... (6,637)
Dividend paid (including Dividend Distribution Tax) .... (8,190)
Finance cost paid ......................................................... (8,240) (8,485)
Net Cash from/used in nancing activities .................. (28,130) (7,242)
D. NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS ........................................ 14,968 (6,974)
Cash and Cash Equivalents (Opening balance) ........ 3,275 10,249
Cash and Cash Equivalents (Closing balance) .......... 18,243 3,275
Notes:
1 Figures in brackets represent outows of cash and cash equivalents.
2 Cash and cash equivalents comprise:
As at
31
st
Mar, 2014
Rs. In lakhs
As at
31
st
Mar, 2013
Rs. In lakhs
As at
31
st
Mar, 2012
Rs. In lakhs
Cash on hand ............................................................... 1
Balances with Banks .................................................... 18,243 3,274 10,249
18,243 3,275 10,249
Add: Earmarked balances with banks 857 857 857
Cash and bank balances as per schedule 18 19,100 4,132 11,106
In terms of our report attached to the Balance Sheet

H.L. Shah
Partner
Pravin Shah
A.M Choksey
Vijay Dhongde
S. Venkatraman
}
Director
Date: 23
rd
April, 2014
Place: Mumbai
Date: 23
rd
April, 2014
Place: Mumbai
12
1. SIGNIFICANT ACCOUNTING POLICIES:
(A) BASIS OF ACCOUNTING :
The nancial statements are prepared in accordance with the generally
accepted accounting principles in India and comply with the Accounting
Standards notied under sub-section (3C) of Section 211 of the Companies
Act, 1956 ( the 1956 Act) ( which continue to be applicable in respect of
Section 133 of the Companies Act ,2013 (the 2013 Act) in terms of General
Circular 15/2013 dated 13 September,2013 of the Ministry of Corporate
Affairs) and the relevant provisions of the 1956 Act/ 2013 Act , as applicable.
(B) Tangible Assets :
(a) Tangible assets are carried at cost less depreciation. Cost includes
nancing cost relating to borrowed funds attributable to the
construction or acquisition of qualifying tangible assets upto the date
the assets are ready for use.
When an asset is scrapped or otherwise disposed off, the cost and
related depreciation are removed from the books of account and
resultant prot (including capital prot) or loss, if any, is reected in
the Statement of Prot and Loss.
(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 the
Companies Act, 1956, except for :
(1) Certain items of Plant and Machinery individually costing
more than Rs. 5,000 - over their useful lives (2 years or 5
years, as the case may be) as determined by the Company.
(2) Cars and Vehicles - at 15% of cost.
(C) Intangible Assets :
Intangible assets are initially measured at cost and amortised so as to
reect the pattern in which the assets economic benets are consumed.
(a) License Fee :
The expenditure incurred is amortised over the estimated period
of benet, not exceeding ve years commencing with the year of
purchase of License.
(b) Technical Know-how fees :
The expenditure incurred on technical services and other project/
product related expenses are amortised over the estimated period of
benet, not exceeding ve years.
(c) Software Expenditure :
The expenditure incurred is amortised over three nancial years equally
commencing from the year in which the expenditure is incurred.
(D) Investments :
Long term investments are valued at cost. However, provision for diminution
in value is made to recognise a decline other than temporary in the value
of investments. Current investments are valued at the lower of cost and fair
value, determined by category of investment.
(E) Inventories :
Inventories comprise all costs of purchase, conversion and other costs
incurred in bringing the inventories to their present location and condition.
Raw materials and bought out components are valued at the lower of cost
or net realisable value. Cost is determined on the basis of the weighted
average method.
Finished goods produced, manufactured components and work-in-progress
are carried at cost or net realisable value whichever is lower. Excise duty is
included in the value of nished goods inventory.
Stores, spares and tools other than obsolete and slow moving items are
carried at cost. Obsolete and slow moving items are valued at cost or
estimated net realisable value, whichever is lower.
(F) Foreign Exchange Transactions :
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of transaction. Monetary items are translated at the
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
ST
MARCH, 2014
year-end rates. The exchange difference between the rate prevailing on the
date of transaction and on the date of settlement as also on translation of
monetary items at the end of the year (other than those relating to long term
foreign currency monetary items) is recognised as income or expense, as
the case may be.
Any premium or discount arising at the inception of a forward exchange
contract is recognised as income or expense over the life of the contract.
(G) Revenue Recognition :
Sales of products and services are recognised when the products are
shipped or services rendered.
Interest is recognized on time proportion basis and dividend income from
investments in shares is recognized when the owners right to receive the
payment is established.
(H) Government Grants :
The Company, directly or indirectly through a consortium of Mahindra
Group Companies, is entitled to various incentives from government
authorities in respect of manufacturing units located in developing
regions. The Company accounts for its entitlement as income on an
accrual basis.
(I) Employee Benets :
Dened Contribution Plan/Dened Benet Plan/Long term Compensated
Absences :
Companys contributions paid/payable during the year to Provident fund,
Superannuation Fund, ESIC and Labour Welfare Fund are recognised in the
Statement of Prot and Loss as and when the employee renders service.
Companys liability towards gratuity, long term compensated absences
are determined by independent actuaries, using the projected unit credit
method. Past services are recognised on a straight line basis over the
average period until the benets become vested. Actuarial gains and
losses are recognised immediately in the Statement of Prot and Loss
as income or expense. Obligation is measured at the present value of
estimated future cash ows using a discounted rate that is determined by
reference to the market yields at the Balance Sheet date on Government
Bonds where the currency and terms of the Government Bonds are
consistent with the currency and estimated terms of the dened benet
obligation.
(J) Borrowing Costs :
All borrowing costs are charged to the Statement of Prot and Loss except :
(i) Borrowing costs that are attributable to the acquisition or construction
of assets that necessarily take a substantial period of time to get
ready for their intended use, which are capitalised as part of the cost
of such assets.
(ii) Expenses incurred on raising long term borrowings are amortised
over the period of borrowings. On early buyback, conversion or
repayment of borrowings, any unamortised expenditure is fully written
off in that year.
(K) 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 to
consideration of prudence, on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets arising on account of unabsorbed depreciation or
carry forward of tax losses are recognised only to the extent that there is
virtual certainty supported by convincing evidence that sufcient future
tax income will be available against which such deferred tax assets can
be realised.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benets in the form of adjustment to future income
tax liability, is considered as an asset if there is convincing evidence that
the Company will pay normal income tax against which the MAT paid will
be adjusted.
13
NOTE 2 SHARE CAPITAL
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Authorised:
1,30,00,00,000 (Previous year 1,30,00,00,000)
equity shares of Rs. 10 each. 130,000 130,000
Issued, Subscribed and Paid up:
96,22,50,000 (Previous year 96,22,50,000)
equity shares of Rs. 10 each fully paid up. 96,225 96,225
Total 96,225 96,225
Reconciliation of the no. of shares outstanding at the beginning and at the
end of the year:
As at 31
st
March, 2014 As at 31
st
March, 2013
No of
shares
Amount
Rs. in Lakhs
No of
shares
Amount
Rs. in Lakhs
No. of Equity shares
outstanding at the beginning of
the year 962,250,000 96,225 962,250,000 96,225
Add: Additional Equity shares
issued during the year
Less: Equity Shares forfeited/
Bought back during the year
No. of Equity shares
outstanding at the end of the
year 962,250,000 96,225 962,250,000 96,225
Notes:
(i) Number of shares held by each shareholder holding more than 5% shares
in the company are as follows:
Particulars
2014 2013
Number of
shares
%
shareholding
Number of
shares
%
shareholding
Equity Shares:
Mahindra & Mahindra Ltd
(holding company) and its
nominees 962,250,000 100 962,250,000 100
(ii) Rights, preferences, restrictions of equity shares
The Company has only one class of Equity Shares having par value of
Rs. 10 per share. Each holder of Equity Share is entitled to one vote per share.
NOTE 3 RESERVES AND SURPLUS
Rs. in Lakhs
As at 31
st

March, 2014
Rs. in Lakhs
As at 31
st

March, 2013
Rs. in Lakhs
Debenture Redemption Reserve:
As per last Balance Sheet 7,599 360
Transfer from Surplus i.e. Balance
in Prot and Loss Statement
during the year 7,083 7,239
14,682 7,599
Surplus i.e. Balance in Prot
and Loss Statement
As per last Balance Sheet 24,576 11,627
Add: Prot for the year 21,667 28,378
Less: Appropriations
Proposed Dividend (Rs. 0.577 per
equity share) (Previous year
Rs. 0.727 per equity share) (5,552) (7,000)
Tax on Proposed Dividend (944) (1,190)
Transfer to Debenture Redemption
Reserve (7,083) (7,239)
32,664 24,576
Total 47,346 32,175

NOTE 4 LONG TERM BORROWINGS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Loans and Advances from other than
related parties:
Debentures (Secured)
2,600 (Previous period 2,600) 8% Non
Convertible Debentures of Rs. 10,00,000/-
each, fully paid (Series III) 26,000 26,000
2,700 (Previous period 2,700) 8% Non
Convertible Debentures of Rs. 10,00,000/-
each, fully paid (Series II) 27,000 27,000
(Previous period 2,700) 8%
Non Convertible Debentures of
Rs. 10,00,000/- each, fully paid (Series I) 27,000
Term Loans (Secured)
from Banks 3,268 5,881
Total 56,268 85,881
Notes:
1. Debentures are to be secured by First Pari Passu charge on xed assets of
the Company.
2. Term Loans are secured by English mortgage of immovable properties and
on all the movable properties (both present and future) including movable
plant and machinery, furniture, xtures, vehicles, etc. (other than current
assets)
NOTE 4a: Terms of repayment/redemption of Term Loans and Debentures:
Terms of repayment/redemption
Period/Date Rs. In Lakhs
Term loan from Banks April 2015 to March 2016 3,268
Debentures 14-Mar-16 27,000
14-Mar-17 26,000
NOTE 5 DEFERRED TAX LIABILITIES (NET)
(i) Break up of deferred tax liability as at year end:
Nature of timing difference
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Provision for Depreciation 16,839 14,638
Total 16,839 14,638
(ii) Break up of deferred tax asset as at year end:
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Unclaimed amount under section
43B of Income Tax Act 1961 689 554
Total 689 554
(iii) Deferred tax asset/(liability) net: (16,150) (14,084)
14
NOTE 6 LONG-TERM PROVISIONS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Provision for Employee Benets 1,823 1,500
Provision Others:
Provision for premium on redemption of
debentures 2,858 2,152
Total 4,681 3,652
NOTE 7 SHORT TERM BORROWINGS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Loans and Advances from other than
related parties:
Loans repayable on demand
from Banks (Secured) 6,637
(Secured by hypothecation by way of
rst charge on all stock in trade both
present and future, consisting of raw
material, nished goods, goods in process
of manufacturing and other movable
property, all book debts, outstanding
money receivable, claims and bills which
are now due and owing or which may at
any time hereafter during the continuance
of this security becomes due and owing.)
Total 6,637
NOTE 11 TANGIBLE ASSETS
Cost Depreciation/Amortization Net Block
As at
31
st
March,
2013
Additions
during the
year
Disposals
during the
year
As at
31
st
March,
2014
Upto
31
st
March,
2013
For the
year
On
disposals
Upto
31
st
March,
2014
As at
31
st
March,
2014
As at
31
st
March,
2013
Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs
Leasehold Land
(Refer Note 32) 31,206 406 31,612 1,432 336 1,768 29,844 29,774
Buildings (Refer
Note 32) 82,931 6,162 89,093 6,584 2,940 9,524 79,569 76,347
Plant & Equipment 92,738 8,619 101,357 17,182 6,735 23,917 77,440 75,556
Furniture & Fixtures 1,698 400 2,098 328 136 464 1,634 1,370
Vehicles 846 336 43 1,139 220 146 27 339 800 626
Ofce Equipment 3,487 637 4,124 1,221 526 1,747 2,377 2,266
Total 212,906 16,560 43 229,423 26,967 10,819 27 37,759 191,664 185,939
Previous year 189,055 23,885 34 212,906 16,676 10,300 9 26,967 185,939
Note: - Plant & Equipment includes cost Rs. 649 lakhs (Previous year - Rs. 649 lakhs), Net Block Rs. 567 lakhs (Previous year 598 lakhs )and depreciation for the
year Rs.31 lakhs (Previous year - Rs.35 lakhs) in respect of expenditure incurred on capital assets, ownership of which does not vest in the Company.
NOTE 12 INTANGIBLE ASSETS
Cost Amortization Net Block
As at
31
st
March,
2013
Additions
during the
year
Disposals
during the
year
As at
31
st
March,
2014
Upto
31
st
March,
2013
For the
year
On
disposals
Upto
31
st
March,
2014
As at
31
st
March,
2014
As at
31
st
March,
2013
Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs
(Other than internally
generated)
Computer Software 939 183 1,122 573 288 861 261 366
License 489 489 105 98 203 286 384
Technical know how 310 310 36 61 97 213 274
Total 1,738 183 1,921 714 447 1,161 760 1,024
Previous year 1,263 475 1,738 315 399 714 1,024
NOTE 8 TRADE PAYABLES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Acceptances 747 1,323
Other than Acceptances (See note 39) 99,735 135,679
100,482 137,002
Note 9 OTHER CURRENT LIABILITIES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Current maturities of long-term debt 29,613 5,063
Interest accrued but not due on
borrowings 380 427
Other payables 14,437 21,753
Total 44,430 27,243
Other payable includes government grants payable to group companies, capital
creditors, advance from customers, employee related statutory obligations,
withholding tax payable, wealth tax payable etc.
NOTE 10 SHORT-TERM PROVISIONS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Provision for Employee Benets 200 130
Proposed Dividend 5,552 7,000
Provision for Tax on Proposed Dividend 944 1,190
Provision - Others :
Provision for premium on
redemption of debentures 1,346
Total 8,042 8,320
15
Note 12A CAPITAL WORK-IN-PROGRESS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Capital Work-in-progress 2,390 5,581
Incidental Expenditure during construction
period pending allocation to xed assets
196
2,586 5,581
Schedule 12B INCIDENTAL EXPENDITURE DURING CONSTRUCTION
PERIOD PENDING ALLOCATION TO FIXED ASSETS (INCLUDED IN
CAPITAL WORK-IN-PROGRESS)
Particulars Balance as at
31
st
March,
2013
Expenditure
incurred during
the year
Expenditure
incurred upto
31
st
March,
2014
Expenditure
allocated to
Fixed Assets
Balance as at
31
st
March,
2014
Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs
Salaries, wages
and bonus 139 139 139
Repairs &
Maintenance
Machinery 40 40 40
Miscellaneous
Expenses 17 17 17
Total expenditure 196 196 196
Previous year 79 35 114 114
Note 13 NON CURRENT INVESTMENTS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Non Current Investments
(Unquoted, Trade)
Investments in Equity Instruments:
(Investment in Class A Equity Shares
of Wardha Power Company Limited
(12,38,279 shares (Previous year -
12,38,279 shares) having face value of
Rs. 10 each fully paid up))
124 124
Investments in preference shares:
(Investment in 0.01% Class A
Redeemable Preference Shares of Wardha
Power Company Limited (15,61,721 shares
(Previous year - 15,61,721 shares) having
face value of Rs. 10 each fully paid up))
156 156
Total 280 280
NOTE 14 LONG TERM LOANS AND ADVANCES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Loans and Advances to other than
related parties
(Secured, considered good)
Other Loans and Advances (Advance to
Suppliers) 369 554
related parties:
(Unsecured, considered good)
Capital Advances 278 1,255
Security deposits 558 578
Other Loans and Advances 31,561 45,041
Total 32,766 47,428
Other Loans & Advances includes income tax payment less provisions, VAT
Refund, and prepaid expenses, MAT Credit entitilement*, etc
*Rs. 109 lakhs (Previous year Rs. 5,768 lakhs)
NOTE 15 CURRENT INVESTMENTS
Face
Value
Rs.
As at 31
st
March 2014 As at 31
st
March 2013
Units Rs. in
Lakhs
Units Rs. in
Lakhs
CURRENT INVESTMENTS
(Unquoted)
(at cost or fair value
whichever is lower)
Investments in Mutual funds:
a) Kotak Floater Short
Term Growth 1,000 52,084 1,000
b) Birla Sun Life Cash Plus
Institutional Premium
Growth 100 532,767 1,000
c) Religare Invesco Liquid
Fund - Growth Plan 1,000 107,901 1,900
d) Birla Sun Life Cash Plus
-Regular Plan - Growth 100 1,217,192 2,500
Total 4,400 2,000
NOTE 16 INVENTORIES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
(at cost or net realisable value whichever
is lower)
Raw materials (Including Goods in
transit Rs. 4,186 Lakhs) (Previous year
Rs. 11,012 Lakhs)) 22,575 35,303
Work-in-Progress 3,913 3,395
Finished Goods 10,349 26,785
Stores and spares 508 325
Loose tools 416 297
Total 37,761 66,105
NOTE 17 TRADE RECEIVABLES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Trade receivables due for a period
exceeding six months from the date they
are due for payment 771
Other Trade Receivables 51,378 58,142
Total 51,378 58,913
NOTE 18 CASH AND BANK BALANCES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
A. Cash and cash equivalents
Cash on hand 1
Balances with banks
In current accounts 43 279
In deposit accounts 18,200 2,995
B. Other bank balances
Earmarked balances with banks 857 857
Total 19,100 4,132
16
NOTE 19 SHORT TERM LOANS AND ADVANCES
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Loans and Advances to related parties:
Inter corporate deposit given 2,500
related parties:
(secured, considered good)
Advances to Suppliers 185 46
Others 5,821 6,305
Total 8,506 6,351
Others Includes advances to suppliers, employee advances, prepaid expenses,
balances with central excise, Lease rent receivable, MAT Credit entitlement*, etc.
*Rs. 3,025 lakhs (Previous year Rs. Nil lakhs) etc.
NOTE 20 OTHER CURRENT ASSETS
As at
31
st
March, 2014
Rs. in Lakhs
As at
31
st
March, 2013
Rs. in Lakhs
Interest Accrued (On Fixed Deposits,
advance to suppliers etc.) 684 429
Other Receivables (Government grants
receivable, Lease rent receivables etc.) 23,739 33,037
Total 24,423 33,466
NOTE 21 REVENUE FROM OPERATIONS- NET
For the year
ended 31
st

March, 2014
Rs. in Lakhs
For the year
ended 31
st

March, 2013
Rs. in Lakhs
Sale of products 676,349 943,198
Sale of services (Painting work) 257 439
Other operating revenues
Government Grants* 15,083 17,978
Scrap Sales 3,320 4,434
695,009 966,049
Less: Excise Duty (116,706) (177,741)
Total 578,303 788,308
* Includes Government Grant recognized in respect of earlier years Rs. 2,998
lakhs (Previous year - Rs. Nil )
NOTE 22 OTHER INCOME
For the year
ended
31
st
March, 2014
Rs. in Lakhs
For the year
ended
31
st
March, 2013
Rs. in Lakhs
Prot on sale of current investments 352 647
Income from Lease Rent 574 638
Cash discount received 47 124
Interest earned 786 616
Other non-operating income (net of
expenses directly attributable to such
income) 53 31
Total 1,812 2,056
NOTE 23 COST OF MATERIAL CONSUMED
For the year
ended 31
st
March, 2014
Rs. in Lakhs
For the year
ended 31
st

March, 2013
Rs. in Lakhs
Raw Material Consumed 484,706 697,121
Packing Material Consumed 59 121
Total 484,765 697,242
NOTE 24 CHANGES IN INVENTORIES OF FINISHED GOODS AND
WORK-IN-PROGRESS
Rs. in Lakhs
For the year
ended 31
st

March, 2014
Rs. in Lakhs
For the year
ended 31
st

March, 2013
Rs. in Lakhs
Opening stock
Work-in-progress 3,395 3,114
Finished goods 26,785 26,252
30,180 29,366
Closing stock
Work-in-progress 3,913 3,395
Finished goods 10,349 26,785
14,262 30,180
Total 15,918 (814)
NOTE 25 EMPLOYEE BENEFIT EXPENSE
For the year
ended 31
st
March, 2014
Rs. in Lakhs
For the year
ended 31
st

March, 2013
Rs. in Lakhs
Salaries and wages 12,416 10,846
Contribution to provident and other funds 618 619
Expense on Employee Stock option
(ESOP) Scheme* 193 187
Staff welfare expenses 1,497 1,468
Total 14,724 13,120
*represents reimbursement of cost to holding company, towards ESOPs granted
by the Holding Company to the employees of the Company
NOTE 26 FINANCE COSTS
For the year
ended 31
st
March, 2014
Rs. in Lakhs
For the year
ended 31
st
March, 2013
Rs. in Lakhs
Interest expense 8,017 8,264
Other borrowing costs 2,228 2,261
Total 10,245 10,525
Other borrowing costs includes provision for premium on redemption of
debentures Rs. 2,052 Lakhs (Previous period - Rs. 2,051 lakhs)
17
NOTE 27 OTHER EXPENSES
Rs. in Lakhs
For the year
ended 31
st

March, 2014
Rs. in Lakhs
For the year
ended 31
st

March, 2013
Rs. in Lakhs
Consumption of stores and
spare parts 4,491 4,935
Power and fuel 3,354 3,974
Rent 77 100
Repairs and maintenance -
Buildings 140 160
Machinery 670 694
Others 847 816
1,657 1,670
Insurance 268 226
Rates & Taxes (excluding
taxes on income) 416 338
Excise Duty relating to change
in inventories of nished
goods (4,653) 1,309
Net loss on foreign currency
transaction and translation 604 94
Hire & service Charge 2,544 2,438
Payment to Auditors*
As Auditors 22 18
For Limited Review fees 8 8
For other services 1 1
31 27
Loss on sale of xed asset 6 2
Miscellaneous expenses 1,491 1,426
Total 10,286 16,539
*Payment to Auditors excludes Rs. 9 lakhs, (Previous year - Rs. Nil) towards
taxation services paid to a rm, some of the partners where of are also partners
in the audit rm.
NOTE 28 THE NET EXCHANGE DIFFERENCES ARISING DURING THE
YEAR:
(i) recognised appropriately in the prot and loss account - net loss Rs. 604
lakhs (31
st
March, 2013 - net loss - Rs. 94 lakhs)
NOTE 29 DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE
ACCOUNTING STANDARD 15 (REVISED) EMPLOYEE BENEFITS
ARE AS UNDER:
(A) Dened Contribution Plan
Amount recognized as an expense in the Statement of Prot and Loss/
Incidental expenditure during construction period pending allocation to
tangible assets in respect of Dened Contribution Plans is Rs. 577 lakhs
(31
st
March, 2013 - Rs. 534 lakhs)
(B) Dened Benet Plan
i) Actuarial gains and losses in respect of dened benet plans are
recognised in the Statement of Prot & Loss.
ii) The Dened Benet Plans comprise of Gratuity.
Gratuity is a benet to an employee based on a proportion of last
drawn salary for each completed year of service.
Amount Rs. In Lakhs
Gratuity (Unfunded)
Particulars For the year
ended on 31
st

March, 2014
For the year
ended on 31
st

March, 2013
(C) Changes in the present value of dened
obligation representing reconciliation of
opening and closing balances thereof
are as follows:
1. Present Value of Dened Benet
Obligation as on 1
st
April 942 723
2. Adjustment on tranfer of employees 6
3. Current Service cost 199 174
4. Interest cost 78 60
5. Losses (gains) on Curtailment
6. Liabilities extinguished on settlements
7. Plan ammendments
8. Actuarial (gains)/losses (59) 12
9. Benets paid (11) (33)
10. Present value of Dened Benet
Obligation as on Balance Sheet date. 1,149 942
(D) Analysis of Dened Benet Obligation:
1. Dened Benet Obligation as at
31
st
March 1,149 942
2. Fair Value of Plan assets at the end of
the year
3. Net (Asset)/Liability recognized in the
Balance Sheet as at 31
st
March 1,149 942
(E) Reconciliation of Present Value of
Dened Benet Obligation and fair
value of plan assets showing amount
recognized in the Balance Sheet:
Obligation 1,149 942
2. Fair value of plan assets
3. Funded status [Surplus/(Decit)] (1,149) (942)
4. Unrecognized Past Service Costs
5. Net asset/(Liability) recognized in
Balance Sheet (1,149) (942)
(F) Components of employer expenses
recognized in the statement of prot and
loss for the year ended 31
st
March 2014
1. Current Service cost 199 174
3. Expected return on plan assets
4. Curtailment cost/(credit)
5. Settlement cost/(credit)
6. Past Service cost
7. Actuarial Losses/(Gains) (59) 12
8. Total expense recognised in the
Statement of Prot & Loss/ Incidental
Expense Capitalised 218 246
18
(G) Principal Acturial Assumptions:
As at 31
st

March, 2014
As at 31
st
March, 2013
1. Discount Rate (%) 9.20% 8.30%
2. Expected Return on plan assets (%) NA NA
3. Salary Escalation (%) 8%/10% 8%/10%
4. Medical cost ination NA NA
5. Withdrawal Rate (%) (Others) 2%/7% 2%/7%
a) The Discount rate is based on the prevailing market yields of Indian
Government securities as at the Balance Sheet date for the estimated terms
of the obligations.
b) Salary Escalation Rate: The estimates of future salary increases considered
takes into account the ination, seniority, promotion and other relevant
factors.
(H) Experience Adjustments
For the year
ended on
31
st
March,
2014
For the year
ended on
31
st
March,
2013
For the year
ended on
31
st
March,
2012
For the year
ended on
31
st
March,
2011
1. Dened Benet
Obligation at the end
of the period 1,149 942 723 622
2. Plan Assets at the
end of the period
3. Funded Status (1,149) (942) (723) (622)
4. Experience
adjustments on plan
liabilities (59) 7 6 (100)
5. Experience
adjustments on plan
assets
Note 30 Related Party Disclosures:
A) Name of the related party and nature of relationship where control exists:
Name of Related Party Nature of Relationship
Mahindra & Mahindra Limited Holding Company
B) Related Party Transactions:
Name of Related Party Description of
Relationship
Nature of Transactions Amount of
Transactions
(Rs. in Lakhs)
Amount Outstanding at the end
of year
Credit
(Rs. In Lakhs)
Debit
(Rs. in Lakhs)
Mahindra & Mahindra Ltd. Holding Company Purchase of Services 82

23,262
}
(20,684)

(76)
Purchase of Assets 160
(379)

Purchase of Material 92,722
(146,349)
Sale of goods 700,396
}

(919,698)
Sale of Asset
(8) 48,782
(41,449)
Sale of Services 289
(522)
Interest Paid 55
()
Mahindra Automobile Distributor Pvt. Ltd. Fellow Subsidiary Inter Corporate Deposit received
back (3,000)

Interest on Inter Corporate Deposit ()
(22)
Mahindra Reva Electric Vehicles Pvt. Ltd. Fellow Subsidiary Inter Corporate Deposit given
}

(1,000)
Inter Corporate Deposit received
back (1,000)
Interest Received on Inter Corporate
Deposit (51) ()
Purchase of Asset 14
(2)
Sale of goods 4
()
19
Name of Related Party Description of
Relationship
Nature of Transactions Amount of
Transactions
(Rs. in Lakhs)
Amount Outstanding at the end
of year
Credit
(Rs. In Lakhs)
Debit
(Rs. in Lakhs)
Mahindra Two Wheeler Ltd. Fellow Subsidiary Inter Corporate Deposit given 2,500 2,500
() ()
Interest Received on Inter Corporate 11
Deposit ()
Mahindra Intertrade Ltd. Fellow Subsidiary Purchase of Material 11,324

}
208
(8)

(16,430)

Purchase of Services ()
(9)
Mahindra Sanyo Special Steel Pvt Ltd. Fellow Subsidiary Sale of Material 16 2
() ()
Mahindra Ugine Steel Co. Ltd. Fellow Subsidiary Purchase of Material 4,132 884
(6,403) (1,076)
Mahindra Forging Ltd. Fellow Subsidiary Purchase of Material 692
(Upto 30
th
September 2013) (2,585) (231)
Mahindra Hinodaya Ltd. Fellow Subsidiary Purchase of Material 434

}
(120)

(Upto 30
th
September 2013) (1,212)

Sale of Material 450
()
Mahindra Logistics Ltd. Fellow Subsidiary Purchase of Services 5,365 236
(7,716) (395)
Mahindra Navistar Engine Pvt. Ltd. Fellow Subsidiary Purchase of Material 6,890
}

(7,784) 1,255
(1,139)
Purchase of Services 35
()
Sale of Material 5
()
Mahindra Trucks and Buses Limited Fellow Subsidiary Sale of goods 337 27
(formerly known as Mahindra Navistar
Automotives Limited) (60,040) (128) (3,319)
Mahindra Gears & Transmissions Pvt. Ltd. Fellow Subsidiary Purchase of Material 58 19
(150) (32)
Mahindra BPO Services Pvt. Ltd. Fellow Subsidiary Purchase of Services 106 4
(115) (8)
Mahindra Holidays & Resorts India Ltd. Fellow Subsidiary Purchase of Services
(3) ()

Ssangyong Motor Company, Korea Fellow Subsidiary Purchase of Material 12,343
}

(32,052)
Technical know how fees 33 359
(258) (4,445)
Royalty Paid 6
(48)
Mahindra Conveyor Systems Pvt. Ltd. Fellow Subsidiary Purchase of Assets
(154) (107)
Purchase of Material 19
()
Purchase of Services 2
()
Mahindra Defence Systems Limited Fellow Subsidiary Purchase of Services 4
() ()
Mr. Vijay Dhongde
Key Management
Personnel Remuneration 48
(48) ()
Note: Figures in brackets are in respect of the corresponding previous year.
20
NOTE 31 THE TOTAL OF FUTURE MINIMUM LEASE PAYMENTS UNDER
NON-CANCELLABLE OPERATING LEASE:
ended on 31
st

March, 2014
Rs. in Lakhs
For the year
ended on 31
st

March, 2013
Rs. in Lakhs
(i) Not later than one year 12 36
(ii) Later than one year and not later than
ve years. 42
(iii) Later than ve years
Total 12 78
a) Lease payments recognised in the statement of prot and loss for the year
Rs. 77 lakhs (31
st
March, 2013 Rs. 100 lakhs)
b) The lease agreements are for premises taken on lease for guest house and
training centres.
NOTE 32 ASSETS GIVEN ON OPERATING LEASE:
General description of signicant lease arrangement:-
The company has entered into cancellable operating lease arrangement for
building and sub-lease of land.
Sub Lease Land Building
Particulars
For the year
ended on 31
st

March, 2014
For the year
ended on 31
st

March, 2013
For the year
ended on 31
st

March, 2014
For the year
ended on 31
st

March, 2013
Rs. in lakhs Rs. in lakhs Rs. in lakhs Rs. in lakhs
(i) Gross Block 1,261 1,242 2,115 1,933
(ii) Accumulated
Depreciation/
Amortisation 65 52 238 163
(iii) Depreciation/
Amortisation in
the year 13 13 75 68
NOTE 33 EARNING PER SHARE
(a) The amount used as the numerator in calculating basic and diluted earnings
per share is the net prot after tax for the year disclosed in the statement of
prot & loss.
(b) The weighted average number of equity shares used as the denominator in
calculating both basic and diluted earnings per share is 962,250,000 (31st
March 2013 - 962,250,000).
NOTE 34 VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS,
SPARE PARTS AND COMPONENTS CONSUMED:
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Value
(Rs. in lakhs)
Percentage
(%)
Value
(Rs. in lakhs)
Percentage
(%)
Imported 33,045 7% 52,493 8%
Indigenously obtained 451,661 93% 644,628 92%
Total 484,706 100% 697,121 100%
Note: In giving the above information, the company has taken the view that
spares and components as referred to in Clause 5(viii)(c) of Part II of Schedule
VI covers only such items as go directly into production.
NOTE 35 CIF VALUE OF IMPORTS
Particulars For the year ended
on 31
st
March, 2014
Rs. in Lakhs
For the year ended
on 31
st
March, 2013
Rs. in Lakhs
Raw materials 28,086 52,309
Capital Goods 1,220 2,421
Total 29,306 54,730
Note 36 (i) Details of Raw Material Consumption and Raw Material Stock:
Raw Materials Consumed Raw Materials Stock
Particulars
For the year
ended
31
st
March,
2014
For the year
ended
31
st
March,
2013
For the year
ended
31
st
March,
2014
For the year
ended
31
st
March,
2013
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Steel 11,609 17,002 443 693
Paint 3,998 5,511 216 264
Tyres & Tubes 17,883 24,922 1,008 1,725
Engine 68,579 102,082 1,910 1,993
Others 382,636 547,604 18,997 30,628
Total 484,706 697,121 22,575 35,303
(a) The consumption has been arrived at by adding to the opening stocks, the
purchases during the year, and deducting therefrom the closing stocks and
therefore includes the excesses/shortages on physical count, write off of
obsolete items etc.
(b) The consumption in value shown in others is a balancing gure based on
the total consumption shown in the Statement of Prot and Loss.
NOTE 36 (ii) Details of Work in Progress Stock:
WIP Opening Stock WIP Closing Stock
As at 1
st

April, 2013
As at 1
st

April, 2012
As at 31
st

March, 2014
As at 31
st

March, 2013
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Vehicles WIP 934 1,708 1,411 934
Other Components
and aggregates 2,461 1,406 2,502 2,461
Total 3,395 3,114 3,913 3,395
NOTE 36 (iii)- Details of Sales and Finished Goods Stock:
Particulars Finished Goods
Opening Stock
Finished Goods
Closing Stock
Sales (Net)
As at 1
st
April,
2013
As at 1
st
April,
2012
As at 31
st
March, 2014
As at 31
st
March, 2013
For the year
ended 31
st
March, 2014
For the year
ended 31
st
March, 2013
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Value
(Rs. in lakhs)
Motor Vehicle 23,508 18,740 8,269 23,508 487,985 677,647
Heavy motor
vehicles 3,131 6,584 1,898 3,131 47,875 51,488
Construction
Equipments 146 928 183 146 12,801 13,725
Accessories &
Components* 11,270 22,994
Total 26,785 26,252 10,349 26,785 559,931 765,854
* Accessories & Components are not enmarked for sale as such. The company
considers a component as meant for sale only when it is actually sold and
hence no stock is indicated.
21
NOTE 37 COMMITMENTS
a) Estimated amount of contracts remaining to be executed on capital
account for tangible assets and not provided for Rs. 20,037 lakhs
(31
st
March 2013 - Rs. 27,665 lakhs).
NOTE 38 (a) Details of Derivative Instruments (for hedging)
Particulars Amount in foreign currency
(USD in lakhs)
Equivalent amount
(Rs. in lakhs)
Purpose
Current
Year
Previous
Year
Current
Year
Previous
Year
Forward cover 124 346 6,144 17,695 Term Loan and
trade Payable
In addition, the company has an interest rate swap converting the oating interest
rate in foreign currency to xed rate in Indian Rupees, in respect of Bank Loan of
Rs. 5,881 lakhs (31
st
March,2013 - Rs. 10,944 lakhs)
NOTE 38 (b) Details of foreign currency exposures that are not hedged
by a derivative instrument or otherwise:
Particulars Amount in foreign currency
(in lakhs)
Equivalent amount
(Rs. in lakhs)
Currency Current
Year
Previous
Year
Current
Year
Previous
Year
Trade Payables USD 16 41 940 2,232
KRW 5,052 286
EURO 13 918
NOTE 39
(a) Principal amount payable to Micro and Small Enterprises (to the extent
identied by the company from available information and relied upon
by the auditors) as at 31
st
March, 2014 is Rs. 908 lakhs (Previous year -
Rs. 926 lakhs ) including unpaid amount of Rs. 371 lakhs (Previous year -
Rs. 184 lakhs)outstanding for more than 45 days/period agreed upon with
the supplier, whichever is less. Estimated interest thereon is Rs. 0.40 lakhs
(Previous Year - Rs. 4 lakhs) .
(b) Amount of payments made to suppliers beyond 45 days/period agreed
during the year is Rs. 4,010 lakhs (Previous year - Rs. 6,564 lakhs).
Interest paid thereon is Rs. Nil (Previous year - Rs. Nil ) and the estimated
interest due and payable thereon is Rs. 38 lakhs (Previous year - Rs. 49
lakhs).
(c) Amount of interest accrued and remaining unpaid as at the end of the year
is Rs. 38 lakhs (Previous year - Rs. 53 lakhs).
(d) The amount of estimated interest due and payable for the period from
1
st
April, 2014 to the actual date of payment or 20
th
April, 2014 (whi chever
is earlier) is Rs. 1 lakhs (Previous year - Rs. 7 lakhs)
NOTE 40 EXPENDITURE IN FOREIGN CURRENCY:
31
st
March, 2014
Rs. in Lakhs
For the year ended
31
st
March, 2013
Rs. in Lakhs
Travelling Expenses 21 20
Technical know-how fees 13 258
Royalty 33 48
Other
Total 68 326
NOTE 41 -
As the Companys business activity falls within a primary business segment and
is a single geographical segment, the disclosure requirements of Accounting
Standard (AS-17) Segment Reporting, are not applicable.
NOTE 42 Contingent Liability: Rs. Nil
NOTE 43 Details of provisions and movements in each class of provisions
as required by the Accounting Standard on Provisions, Contingent Liabilities
and Contingent Assets (Accounting Standard-29):
Provision for Premium on redemption of
debentures
As at
31
st
March, 2014
As at
31
st
March, 2013
Carrying Amount at the beginning
of the year 2,152 101
Additional Provision made during
the year 2,052 2,051
Amounts Used during the year
Unused amounts reversed during
the year
Carrying Amounts at the end of the
year 4,204 2,152
Brief description of the nature of the obligation and the expected timing of
any resulting outows of economic benets:
Premium on redemption of debentures is provided over the period of the
debenture and would be settled at the time of redemption.
NOTE 44
Previous year gures have been regrouped/reclassied wherever necessary to
correspond with the current years classication/disclosure.
Pravin Shah
A.M Choksey
Vijay Dhongde
}

Directors
S. Venkatraman
Date: 23
rd
April, 2014
Place: Mumbai
MAHINDRA AUTOMOBILE DISTRIBUTOR PRIVATE LIMITED
22
Your Directors present their Ninth Report, together with the audited accounts of your Company for the year ended 31
st
March,
2014.
FINANCIAL RESULTS
(Rs. in Lacs)
31
st
March, 2014
For the year ended
31
st
March, 2013
Revenue .................................................................................................................... 8,435.29 8,318.01
Prot/(Loss) before, Finance cost and Taxation ...................................................... 2,060.35 2,125.58
Less : Finance cost .................................................................................................. 0.41 24.22
Prot/ (Loss) before Taxation ................................................................................... 2,059.94 2,101.36
Less : Current Tax ....................................................................................................
700.00 700.00
Prot/(Loss) after Tax ................................................................................................ 1,359.94 1,401.36
Proposed Dividend on Equity Shares ..................................................................... 2,300.00 700.00
Tax on Proposed Dividend ....................................................................................... 390.89 118.97
Transfer to General Reserve..................................................................................... 135.99 140.14
Prot/ (Loss) of earlier year ...................................................................................... 1,843.90 1,401.65
Prot carried forward to Balance Sheet .................................................................. 376.96 1,843.90
PERFORMANCE REVIEW
During the Financial Year ended 31
st
March, 2014, total income
of your Company increased to Rs. 84.35 crore from Rs. 83.18
crore recorded in the previous year, reecting an increase
of approximately 1%. The prot after tax reduced from
Rs. 14.02 crore to Rs. 13.60 crore, dropping by 0.73% from
16.85% to 16.12%. The key reason for this was the economic
slowdown that impacted business performance right across
domestic industries. Your Company faced higher input costs
coupled with the depreciation of the Indian Rupee. However
forex hedging, judicious price increases, cost reduction
measures and superior returns from investible surpluses
helped in reducing the impact on margins and protability.
Your Company continues to have amongst industry best
performance parameters related to fullling dealer and stockist
orders measured by rst ll rates (FFR) providing a high level
of customer satisfaction.
DIVIDEND
Your Directors recommend a dividend of Rs. 230/- per equity
share (including a special dividend of Rs. 160/- per equity
share) on 10,00,000 fully paid-up equity shares of Rs. 10/-
each aggregating to Rs. 23 Crores.
The above equity dividend, if approved by shareholders at
the ensuing Annual General Meeting, will be paid to those
equity shareholders whose name appears on the Register of
Members on the record date xed for this purpose.
The equity dividend for the year, together with income tax
thereon, will absorb a sum of Rs. 2690.89 Lacs (as against Rs.
818.97 Lacs on account of dividend of Rs. 70/- per equity share
of the face value of Rs. 10/- each, paid for the previous year).
OUTLOOK
Your Company will continue to focus on maintaining its
high rst ll rates whilst at the same time focusing on lower
inventories.
A signicant part of your Companys purchases is imported
and hence, your Companys protability may be impacted due
to high volatility in exchange rates. However, your Company
will continue to attempt to reduce the impact through suitable
foreign exchange management strategies.
Your Company will also continue to explore various other
avenues to increase its presence in the automobile distribution
system.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
During the year under review, Human Resources and Industrial
Relations remained cordial.
23
RISK MANAGEMENT
Your Company has proper and adequate systems of internal
controls to ensure smooth operations, safeguarding assets
and ensuring compliance with applicable regulations. Your
Company, being in the automobile business, is exposed to a
variety of risks. These risks are mitigated by using an Integrated
Risk Management approach which employs a number of
techniques to cover the full range of risks in its operations.
DIRECTORS
Mr. S. Venkatraman retires by rotation at the forth coming
Annual General Meeting and being eligible, offers himself for
re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
(ii) they have in the selection of the accounting policies,
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 31
st
March, 2014 and of the prot of the Company
for the year ended on that date;
(iii) they have taken proper and sufcient care 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.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the
Company was re-constituted during the year under review.
The Committee presently comprises of Mr. S. Venkatraman
(Chairman), Mr. P. N. Shah and Mr. A. M. Choksey.
The Committee met once during the year under review.
The Board of Directors of the Company had at its meeting held
on 25
th
March, 2014 adopted the revised terms of reference
of the Audit Committee pursuant to the requirements of the
REMUNERATION COMMITTEE
The Remuneration Committee of the Board of Directors of the
Company was re-constituted during the year under review.
The Committee presently comprises of Mr. P. N. Shah, Mr. S.
Venkatraman and Mr. A. M. Choksey.
The remuneration Committee met once during the year under
review.
The Board of Directors of the Company had at its meeting
held on 25
th
March 2014 changed the nomenclature of
Remuneration Committee as Nomination and Remuneration
Committee and also adopted the revised terms of reference of
the Committee pursuant to the requirements of the Companies
Act, 2013.
CODES OF CONDUCT
Your Company has adopted separate Codes of Conduct
for Corporate Governance for its Directors and Senior
Management Personnel and Employees (the Codes). The
Codes enunciate the underlying principles governing the
conduct of the Companys business and seek to reiterate the
fundamental precept that good governance must and would
always be an integral part of the Companys ethos.
Your Company has for the year under review, received
declarations under the Codes from the Directors and the Senior
Management Personnel and Employees of the Company
afrming compliance with the respective Codes.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants,
Vadodara, (Firm Registration Number 117364W) retire as
Auditors of the Company at the forthcoming Annual General
Meeting and have given their consent for re-appointment.
The Members are requested to appoint Auditors for a period
of 5 years i.e. from the conclusion of the Ninth Annual General
Meeting until the conclusion of the Fourteenth Annual General
Meeting and x their remuneration.
As required under the provisions of Section 139 of the
Companies Act, 2013, your Company has obtained a written
certicate from the above Auditors to the effect that their
re-appointment, if made, would be in conformity with the limits
and condition specied in the said section.
PUBLIC DEPOSITS AND LOANS/ADVANCES
Your Company has not accepted any deposits from the public
or its employees during the year under review.
Your Company has not made any loans/advances which
are required to be disclosed in the annual accounts of the
Company pursuant to Clause 32 of the Listing Agreement
executed by the parent company viz. Mahindra and Mahindra
Limited, with the Stock Exchanges.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Companys commitment towards safety, health and
environment is being continuously enhanced and persons
working at warehouse are given adequate training on safety
and health. The requirements relating to various environmental
legislations and environment protection have been duly
complied with by your Company.
24
CONSERVATION OF ENERGY AND TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The particulars relating to the energy conservation, technology
read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given in the
Annexure to this Report.
PARTICULARS OF EMPLOYEES AS REQUIRED UNDER
SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND
RULES FRAMED THEREUNDER
Your Company had no employee who was employed
throughout the nancial year and was in receipt of remuneration
of not less than Rs. 60,00,000/- per annum during the year
ended 31
st
March, 2014 or was employed for a part of nancial
year and was in receipt of remuneration of not less than
Rs. 5,00,000/- per month.
CORPORATE SOCIAL RESPONSIBILITY
As a part of Mahindra group, your Company carries out
initiatives in the area of Corporate Social Responsibility (CSR).
Your Company sponsored the education of above 200 girl
children as part of CSR activity and has also contributed
Rs. 7.55 lacs towards this.
Your Company has also donated an ambulance to hospital
in Nasik, catering medical services to the needy people at
concessional rates.
The Board of Directors of the Company had on 25
th
March
2014 constituted a Corporate Social Responsibility Committee
consisting of Mr. S. Venkatraman, Mr. Ajay Choksey and
Mr. Ketan Doshi.
The said Committee at its meeting held on 25
th
March 2014
approved CSR Policy and CSR Budget and recommended the
same to the Board.
The Board of Directors has approved CSR Policy and CSR
Budget as recommended by the CSR Committee.
POLICY FOR PREVENTION OF SEXUAL HARASSMENT
The Company has rolled out a policy for prevention of
sexual harassment in which it has formalized a free and fair
enquiry process with clear timelines. The Company has also
constituted an Internal Complaints Committee to which
employees can write their complaints. During the year under
review, no complaints were received by the said Committee.
ACKNOWLEDGEMENT
Your Directors acknowledge the co-operation and assistance
received from the shareholders of the Company, vendors,
dealers, bankers, employees and Government authorities for
their support during this crucial year of the operation of the
Company.
P. N. Shah
Chairman
Mumbai, 29
th
April, 2014
25
ANNEXURE TO THE DIRECTORS REPORT
ST
MARCH, 2014.
The operations of your Company are not energy-intensive, as the Company utilises the services of a third party
for packaging of the spare parts. However, the Company constantly reviews the consumption of electricity and its
rationalization.
(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil.
(c) Impact of the measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of
production of goods: The above measures have resulted in energy consumption reduction.
(d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules
in respect of Industries specied in the Schedule: Not Applicable.
1. Areas in which R & D is carried out : None
2. Benets derived as a result of the above efforts : N.A.
3. Future plan of action : None
4. Expenditure on R & D : Nil
5. Technology absorption, adaptation and innovation : None
6. Imported Technology for the last 5 years : Nil
The Company continues to strive to improve its export earnings.
Total foreign exchange earned and used are as follows:
(Rs. in Lac)
F.Y. 2013-14 F.Y. 2012-13
Total foreign exchange earned 109.07 102.43
Total foreign exchange used 2,773.62 2779.91
P. N. Shah
Chairman
Mumbai, 29
th
April, 2014
26
We have audited the accompanying nancial statements
of MAHINDRA AUTOMOBILES DISTRIBUTORS PRIVATE
LIMITED (the Company), which comprise the Balance
Sheet as at 31
st
March, 2014, the Statement of Prot and Loss
and the Cash Flow Statement for the year then ended, and
a summary of the signicant accounting policies and other
explanatory information.
of these nancial statements that give a true and fair view of
the nancial position, nancial performance and cash ows of
the Company in accordance with the Accounting Standards
notied under the Companies Act, 1956 (the Act)(which
continue to be applicable in respect of Section 133 of the
Companies Act, 2013 in terms of General Circular 15/2013
dated 13
th
September, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles
generally accepted in India. This responsibility includes the
design, implementation and maintenance of internal control
relevant to the preparation and presentation of the nancial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
evidence about the amounts and the disclosures in the
nancial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of
material misstatement of the nancial statements, whether
due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Companys
preparation and fair presentation of the nancial statements
in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Companys internal
control. An audit also includes evaluating the appropriateness
of the accounting policies used and the reasonableness of the
accounting estimates made by the Management, as well as
evaluating the overall presentation of the nancial statements.
Opinion
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MAHINDRA AUTOMOBILE DISTRIBUTOR
PRIVATE LIMITED
st
March, 2014;
(b) in the case of the Statement of Prot and Loss, of the
prot of the Company for the year ended on that date;
and
a statement on the matters specied in paragraphs 4 and
5 of the Order.
and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
Circular 15/2013 dated 13th September, 2013 of the
st
st
of the Act.
Mr. Ketan Vora
Partner
MUMBAI: April 29, 2014
27
(Referred to in paragraph 1 under Report on Legal and
Regulatory Requirements of our report of even date)
(i) Having regard to the nature of the Companys business/
activities/result, clause (viii), (xi), (xv), (xvi), and (xiii)
of paragraph 4 of the order are not applicable to the
Company for the year.
(ii) In respect of its xed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative details
and situation of the xed assets.
(b) The xed assets have been physically veried
during the year by the Management in accordance
with a regular programme of verication which, in
our opinion, provides for physical verication of
all the assets at reasonable intervals. According to
information and explanations given to us, no material
discrepancies were noticed on such verication.
(c) Since there is no disposal of substantial part of xed
assets during the year, paragraph 4(i)(c) of the Order
is not applicable.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically
veried during the year by the Management at
reasonable intervals.
(b) In our opinion and according to the information and
explanations given to us, the procedures of physical
verication of inventories followed by the Management
were reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) In our opinion and according to the information
and explanations given to us, the Company has
maintained proper records of its inventories and
no material discrepancies were noticed on physical
verication.
(iv) According to the information and explanations given to
us, there are no parties covered under section 301 of the
Companies Act, 1956. In view of what has been stated
above, sub-clauses (a), (b), (c), (d), (e), (f) and (g) of
clause (iii) of Paragraph 4 of the Order are not applicable
to the Company for the year.
(v) In our opinion and according to the information and
explanations given to us, having regard to the explanations
that some of the items purchased are of special nature
and suitable alternative sources are not readily available
for obtaining comparable quotations, there is an adequate
internal control system commensurate with the size of the
Company and the nature of its business with regard to
purchases of inventory and xed assets and the sale of
OF MAHINDRA AUTOMOBILE DISTRIBUTOR PRIVATE
LIMITED FOR THE YEAR ENDED 31
ST
MARCH, 2014.
goods and services. During the course of our audit, we
have not observed any major weakness in such internal
control system.
(vi) According to the information and explanations given to
Companies Act, 1956. In view of what has been stated
above, clause (v) of Paragraph 4 of the Order is not
applicable to the Company for the year.
(vii) According to the information & explanations given
to us, the Company has not accepted any deposits
from the public during the year. Hence, clause (vi)
of paragraph 4 of the Order is not applicable to the
(viii) In our opinion, the Company has an adequate internal
audit system commensurate with the size and nature of
its business.
(ix) According to the information and explanations given to us
in respect of statutory dues:
(a) The Company has generally been regular in
depositing undisputed dues, including Provident
Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty,
Cess and other material statutory dues applicable to
it with the appropriate authorities.
(b) There were no undisputed amounts payable in
respect of Income-tax, Wealth Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues
in arrears as at 31
st
March, 2014 for a period of more
than six months from the date they became payable.
(c) According to the information and explanations given
to us, there are no dues on account of Income-tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty and Cess which have not been deposited
on account of any dispute.
(x) The Company has no accumulated losses as at
31
st
March, 2014 and has not incurred any cash losses
during the nancial year covered by our audit and in
immediately preceding nancial year.
(xi) According to the information and explanations given to
us, the Company has not granted any loans or advances
debentures and other securities. Hence, clause (xii) of
paragraph 4 of the Order is not applicable to the Company
for the year.
(xii) According to the information and explanations given to
us, the Company is not dealing in shares, debentures and
other investments. Hence, clause (xiv) of paragraph 4 of
the Order is not applicable to the Company for the year.
(xiii) In our opinion and according to the information and
explanations given to us and on an overall examination of
the Balance Sheet, we report that funds raised on short-
28
term basis have, prima facie, not been used during the
year for long term investment.
(xiv) According to the information and explanations given to
Companies Act, 1956. Hence clause (xviii) of paragraph 4
of the Order is not applicable to the Company for the year.
(xv) To the best of our knowledge and according to the
information and explanations given to us, the Company
has not issued any debentures during the year. Hence,
clause (xix) of paragraph 4 of the Order is not applicable
to the Company for the year.
(xvi) To the best of our knowledge and according to the
has not raised any money by public issue during the
year. Hence, clause (xx) of paragraph 4 of the Order is
not applicable to the Company for the year.
(xvii) To the best of our knowledge and according to the
information and explanations given to us, no fraud by
the Company and no material fraud on the Company has
been noticed or reported during the year.
(Registration No. 117364W)
Ketan Vora
Partner
MUMBAI: April 29, 2014
29
ST
MARCH, 2014
Particulars Note No. As at
31 March, 2014
Rupees Lacs
As at
31 March, 2013
Rupees Lacs
A EQUITY AND LIABILITIES
1 Shareholders funds
(a) Share capital .............................................................................
3 100.00 100.00
(b) Reserves and surplus ...............................................................
4 789.46 2,120.41
889.46 2,220.41
2 Non-current liabilities
(a) Other long-term liabilities ..........................................................
5 4.00 4.00
(b) Long-term provisions ................................................................
6 16.90 34.89
20.90 38.89
3 Current liabilities
(a) Trade payables ..........................................................................
7 949.89 890.42
(b) Other current liabilities ..............................................................
8 392.65 318.13
(c) Short-term provisions ................................................................
9 2,690.89 818.97
4,033.43 2,027.52
TOTAL ....... 4,943.79 4,286.82
B ASSETS
1 Non-current assets
(a) Fixed assets
(i) Tangible assets ..................................................................
10

(b) Long-term loans and advances ................................................
11 1.85 1.85
1.85 1.85
2 Current assets
(a) Current investments ..................................................................
12 130.00 1,374.11
(b) Inventories .................................................................................
13 1,182.46 1,120.56
(c) Trade receivables ......................................................................
14 44.16 88.24
(d) Cash and cash equivalents ......................................................
15 654.32 1,613.54
(e) Short-term loans and advances ...............................................
16 2,930.06 74.64
(f) Other current assets .................................................................
17 0.94 13.88
4,941.94 4,284.97
TOTAL ....... 4,943.79 4,286.82
See accompanying notes to the nancial
In terms of our report attached.
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
P. N. Shah Chairman
Ketan Vora Ketan Doshi
Partner CEO & Wholetime Director
Ajay Choksey
S. Venkatraman
Director
Pallavi Ogale
Company Secretary
Place : Mumbai
Date : 29
th
April, 2014.
Place : Mumbai
Date : 29
th
April, 2014.
}
30
ST
MARCH, 2014
Particulars Note No. For the year ended
31 March, 2014
Rupees Lacs
For the year ended
31 March, 2013
Rupees Lacs
1 Revenue from operations (gross) .......................................... 18 9,193.21 9,132.83
Less: Excise duty ................................................................... 18 (1,043.52) (1,049.72)
Revenue from operations (net) .............................................. 8,149.69 8,083.11
2 Other income .......................................................................... 19 285.60 234.90
3 Total revenue (1+2) .............................................................. 8,435.29 8,318.01
4 Expenses
(a) Purchases of stock-in-trade ............................................ 20.a 4,872.75 4,740.54
(b) Changes in inventories of stock-in-trade ....................... 20.b (61.90) 16.55
(c) Employee benets expense ........................................... 21 24.73 41.14
(d) Finance costs .................................................................. 22 0.41 24.22
(e) Other expenses ............................................................... 23 1,539.36 1,394.20
6,375.35 6,216.65
5. Prot before tax (3 4) ....................................................... 2,059.94 2,101.36
6. Tax expenses:
Current tax .............................................................................. 700.00 700.00
7. Prot for the year (5 6) ..................................................... 1,359.94 1,401.36
8. Earnings per share (of Rs. 10/- each):
Basic & Diluted ....................................................................... 25.4 135.99 140.14
See accompanying notes to the nancial statements
P. N. Shah Chairman
Ajay Choksey
S. Venkatraman
Director
Pallavi Ogale
Company Secretary
Place : Mumbai
Date : 29
th
April, 2014.
Place : Mumbai
Date : 29
th
April, 2014.
}
31
31 March, 2014
For the year ended
31 March, 2013
Rupees Lacs Rupees Lacs Rupees Lacs Rupees Lacs
A. Cash ow from operating activities
Net Prot before tax .................................................... 2,059.94 2,101.36
Finance costs ........................................................ 0.41 24.22
Interest income ...................................................... (205.51) (203.16)
Dividend income ................................................... (80.09) (31.35)
Net Loss on sale of investments .......................... 0.01 (0.39)
Net unrealised exchange (gain)/loss ................... (5.26) 19.47
(290.44) (191.21)
Operating prot before working capital changes ...... 1,769.50 1,910.15
Changes in working capital:
Adjustments for (increase)/decrease in operating assets:
Inventories ............................................................. (61.90) 16.55
Trade receivables .................................................. 44.08 445.19
Short-term loans and advances ........................... 44.58 (40.18)
Long-term loans and advances ............................ (1.48)
Adjustments for increase/(decrease) in operating liabilities:
Trade payables ...................................................... 64.73 (684.33)
Other current liabilities .......................................... 74.52 (132.27)
Long-term provisions ............................................ 1.26 (10.05)
167.27 (406.57)
Cash generated from operations ................................. 1,936.77 1,503.58
Net income tax paid ..................................................... (719.25) (1,391.33)
Net cash ow from operating activities (A) ............ 1,217.52 112.25
B. Cash ow from investing activities
Inter-corporate deposits (net)
Current investments not considered as Cash and
cash equivalents
Purchased .......................................................... (54,582.49) (2,381.74)
Proceeds from sale ............................................ 55,826.59 1,244.10 1,008.02 (1,373.72)
Inter Corporate Deposits given .................................... (5,900.00)
Inter Corporate Deposits refunded .............................. 3,000.00 (2,900.00)
Dividend received
Others ................................................................. 80.09 80.09 31.35 31.35
ST
MARCH, 2014
32
31 March, 2014
For the year ended
31 March, 2013
Rupees Lacs Rupees Lacs Rupees Lacs Rupees Lacs
Interest received
Fellow Subsidiaries ........................................... 116.24 48.82
Others ................................................................. 102.21 218.45 154.15 202.97
Net cash ow (used in) investing activities (B) ..... (1,357.36) (1,139.40)
C. Cash ow from nancing activities
Proceeds from other short-term borrowings ............... (3,000.00)
Finance cost ................................................................. (0.41) (66.36)
Dividends paid .............................................................. (818.97) (819.38) (3,066.36)
Net cash ow (used in)/from
nancing activities (C) ............................................... (819.38) (3,066.36)
Net (decrease) / increase in Cash and cash
equivalents (A+B+C) ................................................ (959.22) (4,093.51)
Cash and cash equivalents at the beginning of the
year ............................................................................... 1,613.54 5,707.05
Cash and cash equivalents at the end of the
year* ............................................................................. 654.32 1,613.54
* Comprises:
(a) Cheques & drafts on hand ................................... 8.10 20.01
(b) Balances with banks
(i) On current accounts ...................................... 87.22 78.53
(ii) In deposit accounts with original maturity of
less than 3 months ........................................ 559.00 1,515.00
654.32 1,613.54
See accompanying notes forming part of the nancial statements
P. N. Shah Chairman
Ajay Choksey
S. Venkatraman
Director
Pallavi Ogale
Company Secretary
Place : Mumbai
Date : 29
th
April, 2014.
Place : Mumbai
Date : 29
th
April, 2014.
}
33
NOTES TO THE FINANCIAL STATEMENTS
1 Nature of Operations
Mahindra Automobile Distributor Private Limited is in the business of
trading in Spare Parts. It deals in spare parts required for four wheelers.
The Company undertakes procurement, warehousing management,
logistics and sale of imported and local spare parts. It has a network of
dealers spread across India to ensure timely availability of spare parts to
the customers. The Company also exports spare parts in small quantities.
It mainly follows a cash & carry business model.
2 Signicant Accounting Policies
2.1 Basis of accounting and preparation of nancial statements
The nancial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in
India (Indian GAAP) to comply with the Accounting Standards notied
under Section 211(3C) of the Companies Act, 1956 (the 1956 Act)
(which continue to be applicable in respect of Section 133 of the
Companies Act, 2013 (the 2013 Act) in terms of General Circular
15/2013 dated 13 September, 2013 of the Ministry of Corporate
Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as
applicable. The nancial statements have been prepared on accrual
basis under the historical cost convention. The accounting policies
adopted in the preparation of the nancial statements are consistent
with those followed in the previous year.
2.2 Tangible Fixed Assets
a) (i) All tangible xed assets are carried at cost of acquisition.
Cost includes nancing cost relating to borrowed funds
attributable to construction or acquisition of qualifying
xed assets up to the date the asset is ready for use.
When an asset is scrapped or otherwise disposed off,
the cost and related depreciation are removed from the
books of account and resultant prot (including capital
prot) or loss, if any, is reected in the Statement of Prot
and Loss.
(ii) The expenditure incurred on start up and commissioning
of project, test runs and experimental production is
treated as an indirect element of the construction cost.
b) Depreciation on assets is calculated on Straight Line Method at
the rates and in the manner prescribed in Schedule XIV to the
Companies Act 1956, except for
(i) Certain items of Plant & Machinery individually costing
more than Rs.5000 over their useful lives (2 years and
5 years) as determined by the Company
(ii) Cars and Vehicles which are depreciated at 15% of cost.
2.3 Intangible Assets
All intangible assets are initially measured at cost and amortized so
as to reect the pattern in which the assets economic benets are
consumed.
(i) Technical Know-how:
The expenditure incurred is amortized over the estimated
period of benet, effective from the month of commencement
of commercial production.
(ii) Development Expenditure:
The expenditure incurred on technical services and other
project / product related expenses are amortized over the
estimated period of benet, not exceeding ve years.
(iii) Software Expenditure:
The expenditure incurred is amortized over three nancial years
equally commencing from the year in which the expenditure is
incurred.
2.4 Investments
Current investments are valued at the lower of cost and fair value,
determined by category of investment.
2.5 Inventories
Inventories comprise of all costs of purchase, conversion and other
costs incurred in bringing the inventories to their present location
and condition.
Raw materials and bought out components are valued at lower of
cost and net realizable value. Cost is determined on the basis of the
weighted average method.
Finished goods produced and purchased for sale, manufactured
components and work-in-progress are carried at cost or net
realizable value, whichever is lower. Excise duty is included in the
value of nished goods inventory.
2.6 Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange
rates prevailing on the date of transaction. Monetary items are
translated at the year-end rates. The exchange difference between
the rate prevailing on the date of transaction and on the date of
settlement as also on translation of monetary items at the end of the
year is recognized as income or expense, as the case may be.
2.7 Revenue Recognition
Sale of products and income from services rendered are recognised
when the products are shipped or service rendered.
2.8 Employee Benets
(i) Dened Contribution Plan:
Companys contributions paid/payable during the year to
Provident Fund, Superannuation Fund are recognised in the
Statement of Prot and Loss.
(ii) Dened Benet Plan:
Companys liability towards gratuity is determined using the
projected unit credit method which considers each period
of service as giving rights to an additional unit of benet
entitlement and measure each unit separately to build up the
nal obligation. Past services are recognised on straight line
basis over the average period until the benets become vested.
Actuarial gains and losses are recognised immediately in the
statement of Prot and Loss Account as income or expense.
Obligation is measured at the present value of estimated future
cash ow using discounted rate i.e., determined by reference
to the market yield at the Balance Sheet date on Government
Bonds where the currency and terms of the Government
Bonds are consistent with the currency and estimated terms of
the dened benet obligation.
(iii) Long Term Compensated Absences:
Companys liability towards compensated absences is
actuarially determined using projected unit credit method.
Employee Benets in respect of gratuity and Long Term
Compensated absences are provided for based on valuations,
as at the Balance Sheet date, made by independent actuaries.
2.9 Product Warranty
In respect of warranties given by Company on sale of products,
the estimated costs of these warranties are accrued at the time of
sale. The estimates for accounting of warranties are reviewed and
revisions are made as required.
2.10 Leases
The companys signicant leasing arrangements are in respect
of operating leases for premises (ofce, godowns). The leasing
arrangements, which are not non-cancelable, range between six
months and ve years generally. The lease rentals payable are
charged as rent on straight line basis over lease term.
34
2.11 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 to
between taxable income and accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets arising on account of unabsorbed
depreciation or carry forward of tax losses are recognised only to
the extent that there is virtual certainty supported by convincing
evidence that sufcient future tax income will be available against
which such deferred tax assets can be realised.
2.12 Segment Reporting
The Companys businees activity falls within a single business
segment viz. Automotive. All other activities of the Company revolve
around its main business. Hence there are no separate reportable
primary segments as dened by Accounting Standard 17 on
Segment Reporting.
Note 3 Share capital
Particulars As at 31 March, 2014 As at 31 March, 2013
Number of
shares
Rupees
Lacs
Number of
shares
Rupees
Lacs
(a) Authorised
Equity shares of Rs. 10/-
each with voting rights ...... 400,000,000 40,000.00 400,000,000 40,000.00
(b) Issued, Subscribed and
fully paid up
Equity shares of Rs. 10/-
each with voting rights ...... 1,000,000 100.00 1,000,000 100.00
Total ........................................ 1,000,000 100.00 1,000,000 100.00
Notes:
(i) Right, preferences and restrictions attached to equity shares.
The company has one class of Equity shares having a face value of
Rs. 10. Each shareholders is eligible for one vote per share held. The
dividend proposed by the Board of Directors is subject to the approval of
the Shareholders in the ensuing Annual General Meeting, except in case
of interim dividend.
(ii) Reconciliation of the number of shares and amount outstanding at the
beginning and at the end of the reporting period:
Particulars Opening
Balance
Fresh
issue
Cancelled Closing
Balance
Equity shares
Year ended 31 March, 2014
Number of shares .......... 1,000,000 1,000,000.00
Amount (Rupees Lacs) .. 100.00 100.00
Number of shares .......... 1,000,000 1,000,000.00
Amount (Rupees Lacs) .. 100.00 100.00
(iii) Details of shares held by each shareholder holding more than 5% shares,
held by the holding & their Subsidiary:
Class of shares /
Name of shareholder
As at 31 March, 2014 As at 31 March, 2013
Number of
shares held
% holding in
that class of
shares
Number of
shares held
% holding in
that class of
shares
Equity shares
Mahindra & Mahindra Limited,
the holding Company ............... 740,000 0.74% 740,000 0.74%
Mahindra Holdings Limited,
the Subsidiary of the holding
Company ................................. 210,000 0.21% 210,000 0.21%
Note 4 Reserves and surplus
Particulars As at
31 March,
2014
As at
31 March,
2013
Rupees Lacs Rupees Lacs
(a) General reserve
Opening balance 276.51 136.37
Add:
Transferred from surplus in the Statement
of Prot & Loss 135.99 140.14
Closing balance 412.50 276.51
(b) Surplus in Statement of Prot and Loss
Opening balance 1,843.90 1,401.65
Add: Prot for the year 1,359.94 1,401.36
Less:
Dividends proposed to be distributed to
equity shareholders (2013: Rs. 70 per share) (2,300.00) (700.00)
Tax on dividend (390.89) (118.97)
Transferred to General reserve (135.99) (140.14)
Closing balance 376.96 1,843.90
Total 789.46 2,120.41
Note 5 Other long-term liabilities
Particulars As at
31 March,
2014
As at
31 March,
2013
Dealer Deposit 4.00 4.00
Total 4.00 4.00
Note 6 Long-term provisions
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Provision for employee benets:
(i) Provision for compensated absences 1.90 1.18
(ii) Provision for gratuity (Refer Note
27.1.b) 1.68 1.14
3.58 2.32
(b) Provision Others:
Provision for Tax
(Net off Advance Tax Rs. 1388.09 lacs
(as at 31st March, 2013 668.85 lacs)) 13.32 32.57
13.32 32.57
Total 16.90 34.89
Note 7 Trade payables
Particulars As at
31 March,
2014
As at
31 March,
2013
Trade payables:
Total Outstanding dues of micro and small
enterprises (Refer Note 26.1)
5.28 2.39
Total Outstanding dues of creditors other
than micro and small enterprises 944.61 888.03
Total 949.89 890.42
35
Note 8 Other current liabilities
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Other payables
(i) Statutory remittances (CST, WCT, etc.) 23.47 19.06
(ii) Advances from customers 196.62 186.12
(iii) Accrued Expenses 172.56 112.95
Total 392.65 318.13
Note 9 Short-term provisions
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Provision Others:
(i) Provision for proposed equity dividend 2,300.00 700.00
(ii) Provision for tax on proposed dividends 390.89 118.97
Total 2,690.89 818.97
Note 10 Fixed assets
A. Tangible assets Gross block Accumulated Depreciation Impairment Net Block Net Block
"Balance
as at
1 April, 2013"
Additions during
the year
Deletions during
the year
"Balance
as at
31 March, 2014"
"Balance
as at
1 April, 2013"
Depreciation for
the year
Deductions for
the year
"Balance
as at
31 March, 2014"
"Balance
as at
1 April, 2013"
Impairment
Provision for
the year
Impairment
Provision Reversal
for the year
"Balance
as at
31 March, 2014"
"Balance
as at
31 March, 2014"
"Balance
as at
31 March, 2013"
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
Rupees
Lacs
(a) Ofce equipment 0.49 0.49 0.04 0.04 0.45 0.45
Grand Total 0.49 0.49 0.04 0.04 0.45 0.45
Previous Period 0.49 0.49 0.04 0.04 0.45 0.45
Note 11 Long-term loans and advances
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Security deposits
Unsecured, considered good Doubtful 0.37 0.37
0.37 0.37
(b) Advance income tax Unsecured,
considered good (net of provisions
Rs. 735.56 lacs (as at 31
st
March, 2013
Rs. 735.56 lacs)) 1.48 1.48
Total 1.85 1.85
Note 12 Current investments
Particulars As at
31 March,
2014
As at
31 March,
2013
Unquoted
Rupees Lacs
Unquoted
Rupees Lacs
Investment in mutual funds
(Refer Note (i) below) 130.00 1,374.11
Total - Other current investments 130.00 1,374.11
Investment in mutual funds:- As at
31 March,
2014
As at
31 March,
2013
Unquoted Unquoted
Particulars Face Value
Per Unit
(Rupees)
Number Rupees
Lacs
Number Rupees
Lacs
Other current investments (At lower of
cost and fair value, unless otherwise
stated)
JP Morgan India Liquid Fund -Super
Institutional Daily Dividend Reinvest 10 2,967,271.58 296.96
JP Morgan India Treasury Fund Super
Institutional Daily Dividend Reinvest 10 1,438,314.04 143.96
JM Money Manager Fund - Super Plus Plan -
Daily Dividend Option 10 1,641,112.70 164.21
JM High Liquidity Fund - Daily Dividend
Option 10 2,565,296.22 267.57
BNP Paribas Money Plus Fund - Daily
Divdend Reinvestment 10 2,503,038.48 250.67
Kotak Floater Long Term-Daily Dividend 10 2,487,613.47 250.75
Religare Invesco Liquid Fund - Growth Plan 1,000 5,677.25 100.00
Templeton India TREASURY MANAGEMENT
ACCOUNT Super Institutional Plan - Growth 1,000 1,570.92 30.00
Total 130.00 1,374.11
Note 13 Inventories
(At lower of cost and net realisable value)
Particulars
As at
31 March,
2014
As at
31 March,
2013
Stock-in-trade 1,106.18 1,120.56
Goods-in-transit 76.28
Total 1,182.46 1,120.56
Note 14 Trade receivables
Particulars
As at
31 March,
2014
As at
31 March,
2013
Trade receivables outstanding for a period
were due for payment
Unsecured, considered good 0.07 13.50
0.07 13.50
Other Trade receivables
44.09 74.74
Total 44.16 88.24
Note 15 Cash and cash equivalents
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Cheques on hand 8.10 20.01
(i) In current accounts 87.22 78.53
(ii) In Fixed deposit accounts 559.00 1,515.00
Total 654.32 1,613.54
Of the above, the balances that meet the
denition of Cash and cash equivalents as
per AS 3 Cash Flow Statements is 654.32 1,613.54
36
Note 16 Short-term loans and advances
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Prepaid expenses Unsecured,
considered good 3.68 5.86
3.68 5.86
(b) Inter-corporate deposits
Unsecured, Considered good 2,900.00
2,900.00
(c) Others: Unsecured, considered good:
Excise Duty Recoverable 24.97 27.99
Receivable from Vendors 1.11 37.63
Advances to Vendors 0.30 3.16
26.38 68.78
Total 2,930.06 74.64
Note 17 Other current assets
Particulars As at
31 March,
2014
As at
31 March,
2013
Accruals
Interest accrued on Fixed Deposit 0.94 13.88
Total 0.94 13.88
Note 18 Revenue from operations
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
(a) Sale of products (Refer Note (i) below) 9,190.81 9,130.70
(b) Other operating revenues
Sale of scrap 2.40 2.13
9,193.21 9,132.83
Less:
(c) Excise duty (1,043.52) (1,049.72)
Total 8,149.69 8,083.11
Note (i)
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Traded goods
Body Repair Parts 1,864.53 1,875.77
Maintenance Parts 2,439.01 2,370.93
Mechanical Parts 4,305.71 4,226.43
Other Parts 581.56 657.57
Total Sale of products 9,190.81 9,130.70
Note 19 Other income
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
(a) Interest Income
(i) Interest on Deposits with Banks 89.27 154.34
(ii) Interest on Inter Corporate Deposits 116.24 48.82
205.51 203.16
(b) Dividend income from current investments 80.09 31.35
(c) Net gain on sale of current investments 0.39
Total 285.60 234.90
Note 20.a Purchase of traded goods
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Body Repair Parts 880.63 864.93
Maintenance Parts 1,280.87 1,287.35
Mechanical Parts 2,226.18 2,071.15
Other Parts 485.07 517.10
Total 4,872.75 4,740.54
Note 20.b Changes in inventories of stock-in-trade
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Trading Goods
Inventory at the end of the year 1,182.46 1,120.56
Less: Inventory at the beginning of the year 1,120.56 1,137.11
Net decrease (61.90) 16.55
Note 21 Employee benets expense
Particulars
For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Salaries and wages 23.00 36.51
Contributions to provident and other funds
(Refer Note 25.1) 1.10 2.17
Gratuity Expenses 0.54 2.13
Staff welfare expenses 0.09 0.33
Total 24.73 41.14
37
Note 22 Finance costs
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Interest expense on:
(i) Borrowings Inter Corporate Deposit 22.37
(ii) Trade payables MSM Creditors 0.23 0.26
(iii) Others
Interest on delayed / deferred payment
of tax 1.41
Interest on Dealer Deposit 0.14 0.14
Interest others 0.04 0.04
Total 0.41 24.22
Note 23 Other expenses
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Consumption of packing materials 81.89 91.42
Service Charges 277.10 224.05
Warehouse Charges 601.37 596.63
Rent including lease rentals 22.80 21.70
Repairs and maintenance 2.05
Insurance 8.32 7.66
Rates and taxes 0.35 0.30
Freight and forwarding 312.95 315.46
Advertisement 100.51
Donations and contributions 13.45 14.00
Legal and professional 21.50 24.53
Payments to auditors (Refer Note (i) below) 11.94 6.50
Bad trade and other receivables, loans and
advances written off 0.74
Net loss on foreign currency transactions
and translation (other than considered as
nance cost) 31.10 21.16
Net loss on sale of investments 0.01
Miscellaneous expenses 55.33 68.74
Total 1,539.36 1,394.20
Notes:
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
(i) Payments to the auditors comprises
(net of service tax input credit, where
applicable):
As auditors statutory audit 4.00 4.00
For taxation matters 6.50 2.50
For other services 1.20
Reimbursement of expenses 0.24
Total 11.94 6.50
Note 24 Additional information to the nancial statements
Note 24.1 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Particulars As at
31 March,
2014
As at
31 March,
2013
(i) Principal amount remaining unpaid
to any supplier as at the end of the
accounting year 5.11 2.13
(ii) Interest due thereon remaining unpaid
accounting year 0.18
(iii) The amount of interest paid along with
the amounts of the payment made to the
supplier beyond the appointed day 0.05
(iv) The amount of interest due and payable
for the year 0.23 0.26
(v) The amount of interest accrued and
remaining unpaid at the end of the
accounting year 0.18 0.26
(vi) The amount of further interest due and
payable even in the succeeding year,
until such date when the interest dues as
above are actually paid
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identied on the basis of information collected by the
Management. This has been relied upon by the auditors.
Note 24.2 Details on derivatives instruments and unhedged foreign currency
exposures
I. The following derivative positions are open as at 31 March, 2014. These
transactions have been undertaken to act as economic hedges for the
Companys exposures to various risks in foreign exchange markets and
may/may not qualify or be designated as hedging instruments.
(a) Forward exchange contracts and options [being derivative instruments],
which are not intended for trading or speculative purposes but for hedge
purposes to establish the amount of reporting currency required or
available at the settlement date of certain payables and receivables.
(i) Outstanding forward exchange contracts entered into by the
Company as on 31 March, 2014
Currency FC Amount
in Lacs
Buy/Sell Cross
currency
EUR
EUR (5.11) Buy Rupees
Note: Figures in brackets relate to the previous year
II. The year-end foreign currency exposures that have not been hedged by a
derivative instrument or otherwise are given below:
Receivable/
(Payable)
Receivable/
(Payable)
in Foreign
currency
Receivable/
(Payable)
Receivable/
(Payable)
in Foreign
currency
Rupees Lacs FC in Lacs (Euro) Rupees Lacs FC in Lacs (Euro)
(267.86) (3.21)
23.11 0.28 45.96 0.65
38
Note 24.3 Value of imports calculated on CIF basis
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Spare parts 2,734.95 2,728.43
Note 24.4 Expenditure in foreign currency
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Royalty 38.67 51.48
Note 24.5 Details of consumption of imported and indigenous items
31 March, 2014
Rupees Lacs %
Imported
Spare parts 2,750.37 57.17%
(2,551.31) (53.63%)
(Note: Figures/percentages in brackets relates to the previous year)
For the year ended
31 March, 2014
Rupees Lacs %
Indigenous
Spare parts 2,060.48 42.83%
(2,205.78) (46.37%)
(Note: Figures/percentages in brackets relates to the previous year)
Note 24.6 Earnings in foreign exchange
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Export of goods calculated on FOB basis 109.07 102.43
Total 109.07 102.43
Note 25. DISCLOSURES UNDER ACCOUNTING STANDARDS
Note 25.1 Employee benet plans
Note 25.1.a Dened contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to dened contribution plans for qualifying employees. Under the Schemes, the
Company is required to contribute a specied percentage of the payroll costs
to fund the benets. The Company recognised Rs. 0.90 Lacs (Year ended 31
March, 2013 Rs. 1.18 Lacs) for Provident Fund contributions and Rs. Nil (Year
ended 31 March, 2013 Rs. 0.84 lakhs) for Superannuation Fund contributions in
the Statement of Prot and Loss. The contributions payable to these plans by
the Company are at rates specied in the rules of the schemes.
Note 25.1.b Dened benet plans
The Company offers the following employee benet schemes to its employees:
Gratuity
The Company has only 3 employees on its payroll as of March 31,2014.
However, the Company has a plan towards gratuity, a dened benet retirement
plan covering eligible employees at retirement, death while in employment or
on termination of employment in an amount as per policy payable for each
completed year of service. Vesting occurs upon completion of ve years of
service. Provision for gratuity made on arithmetical basis of Rs. 1.68 Lacs for
employees.
Note 25.2 Segment information
Information about Geographical segment is as follows:
(Rs. in Lacs)
31 March, 2014
For the year ended
31 March, 2013
Within
India
Outside
India
Total Within
India
Outside
India
Total
Segment Revenue 8,036.44 110.85 8,147.29 7,974.91 106.07 8,080.98
Segment Asset 4,920.76 23.03 4,943.79 4,228.65 58.17 4,286.82
Note 25.3 Related party transactions
Note 25.3.a Details of related parties:
Description of relationship Names of related parties
Holding Company Mahindra & Mahindra Limited
Fellow Subsidiary Bristlecone India Limited
Fellow Subsidiary NBS International Limited
Fellow Subsidiary Mahindra First Choice Services Limited
Fellow Subsidiary Mahindra Reva Electric Vehicles Private Limited
Fellow Subsidiary Mahindra Vehicle Manufacturers Limited
Fellow Subsidiary Mahindra Navistar Engines Private Limited
Fellow Subsidiary Mahindra Integrated Business Solution Private
Limited
Fellow Subsidiary Mahindra Aerospace Private Limited
Fellow Subsidiary Mahindra Two Wheeler Private Limited
Key Management Personnel Mr. Ketan Doshi
Note: Related parties have been identied by the Management.
39
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40
Note 25.4 Earnings per share
Particulars For the
year ended
31 March,
2014
For the
year ended
31 March,
2013
Amount used in numerator - Prot for the
year attributable for equity shareholders
1,359.94 1,401.36
Weighted average number of equity shares
used in computing basic earnings per share 1,000,000 1,000,000
Basic and Diluted earnings per share (Rs.)
(Face value of Rs.10 per share)
135.99 140.14
Note 26 Previous years gures
Previous years gures have been regrouped/reclassied wherever necessary to
For and on behalf of the Board of Directors
P. N. Shah Ketan Doshi
Chairman CEO & Wholetime Director
Ajay Choksey S. Venkatraman
Director Director
Pallavi Ogale
Company Secretary
Place : Mumbai
Date : 29
th
April, 2014.
MAHINDRA TRUCKS AND BUSES LIMITED
(FORMERLY KNOWN AS MAHINDRA NAVISTAR AUTOMOTIVES LIMITED)
41
Operations
During the Financial year ended 31
st
March, 2014, total spare
parts income increased to Rs. 67.98 Crores from 57.74 Crores,
in nancial year ended 31st March, 2013, reecting an increase
of 17.73%.
Your company is amongst industry best, which has achieved
rst ll rates (FFR) for commercial as well as vehicle off road
(VOR) orders by executing delivery orders timely, leading
to reduction in retention of vehicles at authorized dealer
workshops.
Dividend
Your Directors have recommended a dividend of Re. 0.01
(Paise one) per Equity Share of Re. 0.20 (Paise Twenty) for
the nancial year ended 31
st
March, 2014.
Capital
The authorized share capital of the Company is Rs.1500 crore
divided into 7500 crore equity shares of Re.0.20 (Paise Twenty)
each.
The paid up share capital of your Company has been reduced
from Rs.1147,92,56,000/- to Rs. 22,95,85,120/- pursuant to the
scheme of demerger.
Change of Name
The name of the Company has been changed from Mahindra
Navistar Automotives Limited to Mahindra Trucks and Buses
Limited with effect from 4
th
June, 2013.
Scheme of Arrangement for Demerger
Your Directors, subject to securing necessary approvals,
decided to demerge and transfer, through a Scheme of
Arrangement for Demerger (the Scheme), its truck business
with Mahindra and Mahindra Limited (name of the Transferee
Company) pursuant to the provisions of Sections 391 to 394
of the Companies Act, 1956. The Scheme was thereafter
approved by the shareholders and creditors of the Company
as also those of Mahindra and Mahindra Limited.
The Honble High Court of Judicature at Mumbai, sanctioned
the Scheme in the month of March, 2014. The Appointed Date
under the Scheme was 1
st
April, 2013.
Board Meetings
The Board Meetings are conducted at least once every quarter
to inter alia review the performance, the nancial status and
matters relating to the operations of the Company. Seven
Board Meetings were held during the last nancial year. These
were well attended.
Directors
Mr Anand Mahindra has ceased to be Director of the Company
with effect from 9
th
April, 2014. Dr. Pawan Goenka and
Mr. Hemant Luthra have ceased to be Directors of the Company
with effect from 30
th
April, 2014. Mr. Bharat Moossaddee retires
by rotation and being eligible offers himself for reappointment.
The Company has reappointed Mr. Nalin Mehta as Managing
Director of the Company w.e.f. 1
st
April, 2014. Mr. Rajan
Wadhera appointed as the Chairman of the Company w.e.f
30
th
April 2014.
Your Directors present their twentieth report together with the audited accounts of your Company for the year ended 31
st
March,
2014.
Financial Results
(Rupees in lakh)
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Net Income ................................................................................................................. 6,797.66 114,872.56
Prot/(Loss) before Depreciation, Amortisation, Interest, taxation ........................... 591.38 (24,653.87)
Depreciation & Amortisation ...................................................................................... 2.78 8,239.46
Prot/(Loss) before Interest, taxation ........................................................................ 588.60 (32,893.33)
Interest ....................................................................................................................... 3.14 3,620.35
Prot/(Loss)before taxation ....................................................................................... 585.46 (36,513.68)
Provision for taxation for the year .............................................................................
Current Tax ............................................................................................................. 189.85
Fringe Benet Tax ...................................................................................................
Prot/(Loss) for the year after taxation ..................................................................... 395.61 (36,513.68)
Balance of Prot/(Loss) from earlier years ............................................................... Nil (55,505.71)
Balance carried forward ............................................................................................ 261.31 (92,019.39)
Proposed Dividend .................................................................................................... 114.79
Tax on proposed Dividend ........................................................................................ 19.51
42
Composition of the Board
The Board presently has four Directors. The Directors have vast
experience in matters related to engineering, manufacturing,
nance and general corporate management, which is of
immense benet to the Company.
Audit Committee
Company was reconstituted on 30
th
April 2014 and it presently
comprises of Mr. S. Durgashankar, Mr. Rajan Wadhera and Mr.
Bharat Moossaddee .
In view of the applicability of Section 177 of the Companies Act,
2013 read with Companies (Meetings of Board and its Powers)
Rules, 2014, the terms of reference of the Audit Committee
were revised and aligned with effect from 27
th
March, 2014 in
accordance with the aforesaid provisions of the Companies
Act, 2013.
In view of the applicability of Section 178 of the Companies
Act, 2013 read with Companies (Meetings of Board and its
Powers) Rules, 2014, the nomenclature of the Remuneration
Committee was changed to Nomination and Remuneration
Committee and the terms of reference of the Nomination
and Remuneration Committee were revised and aligned with
effect from 27
th
March, 2014 in accordance with the aforesaid
provisions of the Companies Act, 2013.
The Nomination and Remuneration Committee of the Board of
Directors of the Company was reconstituted on 30
th
April 2014
and it presently comprises of Mr. Rajan Wadhera and Mr. S.
Durgashankar.
Corporate Social Responsibility (CSR) Committee
In view of the applicability of the provisions of Section 135
of the Companies Act, 2013 read with Companies (Corporate
Social Responsibility Policy) Rules, 2014, the Corporate Social
Responsibility (CSR) Committee was constituted on 27
th

March 2014. The CSR Committee of the Board of Directors
of the Company comprises of Mr. Rajan Wadhera, Mr. Bharat
Moossaddee and Mr. Nalin Mehta.
your Directors, based on the representation received from
the Operating Management, and after due enquiry, conrm
that:
consulted the Statutory Auditors and these policies have
been applied consistently and reasonable and prudent
as at 31
st
(iii) proper and sufcient care has been taken for the
concern basis.
Codes of Conduct
The Board of Directors of the Company had adopted separate
Codes of Conduct for Corporate Governance (the Codes)
for its Directors and Senior Management Personnel and
Employees enunciating the underlying principles governing
the conduct of its business and seeking to reiterate the
always be an integral part of its ethos.
The Company has for the year under review, received
declarations under the Codes from the Board Members and
the Senior Management Personnel and Employees of the
Company afrming compliance with the respective Codes.
Auditors
M/s. Deloitte Haskins and Sells, retires as Auditors of the
Company at the forthcoming Annual General Meeting and
have expressed their willingness for re-appointment.
The Board of Directors, based on the recommendation of
the Audit Committee, recommended the appointment of
M/s Deloitte Haskins and Sells as Statutory Auditors of the
Company to hold ofce from the conclusion of ensuing Annual
General Meeting of the Company till the conclusion of the
next Annual General Meeting subject to the approval of the
members of the Company. The Company has received letter
from M/s Deloitte Haskins and Sells giving their consent to act
as Auditors of the Company and have conrmed that they are
eligible and qualied to be appointed as Auditors.
Cost Auditors
In view of demerger of the Truck Business of the Company
with Mahindra & Mahindra Limited w.e.f 1st April, 2013, the
Cost Audit requirement is not applicable to the Company.
The Company has not accepted any deposits from the public
The Company has not made any loans/advances which
Company pursuant to Clause 32 of the Listing Agreement with
the parent company Mahindra & Mahindra Limited.
Safety, Health and Environmental Performance
The Companys commitment towards safety, health and
environment is being continuously enhanced by its various
initiatives on safety awareness, health surveys of employees,
recycling of waste, etc. The requirements relating to various
environmental legislations and environment protection have
been duly complied with by your Company.
43
The Company has rolled out a Policy for prevention of
review no complaints were received by the said Committee.
Conservation of Energy and Technology Absorption and
Foreign Exchange Earnings and Outgo
required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988 is given in
Particulars of employees as required under section 217(2A)
of the Companies Act, 1956 and Rules framed thereunder
Your Company had no employee, who was employed
throughout the Financial Year and was in receipt of
remuneration of not less than Rs. 60,00,000 per annum during
the year ended 31
st
March, 2014 or was employed for a part of
Financial Year and was in receipt of remuneration of not less
than Rs. 5,00,000 per month.
Acknowledgement
Your Directors would like to express their grateful appreciation
for assistance and cooperation received from Banks,
Employees, Vendors, suppliers and Members during the year
under review.
Rajan Wadhera
Chairman
Mumbai, 30
th
April, 2014
44
(a) Energy conservation measures taken:
The operations of the company are not energy
intensive, as it does not have its own manufacturing
facility, However, the company constantly reviews the
consumption of electricity and its rationalization.
(b) Additional investments and proposals, if any, being
implemented for reduction of consumption of energy:
Nil
(c) Impact of the measures taken/to be taken at (a) &
(b) above for reduction of energy consumption and
consequent impact on the cost of production of
goods: Not Applicable
(d) Total energy consumption and energy consumption
per unit of production as per Form A of the Annexure
to the Rules in respect of Industries specied in the
Schedule: Not Applicable
ST
MARCH, 2014.
Research & Development
1. Areas in which R&D is carried out : None
2. Benets derived as a result of the above efforts : NA
3. Future plan of action : NA
6. Imported Technology for the last 5 years: None
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
(Rs. in lakh)
Financial Year
2013-14
Financial Year
2012-13
Total Foreign Exchange earned Nil 313.82
Total Foreign Exchange used Nil 348.86
Rajan Wadhera
Chairman
Mumbai, 30
th
April, 2014
45
TO THE MEMBERS OF
MAHINDRA TRUCKS AND BUSES LIMITED (formerly known
as MAHINDRA NAVISTAR AUTOMOTIVES LIMITED)(the
Company), which comprise the Balance Sheet as at 31
st

March, 2014, the Statement of Prot and Loss and the Cash
Flow Statement for the year then ended, and a summary of the
signicant accounting policies and other explanatory information.
notied under the Companies Act, 1956 (the Act) (which
dated 13
th
require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about
whether the nancial statements are free from material
misstatement.
INDEPENDENT AUDITORS REPORT
Opinion
st
March, 2014;
5 of the Order.
th
st
st
of the Act.
Nilesh Shah
Partner
Mumbai, 30
th
April, 2014 (Membership No. 49660)
46
(Referred to in paragraph 1 under Report on Other Legal
and Regulatory Requirements section of our report of
even date)
Having regard to the nature of the Companys business/
activities/results during the year, clauses (xi), (xii), (xiii), (xiv),
(xv), (xvi), (xviii), (xix) and (xx) are not applicable to the
Company.
(i) In respect of its xed assets:
and situation of xed assets.
(b) The xed assets were physically veried during
the year by the Management in accordance with
a regular programme of verication which, in our
opinion, provides for physical verication of all the
xed assets at reasonable intervals. According to the
information and explanation given to us, no material
discrepancies were noticed in respect of xed assets
veried during the year.
(c) The Company has transferred a substantial part of
xed assets as on 1
st
April 2013 pursuant to the
Scheme of Arrangement under Sections 391 to
394 of the Companies Act, 1956 due to demerger
of its Trucks Undertaking. Such transfer has, in our
opinion, not affected the going concern status of the
Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories of the Company
including those lying with third parties were physically
veried during the year by the management at
reasonable intervals and substantially conrmed by
third parties.
verication of inventory followed by the management
verication.
(iii) The Company has neither granted nor taken any loans,
secured or unsecured to / from companies, rms or other
parties covered in the Register maintained under Section
301 of the Companies Act, 1956.
explanations given to us, there is an adequate internal
control system commensurate with the size of the
purchases of inventory and xed assets and the sale
of goods. During the course of our audit, we have not
observed any major weakness in such internal control
system.
(v) To the best of our knowledge and belief and according
to the information and explanations given to us, no
contracts or arrangements referred to in Section 301 of
the Companies Act, 1956 that needed to be entered in
the said Register.
In view of what has been stated above, sub clause (b) of
clause (v) of paragraph 4 of the order is not applicable to
the company for the year.
us, the Company has not accepted any deposit from the
public during the year.
(vii) In our opinion, the Company has an adequate internal
audit system commensurate with the size and the nature
of its business.
(viii) To the best of our knowledge and belief and according to
the information and explanations given to us, the Central
Government has not prescribed the maintenance of cost
records for any of the products of the Company.
(ix) According to the information and explanations given to
us, in respect of statutory dues:
depositing undisputed statutory dues, including
Provident Fund, Employees State Insurance,
Investor Education and Protection Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty,
applicable to it with the appropriate authorities.
respect of Provident Fund, Employees State
Insurance, Investor Education and Protection Fund,
Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material
statutory dues in arrears as at 31
st
March, 2014 for
a period of more than six months from the date they
became payable.
(c) There are no dues of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited as on March
31, 2014 on account of any disputes.
(x) The accumulated losses of the Company at the end of
the nancial year are not more than fty per cent of its net
worth and the Company has incurred cash losses only
during the preceding year but has not incurred any cash
loss during the current nancial year .
47
(xi) In our opinion and according to the information and
explanations given to us, and on an overall examination
of the Balance Sheet of the Company, we report that
funds raised on short-term basis have, prima facie, not
been used during the year for long-term investment.
(xii) To the best of our knowledge and according to the
information and explanations given to us, no fraud by the
Company and no material fraud on the Company has
Nilesh Shah
Partner
Mumbai, 30
th
48
ST
MARCH, 2014
(Rupees Lakhs)
31
st
March, 2014
As at
31
st
March, 2013
(1) Shareholders funds
(a) Share capital 4 2,295.85 114,792.56
(b) Reserves and surplus 5 261.31 (87,102.66)
2,557.16 27,689.90
(2) Non-current liabilities
(a) Long-term borrowings 6 20,357.14
(b) Long-term provisions 7 19.38 2,102.32
19.38 22,459.46
(3) Current liabilities
(a) Trade payables 8 1,932.25 24,826.35
(b) Other current liabilities 9 147.24 7,765.02
(c) Short-term provisions 10 157.39 4,830.86
2,236.88 37,422.23
TOTAL .............................................................................................................. 4,813.42 87,571.59
II. ASSETS
(1) Non-current assets
(a) Fixed assets
(i) Tangible assets 11A 17.18 40,313.24
(ii) Intangible assets 11B 9,538.56
(iii) Capital work-in-progress 11C 238.16
(iv) Intangible assets under development 11D 1,867.81
(b) Long-term loans and advances 12 99.68 3,860.62
(c) Deferred tax assets (Net) 13 11.32
128.18 55,818.39
(2) Current assets
(a) Current investments 14 500.00
(b) Inventories 15 1,847.86 12,963.64
(c) Trade receivables 16 2,049.09 3,718.48
(d) Cash and bank balance 17 694.61 6,791.83
(e) Short-term loans and advances 18 93.68 7,779.25
4,685.24 31,753.20
TOTAL .............................................................................................................. 4,813.42 87,571.59
See accompanying notes forming part of the nancial statements 1-48
In terms of our report attached For and on behalf of the Board
For Deloitte Haskins & Sells
Nalin Mehta
Directors
Bharat Moossaddee
Rajan Wadhera
Nilesh Shah Rasesh Joshi S. Durgashankar
Partner CFO
Place: Mumbai Place: Mumbai
Date: 30
th
April, 2014 Date: 30
th
April, 2014
49
Nalin Mehta
Directors
Bharat Moossaddee
Rajan Wadhera
Partner CFO
Date: 30
th
th
April, 2014
ST
MARCH, 2014
(Rupees Lakhs)
Particulars Note No. For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
I. Revenue from operations (Gross) 19 7,817.82 122,748.39
Less: Excise duty (1,023.46) (8,342.23)
Revenue from operations (Net) 6,794.36 114,406.16
II. Other income 20 3.30 466.40
III. Total Revenue (I + II) 6,797.66 114,872.56
IV. Expenses:
Cost of materials consumed 21 45,566.77
Purchases of Stock-in-Trade 22 4,943.01 63,747.22
(Increase)/Decrease in Stock of Finished Goods, Work-in-Progress and
Stock in Trade 23 (257.05) (150.92)
Excise Duty (Note 35) (17.20)
Employee benets expense 24 211.92 7,135.02
Finance costs 25 3.14 3,620.35
Depreciation and amortization expense (Note 11) 2.78 8,239.46
Other expenses 26 1,308.40 23,286.84
Total expenses 6,212.20 151,427.54
Less : Cost of Manufactured Products Capitalised 41.30
6,212.20 151,386.24
V. Prot/(Loss) before tax (III- IV) 585.46 (36,513.68)
VI. Tax expense:
(1) Current tax 201.17
(2) Deferred tax (Credit) (11.32)
189.85
VII. Prot/(Loss) for the year (V-VI) 395.61 (36,513.68)
VIII. Earnings per equity share
(Nominal value per share Rs. 0.20 (Previous year Rs. 10 each))
(1) Basic 0.03 (4.49)
(2) Diluted 0.03 (4.49)
See accompanying notes forming part of the nancial statements 1-48
50
ST
MARCH, 2014
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
For the
year ended
31
st
March, 2013
Rupees Lakhs Rupees Lakhs Rupees Lakhs Rupees Lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net Prot/(Loss) before taxation 585.46 (36,513.68)
Adjustments for:-
Depreciation / Amortisation 2.78 8,239.46
Interest Income (210.57)
Finance Costs 3.14 3,620.35
Provision for Doubtful Debts 12.60 (35.38)
Provision for contingencies (Net) 583.96
Provision for warranty 2,660.17
Prot on sale of Investments (Net) Current (248.67)
Loss on sale of Fixed Assets (Net) 250.87
18.52 14,860.19
Operating Prot/(Loss) before Working capital changes 603.98 (21,653.49)
Changes in Working Capital:
Trade and other receivables (1,095.97) (3,165.80)
Inventories (257.05) 736.66
Trade payables and provisions 1,197.17 (1,459.53)
(155.85) (3,888.67)
Cash from/(used in) operations 448.13 (25,542.16)
Income taxes paid (271.30) (40.41)
NET CASH FROM/(USED IN) OPERATING
ACTIVITIES (A) 176.83 (25,582.57)
B. CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditure on tangible assets (16.17) (2,228.22)
Proceeds from sale of Fixed Assets 28.48
Capital expenditure for Intangible Assets (439.44)
Fixed deposit placed (29.85)
Purchase of investments Current (18,035.11)
Sale of investments Current 21,781.95
Interest received 179.48
NET CASH (USED IN)/FROM USED IN INVESTING
ACTIVITIES (B) (16.17) 1,257.29
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from the issue of equity shares
(Net of expenses) 34,665.30
Proceeds from long term borrowings
Repayment of long term borrowings (4,285.72)
Repayment of short term borrowings
Finance Costs (3,620.35)
51
ST
MARCH 2014 (Contd.)
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
For the
year ended
31
st
March, 2013
Rupees Lakhs Rupees Lakhs Rupees Lakhs Rupees Lakhs
NET CASH FLOW (USED IN)/FROM FINANCING
ACTIVITIES (C) 26,759.23
NET INCREASE IN CASH AND CASH
EQUIVALENTS (A + B + C) 160.66 2,433.95
Cash and Cash equivalents at the beginning
of the year 6,136.57 3,702.62
Less: Transferred in accordance with the scheme
of arrangement (Refer Note 3A) (5,602.62)
Cash and Cash equivalents at the beginning
of the year Net 533.95
Cash and Cash equivalents at the end of the year 694.61 6,136.57
Cash and cash equivalents 694.61 6,136.57
Notes:
1. The above Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard 3 Cash
Flow Statement
2. (A) Cash and cash equivalents comprises:
(a) Cash on hand 0.91
(b) Cheques on hand 3,518.29
(c) Balances with banks:
(i) On Current Accounts 694.61 1,516.81
(ii) Fixed Deposits with original maturity
less than 3 months
1,100.56
694.61 6,136.57
(B) Other bank balances 655.26
Total Cash and Bank Balances (Note 17) 694.61 6,791.83
3. Transaction arising out of demerger as per Note 3A is a non-cash transaction not considered in above cash ow workings.
4. Previous years gures have been regrouped/restated wherever necessary.
Nalin Mehta
Directors
Bharat Moossaddee
Rajan Wadhera
Partner CFO
Date: 30
th
th
April, 2014
52
NOTES FORMING PART OF FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS
Mahindra Trucks and Buses Limited is in the business of trading in Spare
Parts and accessories. It deals in parts required for the range of commercial
vehicles manufactured and sold by its Holding Company Mahindra &
Mahindra Limited. The Company undertakes procurement, warehousing
management, logistics and sale of spare parts and accessories. It has
a network of dealers spread across India to ensure timely availability of
spare parts to commercial vehicle customers.
The Company had its trucks undertaking which was in the business of
designing, developing, marketing and distribution of Light Commercial
vehicles and Heavy commercial vehicles.
As per the scheme of arrangement approved by the Honorable High Court
of Judicature at Bombay, the Trucks undertaking has been demerged into
Mahindra & Mahindra Limited with effect from 1
st
April, 2013. (Refer Note 3A)
NOTE 2 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(A) Basis of Accounting:
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notied under
Section 211(3C) of the Companies Act, 1956 (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 (the
2013 Act) in terms of General Circular 15/2013 dated 13 September, 2013
of the Ministry of Corporate Affairs) and the relevant provisions of the Act
1956 / 2013 as applicable.
The nancial statements have been prepared under the historical cost
convention in accordance with the accounting principles generally
accepted in India.
(B) Use of Estimates:
The presentation of nancial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the nancial statements and the reported amount
of revenues and expenses during the reporting period. Difference between
the actual results and the estimates are recognised in the period in which
the results are known/materialized.
(C) Tangible Assets:
(a) Fixed Assets are carried at cost less depreciation.
(b) Depreciation on assets is calculated on Straight Line Method over
their estimated useful lives or, where ever specied, lives based on
the rates in the manner prescribed in Schedule XIV to the Companies
Act, 1956, whichever is lower, except for:
(i) Vehicles capitalised for Research and Development - 33.33% of cost.
(ii) Cars and Vehicles other than Research and Development
vehicles 15% of cost.
(D) Intangible Assets:
All Intangible Assets are initially measured at cost and amortised so as to
reect the pattern in which the assets economic benets are consumed.
(i) Technical Know-how:
The expenditure incurred is amortised equally over the estimated
period of benet, not exceeding seventy two months commencing
from the month of purchase of such Know-how.
(ii) Non Compete:
Non compete payments are amortised equally over the estimated
period of benet, not exceeding one hundred and twenty months
from the month of incurrence.
(iii) Congeries of Rights:
Payment for Congeries of Rights is amortised equally over the
estimated period of benet, not exceeding one hundred and twenty
months from the month of incurrence.
(iv) Software Expenditure:
The expenditure incurred is amortised over thirty six months equally
commencing from the month in which the expenditure is incurred.
(v) Development Expenditure:
The expenditure incurred on technical services and other project/
product related expenses are amortised over the estimated period of
benet, not exceeding sixty months.
Of the above only development expenditure results in internally generated
assets.
(E) Impairment of Assets:
The carrying value of assets/cash generating units at each balance sheet
date are reviewed for impairment. If any indication of impairment exists,
the recoverable amount of such assets is estimated and impairment
is recognised, if the carrying amount of these assets exceeds their
recoverable amount. The recoverable amount is the greater of the
net selling price and their value in use. Value in use is arrived at by
discounting the future cash ows to their present value based on an
appropriate discount factor. When there is indication that an impairment
loss recognised for an asset in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment loss is recognised
in the Statement of Prot and Loss.
(F) Investments:
Non current investments are valued at cost. However, provision for
diminution in value is made to recognise a decline other than temporary
in the value of investments. Current investments are valued at the lower of
cost and fair value, determined by category of investment.
(G) Inventories:
Raw materials and bought-out components/spares are valued at lower of
cost or net realisable value. Cost is determined on the basis of weighted
average method.
components and work in progress are carried at cost or net realisable
value whichever is lower. Excise duty is included in the value of nished
goods inventory.
(H) Foreign Exchange Transactions:
monetary items at the end of the year is recognised as income or expense,
as the case may be.
(I) Revenue Recognition:
Sales of products and services are recognised when the products are dispatched
or services rendered. Dividend from investments is recognised in the Statement
of Prot and Loss when the right to receive payment is established.
(J) Employee Benets:
(i) Dened Contribution Plan
The Companys contributions paid/payable during the year to Provident
Fund, Superannuation Fund are recognised in the Statement Prot and
Loss as an expense based on amount of contribution required to be
made and when services are rendered by the employees.
(ii) Dened Benet Plan/ Compensated absences:
The Companys liability towards gratuity and compensated absences
is determined using the projected unit credit method which considers
each period of service as giving rights to an additional unit of benet
entitlement and measure each unit separately to build up the nal
obligation. Past services are recognised on straight line basis over
the average period until the benets become vested. Actuarial gains
and losses are recognised immediately in the Statement of Prot
and Loss as income or expense. Obligation is measured at the
present value of estimated future cash ow using discounted rate
i.e. determined by reference to the market yield at the Balance Sheet
date on Government Bonds where the currency and terms of the
Government Bonds are consistent with the currency and estimated
terms of the dened benet obligation.
53
(K) 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 time of sale on
the basis of technical estimate. The estimates for accounting of warranties
are reviewed and revisions are made as required.
(L) 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 to consideration
of prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred tax
assets arising on account of unabsorbed depreciation or carry forward of
tax losses are recognised only to the extent that there is virtual certainty
supported by convincing evidence that sufcient future tax income will be
available against which such deferred tax assets can be realised.
(M) Segment Reporting:
The Company has single reportable business segment namely Automotive
vehicles and related spare parts.
(N) Leases:
The Companys signicant leasing arrangements are in respect of operating
lease for premises (residential and ofce). These leasing arrangements,
which are not non-cancellable, range between (11 months and four years)
and are usually renewable by mutual consent on agreed terms. In respect
of the Companys other leasing arrangement (ofce premises) the leasing
arrangements are non cancellable which range between 3 to 4 years and
are not renewable. The lease rental charges are subject to an escalation of
5% at the end of each 12 months. The lease rentals payable are charged
on a straight line basis over the lease term.
(O) Borrowing Costs:
All borrowings cost are charged to the Statement of Prot and Loss except,
Borrowing cost that are attributable to the acquisition or construction of
qualifying assets that necessarily take a substantial period of time to get ready
for their intended use, which are capitalized as part of the cost of such assets.
(P) Government Grants and Other Incentives:
The Company, directly or indirectly through a consortium of Mahindra
Group Companies, is entitled to various incentives from government
authorities in respect of manufacturing units located in developing regions.
The Company accounts for its entitlement as income on accrual basis in
NOTE 3A - NOTE ON DEMERGER
The Board of directors of Mahindra Trucks and Buses Limited (the Company) in
their meeting held on 13th August, 2013 approved the Scheme of Arrangement
(the Scheme) between the Company and Mahindra and Mahindra Limited
(the Holding Company) and their respective shareholders and creditors under
section 391 to 394 read with section 78 and 100 to 104 of the Companies act,
1956, to demerge the Trucks undertaking of the Company (Demerged Business)
into the Holding Company with effect from 1
st
April, 2013 (appointed date).
The Honourable High Court of judicature at Bombay approved the scheme
vide its order dated 7th March, 2014. The said scheme became effective from
30
th
March, 2014 (Effective Date) on ling the certied copy of the court order
with the registrar of companies, Maharashtra.
The following accounting treatment has been given effect to in these accounts,
in accordance with the scheme:
(a) The issued, subscribed and paid up equity share capital of the Company
has been reorganised by reducing the face value and paid up equity share
capital of Rs. 10 per share to Rs. 0.20 per share, consequent to which
the Companys aggregate book losses has been reduced to NIL and the
Equity share capital consists of 1,147,925,600 Equity shares of Rs. 10 each
reduced to Rs. 2,295.85 Lakhs.
(b) The Companys aggregate book losses of Rs. 92,019.39 Lakhs as on
31
st
March, 2013 has been adjusted against the securities premium account
as on 31
st
March, 2013 aggregating Rs. 4,916.73 Lakhs and balance of
Rs. 87,102.66 Lakhs against the reorganisation of issued, subscribed and
paid-up equity share capital of the Company by reducing face value and
paid up value of equity share capital of Rs. 10 each to Rs. 0.20 each.
(c) The Excess of assets over liabilities of Rs. 25,394.05 Lakhs as on 31st March,
2013 has been adjusted against the reorganisation of issued, subscribed and
paid-up equity share capital of the Company by reducing face value and paid
up value of equity share capital of Rs. 10 each to Rs. 0.20 each.
The net difference between the liabilities and assets is given below:-
Rupees Lakhs
Particulars
As on
appointed date
Assets 84,354.08
Less: Liabilities 58,960.03
Net 25,394.05
In view of the aforesaid demerger with effect from 1
st
April, 2013, the
gures for the current year are not strictly comparable with those of the
previous year.
NOTE 3B - DISCONTINUING OPERATIONS
The Trucks undertaking has been classied as Discontinuing Operations in nancial statements of the Company. The following table summarises the nancial
information for discontinuing operations.
(Rupees Lakhs)
Particulars Continuing Operations Discontinuing Operations Total
Spares Business Trucks Undertaking
31
st
March
2014
31
st
March
2013
31
st
March
2014
31
st
March
2013
31
st
March
2014
31
st
March
2013
I. Assets
Non-Current Assets 128.18 3.79 55,814.60 128.18 55,818.39
Current Assets 4,685.24 3,213.72 28,539.48 4,685.24 31,753.20
Total Assets 4,813.42 3,217.51 84,354.08 4,813.42 87,571.59
II. Liabilities
Non-Current Liabilities 19.38 13.00 22,446.46 19.38 22,459.46
Current Liabilities 2,236.88 908.66 36,513.57 2,236.88 37,422.23
Total Liabilities 2,256.26 921.66 58,960.03 2,256.26 59,881.69
III. Revenue and Expense
Revenue
Revenue from operations (Gross) 7,817.82 6,648.70 116,099.69 7,817.82 122,748.39
54
(Rupees Lakhs)
Particulars Continuing Operations Discontinuing Operations Total
Spares Business Trucks Undertaking
31
st
March
2014
31
st
March
2013
31
st
March
2014
31
st
March
2013
31
st
March
2014
31
st
March
2013
Less: Excise Duty (1,023.46) (874.92) (7,467.31) (1,023.46) (8,342.23)
Revenue from operations (Net) 6,794.36 5,773.78 108,632.38 6,794.36 114,406.16
Other Income 3.30 466.40 3.30 466.40
Total Revenue 6,797.66 5,773.78 109,098.78 6,797.66 114,872.56
Expense
Cost of materials consumed 45,566.77 45,566.77
Purchases of Stock-in-Trade 4,943.01 3,796.32 59,950.90 4,943.01 63,747.22
(Increase)/Decrease in stock of nished goods,
work-in-progress and stock in trade
(257.05) (125.44) (25.48) (257.05) (150.92)
Excise Duty (17.20) (17.20)
Employee benet Expense 211.92 197.85 6,937.17 211.92 7,135.02
Finance Costs 3.14 1.38 3,618.97 3.14 3,620.35
Depreciation and Amortisation Expense 2.78 0.99 8,238.47 2.78 8,239.46
Other Expenses 1,308.40 1,166.36 22,120.48 1,308.40 23,286.84
Less: Cost of Manufactured Products Capitalised (41.30) (41.30)
Total Expenses 6,212.20 5,037.46 146,348.78 6,212.20 151,386.24
Prot/(Loss) before tax 585.46 736.32 (37,250.00) 585.46 (36,513.68)
Less: Tax Expense
(1) Current Tax 201.17 201.17
(2) Deferred Tax (Credit) (11.32) (11.32)
Prot/(Loss) for the year 395.61 736.32 (37,250.00) 395.61 (36,513.68)
IV. Cash Flows:
Net Cash from/(used in) Operating activities 176.83 (76.06) (25,506.52) 176.83 (25,582.58)
Net Cash from/(used in) Investing activities (16.17) 1,256.74 (16.17) 1,256.74
Net Cash from/(used in) Financing activities 26,759.23 26,759.23
NOTE 4 - SHARE CAPITAL
As at 31
st
st
March, 2013
Share Capital: No. of Shares Rupees Lakhs No. of Shares Rupees Lakhs
(A) Authorised:
Equity Shares of Rs. 0.20 each (Previous year Rs. 10 each) 75,000,000,000 150,000.00 1,500,000,000 150,000.00
Total 75,000,000,000 150,000.00 1,500,000,000 150,000.00
(B) Issued, Subscribed and Fully paid up:
Equity Shares of Rs. 0.20 each (Previous year Rs. 10 each) 1,147,925,600 2,295.85 1,147,925,600 114,792.56
Total 1,147,925,600 2,295.85 1,147,925,600 114,792.56
Notes:
(a) Reconciliation of the shares and amount outstanding at the beginning and at the end of the year:
Opening Balance Fresh Issue Reorganised # Closing Balance
Equity Shares
Number of Shares 1,147,925,600 1,147,925,600 1,147,925,600
Face Value Rs per share 10.00 0.20
Amount Rupees in Lakhs 114,792.56 112,496.71 2,295.85
# The issued, subscribed and paid up equity share capital of the Company has been reorganised by reducing the face value and paid up value of equity share capital
of Rs. 10 each to Rs. 0.20 each, consequent to which the Companys equity share capital got revised to 1,147,925,600 equity shares of Rs. 0.20 each aggregating
to Rs. 2295.85 Lakhs.
(b) Terms/rights attached to equity shares:
The Ordinary (Equity) shares of the Company rank pari-passu in all respects including voting rights and entitlement to dividend.
55
NOTE 5 - RESERVES AND SURPLUS
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Rupees
Lakhs
Securities Premium Account:
Opening Balance 4,916.73 4,951.43
Less: Adjusted in accordance with
scheme of arrangement (Refer Note 3A) (4,916.73) (34.70)
Closing Balance 4,916.73
Surplus/(Decit) in the Statement of
Prot and Loss
Opening balance (92,019.39) (55,505.71)
Less: Adjusted in accordance with
scheme of arrangement (Refer Note 3A) 92,019.39
Add: Prot/(Loss) for the year 395.61 (36,513.68)
395.61 (92,019.39)
Proposed Dividend
(Rs. 0.01 per share) 114.79
Tax on Proposed Dividend 19.51
Closing Balance 261.31
Total 261.31 (87,102.66)
NOTE 6 - LONG TERM BORROWINGS
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Term Loans
Secured
from Banks 20,357.14
Total 20,357.14
(a) Details of terms of repayment and security provided in respect of the
secured long-term borrowings:
Nature of
facility
Terms of
repayment
Term loans from Banks amounting to Rs. NIL
Lakhs ( 2013: Rs. 24,642.86 Lakhs) is secured
by way of 1st ranking pari-passu charge on
companys immovable and movable properties
both present & future relating to MHCV project
as well as 2nd charge on current assets relating
to MHCV project in terms of Rupee Loan Facility
Agreement executed by the Company.
Long term loan 28 equal
quarterly
installments of
Rs. 1,071.43
lakhs each,
starting from
31
st
March,
2012
(b) For the current maturities of long-term borrowings, refer note no. 9 (a)
other current liabilities.
NOTE 7 - LONG- TERM PROVISIONS
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
a. Provision for Employee Benets:
Compensated absences 9.28 439.01
Gratuity 10.10 396.29
b. Provision for Others:
Warranty (Note 34 (a)) 1,267.02
Total 19.38 2,102.32
NOTE 8 - TRADE PAYABLES
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Trade payables
Acceptances 12.94 173.57
Trade Payables - Micro, Small & Medium
Enterprises (Note 43) 16.24 289.16
Trade Payables - Others 1,903.07 24,363.62
Total 1,932.25 24,826.35
NOTE 9 - OTHER CURRENT LIABILITIES
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(a) Current maturities of long-term borrowings* 4,285.71
(b) Other Payables:
(i) Statutory remittances (Contributions to
PF and other funds, Withholding Taxes,
Excise Duty, VAT, Service Tax, etc.) 13.13 1,378.65
(ii) Payables on purchase of xed assets 1,030.40
(iii) Trade Deposits received 306.45
(iv) Advance from Customers 134.11 763.81
Total 147.24 7,765.02
*Refer item (a) in note 6 - Long Term Borrowings for details of security
(c) Shares held by holding company
As at 31
st
st
March, 2013
No. of Shares Rupees Lakhs No. of Shares Rupees Lakhs
Equity Shares are held by Mahindra & Mahindra Ltd., Holding
Company and its nominees 1,147,925,600 2,295.85 1,147,925,600 114,792.56
(d) Details of shares held by each shareholder holding more than
5% shares, held by holding & their subsidiary:
As at 31
st
st
March, 2013
Equity Shares: No. of Shares % of Holding Rupees in Lakhs No. of Shares % of Holding Rupees in Lakhs
Mahindra & Mahindra Ltd. (Holding Company)
and its nominees 1,147,925,600 100% 2,295.85 1,147,925,600 100% 114,792.56
56
NOTE 10 - SHORT-TERM PROVISIONS
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
a. Provision for Employee benets:
Gratuity 0.35
Performance pay 21.69 917.97
b. Provision-Others:
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Provision for wealth tax 7.71
Warranty (Note 34 (a)) 1,274.87
Proposed Dividend 114.79
Tax on proposed dividend 19.51
Disputed excise duty (Note 34 (b)) 816.34
Provision for Contingencies (Note 34 (c)) 1,380.89
Total 157.39 4,830.86
NOTE 11 - FIXED ASSETS Rupees Lakhs
Gross Block Accumulated Depreciation/Amortization Net Block
Description of Assets
Balance as
at 1
st
April,
2013
Additions Disposals Adjustment
on account
of Demerger
Balance
as at
31
st
March,
2014
Balance as
at 1
st
April,
2013
Deprecation/
Amortisation
expense for
the year
Eliminated
on disposal
of assets
Adjustment
on account
of Demerger
Balance
as at
31
st
March,
2014
Balance
as at
31
st
March,
2014
Balance
as at
31
st
March,
2013
A : Tangible Assets
Buildings 65.63 65.63 2.76 2.76 62.87
(65.63) (65.63) (1.69) (1.07) (1.69)
Plant and Equipment 47,928.49 47,928.49 9,240.11 9,240.11 38,688.38
(45,889.96) (2,106.89) (68.36) (47,928.49) (5,817.73) (3,469.66) (47.28) (5,817.73)
Furniture and Fittings 382.81 382.81 91.70 91.70 291.11
(373.45) (18.56) (9.20) (382.81) (70.81) (23.54) (2.65) (70.81)
Vehicles 1,122.45 14.03 1,122.45 14.03 321.61 1.42 321.61 1.42 12.61 800.84
(787.73) (434.74) (100.02) (1,122.45) (233.01) (145.39) (56.79) (233.01)
Ofce Equipments 170.63 170.63 33.87 33.87 136.76
(174.03) (4.26) (7.66) (170.63) (27.71) (7.82) (1.66) (27.71)
Computers 932.52 2.14 925.65 9.01 599.24 1.36 596.16 4.44 4.57 333.28
(847.57) (87.11) (2.16) (932.52) (471.35) (129.59) (1.70) (471.35)
Sub Total A 50,602.53 16.17 50,595.66 23.04 10,289.29 2.78 10,286.21 5.86 17.18 40,313.24
(48,138.37) (2,651.56) (187.40) (50,602.53) (6,622.30) (3,777.07) (110.08) (6,622.30)
B : Intangible Assets
1. Internally Generated
Development Expenditure 19,800.44 19,800.44 11,378.20 11,378.20 8,422.24
(20,022.27) (56.18) (278.01) (19,800.44) (7,435.25) (3,942.95) (7,435.25)
2. Others
Congeries of Rights 2,860.00 2,860.00 2,145.00 2,145.00 715.00
(2,860.00) (2,860.00) (1,835.17) (309.83) (1,835.17)
Software Expenditure 1,516.33 1,516.33 1,383.31 1,383.31 133.02
(1,492.65) (23.68) (1,516.33) (1,289.97) (93.34) (1,289.97)
Technical Knowhow 930.00 930.00 930.00 930.00
(930.00) (930.00) (930.00) (930.00)
Non-Compete Fees 1,073.25 1,073.25 804.95 804.95 268.30
(1,073.25) (1,073.25) (688.68) (116.27) (688.68)
Sub Total B 26,180.02 26,180.02 16,641.46 16,641.46 9,538.56
(26,378.17) (79.86) (278.01) (26,180.02) (12,179.07) (4,462.39) (12,179.07)
C : Capital Work In
Progress
238.16 238.16 238.16
Sub Total C 238.16 238.16 238.16

D : Intangible Assets
under Development
1,867.81 1,867.81 1,867.81
(1,230.22) (637.59) (1,867.81)
TOTAL (A+B+C+D) 78,888.52 16.17 78,881.65 23.04 26,930.75 2.78 26,927.67 5.86 17.18 51,957.77
(Previous Year ) (75,746.76) (3,369.01) (465.41) (78,650.36) (18,801.37) (8,239.46) (110.08) (18,801.37)
57
NOTE 12 - LONG TERM LOANS AND ADVANCES
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(Unsecured, considered good unless
otherwise stated)
(a) Capital Advances 522.15
(b) Security deposits 29.55 150.00
(c) Prepaid expenses 26.56
(d) Advance income tax (Net of provision for tax) 70.13 370.59
(e) Balances with government authorities
VAT credit receivable 2,791.32
Total 99.68 3,860.62
NOTE 13 - Deferred Tax Assets (Net)
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Deferred Tax Liability:
(i) On scal allowances on xed assets 0.02 2,873.55
(ii) Development expenses 6,037.57
Total 0.02 8,911.12
Deferred Tax Asset:
(i) On provision for employee benets 7.06 315.79
(ii) Provision for Doubtful Debt 4.28 10.14
(iii) Unabsorbed Depreciation and Unabsorbed
business Loss*
7,126.51
(iv) Others 1,458.68
Total 11.34 8,911.12
Net Deferred Tax Assets 11.32
*Considered to the extent that there are compensating timing differences, the
reversal of which will result in sufcient income against which this can be realised.
NOTE 14 -CURRENT INVESTMENTS
As at 31
st
st
March, 2013
Units Rupees
Lakhs
Units Rupees
Lakhs
Other Current Investments
(Unquoted) (Non-Trade)
(at cost and fair value
whichever is lower)
Investments in Mutual funds 2,128,022 500.00
Total 2,128,022 500.00
As at 31
st
st
March, 2013
Details of Units Face
Value
Per Unit
(Rs)
Numbers Amount
Rupees
Lakhs
Face
Value
Per Unit
(Rs)
Numbers Amount
Rupees
Lakhs
ICICI Prudential STP
Institutional Growth
10 2,128,022 500.00
NOTE 15 - INVENTORIES
(at cost and net realisable value whichever is lower)
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Closing In-Transit Total Closing In-Transit Total
Raw materials 2,299.27 221.07 2,520.34
Work-in-progress 3,258.36 3,258.36
Finished goods 4,569.68 4,569.68
Stock-in-trade 1,831.80 16.06 1,847.86 2,233.36 381.90 2,615.26
Total 1,831.80 16.06 1,847.86 12,360.67 602.97 12,963.64
NOTE 16 -TRADE RECEIVABLES
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Rupees
Lakhs
otherwise stated)
(a) Trade receivables outstanding for
a period exceeding six months
from the date they were due for
payment
Considered Good 277.81 559.86
Considered Doubtful 13.16 29.84
290.97 589.70
(Less) : Provision for Doubtful Debts (13.16) (29.84)
277.81 559.86
(b) Other Trade Receivables:
Considered Good 1,771.28 3,158.62
Considered Doubtful
1,771.28 3,158.62
Total 2,049.09 3,718.48
NOTE 17 - CASH AND BANK BALANCES
As at As at
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(A) Cash and Cash Equivalents:
(a) Cash on hand 0.91
(b) Cheques on hand 3,518.29
(c) Balances with banks
(i) On current accounts 694.61 1,516.81
(ii) Fixed Deposits with original
maturity less than 3 months 1,100.56
694.61 6,136.57
(B) Other bank balances
Fixed Deposits with original maturity greater
than 3 months* 655.26
Total 694.61 6,791.83
* Fixed Deposits with banks which represents margin monies against bank
guarantees amounting to Rs. NIL Lakhs (As at 31st March, 2013 Rs. 543.69
Lakhs) which have an original maturity of more than 12 months.
58
NOTE 18 - SHORT TERM LOANS AND ADVANCES
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Rupees
Lakhs
otherwise stated)
related parties:
(a) Security deposits 163.82
(b) Prepaid expenses 8.37 101.49
(c) Loans and advances others 3.30 163.10
(d) Balances with government
authorities
(i) VAT credit receivable 4,989.60
(ii) Deposit with excise, sales
tax authorities 30.66 40.12
(iii) Service Tax credit receivable 42.22 48.63
72.88 5,078.35
(e) Advances to suppliers 9.13 2,272.49
Total 93.68 7,779.25
NOTE 19 - REVENUE FROM OPERATIONS (GROSS)
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(a) Sale of Products 7,817.82 119,495.33
(b) Sale of Services 1,001.04
(c) Other Operating revenues 2,252.02
Total 7,817.82 122,748.39
Breakup of above balances are as under:
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(i) Sale of products comprises
Manufactured goods
Commercial Vehicles 65,165.02
Total Sale of manufactured goods 65,165.02
Traded goods
Commercial Vehicles & Spares 7,817.82 54,330.31
Total Sale of traded goods 7,817.82 54,330.31
Total Sale of products 7,817.82 119,495.33
(ii) Sale of services comprises
Engineering Services 297.09
Component sourcing services 606.78
Others 97.17
Total Sale of services 1,001.04
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(iii) Other Operating revenues
Government grants and other incentives 1,881.19
Sale of scrap 89.22
Others 281.61
Total Other operating revenues 2,252.02
NOTE 20 - OTHER INCOME
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(a) Net gain on sale of current investments 248.67
(b) Interest Fixed Deposit 210.57
(c) Interest on overdue trade receivables 2.99
(d) Net gain on foreign currency transactions
and translation 0.31 1.19
(e) Interest on Income tax refund 5.97
Total 3.30 466.40
NOTE 21 - COST OF MATERIALS CONSUMED
ended
For the year
ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Opening stock 2,520.34 3,407.92
Add: Purchases 44,679.19
2,520.34 48,087.11
Less: Transferred in accordance with the scheme
of arrangement (Refer Note 3A) (2,520.34)
Less: Closing stock 2,520.34
Cost of material consumed 45,566.77
Material consumed comprises of:
Steel Sheets 563.35
Tyre and Tubes 3,007.06
Paints 43.83
Other items* 41,952.53
Total 45,566.77
* Includes engines, axles, transmission, brake assembly, spring assembly,
steering assembly, batteries, etc.
59
NOTE 22. PURCHASES OF STOCK IN TRADE
Particulars For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Bought out Vehicles 58,872.80
Bought out Spares 4,943.01 4,874.42
Total 4,943.01 63,747.22
NOTE 23 - (INCREASE)/DECREASE IN STOCK OF FINISHED GOODS,
WORK-IN-PROGRESS AND STOCK IN TRADE
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Rupees
Lakhs
(a) Opening stock
Finished goods 4,569.68 5,151.78
Work-in-progress 3,258.36 1,926.15
Stock in Trade 2,615.26 3,214.45
10,443.30 10,292.38
(Less:) Transferred in accordance
with the scheme of arrangement
(Refer Note 3A)
Finished goods 4,569.68
Work-in-progress 3,258.36
Stock in Trade 1,024.44 (8,852.48)
1,590.82
(b) Closing stock
Finished goods 4,569.68
Work-in-progress 3,258.36
Stock in Trade 1,847.87 2,615.26
1,847.87 10,443.30
Total (257.05) (150.92)
NOTE 24 - EMPLOYEE BENEFITS EXPENSE
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(a) Salaries and wages 189.97 6,211.63
(b) Contribution to provident and other funds 10.65 621.62
(c) Staff welfare expenses 11.30 301.77
Total 211.92 7,135.02
NOTE 25 - FINANCE COSTS
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(a) Interest expense
(i) On Borrowings 3,234.53
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(ii) Others
On disputed excise duty (Note 34 (b)) 61.42
On Security Deposits 27.51
On Delayed payments 3.14 296.89
Total 3.14 3,620.35
NOTE 26 - OTHER EXPENSES
For the
year ended
For the
year ended
31
st
March,
2014
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Manufacturing Charges 5.41 2,625.28
Power and fuel 27.80
Rent including lease rental 114.95 931.91
Repairs and maintenance
Machinery 177.47
Others 0.90 256.58
Selling and Distribution Expenses 252.81
Advertisement and Sales Promotion Expenses 7.36 4,151.28
Insurance 8.82 63.39
Rates & Taxes 1.36 66.04
Travelling Expenses 6.39 1,205.36
Freight 381.45 1,426.19
Dealer Incentives 384.28 3,378.30
Provision for warranty (Note 34(a)) 2,660.17
Service Charges 335.66 974.92
Professional Fees 2.31 2,426.94
Provision for doubtful trade receivables 12.60 (35.38)
Auditors remuneration (Note 45) 9.61 18.90
Loss on Fixed Assets sold/scraped (Net) 250.87
Service Coupons 307.20
Research & Development Expenditure 904.36
Provision for contingencies (Net) (Note 34 (c)) 583.96
Total 1,308.40 23,286.84
NOTE 27 -In accordance with the provisions of Section 78 (2) of the Companies
Act, 1956, expenses amounting to Rs. NIL Lakhs (2013: Rs. 34.70 Lakhs) incurred
on issue of shares have been adjusted against the Securities Premium Account.
NOTE 28 -THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:
Recognised appropriately in the Statement of Prot and Loss - net gain - Rs. 0.31 Lakhs
(2013 - net gain - Rs. 1.19 Lakhs).
NOTE 29 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE
ACCOUNTING STANDARD 15 (REVISED) ARE AS UNDER:
The Company makes Provident Fund and Superannuation Fund
contributions to dened contribution plans for qualifying employees.
Under the Schemes, the Company is required to contribute a specied
percentage of the payroll costs to fund the benets. Amount recognised
as an expense in the Statement of Prot and Loss in respect of Dened
Contribution Plans is Rs. 7.35 lakhs (2013 - Rs. 326.22 lakhs).
60
(i) The Dened Benet Plans comprise of Gratuity
(Rupees Lakhs)
Particulars Gratuity
I Changes in the present value of dened
obligation representing reconciliation of
opening and closing balances thereof
are as follows:
As at
31
st
March,
2014
As at
31
st
March,
2013
1 Present Value of Dened Benet Obligation
as on 1st April, 2013 652.38 384.70
Less: Transferred in accordance with
Scheme of Arrangement (Refer Note 3A) (645.23)
Present Value of Dened Benet Obligation
as on 1st April, 2013 (net) 7.15
2 Transfer in of employees
3 Current Service cost 3.35 129.74
4 Interest Cost 0.58 31.77
5 Losses (gains) on Curtailment
6 Liabilities extinguished on settlements
7 Plan amendments
8 Actuarial (gains)/losses (0.63) 136.63
9 Benets paid (30.46)
10 Present value of Dened Benet Obligation
as on Balance Sheet date. 10.45 652.38
II. Changes in the fair value of plan assets
representing reconciliation of opening
and closing balances thereof are as
follows:
1 Fair value of Plan assets as on 1st April,
2013 256.09 183.80
Less: Transferred in accordance with
Scheme of Arrangement (Refer Note 3A) (256.09)
Fair value of Plan assets as on 1st April'
2013 (net)
2 Asset acquired on transfer in of Employees
3 Expected return on plan assets 16.39
4 Actuarial gains and losses (13.64)
5 Actual contributions by employers. 100.00
6 Benets paid (30.46)
7 Plan assets as on 31
st
March, 2014 256.09
III. Reconciliation of Present Value of
Dened Benet Obligation and fair
value of plan assets showing amount
recognized in the Balance Sheet:
1 Present value of Dened Benet Obligation 10.45 652.38
2 Fair value of plan assets 256.09
3 Funded status [Surplus/(Decit)] (10.45) (396.29)
4 Unrecognized Past Service Costs
5 Net asset/(Liability) recognized in
Balance Sheet (10.45) (396.29)
IV Components of employer expenses
recognized in the statement of prot and
loss for the year ended:
1 Current Service cost 3.35 129.74
2 Interest cost 0.58 31.77
3 Expected return on plan assets (16.39)
4 Curtailment cost/(credit)
5 Settlement cost/(credit)
6 Past Service cost
7 Actuarial Losses/(Gains) (0.63) 150.28
8 Total expense recognized in the
Statement of Prot and Loss under
Contribution to Provident Fund and
other Funds 3.30 295.39
V Category of Assets (% Allocation)
Insurer Managed Funds 100%
VI Principal Actuarial Assumptions: As at
31
st
March,
2014
As at
31
st
March,
2013
1 Discount Rate (%) 9.05% 8.10%
2 Expected Return on plan assets (%) 7.50%
3 Salary Escalation (%) 10.00% 10.00%
Experience History Gratuity
31/03/2014 31/03/2013 31/03/2012 31/03/2011 31/03/2010
1 Dened Benet
Obligation at the
end of the period 10.45 652.37 384.70 319.99 194.80
2 Plan Assets at the
end of the period 256.09 183.80 206.72 161.18
3 Funded Status (10.45) (396.28) (200.90) (113.27) (33.62)
4 Experience
adjustments on
plan liabilities (0.62) 25.19 12.34 17.22 (7.20)
5 Experience
adjustments on
plan assets (13.64) (5.75) 0.43 3.30
(ii) Basis used to determine expected rate of return on assets: This is based
on the expectation of the average long term rate of return expected on
investment of the Fund during the estimated terms of obligation.
(iii) The estimates of future salary increases, considered in actuarial valuation,
take account of ination, seniority, promotion and other relevant factors,
such as supply and demand in the employment market.
(iv) Contributions expected to be paid to the plan during the next nancial year
Rs. NIL Lakhs (2013 : Rs. 100 Lakhs).
NOTE 30 - Related Party Disclosures:
(A) Name of the related party and nature of relationship where control exists:
(A) Related parties where control exist:
Holding Company : Mahindra & Mahindra Limited
Fellow Subsidiaries :
Sr.
No
Name of the company
1 Bristlecone India Limited.
2 Mahindra Engineering Services Limited.
3 Mahindra & Mahindra Financial Services
Limited.
4 Mahindra Ugine Steel Company Limited.
5 NBS International Limited.
6 Mahindra Vehicle Manufacturers Limited.
7 Mahindra Intertrade Limited.
8 Mahindra First Choice Wheels Limited.
9 Mahindra Hinoday Industries Limited.
10 Mahindra Holidays and Resorts India Limited.
11 Mahindra Forgings Limited.
12 Mahindra Logistics Limited.
13 Mahindra Heavy Engines Private Limited.
(Formerly known as Mahindra Navistar
Engines Pvt. Ltd.)
14 Mahindra Integrated Business Solutions
Private Limited. (formerly known as
Mahindra BPO Services Private Limited
w.e.f. 04.01.2013)
15 Mahindra Gears & Transmission Private Limited.
Key Managerial personnel : Managing Director - Mr. Nalin Mehta
61
(B) Related Party Transactions:
Rupees Lakhs
Nature of Transactions Holding
Company
(Mahindra
& Mahindra
Limited)
Fellow
Subsidiaries
Key
Management
Personnel
1 Purchases:
Goods 166.95
(12,029.39)
860.96
(61,143.73)
()
()
Fixed Assets ()
(362.47)
(...)
(28.98)
()
()
Service 416.16 267.86 ()
(3,558.78) (3,842.49) ()
2 Sales:
Goods 108.84 () ()
(1,017.36) () ()
Fixed Assets () () ()
(...) (2.18) ()
3 Other Transactions
Reimbursements made to parties ()
(1,895.64)
()
(9.01)
()
()
Reimbursements received from parties ()
(29.26)
()
()
()
()
Other Income 2.99
(66.68)
()
()
()
()
Other Expenses ()
()
()
(...)
()
()
Interest Expense () () ()
(288.79) () ()
4 Outstanding
Payable 306.06 223.54 ()
(3,131.76) (5,381.54) ()
Receivable 661.37 () ()
(105.81) (127.76) ()
5 Managerial Remuneration (...) (...) 10.71
(...) (...) (39.56)
6 Issue of Equity Share (...) (...) (...)
(34,700.00) (...) (...)
The signicant related party transactions are as under: Rupees Lakhs
Nature of Transactions Fellow Subsidiaries Amount
Purchase Goods Mahindra Vehicle Manufactures Limited. 336.95
(60,014.70)
Mahindra Heavy Engines Private Limited 524.01
(373.14)
Purchase Services Mahindra & Mahindra Financial Services
Limited.
(.......)
(433.84)
Mahindra Logistics Limited 267.86
(2,420.42)
Mahindra Engineering Services Limited (.)
(881.82)
Purchase of Fixed Assets Mahindra Vehicle Manufactures Limited. (.)
(24.86)
Mahindra Ugine Steel Company Limited. (.)
(4.12)
Sale of Fixed Assets Mahindra First Choice Services Limited. (..)
(2.18)
Reimbursement made to
Parties
Mahindra Engineering Services Limited. (..)
(3.28)
NBS International Limited (..)
(5.72)
Notes:-
1) Figures in brackets are in respect of the corresponding previous year.
2) Transfer of Assets and Liablities to the Holding Company in accordance with the
scheme of arrangement (Refer Note 3A).
NOTE 31 - THE TOTAL OF FUTURE MINIMUM LEASE PAYMENTS UNDER
(a) Lease payments recognised in the Statement of Prot and Loss for the
year Rs. 114.95 Lakhs (2013: Rs. 931.91 Lakhs)
(b) The total of future minimum lease payments under non-cancellable
operating leases for each of the following period are as under:
Particulars As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
(i) Not later than one year 40.36 275.57
(ii) Later than one year and not later
than ve years. 63.56 367.91
(iii) Later than ve years
Total 103.92 643.48
NOTE 32 - Earning per Share
As at
31
st
March,
2014
As at
31
st
March,
2013
Amount used as the numerator Prot/(Loss)
after tax for the year (Rs. Lakhs) 395.61 (36,513.68)
Weighted average number of equity shares used
in computing earning per share 1,147,925,600 812,333,819
Basic and Diluted Earning per share (Face value of
Rs. 0.20 per share) (Previous year Rs. 10 each) 0.03 (4.49)
NOTE 33 - Research and Development expenditure debited to the Statement of
Prot and Loss aggregating Rs. NIL Lakhs (2013 Rs. 3112.67 Lakhs) has been
incurred by the company and disclosed under appropriate account heads.
NOTE 34 - Details of provisions and movements in each class of provisions
(a) Provision for warranty Rs. NIL Lakhs (2013: Rs. 2541.89 Lakhs) relates to
provision made in respect of sale of certain products, the estimated costs
of which is accrued at the time of sale. The products are generally covered
under warranty period ranging upto 4 years.
The movement in above provisions is as follows:
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Carrying Amount as at 1
st
April 2,541.89 1,434.63
Less: Transferred in accordance with the
scheme of arrangement (Refer Note 3A)
(2,541.89)
Additional Provision made during the year 2,660.17
Amounts Used during the year 1,552.91
Carrying Amounts as at 31
st
March 2,541.89
(b) Provision for Disputed Excise Duty is in respect of show cause notices/
demand notices for differential excise duty including interest thereon. The
timing of the outow is dependent on the outcome of the settlement with
the appropriate authorities.
The movement in above provision is as follows:
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Balance as at 1
st
April 816.34 913.43
62
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
scheme of arrangement (Refer Note 3A)
(816.34)
Add: Provision made during the year 61.42
Less: Amount paid during the year 158.51
Balance as at 31
st
March 816.34
(c) Provision for Contingencies is in respect of (i) likely lower realisation in respect
of nished goods and non moving raw material with the vendor and (ii)
provision for likely liability for certain furniture and xtures taken on rent.
The movement in above provision is as follows:
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Balance as at 1
st
April 1,380.89 796.93
scheme of arrangement (Refer Note 3A) (1,380.89)
Add: Provision made during the year 1,380.89
Less: Provision reversed during the year 796.93
Balance as at 31
st
March 1,380.89
NOTE 35 - Excise duty recovered is included in Sale of Products which
comprises of Manufactured and Traded goods. Excise duties in respect of
nished goods are shown separately as an item of expenses and included in
the valuation of nished goods.
NOTE 36 - Value of imported and indigenous raw materials and components
consumed:
31
st
March, 2014
For the year ended
31
st
March, 2013
Value
Rupees
Lakhs
Percentage
(%)
Value
Rupees
Lakhs
Percentage
(%)
Imported 351.95 0.77
31
st
March, 2014
For the year ended
31
st
March, 2013
Value
Rupees
Lakhs
Percentage
(%)
Value
Rupees
Lakhs
Percentage
(%)
Indigenous 45,214.82 99.23
Total 45,566.77 100.00
NOTE 37 - CIF Value of Imports
Particulars For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Raw materials 58.54 451.08
Capital Goods 381.45
Total 58.54 832.53
Note 38 - Details of Gross income derived from Services rendered / supplied
under broad heads:
Particulars For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Rupees
Lakhs
Engineering Income 297.09
Component Sourcing 606.78
Others 97.17
Total 1,001.04
Note 39 (i) Details of Sales and Finished Goods Stock under broad heads
Particulars Opening stock Less: Transferred on
1st April, 2013 in
accordance with the
scheme of arrangement
(Refer Note 3A)
Closing stock Sales
As at
1
st
April, 2013
Rupees Lakhs
As at
1
st
April, 2012
Rupees Lakhs Rupees Lakhs
As at
31st March, 2014
Rupees Lakhs
As at
1
st
April, 2013
Rupees Lakhs
For the year ended
31
st
March, 2014
Rupees Lakhs
For the year ended
31
st
March, 2013
Rupees Lakhs
Manufactured Goods
Vehicles 4,569.68 5,151.78 (4,569.68) 4,569.68 65,165.02
Traded Goods under Broad Heads
Vehicles 996.08 1,720.72 (996.08) 996.08 47,681.55
Spares 1,619.18 1,493.73 (28.36) 1,847.87 1,619.18 7,817.82 6,648.76
Total 7,184.94 8,366.23 (5,594.12) 1,847.87 7,184.94 7,817.82 119,495.33
Note:
(i) The company utilizes the services of a third party manufacturer for assembly of certain Commercial Vehicles, which are referred above as Manufactured Goods.
63
Note 39 (ii) Details of Work-in-progress
Particulars For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Vehicles Aggregates 3,258.36
Note 39 (iii) Details of Consumption under broad heads
Particulars For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
1. Steel items ( Sheets,Tubes,Etc) 563.35
2. Paints 43.83
3. Tyres and Tubes* 3,007.06
4. Components other than tyres and Tubes
(Note ii) 40,766.77
5. Material handling and transportation
charges,etc. incurred on the above items
not separately allocable 531.41
6. Processing charges 654.35
Total 45,566.77
* 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 adjustment of
excess and shortages as ascertained on physical count aggregating to
Rs. NIL Lakhs (2013: Rs. 86.04 Lakhs) net of recoveries Rs. NIL Lakhs
(2013 :Rs. 57.48 Lakhs) and write-off of obsolete and unserviceable raw
materials and components.
(ii) The consumption in value shown against item 4 is a balancing gure
based on the total consumption shown in the Statement of Prot and Loss.
Note 39 (iv) Details of Purchase of Traded Goods
Particulars For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Vehicles 58,872.80
Spares 4,943.01 4,874.42
Total 4,943.01 63,747.22
NOTE 40 CONTINGENT LIABILITY:
Claims against Company not acknowledged as debt comprise of:
(i) Excise and VAT claims disputed by the company relating to issues of
applicability and classication aggregating Rs. NIL Lakhs (2013: Rs.
1,506.40 Lakhs).
(ii) Probable Excise Duty liability on third party production relating to issues
of applicability and classication aggregating to Rs. NIL Lakhs (2013: Rs.
1,019.93 Lakhs)
(iii) Order has been served for the proto type vehicle valuation by Commissioner
Central Excise, Pune, amounting to Rs. NIL Lakhs. (2013: Rs. 159.06 Lakhs).
NOTE 41 COMMITMENTS:
(a) Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. NIL Lakhs (2013- Rs. 1,726.27 Lakhs).
(b) The company has obligation to make Exports worth Rs. NIL Lakhs (2013- Rs.
22,415.26 Lakhs) phase wise within the stipulated period up to June 2017 on
account of benets availed on the imports made under EPCG scheme.
NOTE 42
Details of year end foreign currency exposures that have not been hedged by a
derivative instrument or otherwise:
Particulars Amount in foreign
currency
Equivalent amount
Rupees Lakhs
As at
31
st
March,
2014
As at
31
st
March,
2013
As at
31
st
March,
2014
As at
31
st
March,
2013
Amounts receivable in
Foreign currency
USD 675,972 367.66
Amounts payable in foreign
currency
USD 16,627 56,045 10.06 30.48
EURO 3,126 2.17
NOTE 43
Micro, Small and Medium enterprises have been identied on the basis of the
information to the extent provided by the suppliers. Total outstanding dues
of Micro, Small and Medium enterprises as on 31
st
March, 2014 which are
outstanding for more than the stipulated period are given below:
Particulars As at
31
st
March,
2014
Rupees
Lakhs
As at
31
st
March,
2013
Rupees
Lakhs
(i) Dues remaining unpaid as at 31
st
March, 2014
Principal 0.45 38.71
Interest 0.21 3.38
(ii) Interest paid in terms of Section 16 of the Act. Nil Nil
(iii) Amount of interest due and payable for the
period of delay on payments made beyond
the appointed day during the year 0.75 4.28
(iv) Amount of interest accrued and remaining
unpaid as at 31
st
March, 2014. 1.25 114.57
(v) Further interest due and payable even in the
succeeding years, until such date when the
interest due as above are actually paid to
the small enterprises. 0.28 5.59
NOTE 44 EARNINGS IN FOREIGN EXCHANGE
Particulars For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
FOB Value of exports 9.84
Program Management fee for Engineering
Services 303.98
Total 313.82
64
NOTE 45 - AUDITORS REMUNERATION:
Particulars For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Audit fees 6.18 18.82
Other services 3.37
Out of pocket expenses reimbursed 0.06 0.08
TOTAL 9.61 18.90
Nalin Mehta
Directors
Bharat Moossaddee
Rajan Wadhera
Rasesh Joshi S. Durgashankar
CFO
Place: Mumbai
Date: 30
th
April, 2014
NOTE 46 EXPENDITURE IN FOREIGN CURRENCY
Particulars
For the
year ended
31
st
March,
2014
Rupees
Lakhs
For the
year ended
31
st
March,
2013
Rupees
Lakhs
Legal and Professional Charges 202.58
Capital Expenditure 123.51
Travel Expenses 22.77
Total 348.86
NOTE 47
During the year the Company changed its name from Mahindra Navistar
Automotives Limited to Mahindra Trucks and Buses Limited.
NOTE 48
MAHINDRA HEAVY ENGINES PRIVATE LIMITED
(FORMERLY KNOWN AS MAHINDRA NAVISTAR ENGINES PRIVATE LIMITED)
65
Your Directors present their Seventh Report together with the audited accounts of your Company for the year ended 31
st
March, 2014.
Financial Results

(Rupees in lakh)
ended 31
st

March, 2014
For the year
ended 31
st
March, 2013
Income ............................................................................................................................................ 9618.31 10593.57
Prot/(Loss) before Depreciation, Amortization, Interest, taxation ............................................... (2161.53) (2240.68)
Depreciation & Amortization .......................................................................................................... 2058.06 1952.94
Prot/(Loss) before Interest, taxation ............................................................................................ (4219.59) (4193.62)
Interest ........................................................................................................................................... 1556.02 1998.56
Prot/(Loss)before taxation ........................................................................................................... (5775.61) (6192.18)
Provision for taxation for the year
Current Tax ................................................................................................................................... 0 0
Fringe Benet Tax ....................................................................................................................... 0 0
Prot/(Loss) for the year after taxation ......................................................................................... (5775.61) (6192.18)
Balance of Prot/(Loss) from earlier years ................................................................................... (19839.01) (13646.82)
Balance carried forward ................................................................................................................ (25614.62) (19839.01)
Operations
The year under review was the third year of full-edged
commercial operations for your Company. On-Highway & off
highway volumes declined by 12% &15% respectively due to
difcult conditions. Import content for the current year stood at
6% against 11% in the previous year, which along with other
cost reduction programs helped the Company to maintain the
costs close to targeted level. Cost control initiatives rolled out
by the Company helped inculcate a frugal mindset across the
organization, resulting in savings in xed costs.
The Company continued its focus on lean management and
has signicantly reduced inventory and improved productivity
rates and has endeavored to utilize its assets better. Your
companys work in this eld was recognized through a Runner
Up award at a National level competition by CII. The Company
enjoyed healthy industrial relations and continued its efforts to
develop its manpower.
Dividend
In view of the losses, your Directors do not recommend
dividend for the year under review.
Capital
During the year under review, the Authorized Share Capital
of the Company has been increased from Rs. 350 crore to
Rs. 375 crore. The paid up share capital of your Company
increased from Rs. 265 crore to Rs. 328 crore.
Change of Name
The name of the Company has been changed from Mahindra
Navistar Engines Private Limited to Mahindra Heavy Engines
Private Limited with effect from 4
th
June, 2013.
Board Meetings
The Board Meetings were conducted at least once every
quarter to inter alia review the performance, the nancial status
and matters relating to the operations of the Company. Six
Board Meetings were held during the last nancial year. These
were well attended.
Directors
Dr. Pawan Goenka and Mr. Hemant Luthra have resigned as
Directors of the Company w.e.f. 26
th
April 2014. Mr. Bharat
Mossaddee retires by rotation and being eligible offers himself
for re-election. Mr. Rajan Wadhera appointed as the Chairman
of the Company w.e.f 22
nd
April 2014.
Post resignation of Dr. Pawan Goenka and Mr. Hemant Luthra
the Board has ve Directors. The Directors have vast experience
in matters related to engineering, manufacturing, nance and
general corporate management, which is of immense benet
to the Company.
Audit Committee:
Company was reconstituted on 22
nd
April 2014 and it presently
comprises of Mr. S. Durgashankar, Mr. Rajan Wadhera and
Mr. Nalin Mehta
th
March, 2014 in
Act, 2013.
66
Nomination and Remuneration Committee:
effect from 27
th
The Nomination and Remuneration Committee of the Board
of Directors of the Company comprises of Mr. Rajan Wadhera
and Mr. S. Durgashankar.
Directors Responsibility Statement:
as at 31
st
March, 2014 and of the Loss of the Company for
concern basis.
Auditors:
M/s. Deloitte Haskins and Sells, retires as Auditors of the
have expressed their willingness for re-appointment.
The Board of Directors, based on the recommendation of
the Audit Committee, recommended the appointment of
M/s Deloitte Haskins and Sells as Statutory Auditors of the
Company to hold ofce from the conclusion of ensuing Annual
General Meeting of the Company till the conclusion of the
next Annual General Meeting subject to the approval of the
members of the Company. The Company has received letter
from M/s Deloitte Haskins and Sells giving their consent to act
as Auditors of the Company and have conrmed that they are
eligible and qualied to be appointed as Auditors.
Cost Auditors:
The Board of Directors of your Company have upon
the recommendation of the Audit Committee appointed
M/s. Dhananjay V. Joshi & Associates, Cost Accountants, to audit
the cost accounts of the Company for the nancial year ended
31
st
March, 2014. The due date for ling the Cost Audit Report for
the year ended 31
st
March 2014 is 30
th
September 2014.
M/s. Dhananjay V. Joshi & Associates, Cost Accountants
are eligible for appointment as Cost Auditors and are an
independent rm of Cost Accountants and have an arms
length relationship with your Company.
Public Deposits and Loans/Advances:
Safety, Health and Environmental Performance:
The Companys commitment towards safety, health and
initiatives on safety awareness, health surveys of employees,
recycling of waste, etc. The requirements relating to various
been duly complied with by your Company.
Foreign Exchange Earnings and Outgo:
the Report of the Board of Directors) Rules, 1988 is given in
Annexure I to this Report.
of the Companies Act, 1956 and Rules framed thereunder:
As required under Section 217(2A) of the Companies Act,
1956, and Rules thereunder, particulars of Companys
employees who were in receipt of remuneration of not less than
Rs. 60,00,000 per annum during the year ended 31
st
March
2014, or not less than Rs 5,00,000 per month during any part
of the said year, are given in Annexure II to this Report.
Acknowledgement:
for assistance and co-operation received from Banks,
Employees, Vendors, suppliers and Members during the year
under review.
Rajan Wadhera
Chairman
Mumbai, 22
nd
April 2014
67
ANNEXURE I TO THE DIRECTORS REPORT
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 31
ST
MARCH, 2014.
A. CONSERVATION OF ENERGY:
(a) Energy Conservation measures taken: Various
measures are taken to contain and to bring about
savings in power consumption like controlling on /
off operation of Chiller, Control on / off operation of
ushing pump etc., Switching on / off of heaters as and
when required, energy savers for Air conditioners etc.
(b) Additional Investments and proposals, if any, being
implemented for reduction of consumption of energy
: NIL
(c) Impact of the measures taken / to be taken at (a)
and (b) above for reduction of energy consumption
and consequent impact on the cost of production of
goods: During the year under review, the Company
had not worked at optimal capacity since the volumes
expected were not produced. Hence, the impact of
the above measures was not substantial.
per unit of production as per Form-A of the Annexure
schedule: Not applicable
B. TECHNOLOGY ABSORPTION:
1. Areas in which Research and
Development is carried out : None
2. Benets derived as a result of
the above efforts : Not applicable
3. Future plan of Action : None
4. Expenditure on R & D : None
5. Technology absorption, adaptation and innovation:
Technology for manufacture of 7.2 Litre, 6 Cylinder
Acteon Diesel Engines acquired is fully absorbed.
6. Imported technology for the last 5 years: Technology
for manufacture of 7.2 Litre, 6 Cylinder Acteon Diesel
Engines from MWM International Industria de Motores
da America do Sul Ltda of Brazil. The technology was
imported in the year 2009-10.
(Rs. in lakh)
2013-14 2012-13
Total Foreign Exchange Earned 963.11 1,019.63
Total Foreign Exchange Used 389.67 1,873.93
Rajan Wadhera
Chairman
Mumbai, 22
nd
April 2014
68
Additional Information as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of
Employees) Rules, 1975 and forming part of the Directors Report for the year ended 31
st
March, 2014
Name Designation Qualication Remuneration
(Amount
in lakh)
Age
(Yrs)
Experience
(Yrs)
Date of
Commencement
of Employment
Mr. Nagarajan Balavijayan Vice President -
Manufacturing
BE Production 70.59 46 14 02.04.2008
Mr. Sonalkar Pankaj Managing Director M.Tech.
Mechanical
105.87 52 20 01.06.2009
Mr. Dhara Rajat Integration MBA
Mechanical
32.34 43 19 21.09.2010
Notes:
1) Nature of employment is contractual.
2) The above employee is not related to any Director.
3) He does not hold by himself or along with his spouse and dependent children 2% or more of the equity shares of the
Company.
4) Employment terms and conditions are as per the Companys rules.
5) Remuneration as shown in the statement includes Basic, Performance pay, House Rent Allowance, Childrens Allowance,
Supplementary Allowance, Transport Allowance, car expenses, etc.
Rajan Wadhera
Chairman
Mumbai, 22
nd
April 2014
69
MAHINDRA HEAVY ENGINES PRIVATE LIMITED (formerly
known as MAHINDRA NAVISTAR ENGINES PRIVATE
LIMITED) (the Company), which comprise the Balance
Sheet as at 31
st
and the Cash Flow Statement for the year then ended, and
a summary of the signicant accounting policies and other
dated 13
th
We believe that the audit evidence we have obtained is
sufcient and appropriate to provide a basis for our audit
opinion.
TO THE MEMBERS OF
Opinion
st
March, 2014;
(b) in the case of the Statement of Prot and Loss, of the loss
5 of the Order.
Circular 15/2013 dated 13th September, 2013 of the
st
st
of the Act.
Nilesh Shah
Partner
Membership No.49660
Mumbai, Dated: 22
nd
April, 2014
70
(Referred to in paragraph 1 under Report on Other Legal and
Regulatory Requirements section of our report of even date)
Having regard to the nature of the Companys business/activities/
results during the year, clauses (xii), (xiii), (xiv), (xv), (xix) and (xx)
are not applicable to the Company.
(a) The Company has maintained proper records showing
full particulars, including quantitative details and situation
of xed assets.
(b) The xed assets were physically veried during the
year by the Management in accordance with a regular
programme of verication which, in our opinion,
provides for physical verication of all the xed assets at
reasonable intervals. According to the information and
explanation given to us, no material discrepancies were
noticed in respect of xed assets veried during the year.
(c) The xed assets disposed off during the year, in our opinion,
do not constitute a substantial part of the xed assets of
the Company and such disposal has, in our opinion, not
affected the going concern status of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories of the Company
including those lying with third parties were physically
veried during the year by the management at reasonable
intervals and substantially conrmed by third parties.
verication of inventory followed by the management
were reasonable and adequate in relation to the size of
(c) In our opinion and according to the information and
explanations given to us, the Company has maintained
proper records of its inventories and no material
discrepancies were noticed on physical verication.
secured or unsecured to/from companies, rms or other
parties covered in the Register maintained under Section 301
of the Companies Act, 1956.
and suitable alternative sources are not readily available for
obtaining comparable quotations, there is an adequate internal
control system commensurate with the size of the Company
and the nature of its business with regard to purchases of
inventory and xed assets and the sale of goods and services.
During the course of our audit, we have not observed any
major weakness in such internal control system.
(v) To the best of our knowledge and belief and according to
the information and explanations given to us, no contracts
or arrangements referred to in Section 301 of the Companies
Act, 1956 that needed to be entered in the said Register.
In view of what has been stated above, sub clause (b) of
clause (v) of paragraph 4 of the order is not applicable to the
(vi) According to the information and explanations given to us,
the Company has not accepted any deposit from the public
during the year.
(vii) In our opinion, the internal audit functions carried out during
the year by a rm of Chartered Accountants appointed by the
Management have been commensurate with the size of the
Company and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by
the Company pursuant to the Companies (Cost Accounting
Records) Rules, 2011 prescribed by the Central Government
under Section 209(1) (d) of the Companies Act, 1956, and
are of the opinion that, prima facie, the prescribed cost
records have been made and maintained. We have, however,
not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(ix) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing
undisputed statutory dues, including Provident Fund,
Employees State Insurance, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and
other material statutory dues applicable to it with the
appropriate authorities.
(b) There were no undisputed amounts payable in respect
of Provident Fund, Employees State Insurance, Investor
Education and Protection Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and other material statutory dues in arrears as at
31
st
March, 2014 for a period of more than six months
from the date they became payable.
(c) There are no dues of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty and Cess
which have not been deposited as on March 31, 2014 on
account of any disputes.
(x) The accumulated losses of the Company at the end of the
nancial year are more than fty percent of its net worth and
the Company has incurred cash losses during the current
nancial year covered by our audit and in the immediately
preceding nancial year.
explanations given to us, the Company has not defaulted in
the repayment of dues to nancial institution and banks nor
has it issued any debentures.
(xii) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company
during the year for the purposes for which they were obtained,
other than temporary deployment pending application.
explanations given to us, and on an overall examination of
the Balance sheet of the Company, we report that the funds
raised on short term basis have, prima facie, not been used
during the year for long term investment.
(xiv) According to the information and explanations given to us,
the Company has not made any preferential allotment of
maintained under Section 301 of the Companies Act, 1956
during the year.
(xv) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and
no material fraud on the Company has been noticed or
reported during the year.
Nilesh Shah
Partner
Membership No.49660
Mumbai, Dated: 22
nd
April, 2014
71
ST
MARCH, 2014
Rupees
As at
31 March, 2014
Rupees
As at
31 March, 2013
Rupees
I EQUITY AND LIABILITIES
(1) Shareholders Funds
(a) Share Capital .............................................................. 2 3,280,000,000 2,650,000,000
(b) Reserves and Surplus ................................................ 3 (2,561,462,012) (1,983,900,868)
718,537,988 666,099,132
(2) Non-Current Liabilities
(a) Long-term borrowings................................................ 4 754,161,749 1,057,911,643
(b) Deferred tax liabilities (Net) ....................................... 5
(c) Long term provisions ................................................. 6 14,505,217 14,250,647
768,666,966 1,072,162,290
(3) Current Liabilities
(a) Short-term borrowings ............................................... 7 183,328,545 204,813,418
(b) Trade payables ........................................................... 8 298,093,451 195,771,531
(c) Other current liabilities ............................................... 9 358,210,861 348,038,435
(d) Short-term provisions ................................................. 10 53,916,248 35,465,183
893,549,105 784,088,567
Total .......................................................................................... 2,380,754,059 2,522,349,989
II ASSETS
(1) Non-Current assets
(a) Fixed assets
(i) Tangible assets ................................................... 11 1,269,987,259 1,334,356,434
(ii) Intangible assets ................................................. 12 171,702,165 290,016,308
(iii) Capital work-in-progress ..................................... 127,284,602 25,031,283
(iv) Intangible assets under development ................ 198,674,679 162,116,757
1,767,648,705 1,811,520,782
(b) Long term loans and advances................................. 13 91,308,199 54,889,378
(c) Other non-current assets ........................................... 14 41,574
91,308,199 54,930,952
(2) Current assets
(a) Inventories .................................................................. 15 82,532,711 149,912,385
(b) Trade receivables ....................................................... 16 272,169,106 320,496,996
(c) Cash and bank balances ........................................... 17 15,311,564 28,940,491
(d) Short-term loans and advances ................................ 18 151,783,774 156,548,383
521,797,155 655,898,255
Total .......................................................................................... 2,380,754,059 2,522,349,989
See accompanying notes forming part of the nancial statements 1 to 44
Anil Mangalvedhekar Bharat Moossaddee
CFO Director
Kiran Bade Pankaj Sonalkar
Nilesh Shah Company Secretary Managing Director
Partner
Mumbai, Dated: 22
nd
April, 2014 Mumbai, Dated: 22
nd
April, 2014
72
ST
MARCH, 2014
Rupees
For the year
ended
31 March, 2014
Rupees
For the year
ended
31 March, 2013
Rupees
I. Revenue from operations (Gross) 1,080,399,926 1,174,253,514
Less: Excise Duty ..................................................................... (119,564,952) (118,136,334)
Revenue from operations (Net) ................................................ 19 960,834,974 1,056,117,180
II. Other Income ........................................................................... 20 996,276 3,239,601
III. Total Revenue (I+II) 961,831,250 1,059,356,781
IV. Expenses:
Cost of materials consumed .................................................... 21 709,680,964 832,371,545
Decrease in stock of nished goods and
work-in-progress ....................................................................... 22 25,467,660 7,027,330
735,148,624 839,398,875
Employee benet expense ....................................................... 23 228,200,109 193,208,002
Finance costs ............................................................................ 24 157,176,451 202,674,867
Depreciation and amortization expense .................................. 11 & 12 205,805,681 195,293,699
Other expenses ......................................................................... 25 213,061,529 247,999,822
Total Expenses .......................................................................... 1,539,392,394 1,678,575,265
V. Loss before tax (III-IV) ........................................................... (577,561,144) (619,218,484)
VI. Tax expense: ............................................................................
(1) Current tax .........................................................................
(2) Deferred tax .......................................................................

VII. Loss after tax for the year (V-VI) ........................................... (577,561,144) (619,218,484)
VIII. Earnings per equity share (face value Rs. 10 per share) 35
(1) Basic ........................................................................... (1.93) (2.94)
(2) Diluted ........................................................................ (1.93) (2.94)
CFO Director
Partner
Mumbai, Dated: 22
nd
nd
April, 2014
73
ST
MARCH, 2014
Particulars Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
Rupees Rupees Rupees Rupees
A CASH FLOW FROM OPERATING ACTIVITIES
Net Loss before tax ........................................................ (577,561,144) (619,218,484)
Adjustment for: ...............................................................
Depreciation/Amortisation .............................................. 205,805,681 195,293,699
Finance Costs ................................................................. 157,176,451 202,674,867
Loss on sale of xed assets ........................................... 124,462 104,863
Provision for doubtful debts and advances written back (1,381,864)
Provision for Warranty .................................................... 3,051,777 5,437,115
Interest Income ............................................................... (996,276) (717,909)
365,162,095 401,410,771
Operating Loss before
Working Capital changes ............................................... (212,399,049) (217,807,713)
Adjustments for changes in Working capital:................
Long term Loans and advances .................................... 17,918,660 905,232
Inventories ....................................................................... 67,379,674 119,363,722
Trade Receivables .......................................................... 48,327,890 113,101,551
Short term Loans and advances.................................... 4,764,609 14,029,758
Long term Provisions...................................................... 254,570 1,246,701
Trade Payables ............................................................... 102,321,920 (101,793,533)
Other Non Current assets .............................................. 41,574 (41,574)
Other current liabilities.................................................... (2,288,572) (27,438,066)
Short term Provisions ..................................................... 15,462,885 2,853,502
254,183,210 122,227,293
Cash used in operations ................................................ 41,784,161 (95,580,420)
Income taxes paid ......................................................... 2,367,268 (521,596)
Net Cash used in Operating activities ........................... 44,151,429 (96,102,016)
B CASH FLOW FROM INVESTING ACTIVITIES
Fixed Assets:
Capital expenditure on xed assets
(including Capital Advances) (306,770,781) (275,425,873)
Proceeds from sale of xed assets 319,534 1,021,540
Fixed Deposits Matured (Net) 3,000,500
Fixed Deposits Placed (Net) (9,999,611)
Other Non Current assets 184,006
Interest received 996,276 533,903
Net Cash used in investing activities ............................. (302,454,471) (283,686,035)
74
31
st
March, 2014
Year ended
31
st
March, 2013
C CASH FLOW FROM FINANCING ACTIVITIES
Repayment of Long Term borrowings ........................... (202,499,894) (67,500,106)
Repayment of Short Term borrowings (Net) ................. (21,484,873) (63,909,288)
Proceeds from Issue of Shares ..................................... 630,000,000 700,000,000
Interest paid .................................................................... (158,340,617) (204,735,814)
Net Cash from nancing activities ................................. 247,674,616 363,854,792
D NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (A+B+C) ........................ (10,628,426) (15,933,259)
Cash and Cash Equivalents (Opening balance) ........... 16,514,806 32,448,065
Cash and Cash Equivalents (Closing balance)
(Refer Note 2 below) ...................................................... 5,886,380 16,514,806
10,628,426 15,933,259
Notes:
1 The above Cash Flow Statement has been prepared under the indirect method as set
out in Accounting Standard 3 Cash Flow Statement.
2 Cash and bank balances comprise of:
As at
31
st
March,
2014
Rupees
As at
31
st
March,
2013
Rupees
Cash and cash equivalents
Cash on hand .......................................................... 107,897 42,557
Bank Balance:
In Current Accounts ............................................. 5,778,483 16,472,249
Other bank balances
In other deposit accounts: ...................................... 9,425,184 12,425,685
15,311,564 28,940,491
3 Figures in brackets represent outow of cash and cash equivalents.
4 Previous years gures have been regrouped/restated wherever necessary
See accompanying notes forming part of the nancial statements (1 to 44)

ST
MARCH, 2014
CFO Director
Partner
Mumbai, Dated: 22
nd
nd
April, 2014
75
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES:
A. Basis of Accounting:
The nancial statements have been prepared under the historical cost
convention in accordance with the accounting principles generally
accepted in India and comply with the mandatory Accounting Standards
notied under Section 211(3C) of the Companies Act, 1956 (The 1956
Act) (which continue to be applicable in respect of Section 133 of the
Companies Act, 2013 (The 2013 Act) in terms of General Circular
15/2013 dated 13
th
Sept 2013 of the Ministry of Corporate Affairs and with
the relevant provisions of the 1956 Act/2013 Act as applicable.
B. Use of estimates:
The preparation of the nancial statements, in conformity with the generally
accepted accounting principles, requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the date of
the nancial statements and the reported amounts of revenues and expenses
during the reporting period. Differences between actual results and estimates
are recognised in the period in which the results are known/ materialised.
C. Fixed Assets:
i) Tangible Assets
Tangible assets are stated at cost less accumulated depreciation.
Cost comprises the purchase price and other attributable costs,
including borrowing costs, of bringing the assets to its working
condition for its intended use.
ii) Intangible Assets
Intangible assets are stated at initially incurred cost less accumulated
amortisation.
iii) Capital work-in-progress
Capital work-in-progress, including projects under commissioning
are carried at cost, comprising direct cost, related incidental
expenses and attributable borrowing costs.
D. Depreciation and Amortisation:
(i) Depreciation on tangible xed assets is provided for on the straight
line method at the rates and in the manner specied in Schedule XIV
to the Companies Act, 1956, except in respect of following assets
where the rates are higher:-
Plant and Machinery 10.34%, 11.32%, 12.50%, 14.29%, 20.00%, 50.00%
Ofce Equipment 20%
Motor Vehicles 15%
Leasehold land is amortised over the period of lease.
(ii) Intangible assets are amortised on the straight line method at the
following rates:
Technical know-how 16.66%
Product Development Expenditure 20%
Software Expenditure:
The expenditure incurred is amortised over three nancial years equally
commencing from the year in which the expenditure is incurred.
E. Impairment:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external factors.
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of an
assets net selling price and its value in use. Value in use is the present
value of estimated future cash ows expected to arise from the continuing
use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arms length
transaction between knowledgeable, willing parties, less the cost of disposal.
F. Inventories:
Inventories are stated at the lower of cost and net realisable value. In
determining the cost of purchased materials moving average method
is used. Cost of manufactured nished goods and work-in-progress are
valued on absorption costing basis.
G. Revenue Recognition:
Sale of products is recognised on the transfer of all signicant risks and
rewards of ownership to the buyer. Income from services rendered is
accounted for when the work is performed.
H. Excise Duty:
Excise duty payable on nished goods is accounted for upon manufacture
and transfer of goods to the customers. Excise duty recovered is included
in the manufacture and sale of products. Excise duties in respect of
nished goods are shown separately as an item of expense and included
in the valuation of nished goods.
I. Custom Duty:
Custom duty payable on imported goods is accounted for when the goods
enter the Indian shores.
J. Export Benets:
Export benets under various schemes of Government of India are
accounted on accrual basis except when there is an uncertainty in respect
of the entitlement.
K. Foreign exchange transactions:
Monetary items at the end of the year, is recognised as income or expense,
as the case may be except exchange differences relating to long term foreign
currency monetary items used for nancing the acquisition of xed assets
and not regarded as interest, are added to or substracted from the cost of
such xed assets and depreciated over the balance useful life of the assets.
L. Employee Benets:
(i) Dened Contribution Plan
The Companys contributions paid/payable during the year to
Provident Fund and Superannuation Fund are considered as dened
contribution plans and are charged as an expense based on the
amount of contribution required to be made as and when services
are rendered by the employees.
(ii) Dened Benet Plan / Leave encashment:
The Companys liability towards gratuity and leave encashment is
determined using the projected unit credit method which considers
present value of estimated future cash ow using discounted rate
i.e. determined by reference to the market yield at the Balance Sheet
terms of the dened benet obligation.
(iii) Other Benets:
The undiscounted amount of short-term employee benets expected
to be paid in exchange for the services rendered by employees is
recognised during the period when the employee renders the service.
M. Taxes on Income:
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to/ recovered from the
tax authorities, using the applicable tax rates. Deferred tax assets and
liabilities are recognised for future tax consequences attributable to timing
differences between taxable income and accounting income that are
capable of reversal in one or more subsequent years and are measured
using relevant enacted tax rates. Deferred tax assets are recognised only to
the extent that there is a reasonable certainty that sufcient future taxable
income will be available against which such deferred tax assets can be
realised. In situations where the Company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognised only if
there is a virtual certainty supported by convincing evidence that they can
be realised against future taxable prots.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
76
N. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of a
qualifying asset are capitalised as part of such assets. A qualifying asset
is one that necessarily takes a substantial period of time to get ready for
its intended use or sale. All other borrowing costs are recognised as an
expense in the period in which they are incurred.
O. Warranty:
Product warranty costs are accrued in the year of sale of products based
on technical estimates made by management and is included in Other
expenses.
P. Government Grants and Other Incentives:
The Company, directly or indirectly through a consortium of Mahindra Group
Companies, expects to be entitled to various incentives from government
authorities in respect of manufacturing units located in developing regions.
The company accounts for such entitlement on accrual basis.
Q. Segment Reporting:
The Companys business activity falls within a primary business segment
namely manufacturing of Engines and other auto components and there
is no reportable geographical segment.
R. Provisions, Contingent Liabilities and Contingent Assets:
Provision involving substantial degree of estimation in measurement is
recognised when there is a present obligation as a result of past events
and it is probable that there will be an outow of resources. Contingent
liabilities are not recognised but are disclosed in the notes. Contingent
assets are neither recognised nor disclosed in the nancial statements.
NOTE 2 - SHARE CAPITAL
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Authorised:
375,000,000 (Previous year - 350,000,000)
Equity Shares of Rs.10 each 3,750,000,000 3,500,000,000
3,750,000,000 3,500,000,000
Issued, Subscribed and Paid up:
328,000,000 (Previous year - 265,000,000)
Equity Shares of Rs.10 each 3,280,000,000 2,650,000,000
[All of the above Equity Shares are held
by Mahindra & Mahindra Ltd., the Holding
Company]
Total 3,280,000,000 2,650,000,000
Reconciliation of the
number of shares and
amount outstanding at
the end of the year:
As at
31
st
March
2014
No. of shares
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
No. of shares
As at
31
st
March
2013
Rupees
Number of Equity shares
outstanding at the
beginning of the year 265,000,000 2,650,000,000 195,000,000 1,950,000,000
Add: Additional Equity
shares issued during
the year 63,000,000 630,000,000 70,000,000 700,000,000
Number of Equity shares
outstanding at the end of
the year 328,000,000 3,280,000,000 265,000,000 2,650,000,000
Notes:
1) Number of shares held by each shareholder holding more than 5% shares
in the company are as follows:
Particulars
Number of
shares as at
31
st
March,
2014
Holding in
percentage as
at 31
st
March,
2014
Number of
shares as at
31
st
March,
2013
Holding in
percentage as
at 31
st
March,
2013
Equity Shares:
Mahindra & Mahindra
Limited (Holding Company) 328,000,000 100% 265,000,000 100%
2) The Equity Shares of the Company rank pari-passu in all respects including
voting rights and entitlement to dividend except that equity shares issued
during the year on right basis would be entitled to proportionate dividend, if
declared, from the date of allotment.
NOTE 3 - RESERVES AND SURPLUS
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Surplus/(Decit) in the
statement of prot and
loss:
Opening balance (1,983,900,868) (1,364,682,384)
Add: Loss for the year (577,561,144) (619,218,484)
Closing balance (2,561,462,012) (1,983,900,868)
Total (2,561,462,012) (1,983,900,868)
NOTE 4 - LONG TERM BORROWINGS
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Term Loan (Secured)
from a Bank 754,161,749 1,057,911,643
(Term Loan from a bank carrying interest
rate of 11% to 12% is secured by rst
charge on entire immovable xed assets,
both present and future, relating to 7.2
litres, 6 Cylinder Aceton Diesel engine
project at Chakan)
Total 754,161,749 1,057,911,643
Term loan is repayable in quarterly installments commencing at the end of 30
months from the date of rst disbursement i.e. 24th June 2010.
Last date of repayment - 24th December, 2017
Quarterly repayments will be on a stepped-up basis as below:
First year 10%
Second year 20%
Third year 25%
Fourth year 25%
Fifth year 20%
NOTE 5 - DEFERRED TAX ASSETS/(LIABILITIES):
(i) Break up of deferred tax liability as at year end:
Nature of timing difference 31
st
March
2014
Rupees
31
st
March
2013
Rupees
Provision for Depreciation 108,969,000 121,455,000
Total 108,969,000 121,455,000
(ii) Break up of deferred tax asset as at year end:
31
st
March
2014
Rupees
31
st
March
2013
Rupees
Provision for leave encashment 4,511,000 3,679,000
Provision for gratuity 2,929,000 2,173,000
Carried forward tax losses* 96,971,000 111,061,000
Others 4,558,000 4,542,000
Total 108,969,000 121,455,000
(iii) Deferred tax asset/(liability) net:
Note:
* Considered to the extent that there are compensating timing differences,
the reversal of which will result in sufcient income against which this can be
realised.
77
NOTE 6 - LONG-TERM PROVISIONS
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Provision for Employee benets
Leave encashment 6,525,674 4,579,810
Gratuity 6,179,543 5,042,228
12,705,217 9,622,038
Provision for others
Provision for warranty (Refer
Note 36) 1,800,000 4,628,609
Total 14,505,217 14,250,647
NOTE 7 - SHORT TERM BORROWINGS
from a Banks
Secured 3,328,545 4,813,418
[Secured by rst charge by way
of hypothecation and/or pledge of
entire goods, movable and other
current assets present and future
(excluding Plant and Machinery
and all other Fixed assets)]
from a Financial Institution
Unsecured 200,000,000
Loan from related party
Unsecured 180,000,000
183,328,545 204,813,418
Total 183,328,545 204,813,418
NOTE 8 - TRADE PAYABLES
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Trade payables (Refer Note 31) 298,093,451 195,771,531
Total 298,093,451 195,771,531
NOTE 9 - OTHER CURRENT LIABILITIES
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Current maturities of long-term
borrowings * 303,750,000 202,500,000
borrowings 4,749,967 5,914,133
Other payables
Statutory dues (Contributions
to PF and other funds,
Withholding Taxes, Excise
Duty, VAT, Service Tax, etc.) 20,095,078 24,263,652
Payables on purchase of
xed assets 27,129,817 114,754,653
Advances from Customers 2,073,455 259,636
Others 412,544 346,361
49,710,894 139,624,302
Total 358,210,861 348,038,435
* Refer Note 4 - Long Term Borrowings for details of security.
NOTE 10 - SHORT-TERM PROVISIONS
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Leave encashment 8,074,625 6,244,017
Gratuity 3,300,000 1,350,000
Performance pay 31,071,894 22,231,023
42,446,519 29,825,040
Provision others
Provision for warranty
(Refer Note 36) 11,300,000 5,494,400
Provision for Wealth Tax 169,729 145,743
11,469,729 5,640,143
Total 53,916,248 35,465,183
NOTE 11 - TANGIBLE ASSETS
(Rupees)
Gross Block Accumulated Depreciation Net Block
Balance as at
1
st
April,
2013
Additions
during the
year
Deductions
during the
year
Balance as at
31
st
March,
2014
Balance as at
1
st
April,
2013
For the
year
On
Deductions
Balance as at
31
st
March,
2014
Balance as at
31
st
March,
2014
Balance as at
31
st
March,
2013
TANGIBLE ASSETS
Leasehold land 69,390,659 69,390,659 3,086,398 730,625 3,817,023 65,573,636 66,304,261
(69,390,659) (69,390,659) (2,355,773) (730,625) (3,086,398)
Buildings 463,921,315 463,921,315 44,397,612 15,506,691 59,904,303 404,017,012 419,523,703
(460,242,947) (3,678,368) (463,921,315) (28,975,142) (15,422,470) (44,397,612)
Plant and machinery 902,313,001 16,542,215 918,855,216 108,963,006 57,221,564 166,184,570 752,670,646 793,349,995
(715,975,436) (186,337,565) (902,313,001) (60,484,723) (48,478,283) (108,963,006)
Furniture and xtures 18,380,772 502,858 18,883,630 4,322,044 1,370,845 5,692,889 13,190,741 14,058,728
(15,899,368) (2,481,404) (18,380,772) (3,083,090) (1,238,954) (4,322,044)
Ofce Equipment 47,434,946 1,135,049 48,569,995 20,279,691 7,579,399 27,859,090 20,710,905 27,155,255
(45,680,006) (1,754,940) (47,434,946) (13,624,327) (6,655,364) (20,279,691)
Motor Vehicles 17,574,328 3,178,779 780,211 19,972,896 3,609,836 2,874,956 336,215 6,148,577 13,824,319 13,964,492
(15,638,230) (3,261,482) (1,325,384) (17,574,328) (1,298,545) (2,510,272) (198,981) (3,609,836)
Total 1,519,015,021 21,358,901 780,211 1,539,593,711 184,658,587 85,284,080 336,215 269,606,452 1,269,987,259 1,334,356,434
Previous year (1,322,826,646) (197,513,759) (1,325,384) (1,519,015,021) (109,821,600) (75,035,968) (198,981) (184,658,587) (1,334,356,434)
Notes :
1
Foreign exchange gain amounting to Rs. Nil (Previous year - Rs. 6,129,009) has been adjusted in additions during the year..
2
Figures in brackets are in respect of the corresponding previous year.
78
NOTE 12 - INTANGIBLE ASSETS
(Rupees)
Balance as at
1
st
April,
2013
Additions
during the
year
Deductions
during the
year
Balance as at
31
st
March,
2014
Balance as at
1
st
April,
2013
For the
year
On
Deductions
Balance as at
31
st
March,
2014
Balance as at
31
st
March,
2014
Balance as at
31
st
March,
2013
INTANGIBLE
ASSETS
Internally generated
Product Development
Expenditure 108,874,825 108,874,825 63,510,314 21,774,966 85,285,280 23,589,545 45,364,511
(108,874,825) () () (108,874,825) (41,735,350) (21,774,964) () (63,510,314)
Other than internally
generated
Technical Know How 549,755,429 549,755,429 313,055,175 91,625,905 404,681,080 145,074,349 236,700,254
(549,755,429) () () (549,755,429) (221,429,270) (91,625,905) () (313,055,175)
Software Expenditure 24,619,099 2,207,458 26,826,557 16,667,556 7,120,730 23,788,286 3,038,271 7,951,543
(20,662,004) (3,957,095) () (24,619,099) (9,810,693) (6,856,863) () (16,667,556)
Total 683,249,353 2,207,458 685,456,811 393,233,045 120,521,601 513,754,646 171,702,165 290,016,308
Previous year (679,292,258) (3,957,095) () (683,249,353) (272,975,313) (120,257,732) () (393,233,045) (290,016,308)
Note:
1
NOTE 13 - LONG TERM LOANS AND ADVANCES
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
(Unsecured, considered good
unless otherwise stated)
Capital advances:
Unsecured Considered good 82,571,096 25,802,751
Unsecured Considered doubtful 640,400
83,211,496 25,802,751
Less: Provision for Doubtful Capital
Advances 640,400
82,571,096 25,802,751
Security deposits 1,754,395 1,490,395
Balances with government authorities
i) Sales tax refund receivable 247,330 18,586,654
ii) Custom deposit receivable 5,096,762 5,003,694
5,344,092 23,590,348
Other Loans and Advances
Advance income tax [net of
provisions Rs. 2,285,734 1,638,616 4,005,884
(Previous year Rs. 2,285,734)]
Total 91,308,199 54,889,378
NOTE 14 - OTHER NON CURRENT ASSETS
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Others - Claims 41,574
Total 41,574
NOTE 15 - INVENTORIES (VALUED AT LOWER OF COST AND NET
REALISABLE VALUE)
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Raw materials [including goods-in-transit
Rs. 377,169 (Previous year - Rs. 3,165,626)] 60,073,714 99,838,990
Work - in - progress 8,648,723 17,892,600
Finished goods 2,695,205 18,918,988
Stores and spares 11,115,069 13,261,807
Total 82,532,711 149,912,385
NOTE 16 - TRADE RECEIVABLES
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Unsecured Considered good
Trade receivables outstanding for a
period exceeding six months from
the date they were due for payment 1,795,829 62,811,083
Other Trade Receivables 270,373,277 257,685,913
Total 272,169,106 320,496,996
NOTE 17 - CASH AND BANK BALANCES
A. Cash and cash equivalents
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Cash on hand 107,897 42,557
Balances with banks (Current account) 5,778,483 16,472,249
5,886,380 16,514,806
B. Other bank balances
In other deposit accounts Fixed Deposits
with original maturity greater than 3 months*# 9,425,184 12,425,685
9,425,184 12,425,685
Total 15,311,564 28,940,491
Notes:
* Includes deposits of Rs. 7,105,000 (Previous year - Rs. 4,605,000) with maturity
greater than 12 months from Balance Sheet date
# Includes Fixed Deposits of Rs. 8,355,000 (Previous year - Rs. 11,665,000)
under Banks lien.
79
NOTE 18 - SHORT TERM LOANS AND ADVANCES
Rupees
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Unsecured, considered good
*Loans and advances to related
parties 202,797 35,729
related parties
Balances with government
authorities
i) Excise duty refund receivable 7,838,483 2,166,385
ii) VAT Refund Receivable 16,763,529
iii) CENVAT credit receivable 65,779,391 77,824,061
iv) Service tax credit receivable 57,928,391 71,691,274
148,309,794 151,681,720
Other loans and Advances
Prepaid expenses 1,530,254 1,664,676
Advances to suppliers 164,540 1,540,124
Others 1,576,389 1,626,134
Total 151,783,774 156,548,383
* List of related parties:
Mahindra & Mahindra Limited 42,797
Mahindra Logistics Limited 160,000
Mahindra Engineering Services
Limited 35,729
Total 202,797 35,729
NOTE 19 - REVENUE FROM OPERATIONS - NET OF EXCISE DUTY
For the year
ended 31
st

March 2014
Rupees
For the year
ended 31
st

March 2013
Rupees
Sale of products [Refer Note 39(iii)] 1,041,498,189 1,141,275,347
Less: Excise Duty (119,212,771) (117,793,415)
922,285,418 1,023,481,932
Sale of services (Refer Note 40) 2,035,918 321,394
Other operating revenues
Sale of Scrap 4,165,103 4,096,446
Less: Excise Duty (352,181) (342,919)
3,812,922 3,753,527
Government Grants and other incentives 31,056,243 27,464,654
Duty Drawback 1,644,473 1,095,673
Total 960,834,974 1,056,117,180
NOTE 20 - OTHER INCOME
For the year
ended 31
st

March 2014
Rupees
For the year
ended 31
st

March 2013
Rupees
Interest earned (include interest on bank
deposit, interest on employee loan, etc.) 996,276 717,909
Net gain on foreign currency transactions and
translation 1,139,828
Provision for doubtful debts and advances
written back (net) 1,381,864
Total 996,276 3,239,601
NOTE 21 - COST OF MATERIALS CONSUMED
Raw material consumed [Refer Note 39(i)] 709,680,964 832,371,545
Total 709,680,964 832,371,545
NOTE 22 - DECREASE STOCK OF FINISHED GOODS AND
WORK-IN-PROGRESS
Rupees
For the year
ended 31
st

March 2014
Rupees
For the year
ended 31
st

March 2013
Rupees
Opening stock
Work - in - progress 17,892,600 33,259,272
Finished goods 18,918,988 10,579,646
36,811,588 43,838,918
Closing stock
Work - in - progress 8,648,723 17,892,600
Finished goods 2,695,205 18,918,988
11,343,928 36,811,588
Total 25,467,660 7,027,330
NOTE 23 - EMPLOYEE BENEFIT EXPENSE
Salaries and wages 194,931,883 162,136,241
Contribution to provident and other funds 11,648,155 12,450,279
Employee compensation expense on account
of ESOP * 2,716,826
Staff welfare expenses 18,903,245 18,621,482
Total 228,200,109 193,208,002
* Represents costs reimbursed by the Company towards ESOPs granted by the
holding Company, Mahindra & Mahindra Limited.
NOTE 24 - FINANCE COSTS
Interest expense
Borrowings 152,185,511 196,937,717
Trade payables 286,909 963,777
Others (Interest on delayed
payment of Excise Duty) 3,129,711 1,955,035
155,602,131 199,856,529
Other borrowing costs 1,574,320 2,818,338
Total 157,176,451 202,674,867
NOTE 25 - OTHER EXPENSES
Consumption of stores and spare parts 13,653,470 21,347,437
Packing material consumed 5,372,612 7,491,677
Power and fuel 9,387,150 9,762,435
Rent (Refer Note 34) 352,918 481,149
Testing expenses 69,000,259 77,342,214
Repairs and maintenance -
Buildings 746,115 865,190
Machinery (Refer Note 41) 5,600,436 5,595,247
Others 3,708,205 3,380,922
10,054,756 9,841,359
Insurance 2,549,301 2,270,697
Rates & Taxes 8,228,437 15,268,541
Excise duty: on (decrease)/increase
in Stocks of Finished Goods (2,111,877) 1,105,988
others 4,513,006 11,070,380
Travelling and conveyance 24,731,786 19,434,827
Freight outward (net of recoveries) 1,518,237 1,924,822
Royalty 18,621,046 25,609,219
Net loss on foreign currency
transactions and translation 308,316
Provision for warranty (Refer Note 36) 3,051,777 5,437,115
Provision for doubtful advances 640,400
Loss on sale xed assets (net) 124,462 104,863
Bank charges 990,838 373,312
Professional charges 10,326,356 4,630,413
Housekeeping and security expenses 5,279,272 4,354,581
Labour Contract Charges 10,991,603 14,250,663
Miscellaneous expenses (Refer Note 42) 15,477,404 15,898,130
Total 213,061,529 247,999,822
80
NOTE 26 - COMMITMENTS:
1. Estimated amount of contracts remaining to be executed on capital account
and not provided for Rs. 931,948,464 (Previous year - Rs. 65,018,637).
2. Other commitment:
(i) The Company has obligation under EPCG scheme to export the
products worth Rs. 232,466,418 (Previous year - Rs. 314,901,462)
over the period of next 5 years
(ii) The Company has obligation to pay Rs. 58,212,000 (Previous year -
Rs. 52,745,000) on account of Technical know-how fees.
NOTE 27 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE
ACCOUNTING STANDARD 15 (REVISED) EMPLOYEE BENEFITS ARE AS UNDER:
percentage of the payroll costs to fund the benets. Amount recognised as
an expense in the Statement of Prot and Loss is Rs. 7,793,580 (Previous
year - Rs. 7,845,041).
i) Actuarial gains and losses in respect of dened benet plans are
recognised in the Statement of Prot and Loss.
ii) The Dened Benet Plans comprise of Gratuity.
Gratuity is a benet to an employee based on 15/26 days (depending
on the grade/ category of the employee and the completed years of
service) last drawn salary for each completed year of service.
Rupees
I Changes in the present value of dened
benet obligation representing reconciliation
of opening and closing balances thereof are
as follows:
As at
31
st
March,
2014
As at
31
st
March,
2013
1 Present Value of Dened Benet Obligation at
the beginning of the year 11,110,209 6,673,154
2 Current Service cost 3,359,084 3,804,471
3 Interest Cost 907,145 563,857
4 Actuarial (gains)/losses (679,460) 147,812
5 Benets paid (94,931) (79,085)
6 Present value of Dened Benet Obligation at
the end of the year 14,602,047 11,110,209
II Changes in the fair value of plan assets
representing reconciliation of opening and
closing balances thereof are as follows:
As at 31
st

March,
2014
As at 31
st

March,
2013
1 Fair value of Plan assets as at the beginning
of the year 4,717,981
2 Expected return on plan assets 431,695 399,279
3 Actuarial gains/(losses) (27,172) (45,000)
4 Actual contributions by employers 4,363,702
5 Plan assets as at the end of the year 5,122,504 4,717,981
III Reconciliation of Present Value of Dened
Benet Obligation and fair value of plan
assets showing amount recognized in the
Balance Sheet :
As at 31
st

March,
2014
As at 31
st

March,
2013
1 Present value of Dened Benet Obligation 14,602,047 11,110,209
2 Fair value of plan assets 5,122,504 4,717,981
3 Funded status [Surplus/(Decit)] (9,479,543) (6,392,228)
4 Net asset/(Liability) recognized in Balance
Sheet (9,479,543) (6,392,228)
IV Components of employer expenses
recognized in the Statement of Prot and
loss
For the
year ended
31st March,
2014
For the
year ended
31st March,
2013
1 Current Service cost 3,359,084 3,804,471
2 Interest cost 907,145 563,857
3 Expected return on plan assets (431,695) (399,279)
4 Actuarial Losses/(Gains) (652,288) 192,812
5 Total expense recognised in the Statement
of Prot and Loss 3,182,246 4,161,861
V Principal Actuarial Assumptions As at 31
st

March,
2014
As at 31
st

March,
2013
Gratuity
1 Discount Rate (%) 9.20% 8.20%
2 Expected Return on plan assets (%) 9.15% 9.15%
3 Salary Escalation (%) - Staff 10.00% 10.00%
4 Salary Escalation (%) - Associates 8.00% 8.00%
5 Medical cost ination N.A. N.A.
6 Withdrawal Rate - Staff 6.00% 7.00%
7 Withdrawal Rate - Associates 0.00% 2.00%
(a) The Discount rate is based on the prevailing market yields of Indian
Government securities as at the Balance Sheet date for the estimated
terms of the obligations.
(b) Salary Escalation Rate: The estimates of future salary increase considered
takes into account the ination, seniority, promotion and other relevant factors.
VI Experience Adjustments As at
31
st
March, 2014
As at
31
st
March, 2013
As at
31
st
March, 2012
As at
31
st
March, 2011
As at
31
st
March, 2010
1 Dened Benet Obligation at the end of the year 14,602,047 11,110,209 6,673,154 4,768,053 2,131,440
2 Plan Assets at the end of the period 5,122,504 4,717,981
3 Funded Status (9,479,543) (6,392,228) (6,673,154) (4,768,053) (2,131,440)
4 Experience adjustments on plan liabilities (898,999) 409,465 991,642 1,424,242 (672,604)
5 Experience adjustments on plan assets (27,172.00) (45,000.00)
VII Actual Return on plan assets: As at
31
st
March, 2014
As at
31
st
March, 2013
1 Expected Return on plan assets 431,695 399,279
2 Acturial Losses/(Gains) (27,172) (45,000)
3 Actual return on plan assets 404,523 354,279
VIII Expected contribution payable during the next nancial year Rs. 3,300,000 (Previous year Rs. 13,50,000).
IX In respect of Funded Benets with respect to gratuity, the fair value of Plan assets represents the amounts invested through Insurer Managed Fund.
NOTE 28 -
As the Companys business activity falls within a primary business segment namely manufacturing of Engines and other auto components and there is no reportable
geographical segment, the disclosure requirements of Accounting Standards (AS-17) Segment Reporting, are not applicable.
81
NOTE 29 - RELATED PARTY DISCLOSURES:
A) Name of the related party and nature of relationship where control exists:
Name of Related Party Nature of Relationship
B) Related Party Transactions:
Name of Related Party
Description of
Relationship Nature of Transactions
Amount of
Transactions
(Rupees)
Amount Outstanding
at the end of year
Credit (Rupees) Debit (Rupees)
Mahindra & Mahindra Ltd. Holding Company Sale of goods 176,036,708 78,898,867
(173,389,289) (45,320,733)
Training & Seminar 1,354,647
(1,223,685)
Engines Returned 512,012
()
Engines for Benchmarking
(469,216)
Engineering Expenses 75,000
()
Rental Charges 184,956
(184,956)
Inter-corporate Loan 180,000,000 180,539,753
() ()
Services rendered 2,366,034
()
Inter-corporate Loan taken & repaid
during the year (100,000,000)
Interest on ICD 599,726
(5,093,153)
Subscription to share capital 630,000,000
(602,000,000)
Purchase of Capital Assets 688,387
()
Reimbursement of ESOP Cost
(Refer Note 1 below)
2,716,826 2,656,735
() (2,775,278)
Reimbursement of expenses paid 5,405,882
(3,044,854)
Mahindra Hinoday Industries Ltd. Fellow Subsidiary Purchase of Raw material/
Prototype material (24,086,956)

(3,001,819)
Mahindra Gears & Transmissions
Pvt. Ltd.
Fellow Subsidiary Purchase of Raw Material 9,000,919
(9,895,844)
3,407,000
Goods in Transit 424,338 (1,789,575)
()
Bristlecone India Ltd. Fellow Subsidiary Professional charges paid
(198,578)
Mahindra Logistics Ltd. Fellow Subsidiary Services received 14,365,292 4,516,870
(15,235,990) (1,644,810)
Mahindra Vehicle Manufacturers
Ltd.
Fellow Subsidiary Sale of Engines 695,287,907 126,006,907
(778,373,895) (113,931,321)
Labour Work 3,482,363
()
Reimbursement of expense paid 908,936 473,736
(769,287) ()
82
Name of Related Party
Description of
Relationship Nature of Transactions
Amount of
Transactions
(Rupees)
Amount Outstanding
at the end of year
Credit (Rupees) Debit (Rupees)
Mahindra Trucks and Buses
Limited (Formerly known as
Mahindra Navistar Automotives
Limited)
Sales of Spares 52,401,112 11,972,397
(36,992,641) (93,229,246)
Services rendered
(321,394)
Ltd.
Fellow Subsidiary Reimbursement of expense
(35,729) (35,729)
Mahindra Integrated Business
Solutions Pvt Ltd.
Fellow Subsidiary Professional Fees 301,011 29,884
(1,029,656) (119,158)
Manpower Cost 609,150
()
Mahindra Automobile
Distributors Pvt Ltd.
Fellow Subsidiary Interest paid on ICD
(4,882,194)
Inter-corporate Loan taken & repaid
during the year (100,000,000)
Mahindra Intertrade Limited Fellow Subsidiary Interest paid on ICD 1,808,219
()
Inter-corporate Loan taken & repaid 200,000,000
during the year ()
Mahindra Yueda (Yancheng)
Tractor Company Ltd.
Fellow Subsidiary Reimbursement of Expenses Paid 86,916
()
86,916 992,071
() ()
Reimbursement of Expenses Received 992,071
()
International Truck and Engine
Mauritius Holding Ltd.
(a venturer in respect of which
Mahindra Heavy Engines Private
Limited [Formerly known as
Mahindra Navistar Engines
Private Limited] was a joint
venture upto 11
th
February 2013)
Company having
signicant inuence
Subscription to share capital
(98,000,000)
Mr. Pankaj Sonalkar Key Management
Personnel
Remuneration 10,586,603
(4,269,864)
Notes:
Represents costs reimbursed by the Company towards ESOPs granted by the holding Company, Mahindra & Mahindra Limited.
83
NOTE 30 - A) DETAILS OF DERIVATIVE INSTRUMENTS (FOR HEDGING)
None
b) Details of year end foreign currency exposures that have not been hedged
by a derivative instrument or otherwise:
Particulars Foreign
Currency
Amount in foreign
currency
Equivalent amount in Rs.
As at 31
st

March,
2014
Rupees
As at 31
st

March,
2013
Rupees
As at 31
st
March, 2014
Rupees
As at 31
st

March, 2013
Rupees
Amount payable
in foreign currency
USD 625,246 2,066,727 37,814,860 113,455,083

EURO 4,750 163,276 401,185 12,112,580
Amount receivable
in foreign currency
USD 722,951 683,130 43,116,813 35,683,725
NOTE 31 -
Micro, Small and Medium enterprises have been identied on the basis of the
information to the extent provided by the suppliers. Total outstanding dues
of Micro, Small and Medium enterprises as on 31st March, 2014 which are
Particulars As at
31
st
March,
2014
Rupees
As at
31
st
March,
2013
Rupees
(i) Dues remaining unpaid as at
31st March, 2014
Principal 2,431,879 17,834,657
Interest 41,243 17,231
(ii) Interest paid in terms of Section 16 of the Act. 1,363,789 937,478
(iii) Amount of interest due and payable for the
period of delay on payments made beyond
the appointed day during the year
218,600 1,346,546
(iv) Amount of interest accrued and
remaining unpaid as at 31st March, 2014.
259,843 1,346,546
(v) Further interest due and payable even
in the succeeding years, until such date
when the interest due as above are
actually paid to the small enterprises.
64,662
NOTE 32 - EARNINGS IN FOREIGN EXCHANGE
Particulars For the
year ended
31
st
March,
2014
Rs.
For the
year ended
31
st
March,
2013
Rs.
FOB Value of exports 96,310,898 101,962,964
NOTE 33 - EXPENDITURE IN FOREIGN CURRENCY
Particulars For the
year ended
31
st
March,
2014
Rs.
For the
year ended
31
st
March,
2013
Rs.
Royalty 18,621,046 25,609,219
Travelling & Conveyance 887,407 765,506
Miscellaneous expenses 401,185 9,812
NOTE 34 - THE TOTAL OF FUTURE MINIMUM LEASE PAYMENTS UNDER
The Company has entered into cancellable leasing arrangements for ofce
sharing and towards which the lease rental of Rs. 352,918 (Previous year - Rs.
481,149) has been included in Rent. Refer Note 25 of the Financial Statements.
NOTE 35 - EARNINGS PER SHARE
Particulars For the
year ended
31
st
March,
2014
Rs.
For the
year ended
31
st
March,
2013
Rs.
Amount used as the numerator (loss) after
tax for the year (577,561,144) (619,218,484)
used in computing earnings per share 299,761,644 210,780,822
Basic and Diluted Earnings per share (Face
value of Rs. 10 per share) (1.93) (2.94)
NOTE 36 - Details of provisions and movements in each class of provisions
as required by the Accounting Standard on Provisions, Contingent Liabilities
and Contingent Assets (Accounting Standard-29)
Warranty Warranty
As at
31
st
March,
2014
Rupees
As at
31
st
March,
2013
Rupees
Carrying Amount at the beginning of the year 10,123,009 4,704,711
Additional Provision made during the year (net
of reversal) 3,051,777 5,437,115
Amounts Used during the year 74,786 18,817
Carrying Amounts at the end of the year 13,100,000 10,123,009
Brief description of the nature of the obligation and the expected timing of any
resulting outows of economic benets:
Warranty Provision:
Warranty cost are accrued at the time of products are sold, based on technical
estimates and past trends. The provision is discharged over the warranty period
of up to 24 to 39 months from the date of sale or 5000 hours of operations
whichever is earlier. The estimates for accounting of warranties are reviewed and
revisions are made as required.
NOTE 37 - VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS,
SPARE PARTS AND COMPONENTS CONSUMED:
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Particulars Value
(Rupees)
Percentage
(%)
Value
(Rupees)
Percentage
(%)
Imported 44,219,542 6% 91,015,677 11%
Indigenous 665,461,422 94% 741,355,868 89%
Total 709,680,964 100% 832,371,545 100%
NOTE 38 - CIF VALUE OF IMPORTS
Particulars
For the
year ended
31
st
March,
2014
Rs.
For the
year ended
31
st
March,
2013
Rs.
Raw materials 17,450,338 29,616,500
Capital Goods 1,607,045 131,391,622
84
NOTE 39 (I)- DETAILS OF RAW MATERIAL CONSUMPTION AND RAW
MATERIAL STOCK UNDER BROAD HEADS
Raw Materials Consumed Raw Materials Stock
ended
31
st
March,
2014
Rupees
For the year
ended
31
st
March,
2013
Rupees
As at
31
st
March,
2014
Rupees
As at
31
st
March,
2013
Rupees
Compressor 8,383,792 9,031,105 348,800 546,117
Crankshaft 46,584,780 50,857,913 12,747 1,274,527
Cylinder Block 99,176,287 111,461,207 4,258,107 8,269,655
Cylinder Head 111,207,948 155,278,165 4,346,419 10,032,803
Radiator 21,549,296 28,531,102 1,942,718 1,523,702
Flywheel Housing 16,883,331 19,163,128 383,909 809,442
Injector Assy, Fuel 34,166,732 40,871,479 3,115,792 3,811,296
Piston 18,746,295 21,656,710 2,184,806 5,937,601
Pump Fuel Injection 86,474,084 98,075,939 7,953,833 8,687,641
Timing Case 14,006,039 23,031,942 2,806,195 10,006,406
Turbo Charger 25,155,494 33,588,940 1,170,670 2,101,252
Others 227,346,887 240,823,914 31,549,718 46,838,548
Total 709,680,964 832,371,545 60,073,714 99,838,990
Notes:
(a) The consumption has been ascertained on the basis of opening stock
plus purchases less closing stock and includes the adjustment of excess
and shortages as ascertained on physical count, write-off of obsolete and
unservicable raw materials and components.
(b) The Consumption in value shown in others is a balancing gure based on
the total consumption.
NOTE 39 (II) - DETAILS OF WORK IN PROGRESS STOCK
UNDER BROAD HEADS
WIP Opening Stock WIP Closing Stock
Particulars As at 1
st

April, 2013
Rupees
As at 1
st

April, 2012
Rupees
As at 31
st

March, 2014
Rupees
As at 31
st

March, 2013
Rupees
Broad Heads of Work
in Progress
Blocks - NLB 11,686,669 18,113,528 1,873,410 11,686,669
Cylinder Block 1,934,198 6,651,029 5,632,140 1,934,198
SFG - Others 4,271,733 8,494,715 1,143,173 4,271,733
Total 17,892,600 33,259,272 8,648,723 17,892,600
NOTE 39 (iii)- Details of Sales and Finished Goods Stock under broad heads
Particulars Finished Goods Opening Stock Finished Goods Closing Stock Sales
As at
1
st
April, 2013
As at
1
st
April, 2012
As at
31
st
March, 2014
As at
31
st
March, 2013
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Rupees Rupees Rupees Rupees Rupees Rupees
Internal Combustion Engines 18,918,988 10,579,646 2,695,205 18,918,988 960,007,909 1,079,239,473
Blocks & Spares 69,094,274 6,473,710
Others 12,396,006 2,657,837
Total 18,918,988 10,579,646 2,695,205 18,918,988 1,041,498,189 1,141,275,347
NOTE 40 - Details of Gross income derived from Services rendered/
supplied under broad heads
ended 31
st

March 2014
Rupees
For the year
ended 31
st
March 2013
Rupees
Engineering Services rendered 2,035,918 321,394
Total 2,035,918 321,394
NOTE 41 -
Repairs and maintenance- Machinery includes spares consumed Rs. 3,432,804
(31st March, 2013- Rs. 4,930,188).
NOTE 42 - MISCELLANEOUS EXPENSES INCLUDE PAYMENT TO
AUDITORS (NET OF SERVICE TAX)
ended 31
st

March 2014
Rupees
For the year
ended 31
st
March 2013
Rupees
Audit fees - Statutory Audit 1,050,000 950,000
Other services 50,000 25,000
Out of pocket expenses reimbursed 15,000
Total 1,115,000 975,000
NOTE 43 -
During the year the Company changed its name from Mahindra Navistar Engines
Private Limited to Mahindra Heavy Engines Private Limited.
NOTE 44 -
CFO Director
Company Secretary Managing Director
Mumbai, 22
nd
April, 2014
NBS INTERNATIONAL LIMITED
85
Your Directors present their Eighteenth Report together with the Audited Accounts of your Company for the year ended
31
st
March, 2014.
Financial Results
(Rs. In lakhs)
Particulars Financial Year Ended
31
st
March, 2014
Financial Year Ended
31
st
March, 2013
Revenue 19,213.03 31,539.82
Prot/(Loss) before Interest, Depreciation, Amortisation Expenses and Taxation (503.68) (140.72)
Less: Interest 15.52 11.77
Less: Depreciation and Amortisation Expenses 85.14 57.65
Prot/(Loss) before Taxation (604.34) (210.14)
Less: Provision for Taxation
Provision for Deferred Tax (0.56) (0.76)
Prot/(Loss) after Taxation (603.78) (209.38)
Prot/(Loss) brought forward from earlier years (26.03) 183.35
Balance of Prot/(Loss) carried forward (629.81) (26.03)
DIRECTORS REPORT
Operations
The year under review saw major drop in sales across the auto
industry. This led to drop in total sales volume for your Company
from 3,826 vehicles in 2012-13 to 2,504 vehicles in 2013-14, a 35%
drop in sales volume of vehicles as compared to the previous
year. Drop was seen in both Personal and Commercial range
of vehicles. Service volumes from the Companys service centre
also dropped by 17% to 18,860 vehicles from 22,757 vehicles as
compared to the previous year. Several initiatives were taken to
build customer relationship and scale up capacity of the sales
and service team throughout the year.
However the slowdown in the automotive industry in the year
impacted the Company throughout the year, resulting in your
Company incurring a loss of Rs. 604.34 lakh for the year, as
compared to loss of Rs. 210.14 lakh in the previous year.
Due to this loss for the year, the net worth of the Company
has been further eroded. However, your Company shall strive
to recover protability in the longer term.
Response to Auditors Comment
During the year under review, your Company had identied
certain lapses in the internal control procedures relating to
recording and physical verication of inventory of spares
and accessories. The Auditors have opined on the need to
strengthen record keeping and internal controls on purchase
and sale of spares and accessories. Net shortage of
Rs. 6.33 lakh was accounted for in the year under review.
The Management of your Company has instituted steps to
strengthen record keeping relating to inventory of spares and
accessories.
Dividend
In view of loss for the year under review, your Directors do not
recommend any dividend.
Directors
Mr. Ramesh Iyer and Mr. Vijay Nakra retire by rotation and
being eligible, offer themselves for re-appointment at the
forthcoming Annual General Meeting of the Company.
Audit Committee
The Audit Committee of the Board of Directors presently
comprises of Mr. A. M. Choksey, Mr. Ramesh Iyer and Mr. Vijay
Nakra.
The Audit Committee met once during the year under review.
The Board of Directors of the Company had at its meeting held
on 22
nd
March, 2014 adopted the revised terms of reference
of the Audit Committee pursuant to the requirements of the
The Board of Directors of the Company had at its meeting
held on 22
nd
March, 2014 changed the nomenclature of
Remuneration Committee as Nomination and Remuneration
Committee and also adopted the revised terms of reference of
the Committee pursuant to the modied requirements of the
The Committee presently comprises of Mr. A. M. Choksey,
Mr. Arun Malhotra and Mr. Ramesh Iyer.
The Committee met once during the year under review.
86
as at 31
st
March, 2014 and of the loss of the Company for
concern basis.
Codes of Conduct
The Company has adopted separate Codes of Conduct for
Corporate Governance (the Codes) for its Directors and
Senior Management Personnel & Employees. These Codes
enunciate the underlying principles governing the conduct of
the Companys business and seek to reiterate the fundamental
precept that good governance must and would always be an
integral part of the Companys ethos.
declarations under the Codes from the Board Members
and the Senior Management Personnel & Employees of the
Company, afrming compliance with the respective Codes.
Risk Management
Your Company has a system of internal controls to ensure
smooth operations, safeguarding assets and ensuring
compliance with applicable regulations. As mentioned earlier
given the identied lapses in the area of spares and accessories
business of the Company, necessary steps have been initiated
to strengthen the processes.
environment is strong and persons working at your Companys
facilities are given training on safety and health.
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai
(Firm Registration Number 105102W), retire as Auditors of the
Company at the conclusion of the forthcoming Annual General
Meeting and have given their consent for re-appointment. The
Members are requested to appoint Auditors for a period of
ve years i.e. from the conclusion of the eighteenth Annual
General Meeting until the conclusion of the twenty third Annual
General Meeting and x their remuneration.
As required under the provisions of section 139(1) of the
Companies Act, 2013, the Company has obtained a written
certicate from the above Auditors to the effect that their
and conditions specied in the said section.
The Company has not made any loans and advances which
executed by the parent Company, Mahindra and Mahindra
Limited with the Stock Exchanges.
Policy for prevention of sexual harassment
The Company has rolled out a policy for prevention of
Conservation of Energy, Technology Absorption and
required under section 217(1)(e) of the Companies Act, 1956
Particulars of employees as required under Section 217(2A)
The Company had no employee, who was employed throughout
the Financial Year and was in receipt of remuneration of not
less than Rs. 60,00,000/- p.a. during the year ended 31
st
March,
2014 or was employed for a part of the Financial Year and was
in receipt of remuneration of not less than Rs. 5,00,000/- p.m.
Arun Malhotra
Chairman
Place: Mumbai
Date: 10
th
May, 2014
87
ANNEXURE TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
ST
MARCH, 2014.
(a) Energy Conservation measures taken: Though the activities/operations of the Company are not power intensive,
necessary measures are taken to contain and bring about saving in power consumption through improved operational
methods, better house-keeping and awareness programmes.
(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil
production of goods: The above measures have resulted in reduction of Energy consumption.
(d) Total energy consumption and energy consumption per unit of production as per FormA of the Annexure to the Rules
in respect of Industries specied in the Schedule: Not applicable.
2. Benets derived as a result of the above efforts : Not Applicable
6. Imported Technology for the last 5 years : None
There were no foreign exchange earnings and outgo during the year under review.
Arun Malhotra
Chairman
Place: Mumbai
Date: 10
th
May, 2014
88
To
The Members of NBS INTERNATIONAL LIMITED,
1. We have audited the accompanying nancial statements
of NBS INTERNATIONAL LIMITED (the Company),
which comprise the Balance Sheet as at March 31, 2014,
and the Statements of Prot and Loss and Cash Flow
for the year then ended, and a summary of signicant
2. The Companys Management is responsible for the
preparation of these nancial statements that give a true
and fair view of the nancial position, nancial performance
and cash ows of the Company in accordance with the
Accounting Standards notied under the Companies Act,
1956 (the Act) read with the General Circular 15/2013
dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act 2013.
This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation
and presentation of the nancial statements that give a
true and fair view and are free from material misstatement,
whether due to fraud or error.
3. Our responsibility is to express an opinion on these
nancial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the nancial
statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
nancial statements. The procedures selected depend on
the auditors judgement, including the assessment of the
risks of material misstatement of the nancial statements,
whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant
to the Companys preparation and fair presentation of the
nancial statements in order to design audit procedures
that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting
policies used and reasonableness of the accounting
estimates made by management, as well as evaluating
the overall presentation of the nancial statements.
5. We believe that the audit evidence we have obtained is
opinion.
Opinion
6. In our opinion and to the best of our information and
according to the explanations given to us, the nancial
statements give the information required by the Act in
the manner so required and give a true and fair view
in conformity with the accounting principles generally
accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs
of the Company as at March 31, 2014
loss for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash
ows for the year ended on that date.
Emphasis of Matter
Attention is invited to Note No. 3(3) to the Accounts with
respect to cash losses incurred during the year, signicant
negative net worth at the end of the year and assumption
of Going Concern in view of managements business and
nancial plans for the foreseeable future. Our opinion is not
qualied in respect of this matter.
7. As required by the Companies (Auditors Report)
Order, 2003, as amended by the Companies (Auditors
Report) (Amendment) Order, 2004, issued by the Central
Government of India in terms of sub-section (4A) of section
227 of the Act (the Order), and on the basis of such
checks of the books and records of the Company as we
considered appropriate and according to the information
and explanations given to us, we give in the Annexure a
statement on the matters specied in paragraphs 4 and 5
of the Order.
8. As required by Section 227 (3) of the Act, we report that:
(a) we have obtained all the information and explanations,
necessary for the purpose of our audit;
(b) in our opinion, proper books of account as required
by law have been kept by the company so far as
appears from our examination of those books;
(c) the Balance Sheet, the Statement of Prot and Loss
and the Cash Flow Statement dealt with by this report
are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, the Statements
of Prot and Loss and Cash Flow dealt with by this
report, comply with the Accounting Standards notied
under the Companies Act, 1956 read with the General
Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of section 133
of the Companies Act, 2013;
(e) On the basis of written representations received from
the directors, as on 31st March 2014, and taken on
record by the Board of Directors, we report that none
of the directors is disqualied as on 31st March, 2014
from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies
Act, 1956;
For B. K. Khare & Co.
Firms Registration Number 105102W
H.P. Mahajani
Place : Mumbai Partner
Date : 10th May, 2014 Membership No. 030168
89
ANNEXURE TO THE AUDITORS REPORT
Referred to in paragraph 1 under Report on Other Legal
and Regulatory Requirements above
1 Fixed Assets
(b) According to information and explanation given to
us, the Company has adopted a phased programme
of physical verication of xed assets under which
all xed assets would be veried over a period of
three years. In our opinion,the frequency of physical
verication is reasonable having regard to the size of
the Company and nature of its assets.
(c) During the year, in our opinion and according to the
information and explanations given to us, a substantial
part of xed assets has not been disposed off.
2 Inventory
(a) The Inventory has been physically veried during
the year by the management. On the basis of the
information and explanations given to us discrepancies
noticed on physical verication of inventory of spares
and accessories which have been properly dealt with
in the books of account.
verication of inventory of vehicles followed by the
management are reasonable and adequate in relation
to the size of the company and the nature of its
business.
(c) The procedures followed by the management for
physical verication of inventory of spares and
accessories are adequate in relation to the size of
the company and the nature of its business. In our
opinion record keeping of inventory of spares and
accessories needs to be further improved to make it
commensurate to the size and nature of business.
3 Loans and Advances Granted / Taken from certain
entities
(a) According to information and explanations given
to us, the Company has not granted any secured/
unsecured loans to the parties listed in the register
1956 and accordingly clause iii(b), iii(c) and iii(d) of
Paragraph 4 of the Order are not applicable to the
Company.
(b) According to information and explanations given to us,
the Company has not taken any secured/unsecured
loans from the parties listed in the register maintained
under section 301 of the Companies Act, 1956 except
unsecured loan taken from one company in previous
year. The maximum amount outstanding during the
year was nil and the aggregate balance outstanding
at the year-end is nil.
(c) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken are prima
facie, not prejudicial to the interest of the Company.
(d) The Company is regular in repaying the principal
amount as stipulated.
4 Internal Control
In our opinion and according to the information and
Company and the nature of its business for the purchase of
inventory and xed assets sales of goods and services. In
our opinion and according to information and explanation
given to us, there is no continuing failure to correct major
weakness in internal control.
5 Contracts or Arrangements referred to in section 301
of the Companies Act, 1956
(a) According to the information and explanations given
to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been
entered in the register required to be maintained
under that section.
explanations given to us each of these transactions in
respect of any such parties during the nancial year
have been made at prices, which are reasonable,
having regard to the prevailing market prices at the
relevant time.
6 Public Deposits
explanations given to us, the Company has not accepted
deposits from the public within the meaning of Section
58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and Rules framed thereunder and
therefore provision of clause (vi) of paragraph 4 of the
Order is not applicable to the Company.
7 Internal Audit System
explanations provided to us, the Company does not have
an internal audit system commensurate with its size and
nature of its business.
8 Cost Records
According to the information and explanations given to us
maintenance of cost records has not been prescribed by
the Central Government under clause (d) of sub section
(1) of section 209 of the Act. Therefore the provisions
of clause 4(viii) of the Order are not applicable to the
Company.
9 Statutory Dues
(i) According to the information and explanations given
to us, the Company has been regular in depositing
undisputed statutory dues including Provident Fund,
90
Investor Education and Protection Fund, Employees
State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, cess and other applicable statutory dues
with the appropriate authorities during the year.
(ii) According to information and explanation given to us,
there are no undisputed statutory dues of Provident
Employees State Insurance, Income Tax, Wealth
Tax, Service Tax, cess and other applicable statutory
payable as of the last day of the nancial year for a
period of more than six months from the date they
became payable.
(iii) According to the records of the Company and
information and explanations given to us, as on
31st March 2014, there were following disputed dues
of income tax, sales tax, wealth tax, service tax,
custom duty, excise duty, cess:-
Assessment
Year
Appellate
Authority
Liability as
per Books of
Account
Liability as
per Income
Tax Demand
2011-12 Appeal led
against order
passed by
DCIT
14,70,158 72,05,660
10 Accumulated losses
The accumulated losses of the Company as at the end of
the nancial year are more than fty percent of the net-
worth. The Company has incurred cash losses during
the current nancial year and also in the immediately
11 Dues to Financial Institution, Banks and Debenture
Holders
According to the information and explanations given to
us, the Company has not taken any loans or advances
from nancial institutions or banks and has not issued
any debentures. Therefore the provisions of clause (xi)
of paragraph 4 of the Order are not applicable to the
Company.
12 Security for Loans and Advances Granted
According to the information and explanations given to us,
the Company has not granted any loans and advances
debentures, or other securities.
13 Special Statute
explanations given to us, the nature of activities of the
Company does not attract any special statute applicable
to the Chit Funds and Nidhi or Mutual Benet Fund/
Societies. Therefore the provisions of clause xiii(a) to
xiii(d) of paragraph 4 of the Order are not applicable to
the Company.
14 Dealing / Trading in Shares, Securities, Debentures and
Other Investments
In our opinion, the Company is not dealing or trading
in shares, securities, debentures and other investments.
Therefore the provisions of clause (xiv) of paragraph 4 of
the Order are not applicable to the Company.
15 Guarantees given
According to the information and explanations given to
us, the Company has not given any guarantee for loans
taken by others from banks or nancial institutions during
the year.
16 Term Loan
To the best of our knowledge and belief and according
to the information and explanations given to us, the
Company has not taken any term loan during the year.
Therefore the provisions of clause (xvi) of paragraph 4 of
17 Utilisation of Funds
According to the information and explanation given to
us and on overall examination of the Balance Sheet and
Cash Flow statement of the Company, in our opinion,
short term fund have been used for long term investment
to the extent of INR 927.08 lakhs.
18 Preferential Allotment of Shares
During the year, the Company has not made any
preferential allotment of shares to parties and companies
covered in the Register maintained under section 301 of
the Companies Act, 1956.
19 Securities of Debenture Issued
The Company has not issued debentures during the year.
Therefore, the question of creating security or charge in
respect thereof is not applicable/does not arise.
20 Public Issue of Equity Shares
During the year, the Company has not raised money by
any public issues and hence the question of disclosure
and verication of end use of such money does not arise.
21 Frauds
During the course of our examination of the books and
records of the company, carried out in accordance with
the generally accepted auditing practices in India and
according to the information and explanations given to us,
we have neither come across any instances of signicant
fraud on or by the Company, noticed or reported during
the year, nor have we been informed of such cases by the
management.
H.P. Mahajani
Date : 10th May, 2014 Membership No. 030168
91
BALANCE SHEET AS AT MARCH 31, 2014
(Currency: Indian Rupees ` in Lacs)
March 31, 2014
As at
March 31, 2013
(1) Shareholders Funds
(a) Share capital ...................................................................................... 1 (1) 5.05 5.05
(b) Reserves and surplus ........................................................................ 1 (2) (614.34) (10.57)
(609.29) (5.52)
(a) Deferred tax liabilities ........................................................................ 1 (3) 13.93 14.49
(b) Long-term provisions ......................................................................... 1 (4) 28.90 32.33
42.83 46.82
(a) Trade payables .................................................................................. 1 (5) 3,955.45 4,106.05
(b) Other current liabilities ....................................................................... 1 (6) 299.83 305.35
(c) Short-term provisions ........................................................................ 1 (7) 126.55 63.78
4,381.83 4,475.18
TOTAL ...................................................................................................................... 3,815.37 4,516.49
II. ASSETS
(1) Non-current Assets
(a) Fixed Assets 1 (8)
(i) Tangible assets ........................................................................... 697.63 689.64
(ii) Intangible assets ......................................................................... 1.32 2.40
(iii) Capital Work-in-Progress ............................................................ 12.11
711.06 692.04
(b) Long-term loans and advances ........................................................ 1 (9) 301.91 256.51
1,012.97 948.54
(2) Current Assets
(a) Inventories .......................................................................................... 1 (10) 1,835.18 2,443.80
(b) Trade receivables ............................................................................... 1 (11) 433.59 699.82
(c) Cash and cash equivalents ............................................................... 1 (12) 212.12 113.65
(d) Short-term loans and advances ........................................................ 1 (13) 190.10 292.21
(e) Other Current assets ......................................................................... 1 (14) 131.41 18.46
2,802.40 3,567.95
TOTAL ...................................................................................................................... 3,815.37 4,516.49
See accompanying notes to the nancial statements, as under
Signicant Accounting Policies & Notes to Accounts 3
In terms of our report of even date For and on behalf of the Board of Directors
NBS International Ltd.
For B K Khare & Co. Arun Malhotra Chairman
Firm Registration No. 105102W Ramesh Iyer Director
A M Choksey Director
Vijay Nakra Director
H P Mahajani
Partner Ketan Doshi
Membership No. 30168 Chief Executive Ofcer
Place: Mumbai
Date: 10th May 2014
92
Year ended
March 31, 2014
Year ended
March 31, 2013
I. Revenue from operations ................................................................................ 2 (1) 18,955.78 31,228.05
II. Other income ................................................................................................... 2 (2) 257.25 311.77
III. Total Revenue (I + II) 19,213.03 31,539.82
IV. Expenses:
Purchases of stock-in-trade ............................................................................. 2 (3) 17,131.29 30,137.46
Changes in inventories of nished goods, work-in-progress ........................ 2 (4) 608.62 (456.41)
Employee benets expense ............................................................................ 2 (5) 674.19 716.53
Finance costs ................................................................................................... 2 (6) 18.88 15.88
Depreciation and amortization expense ......................................................... 1 (8) 85.14 57.65
Other expenses ................................................................................................ 2 (7) 1,299.25 1,278.84
Total Expenses ............................................................................................... 19,817.37 31,749.96
V. Prot before exceptional and extraordinary items and tax (III-IV) ................. (604.34) (210.14)
VI. Exceptional items.............................................................................................
VII. Prot before extraordinary items and tax (V-VI) ............................................. (604.34) (210.14)
VIII. Extraordinary items ..........................................................................................
IX. Prot before tax (VII - VIII) ............................................................................... (604.34) (210.14)
X. Tax Expenses:
(1) Current Tax (Including MAT) ....................................................................
(2) Less : MAT Credit Entitlements ...............................................................
(3) Deferred Tax ............................................................................................. 2(8) (0.56) (0.76)
XI. Prot/(Loss) for the period from continuing operations (VII-VIII) ................... (603.78) (209.38)
XII. Prot/(Loss) from discontinuing operations ...................................................
XIII. Tax expense of discontinuing operations .......................................................
XIV. Prot/(Loss) from discontinuing operations (after tax) (XII-XIII) .....................
XV. Prot/(Loss) for the year (XI + XIV) ................................................................ (603.78) (209.38)
XVI. Earnings per equity share: 2(9)
(1) Basic & Diluted ......................................................................................... (1,196) (415)
See accompanying notes to the nancial statements, as under
Signicant Accounting Policies & Notes to Accounts 3
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014
H P Mahajani
Partner Ketan Doshi
Place: Mumbai
Date: 10th May 2014
93
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014
Year ended
March 31, 2014
Year ended
March 31, 2013
A. Cash Flow from Operating Activities
Net Prot before taxation ................................................................................................... (604.34) (210.14)
Adjustments for:
Depreciation on xed assets .............................................................................................. 85.14 57.65
Loss on sale of xed assets ............................................................................................... 3.87
Interest expense ................................................................................................................. 18.88 15.88
Provision for Doubtful Debts .............................................................................................. 1.44
Provision for Doubtful Advances ........................................................................................ 18.56 0.67
Bad Debts W/off ................................................................................................................. 22.06 11.07
Operating Prot before Working Capital changes ....................................................... (455.83) (123.43)
Adjustments for (Increase) / Decrease in Operating Assets:
Inventories ........................................................................................................................... 608.62 (456.41)
Trade Receivables .............................................................................................................. 225.61 75.01
Short Term Loans and Advances ....................................................................................... 102.11 (102.73)
Long Term Loans and Advances ....................................................................................... (26.24) (62.01)
Other Current Assets .......................................................................................................... (112.95) 11.06
Other Non Current Assets ..................................................................................................
Adjustment for Increase / (Decrease) in Operating Assets:
Trade Payables ................................................................................................................... (150.60) 1,226.81
Other Current Liabilities ...................................................................................................... (5.52) (126.55)
Other Long-Term Liabilities .................................................................................................
Short Term Provisions ........................................................................................................ 62.77 0.75
Long Term Provisions ......................................................................................................... (3.43) 14.74
CASH GENERATED FROM OPERATIONS ..................................................................... 244.54 457.24
Income tax Paid .................................................................................................................. (19.16) (33.17)
Net Cash inow from/ (outow) from Operating activities (A) ................................... 225.38 424.07
B. Cash Flow from Investing Activities
Purchase of xed assets .................................................................................................... (112.64) (366.23)
Sale Proceeds from xed assets ....................................................................................... 4.61
Interest received .................................................................................................................
Net Cash inow from / (outow) from Investing activities (B) .................................... (108.03) (366.23)
94
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014 (Contd.)
Year ended
March 31, 2014
Year ended
March 31, 2013
C. Cash Flow from Financing Activities
Repayment of Long-Term Borrowings ...............................................................................
Repayment of Short-Term Borrowings ............................................................................... (130.00)
Interest paid ....................................................................................................................... (18.88) (15.88)
Net Cash inow from/(outow) from Financing activities (C) .................................... (18.88) (145.88)
Net increase / (decrease) in cash and cash equivalents ............................................. 98.47 (88.04)
Opening Cash and Cash Equivalents
Cash in hand ...................................................................................................................... 6.32 8.10
Bank balances .................................................................................................................... 107.33 193.59
113.65 201.69
Closing Cash and Cash Equivalents
Cash in hand ...................................................................................................................... 19.94 6.32
Bank balances .................................................................................................................... 192.18 107.33
212.12 113.65
H P Mahajani
Partner Ketan Doshi
Place: Mumbai
Date: 10th May 2014
95
ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
NOTE 1: Notes to the Balance Sheet
1 SHARE CAPITAL:
a. Details of authorised, issued and subscribed share capital:
Particulars
As at
March 31,
2014
As at
March 31,
2013
Authorised Capital
5,00,000 Equity Shares of Rs. 10/- each 50.00 50.00
Issued Capital
50,500 Equity Shares of Rs. 10/- each 5.05 5.05
Subscribed and Paid up
50,500 Equity Share of Rs. 10/- each
(PY : 50,500 Equity Shares of Rs. 10/each.)
5.05 5.05
5.05 5.05
b. Information on shareholders:
As at March 31, 2014 As at March 31, 2013
Name of
Shareholder Relationship
No of
Equity
shares
held Percentage
No of
Equity
shares
held Percentage
Mahindra &
Mahindra Ltd
Holding Co 50490 99.98 50490 99.98
Mahindra Holdings
Limited
10 0.02 10 0.02
50500 100.00 50500 100.00
c. Reconciliation of number of shares:
Equity Shares
Particulars Number Rs.
Shares outstanding at the beginning of
the year
50500 505,000.00
Shares Issued during the year
Shares bought back during the year
Shares outstanding at the end of the year 50500 505,000.00
d. Terms/Rights attached to Equity Shares
1) The company has issued equity shares having par value of
Rs. 10 per share. Each holder of equity shares is entitled to one
vote per share. The Company declares and pays dividends in Indian
Rupees. The dividend proposed by Board of Directors is subject to
the approval of shareholders at the Annual General Meeting.
2) In the event of liquidation of the Company, the holders of equity
shares shall be entitled to receive remaining assets of the Company.
The distribution will be in proportion to the number of equity shares
held by the Shareholders.
2 RESERVES AND SURPLUS
a. Other Reserves General Reserve
Particulars
As at
March 31,
2014
As at
March 31,
2013
Opening Balance
15.48 15.48
(+) Current Year Transfer
(-) Written Back in Current Year
Closing Balance 15.48 15.48
b. Surplus
Opening balance (26.03) 183.35
(+) Net Prot/(Net Loss) For the current year (603.78) (209.39)
(+) Transfer from Reserves
(-) Proposed Dividends
(-) Tax on Proposed Dividends
(-) Transfer to Reserves
Closing Balance (629.81) (26.04)
GRAND TOTAL .............................................. (614.34) (10.57)
3 DEFERRED TAX ASSETS / LIABILITY (Net)
The major components of deferred tax liability/asset as recognised in the
nancial statement is as follows:
Particulars
Note Ref As at
March 31,
2014
As at
March 31,
2013
Deferred Tax Liability
Excess of net block of xed assets
as per books of accounts over net
block for tax purpose
3 (2) (d) 39.10 36.20
39.10 36.20
Deferred Tax Asset
Expenses disallowed under Sec 43B 17.61 17.43
Carry forward business loss and
unabsorbed depreciation
Provision for Doubtful Debts/
Advances 7.56 4.28
25.17 21.71
Net 13.93 14.49
4 LONG-TERM PROVISIONS:
Particulars
As at
March 31,
2014
As at
March 31,
2013
Provision for Employee Benets:
Gratuity 17.44 16.47
Leave Encashment 11.46 15.86
TOTAL ............................................................ 28.90 32.33
5 TRADE PAYABLES:
Particulars
As at
March 31,
2014
As at
March 31,
2013
Trade Payables *
Due to Micro and Small Enterprises
Other than Micro and Small Enterprises 3,955.45 4,106.05
3,955.45 4,106.05
* Based on the information available with the Company, there are no
parties who have been identied as micro, small and medium enterprises
based on the conrmations circulated and responses received by the
management.
6 OTHER CURRENT LIABILITIES:
Particulars
As at
March 31,
2014
As at
March 31,
2013
Customer Credit Balance 272.78 286.13
Statutory Dues Payable 16.61 15.79
Others (Salary / Insurance / Registration) 10.44 3.42
TOTAL ............................................................ 299.83 305.35
7 SHORT-TERM PROVISIONS
Particulars
As at
March 31,
2014
As at
March 31,
2013
Provision for employee benets:
Salary and Reimbursement
Bonus 20.62 18.24
Gratuity 1.71 0.45
Leave encashment 3.05 2.69
Others:
Accrued Expenses 101.17 42.40
TOTAL ............................................................ 126.55 63.78
96
9 LONG-TERM LOANS AND ADVANCES
Particulars
As at
March 31,
2014
As at
March 31,
2013
a. Security Deposits
Secured, considered good
Doubtful
Less: Provision for doubtful deposits
b. Balance with Govt Authorities:
Income Tax (Net of provisions) 90.51 71.35
MAT Credit Entitlements
Balance of Maharashtra Value
Added Tax 184.05 143.65
TOTAL ............................................................ 301.91 256.51
10 INVENTORIES
Particulars
As at
March 31,
2014
As at
March 31,
2013
a. Stock-in-trade (Valued at Cost or NRV
whichever is lower)
1,743.64 2,049.05
Goods-in transit 91.54 394.75
(Refer Note 3 (2) - C)
TOTAL ............................................................ 1,835.18 2,443.80
11 TRADE RECEIVABLES
Particulars
As at
March 31,
2014
As at
March 31,
2013
period less than six months
Doubtful
Less: Provision for doubtful debts
413.85 687.07
period exceeding six months
Doubtful 4.06 12.51
Less: Provision for doubtful debts (4.06) (12.51)
433.59 699.82
12 CASH AND CASH EQUIVALENT
Particulars
As at
March 31,
2014
As at
March 31,
2013
a. Balances with banks 192.18 107.33
b. Cheques, drafts on hand
c. Cash on hand 19.94 6.32
d. Others (specify nature)
212.12 113.65
8 FIXED ASSETS
PARTICULARS
As at April
1, 2013
Additions
during the
year
Disposal /
Discarded
during the year
As at March
31, 2014
As at April
1, 2013
Depreciation
charge for the
year
Disposal
during the
year
As at
March 31,
2014
As at
March 31,
2014
As at
March 31,
2013
Tangible Assets
Leasehold Improvements 171.45 3.36 174.81 34.54 17.77 52.31 122.50 136.91
Plant & Machinery 185.94 20.51 206.45 47.61 17.12 64.73 141.72 138.33
Furniture & Fixtures 37.95 0.38 38.33 11.31 2.29 13.60 24.73 26.64
Vehicles 345.24 55.04 (11.28) 389.00 25.74 35.11 (3.41) 57.44 331.56 319.51
Ofce Equipment 30.66 15.68 (0.25) 46.09 7.89 3.67 (0.01) 11.55 34.54 22.77
Computers 62.73 5.56 (0.38) 67.91 34.02 8.10 (0.01) 42.11 25.80 28.71
Others Electrical
Installations 20.73 20.73 3.95 3.95 16.78 16.78
Total ............................ 854.70 100.53 (11.91) 943.32 165.06 84.06 (3.43) 245.69 697.63 689.64
Previous Year ............ 514.00 366.23 (25.54) 854.70 108.37 56.70 165.06 689.64 405.64
Intangible Assets
Computer software 2.70 2.70 0.78 0.51 1.29 1.41 1.92
Others Website 3.00 3.00 2.52 0.57 3.09 (0.09) 0.48
Total ............................ 5.70 5.70 3.30 1.08 4.38 1.32 2.40
Previous Year ............ 5.70 5.70 2.34 0.96 3.30 2.40 3.36
Capital WIP 12.11 12.11 12.11
97
13 SHORT-TERM LOANS AND ADVANCES
Particulars
As at
March 31,
2014
As at
March 31,
2013
a. Others
Doubtful 19.24 6.67
Less: Provision for Warranty (19.24) (6.67)
190.10 292.21
14 OTHER CURRENT ASSETS
Particulars
As at
March 31,
2014
As at
March 31,
2013
Advance to Suppliers 7.91 0.75
Prepaid Expenses 14.54 12.84
Balance with Govt Authorities:
Balance of Service Tax 7.79 4.87
Balance of Maharashtra Value
Added Tax 101.17
131.41 18.46
NOTE 2: Notes to the Statement of Prot and Loss
1 REVENUE FROM OPERATIONS
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Sale of Products 17,437.11 29,633.25
Less: Excise Duty
17,437.11 29,633.25
Sale of Services (Net of Service Tax & VAT) 1,518.67 1,594.80
Other Operating Revenues
18,955.78 31,228.05
2 OTHER INCOME
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Scrap Sales 11.28 10.96
Commission Income 63.45 50.04
Infrastructure Service Income 79.94 163.65
Registration Income
Interest on Income Tax Refund 1.98
Misc Write backs 25.84 13.12
Others 68.29 41.02
Provision for Doubtful Debts written back 8.45
Provision for Doubtful Advances written
back 5.46
Assets Discarded in re Recoverable
from Insurance Company 25.54
257.25 311.77
3 PURCHASE OF STOCK-IN-TRADE
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Purchases
Vehicles, Spares & Accessories 17,131.29 30,137.46
17,131.29 30,137.46
4 CHANGES IN INVENTORY:
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Opening Inventory
Traded Goods 2,431.04 1,957.07
Work-In-Progress 12.76 30.32
2,443.80 1,987.39
Closing Inventory
Traded Goods 1,823.54 2,431.04
Work-In-Progress 11.64 12.76
1,835.18 2,443.80
608.62 (456.41)
5 EMPLOYEE BENEFIT EXPENSES
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Salaries 594.14 616.59
Contributions to
Provident fund / ESIS Fund 31.48 34.65
Gratuity fund contributions 3.10 6.71
674.19 716.53
6 FINANCE COST
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Interest others 15.52 0.61
Interest on Inter Company Deposits 11.16
Bank Charges 3.36 4.12
18.88 15.88
98
7 OTHER EXPENSES
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Power and Fuel 63.39 71.70
Rent 256.77 220.72
Rates and Taxes 12.24 10.62
Repairs & Maintenance
Building 5.06 2.51
Plant & Machinery 28.15 7.68
Vehicle 12.59 16.37
Others 19.03 33.51
Insurance 22.57 14.42
Advertisement 9.94 36.01
Sales Promotion 143.47 113.11
Discount 217.27 237.19
Employee Incentive 99.42 126.50
Travelling & Conveyance 32.32 24.35
Hire & Service Charges 258.74 251.43
Postage & Telephone 25.42 26.02
Printing & Stationery 15.24 23.40
Legal and Professional 20.16 11.08
Audit Fees Statutory Fees 2.00 1.00
Audit Fees Others 1.97 1.47
Provision for Doubtful Debts 1.44
Provision for Doubtful Advance 18.56 0.67
Bad Debts W/off 22.06 11.07
Advances W/off 0.67 5.46
Net loss / gain on sale of xed assets 3.87
Assets Lost in Fire 25.58
Others 8.34 5.53
1,299.25 1,278.84
8 EARNINGS PER EQUITY SHARES
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Basic & Diluted Earnings per Share:
Prot/(Loss) attributable to Equity
shareholders (603.78) (209.38)
Weighted average number of equity shares 50,500.00 50,500.00
Basic & Diluted Earnings Per Share (1,196) (415)
Face value per Share 10 10
NOTE 3: Signicant Accounting Policies & Notes to accounts:
1. Nature Operations
NBS International Limited, a wholly owned subsidiary of Mahindra &
Mahindra Ltd. engaged in the business of Sales of Vehicles and servicing
of Motor Vehicles.
2. Signicant Accounting Policies
(a) Basis of Preparation of Financial Statements
The nancial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting and
in accordance with the provisions of the Companies Act, 2013 (the
Act), and the accounting principles generally accepted in India and
comply with the accounting standards prescribed in the Companies
(Accounting Standards) Rules, 2006 issued by the Central
Government, in consultation with the National Advisory Committee
on Accounting Standards, to the extent applicable.
The nancial statement are prepared and presented in the form set
out in Part I and Part II of Revised Schedule VI of the Act, so far as
they are applicable thereto.
These nancial statements are presented in Indian rupees and
rounded off to nearest Lacs.
(b) Use of estimates
The preparation of nancial statements in conformity with
generally accepted accounting principles in India (Indian GAAP)
requires management to make estimates and assumptions that
affect the reported amount of assets, liabilities, revenues and
expenses and disclosure of contingent liabilities on the date of the
nancial statements. The estimates and assumptions used in the
accompanying nancial statements are based upon managements
evaluation of the relevant facts and circumstances as of the date
of nancial statements which in managements opinion are prudent
and reasonable. Actual results may differ from the estimates used
in preparing the accompanying nancial statements. Any revision
to accounting estimates is recognized prospectively in current and
future periods.
(c) Inventories:
Inventories are valued at lower of cost or net realizable value. Basis
of determination of goods in transits are valued inclusive of duties &
taxes, where applicable.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
(d) Fixed Assets:
(i) Tangible Assets:
Fixed Assets are stated on cost less accumulated depreciation.
The total cost of assets comprises its purchase price, freight,
duties, taxes and any other incidental expenses directly
attributable to bringing the asset to the working condition for
its intended use.
(ii) Intangible assets:
Intangible assets are recognized if it is probable that the future
economic benets that are attributable to the assets will ow
to the Company and cost of the assets can be measured
reliably.
(e) Depreciation:
Leasehold Improvements are amortized over the period of
lease or estimated period of useful life of such improvement,
whichever is lower.
Depreciation on other xed assets is provided on Straight Line
Method on a pro rata basis over its economic useful lives,
estimated by the management or at the rates prescribed under
Schedule XIV of the Act whichever is higher.
99
Fixed Assets Rates
adopted(SLM)
(a) Lease Hold Premises 3.34%
(b) Plant & Machinery 10 years 9.50%
(c) Plant & Machinery 5 years 19.00%
(d) Plant & Machinery Tools 4.75%
(e) Plant & Machinery 3 years
Electric Equipment
31.67%
(f) Plant & Machinery 3 years
Tools
33.00%
(g) Plant & Machinery Electrical
Installation
6.33%
(h) Plant & Machinery Ofce
Equipment 3 years
33.00%
(i) Plant & Machinery Ofce
Equipment 5 years
19.80%
(j) Furniture & Fixtures 6.33%
(k) Furniture & Fixtures 5 years 19.80%
(l) Vehicles 9.50%
(m) Computer & Software 16.21%
(n) Computer & Software (Printer) 33.00%
(o) Web Portal 19.00%
Assets costing less than or equal to Rs. 5,000 are depreciated
fully in the year of purchase.
Cost of intangible assets is being amortized over a period of
ve years on time proportion basis.
(f) Revenue Recognition:
Revenue is recognized to the extent that it is probable that the
economic benets will ow to the Company and the revenue can be
reliably measured.
Sales of goods:
Sale of vehicles/spares parts and accessories of vehicles
(including customized) is recognized when delivery is accepted
by the customer. Sales are stated net of discounts, duties and
sales tax.
Service Income:
Service income is recognized as per the terms of the contract
when the related services are rendered. It is stated net of
service tax.
Other Income:
Income from nancing vehicles, Insurance Income and other
service income are accounted on accrual basis.
(g) Retirement and Other Employee Benets:
Short term employee benet
All employee benets payable wholly within twelve months of
rendering the service are classied as short-term employee
benets. These benets include short term compensated
absences such as paid annual leave. The undiscounted
amount of short-term employee benets expected to be
paid in exchange for the services rendered by employees is
recognized as an expense during the period. Benets such as
salaries and wages, etc. and the expected cost of the bonus/
ex-gratia are recognized in the period in which the employee
renders the related service.
Post employment employee benets
Dened Contribution schemes
Companys contributions to the Provident Fund and Employees
State Insurance Fund are charged to the Statement of Prot
and Loss of the year when the contributions to the respective
funds are due.
Dened benets plans
Companys liabilities towards gratuity is determined by
independent actuary, using the projected unit credit method
which considers each period of service as giving rise to an
additional unit of benet entitlement and measures each unit
separately to build up the nal obligation. Actuarial gain and
losses are recognized in the Statement of Prot and loss as
income or expense in the year in which they occur. Obligation
is measured at the present value of estimated future cash
ow using a discount rate that is determined by reference to
market yields at the Balance Sheet date on Government Bonds
where the currency and terms of the Government Bonds are
consistent with the currency and estimated terms of the dened
benet obligation.
Other long term employee benets
Companys liabilities towards compensated absences to
employees are accrued on the basis of valuations, as at the
Balance Sheet date, carried out by an independent actuary
using Projected Unit Credit Method. Actuarial gains and losses
comprise experience adjustments and the effects of changes
in actuarial assumptions and are recognized immediately in the
(h) Earnings Per Share
Basic earnings per share are calculated by dividing the net prot
or loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during
the period.
Diluted earnings per share are calculated after adjusting effects
of potential equity shares (PES).PES are those shares which will
convert into equity shares at a later stage. Prot/loss is adjusted
by the expenses incurred on such PES. Adjusted prot/loss is
divided by the weighted average number of ordinary plus potential
equity shares.
(i) Taxation
Income-tax expense comprises current tax, deferred tax charge or
credit, minimum alternative tax (MAT).
Current tax
Provision for current tax is made for the tax liability payable on
taxable income after considering tax allowances, deductions and
exemptions determined in accordance with the prevailing tax laws.
Deferred tax
Deferred tax liability or asset is recognized for timing differences
between the prots/losses offered for income tax and prots/losses
as per the nancial statements. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted
or substantively enacted at the Balance Sheet date.
Deferred tax asset is recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax asset is recognized only if there is a virtual
certainty of realization of such asset. Deferred tax asset is reviewed
as at each Balance Sheet date and written down or written up to
reect the amount that is reasonably/virtually certain to be realized.
Minimum alternative tax
Minimum alternative tax (MAT) obligation in accordance with the
tax laws, which give rise to future economic benets in the form of
adjustment of future income tax liability, is considered as an asset if
there is convincing evidence that the Company will pay normal tax
during the specied period. Accordingly, it is recognized as an asset
in the Balance Sheet when it is probable that the future economic
benet associated with it will ow to the Company and the asset can
be measured reliably.
(j) Impairment of Assets
The Company assesses at each Balance Sheet date whether there
is any indication that an asset or a group of assets (cash generating
unit) may be impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset or a group of assets.
100
The recoverable amount of the asset (or where applicable, that of the
cash generating unit to which the asset belongs) is estimated as the
higher of its net selling price and its value in use. If such recoverable
amount of the asset or the recoverable amount of the cash-generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized in the Statement
of Prot and Loss. After impairment, depreciation is provided on the
revised carrying amount of the asset over its remaining useful life.
Value in use is the present value of estimated future cash ow
expected to arise from the continuing use of the assets and from its
disposal at the end of its useful life.
If at the Balance Sheet date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount
is reassessed and the asset is reected at the recoverable amount
subject to a maximum of depreciable historical cost.
(k) Provisions and Contingencies
A provision is recognized when an enterprise has a present
obligation as a result of past event and it is probable that an outow
of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to their present values and are determined based on management
estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to
reect the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations
that have arisen from past events and the existence of which will be
conrmed only by the occurrence or non-occurrence of future events
not wholly within the control of the Company.
When there is an obligation in respect of which the likelihood of
outow of resources is remote, no provision or disclosure is made.
3. During the current year company has incurred cash losses amounting to
INR 519.20 lacs (previous year INR 152.49 lacs). Net-worth at the end of
the year is also negative amounting to INR 609.29 lacs (previous year
INR 5.25 lacs).
In the opinion of the management, taking into account its business
and nancial plans for the foreseeable future, the company is a going
concern and accordingly the nancial statements have been drawn up on
that basis.
4. Information pursuant to para 5(ii) and 5(iii) of the General Instructions
to the Statement of Prot and Loss
(Currency: Indian Rupees in Lacs)
(a) Particulars of traded goods purchases: (for trading companies)
Traded goods Year Ended
March 31,
2014
Year Ended
March 31,
2013
Vehicles 16,197.37 29,012.84
Spares & Accessories 933.92 1,129.03
Others
TOTAL .................................................. 17,131.29 30,141.97
(b) Particulars of sales and inventory position: (for trading companies)
Traded Goods Year Ended March 31, 2014
Sales Closing
Inventory
Opening
Inventory
Vehicles 17,437.11
(29,633.26)
1,511.69
(2,052.96)
2,052.96
(1626.54)
Spares & Accessories
(Incl. Labour Charges)
1,518.67
(1,594.80)
323.49
(390.84)
390.84
(362.86)
TOTAL ......................... 18,955.78
(31,228.05)
1,835.17
(2,443.80)
2,443.80
(1987.39)
* Previous year gures are in brackets
5. Auditor Remuneration
Particulars Year Ended
March 31,
2014*
Year Ended
March 31,
2013*
As Auditor 2,00,000 1,00,000
For Taxation matter 55,000 55,000
For other services 1,47,865 75,000
TOTAL ............................................................ 4,02,865 2,30,000
* Exclusive of Service Tax.
6. Disclosure pursuant to Accounting Standard 15 Employee Benets
a. The following tables set out disclosures prescribed by AS 15 in
respect of companys unfunded gratuity plan.
(i) Changes in the present value of dened benet obligation
representing reconciliation of opening and closing balances
thereof:
March 31,
2014
Year ended
March 31,
2013
Present value of obligation as
at the beginning of the year: 16.92 10.22
Interest cost 2.05 1.37
Current service cost 8.33 5.68
Benets paid
Actuarial (gain) / loss on
obligation (7.29) (0.35)
Closing Present value of
obligation 19.15 16.92
(ii) The amounts recognized in the Statement of Prot and Loss
are as follows:
March 31,
2014
Year ended
March 31,
2013
Past service cost
Expected return on plan assets -
Net actuarial (gain) / loss
recognized in the year (7.29) (0.35)
Expenses recognised in the
statement of prot and loss* 3.09 6.71
* Included in Note 2 (5) Employee benets expenses in the
statement of prot & loss
(iii) Actuarial assumption:
March 31,
2014
Year Ended
March 31,
2013
Salary Growth* 10% for rst
Five years
& 7%
thereafter
10% for rst
Five years
& 7%
thereafter
Discount Rate 9.30% 8.20%
Withdrawal Rate
* The estimates of future salary increases, considered in
a actuarial valuation, takes account of ination, seniority,
promotion and other relevant factors such as supply and
demand in the employment market.
101
Arun Malhotra Chairman
Ramesh Iyer Director
Ketan Doshi
Chief Executive Ofcer
Place: Mumbai
Date: 10th May 2014
7. Related Party disclosures
i. List of related parties
Names of related parties:
(A) Holding Company : Mahindra & Mahindra Limited
(B) Fellow Subsidiary
companies
: 1. Mahindra & Mahindra Financial
Services Limited
2. Mahindra Automobile Dist Pvt. Ltd.
3. Mahindra First Choice Services Ltd.
4. Mahindra First Choice Wheels Ltd.
5. Mahindra Truck & Buses Ltd.
6. Mahindra Reva Electric Vehicles Ltd.
7. Mahindra Intratrade Ltd.
8. Mahindra Life Space Developer Ltd.
9. Mahindra Integrated Services Ltd.
10. Mahindra Rural Housing
Finance Ltd.
ii. Related party transactions are as under:
(Rs. Lacs)
company
Fellow
Subsidiary
companies
Purchases of Goods 18192.63 100.68
(32004.22) (163.77)
Purchases of Fixed Assets (2.85)
(253.01) ()
Amount Receivable 74.54
(16.25) (41.56)
Amount Payable 3,932.50 0.63
(4,079.69) (0.74)
Income from Services rendered and
other income 60.57 18.50
(130.71) (10.16)
Hire & Service Charges (Manpower) 84.58 2.18
(81.47) ()
Rent paid 148.42
(168.54) ()
Sales and Promotion Expenses
(Penalty charge) 40.00
() ()
(Figures in bracket are for previous year ended 31 March 2013)
8. Contingent Liabilities not provided for:
No. of case Amount (Rs.)
Current year Pervious Year Current year Pervious Year
Income tax Demand
(under appeal) for
A.Y 2011-12
1 72, 05,660
9. Previous Year Comparatives
Previous year gures are presented as per the Revised Schedule VI to
make comparables with current year. However, groupings of previous
years gures presented in these nancial statements are not matching
with those presented in previous years nancial statements.
In term of our report of even date attached
MAHINDRA AND MAHINDRA SOUTH AFRICA (PROPRIETARY) LIMITED
102
DIRECTORS RESPONSIBILITIES AND APPROVAL
The directors are required in terms of the Companies Act 71
of 2008 to maintain adequate accounting records and are
responsible for the content and integrity of the annual nancial
statements and related nancial information included in this
report. It is their responsibility to ensure that the annual
nancial statements fairly present the state of affairs of the
Company as at the end of the nancial year and the results
of its operations and cash ows for the period then ended,
in conformity with International Financial Reporting Standards.
The external auditors are engaged to express an independent
opinion on the annual nancial statements.
The annual nancial statements are prepared in accordance
with International Financial Reporting Standards and are
based upon appropriate accounting policies consistently
applied and supported by reasonable and prudent judgments
and estimates.
The directors acknowledge that they are ultimately responsible
for the system of internal nancial control established by the
Company and place considerable importance on maintaining
a strong control environment. To enable the directors to meet
these responsibilities, the board sets standards for internal
control aimed at reducing the risk of error or loss in a cost
effective manner. The standards include the proper delegation
of responsibilities within a clearly dened framework, effective
accounting procedures and adequate segregation of duties
to ensure an acceptable level of risk. These controls are
monitored throughout the Company and all employees are
required to maintain the highest ethical standards in ensuring
the Companys business is conducted in a manner that in all
reasonable circumstances is above reproach. The focus of
risk management in the Company is on identifying, assessing,
managing and monitoring all known forms of risk across the
Company. While operating risk cannot be fully eliminated,
the Company endeavours to minimise it by ensuring that
appropriate infrastructure, controls, systems and ethical
behaviour are applied and managed within predetermined
procedures and constraints.
The directors are of the opinion, based on the information and
explanations given by management, that the system of internal
control provides reasonable assurance that the nancial
records may be relied on for the preparation of the annual
nancial statements. However, any system of internal nancial
control can provide only reasonable, and not absolute,
assurance against material misstatement or loss.
The directors have reviewed the Companys cash ow forecast
for the year to 31
st
March, 2015 and, in the light of this review
and the current nancial position, they are satised that
the Company has or has access to adequate resources to
continue in operational existence for the foreseeable future.
The external auditors are responsible for independently
reviewing and reporting on the Companys annual nancial
statements. The annual nancial statements have been
examined by the Companys external auditors and their report
is presented on along with the nancial statement.
The annual nancial statements set out on hereinafter which
have been prepared on the going concern basis, were
approved by the board on 29
th
April, 2014 and were signed
on its behalf by:
Dr Pawan Goenka Kandasamy Chandrasekar
(Chairman) (Director)
Ramesh Iyer Ruzbeh Irani
(Director) (Director)
Pretoria
29
th
April 2014
103
DIRECTORS REPORT
The Directors submit their report for the year ended 31
st
March,
2014.
1. Review of activities
Main business and operations
The Company is engaged to pursue business opportunities
in the automobile, automobile spare parts and other
related sections and operates principally in South Africa.
The operating results and state of affairs of the company
are fully set out in the attached annual nancial statements
and do not in our opinion require any further comment.
2. Going concern
The annual nancial statements have been prepared on
the basis of accounting policies applicable to a going
concern. This basis presumes that funds will be available to
nance future operations and that the realisation of assets
and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business.
3. Compliances
The directors acknowledge that certain Companies Act
compliances need to be fullled including:
To appoint a Social and Ethics Committee
To perform the solvency and liquidity test for
authorizing and distributing the dividends and
To inform the shareholders of nancial assistance
provided, if any.
4. Events after the reporting period
The directors are not aware of any matter or circumstance
arising since the end of the nancial year.
5. Authorised and issued share capital
There were no changes in the authorised or issued share
capital of the Company during the year under review.
6. Dividends
The dividends already declared and paid to shareholder
during the year are as reected in the attached statement
of changes in equity.
7. Directors
The directors of the Company during the year and to the
date of this report are as follows:
Name Nationality
Dr Pawan Goenka
(Chairman)
United States of
America
Kandasamy
Chandrasekar
Indian
Ramesh Iyer Indian
Ruzbeh Irani Indian
8. Secretary
The Secretary of the Company is P Cilliers of:
Business address 434 Atterbury Road
Menlo Park
Pretoria 0081
Postal address PO Box 35510
Menlo Park 0102
9. Holding company
The Companys holding company is Mahindra &
Mahindra Limited incorporated in India.
10. Auditors
Deloitte & Touche will continue in ofce in accordance
with section 90 of the Companies Act 71 of 2008.
Dr Pawan Goenka Kandasamy Chandrasekar
(Chairman) (Director)
Ramesh Iyer Ruzbeh Irani
Pretoria
29
th
April, 2014
104
We have audited the annual nancial statements of
Mahindra and Mahindra South Africa (Proprietary) Limited
set out on pages 8 to 34, which comprise the statement of
nancial position as at 31 March 2014, and the statement of
comprehensive income, statement of changes in equity and
statement of cash ows for the year then ended, and the notes,
comprising a summary of signicant accounting policies and
other explanatory information.
Directors Responsibility for the Financial Statements
The companys directors are responsible for the preparation
and fair presentation of these nancial statements in accordance
with International Financial Reporting Standards and the
requirements of the Companies Act of South Africa, and for
such internal control as the directors determine is necessary to
enable the preparation of nancial statements that are free from
accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the nancial statements are free from material
misstatement.
evidence about the amounts and disclosures in the nancial
misstatement of the nancial statements, whether due to
fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and
fair presentation of the nancial statements in order to design
audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also
includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation
Opinion
In our opinion, the nancial statements present fairly, in all
material respects, the nancial position of Mahindra and
To the shareholder of Mahindra and Mahindra South Africa
(Proprietary) Limited
Mahindra South Africa (Proprietary) Limited as at 31 March
2014, and its nancial performance and its cash ows for the
year then ended in accordance with International Financial
Reporting Standards and the requirements of the Companies
Act of South Africa.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the matters
below. Our opinion is not modied in respect of these matters.
Restatement of comparative gures
We draw attention to note 27 to the nancial statements which
include details regarding the restatement of comparative
gures as at 31 March 2013 and for the year then ended.
Non-compliance with the Companies Act
We draw attention to the Directors Report which includes
certain aspects of non-compliance with the Companies Act of
South Africa (the Act).
The directors did not appoint a Social end Ethics
Committee as required by the Act.
The directors did not perform the solvency and liquidity
test for authorising and distributing dividends as required
by the Act.
The directors did not obtain shareholder approval for
nancial assistance provided to related and inter-related
companies as required by the Act.
Other reports required by the Companies Act
As part of our audit of the nancial statements for the year
ended 31 March 2014, we have read the Directors Report,
for the purpose of identifying whether there are material
inconsistencies between these reports and the audited
nancial statements.
These reports are the responsibility of the respective preparers.
Based on reading these reports we have not identied material
inconsistencies between these reports and the audited nancial
statements. However, we have not audited these reports and
accordingly do not express an opinion on these reports.
Deloitte & Touche
Registered Auditor
Per: JC vd Walt
Partner
29
th
April, 2014
105
STATEMENT OF FINANCIAL POSITION
Note(s)
2014 2013
Rs ZAR Rs ZAR
ASSETS
Non-Current Assets
Property, plant and equipment ............................ 3 26,142,113 4,610,602 13,022,034 2,296,655
Deferred tax .......................................................... 5 89,298,718 15,749,333 73,932,853 13,039,304
115,440,831 20,359,935 86,954,887 15,335,959
Current Assets
Inventories ............................................................. 7 1,074,334,816 189,477,040 1,034,118,039 182,384,134
Current tax receivable .......................................... 8,021,400 1,414,709 8,658,793 1,527,124
Trade and other receivables ................................ 8 333,752,048 58,862,795 438,614,360 77,357,030
Cash and cash equivalents .................................. 9 244,137,987 43,057,846 60,409,773 10,654,281
1,660,246,251 292,812,390 1,541,800,965 271,922,569
Total Assets ......................................................... 1,775,687,082 313,172,325 1,628,755,852 287,258,528
EQUITY AND LIABILITIES
Equity
Share capital ......................................................... 10 294,840,000 52,000,000 294,840,000 52,000,000
Retained income ................................................... 393,412,870 69,384,986 248,700,136 43,862,458
688,252,870 121,384,986 543,540,136 95,862,458
Liabilities
Non-Current Liabilities
Deferred income ................................................... 11 135,924,489 23,972,573 116,793,450 20,598,492
Provisions .............................................................. 12 89,897,538 15,854,945 82,322,730 14,519,000
225,822,027 39,827,518 199,116,180 35,117,492
Current Liabilities
Trade and other payables .................................... 13 353,937,117 62,422,772 421,519,985 74,342,149
Deferred income ................................................... 11 150,036,705 26,461,500 85,262,120 15,037,411
Provisions .............................................................. 12 357,638,363 63,075,549 286,672,064 50,559,447
Bank overdraft ...................................................... 9 92,645,367 16,339,571
861,612,185 151,959,821 886,099,536 156,278,578
Total Liabilities .................................................... 1,087,434,212 191,787,339 1,085,215,716 191,396,070
Total Equity and Liabilities................................. 1,775,687,082 313,172,325 1,628,755,852 287,258,528
106
STATEMENT OF COMPREHENSIVE INCOME
Note(s)
2014 2013
Rs ZAR Rs ZAR
Revenue .............................................................. 15 3,985,972,311 702,993,353 4,149,071,635 731,758,666
Cost of sales ....................................................... 16 (3,426,689,980) (604,354,494) (3,630,658,274) (640,327,738)
Gross prot 559,282,330 98,638,859 518,413,361 91,430,928
Other income ...................................................... 11,813,938 2,083,587 18,691,132 3,296,496
Operating expenses ........................................... (282,091,753) (49,751,632) (264,406,275) (46,632,500)
Operating prot ................................................. 17 289,004,515 50,970,814 272,698,218 48,094,924
Investment revenue ............................................ 18 5,004,262 882,586 6,467,644 1,140,678
Finance costs ...................................................... 19 (11,082,644) (1,954,611) (25,900,781) (4,568,039)
Prot before taxation ........................................ 282,926,133 49,898,789 253,265,081 44,667,563
Taxation ............................................................... 20 (79,245,399) (13,976,261) (70,918,307) (12,507,638)
Prot for the year .............................................. 203,680,734 35,922,528 182,346,774 32,159,925
Other comprehensive income ............................
Total comprehensive income........................... 203,680,734 35,922,528 182,346,774 32,159,925
STATEMENT OF CHANGES IN EQUITY
Share
capital
Retained
income
Total
equity
Rupee
Balance at 1
st
April, 2012 ................................. 294,840,000 110,579,362 405,419,362
Changes in equity
Total comprehensive income for the year ......... 182,346,775 182,346,775
Dividends ............................................................ (44,226,000) (44,226,000)
Total changes ...................................................... 138,120,775 138,120,775
Balance at 1
st
April, 2013 ................................. 294,840,000 248,700,137 543,540,137
Changes in equity
Dividends ............................................................ (58,968,000) (58,968,000)
Total changes ...................................................... 144,712,733 144,712,733
Balance at 31
st
March, 2014 ............................ 294,840,000 393,412,870 688,252,870
Note(s) 10
Rand
Balance at 1
st
April, 2012 ................................. 52,000,000 19,502,533 71,502,533
Changes in equity
Dividends ............................................................ (7,800,000) (7,800,000)
Total changes ...................................................... 24,359,925 24,359,925
Balance at 1
st
April, 2013 ................................. 52,000,000 43,862,458 95,862,458
Changes in equity
Dividends ............................................................ (10,400,000) (10,400,000)
Total changes ...................................................... 25,522,528 25,522,528
Balance at 31
st
March, 2014 ............................ 52,000,000 69,384,986 121,384,986
Note(s) 10
107
STATEMENT OF CASH FLOWS
Note(s)
2014 2013
Rs ZAR Rs ZAR
Cash ows from operating activities
Cash generated from operations ................... 22 451,900,888 79,700,333 162,274,146 28,619,779
Interest income ............................................... 5,004,262 882,586 6,467,644 1,140,678
Finance costs .................................................. (11,082,644) (1,954,611) (25,900,781) (4,568,039)
Tax paid ........................................................... (93,973,871) (16,573,875) (131,434,778) (23,180,737)
Net cash from operating activities ............. 351,848,635 62,054,433 11,406,231 2,011,681
Cash ows from investing activities
Purchase of property, plant and equipment ........ 3 (25,758,191) (4,542,891) (24,864,968) (4,385,356)
Sale of property, plant and equipment .......... 3 9,251,138 1,631,594 16,313,786 2,877,211
Sale of nancial assets ................................... 46,550 8,210
Net cash from investing activities .............. (16,507,053) (2,911,297) (8,504,632) (1,499,935)
Cash ows from nancing activities
Dividends paid ................................................ (58,968,000) (10,400,000) (44,226,000) (7,800,000)
Total cash movement for the year .............. 276,373,581 48,743,136 (41,324,401) (7,288,254)
Cash at the beginning of the year ................. (32,235,594) (5,685,290) 9,088,805 1,602,964
Total cash at end of the year ...................... 9 244,137,987 43,057,846 (32,235,596) (5,685,290)
108
ACCOUNTING POLICIES
1. Presentation of Financial Statements
The annual nancial statements have been prepared in accordance with
International Financial Reporting Standards, and the Companies Act 71
of 2008. The nancial statements have been prepared on the historical
cost basis, except for the measurement of certain nancial instruments at
fair value, and incorporate the principal accounting policies set out below.
They are presented in South African Rands.
These accounting policies are consistent with the previous period.
1.1 Signicant judgements and sources of estimation uncertainty
In preparing the annual nancial statements, management is required to
make estimates and assumptions that affect the amounts represented in the
nancial statements and related disclosures. Use of available information
and the application of judgement is inherent in the formation of estimates.
Actual results in the future could differ from these estimates which may be
material to the annual nancial statements. Signicant judgements include:
Provisions
Provisions were raised and management determined an estimate based
on the information available. Additional disclosure of these estimates of
provisions are included in note 12 - Provisions.
Warranties
In preparing the nancial statements, management has made signicant
judgements relating to the basis of determining the provision for warranty
claims. This provision has been based on past experience to arrive at an
acceptable rate. Additional disclosure of these estimates of provisions are
included in note 12 - Provisions.
1.2 Property, plant and equipment
The cost of an item of property, plant and equipment is recognised as an
asset when:
it is probable that future economic benets associated with the item will
ow to the company; and
the cost of the item can be measured reliably.
Property, plant and equipment is initially measured at cost.
Costs include costs incurred initially to acquire or construct an item of
property, plant and equipment and costs incurred subsequently to add
to, replace part of, or service it. If a replacement cost is recognised in the
carrying amount of an item of property, plant and equipment, the carrying
amount of the replaced part is derecognised.
Property, plant and equipment are depreciated on the straight line basis
over their expected useful lives to their estimated residual value.
Property, plant and equipment is carried at cost less accumulated
depreciation and any impairment losses.
The useful lives of items of property, plant and equipment have been
assessed as follows:
Item Average useful life
Plant and machinery 3 years
Furniture and xtures 3 years
Motor vehicles 4 years
Ofce equipment 6 years
IT equipment 4 years
Computer software 5 years
Leasehold improvements 3 years
The residual value, useful life and depreciation method of each asset are
reviewed at the end of each reporting period. If the expectations differ
from previous estimates, the change is accounted for as a change in
accounting estimate.
Each part of an item of property, plant and equipment with a cost that is
signicant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in prot or loss.
The gain or loss arising from the derecognition of an item of property, plant
and equipment is included in prot or loss when the item is derecognised.
The gain or loss arising from the derecognition of an item of property, plant
and equipment is determined as the difference between the net disposal
proceeds, if any, and the carrying amount of the item.
1.3 Financial instruments
Initial recognition and measurement
Financial instruments are recognised initially when the company becomes
a party to the contractual provisions of the instruments.
The company classies nancial instruments, or their component parts,
on initial recognition as a nancial asset, a nancial liability or an
equity instrument in accordance with the substance of the contractual
arrangement.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are
subsequently measured at amortised cost using the effective interest rate
method. Appropriate allowances for estimated irrecoverable amounts are
recognised in prot or loss when there is objective evidence that the asset
is impaired. Signicant nancial difculties of the debtor, probability that
the debtor will enter bankruptcy or nancial reorganisation, and default
or delinquency in payments (more than 30 days overdue) are considered
indicators that the trade receivable is impaired. The allowance recognised
is measured as the difference between the assets carrying amount and
the present value of estimated future cash ows discounted at the effective
interest rate computed at initial recognition.
The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss is recognised in prot or
loss within operating expenses. When a trade receivable is uncollectable,
it is written off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are credited
against operating expenses in prot or loss.
Trade and other receivables are classied as loans and receivables.
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Cash and cash equivalents comprise of cash on hand and demand deposits,
and other short term highly liquid investments that are readily convertible to a
known amount of cash and are subject to an insignicant risk of changes in
value. These are initially and subsequently recorded at fair value.
Bank overdraft and borrowings
Bank overdrafts and borrowings are initially measured at fair value, and
are subsequently measured at amortised cost, using the effective interest
rate method. Any difference between the proceeds (net of transaction
costs) and the settlement or redemption of borrowings is recognised over
the term of the borrowings in accordance with the companys accounting
policy for borrowing costs.
Other nancial liabilities are measured initially at fair value and subsequently
at amortised cost, using the effective interest rate method.
Derivatives
Derivative nancial instruments, which are not designated as hedging
instruments, consisting of foreign exchange contracts and interest rate
swaps, are initially measured at fair value on the contract date, and are re
measured to fair value at subsequent reporting dates.
Changes in the fair value of derivative nancial instruments are recognised
in prot or loss as they arise.
Derivatives are classied as nancial assets at fair value through prot or
loss held for trading.
NOTES TO FINANCIAL STATEMENTS
109
1.4 Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid,
recognised as a liability. If the amount already paid in respect of current
and prior periods exceeds the amount due for those periods, the excess
is recognised as an asset.
Current tax liabilities (assets) for the current and prior periods are measured
at the amount expected to be paid to (recovered from) the tax authorities,
using the tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences,
except to the extent that the deferred tax liability arises from the initial
recognition of an asset or liability in a transaction which at the time of the
transaction, affects neither accounting prot nor taxable prot (tax loss).
A deferred tax asset is recognised for all deductible temporary differences
to the extent that it is probable that taxable prot will be available against
which the deductible temporary difference can be utilised. A deferred
tax asset is not recognised when it arises from the initial recognition of
an asset or liability in a transaction at the time of the transaction, affects
neither accounting prot nor taxable prot (tax loss).
A deferred tax asset is recognised for the carry forward of unused tax
losses to the extent that it is probable that future taxable prot will be
available against which the unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Tax expenses
Current and deferred taxes are recognised as income or an expense and
included in prot or loss for the period, except to the extent that the tax
arises from:
a transaction or event which is recognised, in the same or a different
period, to other comprehensive income, or
a transaction or event which is recognised, in the same or a different
period, directly in equity, or
a business combination.
Current tax and deferred taxes are charged or credited directly to equity
if the tax relates to items that are credited or charged, in the same or a
different period, directly in equity.
1.5 Leases
A lease is classied as a nance lease if it transfers substantially all the
risks and rewards incidental to ownership. A lease is classied as an
operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership.
Operating leases lessee
Operating lease payments are recognised as an expense on a straight
line basis over the lease term. The difference between the amounts
recognised as an expense and the contractual payments are recognised
as an operating lease asset. This liability is not discounted.
1.6 Inventories
Inventories are measured at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs
necessary to make the sale.
The cost of inventories comprises of all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their
present location and condition.
The cost of inventories is assigned using the weighted average cost
formula. The same cost formula is used for all inventories having a similar
nature and use to the entity.
1.7 Impairment of assets
The company assesses at each end of the reporting period whether there
is any indication that an asset may be impaired. If any such indication
exists, the group estimates the recoverable amount of the asset.
If there is any indication that an asset may be impaired, the recoverable
amount is estimated for the individual asset. If it is not possible to estimate
the recoverable amount of the individual asset, the recoverable amount of
the cash generating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash generating unit is the higher
of its fair value less costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount. That
reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated
depreciation or amortisation is recognised immediately in prot or loss. Any
impairment loss of a revalued asset is treated as a revaluation decrease.
An entity assesses at each reporting date whether there is any indication
that an impairment loss recognised in prior periods for assets other
than goodwill may no longer exist or may have decreased. If any such
indication exists, the recoverable amounts of those assets are estimated.
The increased carrying amount of an asset other than goodwill attributable
to a reversal of an impairment loss does not exceed the carrying amount
that would have been determined had no impairment loss been recognised
for the asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated
depreciation or amortisation other than goodwill is recognised immediately
in prot or loss. Any reversal of an impairment loss of a revalued asset is
treated as a revaluation increase.
1.8 Share capital and equity
An equity instrument is any contract that evidences a residual interest in
the assets of an entity after deducting all of its liabilities.
1.9 Employee benets
Short term employee benets
The cost of short term employee benets, (those payable within 12
months after the service is rendered, such as paid vacation leave and
sick leave, bonuses, and non monetary benets such as medical care),
are recognised in the period in which the service is rendered and are not
discounted.
The expected cost of compensated absences is recognised as an expense
as the employees render services that increase their entitlement or, in the
case of non accumulating absences, when the absence occurs.
The expected cost of prot sharing and bonus payments is recognised as
an expense when there is a legal or constructive obligation to make such
payments as a result of past performance.
Dened contribution plans
Payments to dened contribution retirement benet plans are charged as
an expense as they fall due.
1.10 Provisions and contingencies
Provisions are recognised when:
the company has a present obligation as a result of a past event;
it is probable that an outow of resources embodying economic benets
will be required to settle the obligation; and
a reliable estimate can be made of the obligation.
The amount of a provision is the present value of the expenditure expected
to be required to settle the obligation.
Where some or all of the expenditure required to settle a provision is
expected to be reimbursed by another party, the reimbursement shall be
recognised when, and only when, it is virtually certain that reimbursement
will be received if the entity settles the obligation. The reimbursement
shall be treated as a separate asset. The amount recognised for the
reimbursement shall not exceed the amount of the provision.
NOTES TO FINANCIAL STATEMENTS (Contd.)
110
Provisions are not recognised for future operating losses.
If an entity has a contract that is onerous, the present obligation under the
contract shall be recognised and measured as a provision.
Contingent assets and contingent liabilities are not recognised.
1.11 Revenue
Revenue from the sale of goods is recognised when all the following
conditions have been satised:
the company has transferred to the buyer the signicant risks and
rewards of ownership of the goods;
the company retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the
goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benets associated with the transaction
will ow to the company; and
the costs incurred or to be incurred in respect of the transaction can be
measured reliably.
Revenue is measured at the fair value of the consideration received or
receivable and represents the amounts receivable for goods and services
provided in the normal course of business, net of trade discounts and
volume rebates, and value added tax.
Revenue from the sale of service plans is deferred over the term of the
service plan.
Interest is recognised, in prot or loss, using the effective interest rate method.
1.12 Turnover
Turnover comprises of sales to customers and service rendered to
customers. Turnover is stated at the invoice amount and is exclusive of
value added taxation.
1.13 Cost of sales
When inventories are sold, the carrying amount of those inventories is
recognised as an expense in the period in which the related revenue is
recognised. The amount of any write down of inventories to net realisable
value and all losses of inventories are recognised as an expense in the
period the write down or loss occurs. The amount of any reversal of any
write down of inventories, arising from an increase in net realisable value,
is recognised as a reduction in the amount of inventories recognised as
an expense in the period in which the reversal occurs.
The related cost of providing services recognised as revenue in the current
period is included in cost of sales.
1.14 Borrowing costs
Borrowing costs are recognised as an expense in the period in which they
are incurred.
1.15 Translation of foreign currencies
Foreign currency transactions
A foreign currency transaction is recorded, on initial recognition in Rands,
by applying to the foreign currency amount the spot exchange rate
between the functional currency and the foreign currency at the date of
the transaction.
At the end of the reporting period:
foreign currency monetary items are translated using the closing rate;
non monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of
the transaction; and
non monetary items that are measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous nancial
statements are recognised in prot or loss in the period in which they arise.
Cash ows arising from transactions in a foreign currency are recorded
in Rands by applying to the foreign currency amount the exchange rate
between the Rand and the foreign currency at the date of the cash ow.
2. New Standards and Interpretations
At the date of approval of these annual nancial statements, certain
new accounting standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have not
been adopted early by the entity.
Management anticipates that all of the pronouncements will be adopted
in the entitys accounting policies for the rst period beginning after the
effective date of the pronouncement. Information on new standards,
amendments and interpretations that are expected to be relevant to
the entitys nancial statements is provided below. Certain other new
standards and interpretations have been issued but are not expected to
have a material impact on the entitys nancial statements.
2.1 Standards and interpretations not yet effective and adopted in the
current year
In the current year, the company has adopted the following standards and
interpretations that are effective for the current nancial year and that are
relevant to its operations:
IFRS 9 Financial Instruments
This new standard is the rst phase of a three phase project to replace
IAS 39 Financial Instruments: Recognition and Measurement. To date,
the standard includes chapters for classication, measurement and
derecognition of nancial assets and liabilities. The following are main
changes from IAS 39:
Financial assets will be categorised as those subsequently measured at
fair value or at amortised cost.
Financial assets at amortised cost are those nancial assets where the
business model for managing the assets is to hold the assets to collect
contractual cash ows (where the contractual cash ows represent
payments of principal and interest only). All other nancial assets are to
be subsequently measured at fair value.
Under certain circumstances, nancial assets may be designated as at
fair value.
For hybrid contracts, where the host contract is an asset within the
scope of IFRS 9, then the whole instrument is classied in accordance
with IFRS 9, without separation of the embedded derivative. In other
circumstances, the provisions of IAS 39 still apply.
Voluntary reclassication of nancial assets is prohibited. Financial
assets shall be reclassied if the entity changes its business model
for the management of nancial assets. In such circumstances,
reclassication takes place prospectively from the beginning of the rst
reporting period after the date of change of the business model.
Financial liabilities shall not be reclassied.
Investments in equity instruments may be measured at fair value
through other comprehensive income. When such an election is made,
it may not subsequently be revoked, and gains or losses accumulated
in equity are not recycled to prot or loss on derecognition of the
investment. The election may be made per individual investment.
IFRS 9 does not allow for investments in equity instruments to be
measured at cost.
The classication categories for nancial liabilities remains unchanged.
However, where a nancial liability is designated as at fair value through
prot or loss, the change in fair value attributable to changes in the
liabilities credit risk shall be presented in other comprehensive income.
This excludes situations where such presentation will create or enlarge
an accounting mismatch, in which case, the full fair value adjustment
shall be recognised in prot or loss.
The effective date of the standard is for years beginning on or after
1
st
January, 2013.
The company has adopted the standard for the rst time in the 2014
annual nancial statements.
The impact of the standard is not material.
111
IFRS 13 Fair Value Measurement
New standard setting out guidance on the measurement and disclosure
of items measured at fair value or required to be disclosed at fair value in
terms of other IFRSs.
The effective date of the standard is for years beginning on or after
1
st
January, 2013.
The company has adopted the standard for the rst time in the 2014
The impact of the standard is not material.
IAS 1 Presentation of Financial Statements
The amendment now requires items of other comprehensive income to be
presented as:
Those which will be reclassied to prot or loss
Those which will not be reclassied to prot or loss.
The related tax disclosures are also required to follow the presentation
allocation.
In addition, the amendment changed the name of the statement of
comprehensive income to the statement of prot or loss and other
comprehensive income.
The effective date of the amendment is for years beginning on or after
1
st
July, 2012.
The company has adopted the amendment for the rst time in the 2014
The impact of the amendment is not material.
2.2 Standards and interpretations not yet effective
The company has chosen not to early adopt the following standards and
interpretations, which have been published and are mandatory for the
companys accounting periods beginning on or after 1
st
April, 2014 or
later periods:
IFRS 9 Financial Statements
The IASB aims to replace IAS 39 Financial Instruments: Recognition and
Measurement (IAS 39) in its entirety with IFRS 9. To date, the chapters
dealing with recognition, classication, measurement, derecognition of
nancial assets and liabilities and hedge accounting have been issued.
Chapters dealing with impairment methodology are still being developed.
Further, in November 2011, the IASB tentatively decided to consider
making limited modications to IFRS 9s nancial asset classication
model to address application issues.
1
st
January, 2018.
The adoption of this standard is not expected to impact on the results of
the company, but may result in more disclosure than is currently provided
in the annual nancial statements.
IFRS 13 Fair value measurement
The following amendments are being implemented: amendments to clarify
the measurement requirements for those short term receivables and
payables and amendments to clarify that the portfolio exception applies
to all contracts within the scope of, and accounted for in accordance with,
IAS 39 or IFRS 9.
1
st
July, 2014.
IAS 16 Property, Plant and Equipment
Amendments to the revaluation method will be implemented relating to
proportionate restatement of accumulated depreciation.
1
st
July, 2014.
IAS 36 Impairment assets
The amendment to IAS 36 claries the required disclosures of information
about the recoverable amount of impaired assets if that amount is based
on fair value less costs of disposal.
1
st
January, 2014.
3. Property, plant and equipment
2014 2013
Rupee
Cost/
Valuation
Accumulated
depreciation
Carrying
value
Cost/
Valuation
Accumulated
depreciation
Carrying
value
Computer
software 5,761,304 (3,162,244) 2,599,060 2,863,163 (2,815,852) 47,311
Furniture and
xtures 4,353,562 (3,146,260) 1,207,302 3,678,180 (3,014,660) 663,520
IT equipment 6,032,613 (4,394,380) 1,638,233 5,004,053 (3,769,331) 1,234,722
Leasehold
improvements 2,111,457 (1,691,832) 419,625 2,111,457 (1,170,883) 940,574
Motor vehicles 21,215,944 (2,446,509) 18,769,435 9,576,862 (1,506,360) 8,070,502
Ofce
equipment 4,638,695 (3,747,065) 891,630 4,445,637 (3,418,636) 1,027,001
Plant and
machinery 1,421,185 (804,357) 616,828 1,413,055 (374,651) 1,038,404
Total 45,534,760, (19,392,647) 26,142,113 29,092,407 (16,070,373) 13,022,034
2014 2013
Rand
Cost/
Valuation
Accumulated
depreciation
Carrying
value
Cost/
Valuation
Accumulated
depreciation
Carrying
value
Computer
software 1,016,103 (557,715) 458,388 504,967 (496,623) 8,344
Furniture and
xtures 767,824 (554,896) 212,928 648,709 (531,686) 117,023
IT equipment . 1,063,953 (775,023) 288,930 882,549 (664,785) 217,764
Leasehold
improvements 372,391 (298,383) 74,008 372,391 (206,505) 165,886
Motor vehicles 3,741,789 (431,483) 3,310,306 1,689,041 (265,672) 1,423,369
Ofce
equipment 818,112 (660,858) 157,254 784,063 (602,934) 181,129
Plant and
machinery 250,650 (141,862) 108,788 249,216 (66,076) 183,140
Total 8,030,822 (3,420,220) 4,610,602 5,130,936 (2,834,281) 2,296,655
Reconciliation of property, plant and equipment - Rupee 2014
Opening
balance
Additions Disposals Depreciation Total
Computer software ....... 47,310 2,898,135 (346,386) 2,599,060
Furniture and xtures .... 663,520 996,843 (131,510) (321,551) 1,207,302
IT equipment ................. 1,234,722 1,099,566 (58,792) (637,263) 1,638,233
Leasehold improvements 940,574 (520,948) 419,625
Motor vehicles .............. 8,070,502 20,638,624 (7,437,418) (2,502,273) 18,769,435
Ofce equipment ........... 1,027,001 116,887 (252,258) 891,630
Plant and machinery ..... 1,038,404 8,136 (429,712) 616,828
13,022,033 25,758,191 (7,627,720) (5,010,391) 26,142,113
112
Reconciliation of property, plant and equipment - Rupee 2013
Opening
balance
Computer software ........... 34 48,133 (856) 47,311
Furniture and xtures ........ 58,123 764,180 (158,783) 663,520
IT equipment ..................... 1,037,616 693,929 (496,823) 1,234,722
Leasehold improvements .... 16,823 1,127,593 (203,842) 940,574
Motor vehicles .................. 5,176,693 20,874,643 (14,984,227) (2,996,606) 8,070,503
Ofce equipment ............... 775,718 439,697 (188,414) 1,027,001
Plant and machinery ......... 338,697 916,793 (217,087) 1,038,403
7,403,704 24,864,968 (14,984,227) (4,262,411) 13,022,034
Reconciliation of property, plant and equipment - Rand 2014
Opening
balance
Computer software .......... 8,344 511,135 (61,091) 458,388
Furniture and xtures ....... 117,023 175,810 (23,194) (56,711) 212,928
IT equipment .................... 217,764 193,927 (10,369) (112,392) 288,930
Leasehold improvements ... 165,886 (91,878) 74,008
Motor vehicles ................. 1,423,369 3,639,969 (1,311,714) (441,318) 3,310,306
Ofce equipment .............. 181,129 20,615 (44,490) 157,254
Plant and machinery ........ 183,140 1,435 (75,787) 108,788
2,296,655 4,542,891 (1,345,277) (883,667) 4,610,602
Reconciliation of property, plant and equipment - Rand 2013
Opening
balance
Computer software .......... 6 8,489 (151) 8,344
Furniture and xtures ....... 10,251 134,776 (28,004) 117,023
IT equipment .................... 183,001 122,386 (87,623) 217,764
Leasehold improvements . 2,967 198,870 (35,951) 165,886
Motor vehicles ................. 912,997 3,681,595 (2,642,721) (528,502) 1,423,369
Ofce equipment .............. 136,811 77,548 (33,230) 181,129
Plant and machinery ........ 59,735 161,692 (38,287) 183,140
1,305,768 4,385,356 (2,642,721) (751,748) 2,296,655
Pledged as security
The property, plant and equipment have been encumbered per note 24.
4. Financial assets by category
The accounting policies for nancial instruments have been applied to the line
items below. The carrying amounts of the nancial assets in each category are
as follows:
2014
Loans and
receivables
Total
Rupee
Cash and cash equivalents ........................................ 244,137,987 244,137,987
Trade and other receivables ....................................... 333,752,047 333,752,047
577,890,034 577,890,034
2013
Loans and
receivables
Total
Rupee
499,024,133 499,024,133
2014
Loans and
receivables
Total
Rand
101,920,641 101,920,641
2013
Loans and
receivables
Total
Rand
88,011,311 88,011,311
5. Deferred tax
Deferred tax asset
2014 2013
Rs ZAR Rs ZAR
Accelerated capital
allowances for tax
purposes ....................... 217,445 38,350 84,920 14,977
Provisions ...................... 89,032,455 15,702,373 74,066,835 13,062,934
Prepaid expenses ........... (23,882) (4,212)
Provision for doubtful
accounts ........................ 9,128 1,610 9,128 1,610
Unrealised foreign
exchange losses with
connected persons ........ 39,690 7,000 (204,148) (36,005)
89,298,718 15,749,333 73,932,853 13,039,304
Reconciliation of deferred tax asset (liability)
2014 2013
Rs ZAR Rs ZAR
At beginning of the year ... 73,932,854 13,039,304 24,584,734 4,335,932
Originating (Reversing)
temporary difference on
tangible xed assets ........ 132,525 23,373 (62,370) (11,000)
provisions ........................ 14,965,625 2,639,440 50,806,193 8,960,528
prepayments .................... 23,876 4,211 (23,882) (4,212)
Reversing temporary
difference on interest on
debtors discounting ......... (1,176,802) (207,549)
Reversing temporary
difference on provision for
doubtful accounts ............ 9,128 1,610
temporary difference
on unrealised foreign
exchange losses with
connected persons .......... 243,838 43,005 (204,148) (36,005)
89,298,718 15,749,333 73,932,853 13,039,304
113
6. Retirement benets
Dened contribution plan
It is the policy of the company to provide retirement benets to all its
employees. A dened contribution provident fund which is subject to
the Pensions Fund Act exists for this purpose. The scheme is funded
by company and employee contributions only, which are charged to the
income statement as they are incurred. The total company contributions to
such scheme in 2014 was Rs 3 142 200, ZAR 554 180 (2013: Rs 2 637 775,
ZAR 465 216).
The company is under no obligation to cover any unfunded benets.
7. Inventories
2014 2013
Rs ZAR Rs ZAR
Motor vehicles ............ 873,262,079 154,014,476 857,806,282 151,288,586
Spares ........................ 136,037,872 23,992,570 90,878,108 16,027,885
Goods-in-transit .......... 122,634,445 21,628,650 169,661,499 29,922,663
Import rebate
certicates .................. 29,519,970 5,206,344
1,161,454,366 204,842,040 1,118,345,889 197,239,134
Provision for obsolete
stock .......................... (87,119,550) (15,365,000) (84,227,850) (14,855,000)
1,074,334,816 189,477,040 1,034,118,039 182,384,134
Carrying value of
inventories carried at
fair value less costs
to sell ......................... 18,773,160 3,310,963
8. Trade and other receivables
Deposits ..................... 868,860 153,238 3,784,447 667,451
Other receivable .......... 1,781,542 314,205 423,294 74,655
Trade receivables ........ 323,150,406 56,993,017 434,406,619 76,614,924
VAT ............................. 7,951,239 1,402,335
333,752,047 58,862,795 438,614,360 77,357,030
Trade and other receivables pledged as security
Trade and other receivables were pledged as security for overdraft facilities
of the company. Refer to note 24 for full details on the facilities granted to
the company.
Fair value of trade and other receivables
All amounts are short term. The carrying value of trade receivables is
considered a reasonable approximation of fair value.
Trade and other receivables past due but not impaired
The ageing of amounts past due but not impaired is as follows:
Not more than
3 months ................... 23,412,983 4,129,274 49,009,161 8,643,591
More than 3 months
but not more than
6 months ................... 9,613,916 1,695,576 9,318,316 1,643,442
More than 6 months
but not more than
1 year ........................
More than 1 year ....... 51,228 9,035 95,165 16,784
33,078,127 5,833,885 58,422,642 10,303,817
Trade and other receivables impaired
As of 31
st
March, 2014, trade and other receivables of Rs 43 483, ZAR 7
669 (2013: Rs 43 483, ZAR 7 669) were impaired and provided for.
All trade and other receivables have been reviewed for indicators of
impairment and accordingly adequate provisions were raised.
9. Cash and cash equivalents
Cash and cash equivalents consist of:
2014 2013
Rs ZAR Rs ZAR
Cash on hand ............. 8,295 1,463 106,358 18,758
Bank balances ............ 244,129,691 43,056,383 60,303,415 10,635,523
Bank overdraft ............ (92,645,367) (16,339,571)
244,137,986 43,057,846 (32,235,594) (5,685,290)
Current assets ............ 244,137,986 43,057,846 60,409,773 10,654,281
Current liabilities ......... (92,645,367) (16,339,571)
244,137,986 43,057,846 (32,235,594) (5,685,290)
10. Share capital
Authorised
70 000 000 Ordinary
shares with a par value
of R1 each.................. 412,300,000 70,000,000 412,300,000 70,000,000
Reconciliation of
number of shares
issued:
Issue of shares
ordinary shares ........... 294,840,000 52,000,000 294,840,000 52,000,000
Issued
52 000 000 Ordinary
shares with a par value
of R1 each.................. 294,840,000 52,000,000 294,840,000 52,000,000
11. Deferred income
Service plans .............. 285,961,199 50,434,074 202,055,570 35,635,903
Nature: Certain vehicles are sold with a service plan. This service plan
then covers certain services for a predetermined number of years and
kilometers travelled. The income from these service plans is deferred and
recognised as these services are performed.
Assumptions: The deferred revenue from service plans is managements
best estimate of the companys future income and cost based on the
estimated service cost that would occur for the selected models over
a period of three to ve years adjusted for ination and possible price
increases in parts and labour used in the service of the selected model.
Non-current liabilities ... 135,924,488 23,972,573 116,793,450 20,598,492
Current liabilities ......... 150,036,705 26,461,500 85,262,120 15,037,411
285,961,193 50,434,073 202,055,570 35,635,903
12. Provisions
Reconciliation of provisions - Rupee 2014
Opening
balance
Additions Utilised during
the year
Total
Provision for advalorem
duty ............................ 29,499,547 122,989,563 (116,567,319) 35,921,791
Provision for customs
duty ............................ 145,873,224 597,538,490 (584,260,239) 159,151,475
Provision for emission
tax .............................. 21,424,123 66,340,667 (62,410,251) 25,354,539
Provision for extended
warranty ...................... 7,831,126 7,831,126
Provision for warranty
claims ......................... 172,197,900 262,776,246 (215,697,176) 219,276,970
368,994,794 1,057,476,092 (978,934,985) 447,535,901
114
12. Provisions
Reconciliation of provisions - Rupee 2013
Opening
balance
Additions Utilised
during the
year
Total
Provision for advalorem duty .. 11,716,068 122,669,934 (104,886,455) 29,499,547
Provision for customs duty ..... 60,742,047 602,297,621 (517,166,444) 145,873,224
Provision for emission tax ...... 10,166,610 62,595,382 (51,337,869) 21,424,123
Provision for warranty claims .. 77,691,287 162,188,564 (67,681,951) 172,197,900
160,316,012 949,751,501 741,072,719 368,994,794
Reconciliation of provisions - Rand 2014
Opening
balance
Additions Utilised
during the
year
Total
Provision for advalorem duty ... 5,202,742 21,691,281 (20,558,610) 6,335,413
Provision for customs duty ...... 25,727,200 105,385,977 (103,044,134) 28,069,043
Provision for emission tax ....... 3,778,505 11,700,294 (11,007,099) 4,471,700
Provision for extended warranty.. 1,381,151 1,381,151
Provision for warranty claims .. 30,370,000 46,345,017 (38,041,830) 38,673,187
65,078,447 186,503,720 (172,651,673) 78,930,494
Reconciliation of provisions - Rand 2013
Opening
balance
Additions Utilised
during the
year
Total
Provision for advalorem duty .... 2,066,326 21,634,909 (18,498,493) 5,202,742
Provision for customs duty ....... 10,712,883 106,225,330 (91,211,013) 25,727,200
Provision for emission tax ........ 1,793,053 11,039,750 (9,054,298) 3,778,505
Provision for warranty claims ... 13,702,167 28,604,685 (11,936,852) 30,370,000
28,274,429 167,504,674 (130,700,656) 65,078,447,
2013 2012
Rs ZAR Rs ZAR
Non-current liabilities ....... 89,897,538 15,854,945 82,322,730 14,519,000
Current liabilities .............. 357,638,362 63,075,549 286,672,064 50,559,447
447,535,900 78,930,494 368,994,794 65,078,447
Warranty Provision
Nature: This provision is raised due to the fact that certain vehicles are
under a warranty, thus this provision estimates cost that would occur in
the future for vehicles repairs under warranties.
Assumptions: Warranty provisions are managements best estimate
of the companies liability (after the expected reimbursement from the
manufacturer) on vehicles under two or three year warranties based on
three years actual historical sales and warranty claims occurred.
Extended warranty
Nature: This provision is raised due to the fact that certain vehicles are
under extended warranty (beyond the standard factory warranty), thus the
provision estimates the cost that would occur in future for vehicles repairs
under extended warranties.
Assumptions: Extended Warranty provision are managements best
estimate of the company liability (after the expected reimbursement from
the manufacturer) on vehicles eligible under the extended warranty program
and is based on the incremental cost charged by the manufacturer or third
party service provider for this specic purpose.
Advalorem, customs duty and emissions tax provisions
Nature: the provisions for ad valorem, customs duty and emissions tax is
the estimated future costs payable on vehicles already imported into South
Africa but is only payable once these vehicles have been removed from
the bonded store or have been sold.
Assumptions: Ad valorem, customs duty and emissions tax provisions is
calculated based on the latest tax rates based on the value of the vehicles
imported and the fuel efciency of the specic models.
Provision for Loss on Vehicle Repurchase
Nature: This provision is raised due to the fact that certain vehicles are sold
under a Conditional Repurchase contract, thus the provision estimates
loss that would occur in the future for vehicles bought back under such
Repurchase contracts.
Assumptions: Loss on Vehicle Repurchase provisions are managements
best estimate of the estimated future loss on account of the difference
between repurchases and resale of certain vehicles that were sold under
such repurchase agreement. The calculations are based as a percentage
of the applicable retail price of the vehicle.
13. Trade and other payables
2014 2013
Rs ZAR Rs ZAR
Accrued expense ............. 33,989,836 5,994,680 45,468,858 8,019,199
Accrued leave pay ........... 3,745,420 660,568 8,098,665 1,428,336
Sundry payables .............. 699,814 123,424 893,087 157,511
Trade payables ................. 315,502,047 55,644,100 364,552,667 64,295,003
VAT ................................... 2,506,707 442,100
353,937,117 62,422,772 421,519,984 74,342,149
All amounts are short term. The carrying values are considered to be a
reasonable approximation of fair value.
14. Financial liabilities by category
The accounting policies for nancial instruments have been applied to
the line items below. The carrying amounts of the nancial assets in each
category are as follows:
2014 Financial
liabilities at
amortised
cost
Total
Rupee
Trade and other payables ............................................. 416,359,889 416,359,889
2013 Financial
liabilities at
amortised
cost
Total
Rupee
Bank overdraft ............................................................... 92,645,367 92,645,367
514,165,352 514,165,352
2014 Financial
liabilities at
amortised
cost
Total
Rand
115
14. Financial liabilities by category
2013 Financial
liabilities at
amortised
cost
Total
Rand
Bank overdraft ............................................................... 16,339,571 16,339,571
90,681,720 90,681,720
15. Revenue
2014 2013
Rs ZAR Rs ZAR
Sale of goods ........... 3,985,972,311 702,993,353 4,149,071,636 731,758,666
The amount included
in revenue arising
from exchanges of
goods or services
included in revenue
are as follows:
Sale of spares .......... 438,046,158 77,256,818 311,828,256 54,996,165
Sale of vehicles ........ 3,407,297,044 600,934,223 3,758,564,606 662,886,174
Sale of service plan .. 140,529,635 24,784,768 78,454,957 13,836,853
Sale of accessories .. 99,474 17,544 223,817 39,474
3,985,972,311 702,993,353 4,149,071,636 731,758,666
16. Cost of sales
Sale of goods
Cost of goods sold .. 3,513,809,530 619,719,494 3,714,888,426 655,183,144
Write down of
inventories to net
realisable value ...... (87,119,550) (15,365,000) (84,230,152) (14,855,406)
3,426,689,980 604,354,494 3,630,658,274 640,327,738
17. Operating prot
Operating prot for the year is stated after accounting for the following:
Operating lease charges
Premises
Contractual
amounts .............. 6,450,095 1,137,583 5,115,349 902,178
Prot on sale of
property plant and
equipment ............... 1,623,417 286,317 1,329,558 234,490
(Prot)/Loss
on exchange
differences .............. (2,228,899) (393,104) (4,173,409) (736,051)
Depreciation on
property, plant and
equipment ............... 5,010,391 883,667 4,262,411 751,748
Employee costs ...... 79,064,606 13,944,375 77,577,631 13,682,122
18. Investment revenue
Interest revenue
Discounting of
debtors ................... 4,202,859 741,245
Other interest ......... 5,004,262 882,586 2,264,785 399,433
5,004,262 882,586 6,467,644 1,140,678
19. Finance costs
2014 2013
Rs ZAR Rs ZAR
Bank and other ...... 1,026,661 181,069 1,674,493 2,95,325
Holding company
for vehicle purchase
credit ...................... 9,927,246 1,750,837 24,226,288 4,272,714
Interest to SARS .... 128,737 22,705
11,082,644 1,954,611 25,900,781 4,568,039
20. Taxation
Major components of the tax expense
Current
Local income tax
current period ........ 94,611,264 16,686,290 120,266,426 21,211,010
Deferred
Deferred tax ........... (15,365,865) (2,710,029) (49,348,119) (8,703,372)
79,245,399 13,976,261 70,918,307 12,507,638
Reconciliation of the tax expense
Reconciliation between accounting prot and tax expense.
Accounting prot .......... 282,926,133 49,898,789 253,265,082 44,667,563
Tax at the applicable
tax rate of 28% (2013:
28%)............................. 79,219,317 13,971,661 70,914,225 12,506,918
Tax effect of
adjustments on taxable
income
Fines and penalties ....... 26,082 4,600 453 80
Sundry disallowable
expenses ...................... 3,629 640
79,245,399 13,976,261 70,918,307 12,507,638
21. Auditors remuneration
Fees .............................. 2,866,185 505,500 2,551,500 450,000
Other services ................. 27,913 4,923
2,866,185 505,500 2,579,413 454,923
22. Cash generated from operations
Prot before taxation ..... 282,926,133 49,898,789 253,265,082 44,667,563
Adjustments for:
Depreciation .................. 5,010,392 883,667 4,262,411 751,748
Prot on sale of assets ... (1,623,417) (286,317) (1,329,557) (234,490)
Interest received ........... (5,004,262) (882,586) (6,467,644) (1,140,678)
Finance costs ............... 11,082,644 1,954,611 25,900,781 4,568,039
Movements in
provisions ..................... 78,541,106 13,852,047 208,678,782 36,804,018
Inventories .................... (40,216,777) (7,092,906) (360,743,702) (63,623,228)
Trade and other
receivables.................... 104,862,312 18,494,235 (2,713,083) (478,498)
Trade and other payables .. (67,582,867) (11,919,377) (65,160,252) (11,492,108)
Deferred income 83,905,624 14,798,170 106,581,330 18,797,413
451,900,888 79,700,333 162,274,146 28,619,779
116
23. Commitments
Operating leases as lessee (expense)
2014 2013
Rs ZAR Rs ZAR
Minimum lease
payments due
within one year ............. 4,694,215 827,904 6,288,778 1,109,132
in second to fth year
inclusive ......................... 4,993,949 880,767
4,694,215 827,904 11,282,727 1,989,899
Operating lease payments represent rentals payable by the company
for certain of its premises (residential and ofce properties). The
noncancellable leasing arrangements range from between two and three
years and are usually renewable by mutual consent on agreed terms. No
contingent rent is payable.
24. Banking facilities
The company avails credit facilities with The State Bank of India which
has sanctioned an interchangeable ZAR facility of R 30 million (2013:
R60 million) for a combination of overdraft, letters of credit and bank
guarantees. An additional Forward Cover Limit of USD5 million (2013:
USD25 million) is available. At year end the company has utilised none of
its overdraft facility from State Bank of India and has also used none of the
Forward Cover facility.
The above facilities have been secured as follows:
General Notorial Bond on all present and future moveable assets of the
Company including stocks.
Whether in the companys showroom, warehouse or in transit, but
excluding book debts.
An unrestricted rst cession of all present and future book debts due or to
become due.
Letter of comfort from Mahindra & Mahindra Limited India.
25. Related parties
Relationships
Holding company Mahindra & Mahindra Limited
Fellow Subsidiaries SsangYong Motor Company
Directors Dr. Pawan Goenka
Kandasamy Chandrasekar
Ramesh Iyer
Ruzbeh Irani
Members of key management Ashok Thakur
Avinash Bapat
Related party balances
2014 2013
Rs ZAR Rs ZAR
Amounts included in Trade
receivable (Trade payables)
regarding related parties
Mahindra & Mahindra Limited
(Payable) ................................ (203,820,142) (35,947,115) (214,113,000) (37,762,434)
(Receivable) ............................ 22,879,776 4,035,234 6,028,270 1,063,187
SsangYong Motor Company
(Receivable) ............................ 6,656,154 1,173,925 889,838 156,938
(Payable) ................................ (348,047) (61,384) 412,129 72,686
Amounts included in goods
in transit
2014 2013
Rs ZAR Rs ZAR
Mahindra & Mahindra Limited .... 122,634,445 21,628,650 143,672,396 25,339,047
SsangYong Motor Company ...... 14,632,863 2,580,752
Related party transactions
Interest paid (received from) to
related parties
Mahindra & Mahindra Limited .... 9,927,245 1,750,837 24,226,288 4,272,714
Purchases from related parties
Mahindra & Mahindra Limited .... 1,755,500,096 309,612,010 2,319,599,931 409,100,517
SsangYong Motor Company ...... 106,506,946 18,784,294 227,845,831 40,184,450
Other income received from
related parties
Mahindra & Mahindra Limited .... 5,534,277 976,063
SsangYong Motor Company ...... 2,165,356 381,897
Compensation to directors and
other key management
Short-term employee benets .... 31,021,188 5,471,109 19,083,071, 3,365,621
26. Directors emoluments
No emoluments were paid to the directors. The remuneration paid
to individuals holding a prescribed ofce during the year is reected in
note 25.
27. Prior period adjustment
Certain vehicles are sold with a service plan. In the past a provision for
future service costs has been raised to accurately match the income
from these service plans to the future expected expenses. In the current
year this accounting treatment has been changed as the income from
these services plans should be deferred over the period of the service
plan. Costs relating to the services are then expenses as they occur.
The effect of the prior period error had no impact on the cashows of
the company.
The effects of the reclassication are as follows:
2014 2013
Rs ZAR Rs ZAR
Statement of Financial
Position
Deferred income ........... (202,055,570) (35,635,903)
Provisions ..................... 202,055,570 35,635,903
Prot or Loss ..........
Sale of vehicles ............ 185,036,288 32,634,266
Sale of service plan ...... (78,454,957) (13,836,853)
Cost of sales ................ (106,581,331) (18,797,413)

28. Risk management
Capital management policies and procedures
The companys capital management objectives are:
to ensure the companys ability to continue as a going concern
to provide an adequate return to shareholders
by pricing products and services commensurately with the level of risk.
The company monitors capital on the basis of the carrying amount of
equity less cash and cash equivalents as presented on the face of the
statement of nancial position.
The company sets the amount of capital in proportion to its overall
nancing structure, i.e. equity and nancial liabilities. The company
manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the
underlying assets.
117
Liquidity risk
The company manages its liquidity needs by carefully monitoring
scheduled debt servicing payments for long term nancial liabilities as
well as cash outows due in day to day business. Liquidity needs are
monitored in various time bands, on a day to day and week to week basis
as well as on the basis of a rolling 30 day projection. Short term liquidity
needs for a 120 day or less are identied monthly.
Funding in regards to long term liquidity needs is additionally secured by
an adequate amount of committed credit facilities.
As at 31
st
March, 2014 the company has contractual maturities which are
summarised below:
2014 2013
Rs ZAR Rs ZAR
Current within 6 months
Trade payables .............. 353,218,444 62,296,022 371,446,202 65,510,794
The above contractual maturities reect the gross cash ows which may
differ to the carrying values of the liabilities at the reporting date.
Interest rate risk
The following table illustrates the sensitivity of the net result for the year
and equity to a reasonably possible change in interest rates of +0.5%
and 0.5% (2013: +0.5% and 0.5%), with effect from the beginning of the
year. These changes are considered to be reasonably possible based on
observation of current market conditions. The calculations are based on
the companys nancial instruments held at each balance sheet date. All
other variables are held constant.
2014
Rs
2014
ZAR
2013
Rs
2013
ZAR
+0.5% -0.5% +0.5% -0.5% +0.5% -0.5% +0.5% -0.5%
Net results
for the
year 733,754 (733,754) 129,410 (129,410) 1,104,442 (1,104,442) 194,787 (194,787)
Credit risk
The companys exposure to credit risk is limited to the carrying amount of
nancial assets recognised at the balance sheet date.
The company continuously monitors defaults of customers and
other counterparties, identied either individually or by company and
incorporates this information into its credit risk controls. Where available
at reasonable cost, external credit ratings and/or reports on customers and
other counterparties are obtained and used. The companys policy is to
deal only with creditworthy counterparties.
The companys management considers that all the nancial assets are not
impaired for each of the reporting dates under review is of good credit
quality, including those that are past due. See note 8 for further information
on impairment or nancial assets that are past due.
In respect of trade and other receivables, the company is not exposed
to any signicant credit risk exposure to any single counterparty or any
company of counterparties having similar characteristics.
The credit risk for liquid funds is considered negligible, since the
counterparties are reputable banks with quality external credit ratings.
Foreign exchange risk
Foreign currency exposure at the end of the reporting period
Most of the companys transactions are carried out in Rands. Exposure to
currency exchange rates arise from the companys overseas purchases
and sea freight, which are primarily denominated in USDollars. To
mitigate the companys exposure to foreign currency risk, nonRand cash
ows are monitored and forward exchange contracts are entered into
in accordance with our risk management policies. Forward exchange
contracts are generally entered into when the rate is more favourable
than the budgeted rate.
Foreign currency denominated nancial assets and liabilities, translated in
Rands at the closing rate, are as follows:
2014 2013
Rs ZAR Rs ZAR
Assets
Mahindra and Mahindra Limited
(2014: USD 23 000; 2013: USD
115 000) ................................ 1,378,275 243,082 6,028,270 1,063,187
Bank balance (2014: USD 68 349;
2013: USD 256 651) ................... 4,095,820 722,367 13,453,572 2,372,764
Trade receivable (American
Motors 2013: USD 110 000) ..... 5,766,169 1,016,961
(2014:USD 110 167; 2013: USD
24 729) .................................. 6,601,768 1,164,333 1,296,298 228,624
12,075,863 2,129,782 26,544,309 4,681,536
Liabilities
Hoegh Autoliners (2014: USD 170
378; 2013: USD 181 518)............. 10,209,913 1,800,690 9,515,110 1,678,150
(2014: USD 60 850).................... 3,646,439 643,111
SsangYong Motor Company (2014:
USD 5 800) .............................. 347,565 61,299
14,203,917 2,505,100 9,515,110 1,678,150
Foreign currency sensitivity
The following table illustrates the sensitivity of the net result for the year
and equity in regards to the companys nancial assets and nancial
liabilities and the US Dollar Rand exchange rate.
It assumes a +5% and -10% change of the Rand / US Dollar exchange rate
for the year ended 31
st
March, 2014 (2013: +3% and - 8%). This has been
determined based on the average market volatility in exchange rates in the
previous 12 months. The sensitivity analysis is based on the companys
foreign currency nancial instruments held at balance sheet date and also
takes into account forward exchange contracts that offset effects from
changes in currency exchange rates.
If the Rand had strengthened against the US Dollar by 5% (2013: 8%) then
this would have had the following impact:
2014 2013
Rs ZAR Rs ZAR
Net results for the year 76,607 13,511 (980,881) (172,995)
If the Rand had weakened against the US Dollar by 10% (2013: 3%) then
this would have had the following impact:
2014 2013
Rs ZAR Rs ZAR
Net results for the year (153,220) (27,023) 367,829 64,873
Exposure to foreign exchange rates varies during the year depending on
the volumes of overseas transactions. Nonetheless the analysis above is
considered to be representative of the companys exposure to currency risk.
MAHINDRA AUTOMOTIVE AUSTRALIA PTY LIMITED
118
Your directors present their report on the Company for the
nancial year ended 31 March 2014:
Directors
The names and particulars of the directors of the Company
during or since the end of the nancial year are:
Ruzbeh Irani
Michael Thomas Tynan
Ajay Mansukhlal Choksey
Pradeep Kumar
Pravin Kumar Shah (appointed on 15
th
May 2014)
Directors have been in ofce since the start of the nancial
year to the date of this report unless otherwise stated.
Retirement and Appointment of Directors
The Board received a letter dated 25
th
June 2013 from
Dr. Terence Miles tendering his resignation from the Company
as Director. The Board accepted the resignation of Dr. Terence
Miles in the Board meeting dated 16 July 2013.
The Board appointed Mr. Pravin Kumar Shah as Director of the
Company in the Board Meeting dated 15
th
May 2014.
Principal Activities
The principal activities of the Company during the nancial
year was distribution of new motor vehicles, tractors and
related spare parts inventory. There have been no signicant
changes in the nature of the Companys principal activities
during the nancial year.
Review of Operations
The loss after tax amounted to $935,221 (INR 52,101,175)
(2013: $27,251 prot (INR 1,518,153)).
A review of the operations of the Company during the
nancial year and the results of those operations found that
the Company continued to engage in its principal activity,
the results of which are disclosed in the attached nancial
statements.
Subsequent Events
No matters or circumstances have arisen since the end of the
nancial year which signicantly affected or may signicantly
affect the operations of the Company, the results of those
operations or the state of affairs of the Company in future
nancial years.
Likely Developments
The Company expects to maintain the present status and level
of operations and hence there are no likely developments in
the Companys operations.
Signicant Changes in State of Affairs
The Company commenced auto operations in New Zealand
during the year. No other signicant changes in the Companys
state of affairs occured during the nancial year.
Auditors Independence Declaration
The lead auditors independence declaration for the year
ended 31 March 2014 has been received and can be found
as part of the nancial report.
Dividends
No dividends have been paid or declared since the beginning
of the year.
Environmental Issues
The Companys operations are not regulated by any signicant
environmental regulation under a law of the Commonwealth or
of a state or territory.
No Indemnities
No indemnities have been given or insurance premiums
paid, during or since the end of the nancial period, for any
persons who is or has been an ofcer or auditor of Mahindra
Automotive Australia Pty Limited.
No Leave or Proceedings
No persons has applied for leave of Court to bring proceedings
on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of
those proceedings.
The Company was not a party to any such proceedings during
the year.
Signed in accordance with a resolution of the Board of
Directors:
Ruzbeh Irani
Pradeep Kumar
Pravin Kumar Shah
Date : 15
th
May 2014
Place: Mumbai, India
DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31
st
MARCH 2014
119
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MAHINDRA AUTOMOTIVE
AUSTRALIA PTY LIMITED
We have audited the accompanying nancial report, being
a special purpose nancial report, of Mahindra Automotive
Australia Pty Limited, which comprises the statement of nancial
position as at 31 March 2014, and the statement of prot or
loss and other comprehensive income, the statement of cash
ows and the statement of changes in equity for the year
ended on that date, notes comprising a summary of signicant
accounting policies and other explanatory information, and the
directors declaration as set out on pages herein.
Directors Responsibility for the Financial Report
The directors of the company are responsible for the
preparation of the nancial report that gives a true and fair
view and have determined that the basis of preparation
described in Note 1 to the nancial report is appropriate to
meet the requirements of the Corporations Act 2001 and is
appropriate to meet the needs of the members. The directors
responsibility also includes such internal control as the
directors determine is necessary to enable the preparation of
the nancial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on the nancial
report based on our audit. We have conducted our audit
in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and
perform the audit to obtain reasonable assurance whether the
nancial report is free from material misstatement.
report. The procedures selected depend on the auditors
judgement, including the assessment of the risks of material
misstatement of the nancial report, whether due to fraud or
error. In making those risk assessments, the auditor considers
internal control relevant to the entitys preparation of the
nancial report that gives a true and fair view, in order to design
by the directors, as well as evaluating the overall presentation
of the nancial report.
opinion.
Auditors Independence Declaration
In conducting our audit, we have complied with the
independence requirements of the Corporations Act 2001.
We conrm that the independence declaration required by the
Corporations Act 2001, which has been given to the directors
Mahindra Automotive Australia Pty Limited would be in the
same terms if given to the directors as at the time of this
auditors report.
Opinion
In our opinion, the nancial report of Mahindra Automotive
Australia Pty Limited is in accordance with the Corporations
Act 2001, including:
(a) giving a true and fair view of the companys nancial
position as at 31 March 2014 and of its performance for
the year ended on that date; and
(b) complying with Australian Accounting Standards to
the extent described in Note 1, and the Corporations
Regulations 2001.
Basis of Accounting
Without modifying our opinion, we draw attention to Note 1 to
the nancial report, which describes the basis of accounting.
The nancial report has been prepared for the purpose of
fullling the directors nancial reporting responsibilities under
the Corporations Act 2001. As a result, the nancial report may
not be suitable for another purpose.
DELOITTE TOUCHE TOHMATSU
Mark Weaver
Partner
Sydney
Date : 15
th
May 2014
120
Deloitte Touche Tohmatsu
ABN 74 490 121 060

Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1219 Australia
The Board of Directors
Mahindra Automotive Australia Pty Limited
4/20 Buttonwood Place
Willawong Queensland 4110
Dear Board Members
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence
to the directors of Mahindra Automotive Australia Pty Limited.
As lead audit partner for the audit of the nancial statements of Mahindra Automotive Australia Pty Limited for the nancial year
ended 31 March 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
DELOITTE TOUCHE TOHMATSU
Mark Weaver
Partner
Sydney
Date : 15
th
May 2014
121
2014 2014 2013 2013
Note $ ` $ `
Sales revenue ............................................................... 2 18,257,130 1,017,104,730 18,690,053 1,041,222,853
Other revenue ............................................................... 2 703,254 39,178,282 865,321 48,207,033
Finance costs ................................................................ (16,008) (891,787) (13,610) (758,213)
Expenses ....................................................................... 3 (19,879,597) (1,107,492,344) (19,514,513) (1,087,153,519)
Prot/(loss) before income tax .................................. (935,221) (52,101,119) 27,251 1,518,153
Income tax benet ........................................................ 4
Prot/(loss) for the year ............................................. (935,221) (52,101,175) 27,251 1,518,153
Other Comprehensive Income .....................................
Total comprehensive income/(loss) for the year ....... (935,221) (52,101,175) 27,251 1,518,153
The accompanying notes form part of these nancial statements.
STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2014
122
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2014
2014 2014 2013 2013
Note $ ` $ `
ASSETS
Current assets
Cash and cash equivalents ............................. 5 472,034 26,297,014 678,299 37,788,037
Trade and other receivables ........................... 6 944,290 52,606,396 1,548,685 86,277,241
Inventories ........................................................ 7 5,712,178 318,225,436 8,696,247 484,467,920
Total current assets ....................................... 7,128,502 397,128,846 10,923,231 608,533,199
Non-current assets
Plant and equipment ....................................... 8 197,339 10,993,756 278,415 15,510,500
Net deferred tax ............................................... 4
Total non-current assets .................................. 197,339 10,993,756 278,415 15,510,500
TOTAL ASSETS .............................................. 7,325,841 408,122,602 11,201,646 624,043,699
LIABILITIES
Current liabilities
Trade and other payables ............................... 9 5,942,265 331,043,596 8,864,209 493,825,083
Provisions ......................................................... 10 50,673 2,822,993 57,058 3,178,701
Total current liabilities ................................... 5,992,938 333,866,589 8,921,267 497,003,785
TOTAL LIABILITIES ........................................ 5,992,938 333,866,589 8,921,267 497,003,785
NET ASSETS ................................................... 1,332,903 74,256,013 2,280,379 127,039,914
EQUITY
Issued capital ................................................... 11 4,575,000 254,873,250 4,575,000 254,873,250
Reserves........................................................... 12,255 682,726
Accumulated losses ........................................ (3,242,097) (180,617,237) (2,306,876) (128,516,062)
TOTAL EQUITY ............................................... 1,332,903 74,256,013 2,280,379 127,039,914
123
STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2014
Issued
Capital
Foreign
Currency
Translation
Reserve
Accumulated
Losses Total
$ $ $ $
Balance at 1 April 2012 ................................................... 2,375,000 (2,334,127) 40,873
Issue of ordinary shares .................................................. 2,200,000 2,200,000
Total comprehensive income for the year ...................... 27,251 27,251
Foreign currency translation reserve .............................. 12,255 12,255
Balance at 31 March 2013 ............................................ 4,575,000 12,255 (2,306,876) 2,280,379
Balance at 1 April 2013 ................................................... 4,575,000 12,255 (2,306,876) 2,280,379
Foreign currency transfer ................................................ (12,255) (12,255)
Total comprehensive income for the year ...................... (935,221) (935,221)
Balance at 31 March 2014 ............................................ 4,575,000 () (3,242,097) 1,332,903
Issued
Capital
Foreign
Currency
Translation
Reserve
Accumulated
Losses Total
` ` ` `
Balance at 1 April 2012 ................................................... 132,311,250 (130,034,215) 2,277,035
Issue of ordinary shares .................................................. 122,562,000 122,562,000
Total comprehensive income for the year ...................... 1,518,153 1,518,153
Foreign currency translation reserve .............................. 682,719 682,719
Balance at 31 March 2013 ............................................ 254,873,250 682,719 (128,516,062) 127,039,907
Balance at 1 April 2013 ................................................... 254,873,250 682,719 (128,516,062) 127,039,907
Foreign currency transfer ................................................ (682,719) (682,719)
Total comprehensive income for the year ...................... (52,101,175) (52,101,175)
Balance at 31 March 2014 ............................................ 254,873,250 (180,617,237) 74,256,014
124
STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2014
2014 2014 2013 2013
Note $ ` $ `
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers ................................ 21,507,012 1,198,155,639 21,840,704 1,216,745,620
Cash payments to suppliers and employees ......... (21,709,532) (1,209,438,028) (24,015,069) (1,337,879,494)
Interest received ...................................................... 80 4,457 8,150 454,037
Finance costs ................................................... (16,008) (891,806) (13,610) (758,213)
Net cash provided by operating activities ........... 13 (218,448) (12,169,738) (2,179,825) (121,438,051)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase/(sale) of plant & equipment .................... 12,183 678,714 (73,354) (4,086,551)
Net cash provided by investing activities ............ 12,183 678,714 (73,354) (4,086,551)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital ..................... 2,200,000 122,562,000
Effects of exchange rate changes on the balance
of cash held in foreign currencies .......................... 12,255 682,726
Net cash provided by nancing activities ........... 2,212,255 123,244,726
Net increase in cash and cash equivalents ......... (206,265) (11,491,024) (40,924) (2,279,876)
Cash and cash equivalents at beginning of year .. 678,299 37,788,037 719,223 40,067,913
Cash and cash equivalents at end of year .......... 5 472,034 26,297,014 678,299 37,788,037
125
NOTES TO THE FINANCIAL STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2014
1. Statement of signicant accounting policies
General information
The nancial report is a special purpose nancial report prepared to satisfy
the nancial report preparation requirements of the Corporations Act 2001.
The directors have determined that the company is not a reporting entity
because in the opinion of the directors there are unlikely to exist users of
the nancial report who are unable to command the preparation of reports,
tailored so as to satisfy specically all of their information needs.
For the purposes of preparing the nancial statements, the Company is a
for prot entity.
Mahindra Automotive Australia Pty Limited is a proprietary company
limited by shares, incorporated and domiciled in Australia. The ultimate
parent entity is Mahindra & Mahindra Limited incorporated in India.
The following is a summary of the material accounting policies adopted
by the company in the preparation of the nancial report. The accounting
policies have been consistently applied, unless otherwise stated. Any
changes in accounting policies compared to the previous nancial year
have been disclosed in the Notes to the Financial Statements.
Basis of preparation
The report has been prepared in accordance with the requirements of the
Corporations Act 2001, the basis of accounting specied by all Accounting
Standards and Interpretations, and the disclosure requirements of the
following Accounting Standards:
AASB 101 : Presentation of Financial Statements
AASB 107 : Cash Flow Statements
AASB 108 : Accounting Policies, Changes in Accounting Estimates and Errors
AASB 1054 : Australian Additional Disclosures
The nancial report has been prepared on an accruals basis and is based
on historical costs, and nancial assets and nancial liabilities for which fair
value basis of accounting has been applied. All amounts have been stated
in Australian dollars.
Adoption of new and revised accounting standards
New and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) have not resulted in changes to the
entitys accounting policies.
At the date of authorisation of the nancial report, the Standards and
Interpretations listed below were in issue but not yet effective. The potential
impact of the new or revised Standards and Interpretations has not yet
been determined.
Standard Effective for
annual reporting
periods beginning
on or after
Expected to be
initially applied in
the nancial year
ending
AASB 9 Financial Instruments, and the
relevant amending standards 1 January 2017 31 December 2017
AASB 1031 Materiality (2013) 1 January 2014 31 December 2014
AASB 2011-4 Amendments to Australian
Accounting Standards to Remove
Individual Key Management Personnel
Disclosure Requirements 1 July 2013 31 December 2014
Accounting Standards Disclosures
Offsetting Financial Assets and Financial
Liabilities 1 January 2014 31 December 2014
AASB 2013-3 Amendments to AASB 136
Recoverable Amount Disclosures for
Non-Financial Assets 1 January 2014 31 December 2014
Accounting Standards Novation of
Derivatives and Continuation of Hedge
Accounting 1 January 2014 31 December 2014
Standard Effective for
annual reporting
periods beginning
on or after
Expected to be
initially applied in
the nancial year
ending
Accounting Standards Investment
Entities 1 January 2014 31 December 2014
AASB 2013-7 Amendments to AASB
1038 arising from AASB 10 in relation
to consolidation and interests of
policyholders 1 January 2014 31 December 2014
Accounting Standards Conceptual
Framework, Materiality and Financial
Instruments 1 January 2014 31 December 2014
Interpretation 21 Levies 1 January 2014 31 December 2014
The following signicant accounting policies have been adopted in the
preparation and presentation of the nancial report:
(a) Going Concern
The nancial report of the company shows a working capital surplus of
$1,135,566 (INR 63,262,258) {2013: $2,001,964 (INR 111,529,414)}.
The nancial report was prepared on a going concern basis, which
assumes continuity of normal business activities and the realisation
of assets and the settlement of liabilities in the ordinary course of
business.
The directors are condent of the companys ability to continue as a
going concern and is dependent upon the company:
Generating sufcient cash ows from operations to meet its
nancial obligations;
Achieving future protable trading operations.
Receiving continued support by its shareholders, in the next
12 months by extending credit as and when required.
The support includes, but is not limited to, agreeing not to seek
repayment of the intercompany loan unless the company has
sufcient cash to pay its debts as and when they fall due.
(b) Inventories
Stock on hand has been valued as follows:
New vehicles and tractors at the lower of cost and net realisable value.
Spare parts and accessories at the lower of cost price and net
realisable value.
Demonstrator vehicles at the lower of cost and net realisable value
on a unit by unit basis.
(c) Financial instruments
Financial assets and nancial liabilities are recognised on the
companys balance sheet when the company becomes a party to
the contractual provisions of the instrument.
i) Trade receivables
Trade receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost.
Appropriate allowances for estimated irrecoverable amounts
are recognised in prot or loss when there is objective
evidence that the asset is impaired. The allowance recognised
is measured as the difference between the assets carrying
amount and the initial fair value.
ii) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short-term highly liquid investments that
are readily convertible to a known amount of cash and are
subject to an insignicant risk of changes in value.
iii) Trade payables
Trade payables are initially measured at fair value, and are
subsequently measured at amortised cost.
126
(d) Income tax
The charge for current income tax expense is based on the prot
for the year adjusted for any non-assessable or disallowed items.
It is calculated using the tax rates that have been enacted or are
substantially enacted by the balance sheet date.
Deferred tax assets and liabilities are recognised in respect of
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the nancial statements,
and on unused tax losses. No deferred tax assets or liabilities will
be recognised from the initial recognition of an asset or liability
excluding a business combination, that at the time of the transaction
did not affect either accounting or taxable prot or loss.
Deferred tax is calculated at the tax rates that are expected to apply
to the period when the asset is realised or liability is settled. Deferred
tax is recognised in the income statement except where it relates
to items which are recognised directly in equity, in which case the
deferred tax is recognised directly in equity.
Deferred tax assets are recognised to the extent that it is probable
that future tax prots will be available against which deductible
temporary differences and tax losses can be utilised.
(e) Revenue recognition
i) Sales revenue
Revenue from sale of goods is recognised when the buyer has
accepted the risks and rewards of ownership by taking delivery
of the goods.
ii) Interest revenue
Interest revenue is recognised on a time basis taking into account
the interest effective rates applicable to the nancial assets.
iii) Goods and Services Tax
All revenue is stated net of the amount of goods and services
tax (GST). Cash ows are included in the cash ow statement
on a gross basis. The GST component of cash ows arising
from investing and nancing activities which is recoverable
from, or payable to, the taxation authority is classied as
operating cash ows.
(f) Plant and equipment
i) Plant and equipment
Plant and equipment is measured on the cost basis less
depreciation and impairment losses. Plant and equipment is
measured initially at cost. Cost includes all directly attributable
expenditure incurred including costs to get the asset ready
for its use as intended by management. Costs includes an
estimate of any expenditure expected to be incurred at the end
of the assets useful life. The following useful lives are used in
the calculation of depreciation:
Plant and equipment 3 15 years
Furniture and xtures 3 15 years
Motor Vehicles 4 8 years
Computer equipment 3 10 years
The carrying amount of plant and equipment is reviewed
annually by directors for indications of impairment. If any such
indications exist, an impairment test is carried out, and any
impairment losses on the assets recognised.
Subsequent costs are included in the assets carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benets associated with
the item will ow to the group and the cost of the item can
be measured reliably. All other repairs and maintenance are
charged to the income statement during the nancial period in
which they are incurred.
ii) Depreciation
The depreciable amount of all xed assets is depreciated on a
straight-line basis over their useful lives (commencing from the
time the asset is ready for use). Leasehold improvements are
depreciated over the shorter of either the unexpired period of
the lease or the estimated useful lives of the improvements.
The depreciable amount is the carrying value of the asset less
estimated residual amounts. The residual amount is based
on what a similar asset of the expected condition of the asset
at the end of its useful life could be sold for. The assets
residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses
are included in the income statement. When revalued assets
are sold, amounts included in the revaluation reserve relating
to that asset are transferred back to the income statement as
part of the prot or loss on disposal.
(g) Employee benets
Provisions are made for the companys liability for employee benets
arising from services rendered by employees to balance sheet date.
Employee benets that are expected to be settled within one year
have been measured at the amounts expected to be paid when the
liability is settled. Employee benets payable later then one year
have been measured at the nominal value.
(h) Critical judgements in applying the entitys accounting policies
The following are the critical judgements that management has
made in the process of applying the accounting policies and that
have the most signicant effect on the amounts recognised in the
nancial statements:
Deferred tax
Deferred tax assets for timing differences and tax losses carried
forward have not been recognised in the current year, and will only
be recognised until such time that it is possible that future tax prots
will be available.
2014 2014 2013 2013
$ ` $ `
2 Revenue
Operating activities
Sales revenue 18,257,130 1,017,104,730 18,690,053 1,041,222,853
Other revenue 703,254 39,178,282 865,321 48,207,033
Total Revenue 18,960,384 1,056,283,012 19,555,374 1,089,429,885
3 Expenses
Cost of sales 15,021,267 836,834,777 14,878,820 828,899,062
Depreciation 55,247 3,077,811 43,459 2,421,101
Stamp duty 10,512 585,624
Employee benets
expense 1,471,418 81,972,678 1,321,640 73,628,564
Consulting and
professional fees 81,156 4,521,219 117,698 6,556,956
Advertising 1,334,899 74,367,204 1,180,025 65,739,193
Freight and cartage 400,182 22,294,128 454,512 25,320,864
Travel 121,826 6,786,917 179,815 10,017,494
Other expenses from
ordinary activities 1,393,602 77,637,609 1,328,032 73,984,663
19,879,597 1,107,492,344 19,514,514 1,087,153,519
4 Income tax
i) Prima facie tax on
prot from ordinary
activities
Prima facie tax payable
on prot from ordinary
activities before income
tax at 30% (2013: 30%) (280,566) (15,630,332) 8,176 455,485
Tax effect of:
un-utilised tax losses (8,176) (455,485)
tax losses to be
carried forward 280,566 15,630,332
Income tax benet
127
2014 2014 2013 2013
$ ` $ `
5 Cash and cash equivalents
Cash at bank 471,854 26,287,014 678,271 37,786,477
Cash on hand 180 10,000 28 1,560
472,034 26,297,014 678,299 37,788,037
6 Trade and other receivables
Amounts due from
franchised dealers 876,652 48,838,278 1,463,848 81,550,972
Provision for impairment of
receivables (35,512) (1,978,369) (33,830) (1,884,669)
Other receivables 103,150 5,746,487 118,667 6,610,939
944,290 52,606,396 1,548,685 86,277,241
7 Inventories
New vehicles and tractors
- on hand 3,117,248 173,661,898 6,103,313 340,015,567
New vehicles and tractors
- in transit 211,626 11,789,684 312,869 17,429,932
Demonstrator vehicles 189,621 10,563,793 173,934 9,689,863
Spare parts and
accessories 2,193,683 122,210,061 2,106,131 117,332,558
5,712,178 318,225,436 8,696,247 484,467,920
8 Plant and equipment
Plant and equipment
at cost 53,040 2,954,858 42,347 2,359,151
Less: accumulated
depreciation (9,911) (552,142) (3,789) (211,085)
43,129 2,402,717 38,558 2,148,066
Furniture and xtures
at cost 249,124 13,878,698 200,518 11,170,858
Less: accumulated
depreciation (103,846) (5,785,261) (29,293) (1,631,913)
145,278 8,093,437 171,225 9,538,945
Motor vehicles at cost 30,533 1,700,991 76,321 4,251,864
Less: accumulated
depreciation (30,533) (1,700,991) (23,408) (1,304,060)
52,913 2,947,804
Computer equipment
at cost 41,105 2,289,960 25,638 1,428,293
Less: accumulated
depreciation (32,173) (1,792,358) (9,919) (552,587)
8,932 497,602 15,719 875,684
Total plant and equipment 197,339 10,993,756 278,415 15,510,500
9 Trade and other payables
CURRENT
Unsecured liabilities
Trade payables 482,155 26,860,872 507,492 28,272,379
Other payables and
accruals 982,290 54,723,363 1,139,883 63,502,882
Related party payables 4,477,820 249,459,361 7,216,834 402,049,822
5,942,265 331,043,596 8,864,209 493,825,083
2014 2014 2013 2013
$ ` $ `
10 Provisions
CURRENT
Employee benets 50,673 2,822,993 57,058 3,178,701
11 Issued capital
4,575,000 Ordinary shares
fully paid (2013: 4,575,000) 4,575,000 254,873,250 4,575,000 254,873,250
Changes to the then Corporations Law abolished the authorised capital
and par value concept in relation to share capital from 1 July 1998.
Therefore, the company does not have a limited amount of authorised
capital and issued shares do not have a par value.
On 25 March 2013, the company issued 2,200,000 ordinary shares, the
shares rank equally with the existing share capital in all respects.
12 Auditors remuneration
Auditing services 37,800 2,105,838 37,800 2,105,838
Other services 2,500 139,275 2,500 139,275
40,300 2,245,113 40,300 2,245,113
13 Cash ow information
(a) Reconciliation of cash
ow from operations
with prot from ordinary
activities after tax
Net prot/(loss) for the year (935,221) (52,101,175) 27,251 1,518,153
Non-cash ows in prot
from ordinary activities
Depreciation 55,247 3,077,810 43,459 2,421,101
Net (gain)/loss on disposal
of PPE 13,645 760,163
Changes in assets and
liabilities
Decrease/(increase) in
trade and other receivables 592,142 32,988,244 307,961 17,156,507
(Increase)/decrease in
inventories 2,984,069 166,242,484 (4,669,936) (260,162,135)
(Decrease)/increase
in trade payables and
accruals

(2,921,945) (162,781,556) 2,140,021 119,220,570
(Decrease)/increase in
provisions (6,385) (355,708) (28,581) (1,592,248)
(218,448) (12,169,738) (2,179,825) (121,438,051)
14 Subsequent events
There has not been any matter or circumstance, other than that referred to
in the nancial statements or notes thereto, that has arisen since the end
of the nancial year, that has signicantly affected, or may signicantly
affect, the operations of the company, the results of those operations, or
the state of affairs of the company in future nancial years.
15 Company details
Registered ofce
The registered ofce and principal place of business of the company is:
Unit 4/ 20 Buttonwood Place
Willawong, QLD 4110
128
As detailed in Note 1 to the nancial statements, the company is not a reporting entity because in the opinion of the directors
there are unlikely to exist users of the nancial report who are unable to command the preparation of reports tailored so as to
satisfy specically all of their information needs. Accordingly, this special purpose nancial report has been prepared to satisfy
the directors reporting requirements under the Corporations Act 2001.
The directors declare that:
(a) Not withstanding Note 1(a) in the directors opinion, there are reasonable grounds to believe that the company will be able
to pay its debts as and when they become due and payable.
(b) in the directors opinion, the attached nancial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the nancial position and performance of
the company.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Ruzbeh Irani
Pradeep Kumar
Pravin Kumar Shah
Date : 15
th
May 2014
DIRECTORS DECLARATION FOR THE FINANCIAL YEAR ENDED 31
st
MARCH 2014
MAHINDRA REVA ELECTRIC VEHICLES PRIVATE LIMITED
129
DIRECTORS REPORT
YEAR UNDER REVIEW
Your Companys total Income from operations (Net) is
lower by 2.41% mainly due to onetime upfront license fee
of Rs.1,375 Lakhs received from Mahindra & Mahindra Ltd.
(M&M Ltd.) for Electric Verito project in Financial Year 2012-13.
In Current year income from sale of products increased by
228% due to increase in volumes.
Demand for Companys product e2o was lower than
expectation. However, Company is working on various
initiatives and new products to increase the sales in next
year. Your Company continued to invest in Research &
Development and development of new EV models, which
consumed a signicant part of your Companys nancial
resources.
DIVIDEND
In view of the losses, your Directors do not recommend any
CHANGES IN THE PAID UP SHARE CAPITAL
During the year under review, 56,15,385 Equity shares of face
value Rs. 10 were issued to Mahindra and Mahindra Limited as
part of the rights issue of your Company at a price of Rs. 130/-
per share.
BUSINESS OUTLOOK AND FUTURE PROSPECTS
Your Company had launched its new model e2o in the
month of March 2013. The product feedback from consumers
has been positive. Your Company has also installed over 300
charging points in the country. At the Delhi autoshow your
Company launched quick@charge fast charge stations as
well as showcased the next generation electric car Halo. In
addition, your Company has been working on the electrication
of the Mahindra Maxximo and Verito platforms, both of which
were also showcased at the autoshow. Access to Mahindras
distribution network and electrication of existing platforms
from Mahindra will enable the growth of your Company.
With global EV markets growing at 70-80%, your Company
has also started exploring global market opportunities. During
the year it has also commenced exports to Nepal, Bhutan and
Bahamas.
Investments made this year on new products for the domestic
and global markets will place your Company well to expand its
product line as well as markets in the near future.
DIRECTORS
Prof. Ashok Jhunjhunwala, Mr. Sandeep Kumar Maini and
Mr. Gautam Kumar Maini were appointed as Additional
Directors of your Company with effect from 20
th
January, 2014.
To the Members
Your Directors present the Eighteenth Annual Report together with the Audited Statement of Accounts for the year ended
31
st
March, 2014.
FINANCIAL RESULTS
(Rs. in Lakhs)
2014 2013
Income
Revenue from Operations (Gross) 3,779.35 3,740.91
Less: Excise Duty 232.95 106.90
Revenue from Operations (Net) 3,546.40 3,634.01
Other Income 167.29 299.24
Total Income 3,713.69 3,933.25

Expenses
Cost of Raw Material and Components Consumed 2,689.06 1,478.79
(Increase)/decrease in inventories 62.24 (143.35)
Employee Benet Expenses 2,542.14 1,992.94
Other Expenses 2,653.79 1,764.32
Depreciation and Amortisation Expenses 3,146.17 1,607.29
Finance Costs 671.23 418.85
Total Expenses 11,764.64 7,118.84

Loss Before Tax 8,050.95 3,185.59
Provision for Tax 0.00 0.00
Loss for the year from Continuing Operations 8,050.95 3,185.59
130
They hold ofce till the forthcoming Annual General Meeting
and are eligible for being appointed as Directors at the
forthcoming Annual General Meeting.
Mr. Rajan Wadhera has resigned as Director of your Company
with effect from 28
th
April, 2014. The Board places on record
its sincere appreciation for the guidance and support provided
by Mr. Wadhera during his stint in your Company.
Mr. P. N. Shah and Dr. Pawan Kumar Goenka retire by rotation
at the forthcoming Annual General Meeting and, being eligible,
offer themselves for re-appointment.
All the Directors of your Company have given requisite
declarations pursuant to Section 164 of the Companies
Act, 2013 that they are not disqualied to be appointed as
Directors of your Company. Your Company has also received
nomination of candidature of all the aforesaid additional
Directors pursuant to Section 160 of the Companies Act, 2013
along with the requisite deposit.
Pursuant to Section 217(2AA) of the Companies Act, 1956,
as at 31
st
1956, for safeguarding the assets of the Company and for
concern basis.
AUDIT COMMITTEE
In view of the applicability of the provisions of Section 177 of
the Companies Act, 2013 read with Companies (Meetings of
Board and its Powers) Rules, 2014, the terms of reference of
the Audit Committee were revised and aligned in accordance
with the aforesaid provisions. The Audit Committee comprises
of Mr. V. S. Parthasarathy (Chairman), Mr. Rajan Wadhera and
Mr. P. N. Shah.
The Audit Committee met once during the year under review.
NOMINATION AND REMUNERATION COMMITTEE (FORMERLY
KNOWN AS REMUNERATION/COMPENSATION COMMITTEE)
the Companies Act, 2013 read with Companies (Meetings of
Board and its Powers) Rules, 2014, the nomenclature of the
Remuneration/Compensation Committee was changed to
Nomination and Remuneration Committee and the terms of
reference of the Nomination and Remuneration Committee were
revised and aligned in accordance with the aforesaid provisions.
The Nomination and Remuneration Committee comprises of
Dr. Pawan Kumar Goenka (Chairman), Mr. V. S. Parthasarathy
and Mr. P. N. Shah and had met thrice during the year under
review.
AUDITORS
M/s. S. R. Batliboi & Company, LLP, Chartered Accountants,
Bangalore, retire as Auditors at the forthcoming Annual General
Meeting and do not offer themselves for re-appointment. The
Board has recommended appointment of M/s. S. R. Batliboi
& Associates, LLP, Chartered Accountants, Bangalore as the
Auditors of your Company. M/s. S. R. Batliboi & Associates,
LLP, Chartered Accountants have expressed their willingness to
act as Auditors of your Company, if appointed, and have also
conrmed that the said appointment would be in conformity
with the provisions of Sections 139 and 141 of the Companies
Act, 2013.
Appointment of M/s. S. R. Batliboi & Associates, LLP, as
Auditors your Company is proposed to be made from the
conclusion of the eighteenth Annual General Meeting till the
conclusion of the nineteenth Annual General Meeting. The
Company has received a special notice from a Member of the
Company in terms of provisions of the Companies Act, 2013
signifying his intention to propose appointment of M/s. S. R.
Batliboi & Associates, LLP, Chartered Accountants, Bangalore
as the Auditors of the Company.
STOCK OPTIONS
Pursuant to the authority of the Shareholders vide Special
Resolution passed on 5
th
September, 2013 for approval of
Employees Stock Option Scheme (ESOS) 2012 and on
18
th
September, 2013 for approval of Employees Stock Option
Scheme (ESOS) 2013, 66,680 options under Employees Stock
Option Scheme (ESOS) 2012 and 1,26,286 options under
Employees Stock Option Scheme (ESOS) 2013 were granted
to Mr. Chetan Maini, a Senior Employee of your Company.
or employees during the year under review.
are required to be disclosed in the annual accounts of your
between the parent Company - Mahindra & Mahindra Limited,
and the Stock Exchanges.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company continues to look at Research and Development
as an effective tool for meeting its business objectives. Your
Company continued to undertake a number of Research &
Development projects to upgrade the technology and quality
of the product during the year under review. Details of specic
131
area in which Research & Development activities are carried
out by your Company in the area of technology absorption,
adaptation and innovations etc. and the particulars relating to
energy conservation, foreign exchange earnings and outgo,
as required under section 217(1)(e) of the Companies Act,
the Report of Board of Directors) Rules, 1988 are given in the
EMPLOYEES
During the year under review, your Company has recruited
several senior professional managers to strengthen its senior
management team.
The Board also wishes to place on record its appreciation
to all employees in your Company for their sustained efforts
and immense contributions in the growth of the technology,
business and for launch of its all new product e2o.
and Rules thereunder, a statement containing particulars of your
Companys employees who were in receipt of remuneration of
not less than Rs.60,00,000 p.a. during the year ended 31
st
March,
2014 or of not less than Rs.5,00,000 per month during any part
thereof is given in Annexure II to this report.
POLICY ON SEXUAL HARASSMENT
harassment in which it has formalised a free and fair enquiry
process with clear timelines. The Company has also constituted
an Internal Complaints Committee to which employees
can write their complaints. During the year under review no
complaints were received by the said Committee.
ACKNOWLEDGEMENT
Your Directors would like to place on record their sincere
thanks for the cooperation and support received from your
Companys bankers, stakeholders, business associates and
various agencies of the Central and State Governments.
On behalf of the Board of Directors
Chairman
Place: Bangalore
Date : 28
th
April, 2014
132
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 31
ST
MARCH, 2014.
FORM A
A Conservation of Energy:
The Company has always been conscious of the need
to conserve energy. The IGBC manufacturing plant has
started production this year and a signicant portion of
the energy has been from solar energy. In the current
nancial year, total 67,395 KWH electricity was generated
through solar park. Use of natural ventilation, LED lighting
and rain water harvesting has further reduced our energy
consumption. These measures are aimed at effective
management and utilization of energy resources and have
resulted in sustainable cost savings for the Company.
B Technology Absorption:
Research & Development (R&D)
1. Areas in which R&D is carried out :
During the year under review, the in-house R&D unit
of the Company carried out the following:
Design and Development of e2o variant (e2o
T01 Commercial production started) with Value
Engineering and Feature Optimization (Optimized
drive train & controller for normal on road usage)
Design, Development and Validation of Fast
Charging System for e2o variant (e2o T20).
Successful Completion of 1 million plus
cumulative km of Endurance Testing on Indian
Roads for e2o Domestic Model.
Successful completion of Airbag Development
Crash Test of e2o export model
Filed PCT applications in the elds of Electric
Vehicles on Method of determining distance to
empty & Charging of electric vehicles using non
conventional energy sources and led National
Phase Application in US for Efcient Thermal
Management of Battery Packs for Electric Vehicles.
Design and Development of Advanced Electric
Power Train with Electronic Power Steering
System (EPS), Advanced Battery Technologies
with state of the art Energy Management System
for export Model is ongoing. (Designed and
Developed high voltage 60 kW Isolated Drive
Train Prototype)
Design and Development of Advanced Safety
Features for e2o export Model like Airbag,
TPMS, ABS System etc., Community Charging
Infrastructure (Fast Charge Stations) and
Electrication Kit for Mahindra Platforms is ongoing.
Developed and showcased Concept NXG Proto
named HALO with Advanced Infotainment
Systems with World Leading HMI. Designed with
High Powered Drive Train and Advanced Battery
Technologies.
Adaptability of Energy Systems for Stationary
Applications is undergoing Lab and eld Trials.
2. Benets derived as a result of the above efforts:
Due to its sustained R&D efforts, the Company
continued to maintain its leadership in the electric
vehicle technology in India. As the overall market for
Electric Vehicles signicantly expands both in India
and abroad, your Company will be one of the major
beneciaries.
3. Future plan of Action:
The Company has set up a separate group for new
technologies and IPR to further increase the focus on
new technologies and ling of additional patents. The
group will focus on next generation powertrain, batteries,
light weight materials and connected car technologies.
Development for export model products with
enhanced range, speed and safety technologies
will continue this year along with developments of
variants of the e2o platform for the domestic market.
Electrication Kit for Mahindra Platform and further
indigenization of components to reduce cost will also
be undertaken.
4. Expenditure in R&D:
(Rs. in Lakhs)
Description
Current
Year
Previous
Year
a) Capital 249.00 2,982.43
b) Recurring 1,663.33 2,250.82
c) Total 1,912.33 5,233.25
Total R&D expenditure as a
percentage of total turnover 51.49% 144.01%
Technology absorption, adaptation and innovation:
1. Efforts in brief, made towards technology absorption,
adaptation and innovation:
During the year under review, the Company has
successfully designed and developed e2o Domestic
Model (Commercial production started) with several
features of world class technology innovations.
With the above efforts the Company was able to further
strengthen the niche already carved in the Electric Vehicle
Market in India and abroad.
C Foreign Exchange Earnings and Outgo:
Total Foreign exchange used and earned (on accrual basis)
(Rs. in Lakhs)
Current Year Previous Year
Foreign Exchange Used 331.26 129.32
Foreign Exchange Earned 92.03 114.27
Chairman
Place: Bangalore
Date : 28
th
April, 2014
133
ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956, READ WITH THE
THE YEAR ENDED 31
ST
MARCH, 2014.
Sl.
No. Name Designation Qualication
Age
(Yrs)
Joining
Date
Experience
in Yrs
Gross
Remuneration
(in Rs)
Previous
Employment/
Designation
1 Chetan Kumar
Maini
Chief Executive
Ofcer
BSME,
MSME.
45 01.04.99 24 2,74,95,214 Amerigon Inc.,
Program Manager
2 Chandramouli R Chief of
Operations
BE, MBA 56 02.07.08 32 32,43,146* TVS Motor,
Vice President
3 Umesh
Krishnappa
VP Operations
& Business
Excellence
BE, PGDBA 48 08.05.09 27 69,23,280 Tata Auto Components
Vice President
* Part of the year.
Notes:
1. Nature of employment is permanent, subject to termination on three months notice on either side.
2. Mr. Chetan Kumar Maini is relative of two Directors of the Company viz. Mr. Sandeep Kumar Maini and Gautam Kumar Maini.
3. The above employees do not hold by themselves, or along with their spouse and dependent children, 2% or more of
the equity shares of the Company except Mr. Chetan Maini who holds 3.57% of the equity shares of the Company as at
31
st
March, 2014.
4. Terms and conditions of employment are as per Companys rules.
5. Gross remuneration received as shown in the statement includes Salary, Commission, Bonus, House Rent Allowance or
value of perquisite for accommodation, car perquisite value/allowance as applicable, leave encashment, leave travel facility,
reimbursement of medical expenses and all allowances/perquisites and terminal benets as applicable.
Chairman
Place: Bangalore
Date : 28
th
April, 2014
134
To the Members of Mahindra Reva Electric Vehicles Private
Limited
Mahindra Reva Electric Vehicles Private Limited (the Company),
the Statement of Prot and Loss and Cash Flow Statement for
the year then ended, and a summary of signicant accounting
policies and other explanatory information.
Management is responsible for the preparation of these
nancial statements that give a true and fair view of the
Company in accordance with accounting principles generally
accepted in India, including the Accounting Standards notied
under the Companies Act, 1956, read with General Circular
8/2014 dated 4 April 2014 issued by the Ministry of Corporate
Affairs. This responsibility includes the design, implementation
and maintenance of internal control relevant to the
preparation and presentation of the nancial statements that
give a true and fair view and are free from material
misstatement, whether due to fraud or error.
or error. In making those risk assessments, the auditor
considers internal control relevant to the Companys
preparation and fair presentation of the nancial statements in
order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an
opinion on the effectiveness of the entitys internal control.
An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the
accounting estimates made by management, as well as
opinion.
Opinion
In our opinion and to the best of our information and
statements give the information required by the Companies
Act, 1956 (the Act) in the manner so required and give
a true and fair view in conformity with the accounting
principles generally accepted in India:
the Company as at March 31, 2014;
for the year ended on that date; and
for the year ended on that date.
2003 (the Order) issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the
Act, we give in the Annexure a statement on the matters
specied in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required
by law have been kept by the Company so far as
(c) The Balance Sheet, Statement of Prot and Loss,
and Cash Flow Statement dealt with by this Report
Prot and Loss, and the Cash Flow Statement
comply with the Accounting Standards notied under
the Companies Act, 1956, read with General Circular
8/2014 dated 4 April 2014 issued by the Ministry of
Corporate Affairs;
(e) On the basis of written representations received from
the directors as on March 31, 2014, and taken on
record by the Board of Directors, none of the
directors is disqualied as on March 31, 2014, from
being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Act.
For S.R. Batliboi & CO. LLP
ICAI Firm Registration Number: 301003E
per Navin Agrawal
Partner
Membership Number: 56102
Place of Signature: Bangalore
Date: April 28, 2014
135
Re: Mahindra Reva Electric Vehicles Private Limited
(the Company)
(b) All xed assets have not been physically veried
by the management during the year but there is
opinion, is reasonable having regard to the size of
the Company and nature of its assets. No material
(c) There was no substantial disposal of xed assets
during the year.
(ii) (a) The management has conducted physical verication
of inventory at reasonable intervals during the year.
(b) The procedures of physical verication of inventory
followed by the management are reasonable and
adequate in relation to the size of the Company and
the nature of its business.
(c) The Company is maintaining proper records of
inventory and the discrepancies noticed on physical
verication have been properly dealt with in the
books of accounts.
(iii) (a) According to the information and explanations given
to us, the Company has not granted any loans,
secured or unsecured to companies, rms or other
parties covered in the register maintained under
section 301 of the Act.
(b) According to information and explanations given to
us, the Company has not taken any loans, secured
or unsecured, from companies, rms or other parties
covered in the register maintained under section 301
of the Act.
explanations given to us, having regard to the
explanation and specic management representation that
some of the items of xed assets and inventory are of
a special and proprietary nature for which alternative
quotations are not necessarily available or may not have
been obtained, there are adequate internal control
systems commensurate with the size of the Company
and the nature of its business, for the purchase of
inventory and xed assets and for the sale of goods and
services. During the course of our audit, we have not
observed any major weakness or continuing failure to
correct any major weakness in the internal control system
of the Company in respect of these areas.
Annexure referred to in paragraph 1 of our report of even date
(v) (a) According to the information and explanations
provided by the management, we are of the opinion
that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act,
1956 that need to be entered into the register
maintained under section 301 have been so entered.
explanations given to us and having regard to the
explanation that purchases of items of inventories
and certain xed assets are of proprietary nature for
which alternative sources are not available to obtain
comparable quotations, the transactions made in
pursuance of such contracts or arrangements and
exceeding the value of Rupees ve lakhs have been
entered into during the nancial year at prices are
reasonable having regard to the prevailing market
prices at the relevant time.
(vi) The Company has not accepted any deposits from the
public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account
maintained by the Company pursuant to the rules made
by the Central Government for the maintenance of cost
records under section 209(1)(d) of the Act, related to the
manufacture of electrically powered vehicles, and are of
the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including
provident fund, investor education and protection
fund, employees state insurance, income-tax, sales-
tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable
to it.
(b) According to the information and explanations given
to us, no undisputed amounts payable in respect of
provident fund, investor education and protection
fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty,
excise duty cess and other material statutory dues
were outstanding, at the year end, for a period of
more than six months from the date they became
payable.
(c) According to the records of the Company, the dues
outstanding of income tax, sales-tax, wealth tax,
service tax, customs duty, excise duty and cess on
account of any dispute, are as follows:
136
(x) The Companys accumulated losses at the end of the
nancial year are more than fty percent of its net worth.
The Company has incurred cash losses during the current
year and in the immediately preceding nancial year.
(xi) Based on our audit procedures and as per the
information and explanations given by the management,
we are of the opinion that the Company has not defaulted
in repayment of dues to a nancial institution or bank.
The Company has no outstanding dues in respect of
debentures.
(xii) According to the information and explanations given to us
and based on the documents and records produced
before us, the Company has not granted loans and
advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benet fund/society. Therefore, the provisions of
clause 4(xiii) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading
in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Companies
(Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
(xv) According to the information and explanations given to
taken by others from bank or nancial institutions.
(xvi) Based on information and explanations given to us by
management, term loans were applied for the purpose for
which loans were obtained.
(xvii) According to the information and explanations given to us
and on an overall examination of the balance sheet of the
Company, we report that no funds raised on short-term
basis have been used for long-term investment.
(xviii) The Company has not made any preferential allotment of
shares to parties or companies covered in the register
maintained under section 301 of the Act.
(xix) The Company did not have any outstanding debentures
during the year.
(xx) The Company has not raised any money through a public
issue during the year.
(xxi) Based upon the audit procedures performed for the
purpose of reporting the true and fair view of the nancial
statements and as per the information and explanations
given by the management, we report that no fraud on or
by the Company has been noticed or reported during
the year.
For S.R. Batliboi & CO. LLP
ICAI Firm Registration Number: 301003E
per Navin Agrawal
Partner
Place of Signature: Bangalore
Name of the statute Nature of dues Amount of
demand* (Rs)
Period to which the amount
relates
Forum where dispute is pending
Central Excise Act, 1944 Penalty and interest 25,916,353 Feb 2008 to Nov 2008 CESTAT
Central Excise Act, 1944 Penalty and interest 25,809,305 Dec 2008 to Feb 2010 CESTAT
Finance Act, 1994 Service Tax including penalty and interest 5,979,665 2005-2008 CESTAT
Finance Act, 1994 Service Tax including penalty and interest 8,497,900 2005-2007 CESTAT
Total 66,203,223
Against the above, amount already paid/adjusted under protest- Rs 25,000,000
137
BALANCE SHEET AS AT 31 MARCH 2014
Notes 2014 2013
Rs. Rs.
Shareholders funds
Share capital ............................................................................................................. 4 326,101,450 269,947,600
Reserves and surplus ............................................................................................... 5 552,687,493 684,496,571
878,788,943 954,444,171
Non-current liabilities
Long-term borrowings .............................................................................................. 6 409,520,000 514,675,000
Other long-term liabilities ......................................................................................... 7 54,099,517 73,739,836
Long-term provisions ................................................................................................ 8 54,629,860 33,031,605
518,249,377 621,446,441
Current liabilities
Short-term borrowings .............................................................................................. 9 50,000,000
Trade payables ......................................................................................................... 10 107,185,165 214,696,190
Other current liabilities.............................................................................................. 10 402,619,061 303,411,970
Short-term provisions ............................................................................................... 8 7,275,404 21,358,100
567,079,630 539,466,260
TOTAL ....................................................................................................................... 1,964,117,950 2,115,356,872
ASSETS
Non-current assets
Fixed assets
Tangible assets .................................................................................................. 11 617,983,251 634,574,052
Intangible assets ............................................................................................... 12 638,236,394 874,208,603
Capital work-in-progress ................................................................................... 11,088,754 10,409,644
Intangible assets under development .............................................................. 234,258,091 67,925,563
Long-term loans and advances ............................................................................... 13 81,309,846 64,897,534
1,582,876,336 1,652,015,396
Current assets
Current investments .................................................................................................. 15 1,752,845 19,149,222
Inventories ................................................................................................................. 16 155,613,988 216,053,122
Trade receivables ...................................................................................................... 14 28,281,755 4,115,940
Cash and bank balances ......................................................................................... 17 85,775,541 103,099,778
Short-term loans and advances ............................................................................... 13 108,323,474 118,249,472
Other current assets ................................................................................................. 18 1,494,011 2,673,942
381,241,614 463,341,476
TOTAL ....................................................................................................................... 1,964,117,950 2,115,356,872
Summary of signicant accounting policies 2.1
The accompanying notes are an integral part of the nancial statements.
As per our report of even date For and on behalf of the Board of Directors of
For S.R. BATLIBOI & CO LLP Mahindra Reva Electric Vehicles Private Limited
Firm registration number: 301003E
Chartered Accountants Dr. Pawan Kumar Goenka V.S. Parthasarathy Pravin N. Shah
A Narayana Swamy Chairman Director Director
per Navin Agrawal Manager
Partner Ajay Patel Rajan Wadhera Dr. Ashok Jhunjhunwala Sandeep K Maini
Membership No.: 56102 Chief Financial Ofcer Director Director Director
Place: Bangalore
Place: Bangalore
138
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2014
Notes 2014 2013
Rs. Rs.
Income
Revenue from operations (net) .............................................................................. 19 354,640,177 363,401,359
Other income .......................................................................................................... 20 16,728,710 29,924,012
Total Income .......................................................................................................... 371,368,887 393,325,371
Expenses
Cost of raw material and components consumed ................................................ 21 268,906,492 147,879,370
(Increase)/decrease in inventories ......................................................................... 22 6,223,819 (14,335,580)
Employee benets expense ................................................................................... 23 254,214,302 199,293,843
Other expenses ....................................................................................................... 24 265,378,950 176,432,249
Depreciation and amortisation ............................................................................... 25 314,617,152 160,729,060
Finance costs .......................................................................................................... 26 67,123,144 41,885,428
Total ........................................................................................................................ 1,176,463,859 711,884,370
Loss before tax ....................................................................................................... 805,094,972 318,558,999
Provision for tax ......................................................................................................
Loss for the year ................................................................................................... 805,094,972 318,558,999
Loss per equity share (Basic and Diluted) ....................................................... 27 (29.29) (13.09)
Nominal value of share Rs.10 (2013 - Rs 10)
Place: Bangalore
Place: Bangalore
139
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2014
2014 2013
Rs. Rs.
Cash ow from operating activities
Loss before tax ......................................................................................................... (805,094,972) (318,558,999)
Non-cash adjustment to reconcile loss before tax to net cash ows
Depreciation/amortisation ................................................................................. 314,617,152 160,729,060
Loss/(prot) on sale of xed assets, net .......................................................... 1,234,195 7,733,811
Employee Stock Option cost ............................................................................ 169,695
Provision for doubtful debts and advances ..................................................... 431,426 671,807
Provisions no longer required written back ..................................................... (2,655,692) (3,855,784)
Unrealized foreign exchange (gain)/loss .......................................................... (8,809,006) (1,849,627)
Net gain on sale of current investments .......................................................... (3,852,919) (5,600,130)
Interest expense ....................................................................................................... 66,732,728 41,532,848
Interest income ......................................................................................................... (8,677,192) (9,830,664)
Operating loss before working capital changes (445,904,585) (129,027,678)
Movements in working capital :
Increase/(decrease) in trade payables .................................................................... (97,887,301) 126,750,626
Increase/(decrease) in long-term provisions ........................................................... 23,561,901 3,095,764
Increase/(decrease) in short-term provisions .......................................................... (14,082,696) (7,600,026)
Increase/(decrease) in other long-term liabilities .................................................... (19,166,667) 57,500,000
Increase/(decrease) in other current liabilities ........................................................ (25,059,061) 110,823,142
Decrease/(increase) in trade receivables ................................................................ (15,178,967) 5,222,633
Decrease/(increase) in inventories ........................................................................... 60,439,134 (138,784,518)
Decrease/(increase) in long-term loans and advances .......................................... 913,094 33,772,205
Decrease/(increase) in short-term loans and advances ......................................... 9,925,997 (44,269,011)
Cash generated from/(used in) operations ......................................................... (522,439,151) 17,483,137
Direct taxes (paid)/received, net of refunds ............................................................ 3,830,810 (45,393,087)
Net cash ow from/(used in) operating activities (A) ....................................... (518,608,341) (27,909,950)
Purchase of xed assets/intangibles ....................................................................... (218,076,447) (560,802,489)
Insurance claim received ......................................................................................... 2,504,840
Proceeds on assets sold/discarded ........................................................................ 2,656,779 2,044,567
Purchase of current investments ............................................................................. (308,316,597) (527,454,498)
Proceeds from sale/maturity of current investments .............................................. 329,565,893 594,711,385
Investments in bank deposits (original maturity of more than 3 months) ............. (79,803,386) (256,231,621)
Redemption of bank deposits (original maturity of more than 3 months) ............ 98,631,622 157,600,000
Interest received ....................................................................................................... 9,857,123 7,156,722
Net cash ow used in investing activities (B) .................................................... (165,485,013) (580,471,094)
140
2014 2013
Rs. Rs.
Proceeds from issuance of share capital ................................................................ 729,270,049 550,464,207
Proceeds from long-term borrowings ...................................................................... 35,000,000 107,800,000
Repayment of long-term borrowings ....................................................................... (62,500,000)
Proceeds from short-term borrowings ..................................................................... 630,000,000 100,000,000
Repayment of short-term borrowings ...................................................................... (580,000,000) (101,978,532)
Interest paid .............................................................................................................. (66,172,696) (44,824,901)
Net cash ow from nancing activities (C) ......................................................... 685,597,353 611,460,774
Net increase/(decrease) in cash and cash equivalents (A + B + C) .................... 1,503,999 3,079,730
Cash and cash equivalents at the beginning of the year ....................................... 4,468,157 1,388,427
Cash and cash equivalents at the end of the year ............................................ 5,972,156 4,468,157
Components of cash and cash equivalents
Cash on hand ........................................................................................................... 21,588 31,984
Balance with banks -
Current account ................................................................................................. 2,450,568 4,436,173
Deposit account ................................................................................................ 3,500,000
Total cash and cash equivalents .......................................................................... 5,972,156 4,468,157
Place: Bangalore
Place: Bangalore
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2014
141
1. Corporate information
Mahindra Reva Electric Vehicles Private Limited (formerly Reva Electric
Car Company Private Limited) (the Company or REVA) is engaged in
design, manufacture, assembly, testing, marketing and selling of
electrically powered vehicles and licensing of technology. The marketing
of the car is done through a network of dealers in India and abroad.
2. Basis of preparation
The nancial statements of the company have been prepared in accordance
with generally accepted accounting principles in India (Indian GAAP). The
company has prepared these nancial statements to comply in all material
respects with the Accounting Standards notied under the Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956, Read with General Circular 8/2014
dated 4 April 2014 issued by Ministry of Corporate Affairs. The nancial
statements have been prepared under the historical cost convention, as on
accrual basis. The accounting policies adopted in the preparation of
nancial statements are consistent with those of previous year.
2.1 Summary of signicant accounting policies
a. Use of estimates
The preparation of nancial statements in conformity with Indian
GAAP requires the management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities and the disclosure of contingent liabilities, at the
end of the reporting period. Although these estimates are based on
the managements best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in
the outcomes requiring a material adjustment to the carrying
amounts of assets or liabilities in future periods.
b. Tangible xed assets
Fixed assets, are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises
purchase price, borrowing costs if capitalization criteria are met and
directly attributable cost of bringing the asset to its working
condition for the intended use. Any trade discounts and rebates are
deducted in arriving at the purchase price.
Subsequent expenditure related to an item of xed asset is added to
its book value only if it increases the future benets from the existing
asset beyond its previously assessed standard of performance.
All other expenses on existing xed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts,
are charged to the statement of prot and loss for the period during
which such expenses are incurred.
Gains or losses arising from de recognition of xed assets are
measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in the
statement of prot and loss when the asset is derecognized.
c. Depreciation
Depreciation on xed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the
Companies Act, 1956, whichever is higher. The company has used
the following rates to provide depreciation on its xed assets.
Rates (SLM) Schedule XIV
Plant and Equipment 4.75%-10% 4.75%
Factory Building 3.34% 3.34%
Furniture and Fixtures 6.33%-20% 6.33%
Computers Equipments 25% 16.21%
Vehicles 16.67%-20% 9.50%
Ofce equipments 20% 7.07%
Tools and xtures 12.50% 11.31%
Leasehold improvements are depreciated over the unexpired lease
period or the estimated useful life, whichever is less. Fixed assets
individually having an original cost of Rs 5,000 or less are fully
depreciated in the year of purchase.
Vehicles and Power pack batteries given on operating lease are
depreciated over the unexpired lease period or the estimated useful
life, whichever is less.
d. Intangible assets
Technical Know-how
Technical know-how is amortised using the straight-line method over
a period not exceeding ve years from the date of purchase/
licensing.
Development expenditure
Research costs are expensed as incurred. Development expenditure
incurred on individual products is capitalised as an intangible asset,
when its future recoverability can reasonably be regarded as
assured. Intangibles representing capitalised product development
costs are amortised, on a straight line basis over a period not
exceeding ve years from the date of commercial production, based
on the estimation of future economic life of the product by the
management.
Computer Software
The expenditure incurred is amortised, on a straight line basis over a
period of four years.
e. Operating Leases
Leases of assets under which all the risks and rewards of ownership
are effectively retained by the lessor are classied as operating
leases. Lease payments under operating leases are recognized as
an expense on a straight-line basis over the lease term.
f. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and
exchange differences arising from foreign currency borrowings to
the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
g. Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet
date if there is any indication of impairment based on internal/
external factors. An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price and
value in use. In assessing value in use, the estimated future cash
ows are discounted to their present value at the weighted average
cost of capital. After impairment, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
h. Investments
Investments that are readily realisable and intended to be held for
not more than a year are classied as current investments. All other
investments are classied as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise
a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of prot and loss.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014
142
i. Inventories
Inventories are valued as follows:
Raw materials, components, stores and spares
Lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the nished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis. Customs duty on
materials in bonded warehouses is considered for valuation of
inventories, as applicable.
Work-in-progress and nished goods
Lower of cost and net realizable value. Cost includes direct materials
and labour and a proportion of manufacturing overheads based on
normal operating capacity. Cost of nished goods includes excise
duty.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and to make
the sale. Obsolete or slow moving inventories are adequately
provided for on a specic identication basis.
j. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benets will ow to the company and the revenue can be
reliably measured. The following specic recognition criteria must
also be met before revenue is recognized:
Sale of Products
Sale of cars, accessories and spares, are recognised on despatch
of goods to customers and are shown net of trade discounts and
returns, Sales Tax and Value Added Tax. Excise duty deducted from
Sales (Gross) is the amount that is included in the amount of Sales
(Gross) and not the entire amount of liability that arose during the
year. Sales value includes amount of subsidies receivable from the
government as per applicable policy.
Income from services
Revenue relating to licensing of technology is recognized upon
completion of performance obligations under the terms of agreement
with the customer. Revenue relating to development of technology is
recognized on the basis of proportionate completion method.
Revenues from maintenance contracts are recognized pro-rata over
the period of the contract as and when services are rendered. The
company collects service tax on behalf of the government and,
therefore, it is not an economic benet owing to the company.
Hence, it is excluded from revenue.
Interest
Revenue is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
k. Foreign currency translation
Foreign currency transactions and balances
(i) Initial recognition
Foreign currency transactions are recorded in the reporting
currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign
currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the
closing rate. Non-monetary items which are carried in terms of
historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction; and
non-monetary items which are carried at fair value or other
similar valuation denominated in a foreign currency are
reported using the exchange rates that existed when the
values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement of monetary
items or on reporting companys monetary items at rates
different from those at which they were initially recorded during
the year, or reported in previous nancial statements, are
recognised as income or as expenses in the year in which
they arise.
(iv) Forward exchange contracts not intended for trading or
speculation purposes
The premium or discount arising at the inception of forward
exchange contracts is amortised as expense or income over
the life of the contract. Exchange differences on such
contracts are recognised in the statement of prot and loss
in the year in which the exchange rates change. Any prot
or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for
the year.
l. Retirement and other employee benets
Dened Contribution Plan (Provident fund)
Retirement benet in the form of provident fund is a dened
contribution scheme. The contributions to the provident fund are
charged to the statement of prot and loss for the year when the
contributions are due. The company has no obligation, other than
the contribution payable to the provident fund.
Dened Benet Plan (Gratuity)
Gratuity liability is provided for based on the actuarial valuation on
projected unit credit method made at end of each nancial year. The
gratuity plan is funded with insurance companies, in the form of
qualifying insurance policies. Actuarial gains/losses are immediately
taken to prot and loss account and are not deferred.
Leave Encashment
Accumulated leave, which is expected to be utilized within the next
12 months, is treated as short-term employee benet. The company
measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement
that has accumulated at the reporting date. The company treats
accumulated leave expected to be carried forward beyond twelve
months, as long-term employee benet for measurement purposes.
Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the
statement of prot and loss and are not deferred.
m. Income taxes
Tax expense comprises current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities
in accordance with the Income-tax Act, 1961 enacted in India.
Deferred income taxes reect the impact of current year timing
differences between taxable income and accounting income for the
year and reversal of timing differences of earlier years. Deferred tax
is measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognised on carry forward of unabsorbed depreciation and tax
losses only if there is virtual certainty that such deferred tax assets
can be realised against future taxable prots. Unrecognised deferred
tax assets of earlier years are re-assessed and recognised to the
extent that it has become reasonably certain that future taxable
income will be available against which such deferred tax assets can
be realised. As at March 31, 2014, the Company has carry forward
loss and unabsorbed depreciation but no deferred tax assets have
been recognised in absence of virtual certainty of prots in the near
future.
n. Employee stock compensation cost
Measurement and disclosure of the employee share-based payment
plans is done in accordance with the Guidance Note on Accounting
for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures
143
compensation cost relating to employee stock options using the
intrinsic value method. Compensation expense is amortized over the
vesting period of the option on a straight line basis.
Compensation expense means the excess of the intrinsic value of
the underlying shares as at the date of grant of the options over the
exercise price of the options.
o. Segment reporting
The Company is engaged in design, manufacture, assembly,
testing, marketing and selling of electrically powered vehicles and
licensing of technology. The risks and returns of the Company are
predominantly determined by its principal product i.e. battery
operated electric cars and accordingly the Company operates in
single business segment. The geographical segment information is
disclosed based on the location of the customer. There are no xed
assets located outside India.
p. Earnings/(Loss) Per Share
Basic earnings/(loss) per share are calculated by dividing the net
prot or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the
weighted average number of equity shares outstanding during the
period. Partly paid equity shares are treated as a fraction of an
equity share to the extent that they were entitled to participate in
dividends relative to a fully paid equity share during the reporting
period. The weighted average number of equity shares outstanding
during the period is adjusted for events of bonus issue; bonus
element in a rights issue to existing shareholders; share split; and
reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(loss) per share, the
net prot or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity
shares. Potential equity shares are anti-dilutive since their conversion
to equity shares would decrease loss per share from continuing
ordinary activities. Accordingly, the effects of anti-dilutive potential
equity shares are ignored in calculating dilutive earnings per share.
q. Provisions
A provision is recognized when the company has a present obligation
as a result of past event, it is probable that an outow of resources
embodying economic benets will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are
determined based on the best estimate required to settle the
obligation at the reporting date. These estimates are reviewed at each
reporting date and adjusted to reect the current best estimates.
r. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be conrmed by the occurrence or non-
occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not
recognized because it is not probable that an outow of resources
will be required to settle the obligation. A contingent liability also
arises in extremely rare cases where there is a liability that cannot
be recognized because it cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its
existence in the nancial statements.
s. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash ow statement
comprise cash at bank and in hand and short-term investments with
an original maturity of three months or less.
3. During the year, the Company continued to incur substantial losses i.e. Rs
805.09 million (2013 Rs 318.55 million) and has accumulated losses of
Rs 2,602.90 million (2013 Rs 1,797.81 million) as at March 31, 2014.
However, owing to the continued support from the holding company and
based on the future growth as per the business plans, the Company is
condent of funding its operating and capital expenditure and continue
business operations in the foreseeable future. Accordingly, these nancial
statements have been prepared on a going concern basis.
2014 2013
Rs. Rs.
4. Share capital
Authorised
135,482,650 (2013 - 135,482,650)
Equity Shares of Rs 10 each 1,354,826,500 1,354,826,500
1 (2013 - 1) Class A Preference
Shares of Rs 28 each 28 28
Issued, subscribed and fully paid-up
32,610,145 (2013 - 26,994,760) Equity
Shares of Rs 10 each 326,101,450 269,947,600
Share Application
Total issued, subscribed and fully
paid-up share capital 326,101,450 269,947,600
a. Reconciliation of the shares outstanding at the beginning and at the
end of the reporting period
Equity shares 2014 2013
No. Rs. No. Rs.
At the beginning of the
period
26,994,760 269,947,600 23,316,069 233,160,690
Issued during the period 5,615,385 56,153,850 3,678,691 36,786,910
Outstanding at end of
the period 32,610,145 326,101,450 26,994,760 269,947,600
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote per
share. In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company, after
distribution of all preferential amounts. The distribution will be in proportion
to the number of equity shares held by the shareholders.
c. Shares held by holding company
2014 2013
Rs. Rs.
23,943,542 (2013: 18,328,157) equity
shares of Rs.10 each fully paid 239,435,420 183,281,570
d. Aggregate number of shares issued for consideration other than cash
during the period of ve years immediately preceding the reporting
date:
2014 2013
No. No.
The Company has not issued shares
for consideration other than cash or
under employee stock option plan in
the current year or during the period of
ve years immediately preceding the
reporting date.
144
e. Details of shareholders holding more than 5% shares in the company
2014 2013
No. % holding in No. % holding in
the class the class
Equity shares of
Rs.10 each fully
paid
Mahindra &
Mahindra Limited,
holding company 23,943,542 73.42% 18,328,157 67.90%
Sudarshan Kumar
Maini 3,893,335 11.94% 3,893,335 14.42%
AEV LLC 2,230,561 6.84% 2,230,561 8.26%
f. Shares reserved for issue under options
For details of shares reserved for issue under the employee stock option
plan of the company, please refer note 29.
5. Reserves and surplus
2014 2013
Rs. Rs.
Securities premium account
Balance, beginning of the year 2,482,308,996 1,968,631,699
Add: Received on issue of shares 673,116,199 513,677,297
Closing Balance 3,155,425,195 2,482,308,996
Employee Stock Option Outstanding
Gross compensation for option
granted during the year 8,001,600
Less: Deferred employee stock
compensation 7,831,905
Closing Balance 169,695
Surplus/(decit) in the statement of
prot and loss
Balance as per last nancial
statements (1,797,812,425) (1,479,253,426)
Prot/(Loss)for the year (805,094,972) (318,558,999)
Net decit in the statement of prot
and loss (2,602,907,397) (1,797,812,425)
Total 552,687,493 684,496,571
6. Long-term borrowings
2014 2013
Rs. Rs.
Rupee term loans
From Export-Import Bank of India
(Secured)* 312,500,000 406,875,000
From Council of Scientic and
Industrial Research (Unsecured) ** 97,020,000 107,800,000
409,520,000 514,675,000
* EXIM Bank loan is secured by a rst pari passu charge on the land and
immovable properties and hypothecation of entire movable xed assets,
both present and future, repayable in 16 equal quarterly instalments
commencing from January 1, 2014. Loan carries interest at 8.5% for rst
three years and 12% for next four years.
** Loan from CSIR is for development of next generation electric car with
interest at 3% p.a and repayable in 10 years from Jan 01, 2015 in equal
annual instalments. Royalty upto Rs 50 lakhs is also payable over a period
of 10 years from the sale of such car.
7. Other long-term liabilities
2014 2013
Rs. Rs.
Deferred interest 10,921,837 13,014,696
Interest accrued and not due 4,844,347 3,225,140
Deferred revenue 38,333,333 57,500,000
54,099,517 73,739,836
8. Provisions
Long-term Short-term
2014 2013 2014 2013
Rs. Rs. Rs. Rs.
Provision for
employee benets
Provision for leave
benets 10,556,261 7,714,984 2,982,645 1,348,680
Provision for Gratuity
benets 3,011,985
10,556,261 7,714,984 5,994,630 1,348,680
Other provisions
Provision for warranties 1,280,774 1,509,420 1,280,774 1,509,420
Provision for litigations/
contingencies 42,792,825 23,807,201 18,500,000
44,073,599 25,316,621 1,280,774 20,009,420
54,629,860 33,031,605 7,275,404 21,358,100
Provision for warranties
Provision for warranty-related costs are recognized based on historical
experience, when the product is sold or service provided.
The estimate of such warranty-related costs is revised annually.
2014 2013
Rs. Rs.
At the beginning of the year 3,018,840 9,737,300
Arising during the year 5,311,777 1,689,532
Utilized during the year (5,769,069) (4,823,174)
Unused amounts reversed (3,584,818)
At the end of the year 2,561,548 3,018,840
9. Short-term borrowings
2014 2013
Rs. Rs.
12.5% Inter Corporate Deposit
(repayable on demand) 50,000,000
50,000,000
145
10. Trade payables and Other current liabilities
2014 2013
Rs. Rs.
Trade payables 107,185,165 214,696,190
(refer note 40 for details of dues to
micro and small enterprises)
107,185,165 214,696,190
Other current liabilities
borrowings 135,780,000 58,125,000
borrowings 3,309,990 2,968,352
Interest free deposits from Dealers 2,477,700 5,956,431
Deferred Interest 7,046,661
Advance from customers 38,986,465 42,227,944
Deferred revenue 158,486,038 151,177,820
Other Payables 46,269,514 32,256,825
Other liabilities (Statutory) 10,262,693 10,699,598
402,619,061 303,411,970
11. Tangible assets
(Rs.)
Land Buildings Computer Plant and Tools and Ofce Furniture Vehicles Leasehold Total
Freehold Equipments equipment Fixtures Equipments and xtures improvements
Cost or valuation
At March 31, 2012 5,180,637 161,546,231 26,063,184 49,407,290 52,922,668 10,054,788 10,059,746 36,084,499 23,862,102 375,181,145
Additions 4,147,533 6,972,621 88,497,777 281,052,623 867,061 2,368,412 37,407,182 1,163,819 422,477,028
Disposals (174,324) (1,025,983) (87,864) (122,336) (4,464,480) (1,037,672) (6,912,659)
At March 31, 2013 5,180,637 165,693,764 32,861,481 136,879,084 333,975,291 10,833,985 12,305,822 69,027,201 23,988,249 790,745,514
Additions 10,000,000 3,672,760 9,984,461 15,752,377 1,717,692 1,080,977 17,186,600 59,394,867
Disposals (695,704) (52,900) (7,463,959) (391,944) (8,604,507)
At March 31, 2014 15,180,637 165,693,764 35,838,537 146,863,545 349,727,668 12,551,677 13,333,899 78,749,842 23,596,305 841,535,874
Land Buildings Computer Plant and Tools and Ofce Furniture Vehicles Leasehold Total
Leasehold Equipments equipment Fixtures Equipments and xtures improvements
Depreciation
At March 31, 2012 457,350 14,530,703 19,408,822 47,693,770 3,746,573 5,682,409 15,695,997 12,719,519 119,935,143
Charge for the year 5,498,082 4,901,350 8,364,827 6,829,848 1,672,645 1,766,824 9,365,740 2,611,645 41,010,961
Disposals (97,623) (797,822) (35,132) (109,555) (2,741,373) (993,137) (4,774,642)
At March 31, 2013 5,955,432 19,334,430 26,975,827 54,523,618 5,384,086 7,339,678 22,320,364 14,338,027 156,171,462
Charge for the year 5,538,307 5,598,480 7,913,683 36,987,535 1,782,737 738,863 11,049,199 2,485,893 72,094,697
Disposals (343,359) (52,899) (3,925,335) (391,943) (4,713,536)
At March 31, 2014 11,493,739 24,589,551 34,889,510 91,511,153 7,166,823 8,025,642 29,444,228 16,431,977 223,552,623
Net Block
At March 31, 2013 5,180,637 159,738,332 13,527,051 109,903,257 279,451,673 5,449,899 4,966,144 46,706,837 9,650,222 634,574,052
At March 31, 2014 15,180,637 154,200,025 11,248,986 111,974,035 258,216,515 5,384,854 5,308,257 49,305,614 7,164,328 617,983,251
a. Vehicles as on March 31, 2014 includes self generated assets aggregating to Rs. 68,331,233 (2013 - Rs. 58,458,876).
b. Tools and Fixtures includes tools aggregating to Rs. 346,625,355 (2013 - Rs 326,742,892) lying with third party vendors.
c. Vehicles includes assets given on operating lease: Gross block Rs 5,439,010 and Net Block Rs 2,706,746 (2013- Gross block Rs 3,026,831 and Net Block
Rs 313,844).
d. Interest capitalised during the year Rs Nil (2013 - Rs 30,302,169).
146
12. Intangible assets
(Rs.)
Product
development
expenditure
Technical
know now
Computer
software
Total
Gross block
At March 31, 2012 181,026,380 30,954,338 28,835,266 240,815,984
Additions 684,959,184 281,500,000 3,780,794 970,239,978
At March 31, 2013 865,985,564 312,454,338 32,616,060 1,211,055,962
Additions 6,550,246 6,550,246
At March 31, 2014 865,985,564 312,454,338 39,166,306 1,217,606,208
Amortisation
At March 31, 2012 166,285,298 30,954,338 19,889,623 217,129,259
Charge for the year 28,888,274 86,013,889 4,815,937 119,718,100
At March 31, 2013 195,173,572 116,968,227 24,705,560 336,847,359
Charge for the year 143,812,681 93,833,333 4,876,441 242,522,455
At March 31, 2014 338,986,253 210,801,560 29,582,001 579,369,814
Net block
At March 31, 2013 670,811,992 195,486,111 7,910,500 874,208,603
At March 31, 2014 526,999,311 101,652,778 9,584,305 638,236,394
13. Loans and advances
Non-current Current
2014 2013 2014 2013
Rs. Rs. Rs. Rs.
(A) Unsecured,
Considered Good
Capital advances 34,450,349 12,684,873
Advances
recoverable from
related parties
(note 33) 953,524 2,394,570
Advances
recoverable in cash
or kind 26,903,783 22,917,154
Other loans and
advances
Advance income-tax
(net of provision for
taxation) 45,806,471 49,637,281
Advance gratuity
contribution 1,138,530
Loans to employees 1,528,778 1,483,936
Balances with
statutory/
government
authorities 69,226,965 86,766,356
81,309,846 64,897,534 108,323,474 118,249,472
Non-current Current
2014 2013 2014 2013
Rs. Rs. Rs. Rs.
(B) Unsecured,
Considered Doubtful
Security deposits 817,593 817,593
Advances
recoverable in cash
or kind 5,373,715 4,764,455
Balances with
statutory/
government
authorities 48,001,052 48,001,052
Provision for
doubtful balances (54,192,360) (53,583,100)

Total (A+B) 81,309,846 64,897,534 108,323,474 118,249,472
14. Trade receivables
Non-current Current
2014 2013 2014 2013
Rs. Rs. Rs. Rs.
Unsecured,
considered good
unless stated
otherwise
Outstanding for
a period exceeding
six months from the
date they are due for
payment
Unsecured,
considered good 532,724 1,272,810
Doubtful 4,184,117 4,361,951
4,184,117 4,361,951 532,724 1,272,810
Provision for
doubtful receivables (4,184,117) (4,361,951)
(A) 532,724 1,272,810
Other receivables
Unsecured,
considered good (B) 27,749,031 2,843,130
Total (A + B) 28,281,755 4,115,940
147
15. Current investments
2014 2013
Rs. Rs.
Current investments (valued
at lower of cost and fair value,
unless stated otherwise)
Unquoted mutual funds
Nil units (2013 - 40,424units) of ICICI
Prudential Flexible Income Plan
Premium-Growth
7,149,222
Market Value Rs Nil (2013 - Rs
8,850,376)
9500 Units(2013-Nil Units) of Citi
Bank Mutual Fund-Growth.
1,752,845
Market Value Rs 22,86,456
(2013 - Nil)
Nil units (2013- 12893 units ) of Birla
Sun Life Floating Rate STP - Growth
2,000,000
Market Value Rs Nil
(2013 -2,009,432)
Nil units (2013- 5775 units) of
Franklin Templeton Ultra-Short Term
Fund - Growth
10,000,000
Market Value Rs Nil
(2013 -Rs 10,078,694)
1,752,845 19,149,222
a) Aggregate market value of
unquoted investments
2,286,456 20,938,502
b) 9,500 units (Cost- Rs. 17,52,845
Market Value - Rs.22,86,456)
[2013 - 40,424 units
(Cost - Rs 7,149,222 Market
Value -Rs. 8,850,376)] pledged
with CITI Bank N.A. for availing
cash credit facility
16. Inventories (valued at lower of cost and net realizable value)
2014 2013
Rs. Rs.
Raw materials and components
[Includes in transit Rs 69,56,648
(2013 -Rs 34,394,301)] 141,248,798 195,464,113
Work-in-progress (Electric cars) 3,716,256
Finished goods (Electric cars) 10,648,934 20,589,009
155,613,988 216,053,122
Details of inventory
Raw materials and components
Battery 31,702,796 88,021,417
Others 109,546,002 107,442,696
141,248,798 195,464,113
17. Cash and bank balances
Current
2014 2013
Rs. Rs.
Balances with banks:
On current accounts 2,450,568 4,436,173
Deposits with original maturity for less
than three months 3,500,000
Cash on hand 21,588 31,984
5,972,156 4,468,157
Other bank balances
Deposits with original maturity for more
than
3 months but less than 12 months 38,613,293 68,631,621
Deposits with original maturity for more
than 12 months 41,190,092 30,000,000
79,803,385 98,631,621
85,775,541 103,099,778
18. Other Current Assets
2014 2013
Rs. Rs.
Interest accrued on deposits 1,494,011 2,673,942
1,494,011 2,673,942
19. Revenue from operations
2014 2013
Rs. Rs.
Sale of products
Finished goods (Cars, Accessories
and Spares) 306,687,919 134,712,782
Less: Excise duty 23,294,990 10,689,500
283,392,929 124,023,282
After sales service 4,081,460 3,372,111
Technology license fee 172,500,000
Powertrain development income 64,858,449 61,822,180
Lease Income 1,348,850 213,720
Scrap Sale 958,489 1,470,066
Revenue from operations (net) 354,640,177 363,401,359
20. Other income
2014 2013
Rs. Rs.
Interest income on
Bank deposits 8,677,192 9,830,664
Others 366,464 126,791
Net gain on sale of current investments 3,852,919 5,600,130
Net foreign exchange gain 827,952 8,266,686
Provisions no longer required written
back 2,655,692 1,960,498
Warranty written back (net) 1,895,286
Miscellaneous income 348,491 2,243,957
16,728,710 29,924,012
148
21. Cost of raw material and components consumed
2014 2013
Rs. Rs.
Inventory at the beginning of the year 195,464,113 71,015,175
Add: Purchases 228,232,415 319,285,277
423,696,528 390,300,452
Less: Inventory at the end of the year 141,248,798 195,464,113
Less: Issued for product development 13,541,238 46,956,968
Cost of raw material and components
consumed 268,906,492 147,879,370
Details of raw material and
components consumed
(includes capitalised)
Battery 69,455,794 43,586,550
Others 212,991,936 151,249,788
282,447,730 194,836,338
Imported and indigenous raw materials, components and spare parts
consumed
% of total Value * % of total Value *
consumption (Rs.) consumption (Rs.)
2014 2014 2013 2013
Imported 48% 136,193,454 26% 50,713,744
Indigenously
obtained 52% 146,254,277 74% 144,122,594
100% 282,447,730 100% 194,836,338
* Includes prototype development expenditure of Rs 13,541,238 (2013 -
Rs 46,956,968)
22. (Increase)/decrease in inventories
2014 2013
Rs. Rs.
Inventories at the end of the year
Work-in-progress 3,716,256
Finished goods 10,648,934 20,589,009
14,365,190 20,589,009
Inventories at the beginning of
the year
Work-in-progress 989,187
Finished goods 20,589,009 5,264,242
20,589,009 6,253,429
(Increase)/decrease in inventories 6,223,819 (14,335,580)
23. Employee benet expense
2014 2013
Rs. Rs.
Salaries, wages and bonus 222,105,887 171,045,560
Contribution to provident and other fund 21,024,575 16,848,752
Stock Option cost 169,695
254,214,302 199,293,843
24. Other expenses
2014 2013
Rs. Rs.
Power and fuel 7,744,232 7,349,965
Freight and forwarding charges 5,084,758 1,662,837
Rent 12,369,892 12,812,601
Rates and taxes 3,367,273 1,206,368
Insurance 1,780,501 1,663,743
Plant and machinery 4,982,209 2,698,715
Buildings 642,806 800,364
Others 2,676,302 4,737,494
Sub-contracting expenses 18,170,081 16,230,939
Excise duty on nished goods
inventory 830,675 1,217,551
Advertising and sales promotion
[Includes discount given to customers
Rs 5,452,143 (2013 - Rs 2,380,450)] 106,959,583 47,571,860
Research and Development Expenses 4,502,802
Communication costs 3,561,317 3,236,171
Legal and professional fees 40,530,123 28,171,320
Payment to auditor (Refer details
below) 1,400,472 1,265,700
Provision for warranties (net of
reversals) 5,311,777
Provision for doubtful debts and
advances 431,426 671,807
Loss on assets sold/discarded (net) 1,234,195 7,733,811
Security Charges 4,367,291 4,189,662
Recruitment Expenses 2,758,564 3,451,952
Miscellaneous Expenses 7,621,511 4,798,022
265,378,950 176,432,249
Payment to auditor
(Excluding Service Tax)
As auditor:
Audit fee 1,250,000 1,100,000
Other services 75,000 100,000
Reimbursement of expenses 75,472 65,700
1,400,472 1,265,700
25. Depreciation and amortisation expense
2014 2013
Rs. Rs.
Depreciation of tangible assets 72,094,697 41,010,959
Amortisation of intangible assets 242,522,455 119,718,101
314,617,152 160,729,060
26. Finance costs
2014 2013
Rs. Rs.
Interest on borrowings 66,040,682 20,601,948
Interest on indirect tax disputes 692,046 20,930,900
Bank charges 390,416 352,580
67,123,144 41,885,428
149
27. Earnings per share (EPS)
2014 2013
Rs. Rs.
Loss and share data used in basic and
diluted EPS computations:
Net loss for calculation of basic and
diluted EPS 805,094,972 318,558,999
Weighted average number of equity
shares in calculating basic and diluted
EPS (No.) 27,487,068 24,334,729
28. Gratuity and other post-employment benet plans
The Company operates one dened plan, viz., gratuity , for its employees.
Under the gratuity plan, every employee who has completed atleast ve
years of service gets a gratuity on departure at 15 days of last drawn
salary for each completed year of service. The scheme is funded with an
Insurance Company in the form of qualifying insurance policy.
The following tables summarize the components of net benet expense
recognized in the statement of prot and loss and the funded status and
amounts recognized in the balance sheet for the respective plans.
Statement of prot and loss
Net employee benet expense recognized in the employee cost
Gratuity
2014 2013
Rs. Rs.
Current service cost 4,112,036 3,408,157
Interest cost on benet obligation 1,193,417 819,495
Expected return on plan assets (1,183,848) (904,784)
Net actuarial( gain)/loss recognized in the year 1,319,333 (759,862)
Net benet expense 5,440,938 2,563,006
Actual return on plan assets 740,589 1,163,294
Balance sheet
Benet asset/liability
Present value of dened benet obligation 18,550,674 13,659,570
Fair value of plan assets (15,538,689) (14,798,100)
Plan asset/(liability) (3,011,985) 1,138,530
Changes in the present value of the dened
benet obligation are as follows:
Opening dened benet obligation 13,659,570 9,933,270
Current service cost 4,112,036 3,408,157
Interest cost 1,193,417 819,495
Benets paid (1,290,422)
Actuarial (gains)/losses on obligation 876,073 (501,352)
Closing dened benet obligation 18,550,674 13,659,570
Changes in the fair value of plan assets are
as follows:
Opening fair value of plan assets 14,798,100 10,534,806
Expected return 1,183,848 904,784
Contributions by employer 1,290,422 3,100,000
Benets paid (1,290,422)
Actuarial gains/(losses) (443,259) 258,510
Closing fair value of plan assets 15,538,689 14,798,100
The Company expects to contribute
Rs.4,000,000 to gratuity in the next year
The major categories of plan assets as
a percentage of the fair value of total plan
assets are as follows:
Investments with insurer 100% 100%
The principal assumptions used in determining gratuity for the companys
plan are shown below:
2014 2013
Discount rate 9.17% 8.25%
Expected rate of return on assets 8% 8%
Employee turnover 10% 5%
The estimates of future salary increases, considered in actuarial valuation,
take account of ination, seniority, promotion and other relevant factors, such
as supply and demand in the employment market. The overall expected rate
of return on assets is determined based on the market prices prevailing on
that date, applicable to the period over which the obligation is to be settled.
2014 2013 2012 2011 2010
Rs. Rs. Rs. Rs. Rs.
Gratuity
Dened benet
obligation 18,550,674 13,659,570 9,933,270 7,871,854 6,941,310
Plan assets 15,538,689 14,798,100 10,534,806 7,087,786 2,613,433
Surplus/(decit) (3,011,985) 1,138,530 601,536 (784,068) (4,327,877)
Experience
adjustments on
plan liabilities 876,073 (501,352) (150,305) (719,086) (196,863)
Experience
adjustments on
plan assets (443,259) 258,510 (240,003) (214,516) 16,701
29. Employee stock option plans
The Company has share-based schemes for its employees and
directors. The Company follows intrinsic method of accounting for stock
compensation cost pursuant to the Guidance Note on Accounting for
Employee Share-based Payments issued by the Institute of Institute of
Chartered Accountants of India.
The details of the plans and options are given below :
Particulars
Reva ESOP
2008
Reva ESOP
2008 II
Reva ESOS
2012
Reva ESOS
2013
Date of scheme June
2008
September
2008
September
2013
September
2013
Number of options allocated
for grant 750,000 250,000 66,680 126,286
Number of options granted 34,510 233,437 66,680 126,286
Method of settlement
(Cash/Equity) Equity Equity Equity Equity
Vesting period 4 years
3 years
6 months 1 to 7 years 1 to 7 years
The details of activity under Reva ESOP 2008 and Reva ESOP 2008 II have
been summarized below:
2014 2013
Reva ESOP
2008
Reva ESOP
2008 II
Reva ESOP
2008
Reva ESOP
2008 II
Outstanding at the beginning
of the year 34,510 233,437 34,510 233,437
Forfeited during the year 20,710
Outstanding at the end of
the year 13,800 233,437 34,510 233,437
Exercisable at the end of
the year 13,800 233,437 29,508 233,437
Weighted average of remaining
contractual life (in years) 0.11
2014
Reva ESOP
2013
Reva ESOP
2012
Number of options 126,286 66,680
Granted during the year 126,286 66,680
the year 126,286 66,680
Exercisable at the end of
the year 126,286 66,680
Weighted average of remaining
contractual life (in years) 7.00 7.00
The weighted average exercise price of all the options is Rs 125.63
(2013 - Rs 144.88) and weighted average fair value of options granted on the
date of grant is Rs 58.25 (2013 - Rs 43). The fair value of the option at date
of grant had been arrived using Balck Scholes Pricing Model, by applying
exercise price on the date of grant, average interest rate of 8% and expected life
of the options 4 years (ESOP 2008) and 7 years (ESOP 2012 and ESOP 2013).
150
30. Leases
Finance lease: Company as lessee
The Company has not entered into any nance lease arrangement.
Operating lease: Company as lessee
The Company has taken ofce and other facilities under cancellable and
non-cancellable operating leases with lock in periods, which are renewable
on a periodic basis and are cancellable, at the option of both the lessee
and the lessor. The future rental commitments for non-cancellable period
(including notice period) are as follows:
2014 2013
Rs. Rs.
Lease payments for the year* 15,864,976 16,224,473
Minimum lease payments
Not later than one year 13,717,760 13,240,500
Later than one year but not later than
ve years 6,945,750 19,860,750
More than ve years
20,663,510 33,101,250
* Includes amount capitalised - Rs 3,495,084 (2013 Rs 3,411,872)
Operating lease commitments - Company as lessor
The Company has leased out vehicles and power pack batteries on
operating lease for a period of 2 to 5 years and such assets are to
be returned to the Company at the end of lease term. There are no
uncollectible minimum lease receivables at the balance sheet date.
Future minimum rentals receivable under operating leases are as follows:
2014 2013
Rs. Rs.
Within one year 675,834 182,400
After one year but not more than
ve years 2,556,104 51,350
More than ve years
3,231,938 233,750
31. Product development expenditure
a) Expenses incurred during the year *
2014 2013
Rs. Rs.
Raw Material and Components 13,541,238 46,956,968
Salaries and Wages 102,292,033 101,966,803
Professional Charges 42,391,856 45,348,980
Rent 3,495,084 3,411,872
Testing Charges 4,209,300 3,064,719
Subcontracting charges 403,037 5,075,371
Interest expenses 19,115,398
166,332,548 224,940,111
* Expenses disclosed under the respective notes are net of above
amounts.
b) Movement of Intangible assets under development during the year
2014 2013
Rs. Rs.
At the beginning of the year 67,925,563 538,089,834
Incurred during the year 166,332,548 224,940,111
Capitalised during the year (684,959,184)
Reversed during the year (10,145,198)
At the end of the year 234,258,111 67,925,563
32. Segment information
The Company currently operates in a single Business segment i.e. battery
operated electric cars and development of technology thereof. The
Geographical segment information is disclosed based on the location
of customers. The operations of the Company comprise export sales to
Europe and other foreign countries. The management views the Indian
market and export market as distinct geographical segments.
(Rs.)
Year ended 31 March
2014 India Europe Others Total
Revenue
Sales to external
customers 327,450,454 1,117,034 26,072,689 354,640,177
Other segment
information
Segment assets 1,936,961,270 1,623,019 25,533,661 1,964,117,950
(Rs.)
Year ended 31 March
2013 India Europe Others Total
Revenue
Sales to external
customers 346,656,908 7,995,768 8,748,683 363,401,359
Other segment
information
Segment assets 2,104,499,986 1,948,837 8,908,049 2,115,356,872
33. Related party disclosures
Names of related parties and related party relationship
Related parties where control
exists
Holding company Mahindra & Mahindra Limited
Related parties with whom
transactions have taken place
during the year
Fellow subsidiaries Mahindra Automobile Distributor Private Limited
Mahindra Engineering Services Limited
Mahindra Forgings Limited
(Up to September 30, 2013)
Mahindra Vehicles Manufacturers Limited
Mahindra Integrated Business Solutions Limited
(erstwhile Mahindra BPO Services Private
Limited)
Mahindra EPC services Pvt Ltd
Bristlecone India Pvt Ltd
Mahindra Holidays & Resorts India Limited
Mahindra Logistics Limited
NBS International Limited
Mahindra Composites Limited
Key management personnel Mr. Chetan Maini
Mr. Sandeep K Maini
(Director from January 20,2014)
Mr. Gautam Maini
(Director from January 20,2014)
Relatives of key management
personnel
Mrs. Reva Maini
Mr. Sudarshan.K. Maini
Enterprises owned or signicantly
inuenced by key management
personnel or their relatives
Ajay Construction
Bangalore Transport Finance Corporation
Maini Sadan
Maini Materials Movement Private Limited
Maini Precision Products Private Limited
Maini Plastics and Composites Pvt Ltd
151
33. Related party disclosures (Contd)
Particulars Mahindra &
Mahindra Ltd
Mahindra
Vehicle
Manufacturers
Ltd
Mahindra
Forgings ltd
NBS
International
Mahindra
Automobile
Distributor
Pvt Ltd
Swaraj
Engines Ltd
Maini
Plastics &
Compsites
Pvt Ltd
Maini
Materials
Movement
Pvt Ltd.
Maini
Precision
Products
Pvt Ltd.
Maini
Industrial
Consultants
Maini
Sadan
Mr. Chetan
Maini
Others Total
Sale of goods and
services
3,387,183 1,208,366 5,755,001 559,642 805,450 3,265,861 2,234,082 17,215,585
() (225,412) (1,776,173) (150,587) (1,960) (11,350) (2,165,482)
Technology
license fee

(172,500,000) (172,500,000)
Development Fee 64,858,449 64,858,449
(61,822,180) (61,822,180)
Purchase of goods
and services
27,229,345 309,434 184,600 47,639,272 11,220,712 8,085,420 15,417,683 110,086,466
(12,375,544) () (289,680) (34,621) (25,175,386) (15,016,378) (1,130,676) (281,500,000) (11,469,472) (346,991,757)
Purchase of xed
assets
3,600,000 705,325 4,305,325
(1,000,000) () () (1,000,000)
Loans taken 300,000,000 150,000,000 450,000,000
(100,000,000) () () (100,000,000)
Loans repaid 250,000,000 150,000,000 400,000,000
(100,000,000) () () (100,000,000)
Interest paid 8,305,616 3,057,534 11,363,150
(5,104,108) () () (5,104,108)
Rent paid 12,915,000 204,115 1,268,100 14,387,215
(12,836,792) (206,412) (1,268,100) (14,311,304)
Reimbursement
of expenses by
Company
16,371,337 703,980 400,697 17,476,014
(1,616,633) (963,996) (1,535,365) (4,115,994)
Crosscharge of
expenses to others
304,178 304,178
(1,814,769) (1,814,769)
Advances received 28,028,443 28,028,443
(19,741,837) (19,741,837)
Advances Paid 2,642,000 2,642,000
()
Deferred Revenue 196,819,371 196,819,371
(208,677,820) (208,677,820)
Amount receivables 1,479,771 723,800 1,699,887 3,903,458
(851,055) (953,524) () (1,804,579)
Amount payable 12,736,003 349,986 50,000,000 6,692,027 3,027,975 1,072,334 160,959 74,039,284
(17,085,895) (956,996) (608,360) () (4,574,036) (11,017,286) (603,381) (106,419) (4,249,685) (39,202,058)
Remuneration to
key management
personnel
23,663,672 23,663,672
(17,463,600) (17,463,600)
Allotment of equity
shares (including
premium)
730,000,050 730,000,050
(499,999,856) (9,272,457) (41,191,894) (550,464,207)
Note:
Figures in brackets represent amounts for previous year ended March 31, 2013.
34. Capital and other commitments
2014 2013
Rs. Rs.
a) Estimated amount of contracts
remaining to be executed on
capital account and not provided
for 104,208,795 11,833,341
b) For commitments relating to
lease arrangements, please refer
note 30
35. Contingent liabilities not provided for
2014 2013
Rs. Rs.
Central Excise/Service tax matters
under dispute 41,902,102 43,553,735
Claims against the company not
acknowledged as debts 9,543,151
One of the overseas dealers had claimed damages/compensation for
termination of dealership without adequate notice by the company.
Pending settlement of the claim through legal process/negotiations, based
on consultation with the legal advisors, the company had provided for Rs
18.5 million towards such claims under litigation.
152
36. Foreign currency exposures
The company has signicant receivable/(payable) in foreign currency as
at March 31, 2014 which has not been hedged. The details of un hedged
balances are as below.
Equivalent Foreign Currency
Amount (Rs) EURO USD GBP
Sundry Creditors
2014 (1,348,613) (4,635) (15,858)
2013 (10,353,483) (83) (188,721)
Sundry Debtors,
Gross
2014 844,372 830 12,874
2013 1,877,414 15,555 13,631
Dealer Deposits
2014 (2,477,700) (30,000)
2013 (5,956,431) (85,000)
Advance from
customers
2014 (231,482) (2,803)
2013 (323,632) (4,250) (427)
Advance to
Suppliers
2014 26,312,308 19,055 410,432 2,983
2013 8,979,471 8,185 151,394 3,005
37. Value of imports calculated on CIF basis
2014 2013
Rs. Rs.
Raw materials and components 72,398,843 177,218,798
Capital goods 4,366,746 23,192,024
76,765,589 200,410,822
38. Expenditure in foreign currency (accrual basis)
2014 2013
Rs. Rs.
Royalty 145,481 159,275
Marketing Expenses 9,907,536 81,765
Warranty/Liquidated damages 333,811 229,329
Others 3,807,985 3,619,802
33,125,732 12,932,626
39. Earnings in foreign currency (accrual basis)
2014 2013
Rs. Rs.
Exports at F.O.B. Value 8,114,448 9,115,887
Others 1,088,724 2,310,642
9,203,172 11,426,529
40. Details of dues to micro and small enterprises as dened under the
MSMED Act, 2006
The Company has amounts due to Micro and Small Enterprises under
The Micro, Small and Medium Enterprises Development Act, 2006
(MSMED Act) as at March 31, 2014
i) The principal amount and the interest
due thereon remaining unpaid to any
supplier as at the end each accounting
year
Principal amount 678,885 3,997,423
Interest 91,762 87,562
ii) The amount of interest paid by the
Company along with the amounts of
payment made to the supplier beyond
the appointed day for the year ending
March 31, 2014.
Principal amount
Interest
iii) The amount of interest due and
payable for the period of delay
in making payment (beyond the
appointed day during the year)
iv) The amount of interest accrued and
remaining unpaid for the year ending
March 31, 2014 4,200 87,562
v) The amount of further interest
remaining due and payable for the
earlier years. 87,562
41. Previous year gures
Previous years gures have been regrouped where necessary to conform
to this years classication.
Place: Bangalore
Place: Bangalore
SSANGYONG MOTOR COMPANY
153
1. Company Overview
Located in Pyeongtaek near Seoul, South Korea, SYMC
is a manufacturer of vehicles and automotive parts with a
line-up of 8 models including
a) SUVs Rexton, Kyron, Actyon, and Korando C;
b) pick up Korando Sports (SUT);
c) MPV Korando Turismo; and
d) luxury sedans the Chairman W and Chairman H.
The Company also manufactures gasoline and diesel
engines at its Changwon plant. The Company has over
170 domestic dealers, and exports through distributors to
more than 100 countries.
The Company has 2 subsidiaries which are Ssangyong
Motor (SHANGHAI) Company Limited in China, and
Ssangyong European Parts Center B.V. in the Netherlands.
Ssangyong (Yizheng) Auto Parts Manufacturing Co.,Ltd.,
a subsidiary in China, was wound up in November 2013.
2. Operation Overview
In 2013, Korea witnessed stagnant domestic demand
in automotive market due to prolonged economic
sluggishness and aggressive sales expansion of imported
vehicles.
Notwithstanding the stagnant auto market condition,
SYMC has maintained upward trend in sales for four
consecutive years and recorded the highest ever sales
revenue since the foundation of the Company, thanks to
successful launches of face lift models.
Especially in 2013, SYMC recorded the highest growth
in domestic auto industry and highest exports in the
companys history. The global sales in 2013 increased
by 20% compared to that in 2012, to 145,649 units. The
domestic sales of SYMC was 63,907 units, an increase
of 34% compared to 2012. Compared to 2012, exports in
2013 increased by 10% to 81,742 (including CKD). Sales
revenue increased 21.3% year on year to 3,475.2 bn KRW
(INR 204.2 bn).
3. Prot and Loss
SYMCs nancial performance, along with the overall
growth in sales volume, improved substantially from the
previous year. The Company undertook several measures,
including several cost reduction measures, to improve the
nancial performance. As a result, the Company was able
to reduce operating loss by 89.3% to KRW 10.6 bn (INR
0.6 bn) in 2013 from KRW 99.1 bn (INR 5.8 bn) in 2012.
Net loss decreased by around 96.4% to KRW 3.8 bn (INR
0.2 bn) in 2013 from net loss of KRW 106.1 bn (INR 6.2
bn) in 2012.
The company achieved prots in 2 consecutive quarters
during 2013. However, due to the unfavorable exchange
rate in the fourth quarter and the provisions made due to a
Supreme Court guideline on the denition of ordinary wages,
the company could not realize prots for the full year.
DIRECTORS REPORT FOR SSANGYONG MOTOR COMPANY (SYMC)
4. Financial Status
Total asset increased by KRW 266.2 bn (INR 15.6 bn)
to KRW 2,123.8 bn (INR 124.8 bn) at the end of 2013,
from KRW 1,857.6 bn (INR 109.1 bn) at the end of the
preceding scal year. Total liabilities increased by KRW
183.9 bn (INR 10.8 bn) to KRW 1,233.8 bn (INR 72.5
bn) at the end of 2013 from KRW 1,049.9 bn (INR 61.7
bn) at the end of the preceding scal year. Total capital
increased by KRW 82.3 bn (INR 4.8 bn) to KRW 890 bn
(INR 52.3 bn) at the end of 2013 from KRW 807.7 bn (INR
47.5 bn) at the end of the preceding scal year, and debt
ratio (total liabilities to total capital) increased to 138.6%
from 130.0% at the end of the preceding scal year. The
increase in assets is due to the increase in cash and cash
equivalents by KRW 161.9 bn (INR 9.5 bn) generated by
increase in sales and issue of new shares.
The main cause for the increase in liabilities is also due
to production volume increase resulting from the sales
increase that led to an increase in trade payables by KRW
75.8 bn (INR 4.5 bn).
Share capital increased to KRW 686.1 bn (INR 40.3 bn)
at the end of 2013 from KRW 613.4 bn (INR 36.0 bn) at
the end of the preceding scal year thanks to the issue
of 14,545,455 new shares to Mahindra & Mahindra Ltd.
through a third party allotment (total value of KRW 80 bn
(INR 4.7 bn) including premium of KRW 7.3 bn (INR 0.4
bn) on stock issued).
5. Future Business Plan
SYMC has completed its Promise 2013 deliverables
which has been pursued for the last three years since its
strategic partnership with Mahindra and Mahindra Limited
(M&M). The Company has now set up the next cycle of
Promise 2016 and Aspiration 2016 targets and renewed
its mid - long term strategies.
To achieve Promise 2016, SYMC will accomplish global
sales target of 150,500 units in 2014 to continue intensively
the path of turn around and will prepare for new model
launches scheduled in 2015.
Especially, the Company will complete the development of
X100 in 2014. X100 is a key strategic model for the future
success of SYMC.
6. Corporate Governance
1) Board of Directors
i. Composition of BOD and other board committee
Name BOD Status Other Board Committee
Pawan
Kumar
Goenka
Chairman
(Director)
Non-
standing
Chairman of Management
Committee
Chairman of Outside
Director
Candidate
Recommendation
Committee
Yoo-Il Lee Director Standing
Member of Management
Committee
154
Name BOD Status Other Board Committee
Bharat Doshi Director Non-standing
Yoon-Suk Suh
Outside
Director
Non-standing
Chairperson of Audit
Committee
Member of Outside Director
Candidate
Recommendation Committee
Ki-Hwan Kim
Outside
Director
Non-standing Member of Audit Committee
Dominic
DiMarco
Outside
Director
Non-standing
Member of Audit Committee
Member of Outside Director
Candidate
Recommendation Committee
Director Bharat Doshi retired, and Director Rajeev Dubey and
Outside Director Dae-Ryun Chang were newly appointed at
the 52
nd
Annual Shareholders Meeting held on March 26, 2014.
Yoon-Suk Suh was appointed as the Chairman of the Outside
Director Candidate Recommendation Committee at the
Committee Meeting on March 26, 2014.
2) General Body Meetings
i. Date, Time and Location where last three AGMs held.
2014 2013 2012
Date & time
Mar 26, 2014
09:30 am
March 27, 2013
09:30 am
March 28, 2012
09:30 am
Special
resolutions
Revision of
the Articles of
Incorporation
Revision of
the Articles of
Incorporation
Location
455-12, Dongsak-ro, Pyeongtaek-si, Gyeonggi-do,
Seminar room of Mirae-dong dormitory
3) Disclosure
i. Details of non-compliance by the company and
penalties imposed by administrative agencies during
the last three years.
Date: November, 2013
Details: Administrative penalties KRW 1 bn (INR
59 mn)
Reason: Actyon Sports tted with EGR valve
which is different from that permitted in the
certication was sold for the period between
June 5, 2008 and December 31, 2011.
4) General Shareholder information
i. Date, time and venue of General Shareholders
Meeting;
Mar 27, 2013, 09:30 am, 455-12, Dongsak-ro,
Pyeongtaek-si, Gyeonggi-do, Seminar room of Mirae-
dong dormitory
ii. Financial year: Jan 1 Dec 31
iii. Date of Book closure: Dec 31
iv. Dividend Payment Date: N/A
v. Listing on Stock Exchanges: Korea Exchange (KRX)
vi. Stock Code: 003620 (KOSPI)
vii. Market Price Data of 2013
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
High KRW 7,600 8,380 8,690 8,910 9,080 9,040 9,350 8,800 6,020 6,460 6,400 6,440
INR 447 492 511 524 534 531 549 517 354 380 376 378
Low KRW 6,690 7,400 8,330 8,350 8,340 8,470 8,100 5,990 5,540 5,730 6,100 5,210
INR 393 435 489 491 490 498 476 352 326 337 358 306
viii. Registrar and Transfer Agents : Korea Securities Depository
ix. Plant Locations;
Pyeongtaek plant : 455-12, Dongsak-ro, Pyeongtaek-si, Gyeonggi-do, Korea
Changwon plant : 79, Seongsan-dong, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea
x. Address for correspondence: Ssangyong Motor Company, 455-12, Dongsak-ro, Pyeongtaek-si, Gyeonggi-do, Korea.
Chairman
Pyeongtaek, South Korea, 26
th
March, 2014
155
English Translation of a Report Originally Issued in Korean
To the Shareholders and Board of Directors of
Ssangyong Motor Company:
We have audited the accompanying separate nancial
statements of Ssangyong Motor Company (the Company).
The nancial statements consist of the separate statement of
nancial position as of December 31, 2013 and December
31, 2012, respectively, and the related separate statement
of comprehensive income, separate statement of changes in
stockholders equity and separate statement of cash ows, all
expressed in Korean won, for the years ended December 31,
2013 and 2012, respectively. The Companys management
is responsible for the preparation and fair presentation of
the separate nancial statements and our responsibility is to
express an opinion on these separate nancial statements
based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the Republic of Korea. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the nancial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in
the nancial statements. An audit also includes assessing the
accounting principles used and signicant estimates made
by management, as well as evaluating the overall nancial
statement presentation. We believe that our audit provide a
reasonable basis for our opinion.
In our opinion, the nancial statements referred to above
present fairly, in all material respects, the nancial position
of the Company as of December 31, 2013 and December
31, 2012, respectively, and the results of its operations and
its cash ows for the years ended December 31, 2013 and
December 31, 2012, respectively, in conformity with K-IFRS.
Our audit also comprehended the translation of Korean Won
amounts into Indian - Rupee amounts and, in our opinion,
such translation has been made in conformity with the basis
in Note 2. Such Indian - Rupee amounts are presented solely
for the convenience of readers outside of Korea.
Accounting principles and auditing standards and their application
in practice vary among countries. The accompanying separate
nancial statements are not intended to present the nancial
position, results of operations and cash ows in accordance
with accounting principles and practices generally accepted
in countries other than the Republic of Korea. In addition, the
procedures and practices utilized in the Republic of Korea to
audit such nancial statements may differ from those generally
accepted and applied in other countries. Accordingly, this report
and the accompanying separate nancial statements are for use
by those knowledge about Korean accounting procedures and
auditing standards and their application in practice.
Deloitte Anjin LLC
March 17, 2014
Notice to Readers
This report is effective as of March 17, 2014, the auditors report date. Certain subsequent events or circumstances may have
occurred between the auditors report date and the time the auditors report is read. Such events or circumstances could
signicantly affect the separate nancial statements and may result in modications to the auditors report.
156
Korean won Indian-Rupee
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
(In thousands) (In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Notes 4, 5 and 34) W 359,712,082 W 197,769,855 Rs. 21,135,243 Rs. 11,620,166
Trade and other receivables, net
(Notes 7, 33 and 34) ........................................... 234,067,459 223,530,412 13,752,867 13,133,753
Derivatives assets (Notes 26 and 34) ................. 28,984,560 21,503,503 1,703,017 1,263,460
Inventories, net (Notes 8 and 25) ....................... 277,070,948 264,373,355 16,279,581 15,533,521
Other current assets (Note 10) ........................... 7,145,375 6,739,388 419,834 395,979
Total current assets ............................................. 906,980,424 713,916,513 53,290,542 41,946,879
NON-CURRENT ASSETS:
Non-current nancial instruments
(Notes 5 and 34) ................................................. 6,000 6,000 353 353
Non-current available-for-sale nancial assets
(Notes 6 and 34) ................................................. 560,000 560,000 32,903 32,903
Non-current other receivables, net
(Note 7 and 34) ................................................... 36,564,470 30,171,905 2,148,382 1,772,780
Property, plant and equipment, net (Note 11) ... 1,084,035,359 1,051,358,997 63,693,582 61,773,648
Intangible assets (Note 12) ................................ 89,480,142 56,523,358 5,257,495 3,321,086
Investments in subsidiaries (Note 9) .................. 5,829,056 4,720,009 342,492 277,329
Other non-current assets (Note 10) ................... 357,350 360,541 20,996 21,184
Total non-current assets ..................................... 1,216,832,377 1,143,700,810 71,496,203 67,199,283
TOTAL ASSETS ................................................... 2,123,812,801 1,857,617,323 124,786,745 109,146,162
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Trade and other payables (Notes 18, 33 and 34) 723,397,173 580,411,368 42,503,924 34,102,650
Short-term borrowings (Notes 13, 18 and 34) ... 51,608,036 30,000,000 3,032,282 1,762,680
Derivatives liabilities ............................................ 95,404,765 5,605,602
Provision for product warranties (Note 15) ........ 48,780,982 46,214,861 2,866,175 2,715,400
Long-term employee benets obligation ............ 1,648,815 1,174,371 96,878 69,001
Other current liabilities (Note 14) ....................... 26,718,121 31,098,096 1,569,850 1,827,200
Total current liabilities .......................................... W 947,557,892 W 688,898,695 Rs. 55,674,711 Rs. 40,476,931
(Continued)
SEPARATE STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND DECEMBER 31, 2012
157
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
NON-CURRENT LIABILITIES:
Debentures (Notes 13 and 34) ........................... W W 95,404,765 Rs. Rs. 5,605,602
Other non-current payables (Note 34) ............... 20,223,465 37,977,622 1,188,250 2,231,413
Non-current liabilities (Notes 16) ........................ 8,270 486
Retirement benet obligation (Note 17) ............. 174,656,118 143,298,213 10,262,095 8,419,630
Other long-term employee benets obligation .. 14,632,801 11,933,388 859,765 701,158
Provision for long-term product warranties
(Note 15) .............................................................. 76,698,999 72,384,068 4,506,527 4,252,998
Total noncurrent liabilities .................................. 286,211,383 361,006,326 16,816,637 21,211,287
TOTAL LIABILITIES ..................................................... 1,233,769,275 1,049,905,021 72,491,348 61,688,218
SHAREHOLDERS EQUITY:
Capital stock (Note 19) ....................................... 686,100,480 613,373,205 40,312,520 36,039,356
Other capital surplus (Note 20) .......................... 129,383,402 122,584,976 7,602,051 7,202,603
Other capital adjustments(Note 21) ................... 26,833,680 18,999,750 1,576,640 1,116,349
Retained earnings (accumulated decit)
(Notes 22 and 23) ............................................... 47,725,964 52,754,371 2,804,186 3,099,636
TOTAL SHAREHOLDERS EQUITY ............................ 890,043,526 807,712,302 52,295,397 47,457,944
TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY ........................................................................ W 2,123,812,801 W 1,857,617,323 Rs. 124,786,745 Rs. 109,146,162
See accompanying notes to the nancial statements.
SEPARATE STATEMENTS OF FINANCIAL POSITION (CONTINUED)
AS OF DECEMBER 31, 2013 AND DECEMBER 31, 2012
158
Korean Won Indian-Rupee
Year ended
December 31,
2013
Year ended
December 31,
2012
Year ended
December 31,
2013
Year ended
December 31,
2012
SALES (Notes 32 and 33) ..................................... W 3,475,185,983 W 2,863,805,547 Rs. 204,188,028 Rs. 168,265,759
COST OF SALES (Notes 25 and 33) .................... 2,980,409,595 2,526,439,713 175,116,946 148,443,492
GROSS PROFIT ..................................................... 494,776,388 337,365,834 29,071,082 19,822,267
SELLING AND ADMINISTRATIVE EXPENSES
(Notes 25 and 27).................................................. 505,389,333 436,438,126 29,694,656 25,643,359
OPERATING INCOME ........................................... (10,612,945) (99,072,292) (623,574) (5,821,092)
NON-OPERATING INCOME (Note 28) ................. 45,925,201 44,266,371 2,698,381 2,600,915
NON-OPERATING EXPENSES (Note 28) ............. 61,686,540 62,808,136 3,624,454 3,690,355
FINANCIAL INCOME (Note 29) ............................. 42,211,867 26,244,582 2,480,200 1,542,027
FINANCIAL COST (Note 29) ................................. 19,615,628 14,699,976 1,152,536 863,712
INCOME BEFORE INCOME TAX .......................... (3,778,045) (106,069,451) (221,983) (6,232,217)
INCOME TAX EXPENSE (Note 24) .......................
NET INCOME ......................................................... (3,778,045) (106,069,451) (221,983) (6,232,217)
OTHER COMPREHENSIVE INCOME ................... 6,583,567 (87,758) 386,824 (5,156)
TOTAL COMPREHENSIVE INCOME ..................... W 2,805,522 W (106,157,209) Rs. 164,841 Rs. (6,237,373)
INCOME PER SHARE (Note 30) Basic and
diluted income per share ...................................... W (29) W (867) Rs. (2) Rs. (51)
SEPARATE STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
159
Korean won in thousands
Capital stock
Other capital surplus
Other
capital
adjustments
Retained
earnings
(accumulated
decit) Total
Paid-in
capital
in excess
of par
Gain on
capital
reduction
Consideration
for
conversion
rights
Debt to be
swapped
for equity
Other
capital
surplus
(In thousands)
Balance at January 1, 2012 ........ 609,809,205 4,213,878 120,351,580 931,509 193,310 177,718,020 913,217,502
Net income ................................. (106,069,451) (106,069,451)
Actuarial losses .......................... (18,894,198) (18,894,198)
Capital increase with
consideration .............................. 3,564,000 353,517 3,917,517
Conversion of debt to equity ....... (21,639) (21,639)
Decit recovery...........................
Stock issuance costs .................. (3,243,869) (3,243,869)
Gains on valuation of derivatives 18,806,440 18,806,440
Balance at December 31, 2012 .. W 613,373,205 W 4,545,756 W 120,351,580 W 931,509 W W (3,243,869) W 18,999,750 W 52,754,371 W 807,712,302
Balance at January 1, 2013 ........ 613,373,205 4,545,756 120,351,580 931,509 (3,243,869) 18,999,750 52,754,371 807,712,302
Net income ................................. (3,778,045) (3,778,045)
Actuarial losses .......................... (1,250,363) (1,250,363)
consideration .............................. 72,727,275 7,272,728 80,000,003
Stock issuance costs .................. (365,771) (365,771)
Miscellaneous ............................. (108,530) (108,530)
Gains on valuation of derivatives 7,833,930 7,833,930
Balance at December 31, 2013 .. W 686,100,480 W 11,452,713 W 120,351,580 W 931,509 W (108,530) W (3,243,869) W 26,833,680 W 47,725,963 W 890,043,526
Indian-Rupee in thousands
Capital stock
Other capital surplus
Other capital
adjustments
Retained
earnings
(accumulated
decit) Total
Paid-in
capital in
excess of
par
Gain on
capital
reduction
Consid-
eration for
conversion
rights
Debt to be
swapped
for equity
Other
capital
surplus
(In thousands)
Balance at January 1,
2012 .............................. 35,829,950 247,591 7,071,377 54,732 11,358 10,442,000 53,657,008
Net income .................... (6,232,217) (6,232,217)
Actuarial losses ............. (1,110,147) (1,110,147)
consideration ................. 209,406 20,771 230,177
Conversion of debt to
equity ............................ (1,271) (1,271)
Decit recovery..............
Stock issuance costs ..... (190,597) (190,597)
Gains on valuation of
derivatives ..................... 1,104,991 1,104,991
Balance at December
31, 2012 ....................... Rs. 36,039,356 Rs. 267,091 Rs. 7,071,377 Rs. 54,732 Rs. Rs. (190,597) Rs. 1,116,349 Rs. 3,099,636 Rs. 47,457,944
Balance at January 1,
2013 .............................. 36,039,356 267,091 7,071,377 54,732 (190,597) 1,116,349 3,099,636 47,457,944
Net income .................... (221,983) (221,983)
Actuarial losses ............. (73,466) (73,466)
consideration ................. 4,273,164 427,316 4,700,480
Stock issuance costs ..... (21,491) (21,491)
Miscellaneous ................ (6,377) (6,377)
Gains on valuation of
derivatives ..................... 460,290 460,290
Balance at December
31, 2013 ....................... Rs. 40,312,520 Rs. 672,916 Rs. 7,071,377 Rs. 54,732 Rs. (6,377) Rs. (190,597) Rs. 1,576,639 Rs. 2,804,187 Rs. 52,295,397
SEPARATE STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
160
Year ended
December 31,
2013
Year ended
December 31,
2012
Year ended
December 31,
2013
Year ended
December 31,
2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income W (3,778,045) W (106,069,451) Rs. (221,983) Rs. (6,232,217)
Adjustment (Note 31) ..................................... 203,175,972 197,913,326 11,937,807 11,628,596
Changes in net working capital (Note 31) .... 76,101,512 56,480,668 4,471,421 3,318,578
275,499,439 148,324,543 16,187,245 8,714,957
Interests received ........................................... 7,249,544 6,125,722 425,954 359,923
Interests paid .................................................. (8,721,307) (8,886,715) (512,429) (522,148)
Dividend income received ............................. 1,100,280 165,104 64,648 9,701
Net cash provided by operating activities ..... 275,127,956 145,728,654 16,165,418 8,562,433
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash inows from investing activities:
Decrease in other receivables ....................... 2,268,420 3,796,291 133,283 223,055
Disposal of property, plant and equipment ... 495,195 250,811 29,096 14,736
Disposal of investments on subsidiary .......... 1,759,872 103,403
Decrease in other assets ............................... 37,262 13,970 2,189 821
4,560,749 4,061,072 267,971 238,612
Cash outows from investing activities:
Increase in other receivables ......................... 4,970,361 2,445,000 292,039 143,658
Acquisition of property, plant and equipment 152,239,552 117,338,548 8,944,987 6,894,344
Acquisition of intangible assets ..................... 57,611,817 27,740,980 3,385,040 1,629,949
Acquisition of investments on subsidiary ...... 4,048,680 263,455 237,884 15,480
(218,870,410) (147,787,983) (12,859,950) (8,683,431)
Net cash provided by (used in) in investing
activities .......................................................... (214,309,661) (143,726,911) (12,591,979) (8,444,819)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash inows from nancing activities:
Increase in borrowings ................................... 21,754,957 1,278,234
Issuance of debentures..................................
Capital increase with consideration ............... W 80,000,003 W 3,917,517 Rs. 4,700,480 Rs. 230,178
101,754,960 3,917,517 5,978,714 230,178
(Continued)
STATEMENTS OF CASH FLOWS
161
Year ended
December 31,
2013
Year ended
December 31,
2012
Year ended
December 31,
2013
Year ended
December 31,
2012
Cash outows for nancing activities:
Redemption of borrowings ............................ W W 10,567,689 Rs. Rs. 620,915
Redemption of current portion of longterm
borrowings ......................................................
Redemption of troubled debts .......................
Stock issuance cost ....................................... 365,771 21,639 21,491 1,271
(365,771) (10,589,328) (21,491) (622,186)
Net cash provided by (used in) nancing
activities .................................................................. 101,389,189 (6,671,811) 5,957,223 (392,008)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS ........................ (265,257) (69,886) (15,585) (4,106)
NET INCREASE IN CASH AND CASH
EQUIVALENTS ....................................................... 161,942,227 (4,739,954) 9,515,077 (278,500)
CASH AND CASH EQUIVALENTS, BEGINNING
OF THE YEAR ........................................................ 197,769,855 202,509,809 11,620,166 11,898,666
CASH AND CASH EQUIVALENTS, END OF
THE YEAR .............................................................. W 359,712,082 W 197,769,855 Rs. 21,135,243 Rs. 11,620,166
SEPARATE STATEMENTS OF CASH FLOWS (CONTINUED)
162
1. GENERAL:
(1) Company overview and recent changes in business environment
Ssangyong Motor Company(the Company) was incorporated on
December 6, 1962, and listed its stocks on the Korea Stock Exchange in
May of 1975. The Company is headquartered in Dong-sak Ro, Pyungtaek
and its factories are located in Pyungtaek, Kyeonggi-do and Changwon,
Kyeongsangnam-do. The Company manufactures and distributes motor
vehicles and parts.
(2) Major shareholders
The Companys shareholders as of December 31, 2013 are as follows:
Name of shareholder Number of
shares owned
Percentage of
ownership (%)
Mahindra & Mahindra Ltd. 99,964,502 72.85
Treasury stock 21,706 0.02
Others 37,233,888 27.13
137,220,096 100.00
2. SIGNIFICANT ACCOUNTING POLICIES:
The Company maintains its ofcial accounting records in Republic of
Korean won (Won) and prepares separate nancial statements in
conformity with Korean International Reporting Standards (K-IFRS),
in the Korean language (Hangul). Accordingly, these separate nancial
statements are intended for use by those who are informed about K-IFRS
and Korean practices. The accompanying separate nancial statements
have been condensed, restructured and translated into English with certain
expanded descriptions from the Korean language nancial statements.
Certain information included in the Korean language nancial statements,
but not required for a fair presentation of the Companys nancial position,
comprehensive income, changes in stockholders equity or cash ows, is
not presented in the accompanying separate nancial statements.
The Indian-Rupee amounts presented in these nancial statements were
computed by translating the Korean Won into Indian-Rupees based on the
Bank of Korea Basic Rate (W1 to Rs. 0.058756 at December 31, 2013),
solely for the convenience of the reader. These convenience translations
into Indian-Rupees should not be construed as representations that the
Korean won amounts have been, could have been, or could in the future
be, converted at this or any other rate of exchange.
(1) Basis of preparation
The Company has prepared the separate nancial statements in
accordance with the Korean International Financial Reporting Standards
(K-IFRS) for the annual period beginning on January 1, 2011.
The Companys nancial statements are separate nancial statements
prepared in accordance with the requirements of K-IFRS 1027 Separate
Financial Statements, in which a parent , or an investor with joint control
of, or signicant inuence over, an investee accounts for the investments
on the basis of the direct equity interest rather than on the basis of the
underlying results and net assets of the investees.
The accompanying separate nancial statements have been prepared on
the historical cost basis except for certain non-current assets and nancial
instruments that are measured at revalued amounts or fair values, as
explained in the accounting policies below. Historical cost is generally
based on the fair value of the consideration given
The principal accounting policies are set out below.
1) Amendments to K-IFRSs affecting amounts reported in the nancial
statements
Amendments to K-IFRS 1001 Presentation of Financial Statements
The amendments to K-IFRS 1001 require items of other comprehensive
income to be grouped into two categories in the other comprehensive
income section: (a) items that will not be reclassied subsequently to prot
or loss and (b) items that may be reclassied subsequently to prot or loss
when specic conditions are met. Other than this presentation change,
the application of the amendments to K-IFRS 1001 does not result in any
impact on the Companys nancial position and nancial performance. The
amendments have been applied retrospectively for the comparative period,
and hence the presentation of items of other comprehensive income has
been modied to reect the changes.
Amendments to K-IFRS 1019 Employee Benets
The amendments to K-IFRS 1019 require the recognition of changes in
dened benet obligations and in fair value of plan assets when they occur,
and hence eliminate the corridor approach permitted under the previous
version of K-IFRS 1019 and the accelerate the recognition of past service
costs. All actuarial gains and losses are recognized immediately through
other comprehensive income (the option to recognize actuarial gains and
losses in prot or loss has also been removed). Furthermore, the interest
cost and expected return on plan assets used in the previous version of
K-IFRS 1019 are replaced with a net interest amount under K-IFRS 1019
(as revised in 2011), which is calculated by applying the discount rate to
the net dened benet liability or asset. The amendments to K-IFRS 1019
also require the recognition of past service cost as an expense at the
earlier date of (a) when the plan amendment or curtailment occurs and (b)
when the Company recognizes related restructuring costs or termination
benets. The Company has applied these changes, but the application of
the amendments has had no material impact on the disclosures or on the
amounts recognized in the nancial statements.
Amendments to K-IFRS 1107 Financial Instruments: Disclosures
The amendments to K-IFRS 1107 are mainly focusing on presentation of the
offset between nancial assets and nancial liabilities and require entities to
disclose information about rights of offset and related arrangements (such
as collateral agreements) for nancial instruments under an enforceable
master netting agreement or similar arrangement, irrespective of whether
they would meet the offsetting criteria under K-IFRS 1032. As the Company
has neither any offsetting nancial instruments under K-IFRS 1032 nor any
rights of offset or related arrangements in place, the application of the
amendments has had no material impact on the disclosures or on the
amounts recognized in the separate nancial statements.
K-IFRS 1113 Fair Value Measurement
K-IFRS 1113 establishes a single source of guidance for fair value
measurements and disclosure about fair value measurements. The
standard denes fair value, establishes a framework for measuring fair
value, and requires disclosures about fair value measurements. K-IFRS
1113 denes fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value is measured by taking into
account the characteristics of the asset or liability that market participants
would take when pricing the asset or liability at the measurement date. A
fair value measurement under K-IFRS 1113 requires an entity to determine
the particular asset or liability that is subject of the measurement, the
principal (or most advantageous) market for the asset or liability, and
the valuation technique(s) appropriate for the measurement. In addition,
K-IFRS 1113 requires extensive disclosures about fair value measurements.
The Company has applied these changes, but the application of the
amendments has had no material impact on the disclosures or on the
amounts recognized in the nancial statements.
2) New and revised K-IFRSs in issue but not yet effective
The Company has not applied the following new and revised K-IFRSs that
have been issued but are not yet effective.
Amendments to K-IFRS 1032 Financial Instruments: Presentation
The amendments to K-IFRS 1032 clarify existing application issue relating
to the offset of nancial assets and nancial liabilities requirements.
Specically, the amendments clarify the meaning of currently has a legally
enforceable right of set-off and simultaneous realization and settlement.
Groups right to offset must not be conditional on the occurrence of future
events but enforceable anytime during the contract periods, during the
ordinary course of business with counterparty, a default of counterparty
and master netting agreement or in some forms of non-recourse debt. The
amendments to K-IFRS 1032 are effective for annual periods beginning on
or after January 1, 2014.
Amendments to K-IFRS 1039 Financial Instruments: Recognition and
Measurement
The amendments to K-IFRS 1039 allows the continuation of hedge
accounting when a derivative is novated to a clearing counterparty or
entity acting in a similar capacity and certain conditions are met. The
amendment to K-IFRS 1039 is effective for annual periods beginning on or
after January 1, 2014.
NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
163
Amendments to K-IFRS 1110, K-IFRS 1112 and K-IFRS 1027 Investment
Entities
The amendments introduce an exception to the principle under K-IFRS
1110 that all subsidiaries shall be consolidated and require a reporting
entity that meets the denition of an investment entity not to consolidate
its subsidiaries but instead to measure its subsidiaries at fair value through
prot or loss in its consolidated and separate nancial statements. In
addition, consequential amendments have been made to K-IFRS 1112
and K-IFRS 1027 to introduce new disclosure requirements for investment
entities. The investment entities amendments are effective for annual
periods beginning on or after January 1, 2014.
The Company does not anticipate that these amendments referred
above will have a signicant effect on the Companys separate nancial
statements and disclosures.
Major accounting policies used for the preparation of the separate nancial
statements are stated below. Unless stated otherwise, these accounting
policies have been applied consistently to the nancial statements for the
current period and accompanying comparative period.
(2) Accounting for investments in subsidiaries
The Company in accordance with the K-IFRS 1027 Consolidated and
Separate nanicial statements, is a parent company and it has subsidiaries
of which Ssangyong Motor (Shanghai) Co., Ltd and Ssangyong European
Parts Center B.V. When the Company prepares separate statements, the
investments in subsidiaries are accounted for at cost basis by the direct
investment proportion. And also the Company recognize a dividend from
a subsidiary in prot or loss in the separate nancial statements when its
right to receive the dividend is established.
(3) Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable. Revenue is reduced for estimated customer returns, rebates
and other similar allowances. The Company recognizes revenue when the
amount of revenue can be reliably measured; when it is probable that
future economic benets will ow to the entity; and when specic criteria
have been met for each of the Companys activities, as described below.
1) Sale of goods
Revenue from the sale of goods is recognized when all the following
conditions are satised:
the Company has transferred to the buyer the signicant risks and
rewards of ownership of the goods;
the Company retains neither continuing managerial involvement to
the degree usually associated with ownership nor effective control
over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benets associated with the
transaction will ow to the Company; and
the costs incurred or to be incurred in respect of the transaction can
be measured reliably.
2) Rendering of services
Revenue from a contract to provide services is recognized by reference
to the stage of completion of the contract. The stage of completion of the
contract is determined as follows:
installation fees are recognized by reference to the stage of
completion of the installation, determined as the proportion of the
total time expected to install that has elapsed at the end of the
reporting period;
servicing fees included in the price of products sold are recognized
by reference to the proportion of the total cost of providing the
servicing for the product sold; and
revenue from time and material contracts is recognized at the
contractual rates as labor hours and direct expenses are incurred.
3) Dividend and Interest income
Dividend income from investments is recognized when the shareholders
right to receive payment has been established (provided that it is probable
that the economic benets will ow to the Company and the amount of
income can be measured reliably).
Interest income from a nancial asset is recognized when it is probable
that the economic benets will ow to the Company and the amount of
income can be measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the nancial asset to that assets
net carrying amount on initial recognition.
(4) Foreign currencies
The individual nancial statements of each entity are presented in the
currency of the primary economic environment in which the entity
operates (its functional currency). For the purpose of the separate nancial
statements, the results and nancial position of each entity are expressed
in Currency Units (KRW), which is the functional currency of the Company
and the presentation currency for the separate nancial statements.
In preparing the nancial statements of the individual entities, transactions
in currencies other than the entitys functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at the dates
of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at
that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognized in prot or loss in the period in which
they arise except for:
exchange differences on foreign currency borrowings relating to
assets under construction for future productive use, which are
included in the cost of those assets when they are regarded as an
adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge
certain foreign currency risks see below for hedging accounting
policies); and
exchange differences on monetary items receivable from or payable
to a foreign operation for which settlement is neither planned
nor likely to occur (therefore forming part of the net investment
in the foreign operation), which are recognized initially in other
comprehensive income and reclassied from equity to prot or loss
on disposal or partial disposal of the net investment.
(5) Financial assets
All nancial assets are recognized and derecognized on trade date where
the purchase or sale of a nancial asset is under a contract whose terms
require delivery of the nancial asset within the time frame established
by the market concerned, and are initially measured at fair value, plus
transaction costs, except for those nancial assets classied as at fair
value through prot or loss, which are initially measured at fair value.
Financial assets are classied into the following specied categories:
nancial assets at fair value through prot or loss, (FVTPL), held-to-
maturity investments, available-for-sale nancial assets and loans and
receivables. The classication depends on the nature and purpose of the
nancial assets and is determined at the time of initial recognition.
1) Effective interest method
The effective interest method is a method of calculating the amortized cost
of a debt instrument and of allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or received that form
an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument,
or, where appropriate, a shorter period, to the net carrying amount on initial
recognition. Income is recognized on an effective interest basis for debt
instruments other than those nancial assets classied as FVTPL.
2) Financial assets at fair value through prot or loss (FVTPL)
Financial assets are classied as at FVTPL when the nancial asset is
either held for trading or it is designated as at FVTPL.
A nancial asset is classied as held for trading if:
it has been acquired principally for the purpose of selling it in the
near term; or
on initial recognition it is part of a portfolio of identied nancial
instruments that the Company manages together and has a recent
actual pattern of short-term prot-taking; or
it is a derivative that is not designated and effective as a hedging
instrument.
164
A nancial asset other than a nancial asset held for trading may be
designated as at FVTPL upon initial recognition if:
such designation eliminates or signicantly reduces a measurement
or recognition inconsistency that would otherwise arise; or
the nancial asset forms part of a group of nancial assets or nancial
liabilities or both, which is managed and its performance is evaluated
on a fair value basis, in accordance with the Companys documented
risk management or investment strategy, and information about the
grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded
derivatives, and K-IFRS 1039 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or liability)
to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any gains or losses
arising on remeasurement recognized in prot or loss. The net gain or loss
recognized in prot or loss incorporates any dividend or interest earned on
the nancial asset and is included in the other gains and losses line item
in the Statement of Comprehensive Income.
3) Held-to-maturity investments
Non-derivatives nancial assets with xed or determinable payments and
xed maturity dates that the Company has the positive intent and ability
to hold to maturity are classied as held-to-maturity investments. Held-to-
maturity investments are measured at amortized cost using the effective
interest method less any impairment, with revenue recognized on an
effective yield basis.
4) Financial assets available-for-sale (AFS)
Non-derivatives nancial assets that are not classied as at held-to-
maturity; held-for-trading; designated as at fair value through prot or loss;
or loans and receivables are classied as at nancial assets AFS. Financial
assets can be designated as on initial recognition. Financial assets AFS are
initially recognized at fair value plus directly related transaction costs. They
are subsequently measured at fair value. Unquoted equity investments
whose fair value cannot be measured reliably are carried at cost. Gains
and losses arising from changes in fair value are recognized in other
comprehensive income and accumulated in the investments revaluation
reserve, with the exception of impairment losses, interest calculated using
the effective interest method, and foreign exchange gains and losses
on monetary assets, which are recognized in prot or loss. Where the
investment is disposed of or is determined to be impaired, the cumulative
gain or loss previously accumulated in the investments revaluation reserve
is reclassied to prot or loss. Dividends on AFS equity instruments are
recognized in prot or loss when the Companys right to receive the
dividends is established.
The fair value of AFS monetary assets denominated in a foreign currency
is determined in that foreign currency and translated at the spot rate at the
end of the reporting period. The foreign exchange gains and losses that
are recognized in prot or loss are determined based on the amortized
cost of the monetary asset. Other foreign exchange gains and losses are
recognized in other comprehensive income.
5) Loans and receivables
Trade receivables, loans, and other receivables that have xed or
determinable payments that are not quoted in an active market are
classied as loans and receivables. Loans and receivables are measured
at amortized cost using the effective interest method, less any impairment.
Interest income is recognized by applying the effective interest rate,
except for short-term receivables when the recognition of interest would
be immaterial.
6) Impairment of nancial assets
Financial assets, other than those at FVTPL, are assessed for indicators
of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of
the nancial asset, the estimated future cash ows of the investment have
been affected.
For listed and unlisted equity investments classied as AFS, a signicant
or prolonged decline in the fair value of the security below its cost is
considered to be objective evidence of impairment.
For all other nancial assets, including redeemable notes classied as AFS
and nance lease receivables, objective evidence of impairment could
include:
signicant nancial difculty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or
nancial re-organization.
For certain categories of nancial asset, such as trade receivables, assets
that are assessed not to be impaired individually are, in addition, assessed
for impairment on a collective basis. Objective evidence of impairment for
a portfolio of receivables could include the Companys past experience
of collecting payments, an increase in the number of delayed payments
in the portfolio past the average credit period of the company, as well as
observable changes in national or local economic conditions that correlate
with default on receivables.
For nancial assets carried at amortized cost, the amount of the impairment
loss recognized is the difference between the assets carrying amount
and the present value of estimated future cash ows, discounted at the
nancial assets original effective interest rate.
The carrying amount of the nancial asset is reduced by the impairment loss
directly for all nancial assets with the exception of trade receivables, where
the carrying amount is reduced through the use of an allowance account.
When a trade receivable is considered uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts previously
written off are credited against the allowance account. Changes in the
carrying amount of the allowance account are recognized in prot or loss.
When an AFS nancial asset is considered to be impaired, cumulative
gains or losses previously recognized in other comprehensive income are
reclassied to prot or loss in the period.
With the exception of AFS equity instruments, if, in a subsequent period,
the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss is reversed through
prot or loss to the extent that the carrying amount of the investment at the
date the impairment is reversed does not exceed what the amortized cost
would have been had the impairment not been recognized.
In respect of AFS equity securities, impairment losses previously
recognized in prot or loss are not reversed through prot or loss. Any
increase in fair value subsequent to an impairment loss is recognized in
other comprehensive income.
7) Derecognition of nancial assets
The Company derecognizes a nancial asset only when the contractual
rights to the cash ows from the asset expire, or when it transfers the
nancial asset and substantially all the risks and rewards of ownership of
the asset to another entity. If the Company neither transfers nor retains
substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Company recognizes its retained interest
in the asset and an associated liability for amounts it may have to pay. If
the Company retains substantially all the risks and rewards of ownership
of a transferred nancial asset, the Company continues to recognize the
nancial asset and also recognizes a collateralized borrowing for the
proceeds received.
(6) Financial liabilities and equity instruments issued by the Company
1) Classication as debt or equity
Debt and equity instruments are classied as either nancial liabilities or as
equity in accordance with the substance of the contractual arrangement.
2) Equity instruments
An equity instrument is any contract that evidences a residual interest in
the assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Company are recognized at the proceeds received, net of
direct issue costs.
3) Financial liabilities
Financial liabilities are classied as either nancial liabilities at FVTPL or
other nancial liabilities.
165
4) Financial liabilities at FVTPL
Financial liabilities are classied as at FVTPL when the nancial liability is
either held for trading or it is designated as FVTPL.
A nancial liability is classied as held for trading if:
it has been acquired principally for the purpose of repurchasing it in
the near term; or
on initial recognition it is part of a portfolio of identied nancial
instruments that the Company manages together and has a recent
actual pattern of short-term prot-taking; or
it is a derivative that is not designated and effective as a hedging
instrument.
A nancial liability other than a nancial liability held for trading may be
designated as at FVTPL upon initial recognition if:
such designation eliminates or signicantly reduces a measurement
or recognition inconsistency that would otherwise arise; or
the nancial liability forms part of a group of nancial assets or
nancial liabilities or both, which is managed and its performance is
evaluated on a fair value basis, in accordance with the Companys
documented risk management or investment strategy, and
information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded
derivatives, and K-IFRS 1039 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or liability)
to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses
arising on remeasurement recognized in prot or loss. The net gain or loss
recognized in prot or loss incorporates any interest paid on the nancial liability
and is included in the other gains and losses line item in the statement of
comprehensive income statement.
5) Other nancial liabilities
Other nancial liabilities, including borrowings, are initially measured at fair
value, net of transaction costs.
Other nancial liabilities are subsequently measured at amortized cost
using the effective interest method, with interest expense recognized on
an effective yield basis.
The effective interest method is a method of calculating the amortized
cost of a nancial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the nancial
liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.
6) Derecognition of nancial liabilities
The Company derecognizes nancial liabilities when, and only when, the
Companys obligations are discharged, cancelled or they expire.
(7) Derivative nancial instruments
The Company enters into a variety of derivative nancial instruments
to manage its exposure to interest rate and foreign exchange rate risk,
including foreign exchange forward contracts.
Derivatives are initially recognized at fair value at the date the derivative
contract is entered into and are subsequently remeasured to their
fair value at the end of each reporting period. The resulting gain or
loss is recognized in prot or loss immediately unless the derivative is
designated and effective as a hedging instrument, in such case the timing
of the recognition in prot or loss depends on the nature of the hedge
relationship. The Company designates certain derivatives as either as
hedges of recognized assets or liabilities or rm commitments (fair value
hedges), hedges of highly probable forecast transactions or hedges of
foreign currency risk of rm commitments (cash ow hedges), or hedges
of net investments in foreign operations (net investment hedges).
A derivative with a positive fair value is recognized as a nancial asset; a
derivative with a negative fair value is recognized as a nancial liability. A
derivative is presented as a non-current asset or a non-current liability if
the remaining maturity of the instrument is more than 12 months and it is
not expected to be realized or settled within 12 months. Other derivatives
are presented as current assets or current liabilities.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash ow hedges is recognized in other
comprehensive income. The gain or loss relating to the ineffective portion
is recognized immediately in prot or loss, and is included in the other
gains and losses line item.
Amounts previously recognized in other comprehensive income and
accumulated in equity are reclassied to prot or loss in the periods
when the hedged item is recognized in prot or loss, in the same line
of the statement of comprehensive income as the recognized hedged
item. However, when the forecast transaction that is hedged results in the
recognition of a non-nancial asset or a non-nancial liability, the gains
and losses previously accumulated in equity are transferred from equity
and included in the initial measurement of the cost of the non-nancial
asset or non-nancial liability.
Hedge accounting is discontinued when the Company revokes the hedging
relationship, when the hedging instrument expires or is sold, terminated,
or exercised, or it no longer qualies for hedge accounting. Any gain or
loss accumulated in equity at that time remains in equity and is recognized
when the forecast transaction is ultimately recognized in prot or loss.
When a forecast transaction is no longer expected to occur, the gain or
loss accumulated in equity is recognized immediately in prot or loss.
(8) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost of
inventories, except for those in in-transit, are measured under the weighted
average method and consists of the purchase price, cost of conversion
and other costs incurred in bringing the inventories to their present location
and condition. Net realizable value represents the estimated selling price
for inventories less all estimated costs of completion and costs necessary
to make the sale.
The carrying amount of inventories sold in the period and the amount
of any write-down of inventories to net realizable value and all losses of
inventories in the period; less the amount of any reversal in the period of
any write-down of the inventories, arising from an increase in net realizable
value, is recognized as expense during the period.
(9) Property, plant and equipment
Property, plant, and equipment are stated at cost less subsequent
accumulated depreciation and accumulated impairment losses. The cost
of an item of property, plant and equipment includes expenditure that is
directly attributable to the acquisition of the item, and subsequent costs
are included in carrying amount of an asset or as a separate asset if it is
probable that future economic benets associated with the asset will ow
to the Company and the cost of the asset can be measured reliably.
The Company depreciates its property, plant and equipment using
the straight-line method over the estimated useful lives. Land is not
depreciated, and the cost for the acquisition of a long-term construction
asset including capitalized interest cost is depreciated over the estimated
useful life of the relevant asset.
The estimated useful lives of the Companys assets as follows:
Estimated useful lives (years)
Buildings 24~50
Structures 13~30
Machinery 10
Vehicles 6~10
Other 6~10
The assets residual values and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting period. An assets carrying
amount is written down immediately to its recoverable amount if the assets
carrying amount is greater than its estimated recoverable amount. Gains
and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognized within other operating income
(expenses) in the statement of comprehensive income.
(10) Intangible assets
1) Intangible assets acquired separately
Intangible assets with nite useful lives that are acquired separately
are carried at cost less accumulated amortization and accumulated
166
impairment losses. Amortization is recognized on a straight-line basis over
their estimated useful lives. The estimated useful life and amortization
method are reviewed at the end of each reporting period, with the effect
of any changes in estimate being accounted for on a prospective basis.
Intangible assets with indenite useful lives that are acquired separately
are carried at cost less accumulated impairment losses.
2) Internally-generated intangible assets - research and development
expenditure
Expenditure on research activities is recognized as an expense in the
period in which it is incurred.
Expenditure arising from development (or from the development phase
of an internal project) is recognized as an intangible asset if, only if,
the development project is designed to produce new or substantially
improved products, and the Company can demonstrate the technical and
economical feasibility and measure reliably the resources attributable to
the intangible asset during its development.
The amount initially recognized for internally-generated intangible
assets is the sum of the expenditure incurred from the date when the
intangible asset rst meets the recognition criteria. Where no internally-
generated intangible asset can be recognized, development expenditure
is recognized in prot or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets
are reported at cost less accumulated amortization and accumulated
impairment losses, on the same basis as intangible assets that are
acquired separately.
3) Intangible assets acquired in a business combination
Intangible assets that are acquired in a business combination are
recognized separately from goodwill and are initially recognized at their fair
value at the acquisition date (which is regarded as their cost). Subsequent
to initial recognition, intangible assets acquired in a business combination
are reported at cost less accumulated amortization and accumulated
impairment losses, on the same basis as intangible assets that are
acquired separately.
(11) Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Company reviews the carrying
amounts of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where it
is not possible to estimate the recoverable amount of an individual asset,
the Company estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identied, corporate assets are also allocated
to individual cash-generating units, or otherwise they are allocated to
the smallest group of cash-generating units for which a reasonable and
consistent allocation basis can be identied.
Intangible assets with indenite useful lives and intangible assets not yet
available for use are tested for impairment at least annually, and whenever
there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash ows
are discounted to their present value using a pre-tax discount rate that
reects current market assessments of the time value of money and the
risks specic to the asset for which the estimates of future cash ows have
not been adjusted.
If the recoverable amount of an asset (or a cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount of the
asset (or the cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognized immediately in prot or loss, unless
the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
(12) Dened benet obligation
The retirement benet obligation recognized in the statements of nancial
position represents the present value of the dened benet obligation as
adjusted for unrecognized actuarial gains and losses and unrecognized
past service cost, and as reduced by the fair value of plan assets. For
dened benet retirement benet plans, the cost of providing benets is
determined using the Projected Unit Credit Method, with actuarial valuations
being carried out at the end of each reporting period. The present value of
dened benet obligations is expressed in a currency in which retirement
benets will be paid and is calculated by discounting expected future
cash outows with the interest rate of high quality corporate bonds which
maturity is similar to the payment date of retirement benet obligations.
Actuarial gains and losses comprise the effects of differences between the
previous actuarial assumptions and what has actually occurred and the
effects of changes in actuarial assumptions and are recognized in other
comprehensive income (loss) in the statements of comprehensive income
in the period in which they occur. Actuarial gains and losses recognized in
other comprehensive income (loss) are immediately recognized in retained
earnings and not reclassied to prot or loss in a subsequent period. Past
service cost is recognized immediately to the extent that the benets are
already vested, and otherwise is amortized on a straight-line basis over the
average period until the benets become vested.
(13) Provisions and contingent liabilities
A provision is recognized when the Company has a present obligation
(legal or constructive) as a result of a past event and it is probable that
an outow of resources embodying economic benets will be required to
settle the obligation, and a reliable estimate can be made of the amount
of the obligation.
The amount recognized as a provision is the best estimate of the
expenditure required to settle the present obligation at the end of the
reporting period. The risks and uncertainties that inevitably surround
many events and circumstances are taken into account in reaching the
best estimate of a provision. Where the effect of the time value of money is
material, the amount of a provision is the present value of the expenditures
expected to be required to settle the obligation.
The Company discloses contingent liabilities in the notes to the nancial
statements in any of the following cases;
a) A possible obligation arises from past events but its existence will be
conrmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company
b) A present obligation arises from past events but is not recognized
because:
i) it is not probable that an outow of resources embodying
economic benets will be required to settle the obligation; or
ii) the amount of the obligation cannot be measured with sufcient
reliability.
(14) Lease
Leases are classied as nance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classied as operating leases. Assets held under
nance leases are initially recognized as assets of the Company at their
fair value at the inception of the lease or, if lower, at the present value of
the minimum lease payments. Minimum lease payments are apportioned
between the nance charge and the reduction of the outstanding liability.
The nance charge is allocated to each period during the lease term so as
to produce a constant periodic rate of interest on the remaining balance
of the liability. The nancial charge, except for the case that it is capitalized
as part of the cost of that asset according to the Companys accounting
for borrowing costs, is immediately expensed in the period in which it
is incurred. Contingent rents are charged as expenses in the periods in
Operating lease payments are recognized as an expense on a straight-
line basis over the lease term, except where another systematic basis
is more representative of the time pattern in which economic benets
from the leased asset are consumed. Contingent rentals arising under
operating leases are recognized as an expense in the period in which
they are incurred. In the event that lease incentives are received to enter
into operating leases, such incentives are recognized as a liability. The
aggregate benet of incentives is recognized as a reduction of rental
expense on a straight-line basis, except where another systematic basis
is more representative of the time pattern in which economic benets from
the leased asset are consumed.
167
(15) Borrowing costs
Borrowings are initially recognized at fair value net of transaction costs
and subsequently recognized at amortized cost. The difference between
the amount of borrowings net of transaction costs and the repaid amount
is amortized over the borrowing period using the straight-line method and
the amortization expense is recognized in prot or loss. Moreover, if the
Company has an unconditional right to defer repayment of borrowings
for more than 12 months subsequent to the reporting period, it classies
the borrowings as non-current liabilities; otherwise, they are classied as
current liabilities.
(16) Government Subsidies
Government subsidies are recognized when there is reasonable assurance
that the Company will comply with the conditions attached to them and the
subsidies will be received.
Subsidies related to income are deferred and recognized in the statement
of income in the period in which they may correspond to income or
expenses that are related to the purpose of grant. Monetary government
subsidies related to purchase of assets are presented as deferred income
and the deferred income is recognized as income on a systematic basis
over the useful life of the asset.
(17) Income tax expense and deferred income tax
The tax expense for the period comprises current and deferred tax.
1) Current income tax
The tax currently payable is based on taxable prot for the year. Taxable
prot differs from prot as reported in the statement of comprehensive
income because of items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible.
The Companys liability for current income tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the
reporting period.
2) Deferred income tax
Deferred income tax is recognized on temporary differences between the
carrying amounts of assets and liabilities in the nancial statements and
the corresponding tax bases used in the computation of taxable prot.
Deferred income tax liabilities are generally recognized for all taxable
temporary differences. Deferred income tax assets are generally recognized
for all deductible temporary differences to the extent that it is probable that
taxable prots will be available against which those deductible temporary
differences can be utilized. Such deferred income tax assets and liabilities
are not recognized if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable prot
nor the accounting prot. Deferred income tax assets and liabilities are
measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realized, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the
reporting period
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current income tax assets against current
income tax liabilities and when they relate to income tax levied by the
same taxation authority and the Company intends to settle its current
income tax assets and liabilities on a net basis.
3) Current and deferred income tax for the year
Current and deferred income tax are recognized in prot or loss, except
when they relate to items that are recognized in other comprehensive
income or directly in equity, in which case, the current and deferred
income tax are also recognized in other comprehensive income or directly
in equity respectively. Where current income tax or deferred income tax
arises from the initial accounting for a business combination, the tax effect
is included in the accounting for the business combination.
(18) Fair Value
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants
at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the Company takes into account
the characteristics of the asset or liability if market participants would
take those characteristics into account when pricing the asset or liability
at the measurement date. Fair value for measurement and/or disclosure
purposes in these nancial statements is determined on such a basis,
except for share-based payment transactions that are within the scope
of K-IFRS 1102 Share-based payment, leasing transactions that are within
the scope of K-IFRS 1017 Leases, and measurements that have some
similarities to fair value but are not fair value, such as net realizable value
in K-IFRS 1002 Inventories or value in use in K-IFRS 1036 Impairment
of Assets.
In addition, for nancial reporting purposes, fair value measurements are
categorized into Level 1, 2 or 3 based on the degree to which the inputs
to the fair value measurements are observable and the signicance of the
inputs to the fair value measurement in its entirety, which are described
as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date;
Level 2 inputs are inputs, other than quoted prices included within
Level 1, that are observable for the asset or liability, either directly or
indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
(19) Segment information
Segment information is presented in the same format as the reporting
material presented to the Companys management. The Companys
management is liable for the assessment of the resources to be allocated
to the business segments and the performance results of the business
segments.
3. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS:
The Company uses estimates and assumptions concerning the future.
Estimates and assumptions are continually evaluated and are based on
historical experience and various other factors, including expectations of
future events, which are believed to be reasonable under the circumstances.
Actual results may differ from these estimates, and the following estimates
and assumptions have an inherent signicant risk of potentially causing
material adjustments to the carrying amounts of assets and liabilities within
the next nancial year.
(1) Provision for product warranties
The Company provides warranties for its products at recognition of sale
and establishes a provision for product warranties at the end of each
reporting period based on the best estimate of the expenses necessary to
provide present and future warranty obligations.
(2) Retirement benet obligation
The retirement benet obligation recognized in the statements of
nancial position represents the present value of the dened benet
obligation as adjusted for unrecognized actuarial gains and losses
and unrecognized past service cost, and as reduced by the fair value
of plan assets. For dened benet retirement benet plans, the cost of
providing benets is determined using the Projected Unit Credit Method,
with actuarial valuations being carried out at the end of each reporting
period. The present value of dened benet obligations is expressed in
a currency in which retirement benets will be paid and is calculated by
discounting expected future cash outows with the interest rate of high
quality corporate bonds which maturity is similar to the payment date
of retirement benet obligations. Other signicant assumptions related
to dened benet obligation are partly based on the current market
situation.
4. CASH AND CASH EQUIVALENTS:
Cash and cash equivalents include cash on hand and in banks
(MMDA) and highly liquid short-term nancial instruments that may be
easily converted into cash and whose risk of value uctuation is not
material.
168
5. RESTRICTED FINANCIAL ASSETS:
Restricted nancial assets as of December 31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
Financial
institution
December 31,
2013
December 31,
2012 Notes
Cash and cash equivalents Shinhan Bank and others W 1,092,081 W 1,084,501 Government subsidies and others
Woori Bank and others 15,030,192 14,848,647
Unconrmed reorganization debt
pledged as collateral
Long-term nancial
instruments Shinhan Bank and others 6,000 6,000 Overdraft deposit
W 16,128,273 W 15,939,148
(Unit: Indian-Rupee in thousands):
Financial
institution
December 31,
2013
December 31,
2012 Notes
Cash and cash equivalents Shinhan Bank and others Rs. 64,166 Rs. 63,721 Government subsidies and others
Woori Bank and others 883,114 872,447
Unconrmed reorganization debt
pledged as collateral
Long-term nancial instruments Shinhan Bank and others 353 353 Overdraft deposit
Rs. 947,633 Rs. 936,521
6. LONG-TERM AVAILABLE-FOR-SALE FINANCIAL ASSETS:
The Companys long-term available-for-sale nancial assets as of December 31, 2013 and 2012 are as follows: (Unit: Korean Won in thousands):
December 31, 2013 December 31, 2012
Classication
Ownership
(%)
Acquisition
Cost
Net asset
Value Book value Book value
Kihyup Technology Banking
Corporation (*) ........................................... 1.72% W 500,000 W 663,208 W 500,000 W 500,000
Korea Management Consultants
Association (*) ........................................... 1.50% 60,000 397,841 60,000 60,000
W 560,000 W 1,061,049 W 560,000 W 560,000
Classication
Ownership
(%)
Acquisition
Cost
Net asset
Value Book value Book value
Kihyup Technology Banking
Corporation (*) ........................................... 1.72% Rs. 29,378 Rs. 38,967 Rs. 29,378 Rs. 29,378
Korea Management Consultants
Association (*) ........................................... 1.50% 3,525 23,376 3,525 3,525
Rs. 32,903 Rs. 62,343 Rs. 32,903 Rs. 32,903
(*) Because the market prices from an active market are not available and the fair values cannot be reliably measured, AFS nancial assets are measured at
their acquisition costs.
7. TRADE AND OTHER RECEIVABLES:
All current trade and other receivables are due within 1 year from December 31, 2013 and because the present value discount effect is not material, the fair value
of the aforementioned receivables is equal to the book value.
(1) Details of current portion of trade and other receivables as of December 31, 2013 and 2012 are as follows (Unit: Korean Won in thousands):
December 31, 2013
Classication
Trade
Receivables
Non-trade
Receivables
Other
receivables
Other long-term
receivables
Receivables general ............................................................... W 188,596,087 W 28,976,590 W 2,988,667 W 36,805,929
Receivables due from afliated parties ..................................... 11,187,170 3,018,686
Less: Allowance for doubtful accounts..................................... (208,701) (491,039) (241,459)
W 199,574,556 W 31,504,237 W 2,988,667 W 36,564,470
169
December 31, 2012
Classication
Trade
Receivables
Non-trade
Receivables
Other
receivables
Other
long-term
receivables
Receivables
general .............. W179,340,351 W 20,201,754 W 3,041,886 W 30,341,837
Receivables
due from
afliated parties . 17,823,315 5,150,572
Less: Allowance
for doubtful
accounts ............ (1,061,540) (965,595) (330) (169,932)
W196,102,126 W 24,386,731 W 3,041,556 W 30,171,905
December 31, 2013
Classication
Trade
Receivables
Non-trade
Receivables
Other
receivables
Other
long-term
receivables
Receivables
general Rs. 11,081,152 Rs. 1,702,549 Rs. 175,602 Rs. 2,162,569
Receivables
due from
afliated parties 657,313 177,366
Less: Allowance
for doubtful
accounts (12,262) (28,851) (14,187)
Rs. 11,726,203 Rs. 1,851,064 Rs. 175,602 Rs. 2,148,382
December 31, 2012
Classication
Trade
Receivables
Non-trade
Receivables
Other
receivables
Other
long-term
receivables
Receivables
general Rs. 10,537,322 Rs. 1,186,974 Rs. 178,729 Rs. 1,782,765
Receivables
due from
afliated parties 1,047,227 302,627
Less: Allowance
for doubtful
accounts (62,372) (56,734) (19) (9,985)
Rs. 11,522,177 Rs. 1,432,867 Rs. 178,710 Rs 1,772,780
(2) Credit risk and allowance for doubtful accounts
The above trade and non-trade receivables and other receivables are
classied as loans and receivables and measured at amortized cost.
If a credit risk occurs with respect to a dealership sale, which is a major
type of the Companys sales, the respective dealership bears all of the
risk; the Company manages credit risk on product sales using two
management indexes, agreed liability rate and agreed excess rate, and
when the management index exceeds the agreed rate, it imposes a
release restriction on the respective dealership and transfers a credit risk
arising from product sales.
The Companys trade receivables are usually collected within 30 days
but some of the notes receivable are collected within 75 days. Based on
the past experience, receivables that are overdue for more than 1 year
are usually not collected, and the Company reserves the full amount of
those receivables as an allowance for doubtful accounts. The Company
estimates an allowance for the receivables that are overdue for more than
90 days but less than 1 year through an individual analysis based on
each transacting party; for receivables that are not subject to individual
analysis, the Company estimates an allowance based on the historical
loss rates.
Some of the trade receivables that are overdue for more than 90 days are
not included in the above trade receivables (refer to the aging analysis
below); the Company did not reserve an allowance for the aforementioned
receivables since their credit ratings did not change materially and they
are expected to be collected. The Company has no collaterals pledged
or credit enforcement provided for the aforementioned receivables and
does not have a legal right to offset those receivables with the debt of the
transacting parties.
Aging analysis of the trade and non-trade receivables that are overdue but
are not impaired as of December 31, 2013 and 2012 are as follows (Unit:
Korean Won in thousands):
December 31, 2013
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables W 1,831,255 W 3,769,935 W 3,331,927 W 8,933,117
Non-trade
receivables 3,692,761 102,000 2,322,844 6,117,605
Other
long-term
receivables 103,250 103,250
W 5,524,016 W 3,871,935 W 5,758,021 W 15,153,972
December 31, 2012
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables W 2,031,683 W 4,313,306 W 1,209,924 W 7,554,913
Non-trade
receivables 709,373 458,725 4,313,001 5,481,099
Other
long-term
W 2,741,056 W 4,772,031 W 5,626,175 W 13,139,262
December 31, 2013
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables Rs. 107,597 Rs. 221,506 Rs. 195,771 Rs. 524,874
Non-trade
receivables 216,972 5,993 136,481 359,446
Other
long-term
Rs. 324,569 Rs. 227,499 Rs. 338,319 Rs. 890,387
December 31, 2012
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables Rs. 119,374 Rs. 253,433 Rs. 71,090 Rs. 443,897
Non-trade
receivables 41,680 26,953 253,415 322,048
Other
long-term
Rs. 161,054 Rs. 280,386 Rs. 330,572 Rs. 772,012
170
Aging analysis of the trade, non-trade receivables and other long-term
receivables that are overdue but are impaired as of December 31, 2013 and
2012 are as follows (Unit: Korean won in thousands):
December 31, 2013
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables W W W W
Non-trade
Other
long-term
W W W 518,202 W 518,202
December 31, 2012
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables W W W W
Non-trade
Other
long-term
W W W 1,005,432 W 1,005,432
December 31, 2013
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables Rs. Rs. Rs. Rs.
Non-trade
Other
long-term
Rs. Rs. Rs. 30,448 Rs. 30,448
December 31, 2012
Classication
3-6
months
6-12
months
Over
1 year Total
Trade
receivables Rs. Rs. Rs. Rs.
Non-trade
Other
long-term
Rs. Rs. Rs. 59,075 Rs. 59,075
(3) Changes in allowance for trade and other receivables for the years ended
december 31, 2013 and 2012 is as follows (Unit: Korean won in thousands):
Year ended December 31, 2013
Classication
Trade
receivables
Non-trade
receivables
Other
receivables
Other
long-term
receivables
Beginning
balance W 1,061,540 W 965,595 W 330 W 169,932
Bad debt
expense (852,839) 71,341
Write-offs (462,099)
Reversal of
allowance (*) (12,457) (16) (128)
Transfer (314) 314
Ending
balance W 208,701 W 491,039 W W 241,459
(*) Difference due to the reversal of allowance for advance payments in the
statement of income.
Classication
Trade
receivables
Non-trade
receivables
Other
receivables
Other
long-term
receivables
Beginning
balance W 1,193,267 W 2,019,821 W 1,394 W 403,223
Bad debt
expense 44,296
Write-offs (713,991)
Reversal of
allowance (*) (131,727) (340,235) (1,064) (277,587)
Ending
balance W 1,061,540 W 965,595 W 330 W 169,932
Classication
Trade
receivables
Non-trade
receivables
Other
receivables
Other
long-term
receivables
Beginning
balance Rs. 62,372 Rs. 56,734 Rs. 19 Rs. 9,985
Bad debt
expense (50,109) 4,192
Write-offs (27,151)
Reversal of
allowance (*) (732) (1) (8)
Transfer 18 18
Ending
balance Rs. 12,263 Rs. 28,851 Rs. Rs. 14,187
(*) Difference due to the reversal of allowance for advance payments in the
statement comprehensive of income.
Classication
Trade
receivables
Non-trade
receivables
Other
receivables
Other
long-term
receivables
Beginning
Bad debt
expense 2,603
Write-offs (41,951)
Reversal of
allowance (7,740) (19,991) (63) (16,310)
Ending
The Company estimates allowances for doubtful accounts through individual
analysis, and an allowance for the receivables that are not subject to separate
individual analysis is estimated based on the historical collection rates. For
troubled receivables (default, liquidation, bankruptcy, court receivership,
workout, disappearance, full-scale capital erosion, etc.), the Company assesses
collectability of each receivable through an individual analysis and reserves
100% allowance. For the receivables that are not subject to individual analysis,
the allowance is estimated by applying the average loss rate for the past 3 years
to the remaining balance of the receivables at the end of a reporting period;
the 3-year average loss rate is calculated by dividing the amount of actual loss
occurred in the past 3 years by the average balance of the receivables.
171
8. INVENTORIES:
Details of the inventories as of December 31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
Carrying amount
before valuation
Valuation
allowance Book value
Carrying amount
before valuation
Valuation
Merchandises W 53,211,292 W (526,033) W 52,685,259 W 51,234,457 W (509,816) W 50,724,641
Finished goods 51,400,982 (3,411,723) 47,989,259 34,719,883 (3,838,867) 30,881,016
Work-in-process 25,448,586 (684,102) 24,764,484 22,463,202 (1,104,219) 21,358,983
Raw materials 83,499,004 (17,746,485) 65,752,519 92,839,434 (5,924,608) 86,914,826
Sub-materials 510,850 510,850 6,282,422 6,282,422
Supplies 4,235,253 (2,212) 4,233,041 4,642,578 (2,212) 4,640,366
Goods in transit 81,135,536 81,135,536 63,571,101 63,571,101
Total W 299,441,503 W (22,370,555) W 277,070,948 W 275,753,077 W (11,379,722) W 264,373,355
Carrying amount
before valuation
Valuation
Carrying amount
before valuation
Valuation

Merchandises Rs. 3,126,483 Rs. (30,908) Rs. 3,095,575 Rs. 3,010,332 Rs. (29,955) Rs. 2,980,377
Finished goods 3,020,116 (200,459) 2,819,657 2,040,001 (225,556) 1,814,445
Work-in-process 1,495,257 (40,195) 1,455,062 1,319,848 (64,879) 1,254,969
Raw materials 4,906,067 (1,042,712) 3,863,355 5,454,874 (348,106) 5,106,768
Sub-materials 30,016 30,016 369,130 369,130
Supplies 248,847 (131) 248,716 272,779 (130) 272,649
Goods in transit 4,767,200 4,767,200 3,735,184 3,735,184
Total Rs. 17,593,986 Rs. (1,314,404) Rs. 16,279,581 Rs. 16,202,148 Rs. (668,626) Rs. 15,533,522
The company is using the lower of cost or market method on the balance sheet in the case of inventories market value decrease under the acquisition cost.
On the other hand, losses on valuation of inventories which was added to cost of sales on current period due to the application of lower of cost or market
method, is W11,102,920 thousands (Rs. 652,363 thousands).
9. INVESTMENTS IN SUBSIDIARIES:
(1) Details of investments in subsidiaries
Details of investment in subsidiaries accounted for using equity method as of December 31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
December 31, 2013
December
31, 2012
Name of subsidiary Location
Ownership
%
Acquisition
cost Book value Book value
Ssangyong (Yizheng) Auto-parts Manufacturing Co., Ltd. (*) China 100 W W W 2,939,632
Ssangyong Motor (Shanghai) Co., Ltd. China 100 5,338,097 5,829,056 1,780,377
Ssangyong European Parts Center B.V. Netherland 100 835,695
W 6,173,792 W 5,829,056 W 4,720,009
(Unit: Indian-Rupee in thousands)
December 31, 2013
December
31, 2012
Name of subsidiary Location
Ownership
%
Acquisition
cost Book value Book value
Ssangyong (Yizheng) Auto-parts Manufacturing Co., Ltd. (*) China 100 Rs. Rs. Rs 172,721
Ssangyong Motor (Shanghai) Co., Ltd. China 100 313,645 342,492 104,608
Ssangyong European Parts Center B.V. Netherland 100 49,102
Rs. 362,747 Rs. 342,492 Rs 277,329
(*) During this year, the Company liquidated Ssangyong (Yizheng) Auto-parts Manufacturing Co., Ltd.
(2) Summarized nancial information of subsidiaries
The summarized nancial information of the Companys subsidiaries as of and for the year ended December 31, 2013 is as follows (Unit: Korean won in thousands):
Companies Assets Liabilities Sales
Operating
revenues
Net income
(loss)
Ssangyong (Yizheng) Auto-parts Manufacturing Co., Ltd. W W W W (14,720) W (262,511)
Ssangyong Motor (Shanghai) Co., Ltd 6,609,412 255,069 3,814,332 900,465 809,326
Ssangyong European Parts Center B.V. 7,940,806 12,388,132 13,852,837 177,732 125,145
Companies Assets Liabilities Sales
Operating
revenues
Net income
(loss)
Ssangyong (Yizheng) Auto-parts Manufacturing Co., Ltd. Rs. Rs. Rs Rs. (865) Rs. (15,424)
Ssangyong Motor (Shanghai) Co., Ltd 388,343 14,987 224,115 52,908 47,553
Ssangyong European Parts Center B.V. 466,570 727,877 813,937 10,443 7,353
172
10. OTHER ASSETS:
The carrying values of the Companys other assets as of December 31,
2013 and 2012 are as follows (Unit: Korean won in thousands):
Account
December 31,
2013
December 31,
2012
Other current assets
Advance payments W 2,035,601 W 3,343,151
Less: Allowance for doubtful
accounts (1,147) (12,285)
Income tax refundable 983,619 817,664
7,145,375 6,739,388
Other non-current assets
Long-term prepaid expenses
Other non-current assets 357,350 360,542
W 357,350 W 360,542
Account
December 31,
2013
December 31,
2012
Other current assets
Advance payments Rs. 119,604 Rs. 196,430
Less: Allowance for doubtful
accounts (67) (722)
Prepaid expenses 242,504 152,228
Other current assets 57,793 48,043
419,834 395,979
Other non-current assets
Long-term prepaid expenses
Other non-current assets 20,996 21,184
Rs. 20,996 Rs. 21,184
11. PROPERTY, PLANT AND EQUIPMENT:
(1) Carrying amounts of property, plant and equipment as of December 31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
December 31, 2013
Acquisition
cost
Government
subsidies Depreciation
Loss on
valuation
Carrying
amount
Land ................................................................ W 475,305,570 W W W W 475,305,570
Buildings ......................................................... 520,204,787 1,696,822 176,446,878 148,371,912 193,689,175
Structures ........................................................ 103,715,045 176,520 57,532,368 29,156,376 16,849,781
Machinery ........................................................ 1,229,675,167 789,603 1,030,309,009 99,310,297 99,266,258
Vehicles ........................................................... 9,989,170 6,895,721 1,243,655 1,849,794
Tools and molds ............................................. 873,276,231 31,508 507,905,818 163,823,074 201,515,831
Equipment ....................................................... 62,680,485 26,413 33,950,667 4,924,001 23,779,404
Construction in progress ................................ 70,917,106 70,917,106
Machinery in transit ........................................ 862,440 862,440
W 3,346,626,001 W 2,720,866 W 1,813,040,461 W 446,829,315 W 1,084,035,359
December 31, 2012
Acquisition
cost
Government
Loss on
valuation
Carrying
amount
Land ................................................................ W 469,644,702 W W W W 469,644,702
Buildings ......................................................... 518,052,585 1,743,291 167,223,845 148,652,850 200,432,599
Structures ........................................................ 107,121,068 196,654 59,473,892 29,817,703 17,632,819
Machinery ........................................................ 1,221,639,910 998,695 1,009,908,022 99,698,180 111,035,013
Vehicles ........................................................... 10,767,609 7,156,946 1,467,948 2,142,715
Tools and moulds ........................................... 810,373,198 57,221 449,941,667 164,093,871 196,280,439
Equipment ....................................................... 54,998,331 49,319 32,767,183 5,313,162 16,868,667
W 3,229,919,446 W 3,045,180 W 1,726,471,555 W 449,043,714 W 1,051,358,997
December 31, 2013
Acquisition
cost
Government
Loss on
valuation
Carrying
amount
Land ................................................................ Rs. 27,927,054 Rs. Rs. Rs. Rs. 27,927,054
Buildings ......................................................... 30,565,152 99,698 10,367,313 8,717,740 11,380,401
Structures ........................................................ 6,093,881 10,372 3,380,372 1,713,112 990,025
Machinery ........................................................ 72,250,794 46,394 60,536,836 5,835,076 5,832,488
Vehicles ........................................................... 586,924 405,165 73,072 108,687
Tools and moulds ........................................... 51,310,218 1,851 29,842,514 9,625,589 11,840,264
Equipment ....................................................... 3,682,855 1,552 1,994,805 289,315 1,397,183
Machinery in transit ........................................ 50,675 50,675
Rs. 196,634,358 Rs. 159,867 Rs. 106,527,005 Rs. 26,253,904 Rs. 63,693,582
173
December 31, 2012
Acquisition
cost
Government
Loss on
valuation
Carrying
amount
Land ................................................................ Rs. 27,594,444 Rs. Rs. Rs. Rs. 27,594,444
Buildings ......................................................... 30,438,698 102,429 9,825,404 8,734,247 11,776,618
Structures ........................................................ 6,294,005 11,555 3,494,448 1,751,969 1,036,033
Machinery ........................................................ 71,778,675 58,679 59,338,156 5,857,866 6,523,974
Vehicles ........................................................... 632,662 420,514 86,251 125,897
Tools and molds ............................................. 47,614,288 3,362 26,436,773 9,641,499 11,532,654
Equipment ....................................................... 3,231,482 2,898 1,925,269 312,180 991,135
Rs. 189,777,147 Rs. 178,923 Rs. 101,440,564 Rs. 26,384,012 Rs. 61,773,648
(2) Changes in the carrying amounts of property, plant and equipment for the years ended December 31, 2013 and December 31, 2012 are as follows (Unit:
Korean won in thousands):
Beginning
balance Acquisition(*) Disposal Other Depreciation(*)
Ending
balance
Land ............................ W 469,644,702 W 19,360 W 154,021 W 5,795,529 W W 475,305,570
Buildings ..................... 200,432,599 1,335,708 129,642 1,447,294 9,396,784 193,689,175
Structures .................... 17,632,819 93,830 120,297 835,011 1,591,582 16,849,781
Machinery .................... 111,035,013 4,401,773 91,672 20,116,918 36,195,774 99,266,258
Vehicles ....................... 2,142,714 351,060 97,319 8,996 555,657 1,849,794
Tools and molds ......... 196,280,440 28,206,687 41,641 42,669,046 65,598,701 201,515,831
Equipment ................... 16,868,667 10,384,065 59,809 1,237,289 4,650,808 23,779,404
Construction in
progress ...................... 37,322,043 106,584,628 134,908 (72,854,657) 70,917,106
Machinery in transit .... 862,440 862,440
W 1,051,358,997 W 152,239,551 W 829,309 W (744,574) W 117,989,306 W 1,084,035,359
Beginning
balance Acquisition Disposal Other Depreciation*
Ending
balance
Land ............................ W 469,644,702 W W W - W W 469,644,702
Buildings ..................... 197,526,054 5,502,758 2,432 6,371,091 8,964,872 200,432,599
Structures .................... 17,471,619 1,690,239 11,631 (1,281) 1,516,127 17,632,819
Machinery .................... 128,108,292 6,025,633 29,835 10,146,028 33,215,105 111,035,013
Vehicles ....................... 2,492,383 250,718 33,624 (1,829) 564,934 2,142,714
Tools and molds ......... 180,547,205 28,718,136 44,918 42,692,012 55,631,995 196,280,440
Equipment ................... 10,799,929 9,243,636 146,469 353,986 3,382,415 16,868,667
Construction in
progress ...................... 31,748,336 63,067,454 751,429 (56,742,318) 37,322,043
Machinery in transit .... 87,626 2,795,525 (2,883,151)
W 1,038,426,146 W 117,294,099 W 1,020,338 W (65,462) W 103,275,448 W 1,051,358,997
(*) Depreciation cost of suspended assets amount of W37,502 in thousands (Rs. 2,203 thousands) and W66,421 in thousands (Rs. 3,903 thousands) in
each year is excluded from the depreciation cost in Statement of Cash ow.
174
Beginning
balance Acquisition Disposal Other Depreciation
Ending
balance
Land ............................ Rs. 27,594,444 Rs. 1,138 Rs. 9,050 Rs. 340,522 Rs. Rs. 27,927,054
Buildings ..................... 11,776,618 78,480 7,617 85,037 552,117 11,380,401
Structures .................... 1,036,034 5,512 7,068 49,062 93,515 990,025
Machinery .................... 6,523,973 258,630 5,386 1,181,990 2,126,719 5,832,488
Vehicles ....................... 125,897 20,627 5,718 529 32,648 108,687
Tools and molds ......... 11,532,654 1,657,312 2,447 2,507,062 3,854,317 11,840,264
Equipment ................... 991,135 610,127 3,514 72,698 273,263 1,397,183
Construction in
progress ...................... 2,192,893 6,262,487 7,927 (4,280,648) 4,166,805
Machinery in transit .... 50,675 50,675
Rs. 61,773,648 Rs. 8,944,988 Rs. 48,727 Rs. (43,748) Rs. 6,932,579 Rs. 63,693,582
Beginning
balance Acquisition Disposal Other Depreciation
Ending
balance
Land ............................ Rs. 27,594,444 Rs. Rs. Rs. Rs. Rs. 27,594,444
Buildings ..................... 11,605,841 323,320 143 374,340 526,740 11,776,618
Structures .................... 1,026,562 99,312 683 (75) 89,082 1,036,034
Machinery .................... 7,527,131 354,042 1,753 596,140 1,951,587 6,523,973
Vehicles ....................... 146,442 14,731 1,544 (107) 33,193 125,897
Tools and molds ......... 10,608,232 1,687,362 1,976 2,508,412 3,268,713 11,532,654
Equipment ................... 634,561 543,118 2,639 20,799 198,737 991,135
Construction in
progress ...................... 1,865,405 3,705,591 8,606 (3,333,952) 2,192,893
Machinery in transit .... 5,149 164,253 (169,402)
-
Rs. 61,013,767 Rs. 6,891,729 Rs. 59,951 Rs. (3,845) Rs. 6,068,052 Rs. 61,773,651
(3) Assets pledged as collateral
The assets pledged as collateral for the Companys borrowings as of December 31, 2013 are as follows (won in thousands):
Assets pledged as
Collaterals Details Book value Maximum amount
Land Chilgoe-dong Pyeongtaek, Gyeonggi-do W 281,318,706 195 billion Korean Won
Buildings 150-3 (factory site) and others 62,581,357
Machinery and others Pyeongtaek plant production facilities 14,040,979
W 357,941,042
Assets pledged as
Collaterals Details Book value Maximum amount
Land Chilgoe-dong Pyeongtaek, Gyeonggi-do Rs. 16,529,162 11 billion rupee
Buildings 150-3 (factory site) and others 3,677,030
Machinery and others Pyeongtaek plant production facilities 824,992
Rs. 21,031,184
175
12. INTANGIBLE ASSETS:
(1) Details of intangible assets as of December 31, 2013 and 2012 are as
follows (Unit: Korean won in thousands):
December 31, 2013
Acquisition
cost
Government
subsidies
Accumulated
depreciation
Accumulated
impairment
loss
Book
value
Development cost W 14,478,684 W W 9,371,382 W W 5,107,302
Patents 1,217,210 5,802 475,150 736,258
Other intangible
assets 88,692,583 21,608 4,347,597 686,796 83,636,582
W 104,388,477 W 27,410 W 14,194,129 W 686,796 W 89,480,142
December 31, 2012
Acquisition
cost
Government
subsidies
Accumulated
depreciation
Accumulated
impairment
loss
Book
value
Development cost W 204,311,183 W W 156,314,870 W W 47,996,313
Patents 2,003,315 1,718 1,315,805 27,726 658,066
Other intangible
assets

15,732,099 88,169 7,088,154 686,797 7,868,979
W 222,046,597 W 89,887 W 164,718,829 W 714,523 W 56,523,358
December 31, 2013
Acquisition
cost
Government
subsidies
Accumulated
depreciation
Accumulated
impairment
loss
Book
value
Development cost Rs. 850,710 Rs. Rs. 550,625 Rs. Rs. 300,085
Patents 71,518 341 27,918 43,259
Other intangible
assets 5,211,221 1,270 255,447 40,353 4,914,151
Rs. 6,133,449 Rs. 1,611 Rs. 833,990 Rs. 40,353 Rs. 5,257,495
December 31, 2012
Acquisition
cost
Government
subsidies
Accumulated
Depreciation
Accumulated
impairment
loss
Book
value
Development cost Rs. 12,004,508 Rs. Rs. 9,184,438 Rs. Rs. 2,820,070
Patents 117,707 101 77,311 1,629 38,666
Other intangible
assets 924,355 5,180 416,472 40,353 462,350
Rs. 13,046,570 Rs. 5,281 Rs. 9,678,221 Rs. 41,982 Rs. 3,321,086
(2) Changes in intangible assets for the years ended December 31, 2013 and
2012 are as follows (Unit: Korean won in thousands):
Beginning
balance Acquisition Transfer Depreciation
Impairment
loss Other
Ending
balance
Development
cost W 47,996,313 W W (21,240,402) W 21,648,609 W W W 5,107,302
Patents 658,066 344,860 231,598 35,070 736,258
Other intangible
assets 7,868,979 57,266,957 21,240,402 3,456,886 5,194 722,323 83,636,581
W 56,523,358 W 57,611,817 W W 25,337,093 W 40,264 W 722,323 W 89,480,141
Beginning
Impairment
loss
Ending
balance
Development cost W 58,764,596 W 22,370,553 W W 33,138,836 W W 47,996,313
Patents 701,109 250,192 (1,764) 274,307 17,164 658,066
Other intangible
assets 4,930,999 5,120,236 (42,639) 1,452,821 686,796 7,868,979
W 64,396,704 W 27,740,981 W (44,403) W 34,865,964 W 703,960 W 56,523,358
Beginning
Impairment
loss
Ending
balance
Ending
balance
Development
cost Rs. 2,820,071 Rs. Rs. (1,248,001) Rs. 1,271,986 Rs. Rs. Rs. 300,084
Patents 38,665 20,263 13,608 2,061 43,259
Other
intangible
assets 462,350 3,364,777 1,248,001 203,113 305 42,441 4,914,151
Rs. 3,321,086 Rs. 3,385,040 Rs. Rs. 1,488,707 Rs. 2,366 Rs. 42,441 Rs. 5,257,494
Beginning
Impairment
loss
Ending
balance
Development cost Rs. 3,452,773 Rs. 1,314,404 Rs. Rs. 1,947,105 Rs. Rs. 2,820,072
Patents 41,194 14,700 (104) 16,117 1,008 38,665
Other intangible
assets 289,726 300,845 (2,505) 85,362 40,353 462,351
Rs. 3,783,693 Rs. 1,629,949 Rs. (2,609) Rs. 2,048,584 Rs. 41,361 Rs. 3,321,088
(3) Amortization of the Companys intangible assets for the years ended
December 31, 2013 and 2012 is as follows.
Korean Won in thousands Indian-Rupee in thousands
Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Cost of goods
manufactured W 21,307,066 W 32,775,502 Rs. 1,251,918 Rs. 1,925,757
Selling and
administrative
expenses 4,030,027 2,090,462 236,788 122,827
W 25,337,093 W 34,865,964 Rs. 1,488,706 Rs. 2,048,584
13. BORROWINGS:
(1) The Companys short-term borrowings as of December 31, 2013 and 2012
consist of the following (Unit: Korean won in thousands):
Creditor Type
Interest rate
(%)
December 31,
2013
December 31,
2012
Korea
Development
Bank
Operating
fund
CD rate +
2.26% W 30,000,000 W 30,000,000
Standard
Chartered
Bank
Banker's
usance
EUR: 1.07%
JPY: 0.95% 1,951,103
Korea
Development
Bank
Banker's
usance
EUR: 1.23%
JPY: 1.50% 7,185,047
Bank of
America Banker's
usance
EUR: 0.91%
USD: 0.96%
JPY: 0.86% 12,471,886
W 51,608,036 W 30,000,000
Creditor Type
Interest rate
(%)
December 31,
2013
December 31,
2012
Korea
Development
Bank
Operating
fund
CD rate +
2.26% Rs. 1,762,680 Rs. 1,762,680
Standard
Chartered
Bank
Banker's
usance
EUR: 1.07%
JPY: 0.95% 114,639
Korea
Development
Bank
Banker's
usance
EUR: 1.23%
JPY: 1.50% 422,165
Bank of
America Banker's
usance
EUR: 0.91%
USD: 0.96%
JPY: 0.86% 732,798
Rs. 3,032,282 Rs. 1,762,680
176
(2) The Companys bonds and current portion of long-term borrowings as of
December 31, 2013 and 2012 consist of the following (Unit: Korean won in
thousands):
Type
Issue
date
Maturity
date
Interest rate
(%)
December 31,
2013
December 31,
2012
Private non-
guaranteed bonds 2011-02-09 2014-02-09 7.00% W 95,404,765 W 95,404,765
Type
Issue
date
Maturity
date
Interest rate
(%)
December 31,
2013
December 31,
2012
Private non-
guaranteed bonds 2011-02-09 2014-02-09 7.00% Rs. 5,605,602 Rs. 5,605,602
(3) The Company provided the following collaterals in relation to its borrowings:
Creditor
Assets pledged as
collaterals Pledged date Maximum credit amount
Korea
Development
Bank
Land, buildings
and machinery
2009-08-13 195 billion Korean Won
(11 billion Rupee)
14. OTHER FINANCIAL LIABILITIES:
Carrying amounts of the Companys other nancial liabilities as of
December 31, 2013 and 2012 are as follows:
Classication
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Other current
nancial liabilities:
Accrued expenses W 20,352,993 W 16,409,144 Rs. 1,195,860 Rs. 964,136
15. PROVISION FOR PRODUCT WARRANTIES:
The Company provides warranties for the sale of its products and
establishes a provision for product warranties for the amount of expected
warranty costs. Provisions for product warranties as of December 31, 2013
and 2012 are as follows (Unit: Korean won in thousands):
Beginning
Balance Increase Decrease
Ending
Balance Current
Non-
current

Dec. 31, 2013 W 118,598,929 W 82,634,200 W 75,753,148 W 125,479,981 W 48,780,982 W 76,698,999
Dec. 31, 2012 W 122,007,836 W 69,299,562 W 72,708,469 W 118,598,929 W 46,214,861 W 72,384,068
Beginning
Balance Increase Decrease
Ending
Balance Current
Non-
current

Dec. 31, 2013 Rs. 6,968,399 Rs. 4,855,255 Rs. 4,450,952 Rs. 7,372,702 Rs. 2,866,175 Rs. 4,506,527
Dec. 31, 2012 Rs. 7,168,692 Rs. 4,071,765 Rs. 4,272,059 Rs. 6,968,398 Rs. 2,715,400 Rs. 4,252,998
16. OTHER LIABILITIES AND OTHER LONG-TERM LIABILITIES:
Carrying amounts of the Companys other liabilities as of December 31,
2013 and 2012 are as follows:
Korean won in thousands Indian-Rupee in thousands
Classication
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Other liabilities
Advances from
customers W 5,689,992 W 6,712,542 Rs. 334,321 Rs. 394,402
Deposits received 1,507,995 436,043 88,604 25,620
Withholdings 19,520,134 16,778,055 1,146,925 985,811
Income in advance 7,171,456 421,367
W 26,718,121 W 31,098,096 Rs. 1,569,850 Rs. 1,827,200
Other Long-term
liabilities
Withholdings W W 8,270 Rs. Rs. 486
17. RETIREMENT BENEFIT OBLIGATION:
(1) Dened benet plans and related liabilities arising from the companys
nancial statements conguration items as of December 31, 2013 and
2012 are as follows:
Classication
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Present value of
dened benet
obligation W 176,130,156 W 144,823,054 Rs. 10,348,703 Rs. 8,509,223
Fair value of plan
assets (1,474,038) (1,524,841) (86,609) (89,594)
W 174,656,118 W 143,298,213 Rs. 10,262,094 Rs. 8,419,629
(2) Changes in the Companys dened benet obligation for the year ended
December 31, 2013 and 2012 are as follows (Unit: Korean won in
thousands):
Present value
of dened
benet
obligations
Fair value
of scheme
assets Total
Beginning balance W 144,823,054 W (1,524,841) W 143,298,213
Net current service cost 28,664,682 28,664,682
Interest cost (income) on DBO 5,629,710 (59,122) 5,570,588
Past service cost 1,689,737 1,689,737
Subtotal 180,807,183 (1,583,963) 179,223,220
Remeasurements
DBO (Gain)/Loss due to Experience 9,191,487 23,883 9,215,370
DBO (Gain)/Loss due to Changes in
Demographic Assumptions 2,767,538 2,767,538
Financial Assumptions (10,732,545) (10,732,545)
Subtotal 1,226,480 23,883 1,250,363
Payments
Benet payment from plan assets (86,042) 86,042
Benet payment from company (5,817,465) (5,817,465)
Subtotal (5,903,507) 86,042 (5,817,465)
Ending balance W 176,130,156 W (1,474,038) W 174,656,118
Present value
of dened
benet
obligations
Fair value
of scheme
assets Total
Beginning balance W 188,058,593 W (3,072,683) W 184,985,910
Interest cost (income) on DBO 7,393,121 (93,578) 7,299,543
Past service cost 1,163,872 1,163,872
Subtotal 219,672,093 (3,166,261) 216,505,832
Remeasurements
DBO (Gain)/Loss due to Experience 18,896,792 (2,594) 18,894,198
Subtotal 18,896,792 (2,594) 18,894,198
Payments
Benet payment from plan assets (321,399) 321,399
Benet payment from company (16,118,716) (16,118,716)
Subtotal (16,440,115) 321,399 (16,118,716)
Business Merger, Acquisition, and
Termination
Curtailments (1,594,787) (1,594,787)
Settlements (75,710,929) 1,322,615 (74,388,314)
Subtotal (77,305,716) 1,322,615 (75,983,101)
Ending balance W 144,823,054 W (1,524,841) W 143,298,213
177
Present value
of dened
benet
obligations
Fair value
of scheme
assets Total
Beginning balance Rs. 8,509,223 Rs. (89,594) Rs. 8,419,629
Interest cost (income) on DBO 330,779 (3,474) 327,305
Past service cost 99,282 99,282
Subtotal 10,623,506 (93,068) 10,530,438
Remeasurements
DBO (Gain)/Loss due to Experience 540,055 1,403 541,458
Demographic Assumptions 162,609 162,609
Financial Assumptions (630,601) (630,601)
Subtotal 72,063 1,403 73,466
Payments
Benet payment from company (5,055) 5,055
Benet payment from plan assets (341,811) (341,811)
Subtotal (346,866) 5,055 (341,811)
Ending balance
Rs.
10,348,703
Rs.
(86,610)
Rs.
10,262,093
Present value
of dened
benet
obligations
Fair value
of scheme
assets Total
Beginning balance Rs. 11,049,571 Rs. (180,539) Rs. 10,869,032
Interest cost (income) on DBO 434,390 (5,498) 428,892
Past service cost 68,384 68,384
Subtotal 12,907,053 (186,037) 12,721,016
Remeasurements
DBO (Gain)/Loss due to Experience 1,110,300 (152) 1,110,148
Subtotal 1,110,300 (152) 1,110,148
Payments
Benet payment from company (18,884) 18,884
Benet payment from plan assets (947,071) (947,071)
Subtotal (965,955) 18,884 (947,071)
Business Merger, Acquisition, and
Termination
Curtailments (93,703) (93,703)
Settlements (4,448,471) 77,712 (4,370,759)
Subtotal (4,542,174) 77,712 (4,464,462)
Ending balance
Rs.
8,509,224
Rs.
(89,593)
Rs.
8,419,631
(3) Actuarial assumptions used as of December 31, 2013 and 2012 are as
follows:
December 31,
2013
December 31,
2012
Discount rate (%) 4.39 3.93
Expected rate of salary increase (%) 5.32 5.31
(4) As of December 31, 2013, if the signicant actuarial assumption changes
reasonably and acceptably while the others remain unchanged, the
dened benet obligation will be affected as follows:
Classication Increase Decrease Increase Decrease
Change 1% in
Discount rate W (23,664,177) W 28,368,014 Rs. (1,390,412) Rs. 1,666,791
Changes 1% in
Expected rate of
salary increase W 26,841,874 W (22,849,852) Rs. 1,577,121 Rs. (1,342,566)
The above sensitivity analysis doesnt mean the actual change of dened benet
obligation because any actuarial assumption may not occur independently due
to the correlation each other. And the present value of dened benet obligation
has been calculated by the Method of Estimated Unit Accumulation which was
applied to the due account in the nancial statements.
18. CONTINGENCIES AND COMMITMENTS:
The followings are the major commitments and contingent liabilities as of
December 31, 2013.
(1) The Company carries product liability insurance for all products which it
sells domestically.
(2) As of December 31, 2013, the company has been providing guarantees
from Woori Bank and etc. amounting to USD 65,607,000 related to import
L/C.
provided
Contract
period
Contract
price(USD)
Amount
execution
Amount
execution
Korea
Development
Bank
2013.7.27~
2014.7.27
USD 65,000,000
USD 9,483,000 Usance/Sight
import credit limit
USD 4,954,000
Woori Bank 2013.8.23~
2014.8.23 USD 40,000,000 USD 7,797,000
Sight import
credit limit
Bank of America 2013.11.5~
2014.11.5
USD 50,000,000
USD 27,844,000 Usance/Sight
import credit limit
USD 293,000
JP Morgan 2013.11.5~
2014.11.5 USD 30,000,000 USD
Usance import
credit limit
Standard
Chartered Bank
2013.11.5~
2014.11.5 USD 20,000,000 USD 15,236,000
Usance import
credit limit
Total USD 205,000,000 USD 65,607,000
(3) The followings are the major loan arrangements with the nancial
institutions as of December 31, 2013.
(Unit: Korean won in thousands):
Financial institution Classication Limit Exercise price
KDB Operating purpose loans W 30,000,000 W 30,000,000
Financial institution Classication Limit Exercise price
KDB Operating purpose loans Rs. 1,762,680 Rs. 1,762,680
(4) Pending litigations
As of December 31, 2013, the Company has 4 pending litigations as a
plaintiff with claims amounting to W 15,525 million (Rs. 912 million) and
28 pending litigations as a defendant with claims amounting to W 21,679
million (Rs. 1,274 million). Details of signicant pending litigations as of
December 31, 2013 are as follows:
Type of litigation Claimed amount Plaintiff Defendant Remarks
(Korean won
in thousands)
(Indian-Rupee
in thousands)
Wages W 12,785,493 Rs. 751,224
Sung-Ho
Lee and 243
others
The
Company
2nd trial
pending
(1st trial lost)
Compensation
for damages (10,000,000) 587,560
The
Company
Federation
of Korea
Metal
Workers
trade Union
2nd trial
pending
(1st trial
partially win)
Compensation
for damages (5,000,000) 293,780
The
Company
Labor
Union, Kap
Deuk Jung
and others
2nd trial
pending
(1st trial
partially win)
Void dismissal 3,020,015 177,444
Suk-joo Noh
and 150
others
The
Company
3rd trial
pending
(2nd trial lost)
Objection to
conrmation trial 1,238,517 72,770
SK E&C
Co., Ltd.
The
Company
3rd trial
pending
(1st trial win,
2nd trial lost)
Wages 572,698 33,649
Sang-sik
Lee and
12 others
The
Company
1st trial
pending
178
For the above pending litigations, the Company recognized other payables
amounting to W 38,299,446 thousands (Rs. 2,252,007 thousands) that
are expected to be a probable loss and can be reasonably estimated as of
December 31, 2013.
As of December 31, 2013, the Company has a pending representative suit for
claims related to the ordinary wage. The Company predicts very low possibility
of additional expenditure due to this claim. This is based upon the Supreme
Court judgment as of December 18, 2013 which says any additional retroactive
wage claim from the labor union should not be allowed on the ground of
Principle of Good Faith in case regular bonus is categorized in the ordinary
wage and causes crucial managerial difculty and unexpected nancial burden
to the company.
But the Company has recognized expected expenses with respect to the other
allowances except regular bonuses where Principle of Good Faith may not be
applicable.
19. CAPITAL STOCK:
As of December 31, 2013, the number of authorized shares is 3 billion
shares. Details of capital stock are as follows (Unit: Won in thousands
except par value):
Classication
Shares
outstanding Par value Capital stock
December 31, 2013 137,220,096 W 5,000 W 686,100,480
December 31, 2012 122,674,641 W 5,000 W 613,373,205
(Unit: Rupee in thousands except par value):
Classication
Shares
outstanding Par value Capital stock
December 31, 2013 137,220,096 Rs. 294 Rs. 40,312,520
December 31, 2012 122,674,641 Rs. 294 Rs. 36,039,356
(*) The Company increased paid-in capital amounting to W80,000,003 thousands
and issued 4,545,455 stocks, per W5,500 (Rs. 4,700,480 thousands, and per
Rs. 323) to Mahindra & Mahindra Ltd., in accordance with the Board of Director
on February 14, 2013.
20. OTHER CAPITAL SURPLUS AND RETAINED EARNINGS:
Details of the Companys other capital surplus and retained earnings as of
Year ended
December
31, 2013
Year ended
December
31, 2012
Year ended
December
31, 2013
Year ended
December
31, 2012
Paid-in capital in excess of par
value W 11,452,713 W 4,545,757 Rs. 672,916 Rs. 267,091
Gain on retirement of capital stock

120,351,580 120,351,580 7,071,377 7,071,377
Debt converted to equity 931,508 931,508 54,732 54,732
Treasury stock (108,530) (6,377)
Consideration for conversion
rights (3,243,869) (3,243,869) (190,597) (190,597)
W129,383,402 W122,584,976 Rs. 7,602,051 Rs. 7,202,603
(*) The Company acquired treasury stock by getting back a part of stock(21,706
shares), which it had converted debt into on the approval of the relevant
reorganization plan of the court in 2009, in accordance with a decision of the
court for the year ended December 31, 2013.
21. OTHER CAPITAL ADJUSTMENTS
(1) Detail of the Companys other capital adjustments as of December 31,
2013 and December 31, 2012 are as follows:
(Unit: Won in thousands)
Classication
December 31,
2013
December 31,
2012
Other capital
adjustments
Gains on
valuation of derivatives W 26,833,680 W 18,999,750
(Unit: Rupee in thousands)
Classication
December 31,
2013
December 31,
2012
Other capital
adjustments
Gains on
valuation of derivatives Rs. 1,576,640 Rs. 1,116,349
(2) Changes in the Companys gains (losses) on valuation of derivatives for
the year ended December 31, 2013 and the year ended December 31,
Korean Won in thousands Rupee in thousands
Year ended
December 31,
2013
Year ended
December 31,
2012
Year ended
December 31,
2013
Year ended
December 31,
2012
Beginning balance W 18,999,750 W 193,310 Rs. 1,116,349 Rs. 11,358
Gains on valuation
of derivatives 26,833,680 18,999,750 1,576,640 1,116,349
Reclassication to
Net income/loss W (18,999,750) W (193,310) Rs. (1,116,349) Rs. (11,358)
Ending balance W 26,833,680 W 18,999,750 Rs. 1,576,640 Rs. 1,116,349
22. RETAINED EARNINGS
(1) Details of the Companys retained earnings as of December 31, 2013 and
December 31 ,2012 are as follows:
December 31,
2013
December 31,
2012
Retained earnings W 47,725,964 W 52,754,371
December 31,
2013
December 31,
2012
Retained earning Rs. 2,804,186 Rs. 3,099,636
(2) Changes in retained earnings for the year ended December 31 ,2013 and
December 31,
2013
December 31,
2012
Beginning balance W 52,754,371 W 177,718,020
Loss on appropriated retained earnings (3,778,045) (106,069,451)
Actuarial losses (1,250,362) (18,894,198)
Appropriated retained earnings for decit recovery
Ending balance W 47,725,964 W 52,754,371
December 31,
2013
December 31,
2012
Beginning balance Rs. 3,099,636 Rs. 10,442,000
Loss on appropriated retained earnings (221,983) (6,232,217)
Actuarial losses (73,467) (1,110,147)
Appropriated retained earnings for decit recovery
Ending balance Rs. 2,804,186 Rs. 3,099,636
179
23. STATEMENT OF APPROPRIATION OF RETAINED EARNINGS:
Detail of the Companys statement of appropriation of retained earnings for the years ended December 31, 2013 and 2012 are as follows (Unit: Korean won in
thousands):
STATEMENT OF APPROPRIATION OF RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Expected disposition date: 2014.03.26
Disposal xed date: 2013. 03. 27
(Unit: Korean won)
Accounts Year ended December 31, 2013 Year ended December 31, 2012
Unappropriated retained earning W 47,725,963,330 W 52,754,371,403
Undisposed retained earnings carried over from prior year W 52,754,371,403 W 177,718,020,010
Current net loss (3,778,044,742) (106,069,450,792)
Actuarial losses (1,250,363,331) (18,894,197,815)
Appropriation retained earning
Unappropriated retained to be carried forward to subsequent year W 47,725,963,330 W 52,754,371,403
(Unit: Indian-Rupee)
Accounts Year ended December 31, 2013 Year ended December 31, 2012
Unappropriated retained earning Rs. 2,804,186,701 Rs. 3,099,635,846
Undisposed retained earnings carried over from prior year Rs. 3,099,635,846 Rs. 10,441,999,984
Current net loss (221,982,797) (6,232,216,651)
Actuarial losses (73,466,348) (1,110,147,487)
Appropriation retained earning
Unappropriated retained to be carried forward to subsequent year Rs. 2,804,186,701 Rs. 3,099,635,846
24. INCOME TAX:
(1) Composition of income tax expense for the years ended december 31, 2013 and 2012 are as follows:
Years ended
December 31,
2013
Years ended
December 31,
2012
Years ended
December 31,
2013
Years ended
December 31,
2012
Current income tax payable W W W W
Income tax expense directly reected to shareholders equity
Income tax expense W W W W
(2) Changes in temporary differences and deferred income tax assets
The changes in temporary differences and deferred income tax assets for the year ended December 31, 2013 and 2012 are as follows (Unit: Korean Won in
thousands):
Description Beginning balance Decrease Increase Ending balance
(Temporary differences)
Allowance for doubtful accounts W 48,289 W W (48,289) W
Government subsidies 4,312,255 1,222,435 1,470,193 4,560,013
Provision for product warranties 118,598,929 118,598,929 125,479,981 125,479,981
Accrued severance indemnities 133,641,815 17,264,982 91,472,071 207,848,904
Loss on revaluation of property, plant and equipment 161,756,602 23,470,585 7,496,445 145,782,462
Development cost 60,725,467 10,344,539 9,669,659 60,050,587
Depreciation 10,416,303 292,063 4,551,622 14,675,862
Other payables 16,669,524 33,171,381 91,941,151 75,439,294
Accrued expenses 15,439,413 15,439,413 19,385,586 19,385,586
Investment in subsidiaries 2,863,690 (1,320,829) 4,184,519
Gain (loss) on foreign currency translation (2,220) (28,840) 26,620
Gain (loss) on valuation of derivatives (18,999,750) (12,488,563) (31,488,313)
Other long-term employee benet 13,107,758 13,107,758 16,281,616 16,281,616
Land (260,707,239) (260,707,239)
Others (834,260) (772,950) (450,966) (512,276)
Decit carried over 1,313,655,359 (257,527,729) 1,056,127,630
Total 1,570,691,935 1,437,135,246
Not recognized as deferred tax assets 1,570,691,935 1,437,135,246
Recognized as deferred tax assets
Statutory tax rate 22% 22%
Deferred tax assets resulting from temporary differences
Tax credit carry forwards 17,263,892 1,077,626 16,186,266
Not recognized as deferred tax assets 17,263,892 1,077,626 16,186,266
Deferred tax assets resulting from tax credit carry forwards
Total deferred income tax W W
180
The Company did not recognize deferred income tax assets related to the temporary differences, decit carried forward and tax credit carried forward since it could
not estimate the income tax effect resulting from future taxable income.
Allowance for doubtful accounts W (1,781,828) W 1,535,377 W 3,365,494 W 48,289
Government subsidies 5,565,857 2,176,043 922,441 4,312,255
Depreciation 9,532,068 2,341,226 3,225,461 10,416,303
Other payables 13,838,928 17,533,349 20,363,945 16,669,524
Accrued expenses 15,552,941 15,552,941 15,439,413 15,439,413
Investment in subsidiaries 2,684,828 178,862 2,863,690
Gain (loss) on foreign currency translation 1,212,429 (18,104,070) (19,318,719) (2,220)
Present value discount (8,398,864) (65,381,083) (56,982,219)
Other long term employee benet 12,367,890 12,367,890 13,107,758 13,107,758
Land (261,695,316) 988,077 (260,707,239)
Others (628,420) (218,540) (19,487,130) (19,834,010)
Decit carried over 1,051,562,801 262,092,558 1,313,655,359
Total 1,316,504,009 1,570,691,935
Not recognized as deferred tax assets 1,316,504,009 1,570,691,935
Tax credit carry forwards 20,026,962 2,763,070 17,263,892
Not recognized as deferred tax assets 20,026,962 2,763,070 17,263,892
Total deferred income tax W W
Allowance for doubtful accounts Rs. 2,837 Rs. Rs. (2,837) Rs.
Government subsidies 253,371 71,825 86,383 267,928
Loss on revaluation of property, plant and equipment 9,504,171 1,379,038 440,461 8,565,594
Development cost 3,567,986 607,804 568,150 3,528,332
Depreciation 612,020 17,160 267,435 862,295
Other payables 979,435 1,949,018 5,402,094 4,432,511
Accrued expenses 907,158 907,158 1,139,019 1,139,019
Investment in subsidiaries 168,259 (77,607) 245,866
Gain (loss) on foreign currency translation (130) (1,695) 1,564
Gain (loss) on valuation of derivatives (1,116,349) (733,778) (1,850,127)
Other long term employee benet 770,159 770,159 956,643 956,643
Land (15,318,115) (15,318,115)
Others (49,018) (45,415) (26,497) (30,099)
Decit carried over 77,185,134 (15,131,299) 62,053,835
Total 92,287,575 84,440,319
Not recognized as deferred tax assets 92,287,575 84,440,319
Tax credit carry forwards 1,014,357 63,317 951,040
Not recognized as deferred tax assets 1,014,357 63,317 951,040
Total deferred income tax Rs. Rs.
181
Allowance for doubtful accounts Rs. (104,693) Rs. 90,213 Rs. 197,743 Rs. 2,837
Government subsidies 327,027 127,856 54,199 253,371
Depreciation 560,066 137,561 189,515 612,020
Other payables 813,120 1,030,189 1,196,504 979,435
Accrued expenses 913,829 913,829 907,158 907,158
Investment in subsidiaries 157,750 10,509 168,259
Gain (loss) on foreign currency translation 71,237 (1,063,723) (1,135,091) (130)
Present value discount (493,484) (3,841,531) (3,348,047)
Other long term employee benet 726,688 726,688 770,159 770,159
Land (15,376,170) 58,055 (1,165,367)
Others (36,923) (16,542) (1,144,986) (15,318,115)
Decit carried over 61,785,624 15,399,510 77,185,134
Total 77,352,510 92,287,575
Not recognized as deferred tax assets 77,352,510 92,287,575
Tax credit carry forwards 1,176,704 162,347 1,014,357
Not recognized as deferred tax assets 1,176,704 162,347 1,014,357
Total deferred income tax Rs. Rs.
25. EXPENSES BY CATEGORY:
Details of expenses classied by category for the the year ended December 31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
Year ended
December 31,
2013
Year ended
December 31,
2012
Year ended
December 31,
2013
Year ended
December 31,
2012
Changes in inventories: W (22,474,362) W 7,190,786 Rs. (1,320,504) Rs. 422,502
Raw materials and
Merchandise goods used 2,513,588,345 2,072,302,835 147,688,397 121,760,225
Employee benets 284,462,084 223,917,103 16,713,854 13,156,473
Depreciation 117,951,804 103,209,027 6,930,376 6,064,150
Amortization 25,337,092 34,865,964 1,488,706 2,048,585
Other 566,933,965 521,392,123 33,310,772 30,634,916
W 3,485,798,928 W 2,962,877,838 Rs. 204,811,602 Rs. 174,086,850
26. DERIVATIVES FINANCIAL INSTRUMENTS:
The Company has a derivative contract with Woori Bank and KDB to avoid the risks of exchange rate uctuation by tting the amount and period of expected
foreign currency sales (hedged items) and derivative nancial instruments (hedging instrument). Cash ow risk aversion accounting treatment is applied
on valuation of derivatives for W26,833,680 thousands (Rs. 1,576,640 thousands) recorded as other capitals components and also, W2,150,880 thousands
(Rs. 126,377 thousands) was recognized as prot or loss for the year ended December 31, 2013.
27. SELLING AND ADMINISTRATIVE EXPENSES:
(1) Selling expenses for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Warranty expenses W 62,874,460 W 50,028,856 Rs. 3,694,252 Rs. 2,939,495
Sales commissions 151,138,511 115,310,966 8,880,294 6,775,211
Advertising expenses 19,407,649 22,547,018 1,140,316 1,324,773
Export expenses 74,705,679 77,957,317 4,389,407 4,580,460
Other sales expenses 37,346,915 35,949,428 2,194,355 2,112,245
W 345,473,214 W 301,793,585 Rs. 20,298,624 Rs. 17,732,184
182
(2) Administrative expenses for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Salaries W 46,890,174 W 40,530,996 Rs. 2,755,079 Rs. 2,381,439
Post-employment benets 6,125,022 5,615,360 359,882 329,936
Employee benets 12,690,914 10,184,051 745,667 598,374
Rent expense 10,385,156 13,137,007 610,190 771,878
Service fees 21,311,172 10,823,583 1,252,159 635,950
Depreciation 5,712,570 4,747,636 335,648 278,952
R&D expenses 18,321,478 14,176,233 1,076,497 832,939
Amortization 4,030,027 2,090,461 236,788 122,827
Bad debt expenses (852,839) (131,727) (50,109) (7,740)
Other administrative expenses 35,302,445 33,470,940 2,074,230 1,966,619
W 159,916,119 W 134,644,540 Rs. 9,396,031 Rs. 7,911,175
28. NON-OPERATING INCOME (EXPENSES):
(1) Details of the Companys non-operating income for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Commission income W 14,797,763 W 11,333,513 Rs. 869,457 Rs. 665,912
Gain on foreign currency transactions 12,868,034 7,327,684 756,074 430,545
Gain on foreign currency translation 389,131 685,026 22,864 40,249
Reversal of allowance for doubtful accounts 23,739 679,469 1,395 39,923
Gain on disposal of property, plant and equipment 248,334 210,020 14,591 12,340
Gain on disposal of investments on subsidiary 12,950 761
Gain on disposal of investment assets 8,861 12,810 521 753
Others 17,576,389 24,017,849 1,032,718 1,411,193
W 45,925,201 W 44,266,371 Rs. 2,698,381 Rs. 2,600,915
(2) Details of the Companys non-operating expense for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Loss on foreign currency transactions W 13,234,225 W 11,274,390 Rs. 777,590 Rs. 662,438
Loss on foreign currency translation 753,724 893,171 44,286 52,479
Other bad debt expense 71,341 44,296 4,192 2,603
Non-operating assets and depreciation 37,502 66,421 2,203 3,903
Loss on disposal of property, plant and equipment 447,538 207,532 26,296 12,194
Loss on disposal of investment assets 6,866 17,259 403 1,014
Loss on disposal of trade receivables 12,682,235 9,219,242 745,157 541,686
Impairment loss on property, plant and equipment 712,503 156,011 41,864 9,167
Impairment loss on intangible assets 40,264 703,960 2,366 41,362
Impairment loss on investments on subsidiary 1,192,710 70,079
Others 32,507,632 40,225,854 1,910,018 2,363,510
W 61,686,540 W 62,808,136 Rs. 3,624,454 Rs. 3,690,355
29. FINANCIAL INCOME AND COST:
(1) Details of the Companys nancial income for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Interest income W 7,644,866 W 6,803,896 Rs. 449,182 Rs. 399,770
Dividend income 726,318 388,963 42,676 22,854
Gain on foreign currency transactions 5,776,888 1,459,088 339,427 85,730
Gain on foreign currency translation 264,050 15,515
Gain on disposal of derivatives 25,648,865 14,494,530 1,507,025 851,641
Gain on valuation of derivatives 2,150,880 2,503,753 126,377 147,111
Gain on debt exemption 594,352 34,922
W 42,211,867 W 26,244,582 Rs. 2,480,200 Rs. 1,542,027
(2) Details of the Companys nancial cost for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Interest expense W 8,718,983 W 8,809,804 Rs. 512,293 Rs. 517,629
Loss on foreign currency translation 6,237,205 2,538,576 366,473 149,157
Loss on foreign currency translation 382,542 69,886 22,477 4,106
Loss on disposal of derivatives 4,276,898 3,281,710 251,293 192,820
W 19,615,628 W 14,699,976 Rs. 1,152,536 Rs. 863,712
(3) Details of the Companys nancial net prot for the years ended December 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Loan and receivables W 367,464 W 287,650 Rs. 21,591 Rs. 16,901
Available-for-sale nancial assets 6,000 6,000 353 353
Other nancial liabilities 22,222,776 11,250,956 1,305,721 661,061
W 22,596,240 W 11,544,606 Rs. 1,327,665 Rs. 678,315
183
30. INCOME(LOSS) PER SHARE:
(1) Basic income (loss) per share for the years ended December 31, 2013 and 2012 is calculated as follows (Unit: Won in thousands, except for earnings per share):
2013 2012 2013 2012
Net loss W (3,778,045) W (106,069,451) Rs. (221,983) Rs. (6,232,217)
Preferred stock dividends
Loss contributed to common stocks (3,778,045) (106,069,451) (221,983) (6,232,217)
Number of common stocks outstanding 131,584,991 122,387,523 131,584,991 122,387,523
Basic and diluted loss per share(*) W (29) W (867) Rs. (2) Rs. (51)
(*) Basic and diluted losses per share for the years ended December 31, 2013 and 2012 are identical since there are no dilutive potential common shares.
(2) The number of shares outstanding for the years ended December 31, 2013 and 2012 are calculated as follows:
December 31, 2013
Time interval Outstanding
Accumulated
outstanding
Weighted
average impact Outstanding
Common stock 2013-01-01 2013-04-03 122,674,641 122,674,641 93/365 31,256,826
Additional Share 2013-04-04 2013-05-21 (21,706) 122,652,935 48/365 16,129,701
Additional Share 2013-05-22 2013-12-31 14,545,455 137,198,390 224/365 84,198,464
Total 131,584,991
December 31, 2012
Time interval Outstanding
Accumulated
outstanding
Weighted
average impact Outstanding
Common stock 2012-01-01 2012-05-18 121,961,841 121,961,841 139/366 46,318,841
Additional Share 2012-05-19 2012-08-14 644,550 122,606,391 88/366 29,479,133
Additional Share 2012-08-15 2012-12-31 68,250 122,674,641 139/366 46,589,549
Total 122,387,523
31. CASH FLOWS FROM OPERATING ACTIVITIES:
(1) Details of cash ows from operating activities for the years ended december 31, 2013 and 2012 are as follows:
2013 2012 2013 2012
1. Cash ows from operating activities W 275,499,439 W 148,324,544 Rs. 16,187,244 Rs. 8,714,956
1) Net loss (3,778,045) (106,069,451) (221,983) (6,232,217)
2) Adjustments 203,175,972 197,913,326 11,937,807 11,628,595
(1) Addition of expenses 214,645,100 209,880,355 12,611,687 12,331,730
Loss on foreign currency translation 1,136,266 963,057 66,762 56,585
Loss on disposal of trade receivables 12,682,235 9,219,242 745,157 541,686
Loss on valuation of inventories 11,102,920 4,926,086 652,363 289,437
Bad debt expense (852,839) (131,727) (50,109) (7,740)
Other bad debt expense 71,341 44,296 4,192 2,603
Depreciation 117,951,804 103,209,027 6,930,376 6,064,150
Loss on disposal of investment assets 6,866 17,259 403 1,014
Loss on disposal of property, plant and equipment 447,538 207,532 26,296 12,194
Impairment loss on investment assets 712,503 156,011 41,864 9,166
Amortization 25,337,092 34,865,964 1,488,706 2,048,585
Impairment loss on intangible assets 40,264 703,960 2,366 41,362
Impairment loss on investments on subsidiary 1,192,710 70,078
Interest expense 8,718,983 8,809,804 512,293 517,629
Post-employment benets 35,925,008 29,925,135 2,110,810 1,758,281
Depreciation expenses on assets not in use 37,502 66,421 2,203 3,902
Miscellaneous losses 134,907 16,898,288 7,927 992,876
(2) Deduction of revenue (11,469,128) (11,967,029) (673,880) (703,135)
Gain on foreign currency translation 653,180 685,026 38,378 40,249
Reversal of allowance for doubtful accounts 23,739 679,469 1,395 39,923
Interest income 7,644,866 6,803,896 449,182 399,770
Gain on dividends 726,318 388,963 42,675 22,854
Gain on valuation of derivatives 2,150,880 2,503,753 126,377 147,110
Gain on disposal of investments on subsidiary 12,950 761
Gain on disposal of investment assets 8,861 12,810 521 753
Gain on disposal of property, plant and equipment 248,334 210,020 14,591 12,340
Miscellaneous gains 683,092 40,136
3) Changes in working capital 76,101,512 56,480,669 4,471,421 3,318,579
Increase in trade receivables, net (15,338,393) (62,284,803) (901,222) (3,659,605)
Decrease (Increase) in other receivables, net (7,836,579) 5,778,123 (460,446) 339,499
Decrease (Increase) in other assets (394,850) 9,496,210 (23,200) 557,959
Decrease in derivatives assets 2,503,753 147,111
Increase in inventories (23,800,513) (10,439,970) (1,398,423) (613,411)
Decrease (Increase) in long-term receivables and security (3,313,610) 6,581,433 (194,694) 386,699
Increase in trade payables 75,754,592 115,867,333 4,451,037 6,807,901
Increase in other payables 43,686,890 81,510,065 2,566,867 4,789,205
Increase (Decrease) in accrued charges 3,946,173 (113,528) 231,861 (6,670)
Increase (Decrease) in other liabilities (4,388,244) 3,320,474 (257,836) 195,098
Increase (Decrease) in current other long term benet (1,701,310) 122,261 (99,962) 7,184
Increase (Decrease) in short-term provision of product warranties 2,566,121 (3,408,908) 150,775 (200,294)
Increase (Decrease) in long-term other payables 1,044,849 (58,598) 61,391 (3,443)
Increase in other long term benet 4,875,168 617,607 286,445 36,288
Payment of severance indemnities (5,817,466) (90,507,030) (341,811) (5,317,831)
Increase in long-term provision of product warranties 4,314,931 253,528
2. Interest received 7,249,544 6,125,722 425,954 359,923
3. Interest paid (8,721,307) (8,886,715) (512,429) (522,148)
4. Dividends received 1,100,280 165,103 64,648 9,701
Net cash provided by operating activities W 275,127,956 W 145,728,654 Rs. 16,165,418 Rs. 8,562,433
184
32. SEGMENT INFORMATION:
(1) The Company determined itself as a single reportable segment in the light
of nature of goods or service creating operating income and trait of assets
providing service. Therefore, writing disclosure according to reportable
segments operating income, income before income tax and its assets and
liabilities is omitted.
(2) Information of each sales region for the year ended December 31, 2013 is
as follows (Unit: Korean won and Indian-Rupee in thousands):
Sales region Year ended December 31, 2013
Republic of Korea W 1,920,660,629 Rs. 112,850,336
Europe 848,652,565 49,863,430
Asia Pacic 265,835,844 15,619,451
Others 440,036,945 25,854,811
W 3,475,185,983 Rs. 204,188,028
Republic of Korea W 1,428,582,336 Rs. 83,937,784
Europe 782,716,304 45,989,279
Asia Pacic 130,536,828 7,669,822
Others 521,970,079 30,668,874
W 2,863,805,547 Rs. 168,265,759
The report of non-current assets is omitted due to the location in domestic, so is
the report about the information of major customers because almost sales grow
from each private person and abroad branches.
(3) Information of sales of goods and service region for the year ended December
31, 2013 is as follows (Unit: Korean won and Indian-Rupee in thousands):
Vehicle W 3,053,604,697 Rs. 179,417,598
Merchandise 403,879,483 23,730,343
Others 17,701,803 1,040,087
W 3,475,185,983 Rs. 204,188,028
Vehicle W 2,484,697,431 Rs. 145,990,882
Merchandise 355,914,322 20,912,102
Others 23,193,794 1,362,775
W 2,863,805,547 Rs. 168,265,759
33. RELATED PARTY TRANSACTIONS:
(1) Details of related party as of December 31, 2013 are as follows:
Related parties
Controlling company Mahindra & Mahindra Ltd.
Subsidiary company Ssangyong Motor (Shanghai) Co., Ltd.
Ssangyong European Parts Center B.V.
Other afliates company Mahindra Vehicle Manufacturing Ltd.
Mahindra & Mahindra South Africa Ltd.
(2) Major transactions with the related parties for the years ended December
31, 2013 and 2012 are as follows (Unit: Korean won in thousands):
Sales and
others
Purchases
and others
Sales and
others
Purchases
and others
Transactions
with controlling
company W 2,909,025 W 8,210,408 W 1,922,370 W 6,789,262
Transactions with
subsidiaries 8,693,337 393,647 9,467,586
Transaction with
other afliates 61,927,632 161,017 41,343,061 52,172
Sales and
others
Purchases
and others
Sales and
others
Purchases
and others
Transactions
with controlling
company Rs. 170,923 Rs. 482,411 Rs. 112,951 Rs. 398,910
Transactions with
subsidiaries 510,786 23,129 556,277
Transactions with
other afliates 3,638,620 9,461 2,429,153 3,065
(3) Outstanding receivables and payables from transactions with related
parties as of December 31, 2012 and 2011 are as follows (Unit: Korean
won in thousands):
December 31,
2013
December 31,
2012
Receivables from and payables
to controlling company:
Receivables and others W 761,788 W 377,097
Payables and others 96,377,681 96,501,477
to subsidiaries:
Receivables and others 12,977,768 14,248,992
Payables and others 943,407 633,884
to afliates:
Receivables and others 466,300 8,347,797
Payables and others 47,315 1,081,824
December 31,
2013
December 31,
2012
to controlling company:
Receivables and others Rs. 44,760 Rs. 22,157
Payables and others 5,662,767 5,670,041
to subsidiaries:
Receivables and others 762,522 837,214
to afliates:
Receivables and others 27,398 490,483
The Company did not recognize allowance for the above receivables and no
bad debt expense was recognized for the year ended December 31, 2013.
(4) Details of compensation for key executives for the years ended December
31, 2013 and 2012 are as follows:
2013 2012 2013 2012
Short-term
employee benets W 491,531 W 471,698 Rs. 28,880 Rs. 27,715
Post-employment
benets 14,575 32,661 856 1,919
34. FINANCIAL INSTRUMENTS:
(1) Capital risk management
The Company manages capital risk in order to maximize shareholders
prot by maintaining sound/optimal capital structure through monitoring of
nancial ratios, such as, debt to equity ratio and net borrowings to equity
ratio on a monthly basis and implements capital structure improvement
plan when necessary. There is no change on the overall capital risk
management strategy of the company compared with last year.
The Company uses debt ratio as a capital management index and calculates
the ratio as total liabilities divided by total equity. Total liabilities and total
equity are based on the amounts stated in the nancial statements.
The Company is not subject to externally enforced capital regulation.
Debt ratio as of December 31, 2013 and 2012 are as follows (Unit: Korean
won in thousands):
December 31,
2013
December 31,
2012
Debt (A) W 1,233,769,275 W 1,049,905,021
Equity (B) 890,043,526 807,712,302
Debt ratio (A/B) 138.62% 129.99%
December 31,
2013
December 31,
2012
Debt (A) Rs. 72,491,348 Rs. 61,688,219
Equity (B) 52,295,397 47,457,944
Debt ratio (A/B) 138.62% 129.99%
(2) Major accounting policies and methods (including recognition and
measurement and revenue and expense recognition) for each category of
nancial assets, nancial liabilities and equity are stated in detail in Note 2.
185
(3) Details of nancial assets and liabilities by category as of December 2012 and 2012 are as follows (Unit: Korean won in thousands):
1) Financial assets
December 31, 2013
Financial asset
Loans and
Receivables
AFS nancial
assets
Designated to
hedge item Total Fair value
Cash and cash equivalents W 359,712,082 W W W 359,712,082 W 359,712,082
Long-term nancial instruments 6,000 6,000 6,000
Trade receivables and Other receivables 270,631,929 270,631,929 270,631,929
AFS nancial assets on sales 560,000 560,000 560,000
Derivatives assets 28,984,560 28,984,560 28,984,560
W 630,350,011 W 560,000 W 28,984,560 W 659,894,571 W 659,894,571
December 31, 2012
Financial asset
Loans and
Receivables
AFS nancial
assets
Designated to
Cash and cash equivalents W 197,769,855 W W W 197,769,855 W 197,769,855
Long-term nancial instruments 6,000 6,000 6,000
W 451,478,172 W 560,000 W 21,503,303 W 473,541,675 W 473,541,675
December 31, 2013
Financial asset
Loans and
Receivables
AFS nancial
assets
Designated to
Cash and cash equivalents Rs. 21,135,243 Rs. Rs. Rs. 21,135,243 Rs. 21,135,243
Long-term nancial instruments 353 353 353
Rs. 37,036,846 Rs. 32,903 Rs. 1,703,017 Rs. 38,772,766 Rs. 38,772,766
December 31, 2012
Financial asset
Loans and
Receivables
AFS nancial
assets
Designated to
Cash and cash equivalents Rs. 11,620,166 Rs. Rs. Rs. 11,620,166 Rs. 11,620,166
Long-term nancial instruments 353 353 353
Rs. 26,527,052 Rs. 32,903 Rs. 1,263,460 Rs. 27,823,415 Rs. 27,823,415
2) Financial liabilities
Financial liability measured at amortized cost
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
(Korean Won in thousands) (Indian-Rupee in thousands)
Trade payables
and Other
payables W 743,620,638 W 618,388,989 Rs. 43,692,174 Rs. 36,334,063
Debt 147,012,801 125,404,765 8,637,884 7,368,282
Total W 890,633,439 W 743,793,754 Rs. 52,330,058 Rs. 43,702,346
(4) Financial risk management
The Company is exposed to credit risk, liquidity risk and market risk.
In order to manage the aforementioned risks, the Company operates a
risk management policy and a program that performs close monitoring
of and responding to each risk factors. Financial assets that are subject
to the nancial risk management consist of cash and cash equivalents,
AFS nancial assets, trade receivables, other receivables and others;
nancial liabilities subject to the nancial risk management consist of trade
payables, other payables, borrowings, bonds and others.
1) Market risk
a. Foreign currency risk
The Company undertakes transactions denominated in foreign currencies;
consequently, exposures to exchange rate uctuations arise. The Company
assesses, manages and reports, on a regular basis, the foreign currency
risk for its receivables and payables denominated in foreign currency.
Details of the Company held foreign currency denominated monetary
assets and monetary liabilities of the carrying amount for the year ended
Assets
December 31,
2013
December 31,
2012
USD W 125,466,442 W 113,042,936
EUR 26,210,594 25,724,783
JPY 174,480 113,024
Others 5,927,589 5,366,589
Total W 157,779,105 W 144,247,332
186
Liabilities
December 31,
2013
December 31,
2012
USD W
13,896,981
W
9,685,534
EUR
32,196,251 19,021,629
JPY
8,936,980 6,468,799
Others
1,569,878 1,901,227
Total W 56,600,090 W 37,077,189
(Unit: Indian-Rupee in thousands)
Assets
December 31,
2013
December 31,
2012
USD Rs. 7,371,906 Rs. 6,641,951
EUR 1,540,030 1,511,485
JPY 10,252 6,641
Others 348,281 315,319
Total Rs. 9,270,469 Rs. 8,475,396
Liabilities
December 31,
2013
December 31,
2012
USD Rs. 816,531 Rs. 569,083
EUR 1,891,723 1,117,635
JPY 525,101 380,081
Others 92,240 111,708
Total Rs. 3,325,595 Rs. 2,178,507
The table below shows the sensitivity for each foreign currency when exchange
rates change 10 %. Sensitivity analysis only includes foreign currency monetary
items that is not paid, and it adjusts the translation assuming exchange rate
changes 10% at the year end of December 31, 2013.
The positive (+) in the table below shows the increase of current income of
the relevant currencies when the value of the won is 10% stronger. When won
is 10% weaker than the relevant currency the effect on current income will be
similar but negative (-).
Financial assets Financial liabilities
Currency 10% increase 10% decrease 10% increase 10% decrease
USD W 12,546,644 W (12,546,644) W (1,389,698) W 1,389,698
EUR 2,621,059 (2,621,059) (3,219,625) 3,219,625
JPY 17,448 (17,448) (893,698) 893,698
Others 592,760 (592,760) (156,988) 156,988
W 15,777,911 W (15,777,911) W (5,660,009) W 5,660,009
Financial assets Financial liabilities
Currency 10% increase 10% decrease 10% increase 10% decrease
USD Rs. 737,191 Rs. (737,191) Rs. (81,653) Rs. 81,653
EUR 154,003 (154,003) (189,172) 189,172
JPY 1,025 (1,025) (52,510) 52,510
Others 34,828 (34,828) (9,224) 9,224
Rs. 927,047 Rs. (927,047) Rs. (332,559) Rs. 332,559
In order to avoid the risk of foreign exchange receivables collected foreign
exchange risk within the range of 70 percent, the company has a policy of
making a foreign exchange forward agreement. Also in order to manage sales
transactions to foreign exchange risk that are expected to occur within the next
twelve months that are within the range of 70 percent, the Company makes a
foreign exchange forward.
Details of non-payment forward contracts for the year ended December 31, 2012
are as follows:
Average
exchange rate
contracted
Amount
of foreign
currency
Amount of
Contract Fair value
Cash ow hedges
USD W 1,130.61 USD 185,000,000 W 209,163,450 W 13,319,610
1,133.10 185,000,000 209,532,030 12,825,218
1,160.53 30,000,000 34,815,750 2,839,732
USD 400,000,000 W 453,511,230 W 28,984,560
Average
exchange rate
contracted
Amount
of foreign
currency
Amount of
Contract Fair value
Cash ow hedges
USD Rs. 66.4301 USD 185,000,000 Rs. 12,289,608 Rs. 782,607
66.5764 185,000,000 12,311,264 753,559
68.1881 30,000,000 2,045,634 166,851
USD 400,000,000 Rs. 26,646,506 Rs. 1,703,017
The cumulative benets of cash ow hedges related to foreign forward contracts,
amounts to 26,833,680 thousands won (Rs. 1,576,640 thousands). Sales
transaction is expected to occur within the rst three months after December 31,
2013, and this amount that is deferred in equity will be reclassied as Current
income.
b. Interest rate risk.
Sensitivity analysis was conducted assuming in the case of oating rate
debt current balance is the same during the whole reporting period. When
reporting interest rate risk to management internally, 0.5% variation is used,
representing managements assessment about reasonably occurable
uctuations of interest rates.
When other variables are constant and the interest rate is lower or higher
by 0.5% than the current rate, the companys current income will decrease/
increase W36,986 thousands won (Rs. 2,173 thousands rupee) for the year
ended Dec 31, 2013, due to oating rate debts interest rate risk.
2) Credit risk
Credit risk arises from transactions in ordinary course of business and
investment activities and when a customer or a transacting party fails
to perform obligations dened by respective contract terms. In order to
manage the aforementioned credit risk, the Company regularly assesses
credit ratings of its customers and transacting parties based on their
nancial status and past experiences and establishes credit limit for each
customer or transacting party.
As of December 31, 2013 and 2012, the maximum exposed amounts of
credit risk for nancial assets maintained by the Company are as follows.
However, the value of acquired collaterals and the effects from other credit
enhancement is not considered.
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
(Korean Won in thousands) (Indian-Rupee in thousands)
Trade and other
receivables W 270,631,929 W 253,702,317 Rs. 15,901,250 Rs. 14,906,533
3) Liquidity risk
The Company establishes short-term and long-term fund management
plans; consequently, exposures to liquidity risk. The Company analyzes
and reviews actual cash out ows and its budget to correspond the
maturities of nancial liabilities to those of nancial assets. Management
of the Company believes that the nancial liabilities may be redeemed
by cash ows arising from operating activities and nancial assets. To
manage risks arising from installment sales receivables, the Company has
entered into a factoring agreement with capital nancial institutions.
187
Maturity analysis of non-derivative nancial liabilities according to their
remaining maturities as of December 31, 2013, 2012 is as follows (Unit:
Korean won in thousands):
December 31, 2013
Within
a year
More than
1 year Total
Trade payables W 455,995,938 W W 455,995,938
Non-trade payables 247,048,242 247,048,242
Short-term
borrowings 51,971,981 51,971,981
Other payables 20,352,993 20,352,993
Long-term other
payables 20,223,465 20,223,465
Bonds 96,136,637 96,136,637
W 871,505,791 W 20,223,465 W 891,729,256
December 31, 2012
Within
a year
More than
1 year Total
Trade payables W 380,244,210 W W 380,244,210
Short-term
borrowings 32,067,863 32,067,863
Other payables 16,409,144 16,409,144
Long-term other
payables 37,977,622 37,977,622
Bonds 6,678,334 96,136,637 102,814,971
W 619,157,565 W 134,114,259 W 753,271,824
December 31, 2013
Within
a year
More than
1 year Total
Trade payables Rs. 26,792,497 Rs. Rs. 26,792,497
Short-term
borrowings 3,053,666 3,053,666
Other payables 1,195,860 1,195,860
Long-term other
payables 1,188,250 1,188,250
Bonds 5,648,604 5,648,604
Rs. 51,206,194 Rs. 1,188,250 Rs. 52,394,444
December 31, 2012
Within
a year
More than
1 year Total
Trade payables Rs. 22,341,629 Rs. Rs. 22,341,629
Short-term
borrowings 1,884,179 1,884,179
Long-term other
payables 2,231,413 2,231,413
Bonds 392,392 5,648,604 6,040,996
Rs. 36,379,222 Rs. 7,880,017 Rs. 44,259,239
Funding arrangements as of December 31, 2013 and 2012 are as follows:
December 31,
2013
December 31,
2012
Borrowing limit
commitments Used W 30,000,000 W 30,000,000
Unused
Total W 30,000,000 W 30,000,000
December 31,
2013
December 31,
2012
Borrowing limit
commitments Used Rs. 1,762,680 Rs. 1,762,680
Unused
Total Rs. 1,762,680 Rs. 1,762,680
(5) Fair value of nancial instruments
The fair value of the Companys actively-traded nancial instruments (i.e.
nancial assets AFS and others) is based on the traded market-price as of
the reporting period end. The fair value of the Companys nancial assets
is the amount which the asset could be exchanged for or the amount
which a liability could be settled for.
The following table provides an analysis of nancial instruments that are
measured subsequent to initial recognition at fair value, classied as Level
1, 2 or 3, based on the degree to which the fair value is observable.
Level 1 Unadjusted quoted prices in active markets for identical assets
or liabilities;
Level 2 Inputs other than quoted prices that are observable for the
asset or liability either directly or indirectly; and
Level 3 Inputs that are not based on observable market data.
Fair values of nancial instruments by hierarchy level as of December 31,
2013, are as follows (Unit: Korean won in thousands):
December 31, 2013
Type Level 1 Level 2 Level 3 Fair value
Derivatives
designated to
hedge item W W 28,984,560 W W 28,984,560
December 31, 2012
Derivatives
designated to
hedge item Rs. Rs. 21,503,503 Rs. Rs. 21,503,503
December 31, 2013
Derivatives
designated to
December 31, 2012
Derivatives
designated to
188
INDEPENDENT ACCOUNTANTS REVIEW REPORT
on Internal Accounting Control System (IACS)
English Translation of a Report Originally Issued in Korean
To the Representative Director of
Ssangyong Motor Company
We have reviewed the accompanying Report on the Managements Assessment of IACS (the Managements Report) of
Ssangyong Motor Company (the Company) as of December 31, 2013. The Managements Report, and the design and operation
of IACS are the responsibility of the Companys management. Our responsibility is to review the Managements Report and issue
a review report based on our procedures. The Companys management stated in the accompanying Managements Report that
based on the assessment of the IACS as of December 31, 2013, the Companys IACS has been appropriately designed and is
operating effectively as of December 31, 2013, in all material respects, in accordance with the IACS Framework established by
the Korea Listed Companies Association.
We conducted our review in accordance with the IACS Review Standards established by the Korean Institute of Certied Public
Accountants. Those standards require that we plan and perform a review, the objective of which is to obtain a lower level of
assurance than an audit, of the Managements Report in all material respects. A review includes obtaining an understanding of a
companys IACS and making inquiries regarding the Managements Report and, when deemed necessary, performing a limited
inspection of underlying documents and other limited procedures.
The Companys IACS represents internal accounting policies and a system to manage and operate such policies to provide
reasonable assurance regarding the reliability of separate nancial statements prepared, in accordance with K-IFRS in the
Republic of Korea, for the purpose of preparing and disclosing reliable accounting information. Because of its inherent limitations,
IACS may not prevent or detect a material misstatement of the separate nancial statements. Also, projections of any evaluation
of effectiveness of IACS to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on our review, nothing has come to our attention that causes us to believe that the Managements Report referred to above
is not fairly stated, in all material respects, in accordance with the IACS Framework established by the Korea Listed Companies
Association.
Our review is based on the Companys IACS as of December 31, 2013, and we did not review its IACS subsequent to
December 31, 2013. This report has been prepared pursuant to the Acts on External Audit for Stock Companies in the Republic
of Korea and may not be appropriate for other purposes or for other users.
Deloitte Anjin LLC
March 17, 2014
Notice to Readers
This report is annexed in relation to the audit of the separate nancial statements as of December 31, 2013, and the review of
internal accounting control system pursuant to Article 2-3 of the Act on External Audit for Stock Companies of the Republic of
Korea.
189
REPORT ON THE OPERATION OF THE INTERNAL ACCOUNTING MANAGEMENT SYSTEM
To the Board of Directors and Audit Committee of Ssangyong Motor Company
I, as the Internal Accounting Manager (IAM) of Ssangyong Motor Company (the Company), assessed the effectiveness of the
design and operation of the Companys Internal Accounting Management System (IAMS) for the year ending December 31, 2013.
The Companys management, including myself, is responsible for designing and operating an IAMS.
I assessed the design and operational effectiveness of the IAMS in the prevention and detection of an error or fraud which may
cause a misstatement in the preparation and disclosure of reliable nancial statements.
I followed the Best Practice Guideline to evaluate the effectiveness of the IAMS design and operation.
Based on the assessment results, I believe that the Companys IAMS, as of December 31, 2013, is effectively designed and
operating, in all material respects, in conformity with the Best Practice Guideline.
February 20
th
, 2014
The Internal Accounting Manager
Vasudev Tumbe
SSANGYONG EUROPEAN PARTS CENTER B.V.
190
Ssangyong European Parts Center B.V. (the Company) is
pleased to present the nancial information of the Company
for the year ended 31 December 2013.
Principal Activities
The Company was established in 2006 as a 100% subsidiary
of Ssangyong Motor Company (SYMC, hereinafter), an
automotive manufacturing company in Korea with its products
of SUVs (sports utility vehicles) and a large-sized sedan. On
behalf of SYMC, the Company is supplying spare parts to
SYMCs overseas distributors in Europe for their after-sales
services, through its warehouse facilities in Breda, since April
2007.
Risks
The Company is performing its business activities based on
the service agreement settled with SYMC.
Currency risk:
The Company is mainly active in the European Union and
all receivables and payables are denominated in Euro,
accordingly, the currency risk is not hedged.
Interest rate risk:
The Company is exposed to interest rate risk mainly on the
interest-bearing cash at bank. The Company is exposed to
the consequences of variable interest rates on cash at bank.
The Company has not entered into any derivative contracts to
hedge the interest risk on assets or liabilities.
Operations in 2013
The Company achieved annual re-invoicing sales of around
EUR 9.5 million (around INR 813.3 million) in 2013, which is
slightly higher as in the previous year.
With respect to gross operating structure, excluding the effects
from its provision for bad inventory and yearend adjustment
for the agreed compensation with SYMC, the Companys Cost
Of Goods Sold (COGS) rate decreased by around 1.9% points
to 72.9% in 2013 from 74.8% a year earlier.
In terms of the Companys local operational cost, its Sales,
General & Administrative expenses (SG&A) increased this year
around 8.33% to EUR 2.5 million (around INR 210 million),
primarily due to the investments in its ERP system and Human
Resources to prepare for the further reduced outsourcing work
scopes, mentioned in the Signicant events in 2013 in this
report. As of December 31, 2013, the Company employs 8
local people including expatriates from SYMC.
Signicant events in 2013
The Company has entered into a 5 year service agreement
with Pantos Logistics Benelux B. V. effectively at January 1,
2012 to outsource its warehousing facilities and IT system.
This change has enabled the Company to reduce around 52%
of its xed outsourcing cost, which accounted for around 78%
of total SG&A in 2011, 56% of total SG&A in 2012 and 50% of
total SG&A in 2013.
During 2011, the Company settled with SYMC on the service
agreement, of which the Dutch tax authorities acknowledged
the validity through an Advanced Pricing Agreement (APA)
with the Company.
In 2013 the Company has also seen a change in its senior
management with the resignation of Mr. Yang per May 1, 2013
to return to the shareholder company and the appointment of
Mr. Yoon as the new Managing Director, followed by Mr. Lee
who succeeded Mr. Lim who left the Company per November
30, 2013. The appointment of both Mr. Yoon and Mr. Lee have
the full support of the shareholder and they will bring further
advance to the development of the Company based on their
long experience.
Future Prospects
The Company predicts that its sales in the year of 2014 will be
favourable, compared to the prior period. And the Companys
operating prot will be going forward favourably by the new
environment under which its logistics service provider and the
outsourced work scopes changed since January 1, 2012.
The Company will have a focus on having a stable operation
structure to meet any requirement that is coming from the
customers side and occurs internally as well.
The shareholder has been fully supporting for the Companys
operation going further in the year of 2014 and the after,
considering that the Companys distribution of spare parts is
a basic value in automotive business against Distributors and
Partners in European territories. No further signicant changes
in personnel and investments are expected in 2014.
Breda, 31 January 2014
Board of Directors,
K. T. Yoon J. D. Lee
DIRECTORS REPORT
191
To : the General Meeting of Ssangyong European parts Center B.V
Report on the nancial statements
2013 of Ssangyong European parts Center B.V., Breda,
The Netherlands, Which comprise the balance sheet as at
December 31, 2013, the prot and loss account for the year
then ended and the notes, comprising a summary of the
Managements responsibility
Management is responsible for the preparation and fair
presentation of these nancial statements And for the
preparation of the directors report, both in accordance with
Part 9 of Book 2 of The Dutch Civil Code. Furthermore,
management is responsible for such internal Control as
it determines is necessary to enable the preparation of the
nancial statements that are Free from material misstatement,
Auditors responsibility
statements based on our audit. We Conducted our audit in
accordance with Dutch law, including the Dutch Standards on
Auditing. This requires that we comply with ethical requirements
about whether the nancial statements ate free from material
misstatement.
evidence about the amounts and Disclosures in the nancial
statements. The procedures selected depend on the
auditors Judgment, including the assessment of the risk of
material misstatement of the nancial Statements, whether
due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entitys
the circumstances, but not for the purpose of expressing an
accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the
overall presentation of the nancial statements. We believe
that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion with respect to the nancial statements
In our Opinion, the nancial statements give a true and fair
view of the nancial position of Ssangyoung European Parts
Center B.V. as at December 31, 2013 and of its result for the
year then ended in accordance with Part 9 of Book 2 of The
Dutch Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under Section 2:393 sub 5
at e and f of The Dutch Civil Code, We have no deciencies
to report as a result of our examination whether the directors
report, to the extent we can assess, has been prepared in
accordance with Part of Book 2 of this Code, and whether the
information as required under Section 2:392 sub 1 at b-h has
been annexed.
Further we report that the directors report, to the extent we
can assess, is consistent with the nancial statements as
required by Section 3:391 sub 4 of The Dutch Civil Code.
Eindhoven, 31 January 2014
Deloitte Accountants B.V.
G.P.J. Vossen
192
BALANCE SHEET AS AT 31 DECEMBER 2013
(before appropriation of result)
31-Dec-2013 31-Dec-2012
Note
Proforma
Indian Rupees
Proforma
Indian Rupees
Fixed assets
Intangible xed assets ......................................... 5.1 32,358 2,761,413 64,716 5,522,834
Tangible xed assets ........................................... 5.2 3,502 298,876 4,747 405,080
Financial xed assets .......................................... 5.3 39,421 3,364,153 67,448 5,756,052
75,281 6,424,442 136,911 11,683,966
Current assets
Inventories ............................................................ 5.4 3,950,876 337,167,747 4,795,919 409,283,671
Receivables .......................................................... 5.5 514,039 43,868,147 682,943 58,282,351
Cash and cash equivalents ................................. 5.6 912,680 77,888,151 829,418 70,782,529
5,377,595 458,924,045 6,308,280 538,348,551
5,452,876 465,348,487 6,445,191 550,032,517
Equity and liabilities
Shareholders equity 5.7
Paid-in share capital ............................................ 700,000 59,738,000 700,000 59,738,000
Retained earnings ................................................ (3,840,032) (327,708,332) (3,925,122) (334,969,914)
Result for the year ............................................... 86,095 7,347,389 85,090 7,261,582
(3,053,937) (260,622,943) (3,140,032) (267,970,332)
Current liabilities ................................................ 5.8 8,506,813 725,971,431 9,585,223 818,002,849
5,452,876 465,348,487 6,445,191 550,032,517
The accompanying notes form an integral part of the nancial statements.
193
INCOME STATEMENT FOR 2013
31-Dec-2013 31-Dec-2012
Note

Proforma
Indian Rupees

Proforma
Indian Rupees
Net turnover ........................................................ 6.1 9,530,282 813,314,268 9,461,502 807,444,605
Cost of sales ........................................................ (6,951,690) (593,257,266) (7,080,693) (604,266,361)
Gross turnover result ........................................ 2,578,592 220,057,002 2,380,809 203,178,244
Selling expenses .................................................. 90,007 7,681,200 91,168 7,780,319
General and administrative expenses ................ 6.2 2,366,311 201,940,993 2,176,269 185,722,770
Total expenses .................................................... 2,456,318 209,622,193 2,267,437 193,503,089
Operating Prot .................................................. 122,273 10,434,809 113,372 9,675,155
Financial income (expense), net ......................... 6.3 (8,150) (695,523) (7,009) (598,163)
Result on ordinary activities
before taxation ................................................... 114,123 9,739,286 106,363 9,076,992
Income tax expense (income) ............................. 6.4 (28,028) (2,391,897) (21,273) (1,815,410)
Result after taxation .......................................... 86,095 7,347,389 85,090 7,261,582
194
CASH FLOW STATEMENT FOR 2013
2013 2012
Note
Proforma
Indian Rupees
Proforma
Indian Rupees
Operating Prot .................................................. 122,273 10,434,809 113,372 9,675,155
Adjustments for:
Amortisation and depreciation .......................... 5.1 & 5.2 34,618 2,954,370 36,962 3,154,389
Inventories .......................................................... 5.4 845,043 72,115,924 (89,063) (7,600,623)
Receivables ........................................................ 5.5 168,904 14,414,204 6,156 525,379
Current liabilities ................................................ 5.8 (1,078,410) (92,031,419) 270,488 23,083,411
Cash generated from operations ...................... 92,428 7,887,888 337,915 28,837,711
Financial income (expense), net ....................... 6.4 (8,150) (695,523) (7,009) (598,163)
Net cash generated from
operating activities .......................................... 84,278 7,192,365 330,906 28,239,548
Investments in intangible xed .......................... 5.1 0 0 (32,775) (2,797,019)
Investments in tangible xed assets ................. 5.2 (1,016) (86,743) (3,409) (290,955)
Net cash used in investing activities ............ (1,016) (86,743) (36,184) (3,087,974)
Net cash used in nancing activities ................ 0 0 0 0
Net cash ows .................................................. 83,262 7,105,622 294,722 25,151,574
Movements in cash and cash equivalents can
be broken down as follows:
At 1 January ..................................................... 829,418 70,782,529 534,696 45,630,954
Movements during the year .............................. 83,262 7,105,622 294,722 25,151,575
At 31 December ............................................... 912,680 77,888,151 829,418 70,782,529
195
1 General information
1.1 The Company
Ssangyong European Parts Center B.V., IABC 5253-5254, 4814
RD, Breda (the Company, hereinafter) is a limited liability company,
having its ofcial seat in Breda.
The Company was incorporated as a 100% subsidiary of Ssangyong
Motor Company, 455-12 Dongsak-ro, Pyungtaek-si, Gyeonggi-do in
Korea (SYMC, hereinafter) with its principal capital of Euro 700,000
(Proforma Indian Rupees 59,378,000) on 12 December 2006. Since
early 2011, the majority of the shares of SYMC have been acquired
by Mahindra & Mahindra Ltd. in India. Accordingly, the nancial
information of the Company has been included in the consolidated
nancial information of SYMC and Mahindra & Mahindra Ltd., the
ultimate parent company.
SYMC is an automotive manufacturing company in Korea with its
products of SUVs (sports utility vehicles) and a large-sized sedan, one
of whose main export markets has been Western-Europe since 2002.
1.2 Activities
As of 31 December 2013, SEPC is distributing the spare parts to 25
distributors through its out sourced warehouse facilities in Breda. The
Companys activities is to provide logistics and administrative support
services including re-invoicing activities to SYMC for its distribution
of spare parts to the distributors in Europe, who have an exclusive
distributorship of SYMCs products respectively by country. Accordingly,
all spare parts handled by the Company come from SYMC.
The Companys services are performed in accordance with the
service agreement between SYMC and the Company, which is
effective on January 1, 2011. Based on the agreement, SYMC
compensates the Company for its local operational cost, including
the prot mark-up using a certain xed rate, which is known as the
Transactional Net Margin Method.
The remuneration in the above is acknowledged to be an arms
length remuneration for the Companys services to SYMC, through
the Advance Pricing Agreement settled into by the Company and the
Dutch tax authorities, on October 6, 2011.
1.3 Estimates
The preparation of the nancial information in conformity with the
relevant rules requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process
of applying the Companys accounting policies. If necessary for the
purposes of providing the view required under Section 362(1), Book
2, of the Netherlands Civil Code, the nature of these estimates and
judgments, including the related assumptions, is disclosed in the
notes to the nancial statement items in question.
1.4 Support parent company:
In view of the negative equity and negative working capital balances
the continuation of the companys operation might be dependent on
the nancial support of the parent company. In connection with this
Ssangyong Motor Company, parent of Ssangyong European Parts
Center B.V., has conrmed that it will provide the necessary nancial
support to Ssangyong European Parts Center B.V. to enable it to
operate as a going concern and to meet its nancial obligations for at
the 17 months period after the date of the these nancial statements and
conrmed that it has the nancial resources to full that commitment.
2 Accounting policies for the balance sheet
2.1 General information
The nancial statements are prepared according to the stipulations
in chapter 9 Book 2 of The Netherlands Civil Code.
Valuation of assets and liabilities and determination of the result
takes place under the historical cost convention. Unless presented
otherwise at the relevant principle for the specic balance sheet item,
assets and liabilities are valued according to the cost model.
Income and expenses are accounted for on accrual basis. Prot is only
included when realized on the balance sheet date. Losses originating
before the end of the nancial year are taken into account if they have
become known before preparation of the nancial statements.
The nancial information is denominated in Euros.
2.2 Proforma information
All amounts disclosed in Indian Proforma Indian Rupees are the Euro
amount converted against a currency rate of approximately Rupees
85.34 = Euro 1 for 2012 and 2013.
The same rate is applied for the opening balance sheet, the results
and closing balance sheet. The comparative information has also
been translated against this same currency rate.
2.3 Related party transactions
In the ordinary course of business the company purchases
approximately 99% of its products from afliated parties. The
company is furthermore nanced by a intercompany payable,
reference is made to note 5.8.
2.4 Prior-year comparison
The accounting policies have been consistently applied to all the
years presented, if not specically stated otherwise.
2.5 Foreign currencies
Receivables, liabilities and obligations denominated in foreign
currencies are translated against the exchange rates prevailing at
balance sheet date. Transactions in foreign currencies during the
nancial year are recognised in the nancial statements against
the exchange rates prevailing at transaction date. The exchange
differences resulting from the translation as of balance sheet date,
are recorded in income statement.
Transactions, receivables and debts
Foreign currency transactions in the reporting period are translated
into the functional currency using the exchange rates prevailing at
the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the rate of exchange
prevailing at the balance sheet date. Foreign exchange gains and
losses resulting from the settlement of such transactions and from
the translation at year-end exchange rates are recognised in the
income statement.
Translation differences on non-monetary assets held at cost are
recognised using the exchange rates prevailing at the dates of the
transactions.
2.6 Financial instruments
Financial instruments be both primary nancial instruments, such
as receivables and payables, and nancial derivatives. The notes
to the specic items of the balance sheet disclose the fair value
of the related instrument if this deviates from the carrying amount.
If the nancial instrument is not recorded in the balance sheet
the information on the fair value is disclosed in the notes to the
Contingent rights and obligations. For the principles of primary
nancial instruments, in case applicable, reference is made to the
treatment per balance sheet item.
2.7 Intangible xed assets
Intangible xed assets are presented at cost less accumulated
amortisation. Amortisation is charged as a xed percentage of cost,
as specied in more detail in the notes to the balance sheet. The
useful life and the amortisation method are reassessed at the end of
each nancial year.
2.8 Tangible xed assets
Property, plant and equipment are stated at cost less accumulated
depreciation and impairment and are depreciated over their
estimated useful lives on a straight line basis. Ordinary maintenance
and repairs are expensed as incurred.
Property, plant and equipment are depreciated over their estimated
useful lives as from the inception of their use. Land and investment
property are not depreciated. Future depreciation and amortisation
is adjusted if there is a change in estimated useful life.
2.9 Financial xed assets
Deferred tax assets are stated under the nancial xed assets if and
to the extent it is probable that the tax claim can be realised in due
course. These deferred tax assets are valued at nominal value and
are predominantly long-term in nature.
On balance sheet date, the company tests whether there are any
indications of an asset, which could be subject to impairment.
196
If there are such indications, the company estimates the recoverable
amount of the asset conceded. If this is not possible, the recoverable
amount of the cash-generating unit to which the asset belongs,
is identied. An asset is subject to impairment if its book value
exceeds its recoverable value; the recoverable value is the higher of
the value in use and the fair value less costs to sell.
Impairment is recognized as an expense in the prot and loss account
immediately, unless the asset is carried at the revalued amount; in that
case, the impairment is treated as a revaluation decrease.
2.11 Inventories
Inventories are stated at the lower of cost and net realisable value.
The valuation is based on weighted average prices. Net realisable
value is the estimated selling price in the ordinary course of business,
less applicable variable selling expenses. A provision is made for
obsolete inventories by individual assessment of inventories, where
considered necessary.
2.12 Receivables
Upon initial recognition the receivables are included at fair value
and then valued at amortised cost. The fair value and amortized
cost equal the face value. Any provision for doubtful accounts
deemed necessary is deducted. These provisions are determined by
individual assessment of the receivables.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank balances and
deposits held at call with maturities of less than 12 months. Cash and
cash equivalents are stated at face value.
2.14 Provisions
Provisions are recognised for legally enforceable or constructive
obligations existing at the balance sheet date, the settlement of
which is probable to require an outow of resources whose extent
can be reliably estimated. Provisions are measured on the basis of
the best estimate of the amounts required to settle the obligations
at the balance sheet date. Unless indicated otherwise, provisions
are stated at the present value of the expenditure expected to be
required to settle the obligations.
2.15 Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are recognised to provide
for temporary differences between the tax bases of assets and
liabilities, and their carrying amounts in the nancial information.
Deferred income tax is determined using tax rates that have been
enacted or substantially enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled. Deferred
income tax assets and liabilities are recognised at face value.
3 Accounting policies for the income statement
3.1 Net turnover
Net turnover represents amounts invoiced for goods and services
supplied during the nancial year reported on, net of discounts and
value added taxes.
Revenues ensuing from the sale of goods are accounted for when
all major entitlements to economic benets as well as all major
risks have transferred to the buyer. The cost price of these goods is
allocated to the same period.
Revenues from services are recognised in proportion to the services
rendered, based on the cost incurred in respect of the services
performed up to balance sheet date, in proportion to the estimated
costs of the aggregate services to be performed. The cost price of
these services is allocated to the same period.
3.2 Cost of sales
Cost of sales represents the direct and indirect expenses attributable
to net turnover.
3.3 Selling, General and administrative expenses
Selling, General and administrative expenses are recognised at
the historical cost convention that are not directly attributable to
the cost of the goods sold, and are allocated to the reporting year
to which they related. Selling expenses are related to the packing
material used in the warehouse and various communication activities
for the Companys logistics and administrative support services.
General and administrative expenses include the employee benets,
depreciations, outsourcing cost and other general cost.
Salaries, wages and social security contributions are taken to the
income statement based on the terms of employment, where they
are due to employees.
Provisions for employee benets:
The pension plans are nanced through contributions to pension
providers such as insurance companies. The pension obligations
are valued according to the valuation to pension fund approach.
This approach accounts for the contribution payable to the pension
provider as an expense in the prot and loss account.
Based on the administration agreement it is assessed whether and,
if so, which obligations exist in addition to the payment of the annual
contribution due to the pension provider as at balance sheet date.
These additional obligations, including any obligations from recovery
plans of the pension provider, lead to expenses for the company and
are included in a provision on the balance sheet.
A pension receivable is included in the balance sheet when the
company has the right of disposal over the pension receivable and
it is probable that the future economic benets which the pension
receivable holds will accrue to the company, and the pension
receivable can be reliably established.
As at year-end 2013 (and 2012) no pension receivables and no
obligations existed for the company in addition to the payment of
the annual contribution due to the pension provider.
3.4 Finance income and costs
Interest paid and received
Interest paid and received is recognised on a time-weighted basis,
taking account of the effective interest rate of the assets and liabilities
concerned. When recognising interest paid, allowance is made for
transaction costs on loans received.
3.5 Income tax expense
Income tax is calculated on the result before tax in the income
statement, taking into account any losses carried forward from
previous nancial years where not included in deferred income tax
assets and tax exempt items, and plus non deductible expenses.
Account is also taken of changes in deferred income tax assets and
liabilities owing to changes in the applicable tax rates.
3.6 Principles for preparation of the cash ow statement
The cash ow statement is prepared according to the indirect method.
The funds in the cash ow statement consist of cash and cash
equivalents. Cash equivalents can be considered as highly liquid
investments.
Cash ows in foreign currencies are translated at an estimated
average rate. Exchange rate differences concerning nances are
shown separately in the cash ow statement.
Corporate income taxes, issuance of share capital, interest received
and dividends received are presented under the cash ow from
operating activities. Interest paid and dividends paid are presented
under the cash ow from nancing activities.
Transactions that do not result in exchange of cash and cash
equivalents, such as nancial lease, are not presented in the cash
ow statement. The payment of lease terms on account of the
nancial lease contract is considered as an expenditure of nancing
activities as far as it concerns redemptions and as an expenditure of
operational activities as far as it concerns interest.
4 Risk management
4.1 Currency risk
The Company is mainly active in the European Union and all
receivables and payables denominated in Euro. Accordingly, the
currency risks is not hedged.
4.2 Interest rate risk
The Company is exposed to interest rate risk mainly on the interest-
bearing cash at bank. The company is exposed to the consequences
of variable interest rates on cash at bank. The company has not
entered into any derivative contracts to hedge the interest risk on
assets or liabilities.
197
5 Notes to the balance sheet
5.1 Intangible xed assets
ERP System Total
Proforma
Indian
Rupees
Proforma
Indian
Rupees
At 1 January 2013
Cost 96,109 8,201,944 96,109 8,201,944
Accumulated
depreciation (31,393) (2,679,103) (31,393) (2,679,103)
Carrying amount 64,716 5,522,841 64,716 5,522,841
Movements
Investment 0 0 0 0
Depreciation (32,358) (2,761,428) (32,358) (2,761,428)
Carrying amount (32,358) (2,761,428) (32,358) (2,761,428)
At 31 December 2013
Cost 96,109 8,201,944 96,109 8,201,944
Accumulated
depreciation (63,751) (5,440,531) (63,751) (5,440,531)
Carrying amount 32,358 2,761,413 32,358 2,761,413
Depreciation rate 33% 33% 33% 33%
The Company has been developing its own ERP system using SAP
Business one, due to the changes in out sourced work-scope starting at
January 1, 2012.
Movements in property, plant and equipment can be broken down as follows:
Ofce equipment Total
Proforma
Indian
Rupees
Proforma
Indian
Rupees
At 1 January 2013
Cost 63,992 5,461,075 63,992 5,461,075
Accumulated
depreciation (59,245) (5,056,000) (59,245) (5,056,000)
Carrying amount 4,747 405,075 4,747 405,075
Movements
Investment 1,016 86,743 1,016 86,743
Depreciation (2,261) (192,942) (2,261) (192,942)
Carrying amount (1,245) (106,199) (1,245) (106,199)
At 31 December 2013
Cost 65,008 5,547,818 65,008 5,547,818
Accumulated
depreciations (61,506) (5,248,942) (61,506) (5,248,942)
Carrying amount 3,502 298,876 3,502 298,876
Depreciation rate 20% 20% 20% 20%
5.3 Financial xed assets
31-12-2013 31-12-2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Deferred tax assets 39,421 3,364,153 67,448 5,756,052
39,421 3,364,153 67,448 5,756,052
In the process of APA, the Company agreed with the Dutch tax authorities
on the total amount of taxable losses, of which tax effect, the above balance
is remained as a deferred tax asset as of December 31, 2013. It is expected
that from this amount the majority will be realized within ve years.
5.4 Inventories
31-12-2013 31-12-2012
Proforma
Indian Rupees
Proforma
Indian Rupees
Goods for resale 5,845,501 498,855,055 6,420,867 547,956,790
Less: provision (1,894,625) (161,687,308) (1,624,948) (138,673,119)
3,950,876 337,167,747 4,795,919 409,283,671
With relation to the Companys outsourcing contract described all inventories
above are provided as collateral for the outsourced parties.
5.5 Receivables
31-12-2013 31-12-2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Trade receivables 388,322 33,139,446 592,359 50,551,913
Other
receivables,
including
prepayments 125,717 10,728,701 90,584 7,730,438
514,039 43,868,147 682,943 58,282,351
Receivables in the above fall due in less than one year and the fair value
of the receivables approximates the book value.
Other receivables
31-12-2013 31-12-2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
V.A.T. 61,841 5,277,515 62,511 5,334,684
Prepayments 59,741 5,098,292 22,598 1,928,513
Others 4,135 352,894 5,475 467,242
125,717 10,728,701 90,584 7,730,438
All cash and cash equivalents are available on demand.
5.7 Shareholders equity
Issued
share
capital
Retained
earnings
(accumulated
decit)
Result for
the year Total

At 1 January
2012 700,000 (4,170,237) 245,115 (3,225,122)
Changes
Prot/(loss)
appropriation 0 245,115 (245,115) 0
Prot/(loss)
for the year 0 0 85,090 85,090
At 31 December
2012 700,000 (3,925,122) 85,090 (3,140,032)
Changes
Prot/(loss)
appropriation 0 85,090 (85,090) 0
Prot/(loss)
for the year 0 0 86,095 86,095
At 31 December
2013 700,000 (3,840,032) 86,095 (3,053,937)
198
Issued
share
capital
Retained
earnings
(accumulated
decit)
Result for
the year Total
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Proforma
Indian
Rupees
At 1 January
2012 59,738,000 (355,888,023) 20,918,109 (275,231,914)
Changes
Prot/(loss)
appropriation 0 20,918,109 (20,918,109) 0
Prot/(loss)
for the year 0 0 7,261,582 7,261,582
At 31 December
2012 59,738,000 (334,969,914) 7,261,582 (267,970,332)
Changes
Prot/(loss)
appropriation 0 7,261,582 (7,261,582) 0
Prot/(loss)
for the year 0 0 7,347,389 7,347,389
At 31 December
2013 59,738,000 (327,708,332) 7,347,389 (260,622,943)
The authorised share capital of Ssangyong European Parts Center
B.V. amounts to 3,500 thousand (Proforma Indian Rupees 298,690
thousand), divided by 35 thousand ordinary shares of 100 (Proforma
Indian Rupees 8,534) each. Out of the authorised shares, 7 thousand
ordinary shares, equivalent of 700 thousand (Proforma Indian Rupees
59,738 thousand), have been issued and paid-in.
5.8 Current liabilities
31-12-2013 31-12-2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Payable to SYMC,
the parent company 8,268,280 705,615,013 9,348,931 797,837,769
Accounts payable 178,341 15,219,632 184,923 15,781,343
Other debts,
accruals and
deferred income 60,192 5,136,785 51,369 4,383,749
8,506,813 725,971,430 9,585,223 818,002,861
Payable to the parent company consists of trade payable for goods
purchased and no interest is charged.
5.9 Remuneration of directors
In 2013 an amount of approximately EUR 240 thousand (Proforma Indian
Rupees 20,482 thousand) and for 2012: EUR 240 thousand (Proforma
Indian Rupees 20,482 thousand) for the remuneration of directors of the
legal entity was charged to the company.
5.10 Commitments
On November 11, 2011, the Company settled with Pantos Logistics
Benelux B.V. into a 5 year service agreement including the work-scope of
warehousing and warehousing management system only.
In accordance with the service agreement, the total fee committed by
the Company amounts to EUR 3,525 thousand (Proforma Indian Rupees
300,824 thousand) as of December 31, 2013 of which EUR 1,167 thousand
(Proforma Indian Rupees 99,592 thousand) relates to 2014.
With respect to the outsourcing fee, the fees are recognized on an accrual
basis as general and administrative expenses in the income statement.
The fees for 2013 and 2012 amounted to EUR 1,235 thousand (Proforma
Indian Rupees 105,395 thousand) and EUR 1,237 thousand (Proforma
Indian Rupees 105,566 thousand) respectively.
Total commitments in connection with operational lease agreements amounts to
approximately EUR 177 thousand (Proforma Indian Rupees 15,105 thousand) of
which EUR 55 thousand (Proforma Indian Rupees 4,694 thousand) relates to 2014
6 Notes to the Income statement
6.1 Revenue
2013 2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
The Netherlands 209,267 17,858,810 190,266 16,237,280
Other EU countries 7,742,850 660,774,843 7,703,882 657,449,257
Other European
countries 1,577,571 134,629,879 1,553,879 132,608,095
Total Parts sales 9,529,688 813,263,532 9,448,027 806,294,633
Outbound delivery 594 50,736 13,475 1,149,965
9,530,282 813,314,268 9,461,502 807,444,598
6.2 Employee benets
2013 2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Salaries and wages 543,879 46,414,648 442,835 37,791,540
Social security
contributions 64,590 5,512,130 60,769 5,186,024
Other personnel
expenses 179,590 15,326,223 148,210 12,648,239
788,059 67,253,001 651,814 55,625,803
The above employee benets expense is included in general and
administrative expenses.
Included in the social security charges for 2013 is an amount of
EUR 17,898 (Proforma Indian Rupees 1,527 thousand) and for 2012:
EUR 9,556 (Proforma Indian Rupees 0,816 thousand) with respect to
pension costs.
6.3 Financial income and expenses
2013 2012
Proforma
Indian
Rupees
Proforma
Indian
Rupees
Interest and similar
income 1,099 93,736 1,094 93,368
Bank cost and
similar expense
(incl. bank charges) (9,249) (789,259) (8,103) (691,531)
(8,150) (695,523) (7,009) (598,163)
6.4 Income taxes
The effective tax rate of 20% does not signicantly differ from the nominal
tax rate in The Netherlands.
6.5 Average number of employees
During the year 2013, the average number of employees, based on full
time equivalents, was around 8 (2012: 7) all employed in the logistic
services. There was no employee outside The Netherlands in 2013 and
2012, respectively.
Signing of the nancial statements
Breda, 31 January 2014
Board of Directors,
K. T. Yoon J. D. Lee
Ssangyong European Parts Center B.V.
IABC 5253
4814RD, Breda
The Netherlands
199
OTHER INFORMATION
Independent auditors report
Reference is made to the auditors report as included hereinafter.
Statutory rules concerning appropriation of result
According to Article 15, paragraph 2 of the Companys Articles of Association
the prots, if any, are at the disposal of the General Meeting. The Company
may distribute prots only if and to the extent that its shareholders equity is
greater than the sum of the paid and called up part of the issued capital and the
reserves which must be maintained by virtue of the law.
Appropriation of result for the nancial year 2012
The annual report 2012 is determined in the General Meeting. The General
Meeting has determined the appropriation of result in accordance with the
proposal being made to that end.
Proposed appropriation of result for the nancial year 2013
The board of directors proposes, with the approval of the supervisory board, that
the result for the nancial year 2013 amounting to EUR 86,095 (Proforma Indian
Rupees 7,347 thousand) should be transferred to reserves without payment of
dividend.
The nancial statements do not yet reect this proposal.
Events after the balance sheet date
There are no subsequent events after balance sheet date affecting these
nancial statements.
SSANGYONG MOTOR (SHANGHAI) CO., LTD
200
DIRECTORS REPORT
The Company
The Company was incorporated in Shanghai, China on 2
nd
December 2003 under the business license 310115400138400
(Pudong) and was a wholly owned subsidiary of Ssangyong
Motor Company Limited (SYMC).
The Company has a registered capital of RMB 30.0 million
(INR 290.1 million), RMB 30.0 million (INR 290.1 million) was
paid up to now.
Since August 2011, the Company has started its business
operations as a national car sales distributor in China for
SYMC.
The corporate representative is CHOI JOHNG SIK.
Highlights of Financial year 2013:
Revenue Growth
Revenue of the Company in 2013 stood at RMB 21.4 million
(INR 218.9 million), which is a 55% increased over that of the
previous year resulting from increased of CBU order volume
in 2013.
Dividend payments
Payments of dividend to SYMC amount to RMB 4.0 million
(INR 40.8 million).
SSANGYONG MOTOR (SHANGHAI) COMPANY LIMITED
Corporate representative:
Chol, Johng Sik
President
Place : Shanghai, China
Date : 29
th
March 2014
201
Ssangyong Motor (Shanghai) Co., Ltd:
Ssangyong Motor (Shanghai) Co., Ltd (the Company), which
comprise the balance sheet as at 31 December 2013, and the
income statement, the cash ow statement, the statement of
changes in equity for the year then ended, and notes to the
nancial statements.
I. Managements responsibility for the nancial statements
Management of the Company is responsible for the
preparation and fair presentation of these nancial
statements. This responsibility includes: (1) preparing the
nancial statements according to Chinese Accounting
Standards for Business Enterprises, so as to present fairly
the nancial position, operating results and cash ows
of the Company; and (2) designing, implementing and
maintaining internal control relevant to the preparation
and fair presentation of nancial statements that are free
II. Auditors responsibility
Our responsibility is to express an opinion on these
our audit in accordance with PRC Auditing Standards.
Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain
reasonable assurance whether the nancial statements
are free from material misstatement.
nancial statements. The procedures selected depend
on the auditors judgment, including the assessment
AUDITORS REPORT
of the risks of material misstatement of the nancial
statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation
of the nancial statements in order to design audit
procedures that are appropriate in the circumstances,
policies used and the reasonableness of accounting
opinion.
III. Opinion
In our opinion, the nancial statements give a true and
fair view, in all material aspects, of the nancial position of
Ssangyong Motor (Shanghai) Co., Ltd as of 31 December
2013, and of its nancial performance and its cash ows
for the year then ended in accordance with Chinese
Accounting Standards for Business Enterprises.
Shanghai Changhao CICPA:
Certied Public Accountants
Shanghai China CICPA:
January 10, 2014
202
BALANCE SHEET DECEMBER 31, 2013
Item 31 December 2013 31 December 2012
RMB INR RMB INR
Current assets:
Monetary funds ...................................................... 33,026,887.87 337,534,794.03 16,264,530.78 166,223,504.57
Settlement reserve .............................................
Lend-out fund .....................................................
Financial assets held for trading ..........................
Notes receivable ....................................................
Accounts receivable .............................................. 4,243,074.27 43,364,219.04 - -
Prepayments ..........................................................
Insurance premium receivable ..........................
Reinsurance receivable ......................................
Reinsurance contract reserves receivable ........
Interest receivable .................................................
Dividends receivable .............................................
Other receivables .................................................. 45,475.00 464,754.50 171,359.00 1,751,288.98
Reverse buyback nancial assets .....................
Inventories .............................................................
Including: raw materials ........................................
Commodities in stock (nished goods) ........
Non-current assets due within one year .............
Other current assets ..............................................
Total current assets.................................................. 37,315,437.14 381,363,767.57 16,435,889.78 167,974,793.55
Non-current assets:
Loans issued and money advanced .................
Financial assets available for sale ........................
Investment held to maturity ..................................
Long-term accounts receivable ............................
Long-term equity investments ..............................
Investment property ..............................................
Original costs of xed assets ................................ 755,298.49 7,719,150.57 631,824.32 6,457,244.55
Less: accumulated depreciation ........................... 105,243.77 1,075,591.33 380,083.33 3,884,451.63
Net values of xed assets ..................................... 650,054.72 6,643,559.24 251,740.99 2,572,792.92
Less: impairment provision of xed assets ..........
Net Amounts of xed assets ................................. 650,054.72 6,643,559.24 251,740.99 2,572,792.92
Construction in progress ......................................
Materials held for construction .............................
Fixed assets to be disposed of ............................
Bearer biological assets ........................................
Oil and gas assets ................................................
Intangible assets ...................................................
R&D expenditures .................................................
Goodwill .................................................................
Long-term deferred expenses ...............................
Deferred tax assets ...............................................
Other non-current assets ......................................
Including: authorized reserve supplies ................
Total non-current assets .......................................... 650,054.72 6,643,559.24 251,740.99 2,572,792.92
Total Assets ...................................................................... 37,965,491.86 388,007,326.81 16,687,630.77 170,547,586.47
Note: accounts with * are used for the consolidated nancial statements only; accounts with are used for nancial institutions
only; accounts with # are used for foreign-invested enterprises only.
203
RMB INR RMB INR
Current Liabilities:
Short-term borrowings ......................................................
Loans from the central bank .........................................
Customer deposits and deposits from banks and
other nancial institutions .................................................
Placements from banks and other nancial institutions
Held-for-trading nancial liabilities ....................................
Notes payable ...................................................................
Accounts payable .............................................................. 92,636.23 946,742.27 92,636.23 946,742.27
Advances from customers ................................................
Financial assets sold under agreements to repurchase
Fees and commissions payable....................................
Employee benets payable...............................................
Including: salaries payable ...............................................
benet costs payable .................................................
# including: employee incentive and benet fund...
Taxes and fees payable .................................................... 910,763.02 9,307,998.06 162,192.17 1,657,603.98
Including: taxes payable ................................................... 894,357.76 9,140,336.31 152,187.15 1,555,352.67
Interest payable .................................................................
Dividends payable ............................................................. 2,182,739.86 22,307,601.37
Other payables .................................................................. 461,757.57 4,719,162.37 1,032,621.37 10,553,390.40
Amounts payable under reinsurance contracts ............
Insurance contract reserve ............................................
Amounts received on trust for securities trading ........
Amounts payable to clients under securities
underwriting arrangements ..............................................
Non-current liabilities due within one year .......................
Other current liabilities ......................................................
Total current liabilities ..................................................... 1,465,156.82 14,973,902.70 3,470,189.63 35,465,338.02
Non-current Liabilities:
Long-term borrowings .......................................................
Bonds payable ..................................................................
Long-term payables ..........................................................
Special payables ...............................................................
Provisions ..........................................................................
Deferred tax liabilities ........................................................
Other non-current liabilities ...............................................
Including: authorized reserve funds .................................
Total non-current liabilities .....................................
Total Liabilities ................................................................. 1,465,156.82 14,973,902.70 3,470,189.63 35,465,338.02
204
RMB INR RMB INR
OWNERS EQUITY/SHAREHOLDERS EQUITY
Paid-in capital/Share capital ............................................. 30,000,000.00 306,600,000.00 7,447,192.66 76,110,308.99
State capital ................................................................
Including: state-owned corporate capital ..................
Collective corporate capital .......................................
Corporate capital ........................................................
Including: personal capital ........................................
Foreign capital ............................................................ 30,000,000.00 306,600,000.00 7,447,192.66 76,110,308.99
#Less: refund of capital ............................................
Net paid-in capital/share capital ................................ 30,000,000.00 306,600,000.00 7,447,192.66 76,110,308.99
Capital reserve ........................................................... 184,216.66 1,882,694.27
Less: Treasury shares ................................................
Special reserve ..................................................................
Surplus reserve ................................................................. 1,749,043.58 17,875,225.38 1,558,581.32 15,928,701.08
Including: statutory surplus reserve .......................... 1,559,788.66 15,941,040.11 1,369,326.40 13,994,515.81
Discretionary surplus reserve .................................... 189,254.92 1,934,185.27 189,254.92 1,934,185.27
#Reserve fund ...........................................................
#Venture expansion fund ..........................................
# Refund of investment paid by prot ......................
General reserve ..............................................................
Unappropriated prot ........................................................ 4,567,074.80 46,675,504.46 4,211,667.16 43,043,238.38
Translation differences arising on translation of
nancial statements in foreign currencies ........................
Total equity attributable to equity holders of the parent 36,500,335.04 373,033,424.11 13,217,441.14 135,082,248.45
* Minority interest ..............................................................
Total Owners Equity ............................................................... 36,500,335.04 373,033,424.11 13,217,441.14 135,082,248.45
Total Liabilities and Owners Equity ..................................... 37,965,491.86 388,007,326.81 16,687,630.77 170,547,586.47
Note: accounts with * are used for the consolidated nancial statements only; accounts with are used for nancial institutions
only; accounts with # are used for foreign-invested enterprises only.
205
INCOME STATEMENT
RMB INR RMB INR
I. Total operating income ..................................... 21,416,798.80 218,879,683.74 13,853,291.90 141,580,643.22
Including: Operating income .............................. 21,416,798.80 218,879,683.74 13,853,291.90 141,580,643.22
Including: income from major operations .......... 21,362,275.38 218,322,454.38 13,577,635.86 138,763,438.49
Income from other operations ..................... 54,523.42 557,229.36 275,656.04 2,817,204.73
Interest income ................................................
Insurance premiums earned............................
Fee and commission income ..........................
II. Total operating costs ......................................... 16,655,106.86 170,215,192.11 16,494,767.85 168,576,527.43
Including: Operating costs ..................................
Including: major operating costs ........................
Other operating costs ........................
Interest expenses .............................................
Fee and commission expenses.......................
Surrenders of insurance policies.....................
Insurance claims and benets (net of
amounts recoverable from reinsurers) ...............
Changes in insurance reserve (net of
reinsurers share) .................................................
Insurance policyholder dividends ...................
Expenses for inward reinsurance ....................
Business taxes and levies ................................... 47,384.97 484,274.39 174,919.35 1,787,675.76
Costs of sales ...................................................... 16,308,082.27 166,668,600.80 16,365,046.17 167,250,771.86
Administration expenses .....................................
Including: research and development cost........
Finance costs ...................................................... 299,639.62 3,062,316.92 -45,197.67 -461,920.19
Including: interest expenses ........................
Interest income ........................... 97,472.11 996,164.96 58,937.56 602,341.86
Net losses from foreign exchange (gains
indicated by ) .......................................... 391,733.76 4,003,519.03 7,457.98 76,220.56
Impairment losses on assets ..............................
Others
Add: Gains from changes in fair values
(Losses are indicated by ) .............................
Investment income (Loss is indicated by ) ...
Including: Income from investments in
associates and joint ventures .............................
Foreign exchange gains (Losses are
indicated by ) ..................................................
Note: accounts with * are used for the consolidated nancial statements only; accounts with are used for nancial
institutions only.
206
RMB INR RMB INR
III. Operating prot (Loss is indicated by ) .... 4,761,691.94 48,664,491.63 -2,641,475.95 -26,995,884.21
Add: Non-operating income ............................... 421,714.75 4,309,924.75 1,875.47 19,167.30
Including: gains from disposal of non-current
assets ................................................................... 175,313.94 1,791,708.47
Gains from exchange of non-monetary
assets............................................................
Government grants ...................................... 243,928.83 2,492,952.64 719.84 7,356.76
Gains from debt restructuring .....................
Less: Non-operating expenses ........................... 4,309.42 44,042.27
Including: Losses from disposal of non-
current assets ............................................... 3,545.27 36,232.66
Losses from exchange of non-monetary assets
Losses from debt restructuring ...........................
IV. Total Prot (Total Loss is indicated by ) ... 5,179,097.27 52,930,374.10 -2,639,600.48 -26,976,716.91
Less: Income tax expenses ................................ 634,874.20 6,488,414.32
V. Net prot (Net loss is indicated by ) ......... 4,544,223.07 46,441,959.78 -2,639,600.48 -26,976,716.91
Net prot attributable to owners of the parent ... 4,544,223.07 46,441,959.78 -2,639,600.48 -26,976,716.91
*Prot or loss attributable to minority interests
VI. Earnings per share: ...........................................
Basic earnings per share ....................................
Diluted earnings per share .................................
VII. Other comprehensive income ..........................
VIII. Total comprehensive income attributable to: 4,544,223.07 46,441,959.78 -2,639,600.48 -26,976,716.91
Owners of the parent ..........................................
*Minority interests ...............................................
Note: accounts with * are used for the consolidated nancial statements only; accounts with are used for nancial
institutions only.
INCOME STATEMENT
207
CASH FLOW STATEMENT
RMB INR RMB INR
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the
rendering of services .................................................... 18,458,187.83 188,642,679.62 15,551,561.41 158,936,957.61
Cash receipts from the sale of goods and the
rendering of services ....................................................
Net increase in loans from the central bank ...........
Net increase in placements from banks and other
nancial institutions ......................................................
Cash receipts from premiums under direct
insurance contracts ......................................................
Net cash receipts from reinsurance business .........
Net increase in policyholders deposits and
investment contract liabilities .......................................
Net cash receipts from trading activities involving
nancial assets held for trading ...................................
Cash receipts from interest, fees and commissions
Net increase in placements received .......................
Net increase in funds raised under securities
repurchase arrangements ............................................
Receipts of tax refunds ................................................ 75,801.63 774,692.66
Other cash receipts relating to operating activities .... 243,928.83 2,492,952.64 2,545.00 26,009.90
Sub-total of cash inows.......................................... 18,702,116.66 191,135,632.26 15,629,908.04 159,737,660.17
Cash payments for goods purchased and services
received ........................................................................ 171,303.73 1,750,724.12
Net increase in loans and advances to customers
Net increase in deposits with the central bank and
deposits with banks and other nancial institutions ...
Cash payments for claims and benets under
direct insurance contracts ............................................
Cash payments for interest, fees and commissions
Cash payments for insurance policyholder
dividends ......................................................................
Cash payments to and on behalf of employees ........ 2,717,684.77 27,774,738.35 2,244,544.22 22,939,241.93
Payments of all types of taxes ..................................... 652,761.38 6,671,221.30 2,234,437.27 22,835,948.90
Other cash payments relating to operating activities 15,237,478.47 155,727,029.96 14,009,313.85 143,175,187.55
Sub-total of cash outows ....................................... 18,607,924.62 190,172,989.61 18,659,599.07 190,701,102.50
Net Cash Flow from Operating Activities ............... 94,192.04 962,642.65 -3,029,691.03 -30,963,442.33
Note: accounts with are used for nancial institutions only.
208
RMB INR RMB INR
II. Cash Flows from Investing Activities:
Cash receipts from disposals of investments .............
Cash receipts from returns on investments ................
Net cash receipts from disposal of xed assets,
intangible assets and other long-term assets ............. 300,000.00 3,066,000.00
Net cash receipts from disposals of subsidiaries and
other business units .....................................................
Other cash receipts relating to investing activities .....
Sub-total of cash inows ...........................................
300,000.00 3,066,000.00
Cash payments to acquire or construct xed assets,
intangible assets and other long-term assets ............. 579,499.68 5,922,486.73 56,888.89 581,404.46
Cash payments to acquire investments ......................
Net increase in pledged loan ...................................
Net cash payments for acquisitions of subsidiaries
and other business units .............................................
Other cash payments relating to investing activities ..
Sub-total of cash outows ........................................ 579,499.68 5,922,486.73 56,888.89 581,404.46
Net Cash Flow from Investing Activities ................. -279,499.68 -2,856,486.73 -56,888.89 -581,404.46
III. Cash Flows from Financing Activities:
Cash receipts from investors making investment in
the enterprise ................................................................ 22,737,024.00 232,372,385.28
Including: cash receipts from minorities making
investment in subsidiaries ............................................
Cash receipts from borrowings ...................................
Cash receipts from issue of bonds ..........................
Other cash receipts relating to nancing activities .....
Sub-total of cash inows ........................................... 22,737,024.00 232,372,385.28
Cash repayments of amounts borrowed .....................
Cash payments for distribution of dividends or prot
or interest expenses ..................................................... 6,181,093.03 63,170,770.77
Including: payments for distribution of dividends or
prot to minorities of subsidiaries ...............................
Other cash payments relating to nancing activities ..
Sub-total of cash outows ........................................
6,181,093.03 63,170,770.77
Net Cash Flow from Financing Activities ................ 16,555,930.97 169,201,614.51

IV. Effect of Foreign Exchange Rate Changes on
Cash and Cash Equivalents ......................................
391,733.76 4,003,519.03
V. Net Increase in Cash and Cash Equivalents .......... 16,762,357.09 171,311,289.46 -3,086,579.92 -31,544,846.79
Add: Opening balance of Cash and Cash
Equivalents ................................................................... 16,264,530.78 166,223,504.57 19,351,110.70 197,768,351.36
VI. Closing Balance of Cash and Cash Equivalents ... 33,026,887.87 337,534,794.03 16,264,530.78 166,223,504.57
CASH FLOW STATEMENT
209
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211
I. Company Prole
Ssangyong Motor (Shanghai) Co., Ltd (Company) was funded and
incorporated by Ssangyong Motor Company on December 2, 2003.
The Company has obtained business license with registered number
310115400138400 from Shanghai Administration for Industry and
Commerce. With domicile in Shanghai, the Company has a registered
capital of RMB 30,000,000.00 and a paid-in capital of RMB 30,000,000.00,
and its legal representative is CHOI JOHNG SIK.
Operation scope of the Company: import and exclusive distribution
(excluding retail) of SSANG YONG automobiles with authorization of
Ssangyong Motor Company; wholesale, commission agent (excluding
auction), import/export of auto parts, chemicals (excluding dangerous
goods, specialty chemicals, and precursor chemicals), and metallic
tools, for autos, textiles, and lubricants used for autos, as well as related
marketing, technical support, training services, and supporting services;
enterprise management consulting, economic information consulting, and
investment consulting; international trade within the Free Trade Zone, re-
export trade, agent for trade between enterprises within the Free Trade
Zone as well as trade within the Free Trade Zone, merchandized simple
processing within the Free Trade Zone; and being agent for trade with
non-Free-Trade-Zone-enterprises via domestic enterprises with import/
export qualications (not involving state-trading-goods; if involving any
goods which require quota or license, application should be submitted as
specied by competent regulations.) (If involving any goods which require
administrative license, operate with relevant licenses).
II. Basis of preparation
The nancial statements were prepared on a going concern basis in
accordance with Chinese Accounting Standards for Business Enterprises
and the Implementation Guide as well as Chinese Accounting Standards
for Small Enterprises, subject to the following signicant accounting
policies and accounting estimates.
III. Statement of compliance
The nancial statements have been prepared in accordance with Chinese
Accounting Standards for Business Enterprises and Chinese Accounting
Standards for Small Enterprises. The nancial statements give a true and
complete view of the nancial position of the Company as of 31 December
2013, and of its nancial performance and its cash ows for the year then
ended.
IV. Signicant accounting policies and accounting estimates
1. Accounting year
The Companys accounting year is the period starting from January 1 to
December 31 of a calendar year.
2. Functional currency
The Companys functional currency is Renminbi (RMB). All amounts
disclosed in Proforma Indian Rupees are Renminbi converted against a
currency rate of Rupees (INR) 10.22=RMB 1.00.
3. Accounting basis and measurement basis
The Company adopts the accrual basis of accounting. Generally, the
Company measures the accounting elements on the historical cost basis.
In case the amount of any accounting elements can be reliably measured
as required by Chinese Accounting Standards for Business Enterprises,
such accounting elements are measured at replacement cost, net
realizable value, present value, or fair value.
4. Accounting and translation of foreign currency transactions
(1) Translation of foreign currency transactions
Foreign currency transactions are initially recognized by applying
the spot exchange rate at the date of the transaction, but foreign
currency translations or transactions involving foreign currency
translation are initially recognized by applying the exchange rate
actually used.
(2) Accounting of monetary items and non-monetary items
denominated in foreign currencies at the balance sheet date
Foreign currency monetary items are translated using the spot
exchange rate at the balance sheet date. Exchange differences arising
from the differences between the spot exchange rate prevailing at the
balance sheet date and those spot rates used on initial recognition
or at the previous balance sheet date are recognized in prot or
loss, except that translation differences previous balance sheet date
are recognized in prot or loss, except that translation differences
arising from borrowings relating to the acquisition, construction or
production of a qualifying asset as specied by Chinese Accounting
Standards for Business Enterprises No. 17 Borrowing Costs are
capitalized.
Foreign currency non-monetary items measured at historical cost
continue to be translated at the spot exchange rates at the dates of
the transactions, i.e. the amounts in functional currency shall remain
unchanged.
Foreign currency non-monetary items measured at fair value are
translated at the spot exchange rate on the date the fair value is
determined. Difference between the adjusted functional currency
amount and the original functional currency amount is treated as
changes of fair value (including changes of exchange rate) and is
recognized in prot and loss for the current period.
(3) Translation of nancial statements denominated in foreign currency
Financial statements denominated in foreign currency are translated
into Renminbi in accordance with the following requirements:
Assets and liabilities on the balance sheet are translated at the
spot exchange rate prevailing at the balance sheet date. All equity
items except for unappropriated prots are translated at the spot
exchange rates at the dates on which such items arose.
Income and expenses in the income statement are translated at the
spot exchange rates at the dates of the transactions/an exchange
rate that approximates the actual spot exchange rates at the dates
of the transactions.
Translation differences arising from the foregoing nancial statements
translation are presented as a separate component of equity in the
balance sheet.
Cash ow statement denominated in foreign currency is translated at
the spot exchange rate at the date of the cash ow/an exchange rate
that approximates the actual spot exchange rates at the date of the
cash ow.
5. Recognition criteria of Cash and cash equivalents
(1) Cash comprises cash on hand and deposits that can be readily
withdrawn on demand;
(2) Cash equivalents are short-term (Short-term usually refers to three
months or less from the date of acquisition), highly liquid investments
that are readily convertible to known amounts of cash and which are
subject to an insignicant risk of changes in value.
6. Receivables
The individually signicant receivables are tested separately for impairment.
Where there is objective evidence that the receivables are impaired, the
excess of the carrying amount over its present value of the future cash
ows is recognized as the impairment losses, with provision made for
bad debts. Receivables that are not impaired after separate testing are
classied into several portfolios by credit risk characteristics, and the
impairment losses are calculated at a certain proportion of balance of the
receivables portfolios on balance sheet date, with provision made for bad
debts.
Identication criteria of doubtful debts:
(1) Revoke or bankruptcy of debtor; debts cannot be settled through
judicial process; debt clean-up costs exceed the amount of the debt;
(2) The debtor is faced with insolvency and closure caused by serious
natural disaster and is unable to settle the debts in a short time;
(3) Ageing of the debts exceeds 3 years and there is conclusive
evidence indicating the debts are not recovered.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013
212
7. Inventories
Inventories include raw material, material in transit, commodities in stock,
and low-cost items.
Inventories are initially measured at cost. Cost of inventories comprises all
costs of purchase, costs of conversion and other costs.
The Company adopts the weighted average cost formula to assign the
actual costs of inventories and amortizes low-cost items and packaging
materials by using immediate write-off method.
The Company adopts the perpetual inventory system.
At the balance sheet date, inventories are measured at the lower of cost
and net realizable value. When the circumstances that previously caused
inventories to be written down below cost no longer exist, the amount of
the write-down is reversed. The reversal is limited to the amount originally
provided for the decline in value of inventories. The amount of the reversal
is included in prot or loss for the current period.
If the cost of inventories is higher than the net realizable value, a provision
for decline in value of inventories shall be recognized in prot or loss for
the current period.
8. Fixed assets
Fixed assets are tangible assets that are held for use in the production
or supply of goods or services, for rental to others, or for administrative
purposes and that have useful lives more than one accounting year.
Fixed assets are recognized only when it is probable that economic
benets associated with the assets will ow to the Company and the cost
of the assets can be measured reliably. Subsequent expenditures incurred
for xed assets that meet the recognition criteria are included in the cost
of the xed assets; meanwhile the carrying value of the replaced part are
derecognized. Subsequent expenditures that fail to meet the recognition
criteria are recognized in prot or loss in the period in which they are
incurred.
Fixed assets are initially measured at cost while effect of any expected
abandoning costs are considered. Generally, costs of xed assets comprise
the purchase price, related taxes, and any directly attributable expenditure
for bringing the asset to working condition for its intended use, such as
delivery costs and installation costs. However, where payment for the
purchase price of xed assets are deferred beyond normal credit terms,
cost of the xed assets are determined based on the present value of the
purchase price.
Straight-line method is applied for depreciation of xed assets. Useful lives,
estimated net residual value, and the depreciation rates of each type of
xed assets are as follows:
Type of xed asset Estimated
net residual
value (%)
Estimated
useful life
(year)
Annual
depreciation
rate
Ofce equipment 10 5 18%
Transport equipment 10 5 18%
Depreciation of xed assets is provided monthly. Depreciation of a new
xed asset is not provided in the same month when it is added, but since
the following month; depreciation of a xed asset is still provided in the
same month when it is abandoned, and the provision stops since the
following month.
Where each part of a xed asset has different useful lives or brings economic
benets to the Company in different patterns, different depreciation rates
apply.
Depreciation policy for assets leased through nance lease is consistent
with that for the Companys owned xed assets. If there is reasonable
certainty that the Company will obtain ownership of the leased asset by the
end of the lease term, the leased asset is depreciated over its useful life.
If there is no reasonable certainty that the Company will obtain ownership
of the leased asset by the end of the lease term, the leased asset is
depreciated over the shorter of the lease term and its useful life.
Useful lives, estimated net residual values, and depreciation methods
of xed assets are assessed at least at each nancial year-end and
adjustments are made when necessary.
9. Construction in progress
Costs of construction in progress are determined on the basis of actual
expenditure of the construction, including any construction expenditures,
capitalized borrowing costs before the construction has achieved the
working condition for its intended use, and other related expenses.
Construction in progress is recognized as a xed asset once it has
achieved the working condition for its intended use.
10. Intangible assets
Intangible assets are identiable non-monetary assets without physical
substance owned or controlled by the Company, including land use right
and software.
Intangible assets are measured initially at cost. When it is probable
that economic benets associated with the intangible assets will ow
to the Company and the cost of the assets can be measured reliably,
expenditures incurred for intangible assets are included in the cost of the
intangible assets; any other related expenditure is recognized in prot or
loss in the period in which they are incurred.
Intangible assets with nite useful lives are amortized within their estimated
useful lives by applying the straight-line method since the assets are
available for use.
Useful lives and amortization methods of intangible assets are assessed at
the end of the period and any changes are accounted for as changes of
accounting estimates.
11. Long-term deferred expenses
Long-term deferred expense refers to expense that has occurred and
that shall be borne by the current period and subsequent period and
amortized during over-one-year period. Cost incurred for improvement of
a xed asset leased to the Company under operating lease is recognized
as long-term deferred expenses and averagely amortized over the periods
beneted from such costs. Start-up costs are recognized in prot or loss
when they occur.
12. Impairment of assets
The Company adopts the following impairment policies, except for
inventories, construction contracts, deferred tax, nancial assets, and long-
term equity investments which have no quoted price from an active market
and whose fair value cannot be reliably measured:
The Company assesses at the balance sheet date whether there is any
indication that an asset may be impaired. If any indication exists that an
asset may be impaired, the Company estimates the recoverable amount
of the asset. Goodwill arising in a business combination and an intangible
asset with an indenite useful life is tested for impairment annually,
irrespective of whether there is any indication that the asset may be
impaired.
The recoverable amount of an asset is the higher of its fair value less
costs to sell and the present value of the future cash ows expected to
be derived from the asset. If there is any indication that an asset may be
impaired, recoverable amount is estimated for the individual asset. If it is
not possible to estimate the recoverable amount of the individual asset, the
Company determines the recoverable amount of the asset group to which
the asset belongs. Identication of an asset group is based on whether
major cash inows generated by the asset group are largely independent
of the cash inows from other assets or asset groups.
If the recoverable amount of an asset or asset group is less than its
carrying amount, the Company reduces the carrying amount to its
recoverable amount. That reduction is recognized in prot or loss for the
current period and a provision for impairment loss of the asset or asset
group is recognized accordingly.
For the purpose of impairment testing, the Company allocates the carrying
amount of goodwill on a reasonable basis to each of the related asset
groups from the acquisition date. If it is not possible to allocate to the
related asset groups, the Company allocates to each of the related sets of
asset groups. Each of related asset groups or sets of asset groups is an
asset group or set of asset group that is able to benet from the synergies
of the business combination and is not be larger than a reportable segment
dened by the Company.
In testing asset groups or sets of asset groups with goodwill for impairment,
if there is any indication that the related asset groups or sets of asset
groups may be impaired, the Company rst tests those asset groups
or sets of asset groups to which goodwill has not been allocated. Then
the Company recognizes any impairment losses after determining the
213
recoverable amount and comparing it with the relevant carrying amount.
After that, the Company tests those asset groups or sets of asset groups
to which goodwill has been allocated, by comparing the carrying amount
of such related asset groups or sets of asset groups with their recoverable
amount. If the recoverable amount is less than the carrying amount, the
Company rst reduces the amount of impairment loss from the carrying
amount of any goodwill allocated to the asset group or set of asset groups,
and then reduce from the carrying amount of other assets (other than
goodwill) within the asset group or set of asset groups, pro rata on the
basis of the carrying amount of each asset.
Once the foregoing asset impairment loss is recognized, it will not be
reversed in a subsequent period.
13. Employee benets
In the accounting period in which employees render services to the
Company, the Company recognizes the employee benets payable for the
services as a liability.
The Company has attended the employee social insurance system,
including basic pensions, medical insurance, housing fund, and etc.,
expenditures incurred are included in the cost of relevant assets or are
recognized in prot or loss in the period in which they are incurred.
When the Company terminates the employment relationship with
employees before the end of the employment contracts or provides
compensation as an offer to encourage employees to accept voluntary
redundancy, a provision is recognized for the compensation arising from
termination of employment relationship with employees, provided that the
Company has a formal plan for termination of employment relationship or
has made an offer for voluntary redundancy, which will be implemented
immediately, and that the Company cannot unilaterally withdraw from the
termination plan or the redundancy offer.
Early retirement plan is also accounted for by using the same termination
benet principle. As for salaries and social insurances to be paid /
contributed during the period starting from the day of terminating rendering
services to the day of normal retirement for early-retired employees, the
Company recognizes them in prot or loss for the current period (i.e.
termination benets) when they meet the reorganization conditions of
provisions.
14. Provisions
An obligation related to a contingency is recognized as a provision when
all of the following conditions are satised: the obligation is a present
obligation of the Company; it is probable that an outow of economic
benets will be required to settle the obligation; and the amount of the
obligation can be measured reliably.
At the balance sheet date, the Company takes into consideration factors
pertaining to a contingency such as the risks, uncertainties and time
value of money and measures the provision at the best estimate of the
expenditure required to settle the related present obligation.
Where all or part of the expenditure required for provision settlement is
expected to be reimbursed by a third party, the reimbursement is recognized
as a separate asset only when it is virtually certain that reimbursement will
be received. The amount recognized for the reimbursement will not exceed
the carrying amount of the provision.
15. Revenue
(1) Revenue from sale of goods
Only when the Company has transferred to the buyer the signicant
risks and rewards of ownership of the goods, the Company retains
neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold,
the amount of revenue can be measured reliably, it is probable that
the associated economic benets will ow to the Company, and
the associated costs incurred or to be incurred can be measured
reliably, the Company recognizes revenue from sale of goods.
(2) Revenue from rendering of services
When the outcome of a transaction involving the rendering of
services can be estimated reliably at the balance sheet date, revenue
associated with the transaction is recognized using the percentage
of completion method. Stage of completion of such transactions is
determined on the basis of surveys of work performed.
The outcome of a transaction involving the rendering of services can
be estimated reliably when all of the following conditions are satised:
the amount of revenue can be measured reliably; it is probable that
the associated economic benets will ow to the Company; the
stage of completion of the transaction can be measured reliably;
and the costs incurred and to be incurred for the transaction can be
measured reliably.
When the outcome of a transaction involving the rendering of
services cannot be estimated revenue is recognized to the extent of
costs incurred that are expected to be recoverable and an equivalent
amount is charged to prot or loss as service costs. If the costs
incurred are not expected to be recoverable, the costs incurred are
recognized in prot or loss for the current period and no service
revenue is recognized.
(3) Revenue from royalties
The amount of royalties is determined on the accrual basis according
to relevant contract or agreement.
(4) Revenue from interest
The amount of interest is determined according to the length of time
for which the Companys monetary fund is used by others and the
effective interest rate.
16. Leases
A nance lease is a lease that transfers in substance all the risks and
rewards incidental to ownership of an asset. An operating lease is a lease
other than a nance lease.
1. Accounting of operating leases as a lessee
The Company recognizes the lease payments under an operating
lease on a straight-line basis over the lease term, and either includes
in the cost of another related asset or charges to prot or loss for the
current period.
2. Accounting of operating leases as a lessor
The Company recognizes the income from operating leases in prot
or loss on a straight-line basis over the lease term.
3. Accounting of nance leases as a lessee
At the commencement of the lease term, the Company records
the leased asset at an amount equal to the lower of the fair value
of the leased asset and the present value of the minimum lease
payments, each determined at the inception of the lease, and
recognize a long-term payable at an amount equal to the minimum
lease payments. The difference between the recorded amount of the
leased asset and the recorded amount of the payable is accounted
for as unrecognized nance charge. Unrecognized nance charge
is allocated to each period during the lease term. The Company
recognizes nance charge for the current period using the effective
interest method.
17. Accounting of income tax
(1) Income tax expense
Income tax expense includes current tax and deferred tax of an
enterprise.
Current/deferred tax expense or income is recognized in prot
or loss, except that current tax and deferred tax arising from
transactions or events which are directly recognized in owners
equity is recognized in owners equity and that deferred tax arising
from business combinations is adjusted to the carrying amount of
the goodwill.
(2) Current income tax
At the balance sheet date, current income tax liabilities (or assets) for
the current and prior periods are measured at the amount expected
to be paid (or recovered) according to the requirements of tax laws.
Taxable prot is calculated on the basis of pre-tax prot adjusted
according to tax laws.
214
(3) Deferred tax assets and deferred tax liabilities
As for differences between the carrying amount of certain assets
or liabilities and their tax base as well as temporary differences
between the carrying amount and tax base of those items that are
not recognized as assets or liabilities but have a tax base that can
be determined according to tax laws, the Company recognizes such
differences as deferred tax assets and deferred tax liabilities by
applying the balance-sheet-debt method.
At the balance sheet date, deferred tax assets and deferred tax
liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled,
according to the requirements of tax laws.
At the balance sheet date, the Company assesses the carrying
amount of a deferred tax asset. If it is probable that sufcient taxable
prots will not be available in future periods to allow the benet of the
deferred tax asset to be utilized, the carrying amount of the deferred
tax asset is reduced. Any such reduction in amount is reversed when
it becomes probable that sufcient taxable prots will be available.
18. Uncertainty of signicant accounting estimates
The following are other major sources of uncertainty of key assumptions
and estimates of future events at the balance sheet date, and such
uncertainty may cause signicant adjustment to the carrying amounts of
assets and liabilities in the next accounting year.
(1) Impairment provision of receivables
The Company provides for doubtful debts on the basis of recoverability
of receivables. When any indication exists that receivables are not
recoverable, provision for doubtful debts is required. Provision for
doubtful debts requires professional judgment and estimation.
Differences between the result of re-estimate and existing estimate
may inuence the carrying amount of receivables in the period the
estimates change.
(2) Useful life and residual value of xed assets
The Company estimates useful life and residual value of xed assets
on the basis of past experience with actual useful life and residual
value of similar xed assets. If the useful life of such xed assets
shortens, the Company increases their depreciation rate or disposes
of obsolete/idle xed assets.
(3) Income tax and deferred tax assets
Since certain issues relating to the enterprise income tax are not
conrmed by the tax authority when the income tax is accrued, the
Company follows existing tax laws and regulations to achieve reliable
estimate and judgment for accrued income tax. Differences between
the conclusion made by tax authority and the amount recognized by
the Company will inuence the income tax of the current period.
Deferred tax assets include asset impairment provision, deductible
losses, warranty provision, and temporary difference between the
carrying amount and tax base of expense relating to early retirement.
All tax losses that are not deducted yet are recognized as deferred
tax assets to the extent that it is probable that there is sufcient
taxable prot to deduct the losses. Realization of deferred tax assets
relies largely on the future taxable prot and the actual tax rate of
the year in which temporary differences are reversed. Therefore,
management is required to apply judgment to estimate the time and
amount of future taxable prot, and together with tax planning, to
decide the amount of deferred tax assets.
(4) Liability of early retirement benets
The Company has recognized part of early retirement benets as
a liability. The amount of such benets/liability are calculated and
paid on the basis of several assumptions, including discount rate,
benet increase rate of relevant period, and other factors. Differences
between the actual amount and the assumption are recognized as
expense for the current year. Although management believes such
assumptions are reasonable, past experience the Company relies
on and changes of assumption premise will inuence balances
of expenses and liabilities relating to the Company retirement
benets.
V. Changes in accounting policies and accounting estimates, corrections
of errors, and adjustment of other events
1. Changes in accounting policies
None
2. Changes in accounting estimates
None
3. Corrections of prior period errors and adjustment of other events
None
VI. Taxes
1. Value added tax
The Company calculates and pays value added tax on the basis of
the added value of sold goods or rendered services using the tax
rate of 6%.
2. Business tax
The Company calculates and pays business tax on the basis of the
taxable revenue using the tax rate of 5%.Started in 2012, pays value
added tax on the basis of the added value of sold goods or rendered
services using the tax rate of 6%.
3. Urban maintenance and construction tax and education surtax
The Company calculates and pays urban maintenance and
construction tax on the basis of paid turnover tax using the tax rate
of 1%.
The Company calculates and pays education surtax on the basis of
paid turnover tax using the tax rate of 3%.
The Company calculates and pays local education surtax on the
basis of paid turnover tax using the tax rate of 2%.
The Company calculates and pays river management fee on the
basis of paid turnover tax using the tax rate of 1%.
4. Enterprise income tax
The Company pays enterprise income tax on the basis of the taxable
income using the tax rate of 25%.
VII. Notes to major items of the nancial statements
Unless otherwise stated in the following notes, the currency of amounts
is Indian Rupee, period beginning refers to January 1, 2013, period end
refers to December 31, 2013, the prior period refers to year 2012, and the
current period refers to year 2013.
215
1. Monetary funds
Item
31 December 2013 31 December 2012
RMB INR RMB INR
Cash ............................................................................................ 27,837.60 284,500.27 18,005.46 184,015.80
Bank balances ............................................................................ 32,999,050.27 337,250,293.76 16,246,525.32 166,039,488.77
Total .............................................................................................. 33,026,887.87 337,534,794.03 16,264,530.78 166,223,504.57
2. Accounts receivable
Category
Book balance
Provision for
doubtful debts Book balance
Provision for
doubtful debts
RMB INR RMB RMB INR RMB
Account receivable for which doubtful debt
provision is made using individual identication
method .................................................................. 4,243,074.27 43,364,219.04
Account receivable for which doubtful debt
provision is made using collective identication
(ageing analysis) method .....................................
Total ....................................................................... 4,243,074.27 43,364,219.04
Account receivable for which doubtful debt provision is made using individual identication method:
Item
Book balance
Provision for
Provision for
doubtful debts
0-1 year ................................................................. 4,243,074.27 43,364,219.04
Total ....................................................................... 4,243,074.27 43,364,219.04
3. Other receivables
Category
Book balance
Provision for
Provision for
doubtful debts
Other receivables for which doubtful debt
provision is made using individual identication
method .................................................................. 45,475.00 464,754.50 171,359.00 1,751,288.98
Other receivables for which doubtful debt
provision is made using collective identication
(ageing analysis) method .....................................
Total ....................................................................... 45,475.00 464,754.50 171,359.00 1,751,288.98
Other receivables for which doubtful debt provision is made using individual identication method:
Item
Book balance
Provision for
Provision for
doubtful debts
0-1 year ................................................................. 45,475.00 464,754.50 4,975.00 50,844.50
1-2 year(s) ............................................................. 107,500.00 1,098,650.00
2-3 year(s) ............................................................. 58,884.00 601,794.48
Total ....................................................................... 45,475.00 464,754.50 171,359.00 1,751,288.98
216
4. Fixed assets
Item
31 December 2012 Increase in current year Decrease in current year 31 December 2013
RMB INR RMB INR RMB INR RMB INR
I. The total of the original price 631,824.32 6,457,244.55 579,499.68 5,922,486.73 456,025.51 4,660,580.71 755,298.49 7,719,150.57
Including: ofce equipment .. 211,255.08 2,159,026.92 9,359.79 95,657.05 35,456.27 362,363.08 185,158.60 1,892,320.89
Transport equipment ............. 420,569.24 4,298,217.63 570,139.89 5,826,829.68 420,569.24 4,298,217.63 570,139.89 5,826,829.68
II. The total of the accumulated
depreciation ........................... 380,083.33 3,884,451.63 58,723.84 600,157.65 333,563.40 3,409,017.95 105,243.77 1,075,591.33
Including: ofce equipment .. 94,900.93 969,887.50 30,327.84 309,950.53 31,911.00 326,130.42 93,317.77 953,707.61
Transport equipment ............. 285,182.40 2,914,564.13 28,396.00 290,207.12 301,652.40 3,082,887.53 11,926.00 121,883.72
III. The total of the accumulated
provision for impairment .......
Including: ofce equipment ..
Transport equipment .............
IV. The total of the carrying
amount ................................... 251,740.99 2,572,792.92 520,775.84 5,322,329.08 122,462.11 1,251,562.76 650,054.72 6,643,559.24
Including: ofce equipment .. 116,354.15 1,189,139.42 -20,968.05 -214,293.48 3,545.27 36,232.66 91,840.83 938,613.28
Transport equipment ............. 135,386.84 1,383,653.50 541,743.89 5,536,622.56 118,916.84 1,215,330.10 558,213.89 5,704,945.96
5. Accounts payable
Ageing
RMB INR Percentage (%) RMB INR Percentage (%)
0-1 year (including 1 year) ...................................
Over 3 years ......................................................... 92,636.23 946,742.27 100.00 92,636.23 946,742.27 100.00
Total ....................................................................... 92,636.23 946,742.27 100.00 92,636.23 946,742.27 100.00
6. Employee benets
Item
31 December 2012 Increase in current year Amount paid in current year 31 December 2013
I. Salary, bonus, allowance and
compensation ......................... 1,721,357.53 17,592,273.96 1,721,357.53 17,592,273.96
II. Employee benet costs..........
III. Social insurance fees .............
IV. Housing funds ........................
V. Union running costs and
employee education costs .....
VI. Non-monetary benets ...........
VII. Termination benets and early
retirement compensation ....... 116,401.00 1,189,618.22 116,401.00 1,189,618.22
Including: Compensation for
terminating the employment
relationship ............................. 116,401.00 1,189,618.22 116,401.00 1,189,618.22
Estimated expense paid for
early retired employees .........
VIII. Others .....................................
Including: cash-settled share-
based payment .......................
Total .................................................. 1,837,758.53 18,781,892.18 1,837,758.53 18,781,892.18
217
7. Taxes payable
Item
31 December 2012 Increase in current year Amount paid in current year 31 December 2013
Value added tax ................. 145,544.65 1,487,466.32 1,287,506.35 13,158,314.90 1,182,260.89 12,082,706.30 250,790.11 2,563,074.92
Business tax ....................... 2,726.17 27,861.46 1,741.93 17,802.52 984.24 10,058.93
Enterprise income tax ........ 634,874.20 6,488,414.32 634,874.20 6,488,414.32
Urban maintenance and
construction tax ................. 1,667.50 17,041.85 6,379.83 65,201.86 5,313.12 54,300.09 2,734.21 27,943.63
Individual income tax ......... 4,975.00 50,844.50 61,748.00 631,064.56 61,748.00 631,064.56 4,975.00 50,844.50
River management fee ...... 1,667.50 17,041.85 6,379.83 65,201.86 5,313.12 54,300.09 2,734.21 27,943.63
Education surtax ................ 5,002.51 51,125.65 19,139.48 195,605.49 15,939.36 162,900.26 8,202.63 83,830.88
Local education surtax ...... 3,335.01 34,083.80 12,759.66 130,403.73 10,626.25 108,600.28 5,468.42 55,887.25
Total .................................... 162,192.17 1,657,603.98 2,031,513.52 20,762,068.17 1,282,942.67 13,111,674.09 910,763.02 9,307,998.06
8. Other payables
(1) Detail of other payables
Ageing
RMB INR Percentage (%) RMB INR Percentage (%)
0-1 year (including one year) ...................... 387,757.57 3,962,882.37 83.97 1,032,621.37 10,553,390.40 100.00
1-2 year ........................................................ 74,000.00 756,280.00 16.03
Total .............................................................. 461,757.57 4,719,162.37 100.00 1,032,621.37 10,553,390.40 100.00
(2) Other payables which are individually signicant
Name of creditor
31 December 2013
Nature RMB INR
Shanghai lvwei zhanlan ltd. ....................................................... 258,677.57 2,643,684.77 Advertisement fee
Ssangyong (Beijing) Company .................................................. 128,000.00 1,308,160.00 Rent
9. Dividends payable
Item 31 December 2012 Increase in current year Decrease in current year 31 December 2013
Ssangyong Motor Company 2,182,739.86 22,307,601.37 3,998,353.17 40,863,169.40 6,181,093.03 63,170,770.77
10. Paid-in capital
Name investor
31 December 2012
Increase in current year Decrease in current year
31 December 2013
Amount of investment
Percentage
(%)
Amount of investment
Percentage
(%) RMB INR RMB INR RMB INR RMB INR
Ssangyong Motor
Company ........................ 7,447,192.66 76,110,308.99 100.00 22,552,807.34 230,489,691.01 30,000,000.00 306,600,000.00 100.00
Total .............................. 7,447,192.66 76,110,308.99 100.00 22,552,807.34 230,489,691.01 30,000,000.00 306,600,000.00 100.00
11. Capital reserve
Item
The capital premium ........... 184,216.66 1,882,694.27 184,216.66 1,882,694.27
Total .................................... 184,216.66 1,882,694.27 184,216.66 1,882,694.27
12. Surplus reserve
Item
Statutory surplus reserve ... 1,369,326.40 13,994,515.81 190,462.26 1,946,524.30 1,559,788.66 15,941,040.11
Discretionary surplus
reserve ................................. 189,254.92 1,934,185.27 189,254.92 1,934,185.27
Total .................................... 1,558,581.32 15,928,701.08 190,462.26 1,946,524.30 1,749,043.58 17,875,225.38
218
13. Unappropriated prots
Item
RMB INR RMB INR
Closing Balance of previous year .................................................... 4,211,667.16 43,043,238.38 8,083,275.74 82,611,078.06
Add: changes in accounting policies ..............................................
Corrections of prior period errors .................................................... 24,744.78 252,891.65
Opening Balance of current year ..................................................... 4,211,667.16 43,043,238.38 8,108,020.52 82,863,969.71
Increase of current year ................................................................... 4,544,223.07 46,441,959.78 -2,639,600.48 -26,976,716.91
Including: net prot of current year ................................................. 4,544,223.07 46,441,959.78 -2,639,600.48 -26,976,716.91
Other adjustments ............................................................................ 75,081.79 767,335.90
Decrease of current year .................................................................. 4,188,815.43 42,809,693.70 1,331,834.67 13,611,350.32
Including: Withdrawal of surplus reserve ........................................ 190,462.26 1,946,524.30
Withdrawal of common risks reserve ..............................................
Distribution of cash dividends .......................................................... 3,998,353.17 40,863,169.40 1,331,834.67 13,611,350.32
Closing Balance of current year ...................................................... 4,567,074.80 46,675,504.46 4,211,667.16 43,043,238.38
14. Operating income
Item
RMB INR RMB INR
Income Cost Income Cost Income Cost Income Cost
Income From major
operations ...................... 21,362,275.38 218,322,454.38 13,577,635.86

138,763,438.49
Income From other
operations ...................... 54,523.42 557,229.36 275,656.04 2,817,204.73
Total ................................ 21,416,798.80 218,879,683.74 13,853,291.90 141,580,643.22
15. Finance expense
Item
RMB INR RMB INR
Interest expense .................................................................................
Less: interest income ....................................................................... 97,472.11 996,164.96 58,937.56 602,341.86
Loss from foreign exchange ............................................................ 391,733.76 4,003,519.03 7,457.98 76,220.56
Fees ................................................................................................... 5,377.97 54,962.85 6,281.91 64,201.11
Total ................................................................................................... 299,639.62 3,062,316.92 -45,197.67 -461,920.19
16. Non-operating income
Item
RMB INR RMB INR
Government grants ............................................................................ 243,331.83 2,486,851.30 719.84 7,356.76
Unpayable .......................................................................................... 2,471.98 25,263.64 1,155.63 11,810.54
The disposal of assets income ......................................................... 175,313.94 1,791,708.47
Personal income tax fee income ...................................................... 597.00 6,101.34
Total .................................................................................................... 421,714.75 4,309,924.75 1,875.47 19,167.30
17. Non-operating expense
Item
RMB INR RMB INR
Loss on disposal of assets ............................................................... 3,545.27 36,232.66
Fine..................................................................................................... 600.00 6,132.00
Overdue payment .............................................................................. 164.15 1,677.61
Total .................................................................................................... 4,309.42 44,042.27
219
18. Income tax expense
(1) Composition of income tax expense (income), including current income tax and deferred Income tax:
Item
RMB INR RMB INR
Current income tax expense calculated according to tax laws ..................... 634,874.20 6,488,414.32
Adjustment of deferred income tax .................................................................
Total ................................................................................................................. 634,874.20 6,488,414.32
(2) Relationship between income tax expense (income) and accounting prot
Item
RMB INR RMB INR
Total prot ......................................................................................................... 5,179,097.27 52,930,374.10 -2,639,600.48 -26,976,716.91
Adjustment of taxable prot ............................................................................. -624,060.64 -6,377,899.74 1,042,588.23 10,655,251.71
Make up for the losses of the previous year .................................................. 1,597,012.25 16,321,465.20
Tax rate .............................................................................................................. 25% 25% 25%
Current income tax expense ............................................................................ 739,506.10 7,557,752.29
19. Notes to the cash ow statement
(1) Reconciliation of net prots to the cash ow from operating activities
Item
31 December 2013
RMB INR
1. Reconciliation of net prots to the cash ow from operating activities: ................................................
Net prots ................................................................................................................................................. 4,544,223.07 46,441,959.78
Add: Provision for assets impairment .....................................................................................................
Depreciation of xed assets, depletion of oil and gas assets and depreciation of bearer biological
assets ........................................................................................................................................................ 58,723.84 600,157.64
Amortization of intangible assets .............................................................................................................
Amortization of long-term deferred expenses .........................................................................................
Losses due to disposal of xed assets, intangible assets and other long-term assets (Income shall
be presented with the mark of ) ......................................................................................................... -171,768.67 -1,755,475.81
Losses due to retirement of xed assets (Income shall be presented with the mark of ) ..............
Losses due to changes in fair value (Income shall be presented with the mark of ) .....................
Finance expenses (Income shall be presented with the mark of )................................................... 299,639.62 3,062,316.92
Losses from investment (Income shall be presented with the mark of ) .........................................
Decrease in deferred tax assets (Increase shall be presented with the mark of ) ..........................
Increase in deferred tax liabilities (Decrease shall be presented with the mark of ) .......................
Decrease in inventories (Increase shall be presented with the mark of ) ........................................
Decrease in operating receivables (Increase shall be presented with the mark of ) ...................... -4,243,074.27 -43,364,219.04
Increase in operating payables (Decrease shall be presented with the mark of () .........................
Others ....................................................................................................................................................... -289,881.14 -2,962,585.25
Net Cash Flow from Operating Activities ................................................................................................ 197,862.45 2,022,154.24
2. Signicant investing and nancing activities not involving cash receipts or payments: ......................
Debt transferred to capital .......................................................................................................................
Convertible corporate bonds due within one year .................................................................................
Leased xed assets under nance lease ................................................................................................
3. Net changes in cash and cash equivalents:
Closing balance of cash .......................................................................................................................... 33,026,887.87 337,534,794.03
Less: Opening balance of cash ............................................................................................................... 16,264,530.78 166,223,504.57
Add: Closing balance of cash equivalents .............................................................................................
Less: Opening balance of cash equivalents ...........................................................................................
Net Increase in Cash and Cash Equivalents .......................................................................................... 16,762,357.09 171,311,289.46
220
(2) Cash and cash equivalents
Item
RMB INR RMB INR
I. Cash ........................................................................................................ 33,026,887.87 337,534,794.03 16,264,530.78 166,223,504.57
Including: Cash on hand ....................................................................... 27,837.60 284,500.27 18,005.46 184,015.80
Bank deposits that can be readily withdrawn on demand ................... 32,999,050.27 337,250,293.76 16,246,525.32 166,039,488.77
Other monetary funds that can be readily withdrawn on demand .......
II. Cash equivalents .....................................................................................
Including: Bond investment with a maturity of three months or less ...
III. Closing balance of cash and cash equivalents ..................................... 33,026,887.87 337,534,794.03 16,264,530.78 166,223,504.57
Including: Cash and cash equivalents of the parent or subsidiaries
within the group with restricted usage ...................................................
20. Contingent events
As of December 31, 2013, the Company has no signicant contingent events which require disclosure.
21. Non-adjusting events after the balance sheet date
The Company has no non-adjusting events after the balance sheet date which require disclosure.
22. Related Party and Related-Party Transactions
1. Prole of the Parent
Name of the Parent Nature Domicile
Ssangyong Motor Company Foreign enterprise Gyeonggi Province, South Korea
2. Registered Capital of the Parent and Change of the Registered Capital
Parent
KRW KRW KRW KRW
Ssangyong Motor Company 613,373,205,000.00 72,727,275,000.00 686,100,480,000.00
3. Parents proportion of ownership interest in the Company and change of the proportion
31 December 2012 Increase in current
year
Decrease in current
year
31 December 2013
RMB INR Proportion
(%)
RMB INR Proportion
(%)
RMB Proportion
(%)
RMB INR Proportion
(%)
7,447,192.66 76,110,308.99 100.00 22,552,807.34 230,489,691.01 100.00 30,000,000.00 306,600,000.00 100.00
4. Related-Party Transactions
None.
23. Other Signicant Events
None.
24. Approval of nancial statements
The nancial statements were approved at the General Manager conference of the Company on January 10, 2014.
Ssangyong Motor (Shanghai) Co., Ltd
January 10, 2014
MAHINDRA USA INC
221
DIRECTORS REPORT
Your Directors present their Report together with the audited accounts of your Company for the year ended 31
st
March 2014.
Financial Highlights:
FY2014 US$ FY2014 INR FY 2013 US$ FY 2013 INR
Income ................................................................................ 278,078,696 16,701,406,481 218,018,782 13,094,208,047
Prot/(Loss) before tax ....................................................... 2,298,812 138,066,648 (810,011) (48,649,260)
Prot/(Loss) after tax .......................................................... 4,826,143 289,858,149 (810,011) (48,649,260)
The economy in the United State of America (US) is moderately
positive as consumer condence continues to increase and
unemployment is at its lowest level since before the economic
recession in late 2008/early 2009. In addition, US net farm
income forecast outlook is projected to be lower compared to
previous three years, however 2014 yields, acreage planted
and farm income will post record levels in spite of lower forecasts.
In this challenging environment your Companys performance
was signicantly better than the industry as the billing volume
grew by 21.6% to 13,011 tractors as compared to 10,701
tractors in the previous year. Retail volume grew consecutively
second year above 28% to 12,451 tractors as compared to
9,688 tractors in the previous year. Both the retail as well
as billing performance has been the highest ever till date in
the history of the Company. The overall market share thus
improved from 6.2% to 8% in US and 2.5% to 3.9% in Canada.
Correspondingly, the Revenue for the nancial year 2014 was
at $278 million (Rs. 1,670 Crores) as compared to $218 million
(Rs. 1,309 Crores) in the previous nancial year. The Prot after
tax for the year was $4.83 million (Rs. 28.99 Crores) against
previous year loss after tax of $0.8 million (Rs. 4.86 Crores).
According to accounting principal generally accepted in the
United State of America holding Company should publish their
nancials with all subsidiaries accounts only. Consolidated
accounts are audited by auditors and clear audit reports
are issued by auditors. For benet of various stake holders
and nancial institutes which are evaluating your companys
nancials on standalone basis separate audit report is
presented. Auditors have qualied their report for standalone
reporting of nancials only with conrmation of not having any
other qualications.
Your Company received accolades from various agencies and
institutions for CSR initiatives including the CSR award for the
best Indian company in the US by Indo American chamber
of commerce. Your company also won the best website of
the year in tractor industry and advertising Remi award for TV
commercial. Your Company is at third position in the US tractor
sales for 0 to 120 horse power category as per Association of
Equipment Manufacturers report.
Your Company stabilized its newly introduced products in
the sub compact segment and also introduced new products
in the segment which were well received in the marketplace.
Your company continued to strengthen the dealer channel,
which is reected in substantially improved performance
during nancial year 2014. Your Company continues to
look towards further strengthening its channel and focus on
nancial strengthening of the business in the coming nancial
year 2015.
Dr Pawan Goenka
Chairman
May 16, 2014
Mumbai, India
MAHINDRA USA INC
222
To the Stockholder and the Board of Directors
Mahindra USA, Inc.
Mahindra USA, Inc., a Texas corporation, which comprise the
balance sheet as of March 31, 2014 and 2013, and the related
statements of income, stockholders equity, and cash ows for
the year then ended, and the related notes to the nancial
statements.
presentation of these nancial statements in accordance with
accounting principles generally accepted in the United States
of America; this includes the design, implementation, and
and fair presentation of nancial statements that are free from
accordance with auditing standards generally accepted in the
United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance
misstatement.
effectiveness of the entitys internal control. Accordingly, we
express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the
reasonableness of signicant accounting estimates made by
management, as well as evaluating the overall presentation of
the nancial statements.
sufcient and appropriate to provide a basis for our qualied
audit opinion.
Basis for Qualied Opinion
As discussed in Note 1 to the nancial statements, the
Company reports its investments in Mahindra North American
Technical Center, Inc, and Mahindra Tractor Assembly,
Inc., wholly owned subsidiaries, on the equity method of
accounting. In our opinion, accounting principles generally
accepted in the United States of America require that all
majority-owned subsidiaries be accounted for as consolidated
subsidiaries. If the nancial statements of these subsidiaries
had been consolidated with those of Mahindra USA, Inc., total
assets and total liabilities would be increased by $4,231,015
as of March 31, 2014, and revenues and expenses would have
increased by $8,048,250 for the year then ended.
Qualied Opinion
In our opinion, except for the effects of not consolidating all
majority-owned subsidiaries, as discussed in the Basis for
Qualied Opinion paragraph, the nancial statements referred
to in the rst paragraph present fairly, in all material respects,
the nancial position of Mahindra USA, Inc, as of March 31,
2014 and 2013, and the results of its operations and its cash
ows for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis-of-Matter for Presentation of Financial
Information
The presentation of nancial information in Indian rupees in
the consolidated nancial statements is not a required part of
the basic nancial statements. We have veried the arithmetic
accuracy of the presentation based upon an exchange rate
provide by Companys management. We did not audit and do
not express an opinion on such information, and our opinion
is not modied with respect to this matter.
Kahanek, Franke & Associates, L. C.
Houston, Texas
May 15, 2014
MAHINDRA USA INC
223
BALANCE SHEET AS OF MARCH 31, 2014 AND 2013
ASSETS 2014 2013
U.S. $ INR U.S. $ INR
Current assets:
Cash and cash equivalents ....................................................... 4,368,178 262,352,771 2,264,081 135,980,705
Accounts receivable:
Customers net ..................................................................... 13,658,368 820,321,582 26,096,748 1,567,370,685
Employees ........................................................................... 31,201 1,873,932 67,309 4,042,579
Inventories (note 3) .................................................................... 102,396,351 6,149,924,841 106,169,052 6,376,513,263
Deferred tax asset (note 6) ........................................................ 4,770,312 286,504,939 2,218,312 133,231,819
Prepaid expenses and deposits ................................................ 719,904 43,237,435 1,632,204 98,030,171
Total current assets ........................................................................... 125,944,314 7,564,215,500 138,447,706 8,315,169,222
Investment in wholly-owned subsidiary ..................................... 20,000 1,201,200 10,000 600,600
Property and equipment, net ..................................................... 1,979,405 118,883,064 2,046,990 122,942,219
Total assets ................................................................................. 127,943,719 7,684,299,764 140,504,696 8,438,712,042
LIABILITIES AND STOCKHOLDERS'S EQUITY
Accounts payable
Related parties (note 7) ...................................................... 22,805,213 1,369,681,093 32,928,260 1,977,671,296
Other .................................................................................... 38,917,543 2,337,387,633 56,512,747 3,394,155,585
Accrued expenses ...................................................................... 5,297,146 318,146,589 4,576,916 274,889,575
Note payable (note 10) .............................................................. 50,583,390 3,038,038,403 40,923,566 2,457,869,374
Total current liabilities ................................................................. 117,603,292 7,063,253,719 134,941,489 8,104,585,830
Long-term capital leases less current maturities ...................... 6,085 365,465 55,008 3,303,779
Total liabilities ..................................................................................... 117,609,377 7,063,619,184 134,996,497 8,107,889,609
Stockholder's equity
Common stock ($0.10 par value; 50,000,000 shares authorized
and 45,000,000 issued) .............................................................. 4,500,000 270,270,000 4,500,000 270,270,000
Additional paid-in-capital ............................................................ 9,500,000 570,570,000 9,500,000 570,570,000
Retained Earnings ...................................................................... (3,665,658) (220,159,419) (8,491,801) (510,017,568)
Total stockholder's equity ........................................................... 10,334,342 620,680,581 5,508,199 330,822,432
Total liabilities and stockholder's equity ........................................... 127,943,719 7,684,299,764 140,504,696 8,438,712,041
MAHINDRA USA INC
224
STATEMENTS OF INCOME FOR THE YEARS ENDED MARCH 31, 2014 AND 2013
2014 2013
Revenues:
Sales of tractors and parts ......................................... 278,078,696 16,701,406,482 218,018,782 13,094,208,047
Total revenues ............................................................. 278,078,696 16,701,406,482 218,018,782 13,094,208,047
Cost of sales:
Tractors and parts ....................................................... 216,244,306 12,987,633,018 171,647,949 10,309,175,817
Other direct costs ........................................................ 10,593,713 636,258,403 5,743,183 344,935,571
Total cost of sales........................................................ 226,838,019 13,623,891,421 177,391,132 10,654,111,388
Gross prot .................................................................. 51,240,677 3,077,515,061 40,627,650 2,440,096,659
General and administrative expenses:
Advertising and marketing expenses ......................... 4,873,806 292,720,788 3,271,681 196,497,161
Other general and administrative expenses .............. 42,116,034 2,529,489,002 37,303,627 2,240,455,838
Total general and administrative expenses ................ 46,989,840 2,822,209,790 40,575,308 2,436,952,999
Income from operations .............................................. 4,250,837 255,305,270 52,342 3,143,660

Other income (expense):
Interest expense .......................................................... (2,011,697) (120,822,522) (909,122) (54,601,867)
Other income ............................................................... 48,503 2,913,090 42,393 2,546,124
Gain (loss) on disposal of assets ............................... 11,169 670,810 4,376 262,823
Total other income (expense), net .............................. (1,952,025) (117,238,623) (862,353) (51,792,920)
Income (loss) before income taxes ............................ 2,298,812 138,066,648 (810,011) (48,649,260)
Income tax benet:
Current ......................................................................... (2,527,331) (151,791,500)
Net income 4,826,143 289,858,149 (810,011) (48,649,260)
MAHINDRA USA INC
225
STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE YEARS ENDED MARCH 31, 2014 AND 2013
U.S. $
Shares Common
Stock
Amount
Retained
Earnings
Total
Stockholders
Equity

Balance -
March 31, 2012........................................................................ 45,000,000 14,000,000 (7,681,790) 6,318,210
Additional paid-in-capital .........................................................
Net loss .................................................................................... (810,011) (810,011)
Balance -
March 31, 2013........................................................................ 45,000,000 14,000,000 (8,491,801) 5,508,199
Net income .............................................................................. 4,826,143 4,826,143
Balance -
March 31, 2014........................................................................ 45,000,000 14,000,000 (3,665,658) 10,334,342
INR
Shares Common
Stock
Amount
Retained
Earnings
Total
Stockholders
Equity

Balance -
March 31, 2012........................................................................ 2,702,700,000 840,840,000 (461,368,308) 379,471,692
Net income .............................................................................. (48,649,260) (48,649,260)
Balance -
March 31, 2013........................................................................ 2,702,700,000 840,840,000 (510,017,568) 330,822,432
Net income .............................................................................. 289,858,149 289,858,149
Balance -
March 31, 2014........................................................................ 2,702,700,000 840,840,000 (220,159,419) 620,680,581
MAHINDRA USA INC
226
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 2014 AND 2013
(Increase (decrease) in cash and cash equivalents)
2014 2013
Cash ows from operating activities:
Net income ...................................................................... 4,826,143 289,858,149 (810,011) (48,649,260)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation and amortization ........................................ 481,700 28,930,902 534,410 32,096,665
Deferred income tax ........................................................ (2,526,802) (151,759,728)
Gain (loss) on disposal of assets ................................... 11,169 670,810 4,376 262,823
Federal and state income taxes ..................................... 60,320 3,622,819
(Increase) decrease in:
Accounts receivable - trade ............................................ 12,438,380 747,049,103 22,539,085 1,353,697,445
Accounts receivable - employees................................... 36,108 2,168,646 (12,682) (761,681)
Inventories ....................................................................... 3,772,701 226,588,422 (61,324,699) (3,683,161,422)
Prepaid expenses ............................................................ 912,300 54,792,738 239,623 14,391,757
Increase (decrease) in:
Accounts payable ............................................................ (27,718,251) (1,664,758,155) 18,555,784 1,114,460,387
Accrued expenses ........................................................... 720,230 43,257,014 1,069,487 64,233,389
Net cash used in operating activities ............................. (6,986,002) (419,579,281) (19,204,627) (1,153,429,897)
Cash ows from investing activities:
Investment in wholly-owned subsidiary .......................... (10,000) (600,600) (10,000) (600,600)
Capital expenditures........................................................ (510,802) (30,678,767) (149,050) (8,951,943)
Proceeds from sale of assets ......................................... 31,500 1,891,890
Net cash used in investing activities .............................. (520,802) (31,279,367) (127,550) (7,660,653)
Cash ows from nancing activities:
Note payable ................................................................... 9,610,901 577,230,713 21,596,258 1,297,071,255
Net cash provided by nancing activities ...................... 9,610,901 577,230,713 21,596,258 1,297,071,255
Net increase in cash and cash equivalents ................... 2,104,097 126,372,065 2,264,081 135,980,705
Cash and cash equivalents: ...........................................
Beginning of year ............................................................ 2,264,081 135,980,705
End of year ...................................................................... 4,368,178 262,352,771 2,264,081 135,980,705
MAHINDRA USA INC
227
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013
NOTE 1 THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The Company
Mahindra USA, Inc. (the Company) (MUSA) was incorporated June 8,
1994 in the State of Texas, and commenced business on March 15, 1995.
The Company is owned by Mahindra and Mahindra, Ltd., (M&M). M&M is a
publicly traded corporation headquartered in Mumbai, India which, among other
activities, manufactures farming equipment and automobiles. The Company sells
tractors, parts, attachments and accessories in North America under wholesale
distribution agreements. The Companys sales are to a network of more than
439 dealer locations throughout North America.
The Company formed a wholly owned subsidiary on January 25, 2013, Mahindra
Tractor Assembly, Inc., (MTA) to sell electric powered scooters in North America
under wholesale distribution agreements with a network of dealers.
The Company formed another wholly owned subsidiary on December 18,
2013, Mahindra North American Technical Center, Inc., (MNATC) to design
and develop prototype complete vehicle designs and related parts to facilitate
M&Ms expansion in the worldwide vehicle market.
The Company reported its investment in MTA and MNATC on the equity method
of accounting. Accounting principles generally accepted in the United States
of America require that all majority-owned subsidiaries be accounted for using
consolidated nancial statements.
Financial Presentation in U. S. Dollars and Indian Rupees
Financial information in this report is shown in U. S. dollars ($) and in
Indian rupees (INR). For both March 31, 2014 and 2013, dollar amounts are
translated for convenience into Indian rupees at exchange rate of 60.06 INR
per dollar which is the average of the telegraphic transfer buying and selling
rates quoted by the Mumbai Branch of State Bank of India on March 31, 2014.
Within the notes to the nancial statements, Indian rupee amounts are shown
parenthetically following the U.S. dollar amount.
Signicant Accounting Policies
Accounting method -
The nancial statements are prepared on the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States
of America (GAAP). However, as noted above, the nancial results of MTA
and MNATC, both being wholly owned subsidiaries, are not included in these
nancial statements.
Use of estimates -
The preparation of nancial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the nancial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Receivables -
Receivables are stated at the amount invoiced for the sale to the various
dealers. There is currently an allowance for uncollectible accounts of $862,613
(51,808,537 INR) and $826,162 (49,619,290 INR) at March 31, 2014 and March 31,
2013, respectively, which management considers sufcient to cover uncollectible
accounts (see Note 2 for a discussion of dealer nancing arrangements).
Revenue recognition -
Revenue from the sale of tractors, parts, attachments and accessories is
recognized when the ordered goods are invoiced to the dealer. Invoices are
issued after credit approval and when the ordered items are ready for shipment.
Inventories -
New tractors, parts, and accessories are stated at the lower of cost or market.
Cost is determined by the moving average price.
Property and equipment -
Property and equipment are stated at cost. The cost of additions and
improvements are capitalized and expenditures for repairs and maintenance are
expensed in the period incurred. When items of property and equipment are
sold or retired, the related costs and accumulated depreciation are removed
from the accounts and any gain or loss on disposition is included in the
statement of income.
Depreciation is provided over the useful lives of the related assets using the
straight-line method for nancial reporting and the modied accelerated cost
recovery method for tax purposes.
Income taxes -
Income for nancial reporting purposes is different than income for income tax
reporting purposes due principally from timing differences relating to allowances
for inventory valuation, allowance for doubtful accounts, depreciation and
expense accruals. Federal and state income tax returns for the Company are
subject to examination for three years from the date of ling. Years open for
examination are from March 31, 2011 to present.
Statement of cash ows -
For purposes of the statements of cash ows, the Company considers all cash
accounts, money market accounts, and certicates of deposit with maturities of
less than three months to be cash and cash equivalents.
Supplemental disclosure of cash ow information for the years ended March 31:
2014 2013
Interest Paid 2,011,697 120,822,522 909,122 54,601,867
Advertising -
The Company subsidizes product advertising carried on by dealers within each
dealers local market, and conducts dealer conferences. The Company also
advertises in trade magazines, at trade shows and uses various other means
of promotions, including product brochures, to increase brand awareness and
sale of products in the market. The Company capitalizes expenditures with
extended advertising value and amortizes these costs over an eighteen month
period. Expenditures without extended advertising value are expensed in the
year incurred.
NOTE 2 ACCOUNTS RECEIVABLE CUSTOMERS
The Companys customers are the retail dealers authorized to sell Mahindra
tractors. During the year ending March 31, 2014 and for the current scal year, the
Company offered varying discounts for payments. There are various marketing
programs throughout the year, including programs that offer all dealers interest
free nancing for varying number of days after date of purchase. The Company
has also arranged for dealers to nance tractors purchased through commercial
lenders who remit payment directly to the Company.
NOTE 3 INVENTORIES
Inventories were comprised of the following at March 31:
2014 2013
Tractors 69,647,481 4,183,027,709 82,873,160 4,977,361,990
Parts
Accessories
& Others 32,748,870 1,966,897,132 23,295,892 1,399,151,273
102,396,351 6,149,924,841 106,169,052 6,376,513,263
MAHINDRA USA INC
228
NOTE 4 PROPERTY AND EQUIPMENT
Property and equipment is comprised of the following at March 31:
Est.
Useful
Life
2014 2013
Machinery
& equip. 7 yrs 879,474 52,821,208 681,504 40,931,130
Ofce furniture
& equip. 57yrs 2,976,267 178,754,596 2,755,613 165,502,117
Buildings 39yrs 644,169 38,688,790 644,169 38,688,790
Vehicles 5yrs 785,648 47,186,019 855,954 51,408,597
5,285,558 317,450,613 4,937,240 296,530,634
Less-accumulated
depreciation 3,306,153 198,567,549 2,890,250 173,588,415
1,979,405 118,883,064 2,046,990 122,942,219
NOTE 5 ACCRUED EXPENSES
Expenses accrued for the years ending March 31, 2014 and March 31, 2013
include advertising, marketing program costs, cash discounts, state franchise
taxes, payroll and payroll taxes, employee bonuses, salesmen and customer
bonuses, legal fees, property taxes, insurance deductibles, and warranty
reserves.
NOTE 6 INCOME TAXES
The components of the provision income tax benet for federal income taxes is
as follows for the period ended March 31:
2014 2013
Current income tax
benet 2,527,331 151,791,500
The company calculates income tax benet based upon the maximum federal
income tax rate of 34%.
At March 31, 2014 and 2013 the Company had a net operating loss carryforward
of approximately $14,026,088 (842,406,845 INR) and $16,212,849 (973,743,711
INR), respectively. This loss, if unused, will expire in March 2030. The deferred
tax asset relating to these losses was fully recognized at March 31, 2014 in
the amount of $4,770,312 (286,504,939 INR). Due to the uncertainty of future
benets, at March 31, 2013, these losses were recorded in a discounted manner
in the amount of $2,218,312 (133,231,819 INR).
NOTE 7 RELATED PARTY TRANSACTIONS
The Company purchases tractors and parts from M&M, its sole shareholder, on
an open accounts, which is paid when due. Accounts payable to M&M are net
of amounts the Company has paid for warranty claims and legal fees on behalf
of M&M.
The Company has the following receivables and (payables) with Mahindra and
Mahindra, Ltd., and its afliated companies.
2014 2013
Mahindra and
Mahindra, Ltd., (21,837,883) (1,311,583,253) (33,159,287) (1,991,546,777)
Mahindra
China Tractor
Co. Ltd., 170,539 10,242,572 178,904 10,744,974
Mahindra and
Mahindra
Financial
Services, Ltd., (1,226,434) (73,659,626) 48,749 2,927,865
Mahindra and
Mahindra, Ltd.,
Auto Sector 141,795 8,516,208
Mahindra and
Mahindra,
Head Ofce (5,554) (333,573) 171 10,270
Mahindra
AG & Auto
Australia (53,398) (3,207,084)
Mahindra and
Mahindra, Ltd.,
- Australia 5,722 343,663 3,203 192,372
(22,805,213) (1,369,681,093) (32,928,260) (1,977,671,296)
NOTE 8 EMPLOYEE BENEFIT PLANS
The Company adopted a 401(k) retirement plan effective April 1, 1998. All of the
Companys employees who are at least 21 years of age are eligible upon the rst
enrollment date (January 1 or July 1) after their hire date to participate in a 401(k)
prot sharing plan (the Plan). Eligible employees may make contributions up
to 12% of their compensation. The Plan provides for matching contributions by
the Company in an amount equal to the employee contributions, not to exceed
3% of eligible contributions. Employee contributions and employer matching
contributions are invested in mutual funds. The Companys contributions for
the years ended March 31, 2014 and 2013, were $64,348 (3,864,741 INR) and
$56,606 (3,399,756 INR), respectively.
NOTE 9 CASH BALANCES IN EXCESS OF INSURED LIMITS
During the scal years ending March 31, 2014 and March 31, 2013, the Company
maintained cash balances in excess of insured limits.
MAHINDRA USA INC
229
NOTE 10 NOTES PAYABLE
At March 31, 2014, the Company has an available credit facility in the form of a
revolving note in the amount of $54,000,000 (3,243,240,000 INR) with Bank of
America. This note bears interest at Libor plus 2.00%. M&M provided a Letter
of Comfort to Bank of America, and it stated it will provide management control
over the Company, including compliance with this credit facility. The note was
renewed in March 2013 with a new termination date of February 2014. At March
31, 2013, the Company had a similar credit facility agreement with available
credit facility amount of $45,000,000 (2,702,700,000 INR). The loan outstanding
under the revolving line at March 31, 2014 was $50,555,597 (3,036,369,156 INR)
and at March 31, 2013 was $40,897,832 (2,456,323,790 INR).
Bank of America has issued two irrevocable standby letters of credit totaling
$3,500,000, payable to Mahindra Finance USA, LLC, an unrelated organization
offering nancing to the Companys dealers.
The Company entered into capital leases for the purchase of 5 forklifts. The
capital leases bear interest of approximately 5.6% for a term of 60 months.
Principal payments on the capital leases for the upcoming scal years are as
follows:
March 31, U.S. $ INR
2015 27,793 1,669,248
2016 6,085 365,465
TOTAL 33,878 2,034,713
NOTE 11 LEASES
The Company entered into a lease covering a 130 month period for an ofce
and warehouse on August 11, 2011. The new location enabled all of the
Companys activities to be consolidated into one location. Total rent expense
for all operating leases for 2014 and 2013 were $890,496 (53,483,190 INR) and
$457,122 (27,454,747 INR), respectively.
Future minimum lease payments under the non-cancelable operating leases
with initial or remaining terms of one year or more are as follows:
March 31, U.S. $ INR
2015 871,496 52,342,050
2016 895,763 53,799,526
2017 903,852 54,285,351
2018 928,119 55,742,827
2019 936,207 56,228,592
Thereafter 3,666,489 220,209,329
Total 8,201,926 492,607,675
NOTE 12 ASSEMBLY AND SERVICE AGREEMENT
The Company has entered into agreements with dealerships in Chattanooga, TN,
Bloomsburg, PA, and Red Bluff, CA (collectively the Assemblers) for the nal
assembly of tractors imported from various manufacturers overseas, including
M&M. These agreements stipulate that the Assemblers are to assemble the
tractors in accordance with procedures provided by the Company so that the
tractors are ready for sale. The Assemblers are required to employ qualied
personnel to perform the duties required by the Company. The Assemblers store
inventory owned by the Company in a secure location. The Assemblers are paid
based on a piecemeal basis at various rates depending on the respective model
and related accessories. These rates are reviewed and negotiated at regular
intervals.
Another agreement was entered into with a manufacturing company in Sterling,
KS with similar terms.
NOTE 13 CONTINGENT LIABILITY
The State of Texas has conducted an audit of the Companys franchise tax
returns for the years 2008 through 2011. This examination has concluded
and is subject to the Companys request for independent audit review. The
preliminary deciency for the years under examination is approximately
$322,000. The Company believes that its ling position is supportable and is
vigorously defending its position. The Company has made representations of its
position, and is preparing for possible litigation of this matter. If the Company is
unsuccessful the applicable rate of franchise tax in Texas would double, from .5%
to 1%, which is the rate used for parties who do not qualify as wholesalers. The
additional cost for years not covered by the examination would be approximately
$243,000.
NOTE 14 DATE OF MANAGEMENTS REVIEW
The Companys management reviewed and evaluated subsequent events
through May 15, 2014, and no events have occurred subsequent to the balance
sheets dated March 31, 2014 and 2013 that would require adjustments to, or
disclosure in, the nancial statements.
MAHINDRA TRACTOR ASSEMBLY INC
230
DIRECTORS REPORT
Your Directors present their Report together with the audited
accounts of the Company for the period ended 31
st
March
2014.
Company Operations
Your companys core mission is to develop solutions to the
challenges of urban mobility through the use of innovative
transportation products. Its focus aligns with the Mahindra
Rise initiative and your company uses the Rise pillars
of transformative thinking and innovation to drive these
sustainable solutions.
Your company was primarily involved in design, product
development, development of a supply chain and creation
of marketing channels for its industry leading 100% electric
two-wheeler product called the Genze 2.0. The product has
been conceptualized with many innovative features and is
positioned to provide a fun, no hassles riding and ownership
experience to the consumers in the United States. A functional
alpha prototype was developed by May 2013 followed by the
creation of engineering documentation for the Genze 2.0 and
the assembly of thirteen (13) engineering beta prototypes
beginning December 2013 through March 2014. These
prototypes are being continually tested and utilized to develop
a robust supply chain for the impending assembly of the
Genze 2.0. The exploration of innovative marketing channels
also commenced in this calendar year and will continue
through to start of operations in the following year.
Your Company commenced business on April 1, 2013 as a
100% subsidiary of Mahindra USA Inc. Its expenditures were
primarily for development of product and supply chain and
for the exploration of marketing channels for selling and
distribution of its Genze 2.0 electric two-wheeler product. It
acquired leased facilities in Ann Arbor, Michigan for the setting
up of assembly operations for this two-wheeler product. Your
company plans to launch the innovative Genze 2.0 in the next
scal year and work towards becoming the market leader in
the two-wheeler transportation segment.
Vishwesh (Vish) Palekar
Director
May 23, 2014
Palo Alto, California
231
Board of Directors
Mahindra Tractor Assembly Inc.
We have audited the accompanying balance sheet of Mahindra
Tractor Assembly Inc. (the Company) as of March 31, 2014
and the related statement of income, stockholders equity
and cash ow for the year ended on March 31, 2014. These
nancial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on
these nancial statements based on our audit.
Managements responsibility for the nancial statements
misstatement.
considers internal control relevant to the organizations
opinion on the effectiveness of the organizations internal
control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting
policies used and the reasonableness of signicant accounting
overall presentation of the nancial statements.
opinion.
Opinion
present fairly in all material respects, the nancial position
of the Company as of March 31, 2014 and the results of its
operations and the cash ow for the year then ended, in
in the United States of America.
Emphasis of matters
The nancial statements of Mahindra Tractor Assembly Inc. for
the period ended March 31, 2013 were audited by another
auditor who expressed an unmodied opinion on those
statements on May 28, 2013.
the nancial statements is not a required part of the basic
nancial statements. We have veried the arithmetic accuracy
of the presentation based upon exchange rate provided by
the Companys management. We did not audit and do not
express an opinion on such information, and our opinion is not
modied with respect to this matter.
KNAV P.A.
Atlanta Georgia
May 2, 2014
232
BALANCE SHEET AS OF MARCH 31, 2014
ASSETS
Current Assets:
Cash and Cash Equivalents .......................................... 787,505 47,297,550 10,000 600,600
Accounts receivables, net of allowances ...................... 64,896 3,897,654
Prepaid and other current assets .................................. 25,697 1,543,362
Total current assets ..................................................... 878,098 52,738,566 10,000 600,600
Non-current assets
Property, plant and equipment ...................................... 1,076,361 64,646,242
Security deposit ............................................................. 17,000 1,021,020
Total non-current assets .............................................. 1,093,361 65,667,262
Total assets ................................................................... 1,971,459 118,405,828 10,000 600,600
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
Current liabilities:
Short term borrowings ................................................... 56,210 3,375,973
Accounts payable .......................................................... 1,513,538 90,903,092
Accrued expenses ......................................................... 375,609 22,559,077
Other current liabilities ................................................... 19,078 1,145,825
Accrued income tax ....................................................... 800 48,048
Total current liabilities ................................................. 1,965,235 118,032,015
Advance from related party ........................................... 500,000 30,030,000
Total non-current liabilities ......................................... 500,000 30,030,000
Total liabilities 2,465,235 148,062,015
Stockholders equity (decit)
Common stock $1.00 par value; 10,000 shares authorized
and issued ...................................................................... 10,000 600,600 10,000 600,600
Accumulated decit........................................................ (503,776) (30,256,787)
Total stockholders equity (decit) ............................ (493,776) (29,656,187) 10,000 600,600
Total liabilities and stockholders equity (decit) .... 1,971,459 118,405,828 10,000 600,600
(The accompanying notes are an integral part of these nancial statements).
233
STATEMENTS OF COMPREHENSIVE LOSS FOR THE YEAR ENDED MARCH 31, 2014
For the year ended
March 31, 2014
For the year ended
March 31, 2013
Service revenue 7,280,258 437,252,295
Expenses
Salaries and employee benets .................................... 4,102,858 246,417,651
Product development expenses .................................... 1,607,673 96,556,870
Selling, distribution and administration ....................... 1,780,638 106,945,089
Depreciation .................................................................. 25,519 1,532,671
Legal and professional fees .......................................... 269,546 16,188,933
Total operating expenses ............................................ 7,786,234 467,641,214
Other income ................................................................. 3,000 180,180
Loss before income tax ............................................... (502,976) (30,208,739)
Income tax ...................................................................... (800) (48,048)
Net loss for the year .................................................... (503,776) (30,256,787)
234
STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
Common stock Total
Authorized, issued and
outstanding
Accumulated
decit
stockholders
equity (decit)
Shares Value USD USD USD
Common stock issued ...................................................... 10,000 10,000 10,000
Balance as at March 31, 2013 ........................................ 10,000 10,000 10,000
Balance as at April 01, 2013 ............................................. 10,000 10,000 10,000
Net loss for the year .......................................................... (503,776) (503,776)
Balance as at March 31, 2014 ........................................ 10,000 10,000 (503,776) (493,776)
Common stock Total
Authorized, issued and
outstanding
Accumulated
decit
stockholders
equity (decit)
Shares Value INR INR INR
Common stock issued ...................................................... 10,000 600,600 600,600
Balance as at March 31, 2013 ........................................ 10,000 600,600 600,600
Balance as at April 01, 2013 ............................................. 10,000 600,600 600,600
Net loss for the year .......................................................... (30,256,787) (30,256,787)
Balance as at March 31, 2014 ........................................ 10,000 600,600 (30,256,787) (29,656,187)
235
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2014
For the year
ended March 31, 2014
For the year
ended March 31, 2013
Net loss .......................................................................... (503,776) (30,256,787)
Adjustments to reconcile net loss to net cash provided
by operating activities
Depreciation and amortization ...................................... 25,519 1,532,671
(478,257) (28,724,116)
Net change in non-cash operating working capital
Accounts receivables, net of allowances ...................... (64,896) (3,897,654)
Prepaid and other current assets .................................. (25,697) (1,543,362)
Security deposit ............................................................. (17,000) (1,021,020)
Accounts payables ......................................................... 1,513,538 90,903,092
Accrued expenses ......................................................... 375,609 22,559,077
Accrued income tax ....................................................... 800 48,048
Other current liabilities ................................................... 19,078 1,145,825
Net cash ows provided by operating activities ..... 1,323,175 79,469,890
Cash ows from investing activities:
Purchase of assets ........................................................ (1,101,880) (66,178,913)
Net cash ows used in investing activities .............. (1,101,880) (66,178,913)
Cash ow from nancing activities
Short term borrowings ................................................... 56,210 3,375,973
Advance from related party ........................................... 500,000 30,030,000
Common stock proceeds .............................................. 10,000 600,600
Net cash ows from nancing activities ................... 556,210 33,405,973 10,000 600,600
Net increase in cash and cash equivalents 777,505 46,696,950 10,000 600,600
Cash and cash equivalents at the beginning ............... 10,000 600,600
Cash and cash equivalents at the end ..................... 787,505 47,297,550 10,000 600,600
Supplemental cash ow information
Income taxes paid ............................................................. Nil Nil Nil Nil
Interest paid ....................................................................... Nil Nil Nil Nil
236
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2014
NOTE A NATURE OF OPERATIONS
Mahindra Tractor Assembly, Inc. (MTAI or the Company) a company
incorporated in the State of Delaware on January 25, 2013 commenced
business on April 1, 2013. The Company is owned by Mahindra USA, Inc., a
Texas Corporation, which sells tractors, parts, attachments and accessories in
North America under wholesale distribution agreements. Mahindra USA, Inc.
is in turn a subsidiary of Mahindra & Mahindra Limited; a public listed Indian
company (the ultimate Parent company).
The Company was formed to sell electric powered scooters (hereinafter the
Mahindra GenZe Product or the Product) in North America.
On April 1, 2013, MTAI, entered into an agreement with Mahindra & Mahindra
Limited., to develop the Product, establish the component supply chain and
determine the marketing channels for future sales of the Product. The scope
of services that the Company renders to Mahindra & Mahindra Limited per the
agreement includes
1. Engaging the services of design, pro typing, engineering experts for
development of the Product.
2. Engaging with state level and other authorities for testing of product and
other statutory and other approvals as may be necessary for development
of the Product.
3. Registering the use of intellectual property resulting out of the services
engagement.
4. Establish a reliable supply chain for the entire bill of materials developed
for the Product.
5. Determine and develop alternative marketing channels for the Product.
The agreement shall continue until March 31, 2020 and can be extended by
mutual consultation in writing.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the signicant accounting policies applied in the preparation of
the accompanying nancial statements is as follows:
a. The accompanying nancial statements are prepared on the accrual
basis of accounting in accordance with the accounting and reporting
requirements of generally accepted accounting principles in the
United States of America (US GAAP) to reect the nancial position,
results of operations and cash ows of the Company.
b. The nancial statements are for the year April 01, 2013 to March 31,
2014, and the period from January 25, 2013 to March 31, 2013.
c. The nancial information in this report is shown in both US Dollars
(USD) and in Indian Rupees (INR). For both March, 31, 2014 and
2013, dollar amounts are translated for convenience into Indian
rupees at exchange rate of 60.06 INR per dollar which is the average
of the telegraphic transfer buying and selling rates quoted by the
Mumbai branch of State Bank of India on March 28, 2014. Within the
notes to the nancial statements, Indian rupee amounts are shown
parenthetically following the U.S. dollar amount.
2. Use of estimates
The preparation of nancial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the nancial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
The Company considers all cash accounts, money market accounts, and
certicates of deposit with maturities of less than three months to be cash
and cash equivalents.
4. Comparatives
The Company was incorporated in the previous year on January 25, 2013
and commenced operations from April 2013. The nancial statements
of the current year ended March 31, 2014 are not comparable with the
previous period which is from January 25, 2013 to March 31, 2013.
5. Revenue recognition
The Company renders research and development services that are
reimbursed by a third party. Revenues on this cost-plus contract are
recognized as the services are performed. The Companys effort,
measured on a monthly basis, represents the contractual milestone or
output measure, which is the contractual earnings pattern.
6. Property, plant and equipment
depreciation. Cost of items of property, plant and equipment comprise
cost of purchase and other costs necessarily incurred to bring it to the
condition and location necessary for its intended use. The Company
depreciates property, plant and equipment over the estimated useful life
using the straight-line method. Upon retirement or disposal of assets, the
cost and accumulated depreciation will be eliminated from the accounts
and the resulting gain or loss will be credited or charged to operations.
The estimated useful life used to determine depreciation is:
Engineering equipment 3 years
Factory equipment 5 years
Computers 3 years
Vehicles 2-5 years
Leasehold improvements Lease term
The cost of property, plant and equipment not ready for use before such
date are disclosed under capital work-in-progress.
7. Research and development costs
Revenue expenditure on research and development is expensed as
incurred. Capital expenditure incurred on equipment and facilities that
are acquired or constructed for research and development activities
and having alternative future uses is capitalized as tangible assets when
acquired or constructed.
8. Income taxes
In accordance with the provisions of Financial Accounting Standards
Board (FASB) Accounting Standards Codication (ASC) Topic 740
Income Taxes, income taxes are accounted for using the asset and
liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the nancial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. The deferred tax asset is reduced by a
valuation allowance if it is more likely than not that some portion or all of
the asset will not be realized.
NOTE C - CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of the following:
USD INR USD INR
Balances with banks 786,849 47,258,151 10,000 600,600
PayPal account 656 39,399
787,505 47,297,550 10,000 600,600
Cash balances in bank account (Silicon Valley Bank) are insured by the Federal
Deposit Insurance Corporation up to an aggregate per bank of USD 250,000
[INR 15,015,000] (previous year USD 250,000 [INR 15,015,000]). At March 31,
2014 and 2013, the Company had USD 537,505 [INR 32,282,550] and USD Nil
(INR Nil) cash at risk, respectively.
237
NOTE D - ACCOUNTS RECEIVABLE, NET OF ALLOWANCES
Accounts receivable as at March 31, 2014 represent due from Mahindra &
Mahindra Limited on services provided of USD 64,896 [INR 3,897,654] (previous
year end USD Nil [INR Nil]). The Company does not maintain an allowance for
doubtful account, as it only provides services to the ultimate Parent company,
Mahindra & Mahindra Limited. There are no other contracts or agreements for
receivables.
USD INR USD INR
Accounts receivable 64,896 3,897,654
Less: Allowance for
doubtful account
Accounts receivable,
net of allowances 64,896 3,897,654
NOTE E PREPAID AND OTHER CURRENT ASSETS
The assets comprise of the following:
USD INR USD INR
Prepaid expenses 24,197 1,453,272
Other receivables 500 30,030
Other deposits 1,000 60,060
25,697 1,543,362
NOTE F PROPERTY PLANT AND EQUIPMENT
USD INR USD INR
Engineering
equipment
183,758 11,036,506
Factory equipment 47,476 2,851,409
Computer equipment 5,602 336,456
Leasehold
improvements 235,024 14,115,541
Company vehicles 49,715 2,985,883
Capital work in
progress 580,305 34,853,118
Accumulated
depreciation (25,519) (1,532,671)
1,076,361 64,646,242
Depreciation expense for the year is USD 25,519 [INR 1,532,671], (Previous year
USD Nil [INR Nil]).
NOTE G SHORT TERM BORROWINGS
Short term borrowings consist of amounts payable to Bank of America and are
outstanding corporate credit card bills. The amount outstanding as at March 31,
2014 is USD 56,210 [INR 3,375,973] (Previous year USD Nil [INR Nil]).
NOTE H ACCOUNTS PAYABLE
Account payable comprise of:
USD INR USD INR
Trade payables 555,722 33,376,663
Due to group
companies
(Refer note M) 957,816 57,526,429
1,513,538 90,903,092
NOTE I ACCRUED EXPENSES
Accrued expenses comprise of:
USD INR USD INR
Accrued bonus 332,455 19,967,247
Accrued paid time off 43,154 2,591,829
375,609 22,559,076
NOTE J LINE OF CREDIT
The Company obtained a USD 1 million [INR 60,060,000] line of credit on
February 18, 2014 with interest at LIBOR plus 2.50% per annum (banks prime
rate plus 1.50% per annum) from Bank of America, N.A. All current assets of
the Company serve as collateral for this credit arrangement. The Company did
not utilize any amount of the line of credit during the year.
NOTE K COMMITMENTS AND CONTINGENCIES
Litigations
There was no outstanding litigation as at balance sheet date March 31, 2014 and
during the year then ended.
Capital commitments
As of March 31, 2014, the Company had committed to spend USD 948,986 [INR
56,996,099] under two contracts.
1) Stahl Specialty Company To perform non-recurring engineering work and
develop the tooling on behalf of the Company. The total commitment is
USD 587,904 [INR 35,309,514] of which initial payment of 30% amounting
to USD 176,371[INR 10,592,842] is made and the balance of USD 411,533
[INR 24,716,672] is future commitment.
2) Fori Automation Inc. To develop and supply fully qualied assembly carts
and fully developed and proven assembly line per the agreement. The total
commitment is USD 767,790 [INR 46,113,467] of which initial payment of
30% is made and the balance of USD 537,453 [INR 32,279,427] is future
commitment.
Lease obligations
The Company has following lease obligations:
1) East Ellsworth Road, Ann Arbor, Michigan for light industrial and ofce
use. The period of lease is from January 1, 2014 to December 31, 2016
with an option to extend the lease for additional term of 3 years. The rent
expense for this lease is USD 11,500 per month [INR 690,690]. In addition
to this Company has provided a security deposit of USD 17,000 for period
of three years.
2) Palo Alto, California for ofce use. The period of the lease is April 1, 2013
to November 30, 2014. The rent for this lease is USD 4,950 per month [INR
297,297] till November 30, 2013 and USD 5,160 per month [INR 309,910]
till November 30, 2014.
3) Phoenix Drive, Ann Arbor, Michigan for industrial use. The period of lease
is April 1, 2013 to March 31, 2014. The rent for this lease is USD 5,310 per
month [INR 318,919]. The term is renewed for one month and expires on
April 30, 2014.
The rent expense for the year ended March 31, 2014 is USD 183,792 [INR
11,038,548] (previous year USD Nil, [INR Nil])
As at March 31, 2014 future rental commitments for the leases are as follows:
(Amounts in USD)
Year ending March 31
E Ellsworth
Road, Ann
Arbor,
Michigan
Palo Alto,
California
Phoenix
Drive, Ann
Arbor,
Michigan Total
2015 138,000 36,120 5,310 179,430
2016 138,000 138,000
2017 103,500 103,500
238
(Amounts in INR)
Year ending March 31
E Ellsworth
Road, Ann
Arbor,
Michigan
Palo Alto,
California
Phoenix
Drive, Ann
Arbor,
Michigan Total
2015 8,288,280 2,169,367 318,919 10,776,566
2016 8,288,280 8,288,280
2017 6,216,210 6,216,210
NOTE L INCOME TAXES
The provision for income tax expense is as follows:
USD INR USD INR
Current state tax 800 48,048
800 48,048
Deferred income taxes reect the net tax effects of temporary differences between
the carrying amount of assets and liabilities for nancial reporting purposes
and the amounts used for income tax purposes. Signicant components of the
Companys net deferred income taxes are as follows:
USD INR USD INR
Current deferred tax
assets
Accrued paid time
off
14,672 881,200
Non-current deferred
tax assets
Plant, property &
equipment
22,067 1,325,344
Net operating loss 134,377 8,070,683
Less: deferred tax
asset valuation
allowance (171,116) (10,277,227)
Net deferred taxes
The Company has provided a valuation allowance of USD 171,116 [INR
10,277,227] and USD Nil [INR Nil] as of March 31, 2014 and 2013, respectively,
against the net deferred tax assets. The change in valuation allowance is USD
171,116 [INR 10,277,227] during the year ended March 31, 2014.
The Company has net operating loss carry forwards of approximately USD 395,226
[INR 23,737,274] as of March 31, 2014 available to reduce future federal income
taxes. If not used, the carry forwards will expire in tax year 2032. The Company
currently does not have any net operating loss carry forwards at state level.
ASC 740-10 requires the Company to recognize a provision for uncertainty in
income taxes. As of March 31, 2014 and 2013 the Company does not have any
uncertain tax position.
The tax years 2012 and 2013 remains subject to examination by the taxing
authorities.
NOTE M RELATED PARTY TRANSACTIONS
The Company had transactions with-
A. Ultimate parent company
1. Mahindra & Mahindra Limited
March 31, 2014 March 31, 2013
USD INR USD INR
Balances at the end of the year
Long term advance from
Mahindra & Mahindra Limited 500,000 30,030,000
Receivable for services
Payable
Transactions during
the year
Revenue from
Mahindra & Mahindra Limited 7,280,258 437,252,295
These related party transactions are in the normal course of business operations
and have been valued in these nancial statements at the exchange amount
which is the amount of consideration established and agreed to by the related
parties.
NOTE N OTHER INCOME
Other income comprise of:
Period ended
March 31, 2014
Period ended
March 31, 2013
USD INR USD INR
Settlement of advance 3,000 180,180
3,000 180,180
Other income comprises of income from settlement of advance given of USD
3,000 [INR 181,180] for the year ended March 31, 2014.
NOTE O CONCENTRATIONS
Financial instruments that have a potential to subject the Company to
concentrations of credit risk comprise principally of cash equivalents and
accounts receivable. The fair values of these nancial instruments approximate
their book values. During the year ended March 31, 2014, the Company received
100% of its revenue from one customer. As of March 31, 2014, 100% of the
accounts receivable are from this customer.
NOTE P COMMON STOCK
The authorized share capital of the Company is 10,000 common shares of a par
value of USD 1 each (10,000 shares at USD 1 each as on March 31, 2013). Each
share carries an equal voting right and is entitled to an equal share in the assets
of the Company at liquidation.
NOTE Q SUBSEQUENT EVENTS
Subsequent events have been evaluated through May 2, 2014 which is the date
the nancial statements were issued.
MAHINDRA NORTH AMERICAN TECHNICAL CENTRE, INC.
239
DIRECTORS REPORT
Your Directors present their Report together with the audited
accounts of your company for the period ended 31
st
March,
2014.
F14 (USD) F14 (INR)
Revenues 496,319 29,808,919
Income before income tax 37,860 2,273,871
Net Prot 23,489 1,410,749
The Company was incorporated in the state of Delaware
on 18
th
December, 2013 and is licensed to do the business
in Michigan. Your company engineers, designs, develops,
assembles and delivers parts, tooling and prototype vehicles
to the automotive market. Each product is designed for the
customers specic global market and segment needs.
The Financial Statement as at 31
st
March, 2014 (F14) reports
Revenues of USD 496,319 (INR 29,808,919) with a Net Prot
of USD 23,489 (INR 1,410,749).
Performance during the year:
During the period, the company has beneted from product
design & development work of its customer Mahindra &
Mahindra Ltd. (M&M). Your company seeks to provide
access to advanced engineering skills, experienced technical
resources, and engineering service providers and is working
on specic projects assigned to it by M&M. These projects will
yield world class products. In addition to this, your company
provides expert advice for ongoing improvements in existing
products of M&M.
Future Prospects:
The company is geared up to provide the required skilled
design services of future requirements. The company continues
to execute projects of M&M product development activities
and mainly dependent on M&Ms product development plans.
Holding Company:
Mahindra USA, Inc is the 100% shareholder in the Company.
Directors
Following are the Directors of the Company.
Rajan Wadhera
Pravin Shah
V S Parthasarathy
For and behalf of the Board
Rajan Wadhera
Chairman
Date: 30
th
April, 2014
240
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Mahindra North American Technical Centre Inc.
We have audited the accompanying balance sheet Mahindra
North American Technical Center, Inc. (the Company) as
of March 31, 2014 and the related statement of income,
stockholders equity and cash ow for the period ended on
March 31, 2014. These nancial statements are the responsibility
of the Companys management. Our responsibility is to
express an opinion on these nancial statements based on
our audit.
misstatement.
considers internal control relevant to the organizations
opinion on the effectiveness of the organizations internal
control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting
policies used and the reasonableness of signicant accounting
opinion.
Opinion
present fairly in all material respects, the nancial position
of the Company as of March 31, 2014 and the results of its
operations and the cash ow for the period then ended, in
Emphasis of matter for presentation of nancial information:
the nancial statements is not a required part of the basic
nancial statements. We have veried the arithmetic accuracy
of the presentation based upon exchange rate provided by
the Companys management. We did not audit and do not
express an opinion on such information, and our opinion is not
modied with respect to this matter.
KNAV P.A.
Atlanta, Georgia
April 25, 2014
241
As at March 31, 2014
USD INR
ASSETS
Current assets
Cash & cash equivalents 933,523 56,067,391
Accounts receivable, from related party 496,319 29,808,919
Prepaid expenses 76,773 4,610,987
Total current assets 1,506,615 90,487,297
Other assets 11,800 708,708
Property and equipment, net 739,205 44,396,652
Non-current deferred tax assets 1,936 116,276
Total assets 2,259,556 135,708,933
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Trade payables 462,098 27,753,606
Short term advance from related party 1,500,000 90,090,000
Accrued expenses 6,500 390,390
Other related party loan 241,162 14,484,190
Current deferred tax liability 16,307 979,398
Total current liabilities 2,226,067 133,697,584
Total liabilities 2,226,067 133,697,584
Stockholders equity
Common stock, $ 0.10 par value
100,000 shares authorized
1,000 shares issued and outstanding 100 6,006
Additional paid in capital 9,900 594,594
Retained earnings 23,489 1,410,749
Total stockholders equity 33,489 2,011,349
Total liabilities and stockholders equity 2,259,556 135,708,933
(The accompanying notes are an integral part of these nancial statements)
242

Period ended March 31, 2014
USD INR
Operating revenues 496,319 29,808,919
Cost of goods sold 234,303 14,072,238
Gross prot 262,016 15,736,681
Administrative expenses 209,612 12,589,297
Depreciation 12,114 727,567
Interest expense, net 2,430 145,946
Total costs and expenses 224,156 13,462,810
Income before income tax 37,860 2,273,871
Income tax expense 14,371 863,122
Net prot 23,489 1,410,749
STATEMENT OF COMPREHENSIVE INCOME AS AT MARCH 31, 2014
243
Common stock
Additional
paid in
capital
Retained
earnings
Total
stockholders
equity
Authorized Issued & outstanding
Particulars Shares* Value Shares* Value
Balance as on January 1, 2014 100,000 10,000
Investment January 13, 2014 1,000 100 9,900 10,000
Net income for the period 23,489 23,489
Balance as at March 31, 2014 100,000 $ 10,000 100,000 $ 100 9,900 23,489 33,489
*The shares are in numbers
(All amounts are stated in INR unless otherwise stated)
Common stock
Additional
paid in
capital
Retained
earnings
Total
stockholders
equity
Authorized Issued & outstanding
Particulars Shares* Value Shares* Value
Balance as on January 1, 2014 100,000 600,600
Investment January 13, 2014 1,000 6,006 594,594 600,600
Net income for the period 1,410,749 1,410,749
Balance as at March 31, 2014 100,000 600,600 1,000 6,006 594,594 1,410,749 2,011,349
*The shares are in numbers
STATEMENT OF STOCKHOLDERS EQUITY AS AT MARCH 31, 2014
(All amounts are stated in USD unless otherwise stated)
244
Period ended March 31, 2014
USD INR
Net income 23,489 1,410,749
Adjustments to reconcile net income to net cash used in operating activities
Provision for tax 14,371 863,122
Changes in assets and liabilities
Accounts receivable, from related party -496,319 -29,808,919
Prepaid expenses -76,773 -4,610,987
Other assets -11,800 -708,708
Accounts payable 462,098 27,753,606
Accrued liabilities 8,931 536,395
Net cash used in operating activities -63,889 -3,837,174
Cash ow from investing activities
Purchase of property and equipment -751,319 -45,124,219
Net cash used in investing activities -751,319 -45,124,219
Short term advance from related party 1,500,000 90,090,000
Loan received from related party 238,731 14,338,184
Proceeds from issuance of common stock 10,000 600,600
Net cash provided by nancing activities 1,748,731 105,028,784
Net increase in cash and cash equivalents 933,523 56,067,391
Cash and cash equivalents at the beginning
Cash and cash equivalents at the end 933,523 56,067,391
Income taxes paid
Interest paid
245
NOTE A ORGANIZATION AND NATURE OF OPERATIONS
Mahindra North American Technical Center, Inc. (hereinafter referred to as the
Company) was incorporated in the state of Delaware on December 18, 2013
and is licensed to do business in Michigan. The Company engineers, designs,
develops, assembles and delivers parts, tooling and prototype vehicles to the
automotive market as an Original Equipment Manufacturer (OEM). Each product
is designed for the customers specic global market and segment needs. The
Company is a wholly owned subsidiary of Mahindra USA, Inc.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The signicant accounting policies are detailed below:
a. The accompanying nancial statements are prepared on the
accrual basis of accounting in accordance with the accounting and
reporting requirements of generally accepted accounting principles
in the United States of America (US GAAP) to reect the nancial
position, results of operation and cash ows of the Company.
b. The nancial statements are for the period from January 01, 2014 to
March 31, 2014
c. Financial information in this report is shown in U.S. dollars (USD)
and in Indian rupees (INR). For March 31, 2014 dollar amounts are
translated for convenience into Indian rupees at exchange rate of
60.06 INR per dollar, which is the average of the telegraphic transfer
buying and selling rates quoted by the Mumbai Branch of State
Bank of India on March 28, 2014. Within the notes to the nancial
statements, Indian rupee amounts are shown parenthetically
following the U.S. dollar amount.
2. Use of estimates
Preparation of nancial statements in conformity with accounting principles
generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
3. Property and equipment
Property and equipment are stated at cost less accumulated depreciation.
Cost of items of property and equipment comprises cost of purchase and
other costs necessarily incurred to bring it to the condition and location
necessary for its intended use.
The Company depreciates property and equipment over the estimated
useful life using the straight-line method. Upon retirement or disposal of
assets, the cost and accumulated depreciation are eliminated from the
accounts and the resulting gain or loss is credited or charged to operations.
Property and equipment are considered to have a useful life of three (3)
to ten (10) years. Expenditures for maintenance and repairs are charged
to expense. Property and equipment is reviewed for impairment whenever
events or changes in circumstances indicate the carrying value of the
asset may not be recoverable.
4. Business enterprise segments
The Company operates in one reportable operating segment.
5. Operating leases
Lease rent expenses on operating leases are charged to expense over the
lease term. Certain operating lease agreements provide for scheduled rent
increases over the lease term.
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
7. Income taxes
Income taxes are provided for the tax effects of transactions reported in
the nancial statements and consist of taxes currently due, plus deferred
taxes related primarily to differences between the basis of certain assets
and liabilities for nancial and tax reporting. The deferred taxes represent
the future tax return consequences of those differences, which will either
be taxable or deductible when the assets and liabilities are recovered or
settled, respectively.
The Company has determined whether any tax positions have met the
recognition threshold and has measured the Companys exposure to those
tax provisions. Management believes that the Company has adequately
addressed all relevant tax positions and that there are no unrecorded tax
liabilities. Federal and state taxing authorities generally have the right to
examine and audit the previous three years of tax returns led. Any interest
or penalties from federal and state taxing authorities were recorded in the
accompanying nancial statements.
8. Revenue recognition
Revenues from contracts are recognized when earned and collectability is
reasonably assured. The Companys contract with its principle customer,
Mahindra & Mahindra Limited (M&M) species that invoices may be raised
for the costs incurred in engineering and developing drivable concept
prototype vehicles plus an agreed upon prot margin. Anticipated losses
on contracts are recorded when determinable.
9. Cost of goods sold
The cost of engineering services to develop prototype parts that will
be incorporated into the Companys vehicle products are expensed as
incurred and reported as cost of goods sold. These services can occur in
ve distinctly different ways:
1. Suppliers of engineering services or models used for analysis that
are contracted by the Company.
2. The cost of prototype parts that are produced only for use by the
Company by vendors that will never be selected as a production
supplier of M&M see prototypes below.
3. The development and prototype costs incurred by full service
suppliers of M&M are invoiced directly to the customer through the
suppliers Indian branches.
4. Costs to develop Build-to-Print components are normally borne by
the Company as the eventual part manufacturer and supplier to
M&M in India is not known.
5. Co-developed parts that may remain proprietary to the supplier but
are modied to the Companys specication may involve costs to
the Company or may be invoiced via a supplier unit in India directly
to M&M.
Tooling
Tooling represents costs incurred by the Company in the development of
new parts and tooling used in the manufacture of the Companys products.
All preproduction costs incurred for tools that the Company will not own
and that will be used in producing products are expensed when incurred.
The Company has the right to use the tools and the reimbursement of
such costs is contractually guaranteed by the customer. When the part
for which tooling has been developed reaches a test or validation-ready
status, the tooling becomes the property of the customer.
Prototypes
Throughout the concept design and engineering development process of
the Company, numerous prototypes, bucks and mules are developed to
evaluate characteristic aspects of performance or the appearance of the
contracted vehicle. Occasionally prototype parts will be developed by third
party suppliers based on the specications provided by the Company. The
Company has the right to use the prototypes and the reimbursement of
such costs is contractually guaranteed by the customer.
Engineering
Costs associated with the salaries, wages and benets expense of
employees directly involved in the research and development activities of
the Company are reported as Engineering. For the period ended March
31, 2014, personnel employed in the activities of the Company were paid
through a separate leasing arrangement between M&M and Mahindra
Technical Services, Inc (MTSI).
10. Administrative
All personnel related costs not included in Engineering plus all facilities
related expenses are considered to be Administrative. For the period ended
March 31, 2014, personnel employed in the Administrative functions of
the Company were paid through a separate leasing arrangement between
M&M and MTSI.
246
NOTE C CASH AND CASH EQUIVALENTS
The cash and cash equivalents of the Company comprise of:
Particulars USD INR
Bank balance 933,523 56,067,391
Total 933,523 56,067,391
NOTE D ACCOUNTS RECEIVABLE
Accounts receivable as at March 31, 2014 represent an amount of USD 496,319
(INR 29,808,919) receivable from Mahindra & Mahindra Limited, which is a
related party.
NOTE E PROPERTY AND EQUIPMENT
Property and equipment comprise the following:
Particulars USD INR
Computers 143,767 8,634,646
Furniture 114,893 6,900,474
Vehicles 19,095 1,146,846
Leasehold improvements 288,366 17,319,262
Machinery & equipment 16,121 968,227
Software 87,556 5,258,613
Construction in progress 81,521 4,896,151
Less: Accumulated depreciation -12,114 -727,567
Property and equipment, net 739,205 44,396,652
Depreciation expense for the period is USD 12,114 (INR 727,567).
NOTE F LEASES
On January 1, 2014, the Company entered into a lease contract for the premises
located at 1055 West Square Lake Road, Troy MI 48098. The term of the lease
is ve years and is available for extension at the end of the term with monthly
rents of USD 10,980 (INR 659,459) through December 2014, and USD 11,367
(INR 682,702) from January 2015 to December 2015. The rental expense for
the period ended March 31, 2014, amounted to USD 32,940 (INR 1,978,376).
Required rent payments under non-cancellable operating leases at March 31,
2014, total USD 376,287 (INR 22,599,797) and as follows: year ending March
2015 USD 243,366 (INR 14,616,562); year ending March 2016 USD 105,794
(INR 6,353,988).
The Company signed a 3 year lease for a telephone system in March 2014;
the monthly payment is USD 1,346 (INR 80,841). A 4 year lease was signed for
2 copiers and a plotter; monthly payments are USD 1,362 (INR 81,802) for all
three items. These leases are accounted for as operating leases. The Company
has no capital leases.
NOTE G INCOME TAXES
Deferred income taxes reect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for nancial reporting
purposes and the amounts used for income tax purposes. There is a deferred
federal tax expense of USD 12,872 (INR 773,092) and deferred state income
tax expense of USD 1,499 (INR 90,030) for the period ended. The Company is
subject to taxation in the United States and the State of Michigan. The provision
for income tax expense is as follows:
USD INR
Income tax expense 14,371 863,122
Provision for income taxes 14,371 863,122
In accordance with Financial Accounting Standard Board Accounting Standard
Codication 740-10-45-6, the Company presents a single amount for current
and a single amount for non-current deferred tax liabilities and assets. The tax
effects of signicant temporary differences that resulted in deferred tax assets
and liabilities and a description of the items that create such differences is as
follows:
USD INR
Current deferred tax asset (liability)
Net operating loss carry forward 12,836 770,930
Prepaid expenses -29,143 -1,750,329
Total -16,307 -979,398
Non-current deferred tax assets
Total 1,936 116,276
The Company has federal and state operating loss carry-forwards of USD 33,813
(INR 2,030,809). The Company assesses the available positive and negative
evidence to estimate if sufcient taxable future income will be generated to use
the existing deferred tax assets.
NOTE H RELATED PARTY TRANSACTIONS
The Company has an agreement with Mahindra & Mahindra Limited (M & M)
whereby the Company agrees to supply highly skilled engineering and design
services to develop drivable concept prototype automobiles in accordance with
the requirements established in agreements entered into between the Company
and the customer. Mahindra & Mahindra Limited is the 100% shareholder of
Mahindra USA, Inc. Mahindra USA, Inc. is the 100% shareholder in the Company.
For the period ended March 31, 2014, services purchased from the Company
under the agreement with M&M amounted to USD 496,319 (INR 29,808,919).
Accounts receivable related parties is comprised of this same amount.
Mahindra Engineering Services, Inc. (MES) is 100% shareholder of Mahindra
Technical Services, Inc. MES is a separate subsidiary entity of M&M.
The Company has a loan payable to Mahindra Technical Services, Inc. of USD
241,162 (INR 14,484,190) at March 31, 2014. The Company has agreed to pay
interest of two basis points above the WSJ Prime rate, which was 3.25% on this
loan payable at year end.
M&M advanced USD 1,500,000 (INR 90,090,000) to the Company as a short
term supplier advance payable within twelve months.
The balance related party payable/receivable and transactions during the period
are as follows:
March 31, 2014
USD INR
Transactions during the period
Advance received 1,500,000 90,090,000
Sale of service 496,319 29,808,919
Mahindra Technical Services, Inc
Loan received 241,162 14,484,190
Balances at the end of the period
Mahindra Technical Services, Inc
Loan balance 241,162 14,484,190
Short term advance 1,500,000 90,090,000
Accounts receivable 496,319 29,808,919
NOTE I CONCENTRATIONS
Financial instruments, which potentially subject the Company to concentrations
of credit risk, consist principally of cash and accounts receivable. The Company
places its cash with high credit qualied nancial institutions. At times, such
cash in banks exceeded the Federal Deposit Insurance Corporation insurance
limit. The Company held USD 933,523 (INR 56,067,391) in cash balances at
March 31, 2014. The Company does not currently require collateral on accounts
receivable. During the period ended March 31, 2014, the Company received
100% of its revenue from one customer. As of March 31, 2014, 100% of the
accounts receivable are from this customer.
NOTE J SUBSEQUENT EVENTS
Subsequent events have been evaluated through April 25, 2014 which is the
date the nancial statements were issued.
MAHINDRA GUJARAT TRACTOR LIMITED
247
DIRECTORS REPORT TO THE MEMBERS
Your Directors present their Thirty Fifth Report together with the audited accounts of your Company for the year ended 31
st
March, 2014.
Financial Results
(Rs. in Lakhs)
For the year ended
31
st
March
2014 2013
Income ......................................................................................... 13,094.33 13,021.79
Prot before Interest, Depreciation and Taxation ....................... 837.15 670.62
Finance Costs .............................................................................. 133.01 139.78
Depreciation/Amortization ........................................................... 91.95 83.23
Prot for the year before Taxation ............................................... 612.19 447.61
Provision for Taxation ..................................................................
Current tax .........................................................................
142.30
Fringe Benet Tax .............................................................

Deferred(tax)/Income ........................................................

Prot after Taxation ...................................................................... 469.89 447.61
Balance of Loss brought forward from earlier years ................. 2,783.37 3,230.98
Balance of Loss carried to Balance Sheet ................................. 2,313.48 2,783.37
Operations
During the year under review, your Company sold 2,836
Tractors as compared to 2,921 Tractors sold in the previous
year. Your Company exported 199 Tractors to Nepal as
compared to 87 tractors in the previous year. Your Company
did not sell any Tractor to Mahindra & Mahindra Limited for
exporting to Bangladesh (Previous Year 59 tractors) due to
de-growth in Tractor Industry there affected by their domestic
nancial reasons.
The Prot before depreciation, interest and tax for the year
under review grew 24.83% to Rs. 837.15 lakhs from Rs. 670.62
lakhs in the previous year. The prot after tax for the year under
review stood at Rs. 469.89 lakhs as against Rs. 447.61 lakhs of
the previous year, registering growth of 4.98%.
During the year under review, your Company achieved
signicant improvement in the product quality, productivity,
product awareness and implemented various low cost
initiatives in the areas of operations.
Looking at the industry potential, your Company is working
on aggressive growth plan by promoting existing models as
well as developing price competitive variants. With focused
market approach, your Company is also in the process of
strengthening distribution channel.
Dividend
With a view to conserve resources, your Directors do not
recommend any dividend for the year.
Directors
Upon being nominated by the Government of Gujarat, Mr. Raj
Kumar was appointed as an Additional Director of your
Company with effect from 8
th
August, 2013. His directorship
was conrmed by the shareholders at their thirty fth Annual
General Meeting held on 20
th
September, 2013.
As nominations of Mr. R. K. Tripathy and Mr. Sanjeev Kumar as
Directors of your Company were withdrawn by the Government
of Gujarat, Mr. R. K. Tripathy and Mr. Sajeev Kumar ceased to
be Directors of your Company with effect from 18
th
July, 2013
and 25
th
April, 2014 respectively. The Board places on record
its appreciation of the guidance given by Mr. R. K. Tripathy
and Mr. Sanjeev Kumar during their tenure as Directors of your
Company.
Mr. P. C. Vaidya, Mr. Rajesh Jejurikar and Mr. C. J. Macwan
retire by rotation and, being eligible, offer themselves for
re-appointment.
as at 31
st
248
provisions of the Companies Act, 1956 for safeguarding
the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) as mentioned in the Notes on Accounts, the annual
accounts have been prepared on a going concern basis.
Audit Committee
The Audit Committee comprises of Mr. P. C. Vaidya (Chairman
of the Committee), Mr. K. Chandrasekar, Mr. Rajesh Jejurikar
and Mr. B. L. Khanna.
the Companies Act, 2013 read with the Companies (Meetings
of Board and its Powers) Rules, 2014, the terms of reference of
the Audit Committee were revised and aligned in accordance
with the aforesaid provisions.
The Audit Committee met thrice during the year under review.
the Companies Act, 2013 read with the Companies (Meetings
of Board and its Powers) Rules, 2014, the Nomination and
Remuneration Committee of the Board was constituted on the
terms of reference as prescribed under the aforesaid Section of
the Companies Act, 2013. The Nomination and Remuneration
Committee comprises of Mr. Rajesh Jejurikar, Mr. C. J. Macwan and
Mr. B. L. Khanna.
Responsibility (CSR) Committee was constituted by the Board
of Directors. The CSR Committee comprises of Mr. P. C. Vaidya,
Mr. K. Chandrasekar, Mr. C. J. Macwan and Mr. B. L. Khanna.
Appointment of Manager
In compliance with the provisions of Section 203 of the
Companies Act, 2013 read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014,
Mr. S. O. Tyagi has been appointed as Manager of your
th
April, 2014.
Appointment of Mr. S. O. Tyagi as Manager of your Company
is subject to the necessary approvals by the shareholders and,
if required, the Central Government.
Auditors
Vadodara (Firm Registration No. 117364W) retire as Auditors
at the conclusion of the forthcoming Annual General Meeting.
The members are requested to appoint Auditors in accordance
with the provisions of Section 139 of the Companies Act, 2013
and x their remuneration.
Since more than 25% of the subscribed capital of your Company
is held by the Government of Gujarat, the appointment or
reappointment of Auditors is required to be made by way of
a Special Resolution.
Cost Auditor
M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad
(Membership No. 4733) have been appointed as Cost Auditor
for the Financial Year 2014-15, subject to approval of the
Central Government.
As required under the provisions of Section 148 read
with Sections 139 and 141 of the Companies Act, 2013,
your Company has obtained a written conrmation from
M/s. Kiran J. Mehta & Co., to the effect that they are eligible
for appointment as Cost Auditors under Section 148 of the
Companies Act, 2013 and they are an independent rm of
Cost Accountants and have an arms length relationship with
your Company.
The due date of ling the Cost Auditors Report for the cost
accounts for the nancial year ended 31
st
March, 2013 was
27
th
September, 2013. The Cost Audit Report was accordingly
led on 25
th
September, 2013 in XBRL format. The due date of
ling the Cost Auditors Report for the cost accounts for the
st
March, 2014 is 27
th
September, 2014.
Your Company has not accepted deposits from the public or
its employees during the year.
Your Company has not made loans and advances which
are required to be disclosed in the annual accounts of your
between the parent company Mahindra & Mahindra Limited
Status with the Board for Industrial and Financial
Reconstruction (BIFR)
Your Companys operations having turned unprotable due to a
variety of factors such as old technology, downturn in the tractor
industry, inadequate marketing structure, liquidity problems,
etc. resulted in your Companys entire net worth being eroded
as at 31
st
March, 2002, and your Company became a Sick
Industrial Company within the meaning of Section 3(1) (o) of
the Sick Industrial Companies (Special Provisions) Act, 1985
(SICA). Your Company led a mandatory reference with the
Board of Industrial and Financial Reconstruction (BIFR) u/s
15(1) of SICA which was registered as Case No. 389/2002.
The said reference was taken up for consideration by BIFR for
the rst time on 7
th
July, 2004, whereat the BIFR declared your
Company Sick within the meaning of Section 3(1)(o) of SICA
and directed your Company to submit its Draft Rehabilitation
Scheme (DRS) u/s 17(2) of SICA. BIFR also at its hearing held
on 23
rd
July, 2008 appointed State Bank of India (SBI) as the
Operating Agency (OA) under SICA with directions to prepare
a Revival Scheme.
After several hearings thereafter and after considering
submissions of your Company and SBI, BIFR at its hearings
on 27
th
October 2010 and 22
nd
December 2010, directed your
Company to submit the Revised DRS with cut-off date being
31
st
December 2010. In line with BIFR directive, your Company
had submitted the Revised DRS cum Merger Scheme to SBI
and BIFR on 18
th
February 2011. SBI (OA) had vetted and
submitted the revised DRS to the BIFR on 18
th
October 2011. At
249
the BIFR hearing held on 31
st
October, 2012, it was noted that
the Merger proposal was not acceptable to the Government of
Gujarat, and the BIFR ordered that other options be explored
for revival of your Company.
At the hearing held on 6
th
February 2013 at BIFR, both the
promoters i.e. Mahindra & Mahindra Limited and Government
of Gujarat submitted that both were ready to infuse funds in
the Sick Company by way of Equity, to revive the Company.
At the hearing held on 17
th
June, 2013, Government of Gujarat
proposed to convert their loan into equity in terms of section
81(1)(4) of the Companies Act,1956.
Mahindra & Mahindra Limited led Misc. Application no.
562/2013 on 28
th
October, 2013, praying to direct SBI (OA)
to consider the draft DRS submitted by Mahindra & Mahindra
Limited so as to formulate and submit OAs fully tied-up DRS
for your Company for consideration of BIFR. Hearing of MA
no.562/2013 was held on 7
th
November, 2013. Government of
Gujarat led Misc. Application no. 111/2014 praying to permit/
allow it to approach Central Government in terms of section
81(1)(4) of the Companies Act, 1956 to convert its loan into
equity. Hearing of the same was held on 26
th
February, 2014
wherein BIFR directed Government of Gujarat to serve MA to
all concerned. Next date of the hearing of main case and both
MA has been xed for 19
th
May, 2014.
Codes of Conduct
The Board of Directors of your Company had adopted separate
Codes of Conduct for Corporate Governance (the Codes)
Employees enunciating the underlying principles governing
the conduct of its business and seeking to reiterate the
always be an integral part of its ethos.
Your Company has, for the year under review, received
the Senior Management Personnel and Employees of your
Industrial Relations
Industrial relations have generally remained cordial throughout
the year.
Particulars required to be disclosed under the Companies
(Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 are set out in the Annexure to this Report.
Your Company pursues various safety improvement measures.
The safety measures have been on focus throughout the year
resulting in an increase in Safety Activity Ratio (S.A.R.). During
the year, operating systems in your Company were certied
with Integrated Management System (IMS - ISO 9001:2008
& OHSAS 18001-2007) and awarded certicate from TUV-
NORD. All statutory requirements have been adhered to & fully
complied with.
Your Company had Zero accident cases during the year under
review.
On a show-cause notice received from Gujarat Pollution
Control Board (GPCB), your Company invested in creation of
new Sewage Treatment Plant (STP) and the facility is now fully
operational. Accordingly, the GPCB has been updated with the
compliance to its notice.
Your Company has rolled out a Policy for prevention of
sexual harassment in which it has formalised a free and fair
enquiry process with clear timelines. Your Company has also
of the Companies Act, 1956 and Rules framed there under
Your Company had no employee who was employed throughout
the nancial year and was in receipt of remuneration of not
less than Rs.60,00,000 per annum during the year ended
31
st
March, 2014, or was employed for a part of nancial year
and in receipt of remuneration of not less than Rs.5,00,000 per
month during any part thereof.
P. C. Vaidya Rajesh Jejurikar
Director Director
Vadodara, 25
th
April, 2014
250
ST
MARCH, 2014.
(a) During the year, your Company has taken following initiatives for conservation of energy:
Optimum utilization of the plant & machinery.
Maintain power factor at unity (0.999)
Installation of LED lights for night security
Induction lights in paint shop & PDI sheds reducing power consumption.
Energy saver engine testing dynamometer.
Installation of energy saving cooling tower for engine testing
Installation of VFD pump at cooling tower
Installation of new energy efcient paint booth
Roller tester for testing tractors with reduced test cycle.
Replacement of asbestos roof sheets in select portion with transparent sheets to improve lux level
Upgradation of electric oven for low energy consumption
Improve ofce space & accommodate ofces in lesser area of admin block, reducing daily power consumption.
(c) Impact of the measures taken / to be taken at (a) & (b) above for reduction of energy consumption and consequent
impact on the cost of production of goods:
Marginal Impact
(d) Total energy consumption and energy consumption per unit of production as per Form A of the Annexure to the Rules
in respect of Industries specied in the Schedule.
Not Applicable
1. Areas in which Research & Development is carried out:
Keeping in view the future requirements of technological upgradation, your Company has undertaken various
programs like development of tractor to meet future regulatory norms in India and also upgrade some models with
improved aesthetics.
During the year under review, pursuant to R&D efforts on development of new features, company introduced
Orchard Model and 60 Hp HWD tractors. These two models have been commercially introduced in October13.
Since introduction, they have been well received by the customers and contributed to 8% (101 nos) of the total
tractor sales in second half of the nancial year.
3. Future plan of action:
For further improvement in quality of product, dust proong of Engine assembly line shall be done. Also procurement
& installation of a new component cleaning machine has been planned.
4. Expenditure on R&D (Rs. in Lakhs)
(a) Capital Nil
(b) Recurring 19.08
(c) Total 19.08
(d) Total R&D Expenditure as a percentage of total turnover 0.15%
5. Technology absorption, adaptation and innovation: Nil
6. Imported Technology for the last 5 years: Nil
The total foreign exchange earnings used and earned:
(Rs. in Lakhs)
Financial Year
2013-2014
Financial Year
2012-2013
Total Foreign Exchange used Nil Nil
Total Foreign Exchange earned Nil Nil
P. C. Vaidya Rajesh Jejurikar
Vadodara, 25
th
April, 2014 Director Director
251
To The Members of
Mahindra Gujarat Tractor Limited
MAHINDRA GUJARAT TRACTOR LIMITED (the Company),
st
March, 2014, the
Companies Act, 2013 in terms of general circular 15/2013
dated 13
th
September 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principals
misstatement.
an opinion on the effectiveness or the Companys internal
evaluating the overall presentation of the nancial statement.
Opinion
with the accounting principles generally accepted in India.
st
March, 2014;
Emphasis of Matter
We draw attention to Note 2.1 to the nancial statements
stating that the accumulated losses of the Company as at
31
st
March 2014 have exceeded the share capital and reserves,
by Rs. 66.15 lacs (as at 31
st
March 2013 Rs. 536.04 lacs).
The Company has prepared the accounts on a going concern
basis for the reasons mentioned in the same note, on which
we have relied on.
Our opinion is not qualied in respect of this matter.
5 of the Order.
2. As required by Section 227(3) of the Act, we report that;
a. We have obtained all the information and explanations
b. In our opinion, proper books of account as required
c. The Balance Sheet, the statement of Prot and Loss,
d. In our opinion, the Balance Sheet, the Statement of
th
September 2013 of the
e. On the basis of the written representations received
st
st
of the Act.
(Gaurav J. Shah)
Partner
Place: Vadodara
Date: 25
th
April, 2014
252
even date on the accounts of Mahindra Gujarat Tractor
Limited for the year ended on 31
st
March 2014)
showing full particulars, including quantitative
details and situation of the xed assets.
(b) The xed assets were physically veried by
the Management in accordance with a regular
programme of verication which, in our opinion
provides for physical verication of all the xed
assets at reasonable intervals. According to the
information and explanations given to us, no material
(c) There is no disposal of xed assets during the year.
(ii) (a) As explained to us, the inventories were physically
regular intervals.
(b) In our opinion and according to the information
and explanations given to us, the procedures of
physical verication of inventories followed by the
Management were reasonable and adequate in
relation to the size of the Company and the nature
of its business.
maintained proper records of inventories and no
material discrepancies were noticed on physical
verication.
secured or unsecured, to/from companies, rms or other
parties covered in the register maintained under Section
for obtaining comparable quotations, there is an
adequate internal control system commensurate with
the size of the Company and the nature of its business
with regard to purchases of inventory and xed assets
and the sale of goods and services. During the course
of our audit, we have not observed any major weakness
in such internal control system.
(v) In respect of contracts or arrangements entered in the
Register maintained in pursuance of Section 301 of the
Companies Act, 1956, to the best of our knowledge and
belief and according to the information and explanations
given to us, there are no contracts or arrangements that
needed to be entered in the Register maintained under
the said Section.
(vi) In our opinion and according to the information and
deposits from the public during the year. Accordingly, the
provisions of clause 4(iv) of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(vii) In our opinion, the internal audit functions carried
out during the year by rm of Chartered Accountants
appointed by the Management have been commensurate
with the size of the Company and the nature of its
business.
(viii) We have broadly reviewed the books of account
maintained by the Company pursuant to the rules made
by the Central Government for the maintenance of cost
records under Section 209(1) (d) of the Companies Act,
1956 in respect of tractors and are of the opinion that
prima facie the prescribed accounts and records have
been made and maintained. We have, however, not
made a detailed examination of the records with a view
to determining whether they are accurate or complete.
(ix) (a) The Company has been regular in depositing
undisputed dues, including provident fund, investor
education and protection fund, employees state
insurance, income-tax, sales tax, wealth tax,
service tax, custom duty, excise duty, and other
material statutory dues applicable to it with the
given to us, no undisputed amounts payable in
respect of income tax, sales tax, wealth tax, service
tax, customs duty and excise duty were in arrears
as at 31
st
(c) Details of dues of income-tax, sales tax, wealth
tax, service tax, custom duty, excise duty and cess
which have not been deposited as on 31
st
March,
2014 on account of disputes are given below:
Name of
the Statute
Nature
of Dues
Amount
(in lakhs)
Period
to which the
amount relates
Forum
where dispute
is pending
The Central
Excise Act,
1944
Excise
Duty
147.02# April 1996 to
May 1998
Supreme Court
# excluding interest
the nancial year are not less than fty percent of its net
worth and the Company has not incurred cash losses
in the nancial year and in the immediately preceding
nancial year.
explanations given to us, the Company has not defaulted
in repayment of dues to bank or nancial institutions
or bank.
253
(xii) Based on our examination of records and the information
and explanations given to us, the Company has not
granted loans and advances on the basis of security
by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benet fund/society. Therefore, the provisions of
clause 4(xiii) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or
trading in shares, securities, debentures and other
investments. Accordingly, the provisions of clause 4(xiv)
of the Companies (Auditors Report) Order, 2003 are not
(xv) There are no guarantees given by the Company for loans
taken by others from banks and nancial institutions.
(xvi) In our opinion and according to the information and
explanations given to us, there have been no term loans
raised during the year.
(xvii) In our opinion and according to the information and
explanations given to us and on an overall examination
of the Balance Sheet of the Company, we report that the
funds raised on short-term basis have not been used for
long-term investment.
(xviii) According to the information and explanations given
to us, the Company has not made any preferential
allotment of shares to parties and companies covered
in the register maintained under section 301 of the
Companies Act, 1956 during the year.
us, during the period covered by our audit report, the
Company has not issued any debentures.
(xx) According to the information and explanations given to
us, during the period covered by our audit report, the
Company has not raised any money by way of public
issues.
(xxi) To the best of our knowledge and according to the
information and explanations given to us, no fraud on
or by the Company has been noticed or reported during
the year.
(Gaurav J. Shah)
Partner
Place: Vadodara
Date: 25
th
April, 2014
254
Rupees in Lacs
Particulars
Note As at 31-Mar-14 As at 31-Mar-13
1. Shareholders fund
(i) Share capital
3 2,030.20 2,030.20
(ii) Reserves and surplus
4 (2,096.35) (2,566.24)
(66.15) (536.04)
2. Non-current liabilities
(i) Deferred tax liabilities (Net)

(ii) Long term provisions
5 336.56 357.60
336.56 357.60
3. Current liabilities
(i) Short term borrowings
6 585.00 585.00
(ii) Trade payables
7 2,027.44 1,508.09
(iii) Other current liabilities
8 2,415.76 3,263.04
(iv) Short term provisions
9 81.79 90.51
5,109.99 5,446.64
Total 5,380.40 5,268.20
II. ASSETS
Non-current assets
1. (a) Fixed assets
10
(i) Tangible assets
522.82 379.31
(ii) Intangible assets
21.31 43.07
(iii) Intangible assets under development

544.13 422.38
(b) Non-current investments
11
(c) Long term loans and advances
12 24.35 57.44
568.48 479.82
2. Current assets
(a) Inventories
13 1,959.91 2,456.63
(b) Trade receivables
14 2,087.43 1,190.12
(c) Cash and bank balances
15 576.56 1,028.49
(d) Short term loans and advances
16 187.47 110.35
(e) Other current assets
17 0.55 2.79
4,811.92 4,788.38
Total
5,380.40 5,268.20

ST
MARCH, 2014
Chartered Accountants Rajkumar, IAS Director
Pradipkumar Vaidya Director
Sudhir Pathak Director
Gaurav Shah C.J.Mecwan Director
Partner Shri Om Tyagi Manager
Anil Saboo Company Secretary
Place : Vadodara Place : Vadodara
Date : 25
th
April, 2014 Date : 25
th
April, 2014
255
Rupees in Lacs
Particulars Note
Year ended
31-Mar-14
Year ended
31-Mar-13
I. Gross Revenue from Sale of Products and Services 18 12,860.09 12,906.22
Less : Excise Duty 57.71 40.72
Net Revenue from Sale of Products and Services 12,802.38 12,865.50
Other Operating Revenue 85.49 57.74
Revenue from operations (Net) 12,887.87 12,923.24
II. Other income 19 206.46 98.55
III. Total revenue (I + II) 13,094.33 13,021.79
IV. Expenditure
(i) Cost of materials consumed 20 5,847.79 6,729.82
(ii) Purchase of stock in trade 3,514.35 3,032.54
(iii) Changes in inventories of nished goods, work-in-progress
and stock in trade
21 222.55 (218.00)
(iv) Employee benets expense 22 1,019.43 1,248.83
(v) Finance costs 23 133.01 139.78
(vi) Depreciation and amortisation expense 11 91.95 83.23
(vii) Other expenses 24 1,653.06 1,557.98
Total expenditure 12,482.14 12,574.18
V. Prot before tax (III - IV) 612.19 447.61
VI. Less: Tax expense
Current tax
142.30
Deferred tax

VII. Prot from continuing operations (V - VI) 469.89 447.61
VIII. Earnings per share (of Rs. 10 each)
(1) Basic
2.75 2.60
(2) Diluted
2.75 2.60
ST
MARCH, 2014
Date : 25
th
th
April, 2014
256
Rupees in Lacs
Particulars 2013-14 2012-13
A: CASH FLOW FROM OPERATING ACTIVITIES
Net Prot before Tax as per Statement of Prot and Loss 612.19 447.61
Adjusted for:
Depreciation/Amortisation 91.95 83.23
Provision for doubtful debts and advances 81.94 73.88
Provisions written back (57.75) (58.08)
Interest and Finance Charges 124.61 129.99
Operating Prot before Working Capital Changes 852.95 676.63
Adjusted for:
(Increase)/Decrease in Trade and Other Receivables (1,017.91) (287.10)
(Increase)/Decrease Inventories 496.72 (360.46)
Increase/(Decrease) Current Liabilities and Provisions 397.30 169.30
(123.89) (478.26)
Cash Generated from Operations 729.06 198.37
Taxes paid (net of refunds) (145.43) (1.15)
Net Cash Generated from Operating Activities 583.63 197.22
B: CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (213.70) (135.31)
Net Cash used in Investing Activities (213.70) (135.31)
C: CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Borrowings
Repayment of Borrowings
Interest Paid (821.86) (18.24)
Net Cash used in Financing Activities (821.86) (18.24)
Net Increase/(Decrease) in Cash and Cash Equivalents (451.93) 43.66
Opening Balance of Cash and Cash Equivalents 1,018.19 974.53
Closing Balance of Cash and Cash Equivalents 566.26 1,018.19
Notes
1. The above statement has been prepared under Indirect Method as per the Accounting Standard on Cash Flow Statement (AS - 3).
2. Cash and Cash Equivalents comprises of As at As at
31-Mar-2014 31-Mar-2013
Cash on Hand 2.58 3.23
Cheques on Hand 364.15 410.15
With Scheduled Banks
in current accounts 0.41 0.41
in margin money accounts
in Cash Credit accounts 199.12 104.40
in Fixed deposit accounts having lien
in Fixed deposit accounts 500.00
566.26 1,018.19

Date : 25
th
th
April, 2014
ST
MARCH, 2014
257
NOTES FORMING PART OF FINANCIAL STATEMENTS
1. Corporate Information
Mahindra Gujarat Tractor Limited (the Company) is a Public Limited
Company domiciled in India and incorporated under the provisions of the
Companies Act, 1956. The Company is engaged in the Manufacture and
Sale of Tractors under the brand name Shaktimaan and spares of the
same. The Company carries out its business activities in India and Nepal.
The Factory and Head Ofce of the Company is located at Vishwamitri,
Vadodara, Gujarat - India.
2.1 Basis of Accounting
The Financial statements are prepared in accordance with the
generally accepted accounting principles in India and comply
with the Accounting Standards notied under the Companies
(Accounting Standards) Rules, 2006 (as amended) and relevant
provisions of the Companies Act, 1956. The nancial statements have
been prepared on accrual basis under the historical cost convention
The accounting policies adopted in the preparation of the nancial
statements are consistent with those followed in the previous year.
The accumulated losses as at the year end have exceeded the Share
Capital and Reserves of the Company by Rs. 66.15 lacs (Previous
Year Rs. 536.04 lacs). The Company has made a prot after tax of
Rs. 469.89 lacs in the current nancial year as against prot after
tax of Rs. 447.61 lacs in the immediately preceding nancial year.
The management expects further improvement in the protability and
consequently in the net worth of the Company considering steps
taken for operational efciency, cost reduction and strengthening of
the marketing set up and exploration of newer markets. Accordingly,
the nancial statements of the Company have been prepared on a
going concern basis.
The Board For Industrial and Financial Reconstruction (BIFR) order
dated 19
th
July, 2004 declared the Company as a sick industrial
undertaking under section 3(1)(o) of the sick Industrial Companies
(Special Provisions) Act, 1985(the Act). Consequent to the hearing
held on 27
th
March 2008, the Company has submitted revised
Rehabilitation Scheme under section 17(2) of the act to the BIFR
authorities. BIFR has since appointed State Bank of India (SBI)
as an Operating Agency (OA) and instructed them to submit DRS
(Draft Rehabiliation Scheme) under Section 17(3). Accordingly SBI
has submitted the DRS to BIFR. Hearing held on 23
rd
April 2009
and BIFR, vide its order dated 11
th
May, 2009 among other things
directed SBI to consider the Contingent liabilities and other issues
in DRS. BIFR has also rejected Companys submission of modifying
the condition of any shortfall in projected cash ow will be made by
Mahindra & Mahindra Limited. The Company has led an appeal with
the Appellate Authority for Industrial and Financial Reconstruction
(AAIFR) against the said order of BIFR.
BIFR in its hearings on 27
th
October and 22
nd
December 2010 directed
the Company to submit the Revised DRS taking cut off date as 31
st

December 2010 to SBI (OA) and BIFR, consequently AAIFR has
discharged the appeal. In line with BIFR directive the Company has
submitted the Revised DRS cum Merger Scheme to SBI (for review
and vetting) and BIFR on 18
th
February 2011. SBI(OA) has vetted
and submitted the revised DRS to the BIFR on 18
th
October 2011.
Government of Gujarat has stated at the BIFR hearing held on 31
st

Oct, 2012 that Merger is not agreeable to them. In the hearing held on
6
th
February, 2013 at BIFR, Government of Gujarat submitted that they
are agreeable to infuse Equity Share Capital. Mahindra & Mahindra
Ltd and Government of Gujarat have agreed to infuse equity capital
in the Company in the proportion of their existing holding.
In the hearing held on 17
th
June, 2013, Government of Gujarat
proposed to convert their loan into equity in terms of section 81(1)(4)
of the Companies Act,1956.
Mahindra & Mahindra Limited led Misc. Application no.562/2013 on
28
th
October, 2013, praying to direct the SBI (OA) to consider the DRS
submitted by Mahindra & Mahindra Limited to formulate and submit
its fully tied up DRS for MGTL for consideration of BIFR. Hearing of
MA no.562/2013 was held on 7
th
November, 2013. Government of
Gujarat led Misc. Application no.111/2014 praying to permit/allow
to approach Central Government in terms of section 81(1)(4) of the
Companies Act, 1956 to convert their loan into equity. Hearing of
the same was held on 26
th
February, 2014 wherein BIFR directed
Government of Gujarat to serve MA to all concerned. Next date of the
hearing of main case and both MA has been xed for 19
th
May, 2014
2.2 Fixed Assets and Depreciation
All xed assets are stated at cost of acquisition less accumulated
depreciation, except for land, which is freehold and is therefore stated
at cost. Cost is net of specic grant received, if any. Assessment of
indication of impairment of an asset is made at the year end and
impairment loss, if any, is recognised.
Certain xed assets transferred to Industrial Co-operative Societies
on hire purchase basis have been reduced from the Fixed Assets of
the Company in the year of actual transaction, though they remain
the property of this Company till the last installment is paid.
Depreciation on assets is calculated on Written Down Value Method
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956. Tractors used for Research & Development
purpose are amortised over a period of three years (30% in 1
st
year,
30% in 2
nd
year and reaming 35% in 3
rd
year).
2.3 Intangible Assets
All intangibles assets are initially measured at cost and amortized so as
to reect the pattern in which assets economic benets are consumed.
a) Development Expenditure
The expenditure incurred on technical services and other
project/product related expenses are amortised over the
estimated period of benets, not exceeding ve years.
b) Software Expenditure
The expenditure incurred is amortised over three nancial years
equally commencing from the year in which the expenditure is
incurred.
2.4 Investments
Long Term Investments are valued at cost or lower. However,
provision for diminution in the value of long term investments is
made only if such a decline is other than temporary.
2.5 Inventories
Inventories are valued at lower of cost or net realisable value. Provision
for obsolete items is made on estimated basis in determining the net
realisable value. Cost is determined by using weighted average cost
method. Valuation of work in progress and nished goods includes
appropriate overheads.
2.6 Employees Benets
Companys Contributions paid/payable during the year to PF, ESIC
and Labour Welfare Fund are recognised in the Statement of Prot
and Loss.
Companys Liability towards Gratuity and long term compensated
absences schemes are determined by independent actuaries, using
the projected unit credit method. Actuarial gains and losses are
recognised immediately in the statement of Prot and Loss Account
as income or expense. Obligation is measured at the present
value of estimated future cash ows using a discounted rate that is
determined by reference to the market yields at the Balance Sheet
terms of the dened benets obligation.
Sales of products and services are recognised when the products
are dispatched/shipped or services rendered. Export benets are
recognised in the year in which the exports are made and there
exists no signicant uncertainties as to the measurement or ultimate
recovery of the amount.
258
2.8 Excise Duties
Excise duties (including industrial cess) recovered are included in
the Sale of Products (Gross). Excise Duty (including industrial cess)
in respect of Finished Goods are shown separately as an item of
Manufacturing and other expenses and included in the valuation of
nished goods.
2.9 Research and Development Expenses
Revenue expenditure on Research and Development is charged to
the Statement of Prot and Loss in the year in which it is incurred.
2.10 Product Warranty
In respect of the warranties given by the Company on sale of certain
products, the estimated costs of these warranties are accrued at the
time of sale. The estimates for accounting of warranties are reviewed
and revisions are made as required.
2.11 Taxes on Income
of taxable income for the year. Deferred tax is recognised, subject
to the consideration of prudence, on timing difference being the
differences between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods.
Deferred tax assets arising on account of unabsorbed depreciation
and carry forward of losses are recognized only to the extent that
there is a virtual certainty supported by convincing evidence that
sufcient taxable prot will be available against which such deferred
tax asset can be realised.
2.12 Provisions, Contingent Liabilities and Contingent Assets
Provisions involve substantial degree of estimation in measurement.
Provisions are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outow of
resources. Contingent liabilities are not recognised but are disclosed
in notes. Contingent assets neither recognised nor disclosed in the
nancial statements.
Note 3 Share Capital
As at 31-Mar-14 As at 31-Mar-13
Partizculars Nos
Rupees
in Lacs Nos
Rupees
in Lacs
A Authorised
1. Equity Shares of
Rs. 10 each 50,000,000 5,000.00 50,000,000 5,000.00
2. 8.5% Cumulative
Redeemable Preference
Shares of Rs. 10 each 10,000,000 1,000.00 10,000,000 1,000.00
Total ............................... 60,000,000 6,000.00 60,000,000 6,000.00
B. Issued, Subscribed
and Paid up
1. Equity Shares of
Rs. 10 each 15,301,979 1,530.20 15,301,979 1,530.20
2. 8.5% Cumulative
Shares of Rs. 10 each 5,000,000 500.00 5,000,000 500.00
Total ............................... 20,301,979 2,030.20 20,301,979 2,030.20
Notes:
1. Shares held by Holding/ultimate Holding Company and details of
shareholders holding more than 5% shares in the Company:
Particulars As at 31-Mar-14 As at 31-Mar-13
Equity Shares
Rupees
in Lacs
% of
share
holding
Rupees
in Lacs
% of
share
holding
Mahindra Holdings Limited
(Holding Company) 74,97,970
Equity Shares of Rs. 10 each
fully paid 749.80 49% 749.80 49%
Mahindra & Mahindra Ltd.
(Ultimate Holding Company)
16,83,218 Equity Shares of
Rs. 10 each fully paid 168.32 11% 168.32 11%
Equity Shares
Rupees
in Lacs
% of
share
holding
Rupees
in Lacs
% of
share
holding
Government of Gujarat
61,20,791 Equity Shares of
Rs. 10 each fully paid 612.08 40% 612.08 40%
Preference Shares
Government of Gujarat 8.5%
Cumulative Redeemable
Preference Shares of Rs. 10
each 500.00 100% 500.00 100%
2. Share Capital
2.1 I. Issued and Subscribed Capital includes
a. 1,500,000 Equity Shares of Rs. 10 each issued to
Government of Gujarat as fully paid up, without
receiving payment in cash, being the consideration
for transfer of the undertaking of Hindustan Tractors
Limited to the Company.
b. 11,979 Equity Shares of Rs. 10 each issued to
Government of Gujarat as fully paid up, being the
reimbursement of preliminary expenses incurred by
them on the formation of the Company.
c. 13,790,000 Equity Shares of Rs. 10 each issued
to Government of Gujarat consequent upon
conversion of loan of Rs. 137,900,000 into Equity
Share Capital.
II. Out of 15,301,979 Equity Shares, as stated above held
by the Government of Gujarat, 9,181,188 Equity Shares
were divested by sale to Mahindra Group. The holding
by Mahindra Group is as follows 1,683,218 Equity
Shares are held by Mahindra & Mahindra Limited, the
holding Company, including 7 Equity Shares jointly with
its nominees & 7,497,970 Equity shares are held by
Mahindra Holdings Limited.
III. 5,000,000 8.5% Cumulative Redeemable Preference
Shares of Rs. 10 each issued to Government of Gujarat
(GOG) as fully paid up on 23
rd
May, 2000 consequent
upon conversion of loan of Rs. 50,000,000. These shares
were redeemable at par at the end of four years from the
date of allotment i.e., on 22
nd
May, 2004. The Company
has not yet decided timing of payment.
2.2 On account of the accumulated book losses, no provision has
been made for 8.5% dividend payable amounting to Rs. 546.46
lacs on the preference shares for the period from 23
rd
May,
2000 (being the date of allotment) to the preceding year ended
31
st
March, 2013 and Rs. 42.50 lacs for the current year, and
additional tax thereon.
Note 4 Reserves and Surplus
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1 Capital Reserve 217.13 217.13
2 Surplus/(Decit) in Statement of Prot
and Loss
Opening balance (2,783.37) (3,230.98)
Add: Prot for the Year 469.89 447.61
Closing Balance (2,313.48) (2,783.37)
Total (2,096.35) (2,566.24)
259
Note 5 Long term provisions
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Provision for Employee benets
Provision for compensated absences 72.83 81.70
Provision for Gratuity 263.73 275.90
Total 336.56 375.60
Notes :
1. Refer Note 25.7 Additional Information for disclosure in
compliance of requirements of Accounting Standard 15 Employee
Benets.
Note 6 Short-term Borrowings
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Loans and advances from related
parties
Unsecured
Inter Corporate Deposit from Mahindra
& Mahindra Ltd. 585.00 585.00
Total 585.00 585.00
Notes :
1. Inter Corporate Deposit (ICD) from M&M Ltd
a. ICD was placed with the Company during the period February
2001 to June 2004.
b. Terms of repayment as originally dened were 90 days + call
basis. No repayment till date. Now repayment is linked to nal
acceptance of DRS submitted to the BIFR.
c. Rate of interest is 12.5% p.a. (revised from 13.6% to 12.5%
w.e.f. 1-Jan-2010).
d. Interest accrued on the same as on 31-Mar-2014 is Rs. 357.39
lacs (PY Rs. 651.57 lacs).
e. Rs. 360 lacs paid during the year towards accumulated Interest.
Note 7 Trade Payables
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Trade Payables
Trade Payables-Micro & Small
Enterprises
26.49 15.07
Trade Payables-Others 1,986.68 1,485.48
Total 2,027.44 1,508.09
Notes :
1. There are some Micro, Small and Medium Enterprises, to whom
the Company owes dues, which are outstanding for more than
the stipulated period. The information regarding micro, small and
medium enterprises have been determined to the extent such
parties have been identied on the basis of information available
with the Company. This has been relied upon by the auditors. The
disclosures required to be made as per Micro, Small, and Medium
Enterprise Development Act 2006 are as follows:
Rupees in Lacs
As at
31-Mar-14
As at
31-Mar-13
I. Dues remaining unpaid
Principal 25.52 11.46
Interest 0.97 3.61
II. Interest paid in terms of
Section 16 of the Act (actual) 3.61 2.48
III. Amount of interest due and
payable for the period of
delay on payments made
beyond the appointed day
during the year 0.97 3.61
IV. Amount of interest accrued
and remaining unpaid 0.97 3.61
V. Amount of interest due and
payable on previous years
outstanding amount
VI. The names of the small scale industrial undertaking(s) to whom
the Company owes any sum exceeding Rs. 1,00,000/- together
with interest which is outstanding for more than 45 days is A. P.
Autotech Pvt. Ltd., Alfa Industrial Corporation, Rajkot, Bhurjee
Machine Tools, Fine Thread Form Industries, Inducto Cast,
Shaktiwan Manufacturers.
Note 8 Other Current Liabilities
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Current maturity of Loan from
Government of Gujarat 316.83 316.83
2. Interest accrued and due on Loan from
Government of Gujarat 449.32 852.38
3. Interest accrued and due on Inter
Corporate Deposit from Mahindra &
Mahindra Ltd. 357.39 651.57
4. Other payables
Trade/Security Deposits received 704.03 719.67
Statutory Remittances (PF, ESIC, VAT,
Excise, Service Tax Payables) 38.98 26.29
Payables on purchase of xed assets 9.89 27.99
Advances from Customers 256.82 309.92
Service coupon Liability 71.81 86.36
Dealers Incentives 79.30 49.19
Interest payable 34.11 117.91
Expenses accruals 79.52 80.28
Others 17.76 24.65
Total 2,415.76 3,263.04
Notes :
1. The loan has been taken from Government of Gujarat in the year
2000.
Repayment (as dened in the agreement) was due in 2002. However,
no repayment of Principal amount made till date. Rs. 449 lacs paid
during the year towards accumulated Interest.
Rate of interest on above loan is 12% p.a. With effect from 2006,
additional penal interest of 2.5% is also charged bringing total
interest to 14.5%.
(a) Period of default 10 years
(b) Amount (Rupees in lacs) 316.83
Interest accrued on the same as
on 31-Mar-2014 is Rs. 449.32 lacs
(PY Rs. 852.38 lacs).
260
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Employee benets
Provision for Gratuity 29.30 30.65
2. Others
Provision for Warranties 29.38 34.23
Total 81.79 90.51
Notes
1. Refer Note 25.7 Additional Information for disclosure in compliance of requirements of Accounting Standard 15 Employee Benets.
2. Refer Note 25.10 Additional Information for disclosure in compliance of requirements of Accounting Standard 29 Provisions, Contingent Liabilities And
Contingent Assets.
Note 10 Fixed Assets
Rupees in Lacs
Cost
as at
01-Apr-13
Additions
during the
year
at cost
Deduction
during
the year
Cost
as at
31-Mar-14
Depreciation/
Amortisation
as at
01-Apr-13
Depreciation/
Amortisation
for 2013-14
Deductions
and
Adjustments
of
Depreciation/
Amortisation
Depreciation/
Amortisation
to
31-Mar-14
Net Balance
as at
31-Mar-14
A : Tangible Assets
Land 1.03 1.03 1.03
1.03 1.03 1.03
Buildings 113.66 21.91 135.57 81.09 2.21 83.30 52.27
103.82 9.84 113.66 79.13 1.96 81.09 32.57
Plant and Equipment 1,224.99 188.83 1,413.82 900.23 63.71 963.94 449.88
1,121.00 103.99 1,224.99 849.72 50.51 900.23 324.76
Furniture and Fittings 38.38 2.96 41.34 22.46 3.33 25.79 15.55
32.20 6.18 38.38 19.12 3.34 22.46 15.92
Vehicles 58.19 58.19 53.16 0.94 54.10 4.09
58.19 58.19 51.95 1.21 53.16 5.03
Sub Total A 1,436.25 213.70 1,649.95 1,056.94 70.19 1,127.13 522.82
1,316.24 120.01 1,436.25 999.92 57.02 1,056.94 379.31
Software Expenditure 45.33 45.33 28.29 11.95 40.24 5.09
30.03 15.30 45.33 13.18 15.11 28.29 17.04
Development Expenditure 55.51 55.51 29.48 9.81 39.29 16.22
55.51 55.51 18.38 11.10 29.48 26.03
Sub Total B 100.84 100.84 57.77 21.76 79.53 21.31
85.54 15.30 100.84 31.56 26.21 57.77 43.07
TOTAL (A+B) 1,537.09 213.70 1,750.79 1,114.71 91.95 1,206.66 544.13
1,401.78 135.31 1,537.09 1,031.48 83.23 1,114.71 422.38
Current year gures are in bold.
Note 11 Non Current Investments
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
Investments (At Cost) :
Investment in the Shares of Industrial
Co-Operative Societies 4.61 4.61
4.61 4.61
Less : Provision for diminution 4.61 4.61
Total
NOTE:
Details of Investments in the Shares of Industrial Co-Operative Societies
Rupees in Lacs
No. of
shares
Name of Industrial
Co-Operative Societies
As at
31-Mar-14
As at
31-Mar-13
154 Parishram Ind. Co-Op. Soc. Ltd. 0.77 0.77
140 Adarsh Ind. Co-Op. Soc. Ltd. 0.70 0.70
227 Akshay Ind. Co-Op. Soc. Ltd. 1.14 1.14
140 Sarvoday Ind. Co-Op. Soc. Ltd. 0.70 0.70
1 Ajay Ind. Co-Op. Soc. Ltd. 0.01 0.01
31 Urja Ind. Co-Op. Soc. Ltd. 0.16 0.16
1 Mahashakti Ind. Co-Op. Soc. Ltd. 0.01 0.01
228 Pragati Ind. Co-Op. Soc. Ltd. 1.14 1.14
Total 4.61 4.61
Note 12 Long-term Loans & Advances
Rupees in Lacs
As at
31-Mar-14
As at
31-Mar-13
1. Capital advances
2. Security deposits with Government
Authorities
Unsecured, Considered Good 20.47 20.45
Total 24.35 57.44
Note 13 Inventories
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Raw materials 569.97 846.87
Goods In Transit 1.09
571.06 846.87
2. Work-in-progress 122.98 134.95
3. Finished goods 947.67 1,210.34
4. Stock-in-trade 288.63 236.54
5. Stores and spares 5.23 5.28
6. Loose tools 24.34 22.65
Total 1,959.91 2,456.63
261
Note 14 Trade Receivable
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Trade Receivables outstanding for
less than six months from the date
they are due for payment
a. Secured, Considered good 650.31 516.99
b. Unsecured, Considered good 1,406.84 622.04
c. Doubtful 89.16
d. Less: Allowance for trade receivables 89.16
2,057.15 1,139.03
2. Trade Receivables outstanding for
more than six months from the date
they are due for payment
a. Secured, Considered good 30.28 26.17
b. Unsecured, Considered good 24.92
c. Doubtful 56.80
d. Less: Allowance for trade receivables 56.80
30.28 51.09
Total 2,087.43 1,190.12
Note
1. The Company holds guarantees from banks in respect of secured
receivables considered good.
Note 15 Cash & Bank Balances
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
A. Cash & Cash Equivalents
1. Cash on hand 2.58 3.23
2. Cheques, Drafts on hand 364.15 410.15
3. Balances with banks
Current account 0.41 0.41
Cash credit account 199.12 104.40
Deposit account
less than 12 months maturity 500.00
Total Cash & Cash Equivalents 566.26 1,018.19
B. Other Bank Balances
Deposit account having lien
less than 12 months maturity 0.30 0.30
Margin money deposits 10.00 10.00
Total Other Bank Balances 10.30 10.30
Total 576.56 1,028.49
Note 16 Short-term Loans and Advances
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
1. Security Deposits
Unsecured considered good 41.22 22.96
2. Prepaid Expenses 7.88 2.55
3. Balances with Government Authorities
Unsecured considered good
Balance with Excise 28.06 20.12
Income Tax 15.49 12.36
Sales Tax 37.91 24.78
81.46 57.26
4. Loans and advances to Employees
4.76 10.40
5. Other loans and advances
a. Unsecured, considered good 52.15 17.18
b. Doubtful 380.67
c. Less: Allowance for doubtful loans
and advances 380.67
52.15 17.18
Total 187.47 110.35
Note 17 Other Current Assets
Rupees in Lacs
Particulars As at
31-Mar-14
As at
31-Mar-13
Interest accrued on deposits 0.55 2.79
Total 0.55 2.79
Note 18 Revenue from Operations
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
Revenue from -
1. Sale of goods
Manufactured goods * 8,132.44 8,558.93
Traded goods ** 4,727.65 4,347.29
2. Other operating revenues
Hire purchase, lease and rental income 1.98 2.01
Scrap sales 54.75 12.96
Export Benets 25.91 37.25
Other Operating income 2.85 5.52
12,945.58 12,963.96
less: Excise duty 57.71 40.72
Total 12,887.87 12,923.24
262
* Sales of Manufactured goods is the value of Tractors, Parts and
Accessories of tractors.
** Sales of Traded Goods is the value of Tractors purchased and sold.
Note 19 Other Income
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
1. Interest income:
Interest from Banks on :
Deposits 29.28 14.59
2.
Interest on overdue trade receivables
& Others 119.43 25.88
3. Excess Provisions for expenses in
earlier year written back 57.75 58.08
Total 206.46 98.55
Note 20 Cost of Raw Material Consumed
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
1. Opening Stock 846.87 703.71
2. Add: Purchases 5,571.98 6,872.98
6,418.85 7,576.69
3. Less : Closing Stock 571.06 846.87
Total 5,847.79 6,729.82
Note 21 Changes in Inventories of Finished Goods, Work-in-progress and
stock-in-trade
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
1. Opening Stock of
Work in Progress 134.95 76.04
Finished Products Produced &
Purchased for sale 1,446.88 1,287.79
1,581.83 1,363.83
2. Less: Closing Stock of
Work in Progress 122.98 134.95
Finished Products Produced &
Purchased for sale 1,236.30 1,446.88
1,359.28 1,581.83
Decrease/(Increase) in Stock 222.55 (218.00)
Note 22 Employee Benets Expenses
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
1. Salaries, wages, bonus 847.16 1,022.76
2. Contribution to Provident & other funds 51.02 49.52
3. Gratuity expense 55.66 87.85
4. Staff welfare 65.59 88.70
Total 1,019.43 1,248.83
Note 23 Finance Costs
Rupees in Lacs
31-Mar-14
Year ended
31-Mar-13
1. Interest on term loans 45.94 45.94
2. Interest on other loans 78.67 84.05
3. Bank Charges 8.40 9.79
Total 133.01 139.78
Note 24 Other Expenses
Rupees in Lacs
Sl.
No.
31-Mar-14
Year ended
31-Mar-13
1. Stores consumed 14.76 11.66
2. Tools consumed 1.78 3.42
3. Power and fuel 57.29 56.66
4. Rent including lease rentals 4.98 3.78
5. Rates and taxes 24.76 35.77
6. Insurance 3.93 2.91
7. Repairs and maintenance
Buildings 56.30 39.85
Machinery 38.65 18.82
Others 11.17 12.21
8. Postage, Telephone and
Communication 27.23 28.68
9. Legal and Professional Charges 53.30 61.08
10. Freight outward 400.62 353.29
11. Sales promotion expense 121.65 93.92
12. Travelling & Conveyance Expenses 227.06 280.75
13. Subcontracting, Hire & Service
Charges 95.02 102.06
14. Provision for doubtful trade and other
receivables, loans and advances 81.94 73.88
15. Auditors remuneration
(Refer Note 25.2) 2.81 2.81
16. Miscellaneous expenses 115.77 123.09
17. Provision for warranty 21.07 17.63
18. Incentives and Discount Allowed to
Customers 292.97 235.71
19. Bad Debt Written off 241.28
Less:-Provision for Doubtful Debt
written back (241.28)
20. Bad Advances Written off 419.46 199.61
Less:-Provision for Doubtful Advances
written back (419.46) (199.61)
Total 1,653.06 1,557.98
Note 25 Additional Information
25.1 Contingent Liabilities
I. Guarantees given by the Company to a nancial institution for
housing loans given by the nancial institution to the employees
of the Company. An aggregate amount of Rs.Nil (Previous Year
: Rs. 0.27 lacs) was outstanding to be paid by the employees to
the nancial institution, as at 31
st
March, 2014.
II. Bills discounted but not matured Rs. 221.61 (Previous Year:
Rs. Nil) - represents customers bills discounted.
III. Bank Guarantee not provided for Rs. 9.50 lacs (Previous Year:
Rs. 9.50 lacs) issued for Sales Tax matters
IV. The Company received a demand of Excise Duty for Rs. 73.50
lacs (Previous Year: Rs. 73.50 lacs) (excluding interest and
penalty) on Transmission Assemblies/Chassis Assemblies used
in the manufacture of Tractors of less than 25HP, which were
exempted from payment of duty, during the period April 1996
to May 1998. The demand is conrmed by the Commissioner
of Central Excise and Customs, Vadodara and the Company
263
has led an appeal in The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai. The CESTAT, Mumbai has remanded the matter
for re-determination of exact classication and the rate of duty vide the order dated 28/10/2005. against the order of CESTAT, Mumbai the Company
has led an Appeal with the Supreme Court. Appeal is admitted and tagged with the Civil Appeal no.6561/2004
(Rupees in Lacs)
25.2 Payment to Auditors for other services 2013-14 2012-13
For Other Services [including service tax Rs. 0.03 (Previous Year Rs. 0.03 lacs)] 0.28 0.28
Reimbursement of Expenses
25.3 The Company has, by applying the denitions of Business Segment and Geographical Segment, contained in Accounting Standard 17 Segment
Reporting, concluded that there is neither more than one Business Segment nor more than one Geographical Segment, and therefore segment information
as per Accounting Standard 17 is not required to be disclosed.
25.4 Earnings/(Loss) Per Share (EPS) Calculation (basic and diluted):
Rupees in Lacs
31-Mar-14 31-Mar-13
i. Prot after taxation 469.89 447.61
ii. Dividend on Pref. shares (Note 3) (42.50) (42.50)
iii. Tax on Dividend (Note 3) (7.22) (7.22)
Total 420.17 397.89
iv. Weighted average number of equity shares used as the denominator 153.02 153.02
v. Nominal values of equity shares 10.00 10.00
vi. Earnings Per Equity Share 2.75 2.60
25.5 Related Party Disclosures for the year ended 31
st
March, 2014
A. Related Party and their relationship
Holding Company: Mahindra & Mahindra Limited (M&M)
Fellow Subsidiaries: Mahindra Ugine Steel Company Limited
Mahindra Hinoday Industries Limited (Upto 30th September, 2013)
Key Management Personnel: Mr. Shri Om Tyagi
B. Transactions with the related parties (Rupees in Lacs)
Particulars Holding Company Fellow Subsidiaries Total
2013-14 2012-13 2013-14 2012-13 2013-14 2012-13
Income
Sales of goods (299.82) (373.07) (299.82) (373.07)
Job work income
Expenses reimbursed (Receipt) (11.00) (0.10) (11.00) (0.10)
Expenses
Purchase of Tractors 3,514.35 3,027.74 3,514.35 3,027.74
Purchase of Other components 1,874.74 2,356.87 144.36 210.49 2,019.10 2,567.36
Services received 55.50 50.55 55.50 50.55
Expenses reimbursed 48.76 36.10 48.76 36.10
Interest 73.13 73.13 73.13 73.13
Year End Balances
Amount Payable 1,397.13 876.16 3.65 7.35 1,400.78 883.51
Amount Payable (in respect of loan and interest) 942.39 1,236.57 942.39 1,236.57
The Signicant Related party transactions are as under :
Sr.
no
Nature of Transations Name of Related Party 2013-14 2012-13
1 Purchase of Tractors Mahindra & Mahindra Ltd 3,514.35 3,027.74
2 Purchase of Other components Mahindra & Mahindra Ltd 1,874.74 2,356.87
3 Services received Mahindra & Mahindra Ltd 55.50 50.55
4 Expenses reimbursed Mahindra & Mahindra Ltd 48.76 36.10
5 Interest Mahindra & Mahindra Ltd 73.13 73.13
264
25.6 Components of Deferred Tax Assets/(Liability)
(Rupees in Lacs)
31-Mar-14 31-Mar-13
Deferred tax Asset
Gratuity 120.54 99.47
Bonus 7.77 7.37
Provision for Doubtful Debts &
Advances
18.17 152.46
Deferred tax liability
Depreciation (34.56) (21.35)
Net Deferred Tax Asset 111.92 237.95
The Company has brought forward losses under the Income Tax Act,
hence deferred tax asset has not been recognised in absence of virtual
certainty as to realisation there of against future taxable income.
25.7 Employees benets
(A) Dened Benet Plans
Companys liabilities towards Gratuity and Leave Encashment
are ascertained by an independent actuarial valuation as
per the requirements of Accounting Standard -15 (revised
2005) on Employee Benets as issued by the Institute of
Chartered Accountants of India.
Dened benet plans (Gratuity - unfunded) - As per
actuarial valuations as on March 31, 2014
Rupees in Lacs
Sr. Particulars 31-Mar-14 31-Mar-13
I. Expense recognized in
Statement of Prot and Loss
a. Current Service Cost 13.13 13.58
b. Interest cost 24.52 22.04
c. Expected return on Plan
Assets
d. Actuarial (Gain)/Loss 18.01 52.25
e. Additional charge/(write-
back) on account of
change in Policy
f. Net expense recognised
in Statement of Prot
& Loss (under head
Gratuity expense in
Note - 23 Employee
Benets Expense) 55.66 87.87
II. Actual Benet Payments for
period ended March 31, 2014
a. Actual Benet Payments 69.17 56.84
III. Changes in Obligation during
the year
a. Obligation as at the
beginning of the year 306.54 275.51
b. Current service cost 13.13 13.58
c. Interest cost 24.52 22.04
d. Accrued value of short
term o/s leave
e. Actuarial (Gain)/Loss 18.01 52.25
f. Benets Paid (69.17) (56.84)
g. Present Value of
Obligation as at the end
of the year 293.03 306.54
IV. Net Assets/Liabilities
recognized in the Balance
Sheet
a. PV of Obligation as at
the end of the year 293.03 306.54
b. Fair Value of Plan
Assets as at the end of
the year
c. Net Liabilities/(Assets)
recognised in the Balance
Sheet at year end 293.03 306.54
d. Non Current - Long
Term Provision 263.73 275.89
e. Current - Short Term
Provision 29.30 30.65
(Rupees in Lacs)
Sr. Particulars 31-Mar-14 31-Mar-13
V. Principal Actuarial
Assumptions
a. Discount rate (per
annum) (Refer Note - i) 8.00% 8.00%
b. Expected return on Plan
Assets (per annum)
(Note - ii) N.A. N.A.
c. Expected increase
in salary costs (per
annum) (Refer Note) - iii
d. Salary escalation 5.00% 5.00%
Notes :
i. Discount rate is determined by reference to market yields
at the Balance Sheet date on Government Bonds, where
the currency and terms of the Govt. Bonds are consistent
with the currency and estimated terms for the benet
obligation.
ii. The estimate of future salary increases take into account
ination, seniority, promotion and other relevant factors
(B) Dened Contribution Plans
The Company has recognized, in the statement of prot and
loss for the year ended 31
st
March, 2014, following amounts
as expenses under dened contribution plan under note 22
Employee Benets Expenses
(Rupees in Lacs)
2013-14 2012-13
Contribution to Provident Fund 50.27 48.93
25.8 Value of Raw Materials Consumed:
(Rupees in Lacs)
2013-14 2012-13
Quantity Amount Quantity Amount
Forgings, Castings,
Semi Finished
Materials (Nos.) 6,638 225.54 17,563 326.10
Crankshaft (Nos.) 1,748 75.44 2,056 90.31
Tyres and Tubes
(Nos.) 13,801 610.21 15,640 741.31
Wheel Rims (Nos.) 6,849 153.99 7,820 185.20
FIP (Nos.) 1,700 148.08 1,983 171.67
Transmission Assly
(Nos.) 1,705 1,973.06 1,955 2,184.23
Battery (Nos.) 1,786 74.68 1,967 75.74
265
(Rupees in Lacs)
2013-14 2012-13
Quantity Amount Quantity Amount
Others 2,586.79 2,955.26
5,847.79 6,729.82
Notes :
i. The consumption in value has been ascertained on the
basis of opening stock plus purchases less closing stock
and includes the adjustment of excesses and shortages as
ascertained on physical count and write-off of obsolete and
unserviceable raw material and components.
ii. The consumption in value shown against others is a
balancing gure based on the total consumption shown in the
25.9 Value of Imported and Indigenous Raw Material Consumed :
(Rupees in Lacs)
2013-14 2012-13
% Amount % Amount
Raw Material,
Components &
Spare Parts
Imported
Indigenous 100 5,847.79 100 6,729.82
100 5,847.79 100 6,729.82
25.10 Disclosures in pursuance of the Accounting Standard 29
Provisions, Contingent Liabilities And Contingent Assets notied
under Companies (Accounting Standards) Rules, 2006.
(Rupees in Lacs)
Balance
at the
beginning
of the
year
Provision
made
during
the year
Provision
used
during the
year
Provision
written
back
during the
year
Balance
at the end
of the
year
Provision
for
Warranties 34.23 21.07 15.15 10.77 29.38
(33.10) (17.63) (16.50) (34.23)
(gures in bracket represent previous year gures)
Provision for warranty has been recognised for expected warranty
claims on products sold during the last two nancial years. It is
expected that the majority of this expenditure will be incurred in the
next nancial year, and all within two years of the balance sheet date.
25.11 The Companys leasing arrangements entered on or after 1
st
April,
2001 are in respect of Operating lease for premises (residential,
ofce, godowns). The leasing arrangements Range between 11
months and three years generally, and are usually renewable by
mutual consent on agreed terms. The aggregate lease rentals
payable are charged as rent.
25.12 The Company had entered into an agreement on 9
th
November
2012 for Wage Settlement of Workmen and paid lumpsum Ex-Gratia
of Rs. 75000/- per person for the period of 1
st
January 2011 to 30
th
September 2012, Financial impact of Rs. 113 lacs is included in the
Employee Benets Expenses at Note -22 for the year ended 31
st

March, 2013
25.13 The previous year gures have been accordingly regrouped/re-
classied to conform to the current years classication.
Rajkumar, IAS Director
C.J.Mecwan Director
Shri Om Tyagi Manager
Place : Vadodara
Date : 25
th
April, 2014
MAHINDRA SHUBHLABH SERVICES LIMITED
266
Your Directors present their Fourteenth Report, together with the audited accounts of the Company for the year ended 31
st
March,
2014.
Financial Results
(Rupees in Lakhs)
31.3.2014
Year ended
31.3.2013
Total Income........................................................................................ 14882.46 8562.11
Prot/(Loss) before Interest, Depreciation and Tax ........................... 978.28 521.19
Interest ................................................................................................ 84.78 86.83
Prot/(Loss) before Depreciation and Tax ......................................... 893.50 434.36
Depreciation ........................................................................................ 35.56 2.81
Prot/(Loss) before Tax ....................................................................... 857.94 431.55
Provision for Tax
Current Year .............................................................................. 175.00 91.91
Prot for the year after provision for Tax ........................................... 682.94 339.64
Balance of (Loss) brought forward from earlier years ...................... (393.76) (733.40)
Prot/(Loss) carried to Balance Sheet ............................................... 289.18 (393.76)
Operations
During the year under review, the performance of the Company
reects a signicant improvement as compared to the previous
year. The Company exported an all-time high of 642 containers
of Grapes (approximately 9250 MTS) during the current year
as compared to 417 containers (approximately 6200 MTS) in
the previous Financial Year resulting in all time high Revenues
and Prots. This has been possible due to high volume
procurements as a result of the Companys signature Khet-Se-
Kaliyan-Tak (KSKT) initiatives adopted by the Company over
the last few years, farmer engagement and farmer recognition
initiatives such as Farmer Felicitation and Awards functions,
multilocation sourcing, expansion of supply window by early
procurements from December, 2013 and scaling up volumes
to Russia and South East Asia. KSKT initiatives have resulted
in, inter alia, building a strong bonding with the farmers due
to which signicant improvement in yields of exportable grapes
per acre has been achieved. Your Directors are pleased to
inform you that your Company was the largest Indian exporter
of Grapes to the European Union in the last season and will
continue to occupy the rst position in the current season as well.
The Company has placed strict controls on the chemicals
residue and is continuously being managed over the season.
Consequently, there have been no quality issues in the current
Financial Year pertaining to the export markets.
In the domestic fruit business, since the market conditions
were not very favourable, the Company decided to go slow in
imports of fruits.
Dividend
In view of the brought forward losses of the previous year
and also to conserve resources for meeting future operational
requirements, your Directors do not recommend a dividend for
the Financial Year 2013-14.
Current Year
The outlook for crop in the 2014 season is better in terms
of productivity despite some weather aberrations due to
unseasonal rainfall and hailstorms in the operating Grape
producing regions. This is because the Company was
successful in being able to expand the sourcing window and
multi-location operations and again strong support from KSKT
initiatives. The European market continues to remain strong,
consequently the Company expects exports to be much better
than in the previous years.
The Company has intensied efforts to grow in markets other
than Europe. It has developed and implemented steps to
constantly review European Union Food Safety Regulations
relating to phyto-sanitary standards of different markets that
are being opened.
Offer of Equity Shares on a Rights basis
During the year under review, your Company has allotted
40,00,000 Equity Shares of Rs.10 each for cash at par on
a Rights basis aggregating Rs.4,00,00,000 to its holding
company, Mahindra & Mahindra Limited.
UNIVEG BV (Joint Venture Subsidiary)
The Company has formed a 60:40 Joint Venture (JV)
Subsidiary Company with Univeg BV of Netherlands, one of
the global fruit majors. The JV will, inter alia, undertake the
domestic development of the Fresh Produce supply chain for
distribution to Indian markets, imports of Fresh Produce to
India and exports (other than grapes which would remain with
the Company) of Fresh Produce from India.
The newly formed JV, will benet from the global expertise
of UNIVEG who will provide technical knowhow and best
practices in quality control, post-harvest handling of fresh
produce, ripening process, farm agronomy practices and
procedures to meet international quality standards.
The JV will further help farmers improve their productivity
as well as price realisation. The JV will also focus on the
modernisation of the domestic fruit supply chain in order to
respond to the demand for high quality produce, improve yield,
lower wastage levels and build grower productivity thereby
improving their returns. It will focus on improving ripening,
267
packaging and storage processes to offer better fresh produce
to the discerning Indian and Overseas consumers. Under the
JV, high quality fruits will be imported from across the world and
position Indian fruits in the global markets by building efcient
export oriented supply chains, for certain select fruits. Fruits
from this JV will also be marketed under the Saboro brand.
Audit Committee
The Audit Committee of the Board presently comprises
of Mr. M. G. Bhide (Chairman), Mr. Ashok Sharma and
Mr. K. Chandrasekar. The Committee met twice during the year
under review. The Board at its Meeting held on 29
th
March,
2014 revised the terms of reference of the Audit Committee
in conformity with the relevant provisions of the Companies
Act, 2013.
Nomination and Remuneration Committee (formerly known
as Remuneration/Compensation Committee)
presently comprises of Mr. Ashok Sharma, Mr. M. G. Bhide
and Mr. K. Chandrasekar. The Committee met once post the
year end. The Board at its Meeting held on 29
th
March, 2014
changed the nomenclature of Remuneration/Compensation
Committee to Nomination and Remuneration Committee.
Further, the Board revised the terms of reference of the
Nomination and Remuneration Committee in conformity with
the relevant provisions of the Companies Act, 2013.
your Directors, based on the representations received from the
as at 31
st
concern basis.
Directors
Dr. Veena Mishra and Mr. Anoop Mathur retire by rotation and
being eligible, offer themselves for re-appointment.
Codes of Conduct
The Company had adopted Codes of Conduct for Corporate
Governance (the Code(s)) for its Directors and Senior
Management and Employees. These Codes enunciate the
underlying principles governing the conduct of the Companys
business and seeks to reiterate the fundamental precept that
good governance must and would always be an integral part
of the Companys ethos.
the Senior Management and Employees of the Company
Auditors
Messrs Deloitte Haskins & Sells, Chartered Accountants,
Baroda retire as Auditors of the Company and have given their
consent for re-appointment. The Members are requested to
elect Auditors from the conclusion of the forthcoming Annual
General Meeting until the conclusion of the next Annual
As required under the provisions of section 224(1B) of the
Companies Act, 1956 and sections 139(1) read with section 141
of the Companies Act, 2013, the Company has obtained a written
Certicate 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 specied in the said sections.
Deposits and Loans/Advances
Policy for Prevention of Sexual Harassment
Particulars of Employees as required under section
217(2A) of the Companies Act, 1956 and the Rules made
thereunder
the Financial Year and was in receipt of remuneration, of not
less than Rs.60,00,000 per annum during the year ended
31
st
March, 2014, or was employed for a part of Financial Year
and was in receipt of remuneration of not less than Rs.5,00,000
per month during any part of the year.
Acknowledgement
Your Board takes this opportunity to express their sincere
thanks to all the stakeholders for extending their valuable
co-operation to the Company.
Ashok Sharma
Chairman
Mumbai, 30
th
April, 2014
268
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
31
ST
MARCH, 2014.
The operations of your Company are not energy-
intensive. However, adequate measures have been
initiated to reduce energy consumption.
implemented for reduction of consumption of energy:
Nil
(c) Impact of the measures at (a) & (b) above for
reduction of energy consumption and consequent
The above measures have resulted in reduction of
Energy consumption.
per unit of production as per Form A of the Annexure
in respect of Industries specied in the Schedule
thereto: Not Applicable
Research & Development (R&D):
1. Specic areas in which R & D carried out by the
Company: None
2. Benets derived as a result of the above R & D: Not
Applicable
3. Future plan of action: Further quality improvement
4. Expenditure on R & D: Nil
5. Technology absorption, adaptation and innovation:
None
The Company continues to strive to improve its export
earnings. Further, details in respect of exports are set out
elsewhere in the Annual Report.
(Rupees in Lakhs)
Financial Year
2013-14
Financial Year
2012-13
Total Foreign Exchange earned 8841.25 5092.91
Total Foreign Exchange used 1294.66 1238.63
Ashok Sharma
Chairman
Mumbai, 30
th
April, 2014
269
TO THE MEMBERS OF
of MAHINDRA SHUBHLABH SERVICES LIMITED (the
Company), which comprise the Balance Sheet as at
31
st
March, 2014, the Statement of Prot and Loss and
the Cash Flow Statement for the year then ended, and a
summary of the signicant accounting policies and other
1956 (the Act) (which continue to be applicable in respect
of Section 133 of the Companies Act, 2013 in terms of
General Circular 15/2013 dated 13
th
September, 2013 of
the Ministry of Corporate Affairs) and in accordance with
the accounting principles generally accepted in India. This
responsibility includes the design, implementation and
the auditors judgment, including the assessment of the
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of
the Companys internal control. An audit also includes
evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates
made by the Management, as well as evaluating the
opinion.
Opinion
according to the explanations given to us, the aforesaid
nancial statements give the information required by the
Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally
accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs
of the Company as at 31
st
March, 2014;
(ii) in the case of the Statement of Prot and Loss, of
the prot of the Company for the year ended on that
date; and
(iii) in the case of the Cash Flow Statement, of the cash
ows of the Company for the year ended on that date.
5 of the Order.
(i) As required by Section 227(3) of the Act, we report
that:
explanations which to the best of our knowledge
and belief were necessary for the purposes of
our audit.
(b) In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Prot and
Loss, and the Cash Flow Statement dealt with by
this Report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, the Statement
of Prot and Loss, and the Cash Flow Statement
comply with the Accounting Standards notied
under the Act (which continue to be applicable
in respect of Section 133 of the Companies Act,
2013 in terms of General Circular 15/2013 dated
13
th
Affairs).
(e) On the basis of the written representations
received from the directors as on 31
st
March,
2014 taken on record by the Board of Directors,
none of the directors is disqualied as on 31
st
March, 2014 from being appointed as a director
in terms of Section 274(1)(g) of the Act.
Ketan Vora
Partner
MUMBAI, 30
th
270
ANNEXURE TO THE INDEPENDENT
AUDITORS REPORT
even date)
activities/result, transactions etc., clauses (viii), (xii), (xiii),
(xiv), (xv), (xvi), (xviii), (xix) and (xx) of CARO are not
applicable.
(c) None of the Fixed assets have been disposed off
during the year.
(iii) In respect of its inventories:
(iv) The Company has neither granted nor taken any loans,
Company and the nature of its business for the purchase
of inventory and xed assets and for the sale of goods.
The nature of business does not involve sale of services.
During the course of our audit we have not observed any
continuing failure to correct major weaknesses in such
internal control system.
explanations given to us, there are no contracts or
arrangements that need to be entered in the register
maintained in pursuance of Section 301 of the Companies
Act, 1956.
(vii) According to the information and explanations given to
public during the year. In respect of unclaimed deposits,
the Company has complied with the provisions of
Sections 58A, 58AA or any other relevant provisions of
(viii) In our opinion, the Company has an adequate internal
of its business.
(ix) According to the information and explanations given to
of Provident Fund, Employees State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty,
in arrears as at 31
st
to us, there are no dues of Income-tax, Sales Tax,
Service Tax, Customs Duty, Excise Duty, Cess which
have not been deposited as on 31
st
March, 2014, with
the appropriate authorities on account of any dispute.
(x) The Company does not have any accumulated losses at
the end of the nancial year and the Company has not
incurred cash losses during the nancial year covered by
our audit and in the immediately preceding nancial year.
in the repayment of dues to nancial institutions, banks
and debenture holders. The company does not have any
borrowings in form of debentures.
(xii) In our opinion and according to the information and
the Balance Sheet of the Company, we report that funds
raised on short-term basis have, prima facie, not been
used during the year for long-term investment.
(xiii) To the best of our knowledge and according to the
Ketan Vora
Partner
MUMBAI, 30
th
271
As at
31
st
March, 2014
As at
31
st
March, 2013
Particulars Note No. Rupees Rupees
(a) Share capital 3 10,11,45,140 6,11,45,140
(b) Reserves and surplus 4 2,89,17,635 (3,93,76,134)
13,00,62,775 2,17,69,006
(a) Long-term borrowings 5 68,05,479 75,61,639
(b) Long-term provisions 6 64,24,846 46,29,265
1,32,30,325 1,21,90,904
(a) Short-term borrowings 7 15,00,00,000 21,50,05,875
(b) Trade payables 8 40,66,16,786 26,74,89,483
(c) Other current liabilities 9 2,20,47,683 2,15,64,574
(d) Short-term provisions 10 21,96,393 3,69,367
58,08,60,862 50,44,29,299
TOTAL ............................................................................................... 72,41,53,962 53,83,89,209
II. ASSETS
(a) Fixed assets
i. Tangible assets 11 54,14,157 32,24,673
ii. Capital work-in-progress 11A 41,95,944
(b) Non-current investments 12 58,75,170 58,75,170
(c) Long-term loans and advances 13 84,94,215 1,32,39,156
(d) Other non-current assets 14 19,96,807 63,873
2,59,76,293 2,24,02,872
(2) Current assets
(a) Inventories 15 48,93,77,931 37,34,23,591
(b) Trade receivables 16 14,81,61,630 6,39,91,078
(c) Cash and cash equivalents 17 2,51,85,842 6,15,01,120
(d) Short-term loans and advances 18 67,46,989 74,34,097
(e) Other current assets 19 2,87,05,277 96,36,451
69,81,77,669 51,59,86,337
TOTAL ............................................................................................... 72,41,53,962 53,83,89,209
See accompanying notes forming part of Financial statements
ST
MARCH, 2014
In terms of our report attached. For Mahindra Shubhlabh Services Limited
Chartered Accountants Ashok Sharma Chairman
M. G. Bhide
Ketan Vora K. Chandrasekar
Director
Partner Anoop Mathur
Dr. Veena Mishra
V. Janakiraman Chief Financial Ofcer
Feroze Baria Company Secretary
Mumbai, April 30, 2014 Mumbai, April 30, 2014
}
272
For the
Year ended
31
st
March, 2014
For the
Year ended
31
st
March, 2013
Particulars Note No. Rupees Rupees
I. Revenue from operations 20 1,45,37,92,897 85,24,00,654
II. Other income 21 3,44,52,880 38,10,808
III. Total revenue (I + II) 1,48,82,45,777 85,62,11,462
IV. Expenses
Cost of packing material consumed 22 13,93,37,502 8,61,76,684
Purchases of stock-in-trade 31 & 37 91,98,88,327 58,36,24,471
Changes in inventories of stock-in-trade 23 (10,26,80,180) (12,83,70,728)
Employee benets expense 24 3,99,20,126 3,30,11,642
Finance costs 25 84,78,092 86,83,027
Depreciation 11 35,56,102 2,81,449
Other expenses 26 39,39,52,039 22,96,49,466
Total expenses 1,40,24,52,008 81,30,56,011
V. Prot before tax (III-IV) 8,57,93,769 4,31,55,451
VI. Tax expense
Current tax expenses 1,75,00,000 91,90,755
VII. Prot for the year (V-VI) 6,82,93,769 3,39,64,696
VIII. Earnings per equity share:
Basic and diluted earnings per equity share of Rs. 10 each 30 9.39 5.55
ST
MARCH, 2014
M. G. Bhide
Director
Dr. Veena Mishra
}
273
For the
Year ended
31
st
March, 2014
For the
Year ended
31
st
March, 2013
Particulars Rupees Rupees
A. CASH FLOW FROM OPERATING ACTIVITIES :
Net prot before tax 8,57,93,769 4,31,55,451
Adjustments for :
Depreciation 35,56,102 2,81,449
Unrealised foreign exchange (gain)/loss (10,56,705) (11,92,675)
Finance cost 84,78,092 86,83,027
Sundry balances written back (11,51,939) (9,99,179)
Interest receipts on xed deposit (41,92,736) (27,54,236)
Provision for doubtful debts/advances 4,33,761 26,84,655
Operating prot before working capital changes 9,18,60,344 4,98,58,492
(Increase)/decrease in trade receivables (8,58,08,569) 40,61,797
(Increase)/decrease in inventories (11,59,54,340) (17,65,98,739)
(Increase)/decrease in loans and advances and other assets (1,36,16,290) 1,31,55,207
Increase/(decrease) in trade payables, other liabilities and provisions 15,41,29,107 6,71,78,947
(6,12,50,092) (9,22,02,788)
Cash generated from/(used in) operations 3,06,10,252 (4,23,44,296)
Income tax paid (net of refund) (1,77,46,492) (89,82,233)
NET CASH GENERATED/(USED) IN OPERATING ACTIVITIES 1,28,63,760 (5,13,26,529)
B. CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of xed assets (99,41,530) (2,86,974)
(Increase)/decrease in xed deposits during the year (4,32,934) 7,50,000
Purchase of investments (58,75,170)
Interest received on xed deposits 44,18,742 26,29,040
NET CASH USED IN INVESTING ACTIVITIES (59,55,722) (27,83,104)
ST
MARCH, 2014
274
For the
Year ended
31
st
March, 2014
For the
Year ended
31
st
March, 2013
Particulars Rupees Rupees
C. CASH FLOW FROM FINANCING ACTIVITIES :
Increase in share Capital 4,00,00,000
Inter corporate deposit paid (6,50,00,000) (1,50,00,000)
Proceeds from borrowings 15,00,00,000 18,03,72,939
Repayments of borrowings (15,07,56,160) (5,15,30,439)
Net increase/(decrease) in borrowed working capital loan (5,875) (20,54,934)
Interest paid (1,59,61,281) (44,30,002)
NET CASH (USED)/GENERATED FROM FINANCING ACTIVITIES (4,17,23,316) 10,73,57,564
Net (decrease)/increase in cash and cash equivalents (3,48,15,278) 5,32,47,931
Cash and cash equivalents at the beginning of the year 6,00,01,120 67,53,189
Cash and cash equivalents at the end of the year 2,51,85,842 6,00,01,120
Cash and cash equivalents as per Note 17 2,51,85,842 6,00,01,120
Notes :
1. The Cash ow statement has been prepared under the 'Indirect Method' as
set out in Accounting Standard 3 on Cash Flow statements issued by the
institute of Chartered Accountants of India.
2. Components of Cash and Cash equivalents for the purpose of cash ow
comprise cash in hand and bank balances in current account and xed
deposit accounts with original maturity of less than 3 months.
3. Previous year gures have been regrouped/rearranged, wherever necessary.
M. G. Bhide
Director
Dr. Veena Mishra
}
275
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS
1. Corporate Information:
Mahindra Shubhlabh Services Limited is engaged in the business of
distribution of fruits which includes import of fruits, domestic sales and
export of fruits. It is mainly into trading of fresh fruit products in domestic
market as well as export on consignment basis.
2. Signicant Accounting Policies:
(i) Basis of accounting
accordance with the Generally Accepted Accounting Principles
in India (Indian GAAP) to comply with the Accounting Standards
notied under Section 211(3C) of the Companies Act, 1956 (the
1956 Act) (which continue to be applicable in respect of Section
133 of the Companies Act, 2013 (the 2013 Act) in terms of General
Circular 15/2013 dated 13 September, 2013 of the Ministry of
Corporate Affairs) and the relevant provisions of the 1956 Act/2013
Act, as applicable. The nancial statements have been prepared on
accrual basis under the historical cost convention The accounting
policies adopted in the preparation of the nancial statements are
consistent with those followed in the previous year.
(ii) Use of estimates
The preparation of the nancial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amounts of assets
and liabilities on the date of the nancial statements and the reported
amounts of revenues and expenses during the reporting period.
Differences between actual results and estimates are recognised in
the period in which the results are known/materialise.
(iii) Revenue Recognition
Revenue from sale of products are recognised when the title to the
products is transferred to the buyer which generally coincides with
delivery of goods and are net of sales returns.
Revenue is recognised when no signicant uncertainty as to
collectability or realisability exists.
Export benets are accounted for in the year of export based on
eligibility and when there is no uncertainty in receiving the same.
Interest income is recognised on time proportion basis.
(iv) Fixed Assets & Depreciation
depreciation and impairment losses, if any. Cost comprises of the
purchase price and any other attributable costs of bringing the
assets to its working condition for its intended use.
Depreciation is provided on straight-line method at the rates and in
the manner specied in schedule XIV to the Companies Act, 1956,
except vehicles for which company follows rate of 15% on straight-
line method in line with group policy.
(v) Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet
date if there is any indication of impairment based on internal/external
factors. Impairment loss is provided to the extent the carrying amount
of assets exceeds their recoverable amount. Recoverable amount is
the higher of an assets net selling price and value in use. Value in
use is the present value of estimated future cash ows expected to
arise from the continuing use of an asset and from its disposal at
the end of its useful life. Net selling price is the amount obtainable
from the sale of an asset in an arms length transaction between
knowledgeable, willing parties, less the cost of disposal.
(vi) Investments
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
(vii) Inventories:
Stock-in-trade (traded goods) and packing materials are valued at
the lower of weighted average cost and net realisable value. Cost
includes all charges of bringing the goods to the point of sale.
(viii) Employee Benets
A. Short term benets:
Short term employee benets including performance incentives
are recognised as an expense at the undiscounted amount in
the Statement of Prot and Loss of the year in which the related
service is rendered.
B. Long term benets:
Dened Contribution Plan: Provident Fund
The eligible employees of the Company are entitled to receive
post employment benets in respect of provident fund, in which
both employees and the Company makes monthly contribution
at a specied percentage of the employees eligible salary.
Provident Fund is classied as Dened contribution plans as
the Company has no further obligations beyond making the
contribution.
The Companys contributions to Dened Contribution Plan are
charged to Statement of Prot and Loss as incurred.
Dened Benet Plan: Gratuity
The Company has an obligation towards gratuity, a dened
retirement plan covering eligible employees. The plan provides
a lump sum payment to vested employees at retirement, death
while in employment or on termination of employment. Vesting
occurs upon completion of ve years of service. The Company
has obtained insurance policies with the Life Insurance
Corporation of India (LIC) and makes an annual contribution
to LIC. The cost of providing benets is determined using
Projected Unit Credit method, with actuarial valuations being
carried out at each balance sheet date. Actuarial gains and
losses are recognised in the Statement of Prot and Loss in
the period in which they occur.
Other Long term employee benets: Compensated
Absences
The Company provides for the encashment of leave or
leave with pay subject to certain rules. The employees are
entitled to accumulate leave subject to certain limits for future
encashment/availment. The liability is provided based on the
number of days of unutilised leave at each balance sheet date
on the basis of an independent actuarial valuation. Actuarial
gains and losses are recognised in the Statement of Prot and
Loss in the period in which they occur.
(ix) Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising
out of subsequent uctuations are accounted for on actual payment
or realisation. Monetary items denominated in foreign currency as
at the Balance Sheet date are converted at the exchange rates
prevailing on that date. Exchange differences are recognised in the
(x) Borrowing Cost
Borrowing costs, if any, that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of such
assets. A qualifying asset is the one that necessarily takes substantial
period of time to get ready for intended use. All other borrowing
costs are charged to Statement of Prot and Loss.
(xi) Taxation
Tax expense comprises of current tax and deferred tax. Current tax
is measured at the amount expected to be paid to the tax authorities
in accordance with the Income-tax Act, 1961.
Minimum Alternative Tax (MAT) credit asset is recognised only when
and to the extent there is convincing evidence that the Company
will pay normal income-tax during the specied period. The carrying
amount of MAT credit asset is reviewed at each Balance Sheet date.
Deferred tax reects the impact of current year timing differences
between taxable income and accounting income for the year and
reversal of timing differences of earlier years. Deferred tax is measured
based on the tax rate and tax laws enacted or substantially enacted
at the balance sheet date. Deferred tax assets are recognised for
timing differences of items other than unabsorbed depreciation
and carry forward losses only to the extent that there is reasonable
276
certainty that sufcient future taxable income will be available against
which such deferred tax assets can be realised. Deferred tax assets
related to unabsorbed depreciation and carry forward losses are
recognised only if there is virtual certainty that there will be sufcient
future taxable income available to realise the assets.
(xii) Provisions
A provision is recognised when an enterprise has a present
estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to
reect the current management estimates.
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees Rupees
3 Share capital
Authorised
6,00,00,000 (as at 31
st
March, 2013:
6,00,00,000) equity shares of Rs. 10
each with voting rights 60,00,00,000 60,00,00,000
60,00,00,000 60,00,00,000
Issued, subscribed and fully paid up
1,01,14,514 (as at 31
st
March, 2013:
61,14,514) equity shares of Rs. 10
each with voting rights 10,11,45,140 6,11,45,140
10,11,45,140 6,11,45,140
(a) Rights, preferences and restrictions attached to equity shares:
The Company has only one class of shares referred to as equity
shares having a par value of Rs. 10 per share. Each holder of equity
shares is entitled to one vote per share. The dividend proposed by
the Board of Directors is subject to the approval of the shareholders
in the ensuing Annual General Meeting. In the event of liquidation of
the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
(b) Reconciliation of the number of shares and amount outstanding
at the beginning and at the end of the reporting period:
31
st
March, 2014 31
st
March, 2013
Particulars No. of shares Rupees No. of shares Rupees
Shares
outstanding
at the
beginning of
the year 61,14,514 6,11,45,140 61,14,514 6,11,45,140
Add:
Right shares
issued to
Mahindra &
Mahindra Ltd 40,00,000 4,00,00,000
Shares
outstanding
at the end
of the year 1,01,14,514 10,11,45,140 61,14,514 6,11,45,140
(c) Shares held by holding company and its subsidiary:
31
st
March,
2014
31
st
March,
2013
Particulars No. of shares No. of shares
I. Mahindra & Mahindra Limited,
the holding company including
7 shares held jointly with nominees 89,12,400 49,12,400
II. Mahindra Holdings Limited,
a subsidiary of Mahindra &
Mahindra Limited 12,02,114 12,02,114
(d) Equity shares held by each shareholder holding more than 5
percent equity shares in the Company are as follows:
31
st
March, 2014 31
st
March, 2013
Name of
shareholders
No. of
shares
% of
Holding
No. of
shares
% of
Holding
Mahindra &
Mahindra Limited 89,12,400 88.11% 49,12,400 80.34%
Mahindra Holdings
Limited 12,02,114 11.89% 12,02,114 19.66%
(e) Aggregate number of shares bought back for the period of
5 years immediately preceding the balance sheet date:
31
st
March,
2014
31
st
March,
2013
Particulars No. of shares No. of shares
Equity shares with voting rights
bought back 3,28,18,999 3,28,18,999
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees Rupees
4 Reserves and surplus
Surplus/(Decit) in the Statement of
Prot and Loss
Opening balance (3,93,76,134) (7,33,40,830)
Add: Prot for the year 6,82,93,769 3,39,64,696
Closing balance 2,89,17,635 (3,93,76,134)
TOTAL 2,89,17,635 (3,93,76,134)
5 Long-term borrowings (Unsecured)
Loans from related parties (refer
note no. 35)
Loan from Mahindra & Mahindra
Limited, the holding company 68,05,479 75,61,639
[Repayable within 3 years from
17
th
October, 2012, interest rate: 9% p.a.]
TOTAL 68,05,479 75,61,639
6 Long-term provisions
Provision for employee benets
Compensated absences 46,48,066 35,00,977
Gratuity (refer Note 27) 17,76,780 11,28,288
TOTAL 64,24,846 46,29,265
7 Short-term borrowings
(a) Loans from banks
Secured
(i) Cash credit facility from bank 5,875
[Secured by hypothecation
of stock-in-trade and
trade receivables (except
for export goods and
receivables)]
(ii) Export credit facility from
bank
HDFC Bank 15,00,00,000
Yes Bank 15,00,00,000
[Secured by hypothecation
of current assets pertaining
to exports of goods]
(b) Loans and advances from
related parties (refer note
no. 35)
Unsecured
(i) Inter Corporate Deposit
from Mahindra & Mahindra
Limited, the holding
company 6,50,00,000
TOTAL 15,00,00,000 21,50,05,875
277
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees Rupees
8 Trade payables
Trade payables :
Micro and Small Enterprises
(refer note no. 38) 5,24,022 48,366
Others (refer note 34) 40,60,92,764 26,74,41,117
TOTAL 40,66,16,786 26,74,89,483
9 Other current liabilities
(a) Interest accrued but not due on
Inter Corporate Deposit from
Mahindra & Mahindra Limited,
the holding company (refer note
no. 35) 76,54,929
(b) Interest accrued and due on
borrowings from bank 4,38,699 2,66,959
(c) Other payables
(i) Payables to statutory
authorities (includes
statutory dues such as TDS,
PF, ESIC, etc.) 41,58,650 35,88,740
(ii) Contribution payable
towards employee gratuity
fund 32,126
(iii) Trade deposits 72,27,003 55,90,471
(iv) Advance received from
customers 98,96,666 35,61,190
(v) Others 3,26,665 8,70,159
2,20,47,683 2,15,64,574
10 Short-term provisions
Provision for Taxation 17,70,062
[Net of advance tax of Rs. 2,55,16,568
Previous year NIL]
TOTAL 21,96,393 3,69,367
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees Rupees
12 Non-current investments
Unquoted Trade Investment (At cost)
21,21,000 fully paid up equity shares
(as at 31
st
March, 2013: 21,21,000) of
Rs. 10 each of Vayugrid Marketplace
Services Private Limited 58,75,170 58,75,170
TOTAL 58,75,170 58,75,170
13 Long-term loans and advances
i) Secured, considered good
Loan to Vayugrid Marketplace
Services Private Limited 76,14,780 75,61,644
ii) Unsecured, considered good
(a) Advance income tax
[Net of provision of Rs. NIL
(as at 31
st
March, 2013
Rs. 1,49,81,790) 3,13,169 66,675
(b) Balance with government
authorities 5,66,266 56,10,837
TOTAL 84,94,215 1,32,39,156
11 Fixed assets
(Rupees)
Gross block Accumulated depreciation Net block
As at
1
st
April,
2013
Additions
during the
year Disposals
Balance
as at
31
st
March,
2014
As at
1
st
April,
2013
For the
year
on
Disposals
Balance
as at
31
st
March,
2014
As at
31
st
March,
2014
As at
31
st
March,
2013
Tangible Assets
Plant and equipment 29,80,963 31,36,862 61,17,825 2,83,776 32,42,674 35,26,450 25,91,375 26,97,187
(4,11,379) (25,69,584) (29,80,963) (1,49,915) (1,33,861) (2,83,776) (26,97,187) (2,61,464)
Furniture and xtures 20,452 5,800 26,252 7,513 4,277 11,790 14,462 12,939
(13,164) (7,288) (20,452) (6,572) (941) (7,513) (12,939) (6,592)
Vehicles 1,75,000 16,19,543 17,94,543 23,548 1,27,416 1,50,964 16,43,579 1,51,452
(1,75,000) (1,75,000) (6,923) (16,625) (23,548) (1,51,452) (1,68,077)
Ofce equipment 42,296 28,692 70,988 2,604 2,231 4,835 66,153 39,692
(34,796) (7,500) (42,296) (779) (1,825) (2,604) (39,692) (34,017)
Computers 8,12,214 9,54,689 17,66,903 4,88,811 1,79,504 6,68,315 10,98,588 3,23,403
(7,38,605) (73,609) (812,214) (3,60,614) (1,28,197) (4,88,811) (3,23,403) (3,77,991)
TOTAL 40,30,925 57,45,586 97,76,511 8,06,252 35,56,102 43,62,354 54,14,157 32,24,673
Previous year (13,72,944) (26,57,981) (40,30,925) (5,24,803) (2,81,449) (8,06,252) (32,24,673) (8,48,141)
11A Capital work-in-progress
Particulars
As at
1
st
April,
2013
Additions
during the
year Adjustments
Balance
as at
31
st
March,
2014
TOTAL 41,95,944 41,95,944
Previous year (23,71,011) (23,71,011)
Note: Previous year gures have been disclosed in brackets.
278
As at
31
st
March,
2014
As at
31
st
March,
2013
Rupees Rupees
14 Other non-current assets
Bank deposits with more than 12
months maturities # 19,96,807 63,873
TOTAL 19,96,807 63,873
# includes deposits of Rs. 19,96,807
(as at 31
st
March, 2013: Rs. 63,873)
pledged against counter guarantees
given by bank.
15 Inventories
(At lower of weighted average cost and
net realisable value)
Packing materials [includes goods-in-
transit Rs. 1,27,61,211(as at 31
st
March,
2013: Rs. 1,43,15,552)]
12,65,20,734 11,31,30,320
Stock-in-trade [includes goods sent on
consignment Rs. 32,97,91,712 (as at
31
st
March, 2013: Rs. 22,56,87,484)] 36,28,57,197 26,02,93,271
TOTAL 48,93,77,931 37,34,23,591
16 Trade receivables (Unsecured)
(a) Outstanding for a period
exceeding six months from the
date they are due for payment
(i) Considered good 6,85,327 26,34,201
(ii) Considered doubtful 31,56,579 27,22,818
Less: Provision for doubtful
debts (31,56,579) (27,22,818)
6,85,327 26,34,201
(b) Other trade receivables
Considered good 14,74,76,303 6,13,56,877
TOTAL 14,81,61,630 6,39,91,078
Cash in hand 1,46,212
in current accounts 2,50,39,630 6,00,01,120
in deposit accounts with maturity of
less than 12 months as at the balance
sheet date* 15,00,000
TOTAL 2,51,85,842 6,15,01,120
* includes deposits of Rs. NIL (as at
31
st
March, 2013: Rs. 15,00,000)
pledged against counter guarantees
given by bank
denition of Cash and cash equivalents
as per AS 3 Cash Flow Statements 2,51,85,842 6,00,01,120
18 Short-term loans and advances
Advances to employees 6,35,726 5,20,980
Advances for supply of goods and
services 52,03,260 39,56,655
Others 3,11,214
TOTAL 67,46,989 74,34,097
19 Other current assets
(a) Interest accrued on xed deposits 35,262 2,61,269
(b) Export incentive receivable
Considered good 2,86,40,794 93,75,182
(c) Others 29,221
TOTAL 2,87,05,277 96,36,451
For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
Rupees Rupees
20 Revenue from operations
(a) Sale of traded goods (refer Note
33 & 37) 1,39,01,52,878 81,08,68,752
(b) Other operating revenue
Export incentives 6,36,40,019 4,15,31,902
TOTAL 1,45,37,92,897 85,24,00,654
21 Other income
(a) Interest Income
Interest on deposits with banks 32,93,512 27,54,236
Interest on Loans & advances 8,99,224
(b) Provision no longer required
written back 11,51,939 9,99,179
(c) Other non-operating income 73,57,521 57,393
(d) Foreign exchange gain (net) 2,17,50,684
TOTAL 3,44,52,880 38,10,808
22 Packing material consumed
Opening stock of packing material 11,31,30,320 6,49,02,309
Add: Purchase of packing material
(refer note no. 31) 15,27,27,915 13,44,04,695
Less: Closing stock of packing material (12,65,20,733) (11,31,30,320)
TOTAL 13,93,37,502 8,61,76,684
23 Changes in inventories of stock-in-
trade
Opening stock-in-trade 26,02,93,271 13,19,22,543
Less: Closing stock-in-trade (36,28,57,197) (26,02,93,271)
Less: Stock written off (1,16,254)
TOTAL (10,26,80,180) (12,83,70,728)
24 Employee benets expense
Salaries and wages (refer Note 29 & 35) 3,76,60,191 3,12,80,867
Contribution to provident and other
funds (refer Note 27) 19,10,104 15,72,804
Staff welfare expense 3,49,831 1,57,971
TOTAL 3,99,20,126 3,30,11,642
25 Finance costs
(a) Interest expenses on:
(i) borrowings 84,78,061 84,66,310
(ii) interest on delayed/deferred
payment of income-tax, etc. 31 2,13,166
(iii) others 3,551
TOTAL 84,78,092 86,83,027
26 Other expenses
Commission to consignment agent
(refer Note 32) 9,42,65,793 5,24,65,751
Clearing and forwarding charges (refer
Note 32) 14,00,52,364 9,28,54,701
Overseas freight (refer Note 32) 11,92,22,221 5,18,35,474
Food safety/quality expenses (refer
Note 32) 1,57,83,942 1,18,72,546
Rent 13,97,173 16,56,095
Rates and taxes 1,45,124 1,00,639
Communication expenses 7,81,017 4,76,253
Travelling and conveyance expenses 87,25,487 61,00,235
Payments to Auditor (refer Note 28) 3,68,137 2,96,239
Repairs - plant and machinery 5,734 96,393
Repairs - others 86,813 1,46,758
Insurance 7,29,918 6,10,026
Foreign exchange loss (net) 10,78,032
Business Promotion Expenses 59,96,361 14,87,413
Miscellaneous expenses 37,17,499 33,08,494
TOTAL 39,39,52,039 22,96,49,466
279
27. Employee Benet Plans:
A. Dened Contribution Plan:
On account of dened contribution plans the Companys contribution
to Provident Fund aggregating to Rs. 11,21,316 (For the year ended
31
st
March, 2013: Rs. 10,03,133) has been recognised in Statement
of Prot and Loss.
B. Dened Benet Plan: Gratuity (Funded)
Amount recognised in Balance Sheet
(Rupees)
Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
Present Value of Funded Obligations 33,45,039 25,76,682
Fair Value of Plan Assets (15,68,259) (14,16,268)
Net Liability 17,76,780 11,60,414
Amounts in the Balance Sheet
Liabilities 17,76,780 11,60,414
Assets
Net Liability 17,76,780 11,60,414
Expense recognised in the Statement of Prot and Loss
(Rupees)
Particulars
Year Ended
31st March,
2014
Year Ended
31st March,
2013
Current Service Cost 4,13,436 2,89,670
Interest on Dened Benet Obligation 2,38,251 1,92,055
Expected Return on Plan Assets (1,22,684) (1,14,218)
Net Actuarial Losses/(Gains) recognised
in year 1,02,933 (1,47,914)
Past Service Cost 1,89,479
Total expense, included in Employee
Benets Expense 6,31,936 4,09,072
Reconciliation of Dened Benet Obligations
(Rupees)
Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
Change in Dened Benet Obligation
Opening Dened Benet Obligation 25,76,682 20,50,671
Current Service Cost 4,13,436 2,89,670
Interest Cost 2,38,251 1,92,055
Actuarial Losses/(Gain) 1,16,670 (1,45,193)
Closing Dened Benet Obligation 33,45,039 25,76,682
Reconciliation of Plan Assets
(Rupees)
Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
Change in the Fair Value of Assets
Opening Fair Value of Plan Assets 14,16,268 12,99,329
Expected Return on Plan Asset 1,22,684 1,14,218
Actuarial Gain/(Losses) 13,737 2,721
Contributions by Employer 15,570
Closing Fair Value of Plan Assets 15,68,259 14,16,268
Expected contribution during next
year 500,000 500,000
Category of Assets
(Rupees)
Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
Insurer Managed Funds 100% 100%
Assumptions
(Rupees)
Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
Discount Rate (p.a.) 9.15% 8.05%
Expected Rate of Return on
Assets (p.a.) 7.50% 7.50%
Salary Escalation Rate (p.a.) 10.00% 9.00%
Experience Adjustments:
(Rupees)
Particulars
31
st
March,
2014
31
st
March,
2013
31
st
March,
2012
31
st
March,
2011
31
st
March,
2010
Dened Benet
Obligation 33,45,039 25,76,682 20,50,671 11,85,409 9,57,022
Plan Asset 15,68,259 14,16,268 12,99,329 10,67,948 7,43,913
Surplus/
(Decit) (17,76,780) (11,60,414) (7,51,342) (1,17,461) (2,13,109)
Experience
Adjustment on
plan Liabilities 70,645 (2,24,239) 3,94,772 40,171 (3,10,526)
Experience
adjustment on
plan assets 13,737 2,721 1,52,331 12,759 (14,451)
The expected rate of return on plan assets is based on the average
long term rate of return expected on investments of the fund during the
estimated term of obligation.
The estimate of future salary increases, considered in actuarial valuation,
takes account of ination, seniority, promotion and other relevant factors,
28. Payments to the Auditors (including service tax):
(Rupees)
Particulars
Year Ended
31
st
March,
2014
Year Ended
31
st
March,
2013
Change in Dened Benet Obligation
a. For Statutory Audit 3,37,080 2,24,720
b. For other services 28,090 56,180
c. For reimbursement of expenses 2,967 15,339
Total 3,68,137 2,96,239
29. During the year, the Company has reimbursed amounts aggregating to
Rs. 12,00,000 (for the year ended 31
st
March, 2013: Rs. 12,00,000) to its
Holding Company on account of Deputation charges in respect of the
Companys Chief Executive Ofcer cum Manager who is appointed as a
Manager under the provisions of the Companies Act, 1956 read with
Schedule XIII of the said Act.
30. Earnings Per Share:
Basic and Diluted earnings per share
(Rupees)
Particulars
Year Ended
31
st
March,
2014
Year Ended
31
st
March,
2013
a. Prot for the year attributable to
equity shareholders 6,82,93,769 3,39,64,696
b. Weighted average number of
Equity shares - Basic and Diluted 72,76,158 61,14,514
c. Nominal value of Equity share 10 10
d. Earnings per Share Basic and
Diluted 9.39 5.55
280
31. CIF Value of Imports:
(Rupees)
Particulars
Year Ended
31
st
March,
2014
Year Ended
31
st
March,
2013
Purchase of Traded Goods 5,20,34,442 5,33,55,679
Purchase of Packing materials 7,13,26,615 6,96,90,234
Purchase of Capital goods 39,43,940
32. Expenditure in Foreign Currencies
(Rupees)
Particulars
Year Ended
31
st
March,
2014
Year Ended
31
st
March,
2013
Commission to consignment agent 9,42,65,793 5,24,65,751
Expenses incurred by consignee
agent:
Clearing and forwarding charges 14,00,52,364 9,28,54,701
Overseas freight 11,92,22,221 5,18,35,474
Other expenses 1,57,83,942 1,18,72,546
Travelling 21,61,035 8,16,194
33. Earnings in Foreign Exchange:-
(Rupees)
Particulars
Year Ended
31
st
March,
2014
Year Ended
31
st
March,
2013
Export of Goods on F.O.B. basis 88,41,25,489 50,92,91,478
34. Foreign Currency Balances:-
The year-end foreign currency exposures that have not been specically
hedged by a derivative instrument or otherwise are given below:
Amounts receivables in foreign currency on account of the following:
Particulars 31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
In Rupees In Foreign Currency
Trade
Receivables
84,08,415 96,15,724 USD 1,41,080 USD 1,76,792
29,65,747 1,94,11,210 GBP 30,020 GBP 2,35,744
11,36,75,282 2,70,58,181 EURO 13,92,197 EURO 3,89,382
Advance
Given 3,72,084 USD 6,140
Amounts payable in foreign currency on account of the following:
Particulars 31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
In Rupees In Foreign Currency
Trade
Payables
3,73,70,233 2,11,06,615 EURO 4,46,852 EURO 3,03,736
4,48,64,850 2,85,64,744 USD 7,40,344 USD 5,25,184
Advance
Given
60,82,812 3,18,801 EURO 74,499 EURO 4,588
22,37,605 USD 41,140
34,44,118 GBP 34,863
35. Related Party Disclosures:
A. List of Related Parties and Relationships:
Name of the Related Parties
where control exists
Relation
Mahindra Holidays & Resorts India
Limited
Fellow Subsidiary Company
Bristlecone India Limited Fellow Subsidiary Company
Mahindra BPO Services Private
Limited
Fellow Subsidiary Company
Mahindra Logistics Limited Fellow Subsidiary Company
B. Transactions with Mahindra & Mahindra Limited, Holding
Company:
Sr.
No. Nature of Transaction Rupees
1. Deputation of personnel: 1,05,61,933
[Including for Manager as per Note 29] (80,77,050)
2. Other expenses 26,803
(1,34,832)
3. Reimbursement of expenses charged to the
company 9,86,229
(8,28,146)
4. Inter Corporate Deposit Paid 6,50,00,000
(1,50,00,000)
5. Interest on Inter Corporate Deposit 44,22,602
(70,01,370)
6. Interest on unsecured Loan 6,12,494

7. Closing Balance:
ICD Payable
(6,50,00,000)
Unsecured Loan 68,05,479
(75,61,639)
Payables 2,60,00,893
(2,22,98,286)
Note: Figures in brackets pertain to previous year.
C. Transactions with Fellow subsidiaries:
Sr.
No. Nature of Transaction Rupees
1. Expenses:
(a) Professional fees
Bristlecone India Limited 60,674
(61,798)
Mahindra BPO Services Limited 5,22,056
(1,83,463)
(b) Travelling expenses
Mahindra Holidays & Resorts India Limited 9,02,180
(2,84,004)
(c) Freight expenses
Mahindra Logistics Limited 4,18,440
2. Closing Balance:
Payables
Mahindra Holidays & Resorts India Limited 1,45,899
(1,55,738)
Mahindra BPO Services Limited 1,47,268
(51,306)
281
36. Segment Reporting:
A. Primary Segment - Business Segment
The Companys business activity falls within a single business
segment viz. trading in fruits. All other activities of the Company
revolve around its main business. Hence, there are no separate
reportable primary segments as dened by Accounting Standard 17
on Segment Reporting.
B. Secondary Segment - Geographical Segment
The Company has identied two segments under this category
based on geographical locations of customers
(Rupees)
Domestic Overseas
Revenue 12,80,70,830 1,26,20,82,048
(13,40,80,704) (71,83,19,950)
Segment Assets 59,91,04,518 12,50,49,444
(48,23,04,095) (5,60,85,114)
Capital expenditure 99,41,526
(26,56,981)
37. Information for each class of goods traded during the year :
(Rupees)
Particulars Purchases Sales
Grapes 79,61,59,773 1,26,62,46,516
(49,90,30,269) (72,05,81,936)
Apple 5,60,28,689 3,04,03,830
(5,53,62,736) (5,77,32,719)
Orange 3,09,68,817 2,71,32,886
(1,20,12,533) (1,35,12,319)
Pears 1,48,24,201 1,52,89,982
(1,63,27,607) (1,83,01,950)
Others 2,19,06,847 5,10,79,664
(8,91,326) (7,39,828)
Total 91,98,88,327 1,39,01,52,878
(58,36,24,471) (81,08,68,752)
38. Disclosures under Section 22 of the Micro, Small and Medium
Enterprises Development Act, 2006:
Total outstanding dues of Micro and Small enterprises, which are
(Rupees)
Sr.
No. Particulars
As at
31
st
March,
2014
As at
31
st
March,
2013
I Dues remaining unpaid as at the
year-end:
Principal NIL NIL
Interest NIL NIL
II Interest paid in terms of Section
16 of the MSMED Act NIL NIL
III Amount of interest due and
payable for the period of delay in
making payments 1,600 1,450
IV Amount of interest accrued and
remaining unpaid as at the year
end 9,257 7,657
V Amount of interest due and
payable on previous years
outstanding amount 7,657 6,207
VI Amount of interest written back
during the period as the same is
not payable NIL NIL
such parties have been identied on the basis of information collected by
the Management. This has been relied upon by the auditors.
39. Previous years gures have been regrouped/reclassied wherever
necessary to correspond with the current years classication/disclosure.
For Mahindra Shubhlabh Services Limited
Ashok Sharma Chairman
M. G. Bhide
K. Chandrasekar
Director
Anoop Mathur
Dr. Veena Mishra
Mumbai, April 30, 2014
}
EPC INDUSTRI LIMITED
282
DIRECTORS REPORT
Your Directors are pleased to present the 32
nd
Annual Report on
business and operations of your Company alongwith the audited
nancial statements and accounts for the year ended 31
st
March, 2014.
FINANCIAL HIGHLIGHTS
(Rs. in lacs)
For the
Year ended
31
st
March,
2014
For the
Year ended
31
st
March,
2013
Turnover (Net) 17472.52 16140.80
17729.12 16416.82
Prot Before Interest,
Depreciation & Tax 1285.74 1035.15
Finance cost 235.34 246.37
Depreciation 279.41 254.57
Prot Before Tax 770.99 534.21
Tax expense
Prot After Tax 770.99 534.21
Add : Balance Brought
Forward (1856.46) (2390.67)
Decit Carried to the
Balance Sheet (1085.47) (1856.46)
* Figures have been regrouped wherever necessary.
Operations and Financial Overview
During the year under review, your Companys turnover was at
Rs. 17472.52 lacs as compared to Rs. 16140.80 lacs for the
previous year reecting a growth of 8.3%. The Prot Before Tax
was at Rs. 770.99 lacs vs. Rs. 534.21 lacs in the previous year,
The Prot After Tax was at Rs. 770.99 lacs vs. Rs. 534.21 lacs in
the previous year.
FY 2013-14 proved to be a challenging year for your Company
amidst economic uncertainties, hailstorm, untimely rains and
change in subsidy policies of State Governments. Despite these
constraints and challenging environment, the Company could
register a marginal growth. The Company has succeeded in
sustaining growth in turnover, due to cost savings measures,
operational cost reduction, lift and shift policy, optimum utilization
of available resources despite the acute pressure of rising raw
material prices.
During the year under review, the Company started its Greenhouse/
Polyhouse business. This new business including Agricultural
Pumps will contribute signicantly to the companys top line and
bottom line in the years to come.
Dividend
Your Directors do not recommend any dividend considering the
need to augment resources for operational purposes.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement
with the Stock Exchange, is presented in a separate section
forming part of this Annual Report.
Corporate Governance
Your Company believes in sound practices of good Corporate
Governance. Transparency, Accountability, and Responsibility are
the fundamental guiding principles for all decisions, transactions, and
policy matters of the Company. A Report on Corporate Governance
alongwith a certicate from the Statutory Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, forms part of
this Annual Report.
Stock Options
During the year under review 7375 Nos. Stock Options got
vested in terms of EPC Industri Limited Employees Stock Option
Scheme -2010, and were exercised immediately after vesting.
Accordingly, the Company made the allotment of 7375 Equity
Shares on 12
th
December, 2013 against these options exercised
by the employees.
The disclosures as stipulated under the SEBI Guidelines as at
March 31, 2014 (cumulative position) are provided in Annexure
I to this Report.
EPC Industri Limited Employees Stock Option Scheme-2014
Your Company proposes to introduce a new Employee Stock Option
Scheme known as EPC Industri Limited Employees Stock Option
Scheme 2014 (New Scheme). The New Scheme will facilitate grant
of Options to the employees in the form of Stock Options and/or
Restricted Stock Units (RSUs) and/or other instruments (Options)
exercisable into Equity Shares. It is proposed that the Options can
be exercised by the employees at a price equal to or not less than
the face value of the Equity Shares of the Company. The necessary
Resolutions seeking consent of the Members are being sought as
proposed in the Notice convening the Annual General Meeting.
The New Scheme has been formulated in accordance with the
Guidelines and other applicable laws.
Share Capital
During the year, with the allotment of 7375 equity shares on
exercising of Stock Options by employees, the total paid up equity
share capital of the Company increased from 2,76,30,864 equity
shares of Rs 10/- each to 2,76,38,239 equity shares of Rs 10/-
each. The said equity shares have been listed on the Bombay
Stock Exchange Limited and they rank pari passu with the existing
equity shares in all respects.
Accordingly, the Paid-up Share Capital of the Company stood at
Rs. 27,63,82,390 divided into 2,76,38,239 equity shares of Rs. 10
each as on 31
st
March, 2014.
Holding Company
The promoters of the Company i.e. Mahindra and Mahindra Limited
(M & M) hold 1,51,44,433 equity shares which represents 54.80
percent of the total paid up capital of the Company. Your Company
continues to be a subsidiary company of M & M.
Industrial relations
The industrial relations continue to be peaceful and cordial at
all levels. The Directors wish to place on record their sincere
appreciation of the Companys employees at all levels. The
Companys consistent growth is made possible by their hard work
solidarity, co-operation and support.
The Management Discussion and Analysis Report gives an
overview of the developments in Human Resources/Industrial
Relations during the year.
environment is being continuously enhanced and your Company
encourages involvement of all its employees in activities related to
safety, including promotion of safety standards.
During the year under review, no major accidents occurred. The
Safety Committee regularly reviews the adherence of safety norms.
Some of the programmes undertaken by the Company such as the
behaviour based safety training, Knowledge based re extinguisher
training and re ghting training and safety awareness have resulted
in the reduction of number of accidents.
283
Various health checkup programmes for employees were regularly
undertaken by the Company during the year.
Requirements relating to various environmental legislations and
environment protection have been duly complied by your Company.
Directors
Pursuant to the provisions of Section 149 of the Companies Act,
2013, the Independent Directors Mr. Anand Daga, Mr. Vinayak Patil
and Mr. Nikhilesh Panchal being independent Directors would retire
and, being eligible, have offered themselves for reappointment as
Independent Directors.
The three years term of Mr. Ashok Sharma as Whole time Director
would be expiring on 30
th
September, 2014 and would require to be
renewed for a further period of 3 years with effect from 1
st
October,
2014. The approval from shareholders for renewal of his term is
being sought at the ensuing Annual General Meeting.
The Company has received Notices in writing from Member(s)
proposing Mr. Anand Daga, Mr. Vinayak Patil, Mr. Nikhilesh Panchal
and Mr. Ashok Sharma for appointment to the ofce of Directors at
the ensuing Annual General Meeting.
Pursuant to section 217 (2AA) of the Companies Act, 1956,
Accounting Standards have been followed along with proper
explanation relating to material departures;
applied consistently, and made judgments and estimates that
are reasonable and prudent to give a true and fair view of the
state of affairs of the Company as on 31
st
March, 2014 and of
the prot of the Company for the year ended on that date;
(iv) the annual accounts have been prepared on a Going Concern
basis.
Corporate Social Responsibility Committee
During the year, your Directors have constituted the Corporate
Social Responsibility (CSR) Committee comprising Mr. Ashok
Sharma as the Chairman and Mr. S Durgashankar and Mr. Vinayak
Patil as other members.
The said Committee has been entrusted with the responsibility of
formulating and recommending to the Board, a Corporate Social
Responsibility Policy (CSR policy) indicating the activities to be
undertaken by the Company, monitoring the implementation of
the framework CSR Policy and recommending the amount to be
spent on CSR activities.
Internal Complaints Committee
During the year under review, the Internal Complaints Committee
was constituted in accordance with the new legislation the Sexual
Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 and no complaints were reported to or
resolved by the Committee for the year ended 31
st
March, 2014.
Auditors
The Auditors, Messrs. Deloitte Haskins & Sells, Chartered
Accountants, Baroda holds ofce until the conclusion of the
ensuing Annual General Meeting. The Auditors are eligible for
reappointment under Section 139 (1) of the Companies Act,
2013 and have furnished a certicate to this effect. The Directors
recommend their reappointment as Auditors of the Company upto
the conclusion of the next Annual General Meeting.
Cost Auditors
The Company had led the Cost Audit Report as per the
Companies (Cost Accounting Records) Rules, 2011 prescribed
under Section 209 (1)(d) of the Companies Act, 1956 pertaining to
the nancial year 2012-13 before the due date of ling.
Pursuant to section 148 of the Companies Act, 2013, the Board
of Directors, on the recommendation of the Audit Committee
appointed M/s Shilpa & Company, Cost Accountants, as the Cost
Auditors of the Company for the nancial year 2014-15. M/s Shilpa
& Company have conrmed that their appointment, is within the
limits of section 139 of the Companies Act, 2013 and have also
certied that they are free from any disqualication specied under
sections 141 (3) and 148 (5) of the Companies Act, 2013.
The Audit Committee has also received a Certicate from the Cost
Auditor certifying their independence and arms length relationship
with the Company.
The Directors recommend the remuneration payable to the Cost
Auditors of the Company for the year 2014-15.
The approval from Shareholders for the remuneration payable to the
Cost Auditors is being sought at the ensuing Annual General Meeting.
Public Deposits & Loans/Advances
During the year, in order to meet working capital requirements, the
Fixed Deposit Scheme was re-launched by the Company pursuant
to the provisions of the Companies (Acceptance of Deposits) Rules,
1975 and collected Rs. 369.15 lacs from public and shareholders
of the Company. In view of the provisions of 74 (1)(b) of the
Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014, all the outstanding Fixed Deposits would
required to be repaid within one year from the commencement
of the Act. Accordingly, all deposits due for repayment during the
nancial year 2014-15 or those maturing beyond one year shall
be repaid during the Financial Year 2014-15. Your Company has
also not made any loans or advances, which are required to be
disclosed in the Annual Accounts of the Company pursuant to the
Clause 32 of the Listing Agreement.
Energy Conservation and Technology Absorption and Foreign
Exchange Earnings and Outgo
absorption, foreign exchange earnings and outgo as required to be
disclosed under section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the Report of Board
Directors) Rules, 1988 are provided in Annexure II to this Report.
Particulars of Employees
In terms of the provisions of section 217 (2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, the Company had no employee, who was employed
throughout the nancial year and was in receipt of remuneration
of not less than Rs. 60,00,000 per annum during the year ended
31
st
March, 2014 or was employed for a part of the nancial year
and was in receipt of remuneration of not less than Rs. 5,00,000
per month during any part of the year.
Acknowledgements
Your Directors take this opportunity to place on record their
sincere appreciation for the co-operation and continued support
received from customers, vendors, suppliers, bankers, business
associates and shareholders.
For and On behalf of the Board
Ashok Sharma S. Durgashankar
Executive Director & CEO Director
Place : Mumbai
Dated : 26
th
May, 2014
284
Annexure - I To The Directors Report For The Year Ended 31
st
March, 2014
Information to be disclosed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999:
EPC Industri Limited Employees Stock Option Scheme - 2010
(a) Options granted 60,500
(b) The pricing formula The Stock Options are granted at a xed price of Rs. 35.00 per
share.
(c) Options vested 25,875
(d) Options exercised 25,875
(e) The total number of shares arising as a result of exercise of option 25,875
(f) Options lapsed 27,250
(g) Variation of terms of options Nil
(h) Money realised by exercise of options 9,05,625
(i) Total number of options in force 7375
(j) Employee wise details of options granted to
(i) Senior managerial personnel Options Granted#
Mr. Vinayak Patil (Director) 10,000
* Further details are given at the end of this annexure.
(ii) Any other employee who receives a grant in any one year of
option amounting to 5% or more of option granted during that
year
Mr. A. R. Kshirsagar 6500**
Mr. K. G. Soman 5000
Mr. P. Ravi 5000
** Resigned w.e.f. 31
st
December, 2012.
(iii) Identied employees 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
Nil
(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. 2.79
(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 recognized if
it had used the fair value of the options, shall be disclosed. The
impact of this difference on prots 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 under the Employees
Stock Option Scheme, 2010, the employee compensation would
have been higher by Rs. 0.44 lacs, Prot after Tax lower by
Rs. 0.44 lacs and the basic and diluted earnings per share would
have been lower by Rs. Nil and Rs. Nil 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 Grant Date Exercise Price
(Rs.)
Fair Value
(Rs.)
19
th
November, 2010 35.00 41.84
(n) A description of the method and signicant assumptions used
during the year to estimate the fair values of options, including the
following weighted-average information:
(i) risk-free interest rate
(ii) expected life
(iii) expected volatility,
(iv) expected dividends and
(v) the price of the underlying share in market at the time of
option grant.
The fair value of the Stock Options granted on 19
th
November, 2010
have been calculated using Black-Scholes Options Pricing Formula
and the signicant assumptions made in this regard are as follows:
7.65%
3.50 years
58.12%
Nil, as the Company has not declared any dividend.
Rs. 64
# Out of 4 equal installments, 3 installments have been exercised.
* Grant Date 19
th
November, 2010
Vesting Period Four equal installments, in November 2011, 2012, 2013 and 2014 respectively.
Exercise Period Within two years from the date of vesting.
Exercise Price Rs. 35 per Share
285
PARTICULARS AS PER THE COMPANIES (DISCLOSURE
OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES, 1988 (THE RULES) AND FORMING
PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED
31
ST
MARCH, 2014
A. Conservation of Energy
Your Company has always been giving priority to the
conservation of energy and technology upgradation.
To conserve energy and reduce energy cost, various
initiatives were taken during the year.
New designed extruders and downstream
equipment for higher output in place of old one.
Power factor is being maintained at unity.
Improvement in productivity and savings in power
consumption due to in-house technological
innovations.
Installation of newly designed moulds and high
speed machines.
Continuous raw material supply for higher
productivity.
Continuous improvements within production
area, efcient production planning and improved
preventive maintenance resulting into higher up
time.
(b) Additional investments and proposals, if any,
being implemented for reduction of consumption
of energy:
The Company is in the process of acquiring new
equipment for new generation technology of Micro
Irrigation Systems. This will help in reduction of
consumption of energy.
(c) Impact of the measures at (a) & (b) above for
These measures have resulted in increase in
productivity and savings in energy cost to the
Company.
per unit of production as per Form-A of the
Annexure below:
FORM A
2013-14 2012-13
A. Power and Fuel Consumption
1. Electricity
(a) Purchased Units (Kwh)
(In Lacs) 43.83 42.40
Amount (Rs./lacs) 332.78 337.81
Average Rate (Rs./Unit) 7.59 7.97
2013-14 2012-13
(b) Own Generation Nil Nil
(i) Through Diesel
Generator Units
Units Per Ltr. of diesel
oil Cost/unit
(ii) Through steam turbine
Generator Units
Units Per Ltr. of diesel
oil Cost/units
2. Coal (Specify quality &
where used) Nil Nil
Quantity
Total Cost
Average rate
3. Furnace Oil Nil Nil
Quantity (K.Ltrs)
Total Amount
Average rate
4. Others/internal generation Nil Nil
Quantity
Total cost
Rate/unit
B. Consumption
Electricity (Units/MT Production) 768 753
Furnace Oil
Coal
Others
B. Technology Absorption
(1) Specic Areas in which R&D is carried out by the
Company: Nil
(2) Benets derived as a result of above R&D: N.A.
(3) Future plan of Action: The Company is in the process
of introducing New Generation Micro Irrigation
Technology.
(4) Expenditure of R&D: (Rs. in Thousands)
(a) Capital Expenditure Nil Nil
(b) Revenue Expenditure 545 132
(c) Total 545 132
(d) Total R&D expenditure as a
% of total turnover 0.01 0.01
C. Foreign Exchange Earnings & Outgo
The Company is assessing the potential countries where the
exports business can be explored.
Particulars with regard to foreign exchange earned and outgo are
given in the notes to accounts.
Ashok Sharma S. Durgashankar
Executive Director & CEO Director
Place : Mumbai
Dated : 26
th
May, 2014
Annexure - II To The Directors Report For The Year Ended 31
st
March, 2014
286
Overview
Water is becoming increasingly scarce in many parts of the
world and thereby limiting agricultural development. The capacity
of large countries like India to efciently develop and manage
water resources is likely to be a key determinant for global food
security in 21st century. Indias annual precipitation (rainfall &
snowfall) is around 4000 BCM (Billion Cubic Meters) (or 4000
lakh crore litres). Out of this, close to 80% either gets washed
away into the sea or is subject to evaporation and percolation
in the ground. Only about 20%, or 800 BCM is currently
available for use. 80% of this usable water is utilised for
Agriculture. We are currently on the verge of being water stressed
(< 1500 Cu m per capita) and it is estimated that by the year
2050, owing to the growth in population and the pressure that
it puts on agriculture, India will be on the brink of becoming
a water scarce country (< 1000 Cu m per capita). Demand
management has become a key strategy for managing scarce
water resources. Since agriculture is the major water-consuming
sector in India, demand management in agriculture is crucial
to reduce the demand for water to match the available future
supplies. A number of demand management strategies and
programmes have been introduced to save water and increase
the existing water use efciency in Indian agriculture.
One such method introduced in Indian agriculture is micro-
irrigation, which includes both drip and sprinkler method of
irrigation. Micro-irrigation (MI) has proved to be an efcient
method in saving water and increasing water use efciency
as compared to the conventional surface method of irrigation,
though both drip and sprinkler irrigation methods are in use over
the last two decades.
Micro-irrigation was introduced primarily to save water and
increase the water use efciency in agriculture. However, it also
delivers many other economic and social benets. Reduction
in water consumption due to drip irrigation systems over the
surface irrigation varies from 30 to 70 percent for different crops.
Productivity gain due to use of micro-irrigation is estimated to be
in the range of 20 to 90 percent for different crops. It also reduces
weed problems, soil erosion and cost of cultivation substantially,
especially in labour-intensive operations. The reduction in water
consumption in micro-irrigation also reduces the energy use
(electricity) that is required to lift water from irrigation wells.
Micro-irrigation can also be adopted in all kind of lands, which is
not generally possible through ood irrigation method. Research
suggests that Drip Irrigation systems are not only suitable for
those areas that are presently under cultivation, but can also be
operated efciently in undulating terrain, rolling topography, hilly
areas, barren land and areas which have shallow soils. Given
the population growth and increasing requirement of agricultural
commodities, there is a need to increase the area under
cultivation. Micro-irrigation can be one of the viable options for
expanding area under cultivation.
Investment in Micro Irrigation also appears to be economically
viable, even without availing State subsidy.
Industry Structure and Developments
Though both drip and sprinkler irrigation are treated as MI,
there are distinct characteristic differences between the two
in terms of ow rate, pressure requirement, wetted area, and
mobility. While drip irrigation supplies water directly to the root
zone of the crop through a network of pipes with the help of
emitters, sprinkler irrigation sprinkles water similar to rainfall
into the air through nozzles which subsequently break into
small water drops and fall on the eld surface. Unlike ood
irrigation, water losses occurring through evaporation and
distribution are completely absent in drip irrigation. The on-
farm irrigation efciency of properly designed and managed
drip irrigation system is estimated to be about 90 percent, while
the same is only about 35 to 40 percent for surface method of
irrigation. In sprinkler irrigation, water saving is relatively low
as compared to drip irrigation as it supplies water over the
entire eld area of the crop.
Micro irrigation systems have applications in the following
major segments
Agriculture
Field crops
Orchard crops
Plantation crops
Landscaping
Forage and turf grasses
The micro irrigation systems market is classied into the
organized and unorganized segments in the country. The
Company is presently a major supplier of micro irrigation
systems (MIS) in India. Our strong brand name, expertise in
agronomy services, and wide spread network have contributed
to our growth.
Opportunities and Outlook
Agriculture remains the mainstay of Indian economy;
contributing 14% of Gross Domestic Product (GDP) and with
its allied sectors like forestry and sheries employing 50 per
cent of the countrys workforce. Indias demand for food grains
is expected to be at 240 million tonnes by the end of the XII
Five Year Plan (2012-2017). Enhanced agricultural production
will mean increased use of water for irrigation. At present the
sector receives the largest share of freshwater in the country
(around 90 per cent). This will have a direct impact on efcient
demand management for water and lead to increased demand
for Micro Irrigation Systems.
The Task Force on Micro Irrigation set up by the Central
Government has stated that more areas can be brought
under irrigation if modern methods of irrigation are adopted. It
estimates the total potential in India to be around 69.5 Million
Hectares. Only around ~10% of this potential has been
tapped so far in India. Hence there is tremendous opportunity
for micro irrigation business in the years to come.
MANAGEMENT DISCUSSION AND ANALYSIS
287
The Indian Micro Irrigation Industry had been growing at a
CAGR of ~20% prior to F13. However, for the past two years,
the industry has seen a de growth of ~25% and ~8-10%
respectively. High dependence on government allocated funds
and operational inefciencies in the market have been primary
factors in this de growth. However, given the importance of
this industry to Indian Agriculture, the impetus put by the
government, and improved market efciencies, the future for
the industry looks good. It is expected that the industry would
grow at a CAGR of ~12-15% in the coming years.
Operations and Financial Performance
During the year 2013-14, your Company achieved Turnover
of Rs.174.73 crore as compared to Rs. 161.41 crore in the
preceding year, registering a growth of 8.3%. The growth drivers
are - introduction of new products, establishing presence in
new markets, focus on retail identity, value added services to
end users etc. resulting into steady growth momentum.
In line with its larger objective of Delivering FarmTech Prosperity
and to sustain growth in the MIS market, the Company has
introduced many unique ways of working in addition to
developing & manufacturing high quality MIS systems. Among
them are the introduction of a toll free Agri helpline, creation of
Demo Plots to demonstrate the best practices in Micro Irrigation,
and free agronomy services to customers.
In addition to MIS for agriculture, the Company has entered
the Agricultural Pumps, Greenhouse / Polyhouse businesses
as well as the landscaping segment in FY 2013-14.
Polyhouse / Greenhouse Protected cultivation is an alternative
new technique in agriculture gaining foothold in rural India.
It reduces dependency on rainfall and makes the optimum
use of land and water resources. In recent years, in view of
the globalization and the llip given to exports of agricultural
produce, there has been a spurt in the demand for polyhouses.
Agricultural Pumps market is dominated by the un-organised
sector providing low efciency pump-sets which presents the
company ample opportunity to differentiate and sustain growth
by providing efcient quality Pump sets.
The Company continued its focus on various Quality initiatives
such as 1S 2S, Total Productive Maintenance (TPM), Continuous
Improvement Teams (CIT), Mahindra Yellow Belt Programme,
Kaizen, Parivartan and display of Quality Parameters on all
machines. These measures have amply resulted in improvement
in production efciencies and reduction in rejections.
We believe that our strong Brand, focus on Customer Centricity,
Agronomy services, and our approach of providing a holistic
solution to farmers will give us the competitive edge to tap the
growth opportunities in the MIS Industry.
Risks, Concerns and Threats
Industry growth is heavily dependent on Government policies
and release of capital subsidy. Long lead time in release of
State subsidies requires more working capital for the MIS
Industry. Delays in government decision / allocation / spending
can derail the progress. However, with the implementation of
National Mission on Micro Irrigation by the Central Government,
it is expected that subsidies would be released uniformly. Many
States are exploring implementation of releasing subsidies
online.
The Industry also needs a large pool of trained sales and
service personnel to deliver well designed systems and
proper agronomy services. The growth of the industry can
be constrained by unavailability of the requisite personnel.
Similarly, a dedicated, well equipped dealer network in the far
ung areas of the country is needed.
The industry is also plagued by low quality unorganised
players who do more damage than good for the adoption of
Micro Irrigation in the country.
The uneven distribution of rainfall in the country and consecutive
drought like situation for 2/3 years are potential threats for the
industry. Similarly, uctuations in the raw material prices is also
a constant threat.
Internal Control Systems
The Company has adequate internal control procedure
commensurate with its size and nature of the business. The
internal control system is supplemented by extensive internal
audits, regular reviews by management and well-documented
policies and guidelines to ensure reliability and speedy
compilation of nancial statements, safeguarding the assets
and interests of the Company and ensuring compliance with
laws and regulations. The Company continuously upgrades
these systems in line with best accounting practices.
The Audit Committee of Board of Directors periodically reviews
the audit plans, observations and recommendations of the
internal and external auditors with reference to signicant risk
areas and adequacy of internal controls.
Human Resources
Human resource is one of the key assets that has been nurtured
and encouraged for active participation in the Companys
growth. The Company has a well-dened appraisal system in
place for recognition of talented and deserving employees,
which includes line and staff function personnel. The industrial
relations remained cordial during the year.
During the period under review, Industrial Relations between
Management and Workers remained cordial and satisfactory.
The Company continues to upgrade the skills and effectiveness
of employees at all levels through several training and
development initiatives. The Company also seeks the views
of its employees for improving human relations through
employee satisfaction surveys. During the year under review,
our HR department has successfully launched Tele-connect
an initiative which enables all employees right from top
management to eld staff to express their views and suggestions
related to their work.
As on 31
st
March, 2014, the total number of employees of your
Company was 434.
Cautionary Note
This report contains forward-looking statements based on
certain assumptions and expectations of future events.
Actual performance, results or achievements and risks and
opportunities may differ from those expressed or implied in
any such forward - looking statements. The Company assumes
no responsibility to publicly amend, modify or revise any
forward looking statements, on the basis of any subsequent
developments, information or events.
288
The Company is committed to maintain the highest standards
of corporate governance. The Directors adhere to the
requirements set out by the Securities and Exchange Board of
Indias Corporate Governance Practices and have implemented
all the stipulations prescribed.
A detailed report on corporate governance pursuant to the
requirements of clause 49 of the listing agreement forms part
of the Annual Report. A certicate from the statutory auditors
of the Company, conrming compliance of conditions of
Corporate Governance as stipulated under clause 49 of the
Listing Agreement is annexed.
I. BOARD OF DIRECTORS
The composition of the Board of Directors is in conformity with
the provisions of the Listing Agreement, the Companies Act,
1956 and the Companies Act, 2013. The Board consists of
Executive Director & CEO and four Non-Executive Directors.
The number of Non-executive Directors comprising three
Independent Directors is more than one-half of the total
number of Directors. All the Directors have made necessary
disclosures under Corporate Governance norms and the
applicable provisions of the Companies Act, 1956 and 2013.
The Board reviews and approves strategy and oversees the
actions and results of management to ensure that the long
term objectives of enhancing stakeholders value are met.
Apart from reimbursement of expenses incurred in the
discharge of their duties and the remuneration that a
Director may receive for professional services rendered to
the Company through a rm in which he is a partner, none
of the Independent Directors have any material pecuniary
relationships or transactions with the Company, its Promoters,
its Directors, its Senior Management or its Afliates which in
their judgment would affect their independence. None of the
Directors of the Company are inter-se related to each other.
Professional fees for the year under review to Khaitan & Co.,
Advocate & Solicitors, in which Mr. Nikhilesh Panchal, Non-
Executive and Independent Director is a partner, amounts to
Rs. 3,65,046 (including out of pocket expenses).
The Senior Management personnel have made disclosures
to the Board conrming that there are no material, nancial
and/or commercial transactions between them and the
Company, which could have potential conict of interest with
the Company at large.
A. Composition of the Board
Currently, the Board comprises of ve Directors. 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 of more than 10 Committees
and Chairman of more than 5 Committees (as specied in
applicable Clause 49 of the Listing Agreement), across all
the Companies in which he is a Director.
REPORT ON CORPORATE GOVERNANCE
Sr.
No.
Directors Category
Total Number of Directorships of
public companies #, Committee
Chairmanships and Memberships,
as on 31
st
March, 2014.
Director-
ships $
Committee
Chairman-
ships +
Committee
Member-
ships +
EXECUTIVE
1 Mr. Ashok Sharma
Executive Director &
CEO
Related to
Promoter
2 1 1
NON-EXECUTIVE
2 Mr. Vinayak Patil Independent 1 2 2
3 Mr. S. Durgashankar Related to
Promoter
2 1 1
4 Mr. Nikhilesh Panchal Independent 2 2
5 Mr. Anand Daga Independent 1 1 1
# Excludes private limited companies/foreign companies and
companies u/s.25
$ Includes Directorship in EPC Industri Limited
+ Committees considered are Audit Committee and Stakeholders
Relationship Committee (earlier known as Shareholders/Investors
Grievance Committee) including that of EPC Industri Limited.
B. Board Procedure
A detailed Agenda folder, alongwith necessary supporting
papers are sent to each Director in advance of the Board
meetings and to the concerned Directors of the Committee
Meetings. To enable the Board to discharge its responsibilities
effectively, the Executive Director & CEO apprises the Board
at every meeting of the overall performance of the Company.
The Board also inter alia reviews strategy and business
plans, annual operating and capital expenditure budgets,
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, adoption
of quarterly/half yearly/annual results, risk management,
signicant labour issues, major accounting provisions
and write-offs, minutes of meetings of the Audit and other
Committees of the Board and information on recruitment of
Ofcers just below the Board level, including the Company
Secretary and Compliance Ofcer.
C. Number of Board Meetings, Attendance of the Directors
at Meetings of the Board and at the Annual General
Meeting.
The Board meets atleast once in a quarter to consider among
other business, quarterly performance of the Company and
the nancial results. During the nancial year under review,
six Board Meetings were held on the following dates 2
nd

May, 2013, 31
st
July, 2013, 25
th
October, 2013, 28
th
January,
2014, 28
th
February, 2014 and 29
th
March, 2014. The gap
between two Meetings did not exceed four months. These
meetings were well attended. The 31
st
Annual General
Meeting of the Company was held on 31
st
July, 2013.
The attendance of the Directors at these meetings is as under:
Directors
Number of
Board Meetings
Attended
Attendance
at the AGM
Mr. Ashok Sharma 6 Yes
Mr. Vinayak Patil 4 Yes
Mr. S. Durgashankar 6 Yes
Mr. Nikhilesh Panchal 6 Yes
289
Directors
Number of
Board Meetings
Attended
Attendance
at the AGM
Mr. Anand Daga 5 Yes
D. Directors seeking appointment/re-appointment
Mr. Ashok Sharma
Mr. Ashok Sharmas term of ofce of Whole Time Director
would be expiring on 30
th
September, 2014 and would
require to be renewed for a further period of 3 (three) years
with effect from 1
st
October, 2014 subject to approval of the
members of the Company.
Brief resume of Mr. Ashok Sharma is given below:
Mr. Ashok Sharma has a Bachelors Degree in Mechanical
Engineering from Victoria Jubilee Technical Institute,
Mumbai and has done his Masters in Management
Studies from the Jamnalal Bajaj Institute, Mumbai followed
by a Masters in Management Studies from Jamnalal Bajaj.
He joined the Farm Equipment Sector of Mahindra and
Mahindra Ltd. in 1998 as General Manager Sales and
since then has made signicant contributions in the areas
of Quality, Strategic Planning and Business Excellence.
More recently, he has played a key role in expanding
and growing Mahindras Powerol and Agri businesses.
His current responsibilities include strategy and business
excellence for the Auto and Farm businesses, Agribusiness,
Engine Application Business and the Spares Business Unit
of Mahindra and Mahindra Ltd.
In a career spanning over 27 years, Mr. Sharma has rich
experience in various functions like Sales, Marketing,
strategic planning, business planning and has held
various general management functions.
Mr. Sharma is also a Director in the following companies:
i) Mahindra Shubhlabh Services Limited
ii) Mahindra Investments (International) Private Limited
Mr. Sharma is the member of the Audit Committee and
Nomination and Remuneration Committee of Mahindra
Shubhlabh Services Limited and member of Stakeholders
Relationship Committee and Corporate Social Responsibility
(CSR) Committee of the Company.
Mr. Sharma does not hold any shares in the Company.
In view of the new provisions of Section 149 of the
Companies Act, 2013 all Independent Directors would be
retiring and seeking a fresh reappointment. Accordingly,
Mr. Anand Daga, Mr. Vinayak Patil and Mr. Nikhilesh Panchal
would retire and have offered themselves for reappointment.
Brief resume of these Directors are presented below:
Mr. Anand Daga
Mr. Anand Daga is a Practising Chartered Accountant since
1994 and is a Partner in Messrs. Daga & Chaturmutha,
Chartered Accountants, Nashik/ Mumbai.
Mr. Daga has a Bachelors degree in Commerce and he is
a Member of the Institute of Cost and Works Accountants
of India, Kolkata and a Fellow Member of the Institute of
Chartered Accountants of India, New Delhi. He was an All
India Merit Ranker in CA Exams in 1994.
Mr. Daga possesses varied experience of 18 years in the
areas of Taxation, Audit, Finance, Corporate Strategic
Planning/Restructuring Advisory Services, Mergers and
Acquisitions, etc.
Mr. Daga is on the Board of MSS India Private Limited.
Mr. Anand Daga is the Member of Audit Committee and the
Chairman of Nomination and Remuneration Committee of
the Company.
Mr. Daga does not hold any Shares in the Company.
Mr. Vinayak Patil
Mr. Vinayak Patil is an independent director on the Board. He
is an agriculturist and social activist. Mr. Patil was a member
of the Maharashtra State Legislative Assembly from 1978 to
1980. He was also a member of the Legislative Council of
the State of Maharashtra from 1983 to 1988. During the
period 1978 to 1980, he was also a Minister of State for
Industry, Maharashtra. Mr. Patil has been associated with
various state level government/Cooperative organizations.
He received Maharashtra States Krishi Bhushan Award for
his work in the eld of agriculture.
Mr. Patil is on the Board of Richeld Fertilisers Private
Limited.
Mr. Vinayak Patil is the Chairman of Audit Committee
and Stakeholders Relationship Committee, member of
Nomination and Remuneration Committee and Corporate
Social Responsibility (CSR) Committee of the Company.
Mr. Vinayak Patil holds 15,200 Shares in the Company.
Mr. Nikhilesh Panchal
Mr. Nikhilesh Panchal is currently working as a Partner in
Khaitan & Company, Solicitors and Advocates, Mumbai.
Mr. Panchal has a Bachelors Degree in Commerce and
Law and has done Masters Degree in Law (L.L.M.)
and he is a Solicitor. Mr. Panchal has rich experience in
acquisitions, takeover and mergers, foreign collaborations
and joint venture transactions. He also has expertise on
procedures under Foreign Exchange Management Act,
1999 and Corporate Law, intellectual property rights,
commercial litigations. He has also been involved in
contract negotiations and regularly advises on structuring,
acquisitions, joint ventures and corporate and commercial
matters.
Mr. Nikhilesh Panchal is on the Board of following Companies:
i) Mahindra Ugine Steel Company Limited
ii) Vayugrid Marketplace Services Pvt. Ltd.
Mr. Nikhilesh Panchal is the member of Audit Committee of
Mahindra Ugine Steel Company Limited and the member
of Stakeholders Relationship Committee of the Company.
Mr. Panchal does not hold any shares in the Company.
E. Code of Conduct
Your Company had adopted Code of Ethics (Code)
recommended by Bombay Chamber of Commerce and
Industry for its Directors and Senior Management personnel
and employees. The Code of Ethics has been posted on
the Companys website http://www.epcmahindra.com.
This Code enunciates the underlying principles governing
the conduct of the business and seeks to reiterate the
fundamental precept that good governance must and
would always be an integral part of the Companys culture.
All Board Members and Senior Management Personnel
have afrmed compliance with the Code. A declaration
signed by Executive Director and CEO is enclosed at the
end of this Report.
F. CEO/CFO Certication
290
As required under clause 49 V of the Listing Agreement
with the Stock Exchange, the Executive Director & CEO
and the Chief Financial Ofcer of the Company have
certied to the Board regarding the Financial Statements
st
March, 2014.
G. Uses & Application of Funds raised under Rights Issue
In the year 2012, the Company had allotted 1,03,58,199
equity shares at a price of Rs. 40 per share (including a
premium of Rs. 30/- per share) resulting in total issue size
of Rs. 41.43 crores under the Rights Issue.
The uses and application of funds raised under Rights
Issue are given in Note 27.6 to the Financial Statement.
The Uses and Application of funds under Rights Issue are
monitored regularly by the Audit Committee.
II. REMUNERATION TO DIRECTORS
A. Remuneration Policy
While deciding on the remuneration for Directors, Key
Managerial Personnel and other employees, the Board
Nomination and Remuneration Committee (Committee)
considers the performance of the Company, the current
trends in the industry, the qualication 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. This information is used
to review the Companys remuneration policies.
B. Remuneration to Directors
On 1
st
October, 2011, Mr. Ashok Sharma was appointed
as Whole Time Director of the Company for a period of
three years and designated as Executive Director and
CEO, without remuneration.
The Non-executive independent Directors are paid sitting
fees of Rs. 20,000 for attending the meetings of the
Board of Directors. The sitting fees paid to Non-Executive
Directors for the year ended 31
st
March, 2014 alongwith
their shareholdings are as under:
Directors Sitting Fees for the
Board Meetings held
during the year ended
31
st
March, 2014
(Rs. in Lacs)
No. of Ordinary
(Equity) Shares
held as on
31
st
March, 2014
Mr. Ashok Sharma Nil Nil
Mr. Vinayak Patil 0.40 15,200
Mr. S. Durgashankar Nil Nil
Mr. Nikhilesh Panchal 0.80 Nil
Mr. Anand Daga 0.60 Nil
Details of Options granted to the Directors including the
vesting and exercise period, exercise price are given in
Annexure I to the Directors Report.
III. RISK MANAGEMENT
The assessment of various risks pertaining to the various
aspects of business and the steps taken to mitigate risks
is discussed in the meetings of the Board of Directors.
IV. COMMITTEES OF THE BOARD
A. Audit Committee
The Board of Directors of the Company has an Audit
Committee which comprises Mr. Vinayak Patil as the
Chairman of the Committee and Mr. S Durgashankar and
Mr. Anand Daga as other members of the Committee.
All the members of the Audit Committee possess strong
accounting and nancial management knowledge.
The Company Secretary is the Secretary of the Audit
Committee.
During the year under review, pursuant to terms of the
relevant provisions of Companies Act, 2013, the Company
has adopted the following additional terms of reference as
follows:
The terms of reference of this Committee are very wide. The
broad terms of reference of the Audit Committee include:
a) Review of the Companys nancial reporting process
and its nancial statements.
b) Review of accounting and nancial policies and practices.
c) Review of the internal control and internal audit system.
d) Discussing with statutory Auditors to ascertain any
area of concern.
e) The recommendation for appointment, remuneration
and terms of appointment of auditors of the company;
f) Review and monitor the auditors independence and
performance, and effectiveness of audit process;
g) Examination of the nancial statement and the
auditors report thereon;
h) Approval or any subsequent modication of transactions
of the company with related parties;
i) Scrutiny of inter-corporate loans and investments;
j) Valuation of undertakings or assets of the company,
wherever necessary;
k) Evaluation of internal nancial controls and risk
management systems;
l) Monitoring the end use of funds raised through public
offers and related matters.
m) If required, call for the comments of the auditors
about internal control systems, the scope of audit,
including the observations of the auditors.
n) Review of the nancial statements before their
submission to the Board.
o) If required, discuss with the internal and statutory
auditors and the management of the company any
issues related to internal control system, scope of
audit and nancial statements.
p) Investigate into any matter in relation to the items
specied above or matters which are referred to it by
the Board and for this purpose, to obtain professional
advice from external sources and have full access to
information contained in the records of the Company.
q) Establish vigil mechanism as may be prescribed to
enable directors and employees to report genuine
concerns and also shall provide for adequate
safeguards against victimization of persons who use
such mechanism.
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) of the Listing Agreement.
The meetings of the Audit Committee are also attended by the
291
Executive Director & CEO, Statutory Auditors, Chief Financial Ofcer,
Internal Auditor and the Company Secretary. The Chairman of the
Audit Committee, Mr. Vinayak Patil was present at the 31
st
Annual
General Meeting of the Company held on 31
st
July, 2013.
The Committee met four times during the year under review.
The Committee Meetings were held on the following dates
2
nd
May, 2013, 31
st
July, 2013, 25
th
October, 2013 and 28
th
January, 2014. The gap between two meetings did not exceed
four months. The attendance at the Meetings is as under:
Members Number of
Meetings attended
Mr. Vinayak Patil 4
Mr. S. Durgashankar 4
Mr. Anand Daga 4
The Audit Committee also periodically reviews the uses/
applications of funds raised by the Company under Rights
Issue of Shares.
B. Nomination and Remuneration Committee
During the year under review and pursuant to Section 178
of the Companies Act, 2013, nomenclature of the existing
Remuneration/Compensation Committee changed to
Nomination and Remuneration Committee.
The Terms of Reference of the Nomination and Remuneration
Committee is to:
a) Identify persons who are qualied to become
directors and who may be appointed in senior
management in accordance with the criteria to be laid
down, recommend to the Board their appointment
and removal; and shall carry out evaluation of every
Directors performance.
b) Formulate the criteria for determining qualications,
positive attributes and independence of a director
and recommend to the Board a policy, relating to
the remuneration for the directors, key managerial
personnel and other employees.
c) Review performance of the Executive Director and
recommend to the Board the remuneration payable to
him and administering the Employees Stock Options
Scheme.
The Committee also administers the Companys
ESOP Scheme and take appropriate decisions in
terms of the said scheme.
The Committee comprises Mr. Anand Daga as the
Chairman of the Committee and Mr. S. Durgashankar
and Mr. Vinayak Patil are the other members of the
Committee. The Committee met once during the year
2013-14 and the meeting was attended by all the
members of the Committee.
C. Stakeholders Relationship Committee:
During the year under review, under the provisions of
The Companies Act, 2013 the Companys Shareholders/
Investors Grievance Committee has been renamed as
Stakeholders Relationship Committee. The Committee
functions under the Chairmanship of Mr. Vinayak Patil.
Mr. Ashok Sharma and Mr. Nikhilesh Panchal are
the other Members of the Committee. Mr. Ratnakar
Nawghare, Company Secretary is the Compliance Ofcer
of the Company. The Stakeholders Relationship Committee
resolves the grievances of security holders of the
Company. This Committee met four times during the year
under review. The Committee Meetings were held on
the following dates 2
nd
May, 2013, 31
st
July, 2013,
25
th
th
January, 2014.The attendance
at the Meetings is as under:
Members Number of
Meetings attended
Mr. Vinayak Patil 2
Mr. Ashok Sharma 4
Mr. Nikhilesh Panchal 4
As per Section 178(7) of the Companies Act, 2013, the
Chairperson of the Committee or, in his absence, any
other member of the Committee authorised by him in this
behalf shall attend the General Meetings of the Company.
During the year under review, there was one complaint
received from the Shareholder. There were no investor
complaints remaining unresolved and pending as at
31
st
March, 2014.
D. Corporate Social Responsibility (CSR) Committee:
During the year under review and pursuant to the provisions
of Section 135 of the Companies Act, 2013, the Corporate
Social Responsibility Committee (CSR) of the Board was
constituted and functions under the Chairmanship of
Mr. Ashok Sharma, Mr. S. Durgashankar and Mr. Vinayak
Patil are the other Members of the Committee.
The broad terms of reference of CSR Committee are as
under:
To approve the CSR policy recommended by the CSR
committee and disclose the contents of such policy in
its report and place it on companys website;
To ensure the CSR activities are undertaken by the
company;
To ensure 2 percent spending on CSR activities;
To report CSR activities in Boards report and disclose
non-compliance (if any) with the CSR provisions.
V. DISCLOSURES
A. Disclosure on materially signicant Related Party
transactions
During the nancial year 2013-14 there were no materially
signicant transactions entered into between the Company
and its Promoters, Directors or the Management etc. that
may have potential conict with the interest of the Company
at large. Further details of related party transactions are
given in Note 30 to the Financial Statements.
B. Disclosure of Accounting Treatment in preparation of
Financial Statements
Your Company has followed the Accounting Standards
laid down by the Companies (Accounting Standards)
Rules, 2006 and the Accounting Standards prescribed
under the Companies Act, 1956 in preparation of its
nancial statements.
C. Code of Conduct for Prevention of Insider Trading
292
Pursuant to the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 1992, as amended,
the Company has formulated, adopted and implemented the
Code of Conduct for prevention of Insider Trading.
The code lays down Guidelines, which advise designated
employees 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.
Under the said Code, the Company has appointed
Mr. Ratnakar Nawghare as the Compliance Ofcer. All
Board members and Senior Management personnel have
afrmed compliance with the Code.
VI. SHAREHOLDER INFORMATION
1. 32
nd
Annual General Meeting
Date : 31
st
July, 2014
Time : 2.30 p.m.
Venue: Plot No. H-109, MIDC Ambad, Nashik- 422 010
2. Dates of Book Closure
Dates of Book Closure for Annual General Meeting will be
26
th
July, 2014 to 31
st
July, 2014 (both days inclusive)
3. Date of Dividend Payment
No dividend has been recommended for the Financial
Year ended 31
st
March, 2014.
4. Financial Year of the Company
The nancial year covers the period from 1
st
April to
31
st
March.
Financial Reporting for:
Quarter ending
30
th
June, 2014 Second week of August, 2014
Half-year ending
30
th
September, 2014 - Second week of November, 2014
Quarter ending
31
st
December, 2014 - Second week of February, 2015
Year ending
31
st
March, 2015 - End May, 2015
Note: The above dates are indicative.
5. Registered Ofce
Plot No. H-109, MIDC Ambad, Nashik- 422 010
6. Listing of Equity Shares on Stock Exchange
Your Companys Shares are listed on Bombay Stock
Exchange Limited (BSE). The requisite listing fees have
been paid in full to the Stock Exchange.
7. A. Stock Code
1. Bombay Stock Exchange Limited (BSE): 523754
2. Demat International Securities Identication Number
(ISIN) in NSDL and CDSL for Equity Shares: INE
215D01010
B. Corporate Identity Number:
L25200MH1981PLC025731
8. Stock Performance
The performance of the Companys shares relative to the
BSE Sensitive Index is given in the chart below:
0
5000
10000
15000
20000
25000
0
20
40
60
80
100
120
140
B
S
E

S
e
n
s
e
x

E
P
C

o
n

B
S
E

Closing Price on Last Trading day of the Month
EPC on BSE BSE Sensex
9. Stock Price Data of Equity Shares listed on Bombay
Stock Exchange Limited:
Month High Rs. Low Rs.
April, 2013 134.35 122.15
May, 2013 149.70 112.55
June, 2013 144.35 115.00
July, 2013 127.00 101.00
August, 2013 119.80 84.00
September, 2013 110.00 100.00
October, 2013 120.00 100.00
November, 2013 123.45 91.55
December, 2013 126.10 95.00
January, 2014 143.00 108.90
February, 2014 115.00 101.55
March, 2014 112.00 99.00
10. Registrar and Transfer Agent
Sharepro Services (India) Private Limited
Unit: EPC Industri Limited
13AB, Samhita Warehousing Complex,
2
nd
Floor, Sakinaka Telephone Exchange Lane,
Off Andheri Kurla Road, Sakinaka,
Andheri (East), Mumbai-400 072.
Tel. No. : +91-22-67720421/403
Fax: +91-22-28591568
Email : sharepro@shareproservices.com
The Registrar and Transfer Agents also have an ofce at:
912, Raheja Centre, Free Press Journal Road,
Nariman Point, Mumbai-400 021.
Tel. No.: +91-22-22881568/69
Fax : +91-22-22825484.
11. Share Transfer System
Trading in Equity Shares of the Company through Bombay
Stock Exchange is permitted only in dematerialized 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.
The Board of Directors in FY 2011-12 had authorised
Mr. Ashok Sharma, Executive Director and CEO to approve
the share transfers, issue of duplicate shares etc. and the
same gets conrmed by the Board in their subsequent
meeting.
As of date, there are no pending share transfers pertaining
to the year under review.
12. Distribution of Shareholding as on 31
st
March, 2014:
293
Shareholding
Shareholders Shares
Number % to total
holders
Number % to total
capital
Upto 500 7,090 89.06 10,74,978 3.89
501 1,000 377 4.74 3,09,672 1.12
1,001 5,000 337 4.23 7,54,601 2.73
5,001 10,000 51 0.64 3,81,720 1.38
10,001 1,00,000 87 1.09 26,20,586 9.48
1,00,001 & above 19 0.24 2,24,96,682 81.40
TOTAL 7,961 100.00 2,76,38,239 100.00
Shareholding Pattern as on 31
st
March, 2014
Category No. of shares held %
Promoters 1,51,44,433 54.80
Banks 200 0.00
Private Corporate Bodies 65,48,283 23.69
Indian Public 56,91,829 20.59
NRIs/ OCBs/Others 2,53,494 0.92
GRAND TOTAL 2,76,38,239 100.00
13. Dematerialisation of Shares
97.09% of the paid-up Equity Share Capital is held in
dematerialised form with National Securities Depository
Limited and Central Depository Services (India) Limited as
on 31
st
March, 2014. The Companys Shares are liquid and
actively traded on the Bombay Stock Exchange Limited.
14. Outstanding GDRs/ADRs/Warrants or any Convertible
Instruments, Conversion date and likely impact on equity
Nil
15. Plant Locations
Your Companys manufacturing facility is located at Plot
No. H - 109, MIDC Ambad, Nashik - 422 010.
16. Address for correspondence
Shareholders may correspond with the Registrar and
Transfer Agents at:
Unit: EPC Industri Limited
2
nd
Off. Andheri Kurla Road, Sakinaka,
Andheri (East), Mumbai - 400 072.
Telephone Nos.: +91-22-67720421/403
Fax: +91-22-28591568
Email: sharepro@shareproservices.com
for all matters relating to transfer/dematerialisation of
shares and any other query relating to Equity Shares of
your Company.
Your Company has also designated rvnawghare@epcind.
com as an exclusive email ID for Investors for the purpose
of registering complaints. Shareholders would have to
correspond with the respective Depository Participants for
Shares held in dematerialized form. For all investor related
matters, the Company Secretary & Compliance Ofcer
can be contacted at:
EPC Industri Limited
Plot No. H-109, MIDC Ambad, Nashik-422 010.
Telephone Nos.: +91-253-2381081/82
Fax: +91-253-2382975
email: rvnawghare@epcind.com
Your Company can also be visited at its website:
www.epcmahindra.com
VII. OTHER DISCLOSURES
1. Details of General Meetings and Special Resolutions passed.
Year
ended
Date Time Special Resolution passed
31
st

March,
2011
Thursday
29
th
September,
2011
2.30
p.m.
For Adoption of new sets of Articles
of Association of the Company.
31
st

March,
2012
Wednesday
1
st
August, 2012
2.30
p.m.
For Amendments in the Articles of
Association of the Company.
31
st

March,
2013
Wednesday
31
st
July, 2013
2.30
p.m.
For Variation in the terms referred
to in letter of offer dated May 3,
2012 in respect of utilization of
proceeds of rights issue
All the above Meetings were held at Plot No. H-109, MIDC
Ambad, Nashik- 422 010.
One Extra-ordinary General Meeting was held during the
year, the details are as under:
Date Time Special Resolution passed
Wednesday
3
rd
April, 2013
11:30
a.m.
For Amendment in the Articles of Association
Under Section 31 of the Companies Act, 1956.
The above meeting was held at the Registered Ofce of the
Company at Plot No. H-109, MIDC Ambad, Nashik-422010.
2. Postal Ballot
During the year under review, the Company has not passed
any special resolution through postal ballot. Further, the
Company does not have any proposal for passing the
special resolution through postal ballot, at the ensuing
Annual General Meeting.
3. Details of non-compliance etc.
Your 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 Exchange or SEBI or any statutory authority, on
any matter related to the capital markets.
The Company and the erstwhile Promoters group
company had led the revised consent application on 8
th
January, 2014, in terms of SEBI Circular dated May 25,
2012 (Ref CIR/EFD/1/2012) (May Circular 2012) seeking
settlement for non-disclosure in respect of the transaction
dated 31
st
March, 2003 and for delay in yearly disclosure
as of 31
st
March, 2005, under Securities and Exchange
Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
SEBI vide its letter dated 27
th
November, 2013 issued a
notice of Inquiry against aforesaid delays. The Company in
response to it, led the consent application on 8
th
January,
2014 and reply on 10
th
January, 2014. The SEBI has
returned the Consent application, however, the Company
has requested SEBI to provide an opportunity for personal
hearing to settle the matter. The Inquiry proceedings are
kept in abeyance till the outcome of consent application.
4. Whistle blower Policy:
During the year under review, the Board of Directors of the
Company has adopted Whistle Blower Policy as per the
Corporate Governance norms. Your Company promotes
ethical behaviour in all its business activities and has put
294
in place a mechanism wherein the Employees are free to
report illegal or unethical behaviour, actual or suspected
fraud or violation of the Companys Code of Conduct or
Corporate Governance Policies or any improper activity to
the Chairman of the Audit Committee of the Company. The
Whistle Blower Policy has been appropriately communicated
within the Company. Under the Whistle Blower Policy, the
condentiality of those reporting violation(s) is protected
and they are not subject to any discrimination. No personnel
has been denied access to the Audit Committee.
5. Means of Communication
The quarterly, half-yearly and yearly results are published
in Business Standard, Free Press Journal & Navshakti
which are national and local dailies respectively. These are
not sent individually to the Shareholders. The Companys
results and ofcial news releases are displayed on the
Companys website http://www.epcmahindra.com.
No presentations were made to institutional investors/analysts.
6. Management Discussion and Analysis Report
Management Discussion and Analysis Report (MDA) has
been attached to the Directors Report and forms part of
this Annual Report.
7. Compliance with Mandatory requirements
Your Company has complied with the requirements of
Clause 49 of the Listing Agreement relating to Corporate
Governance.
8. Compliance with Non-Mandatory requirements:
a. Nomination and Remuneration Committee
Your Company has set up the Nomination and
Remuneration Committee pursuant to Clause 49 of
Listing Agreement.
b. Audit Qualication
During the year under review, there is no audit
qualication in your Companys nancial statements.
Your Company continues to adopt best practices to
ensure unqualied nancial statements.
Your Company has not adopted the other non-
mandatory requirements as specied in Annexure I D
of Clause 49.
Mumbai
26
th
May, 2014
DECLARATION BY THE EXECUTIVE DIRECTOR AND CEO UNDER CLAUSE 49 OF THE LISTING AGREEMENT
To
The Members of EPC Industri Limited,
I, Ashok Sharma, Executive Director & CEO of EPC Industri Limited declare that all the Members of the Board of Directors and Senior Management
Personnel have afrmed compliance with the Code of Conduct for the year ended 31
st
March, 2014.
Mumbai, Ashok Sharma
26
th
May, 2014 Executive Director & CEO
To
The Members of
EPC Industri Limited,
We have examined the compliance of the conditions of Corporate
Governance by EPC Industri Limited (the Company) for the year
ended March 31, 2014, as stipulated in Clause 49 of the Listing
Agreement of the said Company with the stock exchange 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 Corporate Governance.
It is neither an audit nor an expression of opinion on the nancial
statements of the Company.
In our opinion and to the best of our information and according to
the explanations given to us and the representations made by the
directors and the management, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated
in the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the
future viability of the Company nor the efciency or effectiveness with
which the management has conducted the affairs of the Company.
Firm Registration No.117364W
Ketan Vora
Partner
Mumbai, May 26, 2014
CERTIFICATE
295
TO THE MEMBERS OF EPC INDUSTRI LIMITED
1. We have audited the accompanying nancial statements of
EPC Industri Limited (the Company), which comprise
the Balance Sheet as at March 31, 2014, the Statement of
Prot and Loss and the Cash Flow Statement for the year
then ended, and a summary of the signicant accounting
General Circular 15/2013 dated September 13, 2013 of
India. Those Standards require that we comply with the
statements, whether due to fraud or error. In making
those risk assessments, the auditor considers the internal
control relevant to the Companys preparation and fair
presentation of the nancial statements in order to design
but not for the purpose of expressing an opinion on
the effectiveness of the Companys internal control. An
audit also includes evaluating the appropriateness of
the accounting policies used and the reasonableness of
the accounting estimates made by the Management, as
well as evaluating the overall presentation of the nancial
statements.
opinion.
Opinion
accepted in India:
the Company as at March 31, 2014;
and
5 of the Order.
(a) we have obtained all the information and explanations
necessary for the purposes of our audit;
Report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, the Statement of
Prot and Loss and the Cash Flow Statement comply
Circular 15/2013 dated September 13, 2013 of the
(e) on the basis of the written representations received
from the directors as on March 31, 2014 taken on
is disqualied as on March 31, 2014 from being
of the Act.
Firm Registration No. 117364W
Ketan Vora
Partner
296
Re: EPC Industri Limited
and Regulatory Requirements section of our Report of
even date)
1. In our opinion and according to the information and
explanations given to us, the nature of the Companys
business/activities during the year are such that clauses
(xiii) and (xiv) of paragraph 4 of the Order, are not applicable
to the Company. In respect of the other clauses, we report
as under:
2. In respect of its xed assets:
xed assets once in every three years. In our opinion,
the frequency of verication is reasonable. According
to the information and explanations given to us,
no material discrepancies were noticed on such
verication.
(c) During the year, in our opinion, a substantial part
of xed assets has not been disposed off by the
Company.
3. In respect of its inventories:
verication.
4. The Company has neither granted nor taken any loans,
secured or unsecured, to or from companies, rms or
other parties covered in the Register maintained under
Section 301 of the Act and accordingly the sub-clauses
(a), (b), (c), (d), (e), (f) and (g) of clause (iii) of the Order
of inventory and xed assets and for the sale of goods
and services and during the course of our audit, we have
not observed any continuing failure to correct major
weaknesses in such internal control system.
6. To the best of our knowledge and belief and according to
the information and explanations given to us, there are no
contracts or arrangements that need to be entered in the
Act.
explanations given to us, the Company has complied with
the provisions of Sections 58A, 58AA or any other relevant
provisions of the Act and the Companies (Acceptance
of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information
and explanations given to us, no order has been passed
by the Company Law Board or the National Company
Law Tribunal or the Reserve Bank of India or any Court or
any other Tribunal.
8. In our opinion, the Company has an adequate internal
of its business.
9. We have broadly reviewed the cost records maintained
Central Government under Section 209(1)(d) of the Act
and are of the opinion that, prima facie, the prescribed
cost records have been maintained. We have, however,
not made a detailed examination of the cost records with a
10. According to the information and explanations given to
State Insurance, Income Tax, Sales Tax, Wealth Tax,
any other material statutory dues applicable to it with
respect of Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income
Tax, Sales Tax, Customs Duty, Wealth Tax, Service
Tax, Excise Duty, Cess and other material statutory
dues in arrears, as at March 31, 2014 for a period
of more than six months from the date they became
payable.
(c) Details of dues of Income Tax, Sales Tax, Customs
Duty, Wealth Tax, Service Tax, Excise Duty and Cess
which have not been deposited as on March 31, 2014
on account of disputes are given below:
297
applied by the Company during the year for the purposes
for which they were obtained, other than temporary
deployment pending application.
17. During the year, the Company has not made any
preferential allotment of shares to parties and companies
covered in the Register maintained under Section 301 of
the Act.
18. The Company has not issued any debentures and hence,
the question of creation of security does not arise.
19. The Company has not raised any money by public issue
during the year.
20. To the best of our knowledge and according to the
Ketan Vora
Partner
Statute Nature
of Dues
Forum where Dispute
is pending
Period to
which the
amount
relates
Amount
involved
(Rupees)
Income Tax
Act, 1961
Income
Tax
Commissioner of
Income Tax (Appeals)
Commissioner of
Income Tax (Appeals)
FY 1992-93
FY 2009-10
23,66,859
1,99,880
Central
Excise Act,
1944
Excise
Duty
Commissioner
of Central Excise
(Appeals)
Commissioner of
Central Excise
Superintendent of
Central Excise
FY 1996-97

FY 1997-98
FY 1998-99
35,76,000
8,12,000
35,56,000
Maharashtra
Value
Added
Tax, 2002
Value
added
tax
Dy. Commissioner of
Sales Tax (Appeals)
The Joint Commissioner
of Sales Tax (Appeals)
FY 2008-09
FY 2009-10
2,28,870
5,14,682
11. The accumulated losses of the Company as at the end
of the nancial year are not more than fty percent of its
networth and the Company has not incurred cash losses
during the nancial year covered by our audit and in the
in repayment of dues to banks and nancial institutions.
13. In our opinion, the Company has not granted loans and
advances on the basis of security by way of pledge of
explanations given to us, the term loans have been
298
We, Ashok Sharma Executive Director and CEO and Mayur
Bumb, Chief Financial Ofcer, responsible for the nance
function certify that:
(1) We have reviewed the nancial statements and the cash
ow statement for the year ended 31
st
March, 2014 and
that to the best of our knowledge and belief , We conrm
that:
(a) these statements do not contain any materially
untrue statement or omit any material fact or contain
statements that might be misleading;
(b) these statements together present a true and fair view
of the Companys affairs and are in compliance with
existing accounting standards, applicable laws and
regulations.
(2) To the best of our knowledge and belief, no transactions
entered into by the Company during the year ended
31
st
March, 2014 are fraudulent, illegal or violative of the
Companys code of conduct/ethics.
(3) We accept responsibility for establishing and maintaining
internal controls for nancial reporting and that we have
evaluated the effectiveness of the internal control systems
of the Company pertaining to nancial reporting and we
have disclosed to the Auditors and the Audit Committee,
deciencies in the design or operation of internal controls,
over nancial reporting, if any, of which we are aware and
the steps we have taken or propose to take to rectify
these deciencies.
(4) We have indicated to the Auditors and the Audit Committee
that:
(i) there has not been any signicant change in internal
control over nancial reporting during the year under
reference;
(ii) there has not been any signicant change in the
accounting policies during the year requiring the
disclosure in the notes to the nancial statements;
and
(iii) We are not aware of any instance during the year
of signicant fraud with involvement therein of the
Management or any employee having a signicant
role in the Companys internal control system over
nancial reporting.
Chief Financial Ofcer Executive Director & CEO
Mumbai
April 29, 2014
CEO AND CFO CERTIFICATION
299
March 31, 2014
Rupees
As at
March 31, 2013
Rupees
A. EQUITY AND LIABILITIES
1. Shareholders funds
(a) Share capital 2 276,401,890 276,328,140
(b) Reserves and surplus 3 853,988,131 779,334,464
1,130,390,021 1,055,662,604
(a) Long-term borrowings 4 7,405,873 126,244,044
(b) Long-term provisions 5 6,730,214 5,819,701
14,136,087 132,063,745
(a) Short-term borrowings 6 541,000 3,557,000
(b) Trade payables 7 200,884,365 164,790,675
(c) Other current liabilities 8 266,427,343 82,544,524
(d) Short-term provisions 9 13,751,538 5,622,084
481,604,246 256,514,283
TOTAL 1,626,130,354 1,444,240,632
B. ASSETS
1. Non-current assets
(a) Fixed assets
(i) Tangible assets 10A 317,744,486 306,883,551
(ii) Intangible assets 10B 3,473,863 3,046,507
(iii) Capital work-in-progress 366,404 3,621,325
321,584,753 313,551,383
(b) Non-current investments 11 55,000 55,000
(c) Deferred tax assets (net) 12
(d) Long-term loans and advances 13 58,577,468 57,464,452
380,217,221 371,070,835
2. Current assets
(a) Current investments 14 11,350
(b) Inventories 15 359,458,517 239,417,009
(c) Trade receivables 16 586,243,244 424,583,802
(d) Cash and bank balances 17 242,444,469 381,224,535
(e) Short-term loans and advances 18 31,613,971 23,545,887
( f ) Other current assets 19 26,152,932 4,387,214
1,245,913,133 1,073,169,797
TOTAL 1,626,130,354 1,444,240,632
In terms of our report attached For and on behalf of the Board of Directors
Ashok Sharma
Executive Director & CEO
S. Durgashankar
}
Directors
Nikhilesh Panchal
Ketan Vora
Vinayak Patil
Partner
Anand Daga
Mayur Bumb Chief Financial Ofcer
R. V. Nawghare Company Secretary
Place : Mumbai Place : Mumbai
Date : 29
th
th
April, 2014
300
Ashok Sharma
S. Durgashankar
}
Directors
Nikhilesh Panchal
Ketan Vora
Vinayak Patil
Partner
Anand Daga
Date : 29
th
th
April, 2014
Particulars Note No. For the year
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
1. Revenue from operations (Gross) 20 1,747,808,535 1,615,068,254
Less: Excise Duty 556,189 987,787
Revenue from operations (Net) 1,747,252,346 1,614,080,467
2. Other income 21 25,659,873 27,601,686
3. Total revenue (1 + 2) 1,772,912,219 1,641,682,153
4. Expenses
(a) Cost of materials consumed 22 1,185,277,117 984,866,661
(b) Purchases of Stock in Trade 16,926,581 20,716,611
(c) Changes in inventories of nished goods, work-in-progress
and stock in trade 23 (59,638,197) 51,732,799
(d) Employee benets expense 24 181,334,765 150,977,843
(e) Finance costs 25 23,534,387 24,637,010
(f) Depreciation and amortisation expense 10C 27,941,444 25,457,291
(g) Other expenses 26 320,437,374 329,872,503
Total expenses 1,695,813,471 1,588,260,718
5. Prot before tax (3 4) 77,098,748 53,421,435
6. Tax expense:
(a) Current tax expense 6,810,000 4,670,000
(b) (Less): MAT credit (6,810,000) (4,670,000)
(c) Net current tax expense
(d) Deferred tax

7. Prot for the year (5 6) 77,098,748 53,421,435
8. Earnings per share (Face Value of Rs. 10/- each): 34
(a) Basic 2.79 2.01
(b) Diluted 2.79 2.01
301
March 31, 2014
For the year ended
March 31, 2013
Net Prot before tax 77,098,748 53,421,435
Adjustments for:
Depreciation and amortisation 27,941,444 25,457,291
Net (Prot)/Loss on sale/write off of assets 967,430 (10,401)
Expense on employee stock option scheme 98,783 148,769
Finance costs 23,534,387 24,637,010
Interest income (23,951,362) (25,872,858)
Dividend income (358,461) (481,831)
Prot on sale of current investments (313,233) (12,350)
Investments written off 14,500
Liabilities/provisions no longer required written back (368) (709,825)
Provision for doubtful trade and other receivables, loans
and advances (676,976) 12,737,691
Bad trade and other receivables, loans and advances
written off 9,044,319 227,854
36,285,963 36,135,850
Operating prot before working capital changes 113,384,711 89,557,285
Inventories (120,041,508) 1,181,378
Trade receivables (170,026,785) (58,947,013)
Short-term loans and advances (8,068,085) (10,228,534)
Long-term loans and advances (4,515) (355,082)
Other current assets (24,638,000) 497,075
Trade payables 36,094,058 12,241,038
Other current liabilities 31,736,846 (13,646,128)
Short-term provisions 8,129,454 (826,214)
Long-term provisions 910,513 147,564
(245,908,022) (69,935,916)
Cash (used in)/generated from operations (132,523,311) 19,621,369
Net income tax (9,929,527) (7,977,097)
Net cash ow (used in)/generated from operating
activities (A) (142,452,838) 11,644,272
Capital expenditure on xed assets, including capital
advances (32,017,778) (52,530,905)
Proceeds from sale of xed assets 714,921 724,379
Purchase of Current Investments (302,500,000) (418,500,000)
Sale of Current Investments 303,181,908 418,991,911
Bank balances not considered as Cash and cash
equivalents -Matured/(Placed) - Net 150,924,002 (208,061,965)
Interest received 26,823,645 22,967,282
Dividend received 1,135 2,270
Net cash ow from/(used in) investing activities (B) 147,127,833 (236,407,028)
302
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014 (Contd.)
March 31, 2014
For the year ended
March 31, 2013
Proceeds from issue of equity shares 258,125 414,642,960
Share issue expenses (8,161,056)
Proceeds from short term borrowing 206,000 3,557,000
Repayment of short-term borrowing (3,182,000)
Proceeds from long term borrowing 36,709,000 113,111,000
Repayment of long-term borrowings (7,574,183) (48,987,183)
Net decrease in working capital borrowings (207,796,745)
Finance costs paid (18,948,002) (20,645,105)
Net cash ow from nancing activities (C) 7,468,940 245,720,871
Net increase in Cash and cash equivalents (A+B+C) 12,143,935 20,958,115
Cash and cash equivalents at the beginning of the year 89,236,335 68,278,220
Cash and cash equivalents at the end of the year 101,380,270 89,236,335
Reconciliation of Cash and cash equivalents with the
Balance Sheet:
Cash and cash equivalents as per Balance Sheet
[Refer Note no. 17] 242,444,469 381,224,535
Less: Bank balances not considered as Cash and cash
equivalents as dened in AS 3 Cash Flow Statements
Balances with banks held as margin money/security
against borrowings and guarantees 89,576,708 84,360,724
Earmarked balances with banks 51,487,491 207,627,476
Net Cash and cash equivalents [as dened in AS 3 Cash
Flow Statements] included in Note no. 17 101,380,270 89,236,335
Cash and cash equivalents at the end of the year
comprises
(a) Cash on hand 293,799 304,247
(i) In current accounts 39,696,997 32,656,666
(ii) In deposit accounts 61,389,474 56,275,422
101,380,270 89,236,335
Ashok Sharma
S. Durgashankar
}
Directors
Nikhilesh Panchal
Ketan Vora
Vinayak Patil
Partner
Anand Daga
Date : 29
th
th
April, 2014
303
NOTE NO. 1 - SIGNIFICANT ACCOUNTING POLICIES
A. Corporate Information:
EPC Industri Limited is a Public Limited Company. It was incorporated
on 28
th
November, 1981 under the Companies Act, 1956. It is engaged in
the business of manufacturing and marketing of Micro Irrigation Systems
such as Drip and Sprinklers, Agricultural Pumps and Greenhouses. The
Company is a subsidiary of Mahindra and Mahindra Limited.
B. Basis of Accounting:
The nancial statements are prepared in accordance with the generally
accepted accounting principles in India (GAAP) and comply with the
Accounting Standards notied under sub-section (3C) of section 211 of
the Companies Act, 1956 and the relevant provisions thereof.
C. Use of Estimates:
The preparation of nancial statements in conformity with GAAP requires
that the management of the Company makes estimates and assumptions
that affect the reported amounts of income and expenses of the period,
the reported balance of assets and liabilities and the disclosures relating to
contingent liabilities as of the date of the nancial statements. Differences,
if any, between the actual results and estimates, is recognised in the
period in which the results are known/materialise.
D. Tangible Assets:
Fixed assets are carried at cost less accumulated depreciation/impairment
losses, if any. Cost includes cost of acquisition or construction and is
stated at historical cost.
Fixed Assets (other than Ofce Premises at Ahmedabad, Furniture &
Fixtures, Ofce Equipments and Vehicles) have been revalued as on
June 24, 1998 and the resultant surplus has been added to the block of
the assets.
Depreciation on all assets, other than Computer & Accessories, is
provided on Straight Line Method in accordance with Schedule XIV to the
Companies Act, 1956. Depreciation is provided on Computer & Accessories
using Straight Line Method over a period of 3 years. Leasehold Assets are
written off over the period of lease. Depreciation on additions to assets or
on sale/disposal of assets is calculated from the beginning of the month of
such addition or up to the month of such sale/scrapped as the case may
be.
Fixed assets retired from active use and held for sale are stated at the
lower of their net book value and net realisable value and are disclosed
separately in the Balance Sheet.
E. Intangible Assets:
Intangible assets are recognised only when economic benet attributable
to the assets will ow to the enterprise and cost can be measured reliably.
They are being amortised over the estimated useful life of three years.
F. Impairment of Assets:
The carrying value of assets/cash generating units at each balance sheet
the recoverable amount of such assets is estimated and impairment
is recognised, if the carrying amount of these assets exceeds their
recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use.Value in use is arrived at by discounting
the future cash ows expected to arise from the continuing use of an asset
and from its disposal at the end of its useful life to their present value
based on an appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting periods no
longer exists or may have decreased, such reversal of impairment loss is
recognised in the Statement of Prot and Loss, except in case of revalued
assets.
G. Investments:
Long term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline other than temporary
in the value of investments. Current investments are valued at the lower of
cost and fair value.
H. Inventories:
Raw materials and bought out components are valued at the lower of cost
and net realisable value. Cost is determined on the basis of the weighted
average method.
components and work-in-progress are carried at cost and net realisable
value whichever is lower. Excise duty is included in the value of nished
goods inventory.
Stores, Spares and tools other than obsolete and slow moving items are
carried at cost. Obsolete and slow moving items are valued at cost and
estimated net realisable value, whichever is lower.
I. Foreign Exchange Transactions:
Transaction in foreign currencies are recorded at the exchange rates
monetary items at the end of the year is recognised as income or expense,
as the case may be.
J. Revenue recognition:
Sales of goods are recognised, net of estimated returns and trade
discounts. Sales include excise duty but exclude sales tax and value
added tax.
Revenue is recognised when the risks and rewards of ownership are
passed on to the customers and no signicant uncertainty as to its
measurability and collectability exists.
K. Other income:
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Dividend
income is accounted for when the right to receive it is established.
L. Government Grants:
Capital Incentive Subsidy, not specically related to xed assets, is credited
to Capital Incentive Reserve and retained till the requisite conditions are
fullled. The Company is entitled to various incentives from government
authorities. The Company accounts for its entitlement as income on
accrual basis and no signicant uncertainty as to its measurability and
collectability exists.
M. Employee benets:
a) Short term employee benets
All employee benets falling due wholly within twelve months of
rendering the service are classied as short term employee benets.
The benets like salaries, wages, short term compensated absences,
etc. and the expected cost of bonus, ex-gratia, are recognised in the
period in which the employee renders the related service.
b) Post-employment benets
(i) Dened contribution plans
The Companys contribution to provident fund, employee state
insurance scheme and superannuation fund are considered as
dened contribution plans and are charged as an expense as
they fall due based on the amount of contribution required to
be made and when services are rendered by the employee.
(ii) Dened benet plans
The employees gratuity fund scheme, managed by LIC
is a dened benet plan. The present value of obligation is
determined based on actuarial valuation carried out as at the
end of each nancial year using the Projected Unit Credit
Method.
The obligation is measured at the present value of the estimated
future cash ows. The discount rate used for determining the
304
present value of the obligation under dened benet plans,
is based on the market yield on government securities, of a
maturity period equivalent to the weighted average maturity
prole of the related obligations at the Balance Sheet date.
In case of funded plans, the fair value of the plan assets is
reduced from the gross obligation under the dened plans to
recognise the obligation on the net basis.
Gains or losses on the curtailment or settlement of any dened
benet plan are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a
straight line basis over the period until benet become vested.
c) Long term employee benets
The obligation for long term employee benets such as long term
compensated absences, long service award, etc. is recognised in the
similar manner as in the case of dened benet plans as mentioned
in (b) (ii) above.
d) Employee Stock Compensation Cost
The Company has formulated Employee Stock Option Schemes
(ESOS) (the Scheme) in accordance with the SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999. The Scheme provides for grant of options to
employees of the Company to acquire equity shares of the Company
that vest in a graded manner and that are to be exercised within
a specied period. In accordance with the SEBI Guidelines; the
excess, if any, of the closing market price on the day prior to the
grant of the options under ESOS over the exercise price is amortised
on a straight-line basis over the vesting period.
N. Leases:
In respect of Operating Leases, Lease payments are recognised as expenses
and Lease income are recognised as income on a straight line basis over the
Lease Term. Initial direct costs are recognised immediately as expenses.
O. Borrowing Costs:
All borrowing costs are charged to the Statement of Prot and Loss except:
(a) Borrowing costs that are attributable to the acquisition or construction
of assets that necessarily take a substantial period of time to get
ready for their intended use, which are capitalised as part of the cost
of such assets.
(b) Expenses incurred on raising long term borrowing are amortised over
the period of borrowing. On early buyback, conversion or repayment of
borrowings, any unamortised expenditure is fully written off in that year.
P. 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 time of sale.
The estimates for accounting of warranties are reviewed and revisions are
made as required.
Q. Taxes on income:
Income Taxes are accounted for in accordance with Accounting Standard
on Accounting for Taxes on Income, (AS-22). Tax Expenses comprises
both current tax and deferred tax. Current tax is measured at the amount
expected to be paid/recovered from the tax authorities using the applicable
tax rates. Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benets in the form of adjustment to
future income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benet associated with it will ow to the Company.
Deferred tax asset is measured based on the tax rates and the laws
enacted or substantively enacted as at the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable certainty
that sufcient future taxable income will be available against which such
deferred tax assets can be realized. In respect of carry forward losses and
unabsorbed depreciation, deferred tax assets are recognized only to the
extent there is virtual certainty that sufcient future taxable income will be
available against which such deferred tax assets can be realized.
R. Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognised when the Company has a present obligation as a
result of past events and it is probable that an outow of resources will be
required to settle the obligation in respect of which a reliable estimate can
be made. Provisions (excluding retirement benets) are not discounted
to their present value and are determined based on the best estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reect the current
best estimates.
Contingent liabilities are not recognised but are disclosed in the notes.
Contingent assets are neither recognised nor disclosed in the nancial
statements.
S. Share issues expenses:
Share issue expenses are adjusted against the Securities Premium
Account as permissible under Section 78(2) of the Companies Act, 1956,
to the extent balance is available for utilisation in the Securities Premium
Account.
NOTE NO. 2 - SHARE CAPITAL
Particulars As at March 31, 2014 As at March 31, 2013
Number of
Shares
Rupees Number of
Shares
Rupees
(a) Authorised
Equity shares of
Rs. 10 each 32,000,000 320,000,000 32,000,000 320,000,000
Preference shares
of Rs. 100 each 1,800,000 180,000,000 1,800,000 180,000,000
33,800,000 500,000,000 33,800,000 500,000,000
(b) Issued
Equity shares of
Rs. 10 each 27,642,139 276,421,390 27,634,764 276,347,640
276,421,390 276,347,640
(c) Subscribed and
fully paid up
Equity shares of
Rs. 10 each 27,638,239 276,382,390 27,630,864 276,308,640
(d) Forfeited Shares
(Amount originally
paid-up) 3,900 19,500 3,900 19,500
Total 276,401,890 276,328,140
Reconciliation of the number of shares and amount outstanding at the beginning
and at the end of the reporting period:
Number of
Shares
Rupees Number of
Shares
Rupees
Balance as at the
beginning of the year 27,630,864 276,308,640 17,263,665 172,636,650
Add: Issued during the
year - Rights Issue 10,358,199 103,581,990
year - ESOS 7,375 73,750 9,000 90,000
Balance as at the end
of the year 27,638,239 276,382,390 27,630,864 276,308,640
Rights, preferences and restrictions attached to the equity shares
The Company is having only one class of equity shares having par value of Rs.
10 each. Each holder of equity share is entitled to one vote per share. In the
event of liquidation of the Company, the holders of the equity shares will be
entitled to receive remaining assets of the Company. The distribution will be in
proportion to the number of equity shares held by the shareholders.
Shares held by the holding company
1,51,44,433 shares (As at March 31, 2013: 1,51,44,433 shares) are held by the
Holding Company viz., Mahindra and Mahindra Limited.
305
Details of shareholders holding more than 5% shares in the Company
Number of % holding Number of % holding
Mahindra and Mahindra
Limited 15,144,433 54.80% 15,144,433 54.81%
Reliance Net Limited 1,489,700 5.39% 1,489,700 5.39%
Shares reserved for issue under options
Shares reserved for issue under options 4,74,125 shares (As at March 31,
2013 - 4,81,500 shares) of Rs. 10 each towards outstanding employee stock
options granted [Refer Note No. 28]
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
NOTE NO. 3 - RESERVES AND SURPLUS
(a) Capital incentive reserve
Closing balance 4,000,000 4,000,000
(b) Securities premium account
Opening balance 915,413,215 612,342,301
Add: Premium received on shares allotted
during the year 184,375 310,970,970
Add: Transferred from Shares Options
Outstanding account 213,875 261,000
915,811,465 923,574,271
Less: Utilised during the year for writing off
shares issue expenses (8,161,056)
Closing balance 915,811,465 915,413,215
(c) Debenture redemption reserve
Opening balance 10,000,000
Less: Transferred to General Reserve (10,000,000)
Closing balance
(d) Revaluation reserve
Opening balance 31,419,014 34,355,374
Less: Utilised for set off against depreciation (2,728,239) (2,936,360)
Closing balance 28,690,775 31,419,014
(e) Share options outstanding account
Opening balance 427,750 826,500
Add: Amounts recorded on grants during
the year
427,750 826,500
Less: Amounts reduced on grants lapsed
during the year (137,750)
Less: Transferred to Securities premium
account on exercise (213,875) (261,000)
213,875 427,750
Less: Deferred stock compensation expense (33,986) (132,769)
Closing balance 179,889 294,981
(f) Investment Allowance Reserve
Opening balance 643,275
Less: Transferred to General Reserve (643,275)
Closing balance
(g) Export Benet Reserve
Less: Transferred to General Reserve (3,210,000)
Closing balance
(h) General Reserve
Add: Transferred from Debenture
Redemption Reserve 10,000,000
Add: Transferred from Investment Allowance
Reserve 643,275
Add: Transferred from Export Benet
Reserve 3,210,000
Closing balance 13,853,275 13,853,275
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
(i) Decit in Statement of Prot and Loss
Opening balance (185,646,021) (239,067,456)
Add: Prot for the year 77,098,748 53,421,435
Closing balance (108,547,273) (185,646,021)
Total 853,988,131 779,334,464
NOTE NO. 4 - LONG-TERM BORROWINGS
Unsecured
Deferred payment liabilities 7,405,873 13,133,044
[Interest Free Loan under Sales Tax Deferral
Scheme is payable in 5 annual instalments
after 10 years from the year of availment of
respective loan. These loans are repayable:
(i) In the second year - Rs. 31,44,207
(As at March 31, 2013 Rs. 57,27,171)
(ii) In the third to fth year - Rs. 28,98,007
(As at March 31, 2013 Rs. 54,63,463)
(iii) After ve years - Rs. 13,63,659
(As at March 31, 2013 Rs. 19,42,410)]
Public Deposits 113,111,000
[Repayable at the end of 2 to 3 years from the date
of deposit and carry an interest rate of 9.50% to
11.75% p.a; Previous Year 10.50% to 11.75% p.a.]
Total 7,405,873 126,244,044
NOTE NO. 5 - LONG-TERM PROVISIONS
Provision for employee benets:
Provision for compensated absences
[Refer Note no. 29 (b)] 6,730,214 5,819,701
Total 6,730,214 5,819,701
NOTE NO. 6 - SHORT-TERM BORROWINGS
Unsecured
Public Deposits 541,000 3,557,000
[For a period of one year and carry an interest rate of
8.50% to 9% p.a.; Previous year 10% to 10.75% p.a.]
Total 541,000 3,557,000
NOTE NO. 7 - TRADE PAYABLES
Trade Payable - Micro and Small enterprises 4,834,262
Trade Payable - Other than Micro and Small enterprises 196,050,103 164,790,675
Total 200,884,365 164,790,675
Disclosures required under section 22 of the Micro, Small and Medium
Enterprises Development Act, 2006 are as below:
(a) Dues remaining unpaid as at March 31
Principal 4,834,262
Interest on the above
(b) Interest paid in terms of Section 16
of the Act, along with the amount of
payment made to the supplier beyond the
appointed day during the year
Principal paid beyond the appointed date 3,004,919
Interest paid in terms of Section 16 of the Act
(c) Amount of interest due and payable for
the period of delay on payments made
beyond the appointed day during the year
(d) Further interest due and payable even
actually paid to the small enterprises
(e) Amount of interest accrued and remaining
unpaid as at March 31
Due to Micro and Small Enterprises have been determined to the extent
such parties have been identied on the basis of information collected by the
306
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
NOTE NO. 8 - OTHER CURRENT LIABILITIES
(a) Current maturities of long-term debt
Unsecured
Deferred payment liabilities 5,727,171 7,470,183
Public Deposits [Refer Note no. 31] 149,716,000
(b) Interest accrued on Public Deposits
(i) Interest accrued but not due 8,297,567 2,075,219
(ii) Interest accrued and due 1,916,686
(c) Other payables
(i) Statutory remittances (Contributions
to PF and ESIC, Withholding Taxes,
Excise Duty, VAT, Service Tax, etc.) 10,814,846 5,654,860
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
(ii) Payables on purchase of xed assets 14,062 467,461
(iii) Trade/security deposits received 31,025,195 26,393,950
(iv) Advances from customers 57,903,780 36,142,712
(v) Others - Employee Deductions 568,533 383,986
(vi) Provision for liabilities 2,039,467 2,039,467
(vii) Unclaimed matured public deposits
and interest 320,722
Total 266,427,343 82,544,524
NOTE NO. 9 - SHORT-TERM PROVISIONS
(i) Provision for compensated absences 3,618,503 2,961,881
(ii) Provision for gratuity (net)
[Refer Note no. 29 (b)] 3,045,235 2,572,403
(b) Provision for tax
[net of advance tax Rs. 10,62,200
(As at March 31, 2013 Rs. 10,62,200)] 87,800 87,800
(c) Provision for Warranty [Refer Note no.35] 7,000,000
Total 13,751,538 5,622,084
NOTE NO. 10 - FIXED ASSETS
A. Tangible assets (Amount in
Rupees)
Gross block Accumulated depreciation Net Block
Description of Assets As at April 1,
2013
Additions Disposals As at
March 31,
2014
Upto March
31, 2013
Depreciation/
Amortisation
for the year
Eliminated on
disposal of
assets
Upto
March 31,
2014
As at
March 31,
2014
Leasehold Land 39,390,388 39,390,388 6,301,737 397,843 6,699,580 32,690,808
(39,390,388) () () (39,390,388) (5,903,894) (397,843) () (6,301,737) (33,088,651)
Buildings
Owned 78,535,032 5,065,105 83,600,137 37,475,366 2,451,071 39,926,437 43,673,700
(78,535,032) () () (78,535,032) (35,101,868) (2,373,498) () (37,475,366) (41,059,666)
Leasehold 2,290,550 2,290,550 2,086,947 89,076 2,176,023 114,527
(2,290,550) () () (2,290,550) (1,857,891) (229,056) () (2,086,947) (203,603)
Plant and Equipment 321,814,798 33,414,980 355,229,778 143,215,129 15,309,724 158,524,853 196,704,925
(291,534,339) (30,280,459) () (321,814,798) (130,209,957) (13,005,172) () (143,215,129) (178,599,669)
Electrical Installations 13,614,632 69,721 13,684,353 8,148,280 697,568 8,845,848 4,838,505
(13,504,132) (110,500) () (13,614,632) (7,416,056) (732,224) () (8,148,280) (5,466,352)
Furniture and Fixtures 7,024,712 1,112,338 8,137,050 4,806,167 381,898 5,188,065 2,948,985
(5,674,543) (1,350,169) () (7,024,712) (4,125,740) (680,427) () (4,806,167) (2,218,545)
Vehicles 10,554,341 2,463,147 8,091,194 1,792,562 782,046 799,497 1,775,111 6,316,083
(8,187,279) (3,081,822) (714,760) (10,554,341) (1,075,597) (1,005,549) (288,584) (1,792,562) (8,761,779)
Ofce Equipments 3,572,017 393,935 3,965,952 1,205,335 204,639 1,409,974 2,555,978
(3,264,264) (535,606) (227,853) (3,572,017) (1,106,336) (209,753) (110,754) (1,205,335) (2,366,682)
Factory Equipments 12,139,467 14,485 12,153,952 8,952,381 379,305 9,331,686 2,822,266
(11,401,354) (890,526) (152,413) (12,139,467) (8,774,583) (322,590) (144,792) (8,952,381) (3,187,086)
Moulds and Dies 96,882,287 40,161 96,922,448 67,177,186 6,722,541 73,899,727 23,022,721
(84,109,796) (12,772,491) () (96,882,287) (60,693,484) (6,483,702) () (67,177,186) (29,705,101)
Computers 9,503,850 1,253,468 111,180 10,646,138 7,277,433 1,405,195 92,478 8,590,150 2,055,988
(9,424,149) (1,257,062) (1,177,361) (9,503,850) (6,918,788) (1,372,924) (1,014,279) (7,277,433) (2,226,417)
Total 595,322,074 41,364,193 2,574,327 634,111,940 288,438,523 28,820,906 891,975 316,367,454 317,744,486
(547,315,826) (50,278,635) (2,272,387) (595,322,074) (263,184,194) (26,812,738) (1,558,409) (288,438,523) (306,883,551)
Note: Figures in bracket relate to the previous year
307
B. Intangible assets (Amount in
Rupees)
Gross block Accumulated amortisation Net Block
Description of Assets As at April 1,
2013
Additions Disposals As at March 31,
2014
Upto March 31,
2013
Depreciation/
Amortisation for
the year
Eliminated on
disposal of
assets
Upto March 31,
2014
As at March 31,
2014
Computer software 12,077,209 2,276,133 14,353,342 9,030,702 1,848,777 10,879,479 3,473,863
(9,180,817) (2,896,392) () (12,077,209) (7,449,789) (1,580,913) () (9,030,702) (3,046,507)
Total 12,077,209 2,276,133 14,353,342 9,030,702 1,848,777 10,879,479 3,473,863
(9,180,817) (2,896,392) () (12,077,209) (7,449,789) (1,580,913) () (9,030,702) (3,046,507)
C. Depreciation and amortisation For the year
ended March
31, 2014
For the year
ended March
31, 2013
Depreciation and amortisation for the year on tangible assets (Note No. 10 A) 28,820,906 26,812,738
Depreciation and amortisation for the year on intangible assets (Note No. 10 B) 1,848,777 1,580,913
30,669,683 28,393,651
Less: Utilised from revaluation reserve 2,728,239 2,936,360
Depreciation and amortisation considered in the Statement of Prot and Loss 27,941,444 25,457,291
NOTE NO. 11 - NON-CURRENT INVESTMENTS
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
Other investments unquoted, (At cost)
Investment in government securities National
Savings Certicates 55,000 55,000
[Pledged with sales tax authority, Aggregate
face value of Rs. 55,000]
Total 55,000 55,000
NOTE NO. 12 - DEFERRED TAX ASSETS (NET)
Tax effect of items constituting deferred tax
liability
On difference between book balance and tax
balance of xed assets 36,364,866 30,991,013
liability 36,364,866 30,991,013
assets
Provision for compensated absences and
gratuity 4,345,668 3,508,381
Disallowances under Section 40(a)(i), 43B of
the Income Tax Act, 1961 17,905,360 17,295,872
Unabsorbed depreciation carried forward 34,332,487 22,377,144
assets 70,203,098 56,361,614
Restricted to the extent of deferred tax liability 36,364,866 30,991,013
Net deferred tax asset
The Company has recognised deferred tax asset on unabsorbed depreciation to
the extent of the corresponding deferred tax liability on the difference between
the book balance and the written down value of xed assets under Income Tax
net off of other balances constituting deferred tax asset.
NOTE NO. 13 - LONG-TERM LOANS AND ADVANCES
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
Unsecured, considered good, unless otherwise
stated
(a) Capital advances 508,053 9,329,079
(b) Security deposits 7,051,384 6,183,893
(c) Advance income tax 15,964,620 12,845,092
[Net of provisions Rs.1,49,80,000
(As at March 31, 2013 Rs. 81,70,000)]
(d) MAT credit entitlement 14,980,000 8,170,000
(e) Balances with government authorities
(i) CENVAT credit receivable 3,394,109 4,257,086
(ii) Excise Refund Claim 16,679,302 16,679,302
Total 58,577,468 57,464,452
NOTE NO. 14 - CURRENT INVESTMENTS
Investment in equity instruments
1,135 Shares of Saraswat Co-op Bank Limited
of Rs. 10 each fully paid 11,350
Total 11,350
NOTE NO. 15 - INVENTORIES
(a) Raw materials & Components 189,486,341 129,083,030
[Goods-in-transit Rs. 87,62,806/-
(As at March 31, 2013 Rs. 25,005,604)]
(b) Work-in-progress 14,884,925 15,974,340
(c) Finished goods 149,560,628 88,040,728
(d) Stock-in-Trade 5,526,623 6,318,911
[Goods-in-transit Rs. Nil
(As at March 31, 2013 Rs. 42,322)]
Total 359,458,517 239,417,009
308
NOTE NO. 16 - TRADE RECEIVABLES
exceeding six months from the date they were
due for payment
Unsecured, considered good 171,142,115 113,071,383
Doubtful 41,977,449 42,654,425
213,119,564 155,725,808
Less: Provision for doubtful trade receivables 41,977,449 42,654,425
171,142,115 113,071,383
Other Trade receivables
Total 586,243,244 424,583,802
NOTE NO. 17 - CASH AND BANK BALANCES
(A) Cash and cash equivalents
Cash on hand 293,799 304,247
Balances with banks
(i) In current accounts 39,696,997 32,656,666
(ii) In deposit accounts 61,389,474 56,275,422
(B) Other bank balances
(i) Balances with banks held as margin
money/security against borrowings
and guarantees* 89,576,708 84,360,724
(ii) Earmarked balances with banks ** 51,487,491 207,627,476
Total 242,444,469 381,224,535
* Includes margin monies amounting to Rs. 42,405,382 [As at March 31,
2013 Rs. 50,758,448] with maturity greater than 12 months from the
Balance Sheet date.
** Includes Rs 303,305/- [As at March 31,2013 Rs 1,934,556/- ] towards
interest payable on Public Deposits Rs 50,184,186/- [As at March 31, 2013
Rs 204,692,920/-] being unutilised proceeds out of the Rights Issue and
Rs. 1,000,000/- [As at March 31,2013 Rs. 1,000,000/-] towards liquid asset
maintained in respect of public deposits.
NOTE NO. 18 - SHORT-TERM LOANS AND ADVANCES
(Unsecured, considered good, unless otherwise
stated)
(a) Security deposits 1,402,148 1,198,748
(b) Loans and advances to employees 1,734,241 1,316,989
(c) Prepaid expenses 3,982,242 4,487,572
(d) Balances with government authorities
(i) VAT credit receivable 4,477,483 2,799,661
(ii) Advance Service Tax/Entry Tax/
Customs duty
703,602 146,932
(e) Others
(i) Advances to Creditors 19,314,006 12,707,481
(ii) Advances Recoverable 249 888,504
Total 31,613,971 23,545,887
NOTE NO. 19 - OTHER CURRENT ASSETS
Octroi Refund Receivable 24,638,000
Interest accrued on deposits 1,514,932 4,387,214
Total 26,152,932 4,387,214
NOTE NO. 20 - REVENUE FROM OPERATIONS (GROSS)
(a) Sale of products (Refer Note (i) below) 1,714,594,980 1,610,114,215
(b) Sale of services (Refer Note (ii) below) 4,166,132 3,478,516
(c) Other operating revenues
(Refer Note (iii) below) 29,047,423 1,475,523
1,747,808,535 1,615,068,254
Notes
(i) Sale of products comprises:
Manufactured goods:
Finished Goods 1,185,189,559 1,113,954,411
Components 503,716,222 479,301,194
Green House 3,027,662
Traded Goods 22,661,537 16,858,610
Total - Sale of products 1,714,594,980 1,610,114,215
(ii) Sale of services comprises:
Agronomy Services 1,192,780 1,068,871
Installation Services 2,973,352 2,409,645
Total - Sale of services 4,166,132 3,478,516
(iii) Other operating revenues comprise:
Sale of scrap 4,409,423 1,475,523
Octroi Refund 24,638,000
Total - Other operating revenues 29,047,423 1,475,523
NOTE NO. 21 - OTHER INCOME
(a) Interest income
On deposits with banks 23,642,458 22,249,010
Interest on Deposits/Debtors 308,904 3,246,448
On income tax refunds 377,400
(b) Dividend income from
Long Term Investments 1,135 2,270
Current Investments 357,326 479,561
(c) Other non-operating income
Liabilities no longer required written back 368 709,825
Prot on sale of Fixed Assets (Net) 10,401
Prot on sale of Current Investments 313,233 12,350
Miscellaneous income 29,643
Discount earned 931,449 484,778
Rent income 105,000
Total 25,659,873 27,601,686
NOTE NO. 22 - COST OF MATERIALS CONSUMED
Opening stock 129,083,030 78,531,609
Add: Purchases 1,245,680,428 1,035,418,082
1,374,763,458 1,113,949,691
Less: Closing stock 189,486,341 129,083,030
Total 1,185,277,117 984,866,661
Material consumed comprises:
Raw Material - Plastic Granules 703,931,595 529,540,038
Components 481,345,522 455,326,623
Total 1,185,277,117 984,866,661
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
309
NOTE NO. 23 - CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-
IN-PROGRESS AND STOCK-IN-TRADE
Inventories at the end of the year:
Finished goods 149,560,628 88,040,728
Work-in-progress 14,884,925 15,974,340
Stock-in-trade 5,526,623 6,318,911
169,972,176 110,333,979
Inventories at the beginning of the year:
Finished goods 88,040,728 145,099,521
Work-in-progress 15,974,340 16,967,257
Stock-in-trade 6,318,911
110,333,979 162,066,778
Net (increase)/decrease (59,638,197) 51,732,799
NOTE NO. 24 - EMPLOYEE BENEFITS
EXPENSE
Contributions to provident and other funds
[Refer Note no. 29 (a)] 14,635,892 10,737,789
Expense on employee stock option scheme
[Refer Note no. 28] 98,783 148,769
Total 181,334,765 150,977,843
NOTE NO. 25 - FINANCE COSTS
(a) Interest expense on:
(i) Borrowings
Debentures 1,304,921
Cash Credit 2,389,906 12,896,904
Public Deposits 14,954,991 5,330,902
(ii) Trade payables 166,866 376,996
(iii) Others
Interest on liabilities 116,040
Interest on delayed payment of
taxes 13,189
Interest under EPCG Scheme 4,589,924
(b) Other borrowing costs
Processing fees/Guarantee Commission 1,432,700 4,598,058
Total 23,534,387 24,637,010
NOTE NO. 26 - OTHER EXPENSES
Consumption of stores and spare parts 3,659,879 2,490,896
Consumption of packing materials 6,160,002 5,996,340
Decrease of excise duty on inventory (22,953) (348,753)
Power and fuel 33,278,291 33,781,467
Rent including lease rentals [Refer Note no.33] 11,723,062 7,877,990
Repairs and maintenance - Buildings 896,059 2,107,640
Repairs and maintenance - Machinery 3,730,381 3,425,412
Repairs and maintenance - Others 2,136,587 2,334,646
Manufacturing Processing Charges 4,522,693
Site Expenses 663,127 5,779,808
Insurance 1,794,831 1,704,478
Rates and taxes 9,091,347 3,039,526
Communication 5,358,033 4,827,252
Printing and stationery 2,172,472 2,792,461
Freight and forwarding 46,297,923 49,558,976
Sales commission 62,293,060 104,406,923
Warranty Claim 14,083,468
Sales promotion expense 4,778,533 4,134,767
Advertisements 11,692,846 6,716,264
Payments to auditors [Refer Note below] 2,022,261 1,706,123
Bad trade and other receivables, loans and
advances written off 9,044,319 227,854
Loss on xed assets sold/scrapped/written off 967,430
Net Loss on foreign currency transactions 38,951 51,519
Investments written off 14,500
Provision for doubtful trade receivables and
advances (net) (676,976) 12,737,691
Directors' Fees 180,000 220,000
Donations 800,000 400,000
Total 320,437,374 329,872,503
Note:
Payments to the auditors comprises (net of
service tax input credit, where applicable):
a) To Statutory auditors
For audit 1,404,500 1,292,140
For other services 455,058 252,810
1,872,261 1,556,123
b) To Cost auditors for Cost audit 150,000 150,000
Total 2,022,261 1,706,123
NOTE NO. 27 - ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
27.1 Contingent liabilities (to the extent not
provided for)
(a) Claims against the Company not
acknowledged as debts 1,533,641 1,417,361
(b) Custom Duty/Interest on account of
commitment to Export, under Export
Promotion Capital Goods Scheme 19,992,408 31,169,936
(c) Demands against the Company, relating
to issues of deductibility and taxability
in respect of which the company is in
appeal/Department is in appeal
Income Tax: 2,566,739 2,566,739
Sales Tax: 743,552
Excise Duty: 7,944,000 7,944,000
Particulars
For the year
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
Particulars
For the year
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
310
Particulars As at
March 31,
2014
Rupees
As at
March 31,
2013
Rupees
(d) Long Term Loans & Advances include refund
claim made for excise duty paid under protest
consequent upon the judicial pronouncement
made by CESTAT in favour of the Company,
which was disputed by the department before
higher authorities. 16,679,302 16,679,302
The Commissioner (Appeals), Central Excise
and Customs, Nashik has sanctioned the claim
on merit but taking recourse to the principle of
Unjust Enrichment has ordered the claim to
be transferred to the credit of the Consumer
Welfare Fund.
The Company had led an appeal against
the order. On hearing the appeal the Hon
CESTAT, Mumbai remanded back the case
to the adjudicating authorities to examine the
issue afresh. The Adjudicating Authority issued
a Show Cause Notice and after personal
hearing passed an order rejecting the claim
without following the guidelines given by the
Hon CESTAT.
The Company had led an appeal against the
order with the Commissioner (Appeals), Central
Excise & Customs, Nashik. The order Passed
by the Commissioner (Appeals), Central Excise
& Customs, Nashik is similar to order as given
in order in appeal. The Company will le an
appeal to CESTAT Mumbai. The Claim still is
tenable, no provision has been considered.
Note: In respect of items mentioned above, till the matters are nally decided,
the timing of outows of economic benets cannot be ascertained.
27.2 Commitments
Estimated amount of contracts remaining to be
executed on capital account and not provided
for in respect of Tangible assets 568,990 21,093,224
27.3 The year-end foreign currency exposures
that have not been hedged by a derivative
instrument or otherwise are given below:
Payable : USD 56,010 35,090
Rupees 3,363,400 1,904,861
27.4 Disclosure as per Clause 32 of the Listing Agreements with the Stock
Exchange
The Company has not given any loans and advances in the nature of loans
to subsidiaries, associates and rms/companies in which directors are
interested. Further, The Company has not made any loans and advances
where there is no repayment schedule or repayment beyond seven years
or no interest or interest below section 372A of The Companies Act, 1956.
27.5 There are no amounts due to Investor Education and Protection Fund.
27.6 Disclosure required in terms of Chapter VII of SEBI (Issue of Capital
& Disclosure requirements) Regulations 2009
In June, 2012, the Company had allotted 1,03,58,199 equity shares at
a price of Rs. 40 per share (including a premium of Rs. 30/- per share)
resulting in total issue size of Rs. 41,43,27,960 under the Rights Issue.
The uses and application of funds raised under the Rights Issue are given
as under :
Actual
Utilisation
Revised
Proposed
Utilisation*
Purpose in
Letter of Offer
Issue Related Expenses 13,018,040 13,018,040 13,018,040
Procurement of plant and machinery 4,508,734 54,692,920 204,692,920
Working capital requirements 270,000,000 270,000,000 120,000,000
General Corporate Purposes 76,617,000 76,617,000 76,617,000
Funds Utilised 364,143,774 414,327,960 414,327,960
Un-utilised Rights Issue proceeds** 50,184,186
Total 414,327,960 414,327,960 414,327,960
* Pursuant to the authority given by the Shareholders at the Annual
General Meeting held on July 31, 2013, the Board of Directors
vide Circular Resolution dated September 4, 2013 have revised the
purpose of utilisation of Rights Issue proceeds.
** Temporarily invested in Fixed Deposits with Banks
For the year
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
27.7 Value of imports calculated on CIF basis :
Raw materials and Components 8,813,530 8,833,910
8,813,530 8,833,910
27.8 Expenditure in foreign currency :
Travelling 254,001 76,882
254,001 76,882
27.9 Earnings in foreign currency :
(i) Export of goods on F.O.B. Basis 745,535 397,261
(ii) Freight & Insurance 55,890 36,803
801,425 434,064
27.10 Details of consumption of imported and indigenous items:
Imported
Raw materials and Components 7,695,017 8,065,333
0.65% 0.82%
Indigenous
Raw materials and Components 1,177,582,100 976,801,328
99.35% 99.18%
1,185,277,117 984,866,661
27.11 Value of imported and indigenous Spare Parts consumed is as follows:
Imported
Spare Parts 535,121 213,338
14.62% 8.56%
Indigenous
Spare Parts 3,124,758 2,277,558
85.38% 91.44%
3,659,879 2,490,896
NOTE NO. 28 - DISCLOSURES ON EMPLOYEE SHARE BASED PAYMENTS
Employee Stock Option Scheme
(a) Pursuant to the Employees Stock Option Scheme - 2010 (ESOS)
approved by the Shareholders in the Annual General Meeting held on July
21, 2010, the Company had granted 60,500 Stock Options to the three
non-executive Directors and some permanent employees on November
19, 2010, as per the recommendation of the Compensation Committee, at
exercise price of Rs. 35/- each.
In respect of the options granted, the equity settled options vest in 4 tranches
of 25% each upon the expiry of 12 months, 24 months, 36 months and 48
months respectively from the date of the grant. Each tranche is exercisable
within two years from the respective date of vesting. The number of options
exercisable in each tranche is minimum 25% of the options vested, except
in case of the last date of the exercise, where the employee can exercise
all the options vested but not exercised till that date.
In case the option is not exercised by the Employee within the time limits
as prescribed in the Scheme, the Options would lapse and no right shall
be deemed to accrue or arise after that date.
The compensation costs of the stock options granted are accounted by the
Company on the basis of intrinsic value of share on the date of grant of options.
The difference between the fair price of the share underlying the options
granted on the date of grant of option and the exercise price of the option
(being the intrinsic value of the option) representing Stock compensation
expense is expensed over the vesting period.
311
(b) Employee stock options details are as follows:
Particulars During the year ended
March 31, 2014
During the year ended
March 31, 2013
Options
(Numbers)
Weighted
average
exercise
price per
option
(Rupees)
Options
(Numbers)
Weighted
average
exercise
price per
option
(Rupees)
Option outstanding at the
beginning of the year 14,750 35 28,500 35
Granted during the year NA NA
Vested during the year 7,375 35 9,000 35
Exercised during the year 7,375 35 9,000 35
Lapsed during the year 35 4,750 35
Options outstanding at the
end of the year 7,375 35 14,750 35
(c) The impact on Earnings per Share if the fair value of the options (on
the date of the grant) were considered instead of the intrinsic value is
as under:
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
Net Prot (as reported) 77,098,748 53,421,435
Add : stock based employee
compensation (intrinsic value) 98,783 148,769
Less : stock based compensation
expenses determined under fair value
method for the grants issued (See note
(d) below) (142,520) (214,639)
Net Prot (proforma) 77,055,011 53,355,565
Basic earnings per share (as reported) 2.79 2.01
Basic earnings per share (proforma) 2.79 2.01
Diluted earnings per share (as reported) 2.79 2.01
Diluted earnings per share (proforma) 2.79 2.00
(d) The fair value of the options has been determined under the Black-Scholes
model. The assumptions used in this model for calculating fair value are
as below:
Assumptions Grant dated November 19, 2010
Risk Free Interest Rate 7.65%
Expected Life 3.50 years
Expected Annual Volatility of
Shares 58%
Expected Dividend Yield Nil
NOTE NO. 29 - EMPLOYEE BENEFIT PLANS
(a) Dened contribution plans
percentage of the payroll costs to fund the benets. The Company
recognised Rs. 75,88,127 [Year ended March 31, 2013 Rs. 63,88,137]
for Provident Fund contributions and Rs. 16,95,221 [Year ended March
31, 2013 Rs. 15,17,716] for Superannuation Fund contributions in the
Statement of Prot and Loss. The contributions payable to these plans by
the Company are at rates specied in the rules of the schemes.
(b) Dened benet plans
The Company offers the following employee benet schemes to its
employees:
i. Gratuity
ii. Compensated absences
The following table sets out the funded status of the dened benet
schemes and the amount recognised in the nancial statements:
Rupees
Particulars For the year ended March
31, 2014
For the year ended March
31, 2013
Gratuity Compensated Gratuity Compensated
Funded Unfunded Funded Unfunded
Components of employer
expense
Current service cost 3,539,913 1,877,502 3,247,873 2,504,603
Interest cost 1,131,580 329,068 1,051,301 1,392,524
Expected return on plan assets (1,199,489) (989,715)
Actuarial losses/(gains) 1,614 (96,834) (2,352,757) (1,254,079)
Total expense recognised in the
Statement of Prot and Loss 3,473,618 2,109,736 956,702 2,643,048
Actual contribution and benet
payments for year
Actual benet payments (500,786) (2,231,626) (1,654,169) (2,495,484)
Actual contributions 2,500,000 2,231,626 1,712,171 2,495,484
Net asset/(liability) recognised
in the Balance Sheet
Present value of dened benet
obligation 17,262,679 5,697,811 14,289,847 5,819,701
Fair value of plan assets 14,217,444 11,717,444
Funded status [Surplus/(Decit)] (3,045,235) (5,697,811) (2,572,403) (5,819,701)
Net asset/(liability) recognised
in the Balance Sheet (3,045,235) (5,697,811) (2,572,403) (5,819,701)
Change in dened benet
obligations (DBO) during the
year
Present value of DBO at beginning
of the year 14,289,847 5,819,701 13,094,312 5,672,137
Current service cost 3,539,913 1,877,502 3,247,873 2,504,603
Interest cost 1,131,580 329,068 1,051,301 1,392,524
Actuarial (gains)/losses (1,197,875) (96,834) (1,449,470) (1,254,079)
Benets paid (2,231,626) (1,654,169) (2,495,484)
Benet Paid Directly by Company (500,786)
Present value of DBO at the end
of the year 17,262,679 5,697,811 14,289,847 5,819,701
Change in fair value of assets
during the year
Plan assets at beginning of the
year 11,717,444 9,766,440
Expected return on plan assets 1,199,489 989,715
Actual company contributions 2,500,000 2,231,626 1,712,171 2,495,484
Actuarial gains/(losses) (1,199,489) 903,287
Benets paid (2,231,626) (1,654,169) (2,495,484)
Plan assets at the end of the year 14,217,444 11,717,444
Actual return on plan assets 1,279,570 1,893,002
Composition of the plan assets
is as follows:
Insurer managed funds 14,217,444 11,717,444
Actuarial assumptions
Discount rate 9.19% 9.19% 8.06% 8.57%
Expected return on plan assets
Salary escalation 10.00% 10.00% 10.00% 10.00%
Attrition 5.00% 5.00% 5.00% 5.00%
Mortality tables
LIC
(200608)
Ult.
LIC
(200608)
Ult.
LIC
(199496)
Ult
LIC
(199496)
Ult
Estimate of amount of
contribution in the immediate
next year 3,045,235 3,618,503 2,572,403 2,961,881
The discount rate is based on the prevailing market yields of Government of India securities as at the
Balance Sheet date for the estimated term of the obligations.
The estimate of future salary increases considered, takes into account the ination, seniority,
promotion, increments and other relevant factors.
312
Experience
adjustments
20132014 20122013 20112012 20102011 20092010
Gratuity
Present value of DBO 17,262,679 14,289,847 13,094,312 12,830,399 9,342,790
Fair value of plan
assets 14,217,444 11,717,444 9,766,440 9,965,346 3,832,688
Funded status
[Surplus/(Decit)] (3,045,235) (2,572,403) (3,327,872) (2,865,053) (5,510,102)
Experience gain/(loss)
adjustments on plan
liabilities 593,704 681,634 697,153 197,459 (395,921)
adjustments on plan
assets 80,081 903,287 (912,595) 124,025
Compensated
absences
Present value of DBO 5,697,811 5,819,701 5,672,137 6,122,240 4,506,351
Fair value of plan
assets
Funded status
[Surplus/(Decit)] (5,697,811) (5,819,701) (5,672,137) (6,122,240) (4,506,351)
adjustments on plan
liabilities 690,538 414,951 870,704 (28,253) 645,670
adjustments on plan
assets
NOTE NO. 30 - RELATED PARTY DISCLOSURES
(a) Parties where control exists
Name Relationship
Mahindra and Mahindra Limited Holding Company
(b) Other related parties with whom
transactions have been undertaken
Name Relationship
Mahindra EPC Services Pvt Ltd Fellow subsidiary
Mahindra Logistics Limited Fellow subsidiary
Mahindra Holidays and Resorts
India Ltd
Fellow subsidiary
Credit Renaissance Fund Limited Associate upto January 8, 2013
Credit Renaissance Development
Fund LP
Associate upto January 8, 2013
Mr. Ashok Sharma Key Management Personnel
(c) Details of related party transactions during the year and balances
outstanding:
Particulars Holding
Company
Fellow
subsidiary
Associate
Transactions during the year
Subscription to Share Capital including premium
(342,662,720)
Sale of goods
(6,698)
Mahindra EPC Services Pvt Ltd 512,040
()
Interest expense
Credit Renaissance Fund Limited
(208,865)
Credit Renaissance Development Fund LP
(1,096,056)
Management contracts including for deputation
of personnel
Mahindra and Mahindra Limited 19,314,713
(19,190,808)
(583,044)
Travelling Expense
Particulars Holding
Company
Fellow
subsidiary
Associate
Mahindra Holidays and Resorts India Ltd 21,901
()
Reimbursement of expenses to
Mahindra and Mahindra Limited 284,851
()
Reimbursement of expenses from
(23,754)
Balances outstanding at the end of the year
Trade payables
Mahindra and Mahindra Limited 22,166,373
(4,561,176)
(46,350)
Note: i) Figures in bracket relate to the previous year
ii) No deputation charges have been claimed by Holding Company in respect
of Mr. Ashok Sharma, Executive Director & CEO
NOTE NO. 31 - PUBLIC DEPOSITS CLASSIFICATION
The provisions of the Companies Act, 2013 (the Act) requires that all
outstanding deposits be repaid within one year from the date of commencement
of the Act or from the date on which such payments are due, whichever is
earlier. Accordingly, xed deposits with original maturity more than one year
have been classied under Current maturities of long term debt in Note no. 8
to the nancial statements.
NOTE NO. 32 - SEGMENT REPORTING
The Company is engaged in the business of Micro Irrigation System (MIS).
All other activities of the Company revolve around the main business and
accordingly there are no separate reportable segments, as per the Accounting
Standard on Segment Reporting (AS 17) notied under the Companies
(Accounting Standards) Rules, 2006.
NOTE NO. 33 - DETAILS OF LEASING ARRANGEMENTS
As Lessee
The Company has entered into operating lease arrangements for certain facilities
and ofce premises. The leases are generally cancellable and are for a period of
11 months to 10 years under leave & license agreements and may be renewed
by mutual consent on mutually agreeable terms.
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
(i) Lease payments recognised in the
Statement of Prot and Loss 4,798,385 2,790,681
(ii) Future minimum lease payments
not later than one year 1,412,560 1,031,762
later than one year and not later than ve
years 1,022,234 311,036
NOTE NO. 34 - EARNINGS PER SHARE
Basic
Net Prot for the year attributable to the equity
shareholders 77,098,748 53,421,435
No. of shares outstanding at the beginning of
the year 27,630,864 17,263,665
Weighted average No. of Shares for Rights
Issue and ESOP 2,202 9,340,467
Weighted average No. of Shares outstanding
during the year 27,633,066 26,604,132
Par value per share 10 10
Earnings per share - Basic 2.79 2.01
313
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
Diluted
Net Prot for the year attributable to equity
shareholders (on dilution) 77,098,748 53,421,435
Weighted average number of equity shares for
Basic EPS 27,633,066 26,604,132
Add: Effect of ESOPs which are dilutive 4,958 10,872
Weighted average number of equity shares -
for diluted EPS 27,638,024 26,615,004
Earnings per share - Diluted 2.79 2.01
NOTE NO. 35 - PROVISION FOR WARRANTY
(a) Provision for warranty is made in respect of sale of certain products, the
estimated cost of which is accrued at the time of sale. The products are
generally covered under a free warranty period ranging from 6 months
to 5 years.
For the year
ended
March 31,
2014
Rupees
For the year
ended
March 31,
2013
Rupees
(b) The movement in provision for warranty is as follows:
Balance as at April 1
Add : Provision made during the year 14,083,468
Less : Utilisation during the year 7,083,468
Balance as at March 31 7,000,000
Out of the above,
Classied as Non Current
Classied as Current 7,000,000
7,000,000
NOTE NO. 36 - PREVIOUS YEARS FIGURES
Previous years gures have been regrouped/reclassied wherever necessary
to correspond with the current years classication/disclosure.
Ashok Sharma
S. Durgashankar
}
Directors
Nikhilesh Panchal
Vinayak Patil
Anand Daga
Place : Mumbai
Date : 29
th
April, 2014
SWARAJ AUTOMOTIVES LIMITED
314
REPORT OF THE DIRECTORS TO THE MEMBERS
Your Directors are pleased to present their 39th Annual Report together with the Audited Accounts for the Financial Year ended
31st March, 2014.
FINANCIAL RESULTS :
(Rs. in Crores)
Year ended
31st March 2014
Year ended
31st March 2013
Net Revenue from Operations ........................................................................................ 80.64 74.94
Other Income ................................................................................................................... 0.62 0.55
Total Revenue .................................................................................................................. 81.26 75.49
Prot before Depreciation, Finance Charges and Tax ................................................... 4.62 4.21
Finance Costs .................................................................................................................. 0.02 0.02
Depreciation & Amortization Expense ............................................................................ 1.06 0.89
Prot for the year ............................................................................................................. 3.54 3.30
Prior period adjustments ................................................................................................. (+) 0.01 (+) 0.08
Prot Before Tax............................................................................................................... 3.55 3.38
Tax Provision
Current ................................................................................................................... 1.15 1.38
Deferred ................................................................................................................. (0.01) (0.30)
Short tax provision of earlier years....................................................................... 0.06 0.02
Prot After Tax .................................................................................................................. 2.35 2.28
Surplus Opening Balance ........................................................................................... 3.85 2.91
Prot for the Year ............................................................................................................. 2.35 2.28
Surplus available for appropriation ............................................................................. 6.20 5.19
Appropriations:
Proposed Dividend .......................................................................................................... 0.84 0.72
Tax on Dividend ............................................................................................................... 0.14 0.12
Transfer to General Reserve .......................................................................................... 0.50 0.50
Surplus Closing Balance .............................................................................................. 4.72 3.85
REVIEW OF OPERATIONS
Members may kindly note that while domestic tractor industry
witnessed revival in demand during FY 2013-14, the automobile
industry continued to battle with weak demand conditions. In
the automobile industry, car and commercial vehicle were the
worst hit segments and these industry trends had also impacted
your Companys business. However, with Companys endeavor
to widen its product range, setting up of facilities for agriculture
implements - rotavator and rice transplanter - completed during
the year and start of volume production in Q4 has helped to
some extent in offsetting the impact of subdued demand trends
from the automobile industry.
In the backdrop of above factors, your Company has posted
total net revenue of Rs.81.26 crores for the year under review
as against the previous years revenue of Rs.75.49 crores. On
these revenues, while prot before interest, depreciation and
tax for the year under review stood at Rs.4.62 crores (previous
year - Rs.4.21 crores), prot before tax for FY 2013-14 reached
to Rs.3.55 crores (previous year - Rs.3.38 crores). Prot after
tax for the year was Rs.2.35 crores (previous year - Rs.2.28
crores). These post tax earnings translates into an Earning Per
Share (EPS) of Rs.9.79 (previous year - Rs.9.48).
DIVIDEND
Your Directors have recommended a dividend of Rs.3.50 per
Equity Share of face value of Rs.10.00 each for the nancial
year 2013-14, as against Rs.3.00 per share declared and
paid in the previous year. The dividend would be payable to
those Members whose names shall appear in the Register of
Members as on Book Closure date. The dividend including
dividend distribution tax, surcharge and education cess would
absorb a sum of Rs.0.98 crore (previous year - Rs.0.84 crore).
FINANCE
Your Directors report that the fund position of the Company
stayed comfortable throughout the nancial year 2013-14. As
a result, after meeting routine capital expenditure and working
capital requirements to support the operations, net interest
income for the year was Rs.0.50 crore against Rs.0.48 crore
for the previous year.
315
INDUSTRIAL RELATIONS
Industrial relations were cordial throughout the year under
review.
Your Company is committed towards excellence in Safety,
Occupational Health and Environment. This is also to ensure
sustainable business growth. The Company has a well-
established Safety, Occupational and Environmental Policy
which inter alia ensures safety of public, employees, plant
and equipment by ensuring compliance with all statutory rules
and regulations on regular basis. Your Company also imparts
training to its employees as per the predened training calendar,
carries out statutory safety audits of its facilities as per legal
requirement and promotes eco-friendly activities. In reiteration
of its commitment to improve the well being of the employees,
Medical Check-ups, both curative and preventive have been
organized regularly, including educating the employees on
Industrial Hygiene at the work place. The Companys Plant is
ISO 14001 : 2004 and OHSAS 18001 : 2007 certied.
Keeping with the Companys core value of Good Corporate
Citizenship, your Company is committed to display its social
responsibility by taking various initiatives beneting the society
at large. These initiatives include organizing medical camps,
awareness campaign on ill effects of tobacco, plantation of
trees at various locations etc.
SUSTAINABILITY INITIATIVES
Your Company is conscious of its responsibility towards
preservation of natural resources and continuously taking
various initiatives to reduce the consumption of electricity and
water.
DIRECTORS
Consequent upon his resignation, Dr. Pawan Goenka ceased
to be Director of the Company with effect from 9th April, 2014.
Your Board has placed on record its deep appreciation of the
valuable guidance and notable contributions of Dr. Goenka as
Director and Chairman of the Company.
Shri Rajesh Jejurikar was appointed as Chairman of the
Company by the Board of Director in their meeting held on
29th April, 2014.
Shri V. S. Parthasarathy, consequent upon his resignation,
ceased to be Director of the Company with effect from 29th April,
2014. Your Board has placed on record its deep appreciation
of the immense contributions of Shri Parthasarathy as Director
of the Company.
Shri S. C. Bhargava and Shri Hardeep Singh retire by rotation at
the forthcoming Annual General Meeting. Shri S. C. Bhargava
has expressed his desire not to seek re-appointment. The
Company does not intend to ll the vacancy caused by the
retirement of Shri S. C. Bhargava. Pursuant to the provisions
of Sections 149, 152 and other applicable provisions of the
Companies Act, 2013, Shri Hardeep Singh, is appointed as an
Independent Director of the Company.
your Directors, based on representations received from the
a) in the preparation of Annual Accounts, the applicable
b) they have, in the selection of the accounting policies,
judgment and estimates have been made so as to give a
at 31st March, 2014 and of the prot of the Company for
c) proper and sufcient care has been taken for maintenance
d) the Annual Accounts have been prepared on a going
concern basis.
AUDITORS
M/s J.S. Chopra & Associates, Chartered Accountants, Statutory
Auditors of the Company, hold ofce till the conclusion of the
ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. They have expressed their
willingness to act as Auditors of the Company, if appointed,
and have further conrmed that the said appointment, if made,
would be within the prescribed limits under Section 141(3)(g)
of the Companies Act, 2013 and that they are not disqualied
for re-appointment. The Members are requested to appoint
Auditors and x their remuneration.
COST AUDITORS
In conformity with the directives of Central Government, the
Board of Directors of the Company appointed M/s Aggarwal
Vimal & Associates, Cost Accountants, as Cost Auditors of the
Company for conducting the cost audit for the year ended
31st March, 2014. Subsequently, their appointment was also
approved by the Central Government.
Further, pursuant to Section 148(3) of the Companies Act,
2013, the Board of Directors has re-appointed M/s Aggarwal
Vimal & Associates, Cost Accountants, as the Cost Auditors
of the Company for the nancial year ending on 31st March,
2015. M/s Aggarwal Vimal & Associates have conrmed that
their appointment, if approved, will be within the limits of
Section 141(3)(g) of the Companies Act, 2013 and have also
certied that they are free from disqualication specied under
Section 141(3) of the Companies Act, 2013.
The Board of Directors of the Company has also received a
certicate from the Cost Auditors certifying their independence
and arms length relationship with the Company.
The Cost Audit Report for the nancial year ended 31st March,
2013 was led on 24th September, 2013.
316
DEPOSITS
The Company has not accepted deposits from the public or its
employees during the year under review.
The Company has not made any loans/advances and
investment in its own shares, associates, etc. during the year
which are required to be disclosed in the annual accounts of
the Company pursuant to Clause 32 of the Listing Agreement.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
Particulars relating to energy conservation, technology
absorption and foreign exchange outgo, as required under
Section 217(1)(e) of the Companies Act, 1956, read with
the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 are provided in the Annexure
to this report.
PARTICULARS OF EMPLOYEES
There was no employee covered by the provisions of Section
217(2A) of the Companies Act, 1956, read with Companies
(Particulars of employees) Rules, 1975, as amended, who was
in receipt of remuneration of Rs. 60,00,000 or more per annum
and was employed throughout the year ended 31
st
March,
2014 or Rs. 5,00,000 or more per month and was employed
for a part of the nancial year 2013-14.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai RAJESH JEJURIKAR
Date : 29
th
April, 2014 Chairman
317
ANNEXURE TO DIRECTORS REPORT
(Year ended 31st March, 2014)
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, 2014.
A. CONSERVATION OF ENERGY:
Some of the initiatives taken by the Company during the year for conservation of energy are given below:
1. Installation of lower MT hydraulic pneumatic press in Recliner Shop.
2. Replacement of higher HP motors with lower HP motors in Heat Treatment Shop.
3. Design modication of heat treatment xtures to optimize the charge lots.
4. Improvement in components carrying capacity of hangers used in Paint Shop.
5. Upgradation of programming for PU Machine to avoid idle running during pouring process.
(c) Impact of the measures taken / to be taken at (a) & (b) above for reduction of energy consumption and consequent
Total annual estimated savings Rs.6.50 lacs
(d) Total energy consumption and energy consumption per unit of production as per Form-A to the Annexure to the Rules
Research & Development:
1. Areas in which Research & Development is carried out: Seats & seat mechanisms and agriculture implements
2. Benets derived as a result of the above efforts: Improvement in the business.
3. Future plan of action : Continuous focus on seats & seat mechanisms and agriculture implements
4. Expenditure on R&D
The Company spent revenue expenditure of Rs.3.45 lacs on Research & Development work during the year, which was
0.04% of the total turnover.
Technology absorption, adaptation and innovation:
On-going programmes on product improvement for performance, reliability and upgradation of products with customer as
focus continued with vigour.
No technology has been imported during the last 5 years.
During the year, there were no exports. Foreign Exchange Outgo is contained in Note No. 2.31 of Notes on Accounts.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai RAJESH JEJURIKAR
Date : 29
th
318
Swaraj Automotives Limited (the Company) which comprise
the Balance Sheet as at 31 March 2014, the statement of
Prot and Loss and the Cash Flow statement for the year then
ended and a summary of signicant accounting policies and
nancial position, nancial performance and cash ows of
referred to in sub-section (3C) of section 211 of the Companies
Act, 1956 (the Act). This responsibility includes the design,
implementation and maintenance of internal control relevant
to the preparation and presentation of the nancial statements
that give a true and fair view and are free from material
misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in
the nancial statements. The procedures selected depend on
the auditors judgment, including the assessment of the risks
of material misstatement of the nancial statements, whether
in order to design audit procedures that are appropriate
in the circumstances. An audit also includes evaluating
reasonableness of the accounting estimates made by
opinion.
Opinion
to the explanations given to us, the nancial statements give
the information required by the Act in the manner so required
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF SWARAJ AUTOMOTIVES LIMITED
and give a true and fair view in conformity with the accounting
(i) in the case of the Balance Sheet, of the state of affairs of
the Company as at 31 March 2014;
(ii) in the case of the Statement of Prot and Loss, of the
prot for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash ows
2003 (the Order), as amended, issued by the Central
Government of India in terms of sub-section (4A) of
section 227 of the Act, we give in the Annexure a statement
on the matters specied in paragraph 4 & 5 of the Order.
a. we have obtained all the information and explanations
b. in our opinion proper books of account as required
c. the Balance Sheet, Statement of Prot and Loss and
Cash Flow Statement dealt with by this Report are in
agreement with the books of account;
d. in our opinion, the Balance Sheet, Statement of Prot
and Loss and Cash Flow Statement comply with the
Accounting Standards referred to in sub-section (3C)
of section 211of the Companies Act, 1956; and
e. on the basis of written representations received
from the Directors as on 31
st
March 2014, and taken
on record by the Board of Directors, none of the
Directors is disqualied as on 31
st
March 2014, from
being appointed as a Director in terms of clause (g)
of sub-section (1) of section 274 of the Companies
Act, 1956.
For J.S. CHOPRA & ASSOCIATES
Chartered Acccountants
Firm registration number : 008849N
Jagdeep S. Chopra, FCA
Place : Chandigarh Partner
Dated : 29 April, 2014 Membership No.: 087476
319
The Annexure referred to in our report to the members of
Swaraj Automotives Limited (the Company) for the year
ended 31 March 2014. We report that:
1. (a) The Company has maintained proper records
to us, the management has a policy of physical
verication of xed assets in a phased manner. Some
of these xed assets have been physically veried
by the management during the current year and the
discrepancies noticed on comparison between book
records and physical inventory were not material
and have been properly dealt with in the books of
accounts. In our opinion, the frequency of verication
is reasonable having regard to the size of the
Company and nature of its assets.
(c) The xed assets disposed off during the year, in our
opinion, do not constitute substantial part of xed
assets of the Company and such disposal has, in our
Company.
2. (a) The inventories have been physically veried by the
management during the year and at the year end. In
our view, the frequency of verication is reasonable.
verication of inventories followed by the management
is reasonable and adequate in relation to the size of
(c) On the basis of our examination of the records of
inventories, we are of the opinion that the Company
has maintained proper records of inventories.
According to the information and explanations given
to us, there were no material discrepancies noticed
on physical verication of inventory as compared to
the book records, and these have been properly dealt
with in the books of accounts.
3. According to the information and explanation given to
us, the Company has neither granted nor taken any
loans, secured or unsecured to/from companies, rms
or other parties covered in the register maintained under
section 301 of the Companies Act 1956. Consequently,
clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f), and (iii)(g) of
paragraph 4 of the Order are not applicable.
explanations given to us during the course of audit, there
are adequate internal control system commensurate with
the size of the Company and the nature of its business
for the purchase of inventory, xed assets and for the
sale of goods and services. Further, on the basis of
our examination and according to the information and
explanations given to us, we have neither come across
nor have any information of any instances of major
weaknesses in the aforesaid internal control system.
5. We have been informed that the Company has not made
any transactions that need to be entered in to the register
in pursuance of Section 301 of the Companies Act, 1956.
us, the Company has not accepted any deposits from the
public.
7. In our opinion, and according to the information and
explanations given to us, the Company has an internal
business of the Company.
8. We have broadly reviewed the books of account maintained
by the Company pursuant to the rules prescribed by the
Central Government for maintenance of cost records under
Section 209(1)(d) of the Companies Act, 1956, in respect
of its products and are of the opinion that prima facie, the
prescribed accounts and records have been maintained.
However, we have not carried out a detailed examination
of the records with a view to determine whether these are
accurate or complete.
9. In respect of statutory dues:
(a) According to information and explanations given to
us, and the records of the Company, examined by us,
amounts deducted/accrued in the books of account
in respect of undisputed statutory dues including
Provident Fund, Employees State Insurance, Investor
Education and Protection Fund, Income tax, Sales
tax, Service tax, Custom Duty, Excise Duty, Cess and
any other statutory dues where applicable, have been
generally regularly deposited during the year with the
According to information and explanations given to
us, no undisputed amounts payable in respect of the
aforesaid dues were outstanding for a period of more
than six months as at 31 March, 2014 from the date
they became payable.
(b) The disputed statutory dues that have not been
deposited on account of matters pending before
appropriate authorities are reported below. According
following dues of Excise Duty, Service Tax, Sales Tax
have not been deposited by the Company on account
of disputes.
320
S.No. Name of the Statute Nature of the dues Amount of Tax
Liability (Rs. Lacs)
Period to which the
amount relates
Forum where dispute
is pending
1 Central Excise Excise Duty 0.34 2005-06 Appellate Tribunal
2 Central Excise Excise Duty 9.78 2005-06 to April 2008 Appellate Tribunal
3 Central Excise &
Service Tax
Excise duty on Depot
Handling charges
15.39 2008-09 to July 2009 Excise - Chandigarh
4 Sales Tax Assessment Case -
Demand Notice for
Short Submission of
C Forms
99.04 2009-10 DETC - Patiala
Total 124.55
10. The Company does not have any accumulated losses at
the end of the nancial year and has not incurred any
cash losses during the nancial year covered by our audit
or in the immediately preceding nancial year.
11. Based on our audit procedures and according to the
information and explanation given to us, the Company has
not defaulted in repayment of dues to nancial institutions
or banks.
12. According to the information and explanation given to
us, no loans and advances have been granted by the
Company on the basis of security by way of pledge of
13. According to the information and explanations given to us,
the Company is not a chit fund or a nidhi/mutual benet
fund/society.
us, the Company is not dealing or trading in shares,
15. According to information and explanations given to us, the
Company has not given any guarantee during the year, for
loans taken by others from bank or nancial institutions,
the terms and conditions whereof are prejudicial to the
interest of the Company.
16. According to information and explanation given to us, the
Company did not have any term loans outstanding during
the year.
17. In our opinion and according to information and
explanation given to us, during the year the Company has
not used the funds raised on short term basis for long
term investment and vice versa.
18. During the year, the Company has not made any
preferential allotment of shares to parties or companies
covered in the register maintained under section 301 of
the Act.
19. The Company has not issued any debentures during the
year.
20. The Company has not raised any money by way of public
issue during the year.
21. Based upon the audit procedures performed and
us, no fraud on or by the Company has been noticed
or reported during the year, that causes the nancial
statements to be materially misstated.
For J.S. CHOPRA & ASSOCIATES
Chartered Acccountants
Firm registration number : 008849N
Jagdeep S. Chopra, FCA
Place : Chandigarh Partner
Dated : 29 April, 2014 Membership No.: 087476
321
ST
MARCH, 2014
(Rs. in Lacs)
Particulars Note 2014 2013
EQUITY & LIABILITIES
Shareholders Funds
Share Capital .................................................... 2.1 239.77 239.77
Reserves & Surplus .......................................... 2.2 2193.57 2433.34 2056.90 2296.67
Other Long-term Liabilities ............................... 2.3 11.35 15.05
Long-term Provisions ........................................ 2.4 272.10 283.45 265.58 280.63
Current Liabilities
Trade Payables ................................................. 2.5 1866.96 1558.37
Other Current Liabilities .................................... 2.6 154.71 167.51
Short-term Provisions ....................................... 2.7 235.01 2256.68 229.73 1955.61
TOTAL ............................................................... 4973.47 4532.91
ASSETS
Non-Current Assets
Fixed Assets ...................................................... 2.8
Tangible Assets ............................................. 1012.06 961.51
Intangible Assets ........................................... 0.36 3.02
Capital Work-in-progress .............................. 34.21 126.33
Capital Spares ............................................... 1.12 1.53
Deferred Tax Assets (Net) ................................ 2.9 68.77 67.57
Long-term Loans & Advances.......................... 2.10 27.76 1144.28 17.77 1177.73
Current Assets
Inventories ......................................................... 2.11 431.83 424.42
Trade Receivables ............................................ 2.12 2116.08 1699.74
Cash & Cash Equivalents ................................ 2.13 847.09 902.92
Short-term Loans & Advances ......................... 2.14 434.19 3829.19 328.10 3355.18
TOTAL ............................................................... 4973.47 4532.91
Signicant Accounting Policies .................... 1
Notes on Accounts ......................................... 2
As per our report of even date attached The Notes referred to above form an integral part of
these nancial statements
For J.S. CHOPRA & ASSOCIATES FOR AND ON BEHALF OF THE BOARD
(FRN008849N) RAJESH K. KAPILA
Company Secretary
RAJESH JEJURIKAR
Chairman
J.S.CHOPRA
Partner
Membership No. 087476
KULVINDER S. DHIMAN
Manager Finance
SANJEEV GOYLE
Director
Chandigarh, 29
th
April, 2014 Mumbai, 29
th
April, 2014
322
STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31
ST
MARCH, 2014
(Rs. in Lacs)
Particulars Note 2014 2013
Revenue from Operations (Gross) .............. 2.15 9088.52 8509.64
Less : Excise Duty ........................................... 1024.97 1015.65
Net Revenue from Operations ..................... 8063.55 7493.99
Other Income ................................................... 2.16 62.52 54.90
Total Revenue ................................................. 8126.07 7548.89
Expenses
Cost of Materials Consumed .......................... 2.17 5800.37 5408.73
Changes in Inventories of Finished Goods
and Work-in-Progress ......................................
2.18 (28.72) (46.65)
Employee Benets Expense ........................... 2.19 1317.84 1235.09
Finance Costs .................................................. 2.20 2.47 1.77
Depreciation & Amortization Expense ............ 2.8 105.86 88.74
Other Expenses ............................................... 2.21 573.81 531.86
Total Expenses ............................................... 7771.63 7219.54
Prot for the year ........................................... 354.44 329.35
Prior period adjustments ................................. (+) 0.93 (+) 8.15
Prot Before Exceptional and Extraordinary
items and Tax ................................................. 355.37 337.50
Exceptional and Extraordinary items ..............
Prot Before Tax ............................................ 355.37 337.50
Tax Expense
Current Tax ................................................... 115.04 138.29
Deferred Tax (Net) ........................................ (1.20) (29.83)
Short tax provision of earlier year ............... 6.68 120.52 1.62 110.08
Prot After Tax ................................................ 234.85 227.42
Earning per Equity Share ............................. 2.27
Basic/Diluted Earning Per Share (Rs.) ............ 9.79 9.48
Signicant Accounting Policies ................... 1
Notes on Accounts ........................................ 2
As per our report of even date attached The Notes referred to above form an integral part of
these nancial statements
Company Secretary
RAJESH JEJURIKAR
Chairman
J.S.CHOPRA
Partner
KULVINDER S. DHIMAN
Manager Finance
SANJEEV GOYLE
Director
Chandigarh, 29
th
th
April, 2014
323
ST
MARCH, 2014
(Rs. in Lacs)
2014 2013
Net Prot Before Tax and Extraordinary Items 355.37 337.50
Adjustments for:
Interest Paid 2.43 0.14
Provision for Earned Leave & Gratuity 5.05 50.61
Provision for Doubtful Debts & Warranty 25.27 11.80
Interest Income (52.33) (49.42)
Prot on Sale of Assets (2.69)
Adjustment in xed assets (0.22) 14.53
Capital grant-in-aid (3.70) 79.67 (3.70) 112.70
Operating Prot before Working Capital Changes 435.04 450.20
Adjustments for:
Trade Receivables (440.54) 120.97
Inventories (7.41) (103.01)
Loans & Advances (115.89) (41.03)
Trade Payables 295.79 (268.05) 74.42 51.35
Cash Generated From Operations 166.99 501.55
Direct taxes refund/(paid) (130.26) (154.49)
Net Cash From Operating Activities 36.73 347.06
Purchase of Fixed Assets (67.55) (235.91)
Sale of Fixed Assets 9.24
Interest received 52.33 (5.98) 49.42 (186.49)
Net Cash Used in Investing Activities (5.98) (186.49)
Repayment of Corporate Loans
Dividend paid (84.15) (83.60)
Interest Paid (2.43) (86.58) (0.14) (83.74)
Net Cash Used in Financing Activities (86.58) (83.74)
Net Increase/(Decrease) in Cash & Cash Equivalents (55.83) 76.83
Opening Cash & Cash Equivalents (#1) 902.92 826.09
Closing Cash & Cash Equivalents (#2) 847.09 902.92
#1 Cash & Bank Balances 902.92 826.09
Cash Credit Account
Opening Cash & Cash Equivalents 902.92 826.09
#2 Cash & Bank Balances 847.09 902.92
Cash Credit Account
Closing Cash & Cash Equivalents 847.09 902.92

Notes:
1 The above Cash Flow Statement has been prepared under the indirect method as set out in the Accounting Standard - 3 on Cash Flow Statement issued by
the Institute of Chartered Accountants of India.
2 Figures in bracket indicates the cash outgo.
3 Previous year gures have been regrouped wherever found necessary.
As per our report of even date attached
Company Secretary
RAJESH JEJURIKAR
Chairman
J.S.CHOPRA
Partner
KULVINDER S. DHIMAN
Manager Finance
SANJEEV GOYLE
Director
Chandigarh, 29
th
th
April, 2014
324
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 BASIS OF ACCOUNTING
The nancial statements are prepared in accordance with historical cost
convention and on accrual basis, and as per applicable Accounting
Standards issued by the Institute of Chartered Accountants of India
and the relevant provisions of the Companies Act, 1956.
1.2 USE OF ESTIMATES
The preparation of nancial statements in conformity with
generally accepted accounting principles requires management
of the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of
contingent liabilities at the date of these nancial statements and the
reported amounts of revenues and expenses for the year. Difference,
if any, between the actual results and estimates is recognised in
the period in which the results are known and are reected in the
nancial statements in the period in which these changes are made.
1.3 REVENUE RECOGNITION
i) Sales are recognised at the time of despatches to customers
or their respective transporters for onward despatches to
customers. Impact of variation in selling price with respect to
despatched goods are recognised as and when conrmed. Sales
include excise duty, wherever applicable. Sales are recorded net
of Trade Discounts, Rebates & Sales Tax. In respect of Toolings
developed for the customers to be used for the production of
components, sale is recognised on completion of such Toolings.
ii) Incomes from services rendered are booked based on
agreements/arrangements with the concerned parties.
1.4 PROVISIONS & CONTINGENT LIABILITIES
Provisions are recognised if reliably estimated, and when there is a
present legal obligation resulting from past events, and it is probable
that there will be an outow of resources to settle the obligation.
Contingent Liabilities are not recognised but disclosed in the Notes.
1.5 FIXED ASSETS/DEPRECIATION
i) Fixed Assets are stated at cost less accumulated depreciation.
Depreciation is provided on a Straight-Line Method at the
rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956, except for the xed assets mentioned in
para (ii) to (v) below. Cost is inclusive of Freight, Duties, Levies
and any other directly attributable cost of bringing the assets
to their working condition for intended use.
ii) Depreciation on dies manufactured by the Company is charged
@ 20%. Depreciation on vehicles (cars) is charged @ 25%.
iii) Intangible Assets (Others than Software) are stated at cost less
accumulated amortisation. These are amortised over a period
of 6 years, which is the estimated useful life of the asset.
Software expenditure capitalised during the year is amortised
over 3 years from the date of its capitalization.
iv) Capital spares are amortised in a systematic manner over the
useful life of the assets to which it relates.
v) Assets individually costing up to Rs. 5000/- are depreciated at
100% in the year of purchase.
vi) Capital Work in progress includes cost of assets not ready for
intended use before the year end.
1.6 INVENTORIES
i) Stores, Spare Parts, Loose Tools, Raw Materials, Components
and Packing Materials are valued at material cost determined
on the basis of moving weighted average cost method with
due provisioning for non useable/obsolete items and impact of
provisioning for price variation, if any.
ii) Work-in-progress and Finished goods are valued at lower
of cost or net realisable value as certied by Management.
Cost includes material cost and an appropriate portion of
manufacturing overheads, wherever applicable, incurred in
bringing them to their present location and condition. Finished
goods include excise duty, wherever applicable.
iii) Scrap/damaged goods value is incorporated in books on the
basis of expected realisable value.
1.7 EMPLOYEE BENEFITS
Long-term and Short-term Employee Benets
i) All employee benets payable within twelve months of receiving
the employee services are classied as Short-term employee
benets and benets payable after twelve months of receiving
the employee services are classied as Long-term employee
benets.
These include salaries and wages, bonus, gratuity and
workmen/staff welfare etc.
ii) Contributions to various contributions schemes such as
provident fund and other funds are charged to the prot and
loss account, as incurred. The Company contributes to Life
Insurance Corporation of India to cover its liability towards its
master policies of employees superannuation and gratuity.
Payment of gratuity at the time of retirement is routed through
the trust created by the company.
Leave encashment liability & gratuity has been provided on
actuarial basis by Independent actuary.
1.8 RESEARCH & DEVELOPMENT
Revenue expenditure on research and development is charged to
Prot & Loss Account in the year in which it is incurred.
1.9 TAXATION
i) Current tax is the amount of tax payable on the taxable income
for the year as determined in accordance with the provisions of
the Income Tax Act 1961.
ii) Deferred Tax is recognised, subject to consideration of
prudence, on timing differences, being the difference between
taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent
periods. The Deferred Tax charge or credit is recognised using
current tax rate.
iii) Deferred Tax assets arising from unabsorbed depreciation
or carry forward losses are recognised only if there is virtual
certainty of realisation of such amount. Other Deferred Tax
assets are recognised only to the extent there is certainty of
realisation in future.
1.10 GRANTS-IN-AID
Capital grants received in previous years are allocated to income
over the periods and in proportions in which the depreciation on
those assets is charged.
1.11 FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at exchange rates
prevailing at the date of transaction. Exchange differences, if any,
arising on settlement of transactions except those relating to xed
assets are recognized as income or expense in the year in which
they arise. In case of xed assets, the cost is adjusted for exchange
differences arising on payment of liabilities incurred for the purpose
of acquiring such xed assets.
1.12 PRODUCT WARRANTY
In respect of warranty given by the Company on sale of agricultural
implements - Rice Transplanter and Rotavator, the estimated costs
of this warranty are accrued at the time of sale. The estimates for
accounting of warranty are reviewed and revisions are made as
required.
2. NOTES ON ACCOUNTS FOR THE YEAR ENDED 31
ST
MARCH, 2014
2.1 SHARE CAPITAL
(Rs. in Lacs)
Particulars As at 31
st
March
2014 2013
Authorised
Equity Shares, Rs. 10/- par value
30,00,000 (2013 30,00,000) Equity Shares 300.00 300.00
Redeemable Cumulative Preference Shares,
Rs. 100/- par value
50,000 (2013 50,000) Redeemable
Cumulative Preference Shares 50.00 50.00
350.00 350.00
Issued, Subscribed & Paid-up
Equity Shares, Rs. 10/- par value
23,97,713 (2013 23,97,713) Equity Shares
fully paid-up 239.77 239.77
239.77 239.77
325
The Company has issued only one class of shares referred to as Equity Shares
having a par value of Rs. 10/-. Each Equity Shareholder is entitled to one vote
per share.
The Company declares and pays dividend in Indian Rupees. The Board of
Directors, in their meeting held on 29
th
April, 2014 proposed a dividend of
Rs. 3.50 per equity share. Dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General
Meeting. The total dividend appropriation for the year ended 31
st
March, 2014
amounted to Rs. 98.18 lacs including corporate dividend tax of Rs. 14.26 lacs
(2013 - Rs. 84.15 lacs including corporate dividend tax of Rs. 12.22 lacs).
Equity Shares held by Holding Company on 31-03-2014 :
Name of Holding Company Mahindra & Mahindra Limited
Shares Held 17,06,925 (71.19%)
Equity Shareholders holding more than 5% shares :
31.03.2014 31.03.2013
Name No. of
Shares
Held
% of
Share-
holding
No. of
Shares
Held
% of
Share-
holding
Mahindra & Mahindra Limited 1,706,925 71.19% 1,706,925 71.19%
CDC-PTL Holdings Limited 204,132 8.51% 204,132 8.51%
Reconciliation of number of Equity Shares outstanding and the amount of Share
Capital :
31.03.2014 31.03.2013
No. of
Shares
Share
Capital
No. of
Shares
Share
Capital
(Rs. in
Lacs)
(Rs. In
Lacs)
Number of equity shares at the beginning 2,397,713 239.77 2,397,713 239.77
Movement in equity shares during the year
Number of equity shares at the closing 2,397,713 239.77 2,397,713 239.77
In the last 5 years, the Company has not :
allotted any shares as fully paid up pursuant to contract(s) without being received in cash,
allotted any bonus shares,
bought back its shares.
2.2 RESERVES AND SURPLUS
(Rs. in Lacs)
st
March
2014 2013
Capital Reserve - Opening Balance 1.38
Less : Transfer to General Reserve 1.38
General Reserve - Opening Balance 1672.24 1620.86
Add : Transferred from Capital Reserve 1.38
Transferred from Surplus 50.00 1722.24 50.00 1672.24
Surplus Opening Balance 384.66 291.39
Add : Prot for the Year 234.85 227.42
619.51 518.81
Less : Appropriations
Proposed Dividend 83.92 71.93
Tax on Proposed Dividend 14.26 12.22
Transfer to General Reserve 50.00 471.33 50.00 384.66
2193.57 2056.90
2.3 OTHER LONG TERM LIABILITIES
(Rs. in Lacs)
st
March
2014 2013
Grants-in-Aid (Refer Note 1.10)
Capital Grant
Opening Balance 15.04 18.74
Less : Depreciation 3.70 11.34 3.70 15.04
Deposits & Earnest Money 0.01 0.01
11.35 15.05
Capital Grant represents the un-appropriated portion of grant-in-aid received
in kind, in 1997-98, from United Nations Ofce for Project Services for
implementation of United Nations Development Programme Montreal Protocol
for phasing out of CFCs in the manufacture of cold cured PU Foam.
The un-appropriated portion of grant-in-aid in previous year was as per terms
and conditions of agreement between Government of India and UNDP dated
06.01.1997.
2.4 LONG-TERM PROVISIONS
(Rs. in Lacs)
st
March
2014 2013
Provision for Employee Benets
(Refer Note 1.7)
Provision for Gratuity (Refer Note 2.32) 189.80 189.18
Provision for Leave Encashment 82.30 76.40
272.10 265.58
2.5 TRADE PAYABLES
(Refer Note 2.33)
(Rs. in Lacs)
st
March
2014 2013
Trade Payables - Micro & Small Enterprises 90.85 32.25
Trade Payables - Other than Micro & Small
Enterprises 1776.11 1526.12
1866.96 1558.37
2.6 OTHER CURRENT LIABILITIES
(Rs. in Lacs)
st
March
2014 2013
Grants-in-Aid (Refer Note 1.10 & 2.3)
Capital Grant 3.70 3.70
Deposits & Earnest Money 1.18 0.83
Advances from Customers 0.65 24.88
Unpaid/Unclaimed Dividend * 3.02 2.78
Other Liabilities
Salary & Other Employee Benets
Payable 81.83 70.64
Expenses Payable 42.72 47.24
Statutory Dues Payable 21.61 146.16 17.44 135.32
154.71 167.51
* There is no amount due and outstanding to be credited to Investor Education
and Protection Fund as on 31
st
March, 2014.
326
2.7 SHORT-TERM PROVISIONS
(Rs. in Lacs)
st
March
2014 2013
Provision for Employee Benets (Refer
Note 1.7)
Provision for Gratuity (Refer Note 2.32) 59.41 72.28
Provision for Leave Encashment 76.35 135.76 64.95 137.23
Others
Proposed Dividend 83.92 71.93
Provision for Warranty 1.07
Income Tax (net of provisions) (Refer
Note 1.9) 99.25 8.35 92.50
235.01 229.73
2.8 FIXED ASSETS
(Refer Note 1.5)
(Rs.in Lacs)
Description
GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK
Cost as at
01-04-2013
Additions
during
the year
Sale/
Adjustments
during the
year
Cost as at
31-03-2014
As at
01-04-2013
Provided
during the
year
Disposal/
Adjustments
during the
year
As at
31-03-2014
As at
31-03-2014
As at
31-03-2013
A) TANGIBLE ASSETS
Land - Freehand 451.81 451.81 451.81 451.81
Buildings 368.65 47.21 415.86 234.94 13.51 248.45 167.41 133.71
Plant & Machinery 889.20 101.30 990.50 627.07 62.11 (0.19) 688.99 301.51 262.13
Electrical Installations 117.11 6.85 123.96 92.02 4.06 (0.01) 96.07 27.89 25.09
Furniture & Fixtures 10.27 0.79 11.06 8.91 0.16 9.07 1.99 1.36
Ofce Equipments 114.64 3.93 118.57 76.06 10.81 (0.02) 86.85 31.72 38.58
Vehicles 139.22 (15.19) 124.03 90.39 12.55 (8.64) 94.30 29.73 48.83
TOTAL (A) 2090.90 160.08 (15.19) 2235.79 1129.39 103.20 (8.86) 1223.73 1012.06 961.51
B) INTANGIBLE ASSETS
Software 26.42 26.42 23.40 2.66 26.06 0.36 3.02
TOTAL (B) 26.42 26.42 23.40 2.66 26.06 0.36 3.02
GRAND TOTAL (A+B) 2117.32 160.08 (15.19) 2262.21 1152.79 105.86 (8.86) 1249.79 1012.42 964.53
Previous Year 2068.23 109.33 (60.24) 2117.32 1109.76 88.74 (45.71) 1152.79 964.53 958.47
Capital Work-in-progress 34.21 126.33
Capital Spares 1.12 1.53
Disposal/adjustment during the year include and amount of Rs. 0.22 lacs over charged in earlier years.
Depreciation for the year on Motor vehicles, Air Conditioners and Coolers, Ofce Equipment and certain Plant & Machinery costing Rs. 348.78 lacs (2013 - Rs. 338.27
lacs) has not been charged since 95% of its original cost has already been charged to depreciation.
2.10 LONG-TERM LOANS & ADVANCES
(Unsecured-considered good unless otherwise stated)
(Rs. in Lacs)
st
March
2014 2013
Capital Advances 6.94
Security Deposits
Less : Provision for
doubtful security
deposits 1.94 1.94
Others 16.54 16.54 17.03 17.03
27.76 17.77
2.11 INVENTORIES
(Refer Note 1.6)
(Rs. in Lacs)
st
March
2014 2013
Raw Materials & Components 241.00 268.06
Work-in-Progress 123.53 106.59
Finished Goods 31.61 19.83
Stores and Spares 24.86 21.23
Loose Tools 10.83 8.71
431.83 424.42
Inventory as at 31
st
March, 2014 has been physically veried and certied by
the Management.
2.9 DEFERRED TAX
(Refer Note 1.9)
(Rs. in Lacs)
st
March
2014 2013
Deferred Tax Liabilities
Difference between book &
tax depreciation 78.14 87.30
Deferred Tax Assets
Provision for Employees Cost (135.56) (133.91)
Others (11.35) (146.91) (20.96) (154.87)
Deferred Tax Liabilities / (Assets) (68.77) (67.57)
Pursuant to Accounting standard 22 - Accounting for taxes on income the
Company estimates deferred fax liability/(asset) using the applicable rate of
taxation based on the impact of timing differences between nancial statement
and taxable income for the current year.
327
2.12 TRADE RECEIVABLES
(Rs. in Lacs)
st
March
2014 2013
Debts outstanding from
the date they are due for
payment
Unsecured
For more than six months
doubtful debts 32.45 62.06
Considered good 140.66 140.66 156.28 156.28
Unsecured
For less than six months
Considered good * 1975.42 1543.46
2116.08 1699.74
* Include dues from Holding Company & Associate Companies amounting to
Rs. 737.06 lacs (2013 - Rs. 327.54 lacs) (Refer Note 2.26).
Provision for doubtful debts - as at 31
st
March, 2014 :
The Company periodically evaluates Trade Receivables due from its customer
for their recoverability. Provision for Doubtful Debts is assessed on the basis
of various factors like ability of the customer to pay and risk perception of the
industry, etc. Provision for doubtful debts, at the Balance Sheet date, normally
pertains to debt or dues outstanding for six months or longer from the invoice date.
2.13 CASH & CASH EQUIVALENTS
(Rs. in Lacs)
st
March
2014 2013
Cash on hand 1.44 0.88
Balances with Banks
In Current Accounts 243.98 347.91
Balance with Banks held as Margin
Money and Deposit against Guarantees 24.43 30.03
Other Bank Balances
Deposit Account with more than 12
months maturities 401.00 254.85
Deposit Account with less than 12
months maturities 138.22 242.33
Interest Accrued on Fixed Deposits 35.00 574.22 24.14 521.32
Unpaid/Unclaimed Dividend Accounts 3.02 2.78
847.09 902.92
Cash and cash equivalents comprise cash balances on hand, bank balance and
term deposits with banks.
Deposits are with State Bank of Patiala and Axis Bank, which can be withdrawn
by the Company at any point without prior notice or penalty on the principal.
Cash and cash equivalents as of 31
st
March, 2014 include restricted cash and
bank balances of Rs. 27.45 lacs (2013 - Rs. 32.81 lacs). The restrictions are
primarily on account of cash and bank balances held as margin money and
deposits against guarantees and unpaid/unclaimed dividends.
2.14 SHORT-TERM LOANS & ADVANCES
(Unsecured-considered good unless otherwise stated)
(Rs. in Lacs)
st
March
2014 2013
Deposit with Excise & Taxation Authorities 29.65 4.89
Insurance Claim recoverable 1.36 1.80
Advances to Suppliers 21.41 11.25
Advances to Employees 1.70 2.09
Balance with Excise Authorities 20.94 24.12
Security Deposits 11.70 9.70
Value Added Tax Recoverable 338.97 269.81
Income Tax (net of provisions) (Refer Note 1.9) 0.19
434.19 328.10
2.15 REVENUE FROM OPERATIONS
(Rs. in Lacs)
Particulars Year ended 31
st
March
2014 2013
Sale of Products (Refer Note 2.30 A) 9009.16 8418.69
Other Operating Revenues
Sale of Scrap 79.36 90.95
9088.52 8509.64
2.16 OTHER INCOME
(Rs. in Lacs)
st
March
2014 2013
Interest Income 52.33 49.42
Prot on Sale of Fixed Assets 2.69
Miscellaneous Income 7.50 5.48
62.52 54.90
2.17 COST OF MATERIALS CONSUMED
(Refer Note 2.30 B)
(Rs. in Lacs)
st
March
2014 2013
Opening Stock 276.77 219.71
Add : Purchases 5686.27 5323.46
Job Charges 89.16 5775.43 142.33 5465.79
6052.20 5685.50
Less : Closing Stock 251.83 276.77
5800.37 5408.73
2.18 CHANGES IN INVENTORIES OF FINISHED GOODS & WORK-IN-PROGRESS
(Rs. in Lacs)
st
March
2014 2013
Opening Stock 126.42 79.77
Less : Closing Stock 155.14 126.42
(28.72) (46.65)
2.19 EMPLOYEE BENEFITS EXPENSE
(Rs. in Lacs)
st
March
2014 2013
Salaries & Wages 1066.81 967.82
Contribution to Provident & Other Funds 61.35 60.75
Gratuity & Superannuation (Refer Note 1.7) 35.73 75.51
Workmen & Staff Welfare 153.95 131.01
1317.84 1235.09
2.20 FINANCE COSTS
(Rs. in Lacs)
st
March
2014 2013
Interest on Overdraft 0.01
Bank Charges 0.04 1.62
Other Interest Cost 2.43 0.14
2.47 1.77
2.21 OTHER EXPENSES
(Rs. in Lacs)
st
March
2014 2013
Power, Fuel & Water Charges 170.96 143.20
Consumption of Stores & Spares 34.62 52.90
Rent 4.68 10.59
328
(Rs. in Lacs)
st
March
2014 2013
Rates and Taxes 2.94 4.81
Insurance 3.39 3.16
Repairs and Maintenance
Buildings 3.80 1.54
Machinery 34.75 15.13
Others 26.25 20.10
Postage & Telephone 3.66 3.99
Printing & Stationery 8.30 9.04
Legal and Professional Charges 2.99 4.24
Advertisement 5.06 5.80
Freight Outward 168.56 169.66
Sales Promotion Expenses 5.44 6.31
Travelling & Conveyance Expenses 45.92 43.09
Provision for Doubtful Debts 24.20 11.82
Auditors Remuneration
Statutory Audit Fees 0.90 0.90
Other Services 0.77 0.77
Reimbursement of Expenses 0.73 0.47
Tax Auditors Fees 0.20 0.20
Cost Auditors Fees 0.30 0.30
Directors Sitting Fees 0.50 0.60
Design & Development Expenses 0.46 0.24
Warranty Claims 4.00 0.45
Loss on Fixed Assets Writen Off 13.63
Miscellaneous Expenses 20.43 8.92
573.81 531.86
2.22 The Company is having Nil outstanding as on 31
st
March, 2014 (2013 -
Nil) against Cash Credit limit from State Bank of Patiala, secured by pari-
passu rst charge over stocks in trade, stores, spares and book debts and
additional charge over the xed assets of the Company.
2.23 CONTINGENT LIABILITIES & COMMITMENTS
(Not provided for in Accounts as certied by the Management)
Contingent Liabilities
(Rs. in Lacs)
st
March
2014 2013
Claims against the Company,
not acknowledged as debts
i) Telephone & Telex (Disputed Amount) 1.47 1.47
ii) Employees/Workers dispute 8.00 8.00
iii) Excise/Service Tax/Sales Tax demand
(pending in appeal) 124.55* 30.63
Counter guarantees to bank 11.54 18.69
* Includes Rs. 99.04 lacs against demand order raised by Sales Tax Authorities
on account of short submission of C Forms related to assessment of FY
2009-10. Against the said Order, the Company has led an appeal before the
Appellate Authority after depositing Rs. 24.76 lacs being 25% of demand raised
for considering all the balance C Forms available for re-assessment.
Commitments (Rs. in Lacs)
st
March
2014 2013
Estimated amount of contracts remaining
to be executed on capital account (net of
advances) 86.79 15.75
2.24 CURRENT ASSETS
Parties accounts are subject to reconciliation and conrmation by them.
2.25 As the Companys principal business activity fall within a single primary
business segment, viz. Automobile Components, the disclosure
requirements of Accounting Standard 17 Segment Reporting, issued
by the Institute of Chartered Accountants of India are not applicable.
2.26 In accordance with Accounting Standard 18, the related party disclosures
st
March, 2014 are as follows:
i) Holding Company Mahindra & Mahindra Limited
ii) Associate Company Swaraj Engines Limited
iii) Key Management Personnel Shri Sanjeev Goyle
iv) Transactions with related parties : (Rs. in Lacs)
Holding
Company
Associate
Company
a) Sale of nished goods 3795.54
(2564.37)
542.83
(420.39)
Mahindra & Mahindra Limited 3795.54
(2564.37)
()
Swaraj Engines Limited
()
542.83
(420.39)
b) Purchase of xed assets
(11.67)
()
(11.67)
()
c) Reimbursement in respect of
services received
96.69
(98.31)
10.43
(8.87)
(98.31)
()
Swaraj Engines Limited
()
10.43
(8.87)
d) Inter-Corporate Deposit paid
()
()
e) Interest paid
()
()
f) Dividend Paid 51.21
(51.21)
()
(51.21)
()
Aggregate balances outstanding as at the year end
Receivables 656.30
(252.52)
80.76
(75.02)
Advances Recoverable
()
()
Previous years gures are given in brackets.
2.27 EARNING PER SHARE (EPS)
st
March
2014 2013
Prot attributable to equity
shareholder (Rs. in lacs) 234.85 227.42
Basic/Weighted average number
of equity shares 23,97,713 23,97,713
Basic/Diluted Earning Per Share
(Face Value Rs. 10/- per share) Rs. 9.79 Rs. 9.48
2.28 Miscellaneous income under Other Income includes a sum of Rs. 3.70 lacs
(2013 - Rs. 3.70 lacs) being the depreciation on Plant & Machinery received
as Capital Grant in aid which is adjusted against the grant received.
2.29 Trade Receivables includes debts aggregating to Rs. 32.45 lacs, which
may be doubtful of recovery. Adequate provisions for doubtful balances
have been made in nancial statements. Out of provision for doubtful
debts made in current/earlier years, Rs. 53.81 lacs (2013 Nil) has been
written off during the year.
2.30 Information with regard to Production, Sales & Stocks, as certied by the
management.
A. Production, Sales & Stock of Finished Goods
Particulars Unit Year ended
31
st
March
2014 2013
i) Seats for Light Commercial
Vehicles
Opening stock Sets 9 92
Production 7156 9,148
329
Particulars Unit Year ended
31
st
March
2014 2013
Sales 6997 9,231
Closing stock 168 9
ii) Seats Others
Opening stock Nos. 392 617
Production 136356 1,09,810
Sales 136460 1,10,035
Closing stock 288 392
iii) Seat Components
Opening stock Nos. 4826 1,541
Production 2310372 23,83,525
Sales 2310089 23,80,240
Closing stock 5109 4,826
iv) Agricultural Implements
Opening stock Nos.
Production 267
Sales 267
Closing stock
v) Sales of Products (including
Excise Duty)
2014
(Rs. in
Lacs)
2013
(Rs. in
Lacs)
Seat Components 4169.11 4535.36
Seats of Light Commercial
Vehicles 468.40 656.94
Tools, Dies & Fine Blanking Components 106.31 182.32
Exhaust Brake & Cover Service
Hole 23.37 146.37
Tractor Parts 4014.30 2884.17
Combine Parts 0.17 13.53
Agricultural Implements 227.50
9009.16 8418.69
B (a) Consumption of Raw Materials & Components
Particulars Unit Year ended 31
st
March
2014 2013
Qty. Rs. in
lacs
Qty. Rs. in
lacs
PU Foam Material MT 174.95 288.14 170.58 263.00
CRCA Sheet & Steel Sheet MT 1511.01 845.44 1883.41 1062.26
Paints & Chemicals MT 119.94 184.02 97.79 144.90
Trim Comp., Frames & Silencer etc. Nos.
(in lacs) 6.36 481.76 6.80 525.49
Stopper, B. Plates,
Arm Plate, H Plate
50.21 551.09 58.32 700.50

Guide Block, Sect-disc Lever etc. 61.28 506.33 59.00 543.09
Upper Rail, Lower Rail, Pawl
Lock etc.
20.72 344.67 24.18 515.40

Tractor Seat Parts - 1280.12 998.02
Packing Materials - 88.54 78.70
Job Work Charges - 89.16 142.33
Others - 1141.10 435.04
5800.37 5408.73
Notes:
i) It is not possible to furnish quantitative information of all the components
in view of large number of items varied in size and nature.
ii) Quantities and values of all items in Analysis of Raw Materials consumed
represent the issues from stores made during the year. The gure of others
is a balancing gure, based on total consumption shown in Note 2.17 and
includes adjustments for excess/shortage found on physical verication.
(b) Value of imported and indigenous Raw Materials & Components, Stores
and Spares etc. consumed & percentage of each to total consumption
st
March
2014 2013
%age Rs. in
Lacs
%age Rs. in
Lacs
a) Raw material & Components
i) Imported
ii) Indigenous 100.00 5800.37 100.00 5408.73
100.00 5800.37 100.00 5408.73
b) Stores & Spares
i) Imported 5.75 3.04
ii) Indigenous 100.00 34.62 94.25 49.86
100.00 34.62 100.00 52.90
2.31 Value of Import on CIF Basis
(Rs. in Lacs)
st
March
2014 2013
Raw Materials & Components 2.42
Stores & Spares 2.30
4.72
2.32 Employee Dened Benets:
Dened benet plans - as per Actuarial Valuation
Gratuity Plan
2014 2013
(Rs. in Lacs) (Rs. in Lacs)
I. Expenses Recognised in the Statement of Prot & Loss Account
1. Current Service Cost 20.11 19.65
2. Interest 40.15 31.73
3. Expected Return on plan assets (18.98) (16.81)
4. Actuarial (Gain)/Loss (8.65) 35.40
5. Total Expense 32.63 69.97
II. Net Asset/(Liability) recognised in the Balance Sheet
Obligation 476.57 454.61
2. Fair Value of plan assets 227.36 193.14
3. Funded Status [Surplus/(Decit)] (249.21) (261.47)
4. Net Asset/(Liability) (249.21) (261.47)
III. Change in the obligation during the year
Obligation as at beginning of the
year 454.61 416.41
2. Current service cost 20.11 19.65
3. Interest Cost 40.15 31.73
4. Benet payments (31.63) (49.37)
5. Actuarial (Gain)/Loss (6.66) 36.19
6. Present value of Dened benet
Obligation as at end of the year
476.57 454.61
IV. Change in the Fair Value of Assets
1. Fair Value of plan assets at the
beginning of the year
193.14 187.91
2. Expected return on plan assets 18.98 16.81
3. Contribution by employer 44.88 37.00
4. Actual benets paid (31.63) (49.37)
330
Gratuity Plan
2014 2013
(Rs. in Lacs) (Rs. in Lacs)
5. Actuarial (Gain)/Loss on Plan
assets 1.99 0.79
6. Fair value of plan assets at the
end of the year 227.36 193.14
7. Actual return on plan assets 20.97 17.60
V. The major categories of plan assets as a percentage of total plan
Funded with LIC 100% 100%
VI. Actuarial Assumptions
1. Imputed Rate 9.15% 8.10%
2. Expected rate of return on plan
assets 9.50% 9.25%
3. In-service Mortality IAL 2006-08
Ultimate
IAL 2006-08
Ultimate
4. Turnover Rate 5.00% 5.00%
5. Salary Rise Ofcers/workers 10%/7.5% 10%/7.5%
6. Remaining Working life 14.28 Yrs 11.20 Yrs
2.33 Micro, Small & Medium Enterprises have been identied by the Company
on the basis of information available. Total Outstanding dues of Micro &
small enterprises, which are outstanding for more than stipulated period,
are given below:-
Rs. in Lacs
S.No Particulars 2014 2013
(a) Dues remaining unpaid as at 31
st
March
- Principal
- Interest on above
(b) Interest paid in terms of section 16 of
the act along with the amount of pay-
ments made to the supplier beyond the
appointed date during the year
- Principal paid beyond the appointed
date
36.95
- Interest paid in terms of section 16 of
the act
0.09
(c) Amount of interest due and payable for
the period of delay in payments made
beyond the appointed date during the
year

(d) Further interest due and payable even
in the succeeding year, until such date

(e) Amount of interest accrued and remain-
ing unpaid as at 31
st
March

2.34 Prior period adjustments includes income/expenses pertaining to earlier
years amounting to Rs. 0.93 lacs (2013 Rs. 8.15 lacs).
2.35 Previous year gures have been regrouped/recast, wherever necessary, so
as to correspond with those of the current year.
MAHINDRA INVESTMENTS (INTERNATIONAL) PRIVATE LIMITED
331
Dear Members,
Your Directors are pleased to present the First Annual Report and the Audited Accounts for the period ended March 31, 2014.
FINANCIAL RESULTS
The nancial performance of the Company for the nancial period ended March 31, 2014 is summarized below
For the period ended
31 March, 2014
(In Rupees)
Loss before Interest and Depreciation ........................................................................................................ 6,83,457
Less: Interest ...................................................................................................................................................
Depreciation .................................................................................................................................................... 298
Gross Loss before taxation ........................................................................................................................... 6,83,755
Less: Provision for taxation ...........................................................................................................................
Current Tax ....................................................................................................................................................
Deferred Tax ...................................................................................................................................................
Loss after tax ................................................................................................................................................. 6,83,755
Operational Review
Your Company will shortly become a joint venture company
between Mahindra and Mahindra Limited and HZPC Holland
B.V.(HZPC). Mahindra and Mahindra will hold 60% equity in
the Company and balance 40% will be held by Participatie
Maatschappij Buitenland B.V. which is a 100% subsidiary
of HZPC. HZPC is the world leader in the production and
marketing of Seed Potatoes for various applications. The
Company will carry on the business of contract growing,
corporate farming, wholesale, retail and trading of Potatoes
seeds, minitubers, table potato and processing potato, tissue
culture plants and services.
During the period under review, the Company purchased
inventory and xed assets from Mahindra and Mahindra
Limited which will be used for carrying on the business.
Dividend
Your Directors have not recommended dividend on Equity
Shares for the period under review.
Promoter of the Company
Your Company was promoted by Mahindra and Mahindra
Limited. The Company was incorporated on 25th April, 2013
as subsidiary of Mahindra and Mahindra Limited.
Share Capital
The Authorized share capital of the Company is Rs 8,00,00,000/-
divided into 80,00,000 equity shares of Rs 10/- each. The Paid
up share capital of the Company is Rs. 4,73,00,000/- as on
30
th
April 2014.
Your Company has not accepted deposits from the public, or its
employees, during the year under review.
required to be disclosed in the annual accounts of your Company
pursuant to Clause 32 of the Listing Agreement of the ultimate
parent company, Mahindra & Mahindra Limited, with Stock
Exchanges.
Directors
Pursuant to the provisions of Section 260 of the Companies
Act, 1956 and the Articles of Association of the Company
Mr. Ashok Sharma, Mr. Vikram Puri and Mr. S Durgashankar
were appointed as Additional Directors on the Board with
effect from 28th February, 2014. They shall hold ofce upto the
date of the ensuing Annual General Meeting. The Company
has received the notices in writing from a member proposing
the candidature of Mr. Ashok Sharma, Mr. Vikram Puri and
Mr. S Durgashankar for the ofce of Director, liable to retire
by rotation.
Mr.Hemant Luthra, Mr.Sanjay Joglekar and Mr.Romesh Kaul
resigned from the directorships of the Company with effect
from 1st March, 2014. The Board wishes to place on record
the valuable contribution made by them during his tenure as
Director of the Company.
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956 with respect to Directors Responsibility
Statement, it is hereby conrmed that
In the preparation of the accounts for the period ended
31st March, 2014, the applicable accounting standards
have been followed;
The Directors have selected such accounting policies
and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give
332
at the end of the nancial period and of the loss of the
Company for the period under review;
The Directors have taken proper and sufcient care for
the maintenance of adequate accounting records in
The Directors have prepared the accounts for the period
ended 31st March, 2014 on a going concern basis.
Auditors
M/s. Joglekar & Gokhale, Chartered Accountants, Statutory
Auditors of the Company, hold ofce until the conclusion of
the ensuing Annual General Meeting of the Company and
are eligible for re appointment. The member are requested to
appoint Auditors from the conclusion of forthcoming Annual
General Meeting until the conclusion of the 6
th
Annual General
Meeting and x their remuneration.
required under section 217(1)(e) of the Companies Act,
the Report of Board of Directors) Rules, 1988 are given in
Particulars of Employees
The Company has not paid any remuneration attracting the
provisions of the Companies (Particulars of Employees) Rules,
1975 read with Section 217(2A) of the Companies Act, 1956.
Hence, no information is required to be appended to this
report in this regard.
Acknowledgement:
for assistance and co-operation received from Banks, Vendors
and Members during the period under review.
Mr. Ashok Sharma Mr. Vikram Puri
Director Director
Mumbai, 30
th
April, 2014
333
RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE PERIOD ENDED 31
ST
MARCH, 2014.
Not Applicable
Nil
(c) Impact of the measures taken at (a) & (b) above for reduction of energy consumption and consequent impact on the
cost of production of goods:
Not Applicable
in respect of Industries specied in the Schedule thereto:
Not Applicable
1. Areas in which R & D is carried out by the Company: None
2. Benets derived as a result of the above efforts R & D: Not Applicable
3. Future plan of action: NIL
4. Expenditure on R & D: NIL
6. Imported Technology for the last 5 periods: None
Total Foreign Exchange earned and used:
(Amount in Rupees)
For the
period ended
31 March, 2014
(In Rupees)
Total Foreign Exchange earned ................................................................................................................................
Total Foreign Exchange used ...................................................................................................................................
Director Director
Mumbai, 30
th
April, 2014
334
TO THE MEMBERS OF
MAHINDRA INVESTMENTS (INTERNATIONAL) PRIVATE
LIMITED (the Company), which comprise the Balance Sheet as
at 31
st
March 2014, and the Statement of Prot and Loss for the
year then ended, and a summary of signicant accounting policies
and other explanatory information.
Management is responsible for the preparation of these nancial
statements that give a true and fair view of the nancial position
and the nancial performance of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956 (the Act) read with the General
th
September 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act,
2013. This responsibility includes the design, implementation and
maintenance of internal controls relevant to the preparation and
presentation of the nancial statements that give a true and fair
view and are free from material misstatement, whether due to fraud
or error.
accordance with the Standards on Auditing issued by the Institute
of Chartered Accountants of India. Those Standards require that
we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the nancial
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the nancial statements.
The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of
the nancial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control
relevant to the Companys preparation and fair presentation of
the nancial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the companys internal
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the nancial statements. We believe that the audit
evidence we have obtained is sufcient and appropriate to provide
a basis for our audit opinion.
Opinion
to the explanations given to us, the nancial statements give the
information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31
st
March 2014;
(b) in the case of the Statement of Prot and Loss, of the loss for
(c) in the case of the cash ow statement, of the cash ows for
the year ended on that date.
1. In our opinion and subject to the information and explanations
given to us the provisions of the Companies (Auditors Report)
Order, 2003 (the Order) issued by the Central Government
of India in terms of sub-section (4A) of section 227 of the Act,
(b) In our opinion proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books. The Company has
no branches.
(c) In our opinion, the Balance Sheet, the Statement of Prot
and Loss and the Cash Flow Statement comply with the
Accounting Standards referred to in subsection (3C) of
section 211 of the Companies Act, 1956 read with the
th
September 2013 of
the Ministry of Corporate Affairs in respect of section 133
(d) On the basis of written representations received from the
directors as on 31
st
March 2014, and taken on record
by the Board of Directors, none of the directors is
disqualied as on 31
st
March 2014, from being appointed
as a director in terms of clause (g) of sub-section (1) of
For and on Behalf of
JOGLEKAR & GOKHALE
Firm Regn. No. 104327W
Prakash Joglekar
Date : 30
th
April, 2014 Membership No.: 031053
335
As per our Report of even date For Mahindra Investments (International) Private Limited
Joglekar & Gokhale
Regn. No. 104327W
(P. Y. Joglekar)
Mr. Ashok Sharma
Mr. Vikram Puri
Partner (Director) (Director)
Place : Mumbai
Date : 30
th
April, 2014
Place : Mumbai
Date : 30
th
April, 2014
In Rupees
Note
Ref
As at
March 31, 2014
Shareholders funds
(i) Share capital 3 500,000
(ii) Reserves & Surplus 4 (683,755)
(183,755)
Non-Current liabilities
(i) Long term Borrowings
(ii) Deferred tax liabilities (Net)
(iii) Other long term liabilities
(iv) Long term provisions
Current liabilities
(i) Short term Borrowings
(ii) Trade payables 5 57,806,771
(iii) Other current liabilities
(iv) Short term provisions
57,806,771
Total 57,623,016
ASSETS
Non-current assets
(a) Fixed Assets
(i) Tangible assets 6 1,636,246
(ii) Intangible assets
(iii) Capital work in progress
1,636,246
(b) Long term loans and advances
1,636,246
Current assets
(a) Current Investments
(b) Inventories 7 55,906,927
(c) Trade receivables
(d) Cash and cash equivalents 8 79,843
(e) Short term loans and advances
(f) Other current assets
55,986,770
Total 57,623,016
See accompanying notes forming part of the Financial Statements
336
STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDED MARCH 31, 2014
In Rupees
Note Ref 2013-14
1 INCOME
Revenue from operations
2. Other income
3 Total Revenue
4 EXPENDITURE
Purchase of stock in trade 55,906,927
Less: Closing Stock (55,906,927)
Employee benets expenses
Finance costs
Depreciation and amortization expenses 298
Other expenses 9 683,457
683,755
5 Prot/(Loss) before tax (683,755)
Less: Tax expense
6 Prot/(Loss) for the year (683,755)
Basic and diluted earnings per share (14.68)
Joglekar & Gokhale
Regn. No. 104327W
(P. Y. Joglekar)
Mr. Ashok Sharma
Mr. Vikram Puri
Place : Mumbai
Date : 30
th
April, 2014
Place : Mumbai
Date : 30
th
April, 2014
337
CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2014
In Rupees
2013-14
Net Prot/(Loss) before tax (683,755)
Adjustments for:
Depreciation and Amortization 298
Finance costs
Loss on sale of xed assets (net)
Gain on sale/redemption of Mutual Fund
Interest income
Operating prot before working capital changes (683,457)
Adjustments for (Increase)/decrease in operating assets
Inventories (55,906,927)
Trade receivables
Short Term Loans and advances
Long term Loans and advances
Other Current Assets
Adjustments for Increase/(Decrease) in operating liabilities
Trade Payables 57,806,771
Other Current Liabilities
Other Long term Liabilities
Short Term Provisions
Long Term Provision
Cash generated from Operations 1,216,387
Net Income Tax (paid)
Net cash ow from/(used in) operation activities (A) 1,216,387
Capital expenditure on xed assets, including capital advances (1,636,544)
Proceeds from sale of xed assets
Bank balances not considered as Cash and cash equivalents
Interest received
Gain on sale/redemption of Mutual Fund
Net cash ow from/(used in) investing activities (B) (1,636,544)
Proceeds from issue of equity shares 500,000
Proceeds from issue of preference shares
Proceeds from long-term borrowings
Repayment of long-term borrowings
Net increase/(decrease) in working capital borrowings
Finance costs
Net cash ow from/(used in) nancing activities (C) 500,000
Net increase/(decrease) in Cash and cash equivalents (A+B+C) 79,843
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year 79,843
338
CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2014
In Rupees
2013-14
Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents as per Balance Sheet 79,843
Less: Bank balances not considered as Cash and cash equivalents
Net Cash and cash equivalents 79,843
79,843
Cash and cash equivalents at the end of the year *
* Comprises:
(a) Cash on hand
(i) In current accounts 79,843
(ii) In deposit accounts with original maturity of less than 3 months
(c) Current investments considered as part of Cash and cash equivalents
79,843
Joglekar & Gokhale
Regn. No. 104327W
(P. Y. Joglekar)
Mr. Ashok Sharma
Mr. Vikram Puri
Place : Mumbai
Date : 30
th
April, 2014
Place : Mumbai
Date : 30
th
April, 2014
339
1 Corporate information
The company is in the business of contract growing, corporate farming,
wholesale, retail and trading of Potato seeds, minitubers, table potato and
processing potato, tissue culture plants and services.
2 Signicant accounting policies
notied under the Companies (Accounting Standards) Rules, 2006
(as amended) and the relevant provisions of the Companies Act,
1956. The nancial statements have been prepared on accrual basis
under the historical cost convention.
Use of estimates
The preparation of the nancial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during
the year. The Management believes that the estimates used in
preparation of the nancial statements are prudent and reasonable.
Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognized in the
periods in which the results are known/materialize.
2.2 Inventories
Inventories are valued at lower of cost and net realizable value.
2.3 Cash ow statement
Cash ows are reported using the indirect method, whereby prot/
(loss) before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash ows from operating,
investing and nancing activities of the Company are segregated
based on the available information.
2.4 Depreciation and amortization
Depreciation is provided on straight line method from the date
the assets are put to use in accordance with Schedule XIV to the
depreciation and impairment losses, if any. Cost comprises of the
purchase price and any other attributable costs of bringing the
assets to its working condition for its intended use.
A provision is recognized when the Company has a present
obligation as a result of past events and it is probable that an
outow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions
(excluding retirement benets) are not discounted to their present
value and are determined based on the best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed
at each Balance Sheet date and adjusted to reect the current best
estimates. Contingent liabilities are disclosed in the Notes.
340
3 Share Capital
Particulars
As at
March 31,
2014
(In Rupees)
Authorized
8,000,000 equity shares of Rs. 10 each 80,000,000
80,000,000
50,000 Equity shares of Rs. 10/- each fully paid up 500,000
Total 500,000
500,000
3.a Details of shares held by each shareholder holding more than 5%
shares:
Particulars
As at March 31,
2014
No of
Shares
Value of
Shares
Holding Company
Mahindra and Mahindra Ltd
Equity 49,999 499,990
Others
Equity 1 10
Total 50,000 500,000
NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2014
4 Reserves & Surplus
Particulars
As at
March 31,
2014
(In Rupees)
Surplus in Statement of Prot and loss
Opening Balance
Add: Prot/(Loss) for the period (683,755)
Closing balance (683,755)
5 Trade payables
Particulars
As at
March 31,
2014
(In Rupees)
Trade payables 57,806,771
57,806,771
6 FIXED ASSETS
Particulars Gross Block Depreciation Net Block
Rate of
Depreciation
As at
1.4.2013
Additions Deductions As at
31.3.2014
As at
1.4.2013
For the
period
Deductions As at
31.3.2014
Net
Balance
as at
31.3.2014
Net
Balance
as at
31.03.2013
Tangible Assets
Plant and machinery 4.75% 1,237,992 1,237,992 162 162 1,237,830
Ofce equipment 4.75% 24,458 24,458 3 3 24,455
Furniture and xtures 6.33% 97,674 97,674 17 17 97,657
Computers 16.21% 276,420 276,420 116 116 276,304
TOTAL TANGIBLE
ASSETS 1,636,544 1,636,544 298 298 1,636,246
7 Inventories (at lower of cost and net realisable value)
Particulars
As at
March 31,
2014
(In Rupees)
Closing Inventory 55,906,927
55,906,927
Particulars
As at
March 31,
2014
(In Rupees)
Cash on hand
Balances with Banks
in Current account 79,843
in Deposits maturing in 3 months
in earmarked accounts (with restriction on usage)
79,843
9 Other expense
Particulars
2013-14
(In Rupees)
Bank Charges 157
Remuneration to auditors
Audit fees 15,000
ROC and Stamp expenses 668,300
683,457
341
10 Related party transactions
Details of related parties:
Holding Company Mahindra & Mahindra Limited
Details of related party transactions during the period ended 31 March,
2014 and balances outstanding as at 31 March, 2014:
Mahindra &
Mahindra
Limited
Purchase of inventory and xed assets 57,543,471
Reimbursement of expenses 248,300
Balances outstanding at the end of the year
Trade payables 57,791,771
For Mahindra Investments (International) Private Limited
Place : Mumbai
Date : 30
th
April, 2014
11 Earnings per share from continuing operations
Particulars
For the
period ended
31 March, 2014
(In Rupees)
Basic & Diluted
Net prot/(loss) for the year from continuing operations (683,755)
Less: Preference dividend and tax thereon
Net prot/(loss) for the year from continuing operations
attributable to the equity shareholders
(683,755)
Weighted average number of equity shares 46,585
Par value per share 10
Earnings per share from continuing operations - Basic &
Diluted (14.68)
12 Since this is the rst year of operation for the Company, information in
respect of previous year gures is not applicable.
MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED
342
DIRECTORS REPORT
To,
The members of
Mahindra & Mahindra Financial Services Limited
Your Directors are pleased to present their Twenty-fourth Report together with the audited accounts of your Company for the
Financial Year ended 31
st
March, 2014. The summarised nancial results of the Company are given below:
FINANCIAL RESULTS
(Rs. in crores)
March 2014 March 2013
Total Income 4,953.0 3,894.7
Less: Finance Costs 2,188.0 1,618.8
Expenditure 1,394.9 1,003.1
Depreciation/Amortisation 24.3 22.2
Total Expenses 3,607.2 2,644.1
Prot Before Tax and Exceptional Items 1,345.8 1,250.6
Add: Exceptional Items 28.6
Prot Before Tax 1,345.8 1,279.2
Less: Provision For Tax
Current Tax 535.4 433.5
Deferred Tax (76.8) (37.0)
Prot After Tax for the Year 887.2 882.7
Add: Amount brought forward from Previous Years 1,358.8 979.8
Amount available for Appropriation 2,246.0 1862.5
Appropriations:
General Reserve 88.7 88.3
Statutory Reserve 177.5 176.5
Proposed Dividend on Equity Shares 216.1 204.8
Income-tax on proposed Dividend 35.4 34.1
Surplus carried to Balance Sheet 1,728.3 1,358.8
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 3.80
per Equity Share of the face value of Rs. 2 each payable to those
Members whose names appear in the Register of Members as on
the Book Closure date. The dividend including dividend tax will
absorb a sum of Rs. 251.5 crores [as against Rs. 238.9 crores on
account of dividend of Rs. 3.60 per Equity Share (including a special
dividend of Re. 0.20 per Equity Share) paid for the previous year].
OPERATIONS
The overall disbursement registered a growth of 6.6% at
Rs. 25,400.0 crores as compared to Rs. 23,838.6 crores in the
previous year. Your Company during the year under review,
continued to provide a wide range of nancial products and
services to its customers through diversication of its product
portfolio within its vehicle nancing business as well as
through the introduction and growth of other nancial products
in rural and semi-urban markets. Despite moderate growth in
disbursement, your Company was able to retain its leadership
position in nancing Mahindra range of vehicles and tractors
in addition to extending its lending to vehicles of other Original
Equipment Manufacturers (OEMs).
Your Company currently has 893 ofces and has one of the
largest network of branches amongst Non-Banking Financial
Companies operating in rural and semi-urban areas. The new
branches opened by the Company in the villages are aimed
at improving collections and providing services closer to the
customers doorsteps. Your Companys nationwide network of
branches and locally recruited employees have facilitated in
developing and strengthening relationship with its customers.
During the year under review, your Company continued to
expand its reach in the Micro Small and Medium Enterprises
(MSME) segment. MSME Assets Under Management
crossed more than Rs. 500 crores during the period under
review, covering more than 440 customers. Your Company
has identied MSMEs engaged in Auto Ancillary and Food
and Agricultural Processing sectors as target customers for
growing this segment.
343
Total Income grew by 27.2 % to Rs. 4,953.0 crores for the year
ended 31
st
March, 2014 as compared to Rs. 3,894.7 crores for
the previous year. Prot Before Tax (PBT) was 5.2% higher at Rs.
1,345.8 crores as compared to Rs. 1,279.2 crores for the previous
year. The PBT for the year ended 31
st
March, 2013 included a
prot of Rs. 28.6 crores arising from exceptional items on account
of prot on stake sale of its subsidiary, Mahindra Insurance Brokers
Limited amounting to Rs. 64.3 crores and additional general
provision on standard assets amounting to Rs. 35.7 crores. Prot
After Tax (PAT) grew marginally to Rs. 887.2 crores as compared to
Rs. 882.7 crores in the previous year.
Your Company has cumulatively nanced over three million
customers since its inception. The number of contracts entered
into by the Company during the year was 5,61,862 as against
5,33,134 in the previous year.
During the year under review, the Assets Under Management
stood at Rs. 34,133 crores as at 31
st
March, 2014 as against
Rs. 27,913 crores as at 31
st
March, 2013.
DISTRIBUTION OF MUTUAL FUND PRODUCTS
During the year under review, the activity of distribution of
Mutual Fund Products (MFP) was carried out across 154
branches covering 22 States.
As on 31
st
March, 2014, the amount of Assets Under Management
outstanding through the Companys Advisory Services on MFP,
aggregate of institutional and retail segment, was Rs. 1,244.56
crores and the number of clients stood at 45,079.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Companys performance is discussed
in the Management Discussion and Analysis Report, which
forms part of this Annual Report.
CORPORATE GOVERNANCE
Your Company practices a culture that is built on core
values and ethical governance practices and is committed
to transparency in all its dealings. A Report on Corporate
Governance along with a Certicate from the Statutory Auditors
of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the
Listing Agreement are annexed to this Report.
ECONOMY
The global economy experienced a cautious recovery. The
growth in 2013 was 3.0% as against 3.1% in 2012. This
growth was led primarily by the developed world with the US
witnessing a stronger than expected growth. The Euro Zone
continued with its sluggish growth but more importantly, the
threat of a nancial crisis receded signicantly. However, the
decision of the US Fed to end the Quantitative Easing led
to signicant volatility in the global markets, especially in
the emerging markets. This caused the Rupee to depreciate
signicantly in July and August of 2013. The Rupee went down
to a low of Rs. 68 to a USD before recovering back to levels
of Rs. 61-62 in the October December period. Apart from
effective intervention by the Reserve Bank of India (RBI), the
improving current account decit was a key factor behind the
rebound of the Rupee.
Faced with volatile global environment and structural constraints,
Indias growth slowed down to 4.7% for the Financial Year
2013-14. Agriculture is expected to grow by 4.7% (source:
www.planningcommission.nic.in) on the back of both increased
production as well as higher support prices. The slowdown
in manufacturing continued and the sector experienced a
contraction of 0.7%. The services sector was the lone bright spot
and registered a growth of 7%. During the year, ination continued
to be a key concern for both the RBI and the government. On
account of the various steps taken, the WPI declined to 6%
(source: www.eaindustry.nic.in) in March 2014. Despite the
easing, the level of ination, especially in the consumer prices
is high.
Liquidity conditions were tight throughout the year and the
situation aggravated post July 2013 when to arrest the rupee
depreciation, the RBI restricted access to repo window for each
bank at 0.5 % of net demand and time liabilities (NDTL) for
that bank. It also increased the rate under Marginal Standing
Facility (MSF) by 200 basis points to 10.25 %.
To ease the situation, RBI conducted Open Market Operations
(OMOs) and rolled back the increase in MSF rate by 125
basis points in a calibrated manner as stability restored to
the foreign exchange market leading to an improvement in
the liquidity situation. It is expected that the scenario of tight
liquidity and high interest rates will continue in the Financial
Year 2014-15.
The overall slowdown in the economy led to a deceleration of
growth for the Company. The high consumer prices coupled
with an uncertain and volatile environment, both economic
and political, resulted in a negative consumer sentiment
towards big ticket purchases. Consequently, the auto industry
contracted for the second year in succession. Relatively, the
semi-urban and rural markets performed better in comparison
with the urban and metro markets. The Company seized
advantage of this situation and strengthened its market
presence by increasing its branch network and reaching out to
the customers directly. With the expected upswing in economic
activity in the next year on account of a stable government and
the governmental thrust on (rural) infrastructure and reforms, it
is expected that Indias growth will be stronger.
FINANCE
During the year under review, the RBI continued its stance
against ination by hiking the Repo Rate by 50 basis points
to contain the inationary pressure, which resulted in medium/
long term interest rates moving up approximately by 100
basis points. Liquidity conditions remained in a decit mode
throughout the year. In July 2013, RBI also announced various
steps to curb the rupee depreciation and restricted the access
to repo window for each bank. However, it continued to provide
344
liquidity through OMOs and term repo auction. All these
measures had an impact on the short term money market
rates going up by approximately 100 basis points. During
the period from July to October 2013, RBI rst increased the
MSF rate by 200 basis points and then gradually reduced it
by 125 basis points putting pressure on Short Term rates by
an average of 200 basis points during that period. However,
your Company was able to reduce the impact of increase
in the interest rates by ensuring that prudent Asset Liability
Management Guidelines are adhered to.
During the year under review, your Company continued with
its diverse methods of sourcing funds in addition to regular
borrowings like Secured and Unsecured Debentures, Term
Loans, Commercial Paper, etc., and maintained prudential Asset/
Liability match throughout the year. Your Company sourced long
term loans from banks at attractive rates. Your Company also
issued Subordinated Debt amounting to Rs. 200 crores and
successfully completed three at par securitization transactions
aggregating to Rs. 1,262.93 crores and one premium structure
direct assignment transaction amounting to Rs. 198.51 crores.
During the year, your Company actively participated in a
number of investor meets both in India and abroad organised
by reputed Global and Domestic Broking Houses. Your
Company also periodically conducted analysts meets and
conference calls to communicate details of performance,
important developments and exchange of information.
CAPITAL ADEQUACY
As on 31
st
March, 2014, the Capital to Risk Assets Ratio (CRAR)
of your Company was 18.0%, which is well above 15.0% CRAR
prescribed by the RBI.
STOCK OPTIONS
During the year under review, on the recommendation of the
erstwhile Remuneration/Compensation Committee of your
Company, the Trustees of the Mahindra & Mahindra Financial
Services Limited Employees Stock Option Trust have granted
1,17,625 Stock Options to Eligible Employees under the
Mahindra & Mahindra Financial Services Limited Employees
Stock Option Scheme2010. No new Options have been
granted under the Mahindra & Mahindra Financial Services
Limited Employees Stock Option Scheme2005.
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.
RBI GUIDELINES
The Company has complied with all the applicable regulations
of the Reserve Bank of India (RBI). As a prudent practice, your
Company makes accelerated provisioning for Non-Performing
Assets (NPAs) than that required by RBI for NBFCs.
Your Company continues to make a general provision at
0.40% on the standard assets outstanding as against 0.25%
mandated by the RBI.
CREDIT RATING
During the year under review, CRISIL Limited [CRISIL], has
reafrmed the rating to the Companys Long-term Debt
Instruments and Bank Facilities as CRISIL AA+/ Stable and
the Companys Fixed Deposit Programme as FAAA/Stable,
respectively. The AA+/Stable rating indicates a high degree
of safety with regard to timely payment of nancial obligations.
The rating on the Companys Short-term Debt and Bank Loans
has been reafrmed at CRISIL A1+ (earlier P1+) which is the
highest level of rating.
During the year under review, India Ratings & Research
Private Limited, which is part of Fitch Group, maintained the
Companys National Long-term Rating instrument and Lower
Tier II Subordinated Debt programme to IND AA+(ind)/
Stable. The AA(ind) national ratings denote a very strong
credit risk relative to other issuers or issues in the country.
The credit risk inherent in these nancial commitments differs
only slightly from the countrys highest rated issuers or issues.
Within a band of rating symbols from AA(ind) to B(ind), the
signs + (plus) or - (minus) may be appended to a rating to
denote relative status within the rating category.
Brickwork Ratings India Private Limited has, during the year,
re-afrmed the BWR AA+ rating with Positive outlook to the
Companys Long-term Subordinated Debt Issue. BWR AA+
stands for an instrument that is considered to offer high credit
quality/safety in terms of timely servicing of principal and
interest obligations.
FIXED DEPOSITS AND LOANS/ADVANCES
As on 31
st
March, 2014, your Company has mobilized funds
from Fixed Deposits to the tune of Rs. 3,602.2 crores, with an
investor base of over 2,10,662 investors.
Your Company has initiated various measures towards
improvement of service levels to the Fixed Deposit holders.
As a customer-centric process, the Company has initiated
the process of online repayment directly to the customers
account on maturity of the Fixed Deposit. In cases where
electronic transfer facility is not available, the repayment is
made through a post-dated cheque sent before the maturity
date to the depositors. In addition to this, the Company also
intimates the depositors of the repayment details by SMS.
Your Company has also launched across-the-counter facility at
its designated ofces to issue Fixed Deposit Receipts promptly
to its customers and the same has been made operational
during the year under review.
As at 31
st
March, 2014, 1,132 deposits amounting to Rs. 5.9
crores had matured for payment and remained unclaimed.
The unclaimed deposits have since reduced to 827 deposits
amounting to Rs. 4.2 crores.
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.
345
Your Company continues to protect and sustain the rural
livelihoods through a sustainable business model. The business
model aims at transforming rural lives and driving positive
change in the community. Your Company has been reporting
on triple Bottom Line Performance since the Financial Year
2008-09 through the Mahindra Group Sustainability Report.
During the Financial Year 2013-14, your Company released
its rst ever standalone Sustainability Report for the previous
Financial Year 2012-13. This Report portrays a balanced
approach towards economic activity, environmental responses
and social progress. This Report is external assured with A+
rating from Global Reporting Initiative (GRI). The Theme of the
Report is Forward Focus to Transform Life and the same has
been hosted on the Companys website.
During the year under review, your Company continued with
its focus on sustainability awareness for employees, vendors,
suppliers and customers and took various initiatives in this
direction. Your Company made proactive efforts to ght against
global warming through Project Mahindra Hariyali, by planting
more than 65,000 saplings across the country. Various initiatives
were also taken for conservation of water and energy and paper
consumption. These efforts of your Company have been duly
acknowledged and a Certicate of Commendation for Signicant
Achievement on the journey towards Sustainable Development
has been conferred on the Company by CII-ITC Centre of
Excellence for Sustainable Development during the year. In
addition to this, your Company continues to report on Carbon
Disclosure Project (CDP) from the Financial Year 2011-12. CDP
focuses on how companies are geared up, to deal with the
challenges of climate change in a carbon constrained economy.
Your Company has been listed on the Dow Jones Sustainability
Index (DJSI) Emerging Market Trends during the year. To be
incorporated in the DJSI, companies are assessed and selected
based on their long term Environmental Social Governance
(ESG) asset management plans. Your Company is the rst and
only Indian Company from amongst the Banks and Financial
Services Companies in India to have made it to this list.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Through its various Corporate Social Responsibility (CSR)
initiatives, the Mahindra Group is enabling entire communities
to RISE. With a vision of transforming the lives of youth from
socially weaker and economically disadvantaged sections
of society, the Mahindra Group is committed to building
possibilities to enable them to RISE above their limiting
circumstances.
CSR has always been a fundamental element deeply ingrained
in your Companys corporate philosophy and culture. CSR
has never been considered as a social obligation but instead
as a moral awareness encompassing holistic development of
the society, beyond the realm of regulatory requirements. This
year too, your Company has pledged 1 % of its Prot after Tax
towards CSR initiatives and continues to be incessantly engaged
in activities, which add value to the community around it.
The Company has already constituted a Corporate Social
Responsibility Committee on 15
th
March, 2013 and has
aligned its CSR Policy in accordance with the Companies Act,
2013 (the Act) read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014 to make it compliant with
the provisions of the Act and the Rules and to undertake the
admissible CSR activities notied by the Ministry of Corporate
Affairs in Schedule VII to the Act.
During the year under review, your Company organised a
nationwide Blood Donation Drive, Health check-up camps,
visits to Orphanages/Differently-abled Homes/Old-age homes,
to re-afrm its pledge to the society. The Lifeline Express
Train, in association with Impact India Foundation, catered to
the medical needs of 2,614 underprivileged people in Karad
(Maharashtra).
As a part of its commitment to Corporate Social Responsibility
initiatives, your Company, during the year continued to
involve itself in social welfare activities by contributing to
recognised charitable institutions, which specically benet
the economically weaker sections of the society as well as
extended its support to Nanhi Kali, the agship programme
of the K.C. Mahindra Education Trust, which supports the
education of the disadvantaged girl child.
During the year under review, your Company contributed
Rs. 7.23 Crores towards Corporate Social Responsibility to
various institutions for charitable purposes.
ACHIEVEMENTS
During the year under review, your Company was awarded
the Asias Most Promising Brand Award presented by World
Consulting and Research Corporation, the Golden Peacock
Award for Excellence in Corporate Governance - 2013, IT
Excellence Award 2013 for best IT governance for its Project
MF-EKA [Enterprise Key Access], Social Action Award by
Indian Development Foundation, Silver Award for Best
Corporate Website at the 53
rd
ABCI (Association of Business
Communications of India) Awards and the EDGE Awards 2013.
Your Company has won the ABP Award in the category of
Most Admired Service Provider in Financial Sector for best
performance and practices in the Banking and Financial
Services Industry and was also conferred with PRCI (Public
Relations Council of India) Awards 2014 in four categories
including the Gold Award for the Coffee Table Book category.
The Company has received an all time high score in the Great
Place to Work Survey conducted during December 2013 and
is listed amongst the top 100 companies.
DIRECTORS
Pursuant to the provisions of section 152 of the Companies
Act, 2013 (the Act), Dr. Pawan Kumar Goenka, Director of
the Company retires by rotation at the forthcoming Annual
General Meeting scheduled to be held on 24
th
July, 2014. Dr.
Goenka has expressed his desire not to seek re-appointment.
It is proposed not to ll up the vacancy thereby caused.
346
The Board placed on record its deep appreciation of the
invaluable counsel rendered by Dr. Goenka to the Company
and his contribution in guiding and supporting the management
during his tenure as Director on the Board of Directors of the
Company.
The Company had, pursuant to the provisions of Clause 49
of the Listing Agreements entered into with Stock Exchanges,
appointed Mr. Piyush Mankad, Mr. Manohar G. Bhide,
Mr. Dhananjay Mungale and Ms. Rama Bijapurkar as
Independent Directors of the Company.
The Companies Act, 2013 provides for the appointment of
Independent Directors. Pursuant to the provisions of section
149 of the Act, the Board of Directors of the Company should
have at least one-third of the total number of Directors as
Independent Directors. The tenure of the Independent Directors
will be for a period of ve years and the provisions relating to
retirement of Directors by rotation shall not be applicable to
Independent Directors.
Pursuant to Clause 49(I)(A) of the Listing Agreement, if the
Chairman of the Company is a Non-Executive Director, at least
one-third of the Board shall comprise of Independent Directors.
Mr. Piyush Mankad, Mr. Manohar G. Bhide, Mr. Dhananjay
Mungale and Ms. Rama Bijapurkar, are being appointed as
Independent Directors at the forthcoming Annual General
Meeting in accordance with the provisions of section 149 and
other applicable provisions of the Companies Act, 2013. Details
of the proposal of appointment of the Independent Directors are
given in the Explanatory Statement pursuant to section 102 (1)
of the Act annexed to the Notice of the Twenty-fourth Annual
General Meeting. The Company has received Notices from
Members signifying their intention to propose Mr. Piyush Mankad,
Mr. Manohar G. Bhide, Mr. Dhananjay Mungale and Ms. Rama
Bijapurkar as Independent Directors under section 149 of the Act.
The Company has received declarations from all the
Independent Directors of the Company conrming that they
fulll the criteria of independence as prescribed under sub-
section (6) of Section 149 of the Act and under Clause 49 of
the Listing Agreement with the Stock Exchanges.
i) in the preparation of the annual accounts, the applicable
ii) they have, in the selection of the accounting policies,
as at 31
st
iii) proper and sufcient care has been taken for the
iv) the annual accounts have been prepared on a going
concern basis.
SUBSIDIARY COMPANIES
Mahindra Insurance Brokers Limited
In March 2014, Mahindra Insurance Brokers Limited (MIBL)
crossed the 1 million mark in terms of cases serviced, with
a total of 10,68,577 cases for both Life and Non-Life Retail
businesses. The customized Life insurance cover Mahindra
Loan Suraksha (MLS) continued to receive an encouraging
response and grew by 16% from 4,40,553 lives covered
with a Sum Assured of Rs. 11,798.2 crores in the nancial
year 2012-13 to 5,09,864 lives covered with a Sum Assured
of Rs. 14,393.5 crores in the nancial year 2013-14, with a
substantial portion being covered in the rural markets.
MIBL had rolled-out a tailor made Health insurance solution
Mahindra Arogya Suraksha for the customers of the Company
across India which received an encouraging response.
MIBL achieved a growth of 33% in Net Premium generated
for the Corporate and Retail business lines, increasing from
Rs. 553.8 crores (Gross Premium Rs.619.8 crores) in the
nancial year 2012-13 to Rs. 738.4 crores (Gross Premium Rs.
825.2 crores) in the nancial year 2013-14.
The Income increased by 29% from Rs. 86.3 crores in the nancial
year 2012-13 to Rs. 111.2 crores in the nancial year 2013-14.
The Prot Before Tax increased by 25% from Rs. 51.2 crores to
Rs. 63.8 crores, and the Prot After Tax increased by 22% from
Rs. 34.5 crores to Rs. 42.0 crores during the same period.
Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited (MRHFL) has during
the year ended 31
st
March, 2014, disbursed loans aggregating
Rs. 630.56 crores (previous year Rs. 432.85 crores) achieving
a growth of 45% over the previous year. The prot after tax for
the year ended 31
st
March, 2014 was Rs. 27.08 crores (previous
year Rs. 20.32 crores). The outstanding loan portfolio as at
31
st
March, 2014 stood at Rs. 1,354.97 crores.
MRHFL has been expanding its geographical presence,
to provide affordable services for rural households. During
the year under review, operations were strengthened in the
states of Maharashtra, Gujarat, Rajasthan, Tamilnadu, Andhra
Pradesh, Kerala, Karnataka, Madhya Pradesh and Bihar.
Mahindra Business & Consulting Services Private Limited
Mahindra Business & Consulting Services Private Limited
(MBCSPL) provides stafng services mainly for your Company
and its subsdiaries viz. MIBL, MRHFL and the ultimate parent
company, Mahindra & Mahindra Limited. As at 31
st
March, 2014,
MBCSPL had on rolls 4,532 employees who were deputed to
these companies to provide services under ongoing contracts.
MBCSPL earns its income in the form of fees towards stafng
services. MBCSPL registered a Prot after Tax of Rs. 281.56
Lacs for the year ended 31
st
March, 2014 as compared to
Rs. 173.80 Lacs in the previous year.
347
Mahindra Asset Management Company Private Limited
Mahindra Asset Management Company Private Limited
(MAMCPL) was incorporated as a subsidiary of the Company
on 20
th
June, 2013. MAMCPL will be engaged as an investment
manager to the proposed Mahindra Mutual Fund, upon receipt
of regulatory approval from SEBI.
Mahindra Trustee Company Private Limited
During the year under review, Mahindra Trustee Company
Private Limited (MTCPL) was incorporated as a subsidiary and
the Company has agreed to subscribe to 49,998 Equity Shares
of Rs. 10/- each of MTCPL constituting 99.99 % of the Equity
Share capital of MTCPL. The investment is yet to be made by
the Company. The rst nancial year of MTCPL would be from
10
th
July, 2013 to 30
th
June, 2014.
MTCPL will be engaged as a Trustee to the proposed Mahindra
Mutual Fund, upon receipt of approval from SEBI.
The Statement pursuant to section 212 of the Companies
Act, 1956, containing details of the Companys subsidiaries is
attached. In accordance with the General Circular No. 2/2011
dated 8th February, 2011 issued by the Ministry of Corporate
Affairs, Government of India, the Balance Sheet, Statement of
Prot and Loss and other documents of the subsidiary companies
are not being attached to the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the
subsidiary companies and the related detailed information,
upon receipt of request from any Member of the Company
interested in obtaining the same. However, as directed by
the Central Government, the nancial data of the subsidiaries
have been separately furnished, forming part of the Annual
Report. Further, the Annual Accounts of the subsidiaries
would also be available for inspection at the Head Ofce of
the Company and at the Ofce of the respective subsidiary
companies, during working hours up to the date of the Annual
General Meeting. The Company shall also put the details of
accounts of individual subsidiary companies on its website
www.mahindranance.com.
JOINT VENTURE
Mahindra Finance USA LLC.
Mahindra Finance USA LLC is a joint venture company
incorporated in Delaware, U.S.A., for the purpose of providing
wholesale inventory nancing to US based dealers, nancing
dealer purchases of Mahindra products and providing retail
nancing to end-user customers to nance their lease or
purchase of Mahindra products or used products from dealers,
in U.S.A. The Company has a 49 % shareholding along with
De Lage Landen Financial Services Inc., a wholly-owned
subsidiary of the Rabobank Group, which holds the balance
51 % shareholding in the joint venture company.
The joint venture companys disbursement registered a
growth of 20.58 % to USD 4,359.69 Lacs for the year ended
31
st
March, 2014 as compared to USD 3,615.71 Lacs for
the previous year. Income grew by 54.82 % to USD 161.66
Lacs for the year ended 31
st
March, 2014 as compared to
USD 104.42 Lacs for the previous year. Prot Before Tax was
92.93% higher at USD 50.24 Lacs as compared to USD 26.04
Lacs for the previous year. Prot After Tax grew at a healthy
rate of 101.78 % to USD 32.81 Lacs as compared to USD
16.26 Lacs in the previous year.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and
its four subsidiaries viz. MIBL, MRHFL, MBCSPL and MAMCPL
prepared in accordance with Accounting Standard AS 21
prescribed by The Institute of Chartered Accountants of India,
form part of this Annual Report. The Consolidated Financial
Statements presented by the Company include the nancial
results of its subsidiary companies and its joint venture viz.
Mahindra Finance USA LLC.
AUDITORS
Messrs. B. K. Khare & Co., Chartered Accountants, retire as
shareholders would be required to elect Auditors from the
conclusion of this Annual General Meeting upto the conclusion
of the next Annual General Meeting and x their remuneration.
Companies Act, 1956 and sections 139(1) read with 141 of
the Companies Act, 2013, the Company has obtained a
written certicate from Messrs. B. K. Khare & Co., Chartered
Accountants, proposed to be re-appointed to the effect that
their re-appointment, if made, would be in conformity with the
criteria specied in the said sections.
Annexure II to this Report.
THE RULES MADE THEREUNDER
The Company had twelve employees who were in receipt
of remuneration of not less than Rs. 60,00,000 during the
year ended 31
st
March, 2014 or not less than Rs. 5,00,000
per month during any part of the said year. However, as per
the provisions of section 219(1)(b)(iv) of the Companies Act,
1956, the Directors Report and Accounts are being sent to
all the Shareholders of the Company excluding the Statement
of particulars of employees. Any Shareholder interested in
obtaining a copy of the Statement may write to the Company
Secretary of the Company.
Bharat Doshi
Chairman
Mumbai, 23
rd
April, 2014
348
ANNEXURE I TO THE DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31
ST
MARCH, 2014
Stock Purchase Scheme) Guidelines, 1999.
Employees Stock Option
Scheme 2005
(ESOS2005)
Employees Stock Option
Scheme 2010 (ESOS-2010)
(a) Options granted 164,74,830 15,87,580
(b) The pricing formula Grant-3
Granted on
25
th
March,
2008
Grant-4
Granted on
18
th
September,
2008
Grant-1
Granted on
7
th
February,
2011
Grant-2
Granted on
25
th
January,
2012
Grant-3
Granted on
22
nd
July,
2013
Grant-4
Granted
on 21
st

October,
2013
At a discount
of 5 % on
the average
price (^)
preceding
the specied
date (#)
18
th
January,
2008
At a discount
of 5 % on the
average price
(^) preceding
the specied
date (#)
18
th
September,
2008
At Face
Value of Rs.
2/- per Equity
Share
At Face
Value of
Rs. 2/- per
Equity Share
At Face
Value of
Rs. 2/- per
Equity Share
At Face
Value of
Rs. 2/- per
Equity
Share
Employees Stock Option Scheme 2005
(^) Average Price: Average of the daily high and low of the prices for the Companys
Equity Shares quoted on National Stock Exchange of India Limited during 15 days
preceding the specied date.
(#) The Specied Date: Date on which the erstwhile Remuneration/Compensation
Committee decided to recommend to the Mahindra & Mahindra Financial Services Limited
Employees Stock Option Trust (Trust), the grant of Options.
Price: Rs. 2/-
The Specied Date: 22
nd
October, 2010
(c) Options stand vested on
31
st
March, 2014
i) Employees Stock Option Scheme 2005: 1,26,52,815
ii) Employees Stock Option Scheme 2010: 8,21,158
(d) Options exercised i) Employees Stock Option Scheme 2005: 1,23,73,665
(e) The total number of shares
arising as a result of exercise
of options
i) Employees Stock Option Scheme 2005: 1,23,73,665 Equity Shares of Rs. 2/- each.
These were transferred from the Trust to the eligible employees.
ii) Employees Stock Option Scheme 2010: 6,64,269 Equity Shares of Rs. 2/- each. These
were transferred from the Trust to the eligible employees.
(f) Options lapsed i) Employees Stock Option Scheme 2005: 38,22,015
ii) Employees Stock Option Scheme 2010: 39,212
(g) Variation of terms of options i) Employees Stock Option Scheme 2005:
At the Seventeenth Annual General Meeting of the Company held on 23
rd
July,
2007, the Mahindra & Mahindra Financial Services Limited Employees Stock Option
Scheme was amended to provide for recovery from the eligible employees, the fringe
benet tax in respect of options which are granted to or vested in or exercised by, the
eligible employees on or after the 1
st
day of April, 2007.
ii) Employees Stock Option Scheme 2010: N.A.
349
(h) Money realized by exercise of
options
i) Employees Stock Option Scheme 2005: Rs. 22,29,35,063/-
ii) Employees Stock Option Scheme 2010: Rs. 13,28,538/-
These monies have been received by the Trust.
(i) Total number of options in force i) Employees Stock Option Scheme 2005: 2,79,150
(j) Employee-wise details of options
granted under Employees
Stock Option Scheme 2005
and Employees Stock Option
Scheme 2010 to:
(i) Senior Managerial
Personnel.
As per statement (1) attached
(ii) Any other employee who
receives a grant in any one
year of option amounting
to 5% or more of options
granted during that year
As per statement (2) attached
(iii) Identied employees 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
Nil
(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. 15.60*
(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 recognized
if it had used the fair value of
the options, shall be disclosed.
The impact of this difference
on prots 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 granted under Employees Stock Option Scheme 2005 and Employees
Stock Option Scheme 2010. Had the fair value method been used, in respect of stock
options granted, the employee compensation cost would have been lower by Rs. 30.89
lacs, prot after tax higher by Rs. 30.89 lacs and the basic and diluted earnings per share
would have been higher by Re. 0.01 and Rs. Nil 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
Employees Stock Option Scheme 2010:
Grant date Exercise price (Rs.) Fair value (Rs.)
22
nd
July, 2013 2.00 198.64
21
st
October, 2013 2.00 259.46
350
(n) A description of the method and
signicant assumptions used
during the year to estimate the
fair values of options, including
the following weighted average
information:
Employees Stock Option Scheme 2010:
The Fair value of stock options granted on 22
nd
July, 2013 and 21
st
October, 2013
have been calculated using Black-Scholes Options pricing formula and the signicant
assumptions made in this regard are as follows:
Sr.
No.
Particulars
Grant date : 22
nd
July, 2013 Grant date : 21
st
October, 2013
(i) risk-free interest rate, 7.61% 8.60%
(ii) expected life, 3.5 years 3.25 years
(iii) expected volatility, 35.53% 39.27%
(iv) expected dividends, and 1.70% 1.32%
(v) The price of the underlying
share in market at the time
of option grant
Rs. 212.35 Rs. 272.40
* Refer Note No. 29(h)under Notes to the Financial Statements in the Annual Accounts of the Annual Report.
(i) Statement (1) Attached to Annexure I to the Directors Report for the Financial Year ended 31
st
March, 2014
Names of Directors and Senior Managerial Persons to whom Stock Options
have been granted
Employees Stock
Option Scheme
2005
Employees Stock
Option Scheme
2010
Options granted in
September, 2008
Options granted in
February, 2011
Mr. Bharat N. Doshi 70,255 Nil
Mr. Uday Y. Phadke 70,255 1,67,390
Dr. Pawan Goenka 17,565 Nil
Ms. Rama Bijapurkar 50,000 Nil
Mr. Ramesh Iyer 1,21,830 2,00,140
Mr. V. Ravi 69,160 77,815
Mr. Rajesh Vasudevan 23,370 21,860
Mr. Dinesh Prajapati 27,365 26,985
Mr. Suresh Shanmugam 20,550 19,360
Mr. H. S. Kamath 17,500 17,115
Mr. Rajnish Agarwal 9,005 16,930
Mr. R. Balaji 27,040 25,830
(ii) Statement (2) attached to Annexure I to the Directors Report for the Financial Year ended 31
st
March, 2014
Names of other employees who have received grants in any one year of option amounting to 5% or
more of options granted during that year
No. of stock
options granted
Nil Nil
a) Options granted during the year ended 31
st
March, 2011
Mr. Anuj Mehra 67,540
b) Options granted during the year ended 31
st
March, 2014
Mr. Vinay Deshpande 35,070
Mr. Muffaddal Dohadwala 8,510
Mr. Charandeep Singh Chawla 6,145
Mr. Nicholes Antony L. 6,205
351
ANNEXURE II TO THE DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31
ST
MARCH, 2014
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 Financial Year ended 31
st
March, 2014.
a) Energy Conservation measures taken: The operations of your Company are not energy-intensive. However, adequate
measures have been initiated to reduce energy consumption.
b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Rs. 0.5
crores.
c) Impact of the measures taken/to be taken at (a) & (b) above for reduction of energy consumption and consequent
impact on the cost of production of goods: These measures are expected to reduce the energy consumption.
d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the
Rules in respect of Industries specied in the Schedule: Not Applicable.
1. Areas in which R & D is carried out None
2. Benets derived as a result of the above efforts Not Applicable
3. Future plan of action None
4. Expenditure on R & D Nil
5. Technology absorption, adaptation and innovation None
6. Imported Technology for the last 5 years None
The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange
earnings during the year.
Bharat Doshi
Chairman
Mumbai, 23
rd
April, 2014
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:
(Rs. in Crores)
Name of the Company Balance as on 31
st
March, 2014 Maximum Outstanding during the year
Mahindra Rural Housing Finance Limited 5.53 95.76
Mahindra Business & Consulting Services
Private Limited
8.84 20.45
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
352
REPORT ON CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PHILOSOPHY
The Company believes that sound Corporate Governance is
pivotal to enhance and retain investor trust and your Company
always seeks to ensure that its performance goals are met
with integrity. Your Company continues to adopt the best
practices in the area of Corporate Governance and promotes
and practices a culture that is built on core values, beliefs
and ethics. Your Company has an active, experienced and
a well-informed Board. The Board along with its Committees
undertakes its duciary duties towards all its stakeholders with
the Corporate Governance mechanism in place.
Your Company is committed to transparency in all its dealings,
conducts business with integrity and fairness and places high
emphasis on business ethics. Your Company has established
robust business practices and procedures to ensure that it
remains fully compliant with all mandated regulations and
achieves business excellence to enhance stakeholder value,
retain trust and goodwill of its investors, business partners,
employees and meet societal expectations as well. During the
year your Company has received the Golden Peacock Award
for Excellence in Corporate Governance 2013. This has
been possible through sustained efforts and commitment to
the highest standards of corporate conduct.
The stipulations mandated by Clause 49 of the Listing
Agreement with the Stock Exchanges, have been fully
complied with by your Company. A Report on 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:
BOARD OF DIRECTORS
The composition of the Board of your Company is in conformity
with Clause 49 of the Listing Agreement, as amended from time
to time. The Company has a Non-Executive Chairman and the
number of Independent Directors is one-half of the total number
of Directors. The number of Non-Executive Directors is more than
50% of the total number of Directors. The management of the
Company is entrusted with the Steering Committee comprising
of Senior Executives from different functions headed by the
Managing Director who operates under the supervision and
control of the Board. The Board reviews and approves strategy
and oversees the actions and results of management to ensure
that the long term objectives of enhancing stakeholders value
are met. Mr. Bharat Doshi, Non-Executive Non-Independent
Chairman, transited from his position as Executive Director &
Group Chief Financial Ofcer of the holding company, Mahindra
& Mahindra Limited (M&M) to Non-Executive Director in
November 2013. Dr. Pawan Kumar Goenka,
Non-Executive Non-Independent Director of your Company is
in the whole-time employment of M&M and draws remuneration
from it. Mr. Uday Y. Phadke, Non-Executive Non-Independent
Director is the Principal Advisor (Finance) at M&M and receives
remuneration from M&M.
Apart from reimbursement of expenses incurred in the
discharge of their duties and the remuneration that the Non-
Executive Directors would be entitled to under the Companies
Act, 1956, none of the 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 judgments would
affect their independence. The Directors of the Company are
not inter-se related to each other.
The Senior Management have made disclosures to the
Board conrming that there are no material, nancial and/
or commercial transactions between them and the Company
which could have potential conict of interest with the Company
at large.
NUMBER OF BOARD MEETINGS
The Board of Directors met seven times during the year
under review, on 23
rd
April, 2013, 6
th
June, 2013, 24
th
June,
2013, 25
th
July, 2013, 21
st
October, 2013, 22
nd
January, 2014
and 19
th
March, 2014. The maximum gap between any two
meetings was not more than four months. These Meetings
were well attended.
DIRECTORS ATTENDANCE RECORD AND DIRECTORSHIP
HELD
As mandated by Clause 49, none of the Directors is a member
of more than ten Board level Committees and no such Director
is a Chairman/Chairperson of more than ve Committees,
across all the companies in which he/she is a Director. Table
1 gives the details.
COMPOSITION OF THE BOARD
As on 31
st
March, 2014, the Companys Board comprised
eight members. The Chairman of the Board and two other
members are Non-Executive Non-Independent Directors.
The Managing Director is an executive of the Company while
the remaining four are Independent Directors. The names
and categories of Directors, their attendance at the Board
Meetings held during the year and at the last Annual General
Meeting (AGM) held on 25
th
July, 2013, as also the number
of Directorships and Committee positions held by them in
companies are as follows:
353
Table 1: Composition of the Board of Directors
Name of the Directors Category Attendance Particulars No. of other Directorships and Committee
Memberships/Chairmanships #
Number of Board
Meetings
Last
AGM
Directorships Committee
Memberships
Committee
Chairmanships
Held Attended
Mr. Bharat N. Doshi
(Chairman)
Non-Executive
Non-Independent
7 6* Yes 7 3 1
Mr. Uday Y. Phadke Non-Executive
Non-Independent
7 7 Yes 8 8 0
Mr. Ramesh Iyer
(Managing Director)
Executive 7 7 Yes 8 5 3
Dr. Pawan Kumar Goenka Non-Executive
Non-Independent
7 2 Yes 12 5 0
Mr. Dhananjay Mungale Independent 7 7 Yes 13 10 4
Mr. Manohar G. Bhide Independent 7 7 Yes 4 4 3
Mr. Piyush Mankad Independent 7 5 Yes 8 10 2
Ms. Rama Bijapurkar Independent 7 7 Yes 2 1 0
Notes:
# Excludes Directorships in private limited companies, foreign companies, companies registered under section 8 of the Companies Act, 2013
[section 25 of the Companies Act, 1956], unlimited companies and Alternate Directorships but includes Directorship in Mahindra & Mahindra
Financial Services Limited (MMFSL). Committees considered are Audit Committee and Share Transfer and Shareholders/Investors Grievance
Committee including in MMFSL.
* In addition to the six Board Meetings, Mr. Bharat Doshi also attended one Board Meeting via Conference Call.
INFORMATION SUPPLIED TO THE BOARD
The Company sends a detailed agenda folder to each Director
sufciently in time before Board and Committee meetings. To
enable the Board to discharge its responsibilities effectively,
the Managing Director apprises the Board at every meeting
on the overall performance of the Company, followed by
presentations by the Chief Financial Ofcer. A detailed
functional report is also placed at Board Meetings. The Board
provides the overall strategic direction and periodically reviews
strategy and business plans, annual operating and capital
expenditure budgets and oversees the actions and results of
the management to ensure that the long term objectives of
enhancing stakeholders value are met. The Board also, inter
alia, reviews and considers investment and exposure limits,
compliance report(s) of all laws applicable to the Company,
as well as steps taken to rectify instances of non-compliances
if any, review of major legal issues, approval and adoption of
quarterly/ half-yearly/ annual results, 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 Ofcers just below the Board level including
the Company Secretary and Compliance Ofcer.
In addition to the above, pursuant to Clause 49, the minutes
of the Board Meetings of your Companys unlisted subsidiary
companies and a statement of all signicant transactions
and arrangements entered into by the unlisted subsidiary
companies are also placed before the Board.
REMUNERATION POLICY
The success of an organisation in achieving good performance
and good governing practice depends on its ability to attract
and retain quality individuals with requisite knowledge
and excellence as Executive and Non-Executive Directors.
The Board at its meeting held on 19
th
March, 2014 has
dissolved the Remuneration/Compensation Committee and
the Nomination Committee respectively and constituted the
Nomination and Remuneration Committee in accordance
with the provisions of section 178 of the Companies Act, 2013.
The role of the Nomination and Remuneration Committee
has been extended inter alia, to include formulation of the
criteria for determining the qualications, positive attributes
and independence of a Director and recommending to
the Board a Policy, relating to the remuneration for the
Directors, Key Managerial Personnel and other employees of
the Company.
While deciding on the remuneration to Directors, the Board
and the Nomination and Remuneration Committee consider
the performance of your Company, the current trends in
the industry, the qualications of the appointee, his experience,
level of responsibility, past performance and other relevant
factors. The Board and the Nomination and Remuneration
Committee regularly keep track of the current and emerging
market trends in terms of compensation levels and practices
within the relevant industries. This information is used to
review the Companys remuneration policies from time
to time.
354
REMUNERATION PAID TO DIRECTORS
Detailed information of Directors remuneration for the year
2013-14 is set forth in Table 2.
The eligible Non-Executive Directors are paid commission
up to a maximum of 1 % of the net prots of the Company
as specically computed for this purpose. A commission of
Rs. 71.12 Lacs has been provided as payable to the eligible
Non-Executive Directors in the accounts for the year ended
31
st
March, 2014.
In addition, the Independent Directors and eligible Non-
Executive Director(s) were paid a sitting fee of Rs. 20,000 each
for every Meeting of the Board or Audit Committee attended,
Rs. 10,000 each for attending a Meeting of the Nomination
and Remuneration Committee (erstwhile Remuneration/
Compensation Committee) and the Corporate Social
Responsibility Committee respectively, and Rs. 5,000 each
for attending the meetings of the Stakeholders Relationship
Committee (earlier known as the Share Transfer and
Shareholders/Investors Grievance Committee).
Remuneration to the Managing Director is xed by the
Nomination and Remuneration Committee (the erstwhile
Remuneration/Compensation Committee) which is
subsequently approved by the Board of Directors and
Shareholders at a General Meeting.
Table 2: Details of Remuneration Paid to Directors for the Financial Year 2013 14 (Rs. in lacs)
Name of the Director Sitting Fees
(excluding
Service Tax)
Salary and
Perquisites
Superannuation
and Provident
Fund #
Commission Total Employees Stock
Option Scheme
2005 (ESOS-2005)
Employees Stock
Option Scheme
2010 (ESOS-2010)
Number of Stock
Options granted in
September 2008
Grant 4 $
Number of Stock
Options granted
in February 2011
Grant 1 $$
Mr. Ramesh Iyer * N.A. 197.06 13.20 56.10 266.36 1,21,830 2,00,140
Mr. Bharat N. Doshi 0.50 N.A. N.A. Nil 0.50 70,255 Nil
Mr. Uday Y. Phadke N.A. N.A. N.A. Nil Nil 70,255 1,67,390
Dr. Pawan Goenka N.A. N.A. N.A. Nil Nil 17,565 Nil
Mr. Dhananjay Mungale 2.90 N.A. N.A. 11.00 13.90 Nil Nil
Mr. M. G. Bhide 3.05 N.A. N.A. 11.00 14.05 Nil Nil
Mr. Piyush Mankad 2.70 N.A. N.A. 11.00 13.70 Nil Nil
Ms. Rama Bijapurkar 2.20 N.A. N.A. 11.00 13.20 50,000 Nil
# Aggregate of the Companys contributions to Superannuation Fund and Provident Fund.
$ ESOS - 2005
Grant-4: The Stock Options have been granted on 18
th
September, 2008. All the options have been vested.
$$ ESOS - 2010
Grant- 1: The Stock Options have been granted on 7
th
February, 2011. Of this, 20% of the options have vested on 7
th
February,
2012, 20% of the options have vested on 7
th
February, 2013, 20% of the options have vested on 7
th
February, 2014 and the
balance options would vest in two equal tranches of 20% each on expiry of 48 months and 60 months, respectively, from the
date of grant.
* The notice period for Managing Director is three months. Commission and Stock Options are the only components of
remuneration that are performance linked. All other components are xed. Details regarding the Stock Options granted to the
Managing Director are given in the Annexure I to the Directors Report. The term of appointment is for a period of 5 years with
effect from 30
th
April, 2011.
During 2013 - 14, the Company did not advance loans to any of its Directors.
SHARES HELD BY NON-EXECUTIVE DIRECTORS
Table 3 gives details of the shares held by the Non-Executive
Directors as on 31
st
March, 2014.
Table 3: Details of the shares held by the Non-Executive
Directors
Name of the Director Number of Shares held
Mr. Bharat N. Doshi 6,42,720
Mr. Uday Y. Phadke 74,025
Dr. Pawan Kumar Goenka 37,815
Name of the Director Number of Shares held
Mr. Dhananjay Mungale 50,000
Mr. M. G. Bhide 50,000
Mr. Piyush Mankad 50,000
Ms. Rama Bijapurkar 50,000
CODES OF CONDUCT
The Board has laid down Code of Conduct for Board Members
and for Senior Management and Employees of the Company
(Codes). These Codes have been posted on the Companys
355
website www.mahindranance.com. All the Board Members
and Senior Management Personnel have afrmed compliance
with these Codes. A declaration signed by the Managing
Director to this effect is enclosed at the end of this Report.
The Code of Conduct of the Board Members has been
amended to align it in accordance with the provisions of
The Board has also laid down a Code of Conduct for
Independent Directors pursuant to section 149(8) and Schedule
IV to the Companies Act, 2013, which is a guide to professional
conduct for Independent Directors of the Company.
CEO/CFO CERTIFICATION
As required under Clause 49V of the Listing Agreement
with the Stock Exchanges, the Managing Director and the
Chief Financial Ofcer of the Company have certied to the
Board regarding the Financial Statements for the year ended
31
st
March, 2014.
RISK MANAGEMENT
The Company has a well-dened 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. The risk management measures and controls
exercised to mitigate risks are presented to the Members of
the Risk Management Committee and the Board.
COMMITTEES OF THE BOARD
Your Company has six Board level Committees - Audit
Committee, Nomination and Remuneration Committee
(the erstwhile Remuneration/Compensation Committee),
Stakeholders Relationship Committee (formerly known as
the Share Transfer and Shareholders/Investors Grievance
Committee), Asset Liability Committee, Risk Management
Committee and Corporate Social Responsibility Committee.
All decisions pertaining to the constitution of Committees,
appointment of members and xing of terms of service for
Committee members are taken by the Board of Directors.
Details on the role and composition of these Committees,
including the number of meetings held during the nancial
year and the related attendance, are provided below:
a) Audit Committee
As on 31
st
March, 2014, the Audit Committee comprised
ve Non-Executive Directors of which four are Independent
Directors. The Committee comprises Mr. Dhananjay
Mungale (Chairman), Mr. M. G. Bhide, Ms. Rama Bijapurkar,
Mr. Piyush Mankad, all being Independent Directors and
Mr. Uday Y. Phadke, Non-Executive Non-Independent
Director. All the members of the Audit Committee possess
strong accounting and nancial management knowledge.
The Committees composition meets with the requirements
of section 177 of the Companies Act, 2013 and Clause 49
of the Listing Agreement.
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 ndings, suggestions
and other related matters. It is authorised to, inter alia,
review and monitor the Auditors independence and
performance, effectiveness of the audit process, oversight
of the Companys nancial reporting process and the
disclosure of its nancial information, reviewing with the
management the quarterly and annual nancial statements
before submission to the Board for approval, examination
of the nancial statements and the Auditors Report
thereon, approval of transactions of the Company with
related parties wherever necessary, including subsequent
modications thereof, scrutiny of inter-corporate loans
and investments, valuation of undertakings or assets
of the Company wherever it is necessary, evaluation of
internal nancial controls and risk management systems,
monitoring the end use of funds raised through public
offers, rights issue, preferential issue, etc.
The Committee is empowered to review, inter alia, the
remuneration payable to the Statutory Auditors and Internal
Auditors and to recommend a change in the Auditors, if
felt necessary. It is also empowered to review Financial
Statements and investments of the unlisted subsidiary
companies, Management Discussion and Analysis of
nancial condition and results of operations, statement
of signicant related party transactions. Generally all
items listed in Clause 49II(D) of the Listing Agreement are
covered in the terms of reference. The Audit Committee
has been granted powers as prescribed under Clause
49II(C) and reviews all the information as prescribed in
Clause 49II(E).
The Managing Director, the Chief Financial Ofcer, Chief
Internal Auditor of Mahindra & Mahindra Limited and
Statutory Auditors are regularly invited to attend the Audit
Committee Meetings. The Company Secretary is the
Secretary to the Committee.
Mr. Dhananjay Mungale, Chairman of the Audit Committee
was present at the Annual General Meeting of the
Company held on 25
th
July, 2013.
The Audit Committee met six times during the year
on 23
rd
April, 2013, 25
th
July, 2013, 6
th
August, 2013,
21
st
October, 2013, 22
nd
January, 2014 and 19
th
February,
2014. The time gap between any two meetings was less
than four months. The details of attendance at the Audit
Committee Meetings are given in Table 4.
356
Table 4: Attendance record of Audit Committee
Meetings
Name of Members No. of Meetings
attended
Mr. Dhananjay Mungale (Chairman) 6
Mr. M.G. Bhide 6
Ms. Rama Bijapurkar 4
Mr. Uday Y. Phadke 6
Mr. Piyush Mankad 6
b) Nomination and Remuneration Committee (the
erstwhile Remuneration/Compensation Committee)
The Board of Directors at its Meeting held on 19
th
March,
2014 has constituted the Nomination and Remuneration
Committee in accordance with the provisions of section
178(1) of the Companies Act, 2013 and consequently the
Remuneration/ Compensation Committee stands dissolved.
is to establish criteria for selection to the Board with
respect to the competencies, qualications, experience,
track record and integrity, and recommend candidates
for Board Membership, develop and recommend policies
with respect to composition of the Board commensurate
with the size, nature of the business and operations of the
Company in line with the appropriate legislations, establish
Director retirement policies and appropriate succession
plans, devise policy on Board Diversity, determine overall
compensation policies of the Company, and administer
the Mahindra & Mahindra Financial Services Limited
Employees Stock Option Scheme - 2005, the Mahindra
& Mahindra Financial Services Limited Employees Stock
Option Scheme 2010 and such further ESOP Schemes
as may be formulated from time to time and take appropriate
decisions in terms of the concerned Schemes.
The scope of the Committee further includes review of
market practices and to decide on remuneration packages
applicable to the Managing Director, Executive Director(s),
Functional Heads, etc., set out performance parameters
for Managing Director, Executive Director(s), Functional
Heads, etc., and review the same. The Committee is
authorised to identify persons who are qualied to
be Directors and who may be appointed in Senior
Management in accordance with the criteria laid down,
recommend to the Board their appointment and removal
and carry out evaluation of every Directors performance.
In addition to the above, the Committee is also authorised
to formulate the criteria for determining the qualications,
positive attributes and independence of a Director and
recommend to the Board formulation of a Policy relating
to the remuneration for the Directors, Key Managerial
Personnel and other employees.
The Nomination and Remuneration Committee comprises
of majority of Independent Directors, including its Chairman.
As of 31
st
March, 2014, the Committee comprised ve
members viz. Mr. Piyush Mankad (Chairman), Mr. Dhananjay
Mungale and Mr. M. G. Bhide, all Independent Directors
and Mr. Bharat N. Doshi and Mr. Uday Y. Phadke, Non-
Executive Non-Independent Directors.
The Committee met 4 times during the year under review
on 23
rd
April, 2013, 25
th
July, 2013, 6
th
August, 2013 and
21
st
October, 2013. The attendance details at Meetings of
the Committee are given in Table 5.
Table 5: Attendance record of Nomination and
Remuneration Committee Meetings (erstwhile
Remuneration/Compensation Committee)
attended
Mr. Piyush Mankad (Chairman) 4
Mr. Bharat N. Doshi 3
Mr. Dhananjay Mungale 4
Mr. M.G. Bhide 4
c) Stakeholders Relationship Committee (Formerly known
as the Share Transfer and Shareholders/ Investors
Grievance Committee)
The Stakeholders Relationship Committee (formerly
known as the Share Transfer and Shareholders/ Investors
Grievance Committee) presently comprises of three
members, viz. Mr. M. G. Bhide (Chairman), Independent
Director, Mr. Uday Y. Phadke, Non-Executive Non-
Independent Director and Mr. Ramesh Iyer, Managing
Director. Ms. Arnavaz M. Pardiwala, Company Secretary
is the Compliance Ofcer of the Company.
The Committee meets, as and when required, to inter
alia, deal with matters relating to transfers/ transmissions
of shares and monitor redressal of grievances of security
holders relating to transfers, non-receipt of balance sheet,
non-receipt of dividends declared, etc. The Committee is
also authorised to approve requests for issue of duplicate
share certicates.
During the year under review, the Committee held
three meetings. The Committee met on 23
rd
April, 2013,
21
st
th
March, 2014. The attendance
details at Meetings of the Committee are given in Table 6.
Table 6: Attendance record of Stakeholders Relationship
Committee (formerly known as Share Transfer and
Shareholders/Investors Grievance Committee) Meetings
Name of Members No. of Meetings attended
Mr. M.G. Bhide 3
Mr. Ramesh Iyer 3
Details of queries and grievances received and attended
to by the Company during the year 2013-14 are given in
Table 7.
357
Table 7: Complaints/Letters received and attended to
during the Financial Year 2013-14
Nature of Complaints/
Letters
Pending
as on
1
st

April,
2013
Received
during
the year
Answered
during
the year
Pending
as on
31
st

March,
2014
1. Status of Share
Application
0 0 0 0
2. Non Receipt of
Electronic Credit
0 0 0 0
3. Non Receipt of
Dividend
0 34 34 0
4. Duplicate/Revalidation/
Correction of Dividend
Warrant
0 767 767 0
5. SEBI/Stock Exchange
Complaints
0 3 3 0
Total 0 804 804 0
d) Corporate Social Responsibility Committee
The Corporate Social Responsibility (CSR) Committee
has been constituted by the Board of Directors to
formulate and recommend to the Board a CSR Policy
indicating the activities to be undertaken by the Company
in compliance with the provisions of the Companies Act,
2013 and Rules made thereunder, allocate the amount
of expenditure to be incurred on CSR activities as
enumerated in Schedule VII to the Companies Act, 2013,
and monitor the CSR Policy of the Company periodically.
The CSR Policy of the Company as duly amended is
displayed on the website of the Company.
Mr. Bharat N. Doshi Non-Executive Non-Independent Director
is the Chairman of the Committee. Mr. Piyush Mankad,
Independent Director, Mr. Uday Y. Phadke, Non-Executive
Non-Independent Director and Mr. Ramesh Iyer, Managing
Director are the other Members of the Committee.
The Committee held two meetings during the year under
review. The Committee met on 6
th
August, 2013 and
19
th
March, 2014. The attendance details at Meetings of
the Committee are given in Table 8.
Table 8: Attendance record of Corporate Social
Responsibility Committee Meetings
attended
Mr. Bharat N. Doshi (Chairman) 2
Mr. Piyush Mankad 2
Mr. Ramesh Iyer 2
e) Asset Liability Committee
The Asset Liability Committee (ALCO) was constituted
by the Board in 2001. It reviews the working of the Asset
Liability Operating Committee, its ndings and reports in
accordance with the guidelines of the Reserve Bank of
India (RBI). The Company submits periodic reports to
the RBI on the management of the Companys risks and
assets and liabilities.
Mr. Dhananjay Mungale (Chairman), Independent Director,
Director and Mr. Ramesh Iyer, Managing Director are the
members of the Committee. The Committee held two
meetings during the year under review. Both the meetings
were well attended by its Members.
f) Risk Management Committee
The Risk Management Committee was constituted by the
Board at its Meeting held on 28
th
January, 2008 to manage
the integrated risk, inform the Board about the progress
made in implementing a risk management system and
review periodically the risk management policy and
strategy followed by the Company.
The Chief Financial Ofcer apprises the Risk Management
Committee and the Board of the major risks as well as
the movement in the prole of the high risk category, the
root causes of risks and their impact, key performance
indicators, risk management measures and the current
controls being exercised to mitigate these risks.
As of 31
st
March, 2014, the Risk Management Committee
comprised Mr. Dhananjay Mungale (Chairman),
Mr. M. G. Bhide and Ms. Rama Bijapurkar, Independent
Directors of the Company.
The Committee held four meetings during the year under
review. All the meetings were well attended by its Members.
g) Nomination Committee (Dissolved with effect from
19
th
March, 2014)
The Nomination Committee was constituted by the Board
at its Meeting held on 25
th
March, 2008, to review and
make recommendations to the Board regarding the
Boards composition and structure, establish criteria for
Board membership, evaluate corporate policies relating
to the appointment of Board members and to establish,
implement and monitor policies and processes regarding
principles of corporate governance in order to facilitate
the Boards compliance with its duciary duties to the
Company and its shareholders. Two meetings were held
during the period under review.
Pursuant to the provisions of section 178(1) of the
Companies Act, 2013, the Board has at its meeting
held on 19
th
March, 2014 constituted the Nomination
and Remuneration Committee and consequently the
Nomination Committee stands dissolved.
Clause 49 denes 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 denition, the Company did not have any material
non-listed Indian subsidiary during the year under review.
The subsidiaries of the Company function independently,
with an adequately empowered Board of Directors and
sufcient resources. The Minutes of the Board Meetings of the
358
Companys subsidiaries are placed at the Board Meeting for
review by the Board Members.
MANAGEMENT
Management Discussion and Analysis
The Annual Report has a detailed chapter on Management
Discussion and Analysis.
Disclosures
During the Financial Year 2013-14, there were no materially
and its Promoters, Directors or the Management, Subsidiaries
or Relatives, etc., that may have potential conict with the
interests of the Company at large. Further, details of related
party transactions are presented in Note No. 40 under Notes
to the Annual Accounts in the Annual Report.
DISCLOSURE OF ACCOUNTING TREATMENT IN
PREPARATION OF FINANCIAL STATEMENTS
The Company has followed the Accounting Standards issued
by the Institute of Chartered Accountants of India (ICAI) in
preparation of its nancial statements.
DETAILS OF NON-COMPLIANCE BY THE COMPANY
The Company has complied with all the requirements of
regulatory authorities. No penalties or strictures were imposed
on the Company by Stock Exchanges or SEBI or any statutory
authority on any matter related to capital market since the
listing of the Companys Equity Shares.
Code for Prevention of Insider Trading Practices
The Company has instituted a comprehensive Code of Conduct
for prevention of Insider Trading for its designated employees,
in compliance with the Securities and Exchange Board of India
[Prohibition of Insider Trading] Regulations, 1992, as amended
from time to time. The Code lays down Guidelines, which advise
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.
SHAREHOLDERS
Appointment of Directors
The details of Directors seeking appointment at the
forthcoming Annual General Meeting is set forth in Table 9.
Table 9:
1) Name of Director Mr. Piyush Mankad
Date of Birth 18
th
November, 1941
Date of Appointment on the Board 21
st
February, 2005
Expertise in specic functional area Finance and Investment, Planning and Strategy, Industrial Promotion and International
Trade and International Economic Relations
Qualications BA (Hon), Master (History) - Delhi University, Diploma in Development Studies (Development
Economics & Sociology) - University of Cambridge, Indian Administrative Service (IAS)
Directorship in Companies Heidelberg Cement India Limited (Chairman)
Tata International Limited
Tata Elxsi Limited
DSP BlackRock Investment Managers Private Limited
Noida Toll Bridge Company Limited
ICRA Limited
The Tata Power Company Limited
Hindustan Media Ventures Limited
Tata South East Asia Limited, Hong Kong
Membership of Committees in Public Limited Companies
Audit Committee The Tata Power Company Limited
Heidelberg Cement India Limited
Tata International Limited
ICRA Limited
Nomination and Remuneration Committee Mahindra & Mahindra Financial Services Limited (Chairman)
Remuneration Committee Tata International Limited
ESOS Compensation Committee ICRA Limited
Stakeholders Relationship Committee/
Shareholders/ Investors Grievance Committee
Heidelberg Cement India Limited (Chairman)
Tata Elxsi Limited (Chairman)
Corporate Social Responsibility Committee ICRA Limited (Chairman)
Shareholding of Director in the Company 50,000 Equity Shares of Rs. 2 each.
359
Mr. Piyush Mankad earned his Bachelors and Masters
Degrees from Delhi University. He later completed a Diploma
in Development Studies from Cambridge University, United
Kingdom.
He joined the prestigious Indian Administrative Service
in 1964. His major ofcial postings included Controller of
Capital Issues, Ministry of Finance, Government of India;
Principal Finance Secretary, Government of Madhya
Pradesh; Secretary in the Ministry of Industry; Secretary
Information and Broadcasting; and Finance Secretary,
Government of India. His overseas assignments included
those as Counsellor Economic, Embassy of India, Tokyo
(1977-81) and Executive Director for India, Bhutan,
Bangladesh, Laos and Tajikistan and Board Member, Asian
Development Bank, Manila (2001-04).
He is presently on the Board of Directors of several highly
regarded companies in the private sector as Independent
Director and is also on various Governing Bodies/Trusts.
Table 9:
2) Name of Director Mr. Manohar G. Bhide
Date of Birth 14
th
February, 1939
th
October, 2000
Expertise in specic functional area Banking and Finance
Qualications Masters Degree in Economics, CAIIB
Directorship in Companies Mahindra Shubhlabh Services Limited
J. P. Morgan Securities India Private Limited
Talwalkars Better Value Fitness Limited
Mahindra Trustee Company Private Limited
Membership of Committees in public limited companies
Audit Committee Mahindra Shubhlabh Services Limited (Chairman)
Nomination and Remuneration Committee Mahindra & Mahindra Financial Services Limited
Remuneration/Compensation Committee Mahindra Shubhlabh Services Limited
Talwalkars Better Value Fitness Limited
Stakeholders Relationship Committee Mahindra & Mahindra Financial Services Limited (Chairman)
Shareholding of Director in the Company 50,000 Equity Shares of Rs. 2 each
Mr. M. G. Bhide is a Certified Associate of the Indian Institute of Bankers and has a Masters Degree in Economics from the
University of Mumbai. He was the Chairman and Managing Director of Bank of India. He was also the Managing Director
& Group Executive (National Banking) of State Bank of India.
Table 9:
3) Name of Director Mr. Dhananjay Mungale
Date of Birth 1
st
June, 1953
st
March, 1999
Expertise in specic functional area Investment Banking and Finance
Qualications B.Com, C.A., L.L.B.
Directorship in Companies Mahindra & Mahindra Financial Services Limited
Chowgule Steamships Limited
Kalpataru Limited
Mahindra CIE Automotive Limited
NOCIL Limited
Samson Maritime Limited
Sicagen India Limited
Tamilnadu Petroproducts Limited
Inestor Advisores Private Limited
Lavgan Dockyard Limited
J. P. Morgan Asset Management Private Limited
IL & FS Engineering & Construction Company Limited
LICHFL Trustee Company Private Limited
L & T Infra Investment Partners Advisory Private Limited
360
3) Name of Director Mr. Dhananjay Mungale
Snowcem Paints Private Limited
Mentor Technologies Private Limited
Audit Committee Chowgule Steamships Limited (Chairman)
Mahindra & Mahindra Financial Services Limited (Chairman)
NOCIL Limited
IL & FS Engineering & Construction Company Limited
Kalpataru Limited
L & T Infra Investment Partners Advisory Private Limited
Nomination and Remuneration Committee Mahindra & Mahindra Financial Services Limited
Remuneration / Compensation Committee Chowgule Steamships Limited
NOCIL Limited
Kalpataru Limited
ALCO Committee Mahindra & Mahindra Financial Services Limited (Chairman)
Share Transfer and Shareholders / Investors
Grievance Committee
Mahindra CIE Automotive Limited (Chairman)
Corporate Social Responsibility Committee Mahindra CIE Automotive Limited
LICHFL Trustee Company Private Limited
Shareholding of Director in the Company 50,000 Equity Shares of Rs. 2 each
Mr. Dhananjay Mungale, a Chartered Accountant has spent the major part of his career in corporate and investment banking in
India and Europe with Bank of America and DSP Merrill Lynch Limited. He is on the boards of various public and private limited
companies.
Table 9:
4) Name of Director Ms. Rama Bijapurkar
Date of Birth 12
th
February, 1957
Date of Appointment to the Board 14
th
June, 2008
Expertise in specic functional area Independent Market Strategy Consultant
Qualications B.Sc. (Hons.) degree in Physics from Delhi University
Post Graduate Diploma in Management from Indian Institute of Management,
Ahmedabad
Directorship in Companies Mahindra & Mahindra Financial Services Limited
ICICI Prudential Life Insurance Company Limited
Ambit Holdings Private Limited
Janalakshmi Financial Services Private Limited
The Ratnakar Bank Limited
People Research on Indias Consumer Economy (PRICE)
[Chairperson]
Redington Gulf FZE
Audit Committee Mahindra & Mahindra Financial Services Limited
Board Nomination and Compensation
Committee
ICICI Prudential Life Insurance Company Limited (Chairperson)
Shareholding of Director in the Company 50,000 Equity Shares of Rs. 2 each.
Ms. Rama Bijapurkar is a well respected voice on Indias consumer economy and has an independent market strategy consulting
practice. She has over three decades of experience in market research & market strategy consulting.
Ms. Bijapurkar has extensive experience as an independent director on a variety of corporate and not-for-prot boards. Present
boards include ICICI Prudential Life Insurance Company Limited, The Ratnakar Bank Ltd., Redington Gulf FZE etc., Additionally,
361
she is a Member of the governing councils of Banking Codes
& Standards Board of India, Insurance Information Bureau,
Member, Board of Governors and visiting faculty at Indian
Institute of Management, Ahmedabad and Member, eminent
person advisory group to the Competition Commission of India.
Ms. Bijapurkar holds a B.Sc. (Hons.) degree in Physics from the
University of Delhi and a Post Graduate Diploma in Management
from the Indian Institute of Management, Ahmedabad. She
is author of We are like that only - Understanding the logic
of Consumer India, Customer in the Boardroom? - Crafting
Customer Based Business Strategy and most recently, A
Never-Before World: Tracking the evolution of Consumer India.
Means of Communication With Shareholders
The Company publishes its quarterly, half-yearly and
annual results in Business Standard and SakaI which are
national and local dailies, respectively. These are not sent
individually to the Shareholders. The Company results and
ofcial news releases are displayed on the Companys
website http://www.mahindranance.com. The Company
also makes presentations to international and national
institutional investors and analysts, which are also hosted
on its website. The Company also les various compliances
as required to be led in the NSE Electronic Application
Processing System (NEAPS).
The Company has designated investorhelpline_mmfsl@
mahindra.com as an email id for the purpose of registering
complaints by investors and displayed the same on the
Companys website. The Company has also designated
mnfd@mahindra.com as an exclusive email ID for Fixed
Deposit Investors for the purpose of registering queries/
complaints in respect of Fixed Deposits of the Company
and the same has also been displayed on the Companys
website.
GENERAL BODY MEETINGS
Table 10: Details of last three Annual General Meetings and Special Resolutions passed
For the
Financial
Year
Date Time Special Resolutions passed Venue
2010-2011 29
th
July,
2011
3.30 p.m. 1. Re-appointment of Mr. Ramesh Iyer as Managing
Director of the Company with effect from 30
th
April,
2011 for a period of 5 years.
2. Partial modication of the Special Resolution passed
at the Twentieth Annual General Meeting held on 23
rd

July, 2010, for payment of commission to Non Whole-
time Directors.
Patkar Hall, SNDT Womens
University, 1
st
Nathibai Thackersey
Road, New Marine Lines, Mumbai
400 020.
2011-2012 27
th
July,
2012
3.30 p.m. Amendment to the Articles of Association of the Company
for convening Board Meetings and General Meetings
through Video Conference and/or other permissible
electronic or virtual facilities and for servicing of documents
to Shareholders through electronic mode.
Birla Matushri Sabhagar, 19,
Sir Vithaldas Thackersey Marg,
New Marine Lines, Mumbai 400 020.
2012-13 25
th
July,
2013
3.30 p.m. None Swatantryaveer Savarkar Rashtriya
Smarak, 252, S.V.S. Marg, Shivaji
Park, Dadar (W), Mumbai 400 028.
Details of Extraordinary General Meeting held during the past three nancial years
For the
Financial
Year
Date Time Special Resolution(s) passed Venue
2012-2013 6
th
November, 2012 10.00 a.m. Allotment of Equity Shares to Qualied
Institutional Buyers under the Qualied
Institutions Placement.
Swatantryaveer Savarkar
Rashtriya Smarak, 252, S.V.S.
Marg, Shivaji Park, Dadar (W),
Mumbai - 400 028.
362
Postal Ballot
Details of Resolutions passed through Postal Ballot during
the Financial Year 2013-14
Date of
Board
Meeting
Description % of Votes in
favour of the
Resolution(s)
Scrutinizer for
conducting the
Postal Ballot
23
rd
April,
2013
Ordinary Resolution for
increase in borrowing
limits from Rs.30,000
Crores to Rs.38,000
Crores under Section
293(1) (d) of the
Companies Act, 1956
(the Act) and creation of
charge on the Companys
property(ies) under
Section 293(1) (a) of the
Act.
99.78 % * Mr. S. N.
Ananthasubramanian,
Practising Company
Secretary.
* Results declared on 12
th
June, 2013
COMPLIANCE
Mandatory Requirements
The Company has fully complied with the applicable mandatory
requirements of Clause 49.
Compliance with Non-Mandatory Requirements
Nomination and Remuneration Committee (the
erstwhile Remuneration/Compensation Committee)
As a good governance, the Company had constituted the
Remuneration/Compensation Committee even before the
provisions of Clause 49 became applicable to it.
Pursuant to the provisions of section 178(1) of the
Companies Act, 2013, the Company has constituted
the Nomination and Remuneration Committee and
subsequently the Remuneration/Compensation Committee
stands dissolved.
Details of the Committee have been provided under the
Section Nomination and Remuneration Committee.
Audit Qualication
During the year under review, there is no audit qualication
in your Companys standalone nancial statements nor
has there been a matter of emphasis made during the
year. Your Company continues to adopt best practices
to ensure a regime of unqualied nancial statements.
Whistle Blower Policy
The Company promotes ethical behaviour in all its business
activities and has put in place a mechanism wherein the
Employees are free to report illegal or unethical behaviour,
actual or suspected fraud or violation of the Companys
Codes of Conduct or Corporate Governance Policies or any
improper activity to the Chairman of the Audit Committee
of the Company or Chairman of the Company or the
Corporate Governance Cell. The Whistle Blower Policy has
been appropriately communicated within the Company.
Under the Whistle Blower Policy, the condentiality of
those reporting violation(s) is protected and they are not
subject to any discriminatory practices. No personnel has
been denied access to the Audit Committee.
Your Company has not adopted the other non-mandatory
requirements as specied in Annexure I D of Clause 49.
COMPLIANCE WITH THE CORPORATE GOVERNANCE
VOLUNTARY GUIDELINES, 2009
In December, 2009 the Government of India, Ministry of
Corporate Affairs (MCA) had issued Corporate Governance
Voluntary Guidelines, 2009 (the Guidelines). In the Guidelines
MCA has claried that the Guidelines were prepared and
disseminated for consideration and adoption by Corporates
and may be voluntarily adopted by public companies with
the objective to enhance not only the economic value of the
enterprise but also the value for every stakeholder who has
contributed in the success of the enterprise and set a global
benchmark for good Corporate Governance.
Your Company has been a strong believer in good Corporate
Governance and has been adopting the best practices that
have evolved over the last two decades.
Your Company is in substantial compliance with the Guidelines
and it will always be the Companys endeavour to attain the
best practices in Corporate Governance.
24
th
Date : 24
th
July, 2014
Time : 3.30 p.m.
Venue : Y. B. Chavan Auditorium, General Jagannath
Bhosale Marg, Next to Sachivalaya Gymkhana,
Mumbai - 400 021.
Financial Year of the Company
st
April to 31
st
March.
For the year ending 31
st
March, 2015 results will be tentatively
announced on:
Quarter ending 30
th
June, 2014 - End July, 2014
Half-year ending 30
th
September, 2014 - End October, 2014
Quarter ending 31
st
December, 2014 - End January, 2015
Year ending 31
st
March, 2015 - End April, 2015
Book Closure
Book Closure for dividend will be from 5
th
July, 2014 to
24
th
July, 2014, inclusive of both days.
Dividend Payment
A dividend of Rs. 3.80 per Equity Share of Rs. 2 each, will
be credited/dispatched between 25
th
July, 2014 to 1
st
August,
2014, subject to approval by Shareholders at the Annual
General Meeting.
Registered Ofce
Gateway Building, Apollo Bunder, Mumbai - 400 001.
363
Listing
A. Equity Shares
The Companys Shares are listed on National Stock
Exchange of India Limited (NSE) and BSE Limited (BSE).
The requisite listing fees have been paid in full to both these
Stock Exchanges.
Table 1: Stock Exchange Codes
BSE 532720
NSE M&MFIN
Demat International Securities
Identication Number (ISIN) in NSDL and
CDSL for Equity Shares
INE774D01024
Corporate Identity Number
L65921MH1991PLC059642
B. Non-Convertible Debentures
The Non-Convertible Debentures (NCDs) of the Company
are listed on the BSE and the Company has paid the
requisite listing fees in full.
Debenture Trustee for the Companys NCDs :
Axis Trustee Services Limited
Axis House, 2
nd
Floor,
Bombay Dyeing Mills Compound,
Worli, Mumbai 400 025.
Table 2: Monthly High and Low of Companys shares for the Financial Year 2013-14 at BSE and NSE
Month BSE Limited
(BSE)
National Stock Exchange of
India Limited (NSE)
High
(Rs.)
Low
(Rs.)
High
(Rs.)
Low
(Rs.)
April, 2013 247.25 195.80 247.35 196.00
May, 2013 269.70 225.10 269.65 224.55
June, 2013 287.50 216.25 287.40 214.15
July, 2013 285.00 218.65 285.40 218.10
August, 2013 268.90 212.60 268.90 212.30
September, 2013 281.90 243.00 282.60 242.25
October, 2013 306.00 254.65 306.50 254.15
November, 2013 313.70 282.50 314.85 282.00
December, 2013 355.90 295.25 356.50 294.00
January, 2014 326.50 232.35 326.30 232.10
February, 2014 265.15 238.35 265.40 237.65
March, 2014 282.60 238.40 283.00 238.10
Chart A: MMFSLs share performance versus BSE Sensex
150
130
110
90
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p
r
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MMFSL SENSEX
150
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MMFSL NIFTY
Note: Share prices and BSE Sensex indexed to 100 as on
the rst working day of the Financial Year 2013-14
i.e. 1
st
April, 2013.
Chart B: MMFSLs share performance versus Nifty
Note: Share prices and Nifty indexed to 100 as on the
rst working day of the Financial Year 2013-14
i.e. 1
st
April, 2013.
364
Distribution of Shareholding
Table 3 and Table 4 list the distribution of the shareholding of
the Equity Shares of the Company by size and by ownership
class as on 31
st
March, 2014.
Table 3: Shareholding pattern by size as on 31
st
March, 2014
Number of
Shares held
Number of
Shareholders
No. of
Shares held
% of
Shareholding
1 - 500 44,409 57,96,690 1.02
501 - 1,000 1,835 14,18,129 0.25
1,001 - 5,000 1,897 43,12,354 0.76
5,001 - 10,000 322 23,11,976 0.40
10,001 - 20,000 176 25,42,546 0.45
20,001 and above 467 55,23,83,265 97.12
Total 49,106 56,87,64,960 100.00
Table 4: Shareholding pattern by ownership as on
31
st
March, 2014
Category of Shareholders No. of Shares
held
% of
Shareholding
Promoter and Promoter Group 29,64,47,501 52.12
Mutual Funds 53,46,917 0.94
FIIs 23,53,88,096 41.39
Bodies Corporate 44,29,715 0.78
Indian Public/HUF 2,20,30,852 3.87
NRIs 13,43,750 0.23
Trusts 33,734 0.01
Indian Financial Institution/Banks 1,43,810 0.02
Venture Capital Fund 18,55,000 0.33
Insurance Companies 3,26,066 0.06
Clearing Members 14,19,519 0.25
Total 56,87,64,960 100.00
Dematerialisation of Shares
As on 31
st
March, 2014, 99.69 per cent of the total equity capital
was held in dematerialised form with National Securities Depository
Limited and Central Depository Services (India) Limited.
Compliance with Clause 5A of the Listing Agreement
The Securities and Exchange Board of India had vide its
Circular No. SEBI/CFD/DIL/LA/1/2009/24/04 dated 24
th
April,
2009, made amendments to the Equity Listing Agreement by
insertion of Clause 5A for the purpose of providing a uniform
procedure for dealing with unclaimed shares i.e. shares which
could not be allotted to the rightful shareholder(s) due to
insufcient/incorrect information or for any other reason.
In accordance with Clause 5A, the unclaimed shares as
well as corporate benet in terms of securities, accruing on
unclaimed shares have been credited to a demat suspense
account opened by your Company with M/s. Karvy Stock
Broking Limited.
The information as required pursuant to sub-clause (g) of
Clause 5A is furnished below:
(i) Aggregate number of shareholders and the outstanding
shares in the suspense account lying at the beginning
of the year - 27 shareholders representing 4,975 Equity
shares of Rs. 2 each.
(ii) Number of shareholders who approached the Company
for transfer of shares from suspense account during the
year - NIL
(iii) Number of shareholders to whom shares were transferred
from suspense account during the year - NIL
(iv) Aggregate number of shareholders and the outstanding
shares in the suspense account lying at the end of the
year - 27 shareholders representing 4,975 Equity shares
of Rs. 2 each.
(v) The voting rights on the unclaimed shares shall remain
frozen till the rightful owner of such shares claims the
shares.
Outstanding GDRs/ADRs/Warrants or any Convertible
Instruments, Conversion Date and likely impact on equity
As on 31
st
March, 2014, the Company did not have any
outstanding GDRs/ADRs/Warrants or any Convertible Instruments.
Plant Locations
In view of the nature of business activities carried on by the
Company, the Company operates from various ofces in India
and does not have any manufacturing plant.
Registrar and Transfer Agents
Karvy Computershare Private Limited
Unit: Mahindra & Mahindra Financial Services Limited
Plot No. 17 - 24,
Vittalrao Nagar, Madhapur,
Hyderabad 500 081.
Tel.: + 91 40 44655000; 40 23420818
Fax: + 91 40 23420814
Email: support@karvy.com; einward.ris@karvy.com
The Registrar and Transfer Agents also have an ofce at:
24-B, Raja Bahadur Mansion,
Ground Floor, Ambalal Doshi Marg, Behind BSE,
Fort, Mumbai - 400 023.
Tel.: + 91 22 66235454
Fax: + 91 22 66331135
SHARE TRANSFER SYSTEM
Trading in 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 fteen 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 transfer any two of Mr. Ramesh Iyer,
Managing Director, Mr. Uday Y. Phadke, Non-Executive Non-
Independent Director and Mr. V. Ravi, Chief Financial Ofcer
are authorised to approve transfers of upto 10,000 Equity
Shares per transfer. The Stakeholders Relationship Committee
(formerly known as Share Transfer and Shareholders/
Investors Grievance Committee) meets as and when required
to consider other requests for transfer/transmission of shares,
issue of duplicate share certicates and attend to grievances
of the security holders of the Company, etc.
365
ADDRESS FOR CORRESPONDENCE
Shareholders may correspond with the Registrar and Transfer
Agents at:
Unit: Mahindra & Mahindra Financial Services Limited
Plot No.17 - 24,
Vittalrao Nagar, Madhapur,
Hyderabad 500 081.
Tel.: + 91 40 44655000; 40 23420818
Fax: + 91 40 23420814
Email: support@karvy.com; einward.ris@karvy.com
on all matters relating to transfers, transmissions,
dematerialisation of shares, payment of dividend and any
other query relating to shares of the Company.
Shareholders would have to correspond with the respective
Depository Participants for shares held in dematerialised
mode.
For all investor related matters, the Chief Financial Ofcer
or the Company Secretary & Compliance Ofcer can be
contacted at Mahindra Towers, 4th Floor, P. K. Kurne Chowk,
Worli, Mumbai - 400 018.
Tel.: + 91 22 66526000
Fax: + 91 22 66526198
Email: investorhelpline_mmfsl@mahindra.com
Website: http://www.mahindranance.com
MANAGING DIRECTORS DECLARATION ON CODE OF CONDUCT
As required by Clause 49 of the Listing Agreement, the CEO declaration for Code of Conduct is given below:
To
The Members of
I, Ramesh Iyer, Managing Director of the Company declare that all Board Members and Senior Management of the Company
have afrmed compliance with the Code of Conduct for the year ended 31
st
March, 2014.
For Mahindra & Mahindra Financial Services Limited
Ramesh Iyer
Managing Director
Place: Mumbai
Date: 23
rd
April, 2014
CERTIFICATE
TO THE MEMBERS OF MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED
We have examined the compliance of conditions of corporate governance by Mahindra & Mahindra Financial Services Limited
(the Company) for the year ended on March 31, 2014 as stipulated in Clause 49 of the listing agreements of the said Company
with the National Stock Exchange of India Limited and BSE Limited.
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 nancial 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 agreements.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or
effectiveness with which the management has conducted the affairs of the Company.
For B. K. KHARE & CO.
(Firms Registration Number: 105102W)
Naresh Kumar Kataria
Partner
Place: Mumbai
Date: 23
rd
April, 2014
366
GLOBAL ECONOMY
The global economy witnessed sluggish trade and low
investment activity, resulting in a growth of 3% in the nancial
year 2013-14. Economic uncertainties weighed heavily on
market sentiments worldwide. There was continued weakness
in the Euro zone and sluggish growth in India and China, along
with the dilemma over withdrawal of the US scal stimulus.
Speculation about the withdrawal of quantitative easing in
the US led to capital ight and currency depreciation, hurting
developing countries in their nancial markets.
The outlook for 2014-15 is more positive as businesses and
consumer sentiments have both revived in a changing environment.
The European markets have rmed up while China is expected to
be a turning point in the nancial year 2014-15, shifting from a
period of rapid economic development to a stable growth phase
of around 7.5%. (Source: IMF World Economic Outlook)
INDIAN ECONOMY
The Indian economy grew at a rate of 4.7% during the nancial
year 2013-14. Containment of the scal and current account
decits in the coming months will provide a cushion to the
Indian economy from further volatility. Ination expectations
have moderated and retail ination stands at 8.31% in March
2014. (Source: CSO data). More than Rs. 60 billion has
been allocated to rural housing in the Interim Budget for the
nancial year 2014-15. Interest subsidies for rural housing are
also expected to bolster rural housing demand in the nancial
year 2014-15. (Source: Interim Budget 2014-15)
The Cabinet Committee on Investment (CCI) and the Project
Monitoring Group (PMG) have cleared 296 projects at an
estimated project cost of Rs. 6.6 trillion. As at end of March
2014 around 284 projects worth Rs. 15.6 trillion are under
the consideration of the PMG. The recovery is likely to be
supported by increased investment activity due to execution of
stalled projects backed by business and consumer optimism.
(Source: RBI Review)
The Manufacturing Purchasing Managers Index (PMI) has
registered an increase on account of higher output and new orders
in the last quarter of the nancial year 2013-14. The rural demand
base is likely to accelerate and external demand is expected
to improve further during the nancial year 2014-15, given the
increase in global trade. Better exports, lower ination and project
clearances will translate into higher investments leading to an
improved business environment in the coming years.
INDIAN FINANCIAL SECTOR A SYNOPSIS
Banks and nancial institutions broadly encompass the framework
of the Indian nancial system. The rapid rise of nancial institutions
was facilitated by simplied sanction procedures, exibility and
low-cost of operations. However, tighter liquidity conditions,
stringent prudential norms and regulatory changes led to the
survival of only a handful of Non-Banking Financial Companies
(NBFCs) to partner in the nancial inclusion of the country.
NBFC SECTOR AN INSIGHT
GLOBAL NBFC
Globally, the size of NBFCs was equivalent to 117% of GDP
as at the end of 2012 (for 20 jurisdictions and the Euro area).
In absolute terms, total assets of NBFCs remained at around
$ 70 trillion as at the end of 2012. USA has the largest system
of NBFCs with assets of $ 26 trillion, followed by the Euro
area ($ 22 trillion), the UK ($ 9 trillion) and Japan ($ 4 trillion).
(Source: Reserve Bank of India Report, January 2014)
INDIAN NBFC
The NBFC sector in India is integral to the nancial framework
of the country. Compared to the global standards, the size
of the industry is relatively small. However, the industry has
witnessed a Compounded Annual Growth Rate (CAGR) of
22% during March 2006 to March 2013, when the countrys
Gross Domestic Product (GDP) slowed down to 4.5% in
nancial year 2012-13 from 9.6% in nancial year 2006-07.
(Source: Reserve Bank of India Report, January 2014)
Retail credit growth for NBFCs slowed considerably in nancial
year 2013-14 with the sluggish economy and high interest
rates adversely affecting the demand for credit. A favourable
monsoon season and high agricultural productivity ensured
that credit growth in the tractor and mortgage segments
remained high. The persistent challenges in the operating
environment resulted in higher delinquency levels for the
NBFCs. (Source: ICRA)
The NBFCs continue to play a key role in the development of
the country by being present in under-banked and unbanked
regions and participating in inclusive growth.
MANAGEMENT DISCUSSION AND ANALYSIS
CLASSIFICATION OF NBFCS
NBFC sector
Core Investment
Infrastructure
Debt Funds
NBFC
Asset Financing Loan Companies
Investment
Companies
Infrastructure
Finance
367
PERFORMANCE ANALYSIS OF KEY SECTORS
Indian automobile industry
The general economic slowdown, high interest rates and
increasing fuel prices were some of the factors that affected
the Indian automobile industry in the nancial year 2013-14.
Despite several new car launches and increasing investments
witnessed by the Original Equipment Manufacturers (OEMs),
the slide in sales volumes could not be averted.
The sale of Passenger Vehicles declined by 6.05% during
the nancial year 2013-14, against the same period last year.
Within the Passenger Vehicles segment, sale of Passenger
Cars, Utility Vehicles and Vans declined by 4.65%, 5.01%
and 19.58% respectively during the nancial year 2013-14
compared to the same period last year. (Source: Society of
Indian Automobile Manufacturers, April 2014)
The overall Commercial Vehicles segment registered de-
growth of 20.23% in the nancial year 2013-14 as compared
to nancial year 2012-13. The Medium and Heavy Commercial
Vehicles (M&HCVs) registered decline in sales of 25.33% and
Light Commercial Vehicles also registered a decline in sales by
17.62%. (Source: Society of Indian Automobile Manufacturers,
April 2014)
The Three Wheelers segment witnessed decline in sales by
10.90% in nancial year 2013-14 as against nancial year 2012-
13. Sale of Passenger Carriers and Goods Carriers declined by
12.74% and 2.53% respectively in the current scal as against
nancial year 2012-13. (Source: Society of Indian Automobile
Manufacturers, April 2014)
Two Wheelers sales registered growth of 7.31% during the
nancial year 2013-14 over previous year. Within the Two
Wheelers segment, Scooters and Motorcycles grew at 23.24%
and 3.91% respectively, while Mopeds declined by 8.35% in
nancial year 2013-14 over the previous year.
Exports
During nancial year 2013-14, overall automobile exports
grew by 7.21%. Passenger Vehicles, Three Wheelers and
Two Wheelers registered growth at 6.09%, 16.60% and 6.52%
respectively. Commercial Vehicles exports declined by 3.71%
during nancial year 2013-14 as compared to the same period
last year. (Source: Society of Indian Automobile Manufacturers,
April 2014)
Indian tractor industry
There was a cyclical upswing in the tractor industry, following
the stagnant/marginal growth witnessed during the previous
years. A favourable monsoon season and good soil moisture
content, backed by brimming reservoirs helped the overall
tractor sales. The country continues to be the largest tractor
manufacturer in the world (in volume terms). Even though
the automotive sector suffered owing to the weakness in the
macroeconomic fundamentals, the tractor industry (along with
the two wheeler segment) registered double-digit growth sales
The Rs. 21,000 crore worth Indian tractor industry today stands
at the threshold of mechanisation. There have been increasing
new variants (in terms of Horse power) by most of the tractor
manufacturers in the country. Despite the declining contribution
of the agricultural sector to the overall GDP (from 30% during
pre-liberalisation period to 14% currently) it continues to
be a key economic driver for the country. Mechanisation is
expected to play a crucial role for the agricultural sector in the
years to come. Upgraded and modern technology-led farming
methods are expected to achieve 280 million tonnes of farm
production by 2020. (Source: Report of the Working Group on
the Automotive sector)
Rs. 21,000 cr+
Size of the Indian tractor industry
Construction equipment
Gross Fixed Capital Formation (GFCF) and infrastructure
investments took a hit due to macroeconomic and regulatory
headwinds. Deferment in project execution and slow pace of
infrastructural investments also resulted in faltering demand
for construction equipment during the year under review.
The sector witnessed a second consecutive year of volume
de-growth during the scal, with demand faltering by 15-17%
to approximate 55,000 56,000 units (as compared to 8-10%
decline in 2012-13 at 66,000 units). One of the primary reasons
for subdued demand for the construction equipment were
bottlenecks across the infrastructure space. The equipment
manufacturers also suffered due to currency volatility and
higher operating costs.
Sectors enabling growth of construction equipment.
DRIVERS FOR
CONSTRUCTION EQUIPMENT
Airports
Oil & Gas
pipelines
Power
Ports
Roads
Railways &
Metros
Industrial
corridor
Real Estate
Urban & Rural
Infrastructure
(Source: ICRA)
368
Housing nance
Rising per capita income and stability in economic growth
have played a role in increasing the pace of urbanisation
in the country. One of the notable factors behind the
growth in the housing industry has been easy availability of
nance. Availability of low interest rate nance has increased
disbursement of loans among several nancial players. As on
31st March 2013, nance penetration in urban areas stood
at 41.2%, which is expected to increase to 47% by 31st
March 2018. In contrast, housing nance penetration in rural
areas stands at a mere 8.3% as on 31st March 2013, with
expectations to rise to 9.4% by 31st March 2018. (Source:
CRISIL Report, Retail Finance Housing, October 2013)
As per CRISIL estimates, housing nance disbursements are
projected to grow at a CAGR of 15-16 % to reach Rs. 4,947
billion by Fiscal 2018. Improvements in the macro-economic
scenario, demographic changes in population, changing age-
mix and increasing nuclearisation of families are some of the
factors that are expected to drive the growth of the housing
industry in India.
Disbursements Growth, y-o-y
Disbursements vs year-on-year growth
6,000
1,126 1,106
1,441
1,760
2,044
2,409
2,723
3,128
(Rs. bn)
5,000
4,000
3,000
2,000
1,000
-
2
0
0
7
-
0
8
E
2
0
0
8
-
0
9
E
2
0
0
9
-
1
0
E
2
0
1
0
-
1
1
E
2
0
1
1
-
1
2
E
2
0
1
2
-
1
3
E
2
0
1
3
-
1
4
P
2
0
1
4
-
1
5
P
E: Estimated; P: Projected
(Source: CRISIL Report, Retail Finance - Housing, October 2013)
Mutual fund industry
Indian mutual fund industry has evolved over the years, with
the countrys savings rate being over 30-35% in the last few
years. However, investment in mutual funds has not been
so phenomenal, growing at CAGR of 15% from nancial
year 2006-07 to nancial year 2012-13. The industry has
been growing more on the business to business (B2B) front
rather than business to consumer front (B2C). The Assets
Under Management (AUM) of the Indian Asset Management
Companies stood at Rs. 8.25 trillion (5-6% of the countrys
GDP). This is signicantly lower than some of the emerging
countries like Brazil (40%) and South Africa (33%). Though,
there are 44 Asset Management Companies operating in the
sector, approximately 80 per cent of the AUM is concentrated
with 8 of the leading players in the market.
Distribution of mutual fund products is one of the critical
components in the entire value chain of the asset management
industry. It is expected that the Indian asset management
industry will grow at a CAGR in the range of 12-15% for the
period 2013-14 - 2018-19. This will be supported by increasing
volumes from retail investors backed by overall increase in
investor awareness and enhanced distribution reach. Domestic
political scenario, global economic environment, scal decit,
ination and liquidity are some of the other factors that will
have an impact on the industry in the coming years.
High Networth Individuals Retail
Foreign Institutional Investors
Corporates Banks/Financial Institutions Corporates Banks/Financial Institutions
AUM Composition by Investor Segment
28
20
49
1 2
(%)
(Source: KPMG Report, January, 2014)
Gold loan industry
The people of our country own signicant gold as assets. In
our country gold is considered more of a nancial security than
just an asset. The borrowing against gold in rural India is more
from the unorganised sector, while the urban people channel
their borrowings through banks. Going ahead, possible rise
for NBFC credit growth could come partly from the gold loan
segment in nancial year 2015 which is likely to benet from
the increase in the regulatory maximum Loan to Value (LTV)
ratio from 60% to 75% of gold value.
(Source: ICRA Report, December 2013)
COMPANY OVERVIEW
Business overview
At Mahindra & Mahindra Financial Services Limited (MMFSL
or Mahindra Finance or the Company), we strongly believe in
building a strong nancial community. Our ethos and promise
of true nancial inclusion in the country makes us one of Indias
prime NBFCs. We operate across terrains and geographies in
our country, covering even the remotest part of rural India. We
continue to provide credit with condence to people who do
not have access to organised nancial services. Having started
our journey way back in 1993, as a subsidiary of the renowned
369
Indian tractor and utility vehicle manufacturer Mahindra &
Mahindra Limited, today MMFSL has a come a long way. Over
the years, we have considerably diversied our product portfolio,
offering the following services to our customers:
Vehicle loans (utility vehicles, commercial vehicles,
tractors, cars, two-wheelers and used vehicles)
Finance Limited, a subsidiary of the Company)
Personal loans
Fixed deposits
Mutual fund distribution
Insurance broking (through Mahindra Insurance Brokers
Limited, a subsidiary of the Company)
Construction equipment loan
Over the years the Company has enhanced its grass-root
presence across India. With 893 ofces (as on 31st March,
2014) spread across 25 states, 4 union territories and 1,82,264
villages, most of its customers are at the bottom of the social
pyramid. The Company lives by its philosophy of providing
loans not for consumption, but primarily for income generation.
The Companys prudent risk management has helped maintain
a better asset quality. This has resulted in steady growth despite
market volatilities. The Company focuses on building long-
term relationships with all stakeholders, including customers,
bankers, investors, dealers and employees. It understands the
evolving requirements of discerning customers and delivers
appropriately to address their needs. This has helped Mahindra
Finance emerge as a customer-focused nancial organisation
and maintain strong protability, despite macroeconomic
headwinds.
CREDIT RATINGS
CRISIL Outlook
Fixed Deposit Programme FAAA Stable
Long term and subordinated debt AA+ Stable
Short term debt A1+
Brickwork
Ratings
Long term and subordinated debt AA+ Positive
India Ratings
(FITCH)
Long term and subordinated debt AA+ (ind) Stable
Banks for Assignment
Insurance Companies and Institutions
Others
Banks Mutual Fund
10
13.7
9.8
58.6
7.9
(%)
Fixed Deposits
Commercial Paper/Inter Corporate Deposit
Assignment
Non-Convertible Debentures
Bank Term Loan
Fund mix on the basis of type of instruments
13.6
9.8
0.2
22.0
54.4
(%)
370
Operational review
The key operational highlights during the year are as below
Income from operations increased to Rs. 4,95,300 lacs from
Rs. 3,89,470 lacs in 2012-13, with an increase of 27%.
Assets Under Management (AUM) grew to Rs. 34,13,306 lacs
from Rs. 27,91,313 lacs in 2012-13, with an increase of 22%.
Assets nanced grew to Rs. 25,40,002 lacs from Rs.
23,83,858 lacs in 2012-13, with a modest increase of 7%.
The customer base crossed a record 3 million people, reaching
31,19,034 from 25,57,172 in 2012-13, an increase of 22%.
We strengthened our branch network to 893 from 657 in
2012-13, a record 36% increase.
We also increased our people base to 12,816 from 11,270
in 2012-13, an increase of 14%.
Gross NPA was affected as it increased to 4% from 3% in
2012-13.
Financial review
The nancial statements have been prepared in compliance
with the requirements of the Companies Act, 1956, and
generally accepted accounting principles (GAAP) in India.
The following table presents MMFSLs standalone abridged
nancials for the nancial year 2013-14, including revenues,
expenses and prots:
ABRIDGED STATEMENT OF PROFIT AND LOSS (Rs. in lacs unless indicated otherwise)
March 2014 March 2013 Growth
Revenue
Revenue from operations 4,92,163.21 3,85,672.15 27.6%
Other income 3,137.24 3,797.75 (17.4)%
Total Revenue 4,95,300.45 3,89,469.90 27.2%
Expenditure
Financial Expenses 2,18,801.45 1,61,876.50 35.2%
Employee Cost 29,733.41 22,340.20 33.1%
Other Expenses 59,180.56 49,632.86 19.2%
Loan Provisions & Write Offs 50,578.57 28,334.34 78.5%
Depreciation & Amortisation expenses 2,429.62 2,224.33 9.2%
Total Expenses 3,60,723.61 2,64,408.23 36.4%
Prot before exceptional items and taxes 1,34,576.84 1,25,061.67 7.6%
Exceptional items (net) - income / (expense) 2,858.21
PBT 1,34,576.84 1,27,919.88 5.2%
Direct tax 45,854.09 39,650.70 15.6%
PAT 88,722.75 88,269.18 0.5%
Basic EPS (Rs.) 15.75 16.59 (5.1)%
KEY RATIOS
PBT/Total Income 27.2% 32.8%
PBT/Total Assets 4.3% 5.1%
RONW (Avg. Net Worth) 18.6% 23.9%
Debt/Equity 4.7 4.2
Capital Adequacy 18.0% 19.7%
Tier I capital 15.5% 17.0%
Tier II capital 2.5% 2.7%
Book Value (Rs.) (excluding ESOPs) 90.2 79.0
Strategic review
Increase in affordability
Increase in rural income is set to rise, backed by support
prices for agricultural produce. Increasing number of aspiring
Indians will be the real game-changers in rural markets. These
consumers have aspirations to spend, giving a huge opportunity
to be capitalised. The per capita Gross Domestic Product has
grown faster in Indias rural areas than the urban region.
Growth in addressable market
The agriculture sector has shored up demand for domestic
tractors and trucks and farm equipment among others.
Financing these products with loans in remote rural branches
is a signicant opportunity. Revival in demand in domestic
tractor market since the nancial year 2013-14 is likely to
continue in future after a successful previous year. NBFCs are
the rst choice of nance among the road transport operators
(both in new and used vehicle nance).
NBFCs are aggressively designing innovative products and
leveraging their operations to reap benets. As regards to
Micro Small and Medium Enterprises (MSMEs), NBFCs are
moving into factoring and bill payment services as well. Micro-
nance, affordable housing and second hand vehicle nance,
three wheeler nancing, nancing tyres, refrigeration kits and
small ticket personal loans are all bringing NBFCs closer to
the rural customers.
Selling various nancial products and Low Insurance
Penetration
Insurance penetration among Indias vast population remains
extremely low. At 3.4% life insurance and at 0.7% general
insurance indicate the massive opportunity of growth
prospects. Few insurance safety nets in rural areas imply
that NBFC customers could also be sold insurance products.
Micro-insurance products both life and non-life could be
leveraged by NBFCs for their customer base through cross-
selling.
371
Geographical concentration: Too much focus on rural
market and lesser on urban markets might affect the
Companys sustainability.
Threats
Cost of funds: Higher cost of funds might lead to reduced
bottomline for the Company. Also, a lesser interest spread,
or higher cost of lending might lead to customers turning
away to cheaper source of funds.
Higher delinquencies: Asset quality deterioration may
not only wipe the prots out of the Company but eat
into its networth. The Company must ensure it maintains
minimal delinquency levels.
MANAGING RISK AND OPPORTUNITIES
The risk management procedures are reviewed periodically, to
ensure the focus of the Company is aligned to the changing
needs of its customers. The Companys risk management
strategy focuses on risk identication and its mitigation,
thereby enhancing stakeholder value.
Risk: The growth of the Company is correlated to high
performing individuals and overall skill development of the
employees.
Mitigation: The Company focuses on enhancing the skills
of its people through a standardised curriculum as well as
on developing talent among its employees in marketing and
technology through various leadership programmes.
Risk: Disruption in sources of funding could adversely affect
the liquidity and nancial position of the Company.
Mitigation: The Company meets its funding requirements from
diverse sources, including shareholder funding, securitized
receivables, secured and unsecured loans and several other
credit facilities.
Risk: Non-repayment by borrowers might disrupt the cash
ows.
Mitigation: The Company actively manages its credit
exposures with regular assessment across its customer
prole. All the diverse product portfolios are strictly monitored
to ensure minimal delinquency levels. In addition, the value
of vehicle also serves as the underlying collateral for the loan
taken by the borrowers, securing its credit portfolio.
Risk: Exposure to interest rate risks might result in increased
cost of lending to customers.
Mitigation: The Company prudently assesses the fund mix to
reduce dependency on any one source of funding. In addition,
the superior credit ratings on nancial instruments of the
Company enable it to raise funds at competitive rates.
Risk: Regulatory implications might dent the smooth
operational functioning of the Company.
Mitigation: The Company has in place a robust Corporate
Governance framework and ensures that all the regulatory
checks are successfully complied with at all times. It maintains
its Tier I and Tier II capital adequacy ratios above the prescribed
limits, to continue efcient functioning of its operations.
Growth in economic activity
Expectations of healthy growth in coming years and likely
higher industrial growth, provide opportunity to NBFCs in the
short term horizon. Sustained growth will lead to buying of
new vehicles and augment the industrial as well consumption
drive in the country. An envisaged pick-up in industrial growth
and corporate capital expenditure investments will stand to
benet most of the commercial assets nanced by the NBFCs.
Improvement in macro indicators and business environment
is expected to improve asset quality and protability as well.
SCOT ANALYSIS
Strengths
Quality service: Mahindra Finance provides nancial
services through simple processes and simple procedures
in sanction and disbursement of credit as well as; timely,
friendly and exible terms of repayment aligned to the
unique features of its clientele. Easy and fast appraisal
and disbursements make the Company the preferred
choice for many of its customers.
Round the corner: An established reach and network
helps the Company to cater to the remotest of villages.
More than 90% of the unorganised sector has no link
with banks and 60% of the rural consumers do not have
bank accounts. The Company has signicant business
presence in semi-urban and rural areas.
Customer Insight: Focus on customer is one of the key
factors that have driven the Company in all these years.
A strong business model and a prudent insight about its
customers gives the Company a competitive edge. Better
risk management and regulatory practices have made
Mahindra Finance achieve commendable growth as well.
Strong balance sheet: On the asset side, leasing, hire
purchase and loans and advances make up nearly 92.6%
of the total assets. This includes auto loans, hire-purchase,
leased assets, personal nance. Investments also add
another 2.7% of total asset size. The diversied nature of
asset mix gives stability which is important for stable and
sustained growth of the Company.
Opportunities
Demographic pattern: A rural middle income boom has
led to rise in rural incomes. This has been fuelled by
increased support prices and welfare schemes initiated
by the government. Per capita Gross Domestic Product
has grown faster in Indias rural areas than in its urban
centres.
New opportunities: New opportunities like home equity,
personal nance, and a foray into factoring and bill
payment for the rural hard-to-reach customer will take the
Company to new scales of success.
Challenges
Regulatory concerns: Newer regulatory updates pose a
constant challenge for smooth operations of the Company.
With constant updates governing the functional aspects of
nancial institutions, there lies unseen challenges in the
coming years.
372
Risk: New entrants or unorganized sector or diversication in
operations by existing nancial institutions.
Mitigation: The Companys deep rural presence across 1.8
lac villages in the country gives it an unparallel advantage over
others. In addition, the Companys ability to secure low-cost
funding ensures it maintains sustainable margin levels.
Risk: Difculty in expanding operations across new markets or
regions in the country.
Mitigation: The Company leverages its deep industry
experience during the course of its expansion strategies. It
identies and collaborates with local business partners and
adopts strategies to successfully market its products, ensuring
it reaches the customers.
OUTLOOK
Rural India accounts for atleast 50% of Indias gross domestic
product (GDP) comprising atleast 70% of the countrys
population. With more than 6.5 lac villages in the country, the
rural India comprises a mix of rising incomes and growing
aspirations. The changing consumption habits of the people
in rural regions today resembles to those of the urban areas.
Brands and premium products are no longer a dream, but an
aspiration for people of the region. The change in the countrys
government is expected to usher in signicant reforms in
policies, which will result in growth of several downstream
industries that we address. Going deeper across the countrys
unbanked regions, we at MMFSL are optimistic that we would
continue to address a wider customer base through our
extensive operational network. We shall continue to increase
our loan book and monitor our margins to ensure sustainable
stakeholder returns.
INFORMATION TECHNOLOGY (IT)
MMFSLs leverage of Information Technology is spread across
its various business lines, products, and functions. The
Companys IT roadmap focuses on innovation, digitisation,
mobility and security. The Companys technology now enables
communication to the customers in over a dozen languages.
The feet-on-street activities from pre-disbursement to collections
can be seamlessly handled through GPRS enabled hand-
held devices now numbering about 11,000. These devices
complement the large branch network connected to the data
centre in Mumbai through MPLS and other telecom lines. The
portfolio review mechanism has been strengthened through
a couple of new systems for review of every contract at any
level of the organisation. The use of document management
system (DMS) has expanded to over 500 branches; this
has been supported by enhancement of bandwidth in over
400 locations. Issuance of xed deposits across the counter
has been enabled in many cities. Now mobile applications
enable the geo-mapping of customers, dealers and branches.
Information security measures are being driven through
implementation of solutions at the network, end-user device
and application levels. The ISO 20000 re-certication process
has been completed successfully assuring us of the processes
and services within the IT function.
HUMAN RESOURCE MANAGEMENT
At MMFSL, we pursue a strong Employment Value Proposition
of Where Passion Meets Growth, with a vision to build an
organisation where Growth is a Way of Life, Employees are
Empowered and People Matter.
We recognise that our human capital drives the Companys
customer-driven business model. Therefore, we continuously
strive to attract and retain the best talent from the local
markets; clearly dene their roles and responsibilities; include
them into robust performance management systems; create
an inspiring and rewarding work environment; engage them
into an inclusive work place; impart training and create
development opportunities for increasing employee knowledge
and efciency to make them future ready; and create career
opportunities within.
Your Company is an equal opportunity employer and is
committed to ensuring that the work environment at all its
locations is conducive to fair, safe and harmonious relations
between employees. It strongly believes in maintaining
the dignity of all its employees, irrespective of their gender
or seniority. Discrimination and harassment of any type are
strictly prohibited. The Company ensures that no employee is
disadvantaged by way of gender discrimination. This being its
core philosophy the Company had already implemented an
appropriate Policy for its employees for prevention of sexual
harassment, which inter alia, sensitised all the employees of
the redressal mechanism and the protection offered by the
Company.
Pursuant to the provisions of The Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 [the Act] and Rules framed thereunder, the
Company has aligned its existing Policy to bring it in line with
the provisions of the Act and has taken necessary steps to
ensure compliance with the Act.
INTERNAL CONTROL SYSTEM
The Company has put in place an adequate internal control
system to safeguard all assets and ensure operational
excellence. The system also meticulously records all transaction
details and ensures regulatory compliance. It also has a team
of internal auditors to conduct internal audit. Reputed audit
rms also ensure that all transactions are correctly authorised
and reported. The reports are reviewed by the Audit Committee
of the Board. Wherever deemed necessary, internal control
systems are strengthened and corrective actions initiated.
CAUTIONARY STATEMENT
Certain statements in the Management Discussion and
Analysis describing the Companys objectives, predictions
may be forward-looking statements within the meaning
of applicable laws and regulations. Actual results may vary
signicantly from the forward looking statements contained in
this document due to various risks and uncertainties. These
risks and uncertainties include the effect of economic and
political conditions in India, volatility in interest rates, new
regulations and Government policies that may impact the
Companys business as well as its ability to implement the
strategy. The Company does not undertake to update these
statements.
373
To the Members of
of MAHINDRA & MAHINDRA FINANCIAL SERVICES
LIMITED (the Company), which comprise the Balance
Sheet as at March 31, 2014, and the Statement of Prot
and Loss and Cash Flow for the year then ended, and
a summary of signicant accounting policies and other
those risk assessments, the auditor considers internal
policies used and the reasonableness of the accounting
opinion.
Opinion
accepted in India:
st
March 2014;
2003, as amended by the Companies (Auditors Report)
(Amendment) Order, 2004, issued by the Central Government
of India in terms of sub-section (4A) of section 227 of the Act
(the Order), and on the basis of such checks of the books
and records of the Company as we considered appropriate
and according to the information and explanations given to
us, we give in the Annexure a statement on the matters
(b) in our opinion proper books of account as required by law
have been kept by the Company so far as appears from
our examination of those books;
(c) the Balance Sheet, the Statement of Prot and Loss and
Cash Flow dealt with by this Report are in agreement with
the books of account;
(d) In our opinion, the Balance Sheet, the Statements of
Prot and Loss and Cash Flow dealt with by this report,
the Companies Act, 1956 read with the General Circular
15/2013 dated 13 September 2013 of the Ministry
of Corporate Affairs in respect of section 133 of the
Companies Act, 2013;
(e) on the basis of written representations received from the
directors as on March 31, 2014, and taken on record by the
Board of Directors, none of the directors is disqualied as
on March 31, 2014, from being appointed as a director in
terms of clause (g) of sub-section (1) of section 274 of the
Firms Registration Number: 105102W
Partner
Mumbai, Dated: April 23, 2014 M.No. 37825
374
and situation of the xed assets. These assets were
physically veried by the Management at reasonable
intervals during the year and no material discrepancies
were noticed on such verication.
(b) None of the xed assets have been revalued during
the year.
(c) Fixed assets disposed off during the year were not
substantial and therefore do not affect going concern
2. Clause 4(ii) of the Companies (Auditors Report) Order
2003 is not applicable to the Company.
3. (a) Based on the records examined by us and according
Company has:
(i) not granted any loans to parties covered in the
Register maintained under section 301 of the
(ii) not taken any loans from parties covered in the
explanations given to us the Company is having an
adequate internal control system commensurate with the
size and the nature of its business, for the purchase of xed
assets and sale of services. The activities of the Company
do not involve purchase of inventory and sale of goods.
On the basis of our examination of the books and records
of the Company and according to the information and
nor have we been informed of any continuing failure to
correct any major weaknesses in the aforesaid internal
control system.
be entered in the register maintained under section 301 of
6. In respect of deposits accepted, in our opinion and
us, directives issued by the Reserve Bank of India and
the provisions of sections 58A, 58AA or any other relevant
provisions of the Act and the rules framed there under,
to the extent applicable, have been complied with. We
are informed by the management that no order has been
passed by the Company Law Board, National Company
Law Tribunal or Reserve Bank of India or any Court or any
other Tribunal.
7 In our opinion and according to the information and
explanations provided to us, the Company has an internal
audit system, which is commensurate with its size and the
8 On facts, the requirements of Para 4 (viii) requiring
maintenance of cost records are not applicable in case of
the Company.
9 (a) According to the records of the Company and
information and explanations given to us, the
Company is regular in depositing undisputed statutory
dues including Provident fund, Investor education and
protection fund, Employees state insurance, Income
tax, Sales tax, Wealth tax and service tax, cess and
other applicable statutory dues with the appropriate
authorities.
of Provident Fund, Investor Education and Protection
Fund, Employees State Insurance, Income-Tax, Sales
Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues in
arrears as at 31st March, 2014 for a period of more
(c) According to the records of the Company and
information and explanations given to us particulars
of disputed dues in respect of income tax and service
tax which have not been deposited on account of
dispute are as under:
Nature of
Dues
Amount Period to
which the
amount
relates
Forum where
dispute is
pending
(In lacs) (Financial
Year)
Income Tax 105.75 2001-02 Commissioner
of Income Tax
(Appeals)
185.02 2002-03 Income Tax
Appellate Tribunal
225.78 2003-04 Commissioner
of Income Tax
(Appeals)
218.7 2005-06 Income Tax
Appellate Tribunal
242.64 2006-07 Income Tax
Appellate Tribunal
of Income Tax
(Appeals)
of Income Tax
(Appeals)
Service Tax 88.41 2004-05 Asst Commissioner
Service Tax
10 The Company does not have accumulated losses as at
the end of the current year. The Company has not incurred
cash losses in the nancial year and in the immediately
ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE:
375
11. Based on the records examined by us and according
Company has not defaulted in repayment of dues to any
nancial institution or bank or debenture holders as at the
Balance Sheet date.
Company has maintained adequate documents and
records where it has granted loans and advances on the
basis of security by way of pledge of shares, debentures,
or other securities.
13. The provisions of any applicable statute to Chit Fund,
Nidhi or Mutual Benet Fund/Society are not applicable to
the Company.
14. In our opinion, the Company has maintained proper
records of transactions and contracts related to dealing
in mutual fund investments during the year and timely
entries have been made therein. Except for this, based
on the records examined by us and according to the
is not dealing or trading in shares, securities, debentures
and other investments.
16. Based on the records examined by us and according to
the information and explanations given to us, during the
year, term loans were applied for the purpose for which
the loans were taken.
17. On the basis of overall examination of the nancial
statements and other nancial information furnished,
including the statement of structural liquidity prepared
in accordance with Reserve bank of India guidelines, we
report that the company has not used short term funds for
long term investments.
18. The Company has not made any preferential allotment of
19. On the basis of our examination of books of account
and documents and according to the information and
explanations given to us, appropriate securities have been
created in respect of secured debentures issued by the
Company.
20. The Company has not made any public issue of its shares
during the year.
21. During the course of our examination of the books and
records of the Company, carried out in accordance with
generally accepted accounting practices and according
to the information and explanations given to us, except
for 77 cases of fraud aggregating to Rs. 560.32 lacs on
the Company mainly in the nature of misappropriation of
assets, we have neither come across any instances of
fraud on or by the Company noticed or reported during
the year, nor have we been informed of any such instances
during the year.
Firms Registration Number: 105102W
Partner
Mumbai, Dated: April 23, 2014 M.No. 37825
376
Rs. in Lacs
Particulars Note No. March 2014 March 2013
I. EQUITY & LIABILITIES
1) Shareholders funds
a) Share capital ................................................................................. 1 11270.50 11260.40
b) Reserves and surplus ................................................................... 2 498151.10 434197.48
509421.60 445457.88
2) Non-current liabilities
a) Long-term borrowings................................................................... 3 1690318.88 1301532.69
b) Other long-term liabilities .............................................................. 4 27641.82 24297.19
c) Long-term provisions .................................................................... 5 31801.27 31038.95
1749761.97 1356868.83
3) Current liabilities
a) Short-term borrowings .................................................................. 6 124428.36 130124.23
b) Trade payables .............................................................................. 7 43785.76 47884.32
c) Other current liabilities .................................................................. 8 649114.91 503721.46
d) Short-term provisions .................................................................... 9 90059.68 65184.98
907388.71 746914.99
TOTAL ........................................................................................... 3166572.28 2549241.70
II. ASSETS
1) Non-current assets
a) Fixed assets 10
i) Tangible assets ...................................................................... 11436.25 10409.79
ii) Intangible assets .................................................................... 494.10 150.32
iii) Capital work-in-progress ........................................................ 22.99 117.57
b) Non-current investments ............................................................... 11 52627.59 34511.43
c) Deferred tax assets (net) .............................................................. 12 31506.64 23820.72
d) Long-term loans and advances .................................................... 13 1577945.52 1291978.98
e) Other non-current assets .............................................................. 14 13593.00 17056.50
1687626.09 1378045.31
2) Current assets
a) Current investments ...................................................................... 15 34289.13 21585.34
b) Trade receivables .......................................................................... 16 1435.36 981.30
c) Cash and cash equivalents .......................................................... 17 55328.88 34542.75
d) Short-term loans and advances ................................................... 18 1383752.32 1111860.38
e) Other current assets ..................................................................... 19 4140.50 2226.62
1478946.19 1171196.39
TOTAL ........................................................................................... 3166572.28 2549241.70
Summary of signicant accounting policies and notes to the nancial
statements .......................................................................................................... I & II
The notes referred to above form an integral part of the Balance Sheet.
This is the Balance Sheet referred in our report of even date.
Bharat Doshi Chairman
FRN:105102W
Ramesh Iyer Managing Director
Uday Y. Phadke Director
Dhananjay Mungale Director
Naresh Kumar Kataria M. G. Bhide Director
Partner V Ravi Arnavaz Pardiwala Piyush Mankad Director
Membership No. 37825 Chief Financial Ofcer Company Secretary Pawan Goenka Director
Rama Bijapurkar Director
377
Rs. in Lacs
I. Revenue from operations ............................................................................ 20 492163.21 385672.15
II. Other income ............................................................................................... 21 3137.24 3797.75
III. Total Revenue (I + II) ............................................................................. 495300.45 389469.90
IV. Expenses:
Employee benets expense ........................................................................ 22 29733.41 22340.20
Finance costs ............................................................................................... 23 218801.45 161876.50
Depreciation and amortization expenses ................................................... 24 2429.62 2224.33
Loan provisions and write offs .................................................................... 25 50578.57 28334.34
Other expenses ............................................................................................ 26 59180.56 49632.86
Total Expenses ........................................................................................ 360723.61 264408.23
V. Prot before exceptional items and taxes (III - IV) 134576.84 125061.67
VI. Exceptional items (net) income/(expense) .............................................. 27 2858.21
VII. Prot before tax (V + VI)........................................................................ 134576.84 127919.88
VIII Tax expense:
(1) Current tax ............................................................................................ 53540.00 43350.39
(2) Deferred tax .......................................................................................... (7685.91) (3699.69)
45854.09 39650.70
IX. Prot (Loss) for the year (VII - VIII) 88722.75 88269.18
X. Earnings per equity share (Rupees): 29 (h)
(Face value Rs. 2/- per share)
(1) Basic ..................................................................................................... 15.75 16.59
(2) Diluted ................................................................................................... 15.60 16.40
Summary of signicant accounting policies and notes to the nancial
statements ............................................................................................... I & II
The notes referred to above form an integral part of the Statement of Prot and Loss.
This is the Statement of Prot and Loss referred in our report of even date.
For B. K. Khare & Co. Bharat Doshi Chairman
FRN:105102W
Partner V. Ravi Arnavaz Pardiwala Piyush Mankad Director
378
CASH FLOW STATEMENT
Rs. in Lacs
Prot before taxes and contingencies and exceptional items ................... 134576.84 125061.67
Add/(Less):
Non Cash Expenses:
Depreciation and amortisation expense ..................................................... 2429.62 2224.33
Provision for non-performing assets (net) .................................................. 24486.70 5814.48
General provision for Standard assets ....................................................... 2110.00 1597.00
Employee stock compensation costs ......................................................... 307.33 443.02
29333.65 10078.83
Add/(Less):
Income considered separately:
Income from investing activities .................................................................. (2933.95) (3098.11)
(Prot)/Loss on sale of assets ..................................................................... (8.29) (8.70)
(Prot)/Loss on sale of Investment ............................................................. (9.15) (231.18)
Income from Assignment/Securitisation transactions ................................ (21372.47) (21454.93)
(24323.86) (24792.92)
Operating prot before working capital changes ....................................... (I) 139586.63 110347.58
Less:
(Increase)/Decrease in interest accrued on investment/others ................. (1603.28) (198.59)
(Increase)/Decrease in Trade receivables .................................................. (454.06) (212.90)
(Increase)/Decrease in Loans & Advances ................................................ (700909.48) (797896.16)
(702966.82) (798307.65)
Add: Increase in Current liabilities .............................................................. 23857.91 36751.90
(II) (679108.91) (761555.75)
Cash generated from operations ................................................................ (I+II) (539522.28) (651208.17)
Advance taxes paid ..................................................................................... (52224.45) (44065.45)
NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES (A) (591746.73) (695273.62)
Purchase of Fixed Assets/Software (3701.15) (3092.66)
Sale of xed assets 98.79 61.04
Purchase of Investments (219320.11) (95990.51)
Investments in/maturity of term deposits with banks (19771.00) (19388.00)
Sale of Investments 188509.31 90368.73
Income received from investing activities 2696.78 2834.14
(Increase)/Decrease in Earmarked balances with banks 4.58 (8.04)
Proceeds from sale of long-term investments in equity shares of Mahindra
Insurance Brokers Limited 6432.99
NET CASH GENERATED FROM/(USED IN) INVESTING ACTIVITIES (B) (51482.80) (18782.31)
379
Rs. in Lacs
Issue of Equity Shares (net of issue expenses) 91.46 85531.99
Increase/(Decrease) in Bank borrowings (net) 344064.87 200175.75
Increase/(Decrease) in long term borrowings (net) 39990.00 191450.00
Increase/(Decrease) in short term borrowings (net) (5650.00) 4188.00
Increase/(Decrease) in Fixed Deposits (net) 127426.58 95305.83
Proceeds from Assignment/Securitisation transactions 159029.71 161623.22
Dividend paid (including tax on dividend) (23887.38) (16816.18)
NET CASH GENERATED FROM/(USED IN) FINANCING ACTIVITIES (C) 641065.24 721458.61
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (2164.29) 7402.68
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 24346.92 16944.24
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
(refer note no. 17)
22182.63 24346.92
Note: The above Cash Flow Statement has been prepared under the Indirect method as set out in Accounting Standard 3
Cash Flow Statement.
For B. K. Khare & Co. Bharat Doshi Chairman
FRN:105102W
Partner V. Ravi Arnavaz Pardiwala Piyush Mankad Director
CASH FLOW STATEMENT (CONTINUED)
380
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) Basis for preparation of nancial statements:
The nancial statements have been prepared in accordance with
the Generally Accepted Accounting Principles (IGAAP) under the
historical cost convention as a going concern and on accrual basis
and in accordance with the provisions of the Companies Act, 1956
and the Accounting Standards notied under section 133 of the
All assets and liabilities have been classied as current and non
current as per the Companys normal operating cycle and other
criteria set out in the Revised Schedule VI of the Companies Act,
1956. Based on the nature of services and their realisation in cash
and cash equivalents, the Company has ascertained its operating
cycle as 12 months for the purpose of current non current
classication of assets and liabilities.
Further, the Company follows prudential norms for Income
Recognition, assets classication and provisioning for Non-
performing assets as well as contingency provision for Standard
assets as prescribed by The Reserve Bank of India (RBI) for Non-
Banking Financial Companies. The Company has a policy of making
additional provision on a prudential basis (refer note no. 30 of notes
to the nancial statements)
2) Use of estimates:
The preparation of nancial statements requires the management to
make estimates and assumptions considered in the reported amount
of assets and liabilities (including contingent liabilities) as on the
date of nancial statements and the reported income and expenses
during the reporting period. Management believes that the estimates
used in the preparation of the nancial statement are prudent and
reasonable. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively in
current and future periods.
3) Revenue recognition:
I. General:
The Company follows the accrual method of accounting for
recognition of income except for delayed payment charges,
fee based income and Interest on trade advances, which on
account of uncertainty of ultimate collection are accounted on
receipt basis.
Further, in accordance with the guidelines issued by The
Reserve Bank of India for Non-Banking Financial Companies,
income on business assets classied as Non-performing
Assets, is recognised on receipt basis. Unrealized interest
recognized as income in the previous period is reversed in the
month in which the loan is classied as Non-performing.
II. Income from loans:
a) Interest Income from loan transactions is accounted for
by applying the interest rate implicit in such contracts.
b) Service charges, documentation charges and other
fees on loan transactions are recognised at the
commencement of the contract.
III. Subvention income:
Subvention received from manufacturers/dealers on retail
cases is booked over the period of the contract.
IV. Income from assignment/securitization transactions:
A. Income accounted prior to the issuance of RBI
Circular dated August 21, 2012 (the Circular):
i. Receivables assigned/securitised by the Company,
the assets are de-recognised as all the rights, title,
future receivables and interest thereof are assigned
to the purchaser.
ii. On de-recognition, the difference between book
value of the receivables assigned/securitised and
consideration received as reduced by the estimated
provision for loss/expenses and incidental expenses
related to the transaction is recognised as gain or
loss arising on assignment/securitisation.
iii. On the maturity of an underlying assignment/
securitisation deal, estimated provision for loss/
expenses and incidental expenses in respect of the
said deal are reversed as the actual losses/expenses
have already been debited to the Statement of prot
and loss over the period.
B. Income accounted post the issuance of RBI Circular
dated August 21, 2012 (the Circular):
i. Securitisation transactions:
a. Securitized receivables are de-recognized in the
balance sheet when they are sold i.e. if they fully
meet the true sale criteria.
b. Gains arising on securitisation of assets are
recognised over the tenure of securities issued
by Special Purpose Vehicles Trust (SPV).
c. Companys contractual rights to receive the
share of future interest (i.e. interest spread) in the
transferred assets from the SPV is capitalised at
the present value as Interest Only (I/O) strip with
a corresponding liability created for unrealised
gains on loan transfer transactions. The excess
interest spread on the securitisation transactions
are recognised in the Statement of prot and
loss only when it is redeemed in cash by the
SPV. Losses, if any, are recognised upfront.
ii. Assignment transactions:
a. Receivables under the assignment transactions
are de-recognized in the balance sheet when
they are sold subject to the portion of loan
assets which is required under the Minimum
Retention Criteria and reected as Loans and
Advances (refer note no. 13 and 18).
b. The amount of prot in cash on such
transactions is held under an accounting
head styled as Cash prot on loan transfer
transactions pending recognition maintained on
an individual transaction basis. The amortisation
of cash prot arising out of loan assignment
transaction is done at the end of every nancial
year based on the formula prescribed as per
the Circular.The unamortized portion is reected
as Other long-term liabilities/Other current
liabilities (refer note no. 4, 8 and 37 (b))
V. Income from investments:
a) Dividend from investments is accounted for as income
when the right to receive dividend is established.
b) Interest income is accounted on accrual basis.
4) Fixed assets, depreciation and amortization:
a) Tangible assets:
i. Tangible assets are stated at cost of acquisition (including
incidental expenses), less accumulated depreciation.
ii. Assets held for sale or disposals are stated at the lower
of their net book value and net realisable value.
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
ST
MARCH, 2014
381
b) Depreciation on Tangible assets:
I. Depreciation on tangible assets is charged on Straight
Line Method (SLM) at rates specied in Schedule XIV to
the Companies Act, 1956 on a pro-rata basis except for
following assets:
a) Ofce Equipment on which depreciation is charged
at the rate of 16.21% instead of 4.75% as prescribed
in Schedule XIV.
b) Assets costing less than Rs.5000/- are fully
depreciated in the period of purchase.
c) Vehicles used by employees are depreciated over
the period of 48 months considering this period as
the useful life of vehicle for the Company.
d) Repossessed assets that have been capitalised for
own use are depreciated at the rate of 15% on SLM
over the remaining useful life of these assets. The
same have been grouped under the head Vehicles
forming part of Companys Tangible assets in note
no.10.
c) Intangible assets:
Intangible assets are stated at cost less accumulated
amortization and impairment loss, if any.
d) Amortization of Intangible assets:
Intangible assets comprises of computer software which is
amortized over the estimated useful life. The maximum period
for such amortization is 36 months.
5) Foreign exchange transactions and translations:
i. Initial recognition
Transactions in foreign currencies are recognised at the
prevailing exchange rates between the reporting currency and
a foreign currency on the transaction dates.
ii. Conversion
a) Foreign currency monetary assets and liabilities at the
year-end are translated at the year-end exchange rates
and the resultant exchange differences are recognised in
the Statement of prot and loss.
b) Non-monetary items, which are measured in terms of
historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the
transaction. Non-monetary items, which are measured
at fair value or other similar valuation denominated in a
foreign currency, are translated using the exchange rate
at the date when such value was determined.
iii. Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as
below:
a. Realized gains and losses on settlement of foreign
currency transactions are recognised in the Statement of
prot and loss.
b. Foreign currency monetary assets and liabilities at the
year-end are translated at the year-end exchange rates
and the resultant exchange differences are recognised in
the Statement of prot and loss.
iv. Forward exchange and other derivative contracts entered
into to hedge foreign currency risk of an existing assets/
liabilities
a. In case of forward contracts with underlying assets or
liabilities, the difference between the forward rate and
the exchange rate on the date of inception of a forward
contract is recognised as income or expense and is
amortised over the life of the contract.
b. Exchange differences on such contracts are recognised
in the Statement of prot and loss in the period in which
the exchange rate changes.
c. Any prot or loss arising on cancellation or renewal of
forward exchange contracts are recognised as income or
expense for the period.
d. Interest rate swaps in the nature of hedge, taken to
manage interest rate risk on foreign currency liabilities,
whereby variable interest rate is swapped for xed
interest rate, are recognized on accrual basis at xed
interest rate and charged to the Statement of Prot and
Loss.
6) Investments:
In terms of Non-Banking Financial Companies Prudential Norms
(Reserve Bank) Directions, 1998, Investments held as long-term
investments are carried at cost comprising of acquisition and
incidental expenses. Provision for diminution in value of investments,
if any, is made if in the opinion of management, such diminution
is other than temporary. Any premium on acquisition is amortised
over the remaining maturity of the security on a constant yield to
maturity basis. Such amortisation of premium is adjusted against
interest income from investments. The book value of the investments
is reduced to the extent of amount amortised during the relevant
accounting period.
Investments other than long-term investments are classied as
current investments and valued at lower of cost or fair value.
7) Loans against assets:
Loans against assets are stated at agreement value net of instalments
received less unmatured nance charges.
8) Employee benets:
(a) Contribution to provident fund
Companys contribution paid/payable during the year to
provident fund and labour welfare fund are recognised in the
Statement of prot and loss.
(b) Gratuity
The Company provides for the gratuity, a dened benet
retirement plan covering all employees. The plan provides
for lump sum payments to employees upon death while in
employment or on separation from employment after serving
for the stipulated period mentioned under The Payment of
Gratuity Act, 1972. The Company accounts for liability of future
gratuity benets based on an external actuarial valuation on
projected unit credit method carried out for assessing liability
as at the reporting date. Actuarial gains/losses are immediately
taken to the Statement of prot and loss and are not deferred.
(c) Superannuation
The Company makes contribution to the Superannuation
scheme, a dened contribution scheme, administered by
Life Insurance Corporation of India, which are charged to the
Statement of prot and loss. The Company has no obligation
to the scheme beyond its monthly contributions.
(d) Leave encashment/compensated absences/sick leave
The Company provides for the encashment/availment of
number of days of unutilized leave at each balance sheet date
on the basis of an independent actuarial valuation.
9) Borrowing costs:
Borrowing costs that are attributable to the acquisition or construction
of qualifying assets are capitalised as part of the cost of such
382
assets. A qualifying asset is one that necessarily takes a substantial
period of time to get ready for its intended use or sale. All other
borrowing costs are charged to the Statement of prot and loss.
Ancillary expenditure incurred in connection with the arrangement of
borrowings is amortised over the tenure of the respective borrowings.
10) Current and deferred tax:
Tax expense for the period, comprising current tax and deferred tax,
are included in the determination of the net prot or loss for the
period. Current tax is measured at the amount expected to be paid
to the tax authorities in accordance with the provisions of the Income
Tax Act, 1961.
Deferred tax on timing differences, being the difference between
periods is accounted for using the tax rates and tax laws enacted
or substantively enacted as on the balance sheet date. Deferred
tax assets arising on account of unabsorbed depreciation or carry
forward of tax losses are recognised only to the extent that there
is virtual certainty supported by convincing evidence that sufcient
future taxable income will be available against which such deferred
tax assets can be realised. Other deferred tax assets are recognised
only when there is a reasonable certainty of their realisation.
11) Share issue expenses:
Expenses incurred in connection with fresh issue of Share capital
are adjusted against Securities premium reserve in the year in which
they are incurred.
12) Impairment of assets:
The carrying value of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash ows expected to arise from
the continuing use of an asset and from its disposal at the end of its
useful life to their present value based on an appropriate discount factor.
13) Provisions and contingent liabilities:
Provisions are recognised when there is a present obligation as a
result of a past event, and it is probable that an outow of resources
embodying economic benets will be required to settle the obligation
and there is a reliable estimate of the amount of the obligation.
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
conrmed only by the occurrence or non occurrence of one or more
uncertain future events not wholly within the control of the Company
or a present obligation that arises from past events where it is either
not probable that an outow of resources will be required to settle
the obligation or a reliable estimate of the amount cannot be made.
14) Employee Stock Compensation Costs:
Measurement and disclosure of the Employee Share-based Payment
plans is done in accordance with SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
and the Guidance Note on Accounting for Employee Share-based
Payments, issued by ICAI. The Company measures compensation
cost relating to employee stock options using the Intrinsic value
method (i.e. excess of market value of shares over the exercise price
of the option at the date of grant). Compensation cost is amortized
over the vesting period of the option on a straight line basis.
15) Lease:
Lease rentals in respect of assets taken on operating lease
arrangements are recognized as per the terms of the lease.
16) Earnings Per Share:
Basic earnings per share is calculated by dividing the net prot
or loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the
period. Earnings considered in ascertaining the Companys earnings
per share is the net prot for the period after deducting preference
dividends and any attributable tax thereto for the period. The weighted
average number of equity shares outstanding during the period
and for all periods presented is adjusted for events, such as bonus
shares, sub-division of shares etc. that have changed the number
of equity shares outstanding, without a corresponding change in
resources. For the purpose of calculating diluted earnings per share,
the net prot or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the
period is adjusted for the effects of all dilutive potential equity shares.
II. NOTES TO THE FINANCIAL STATEMENTS:
1) Share capital
Rs. in Lacs
Authorised capital:
70,00,00,000 equity shares of Rs.2/- each 14000.00 14000.00
50,00,000 Redeemable preference shares
of Rs.100/- each 5000.00 5000.00
Issued capital:
56,87,64,960 equity shares of Rs.2/- each 11375.30 11375.30
Subscribed and paid-up capital:
56,87,64,960 equity shares of Rs.2/- each
fully paid up 11375.30 11375.30
Less: Shares issued to ESOS Trust but not
allotted to employees 104.80 114.90
(52,39,841 equity shares of Rs.2/- each
(March 2013: 57,44,785 equity shares of
Rs.2/- each))
Total 11270.50 11260.40

Number of
shares
Rs.
in Lacs
Number of
shares
Rs.
in Lacs
a) Reconciliation of number
of equity shares:
Balance at the beginning
of the year 568764960 11375.30 104002735 10400.27
Add: Fresh allotment of
shares/adjustment for
sub-division of equity
shares during the year:
1) Private placement to
Qualied Institutional
Buyers (QIBs) through
Placement (QIP) (Equity
shares of face value
Rs.10/-each) 9750257 975.03
2) Addition on account of
sub-division of equity
shares of Rs.10/- face
value into equity shares
of Rs.2/- face value 455011968
Balance at the end of the
year 568764960 11375.30 568764960 11375.30
383

Number of
shares
Rs.
in Lacs
Number of
shares
Rs.
in Lacs
b) Number of equity shares
held by holding company
or ultimate holding
company including
shares held by its
subsidiaries/associates:
Holding company:
Mahindra & Mahindra
Limited 291207660 5824.15 291207660 5824.15
Percentage of holding (%) 51.20% 51.20% 51.20% 51.20%
c) Shareholders holding
more than 5 percent
shares:
Mahindra & Mahindra
Limited 291207660 5824.15 291207660 5824.15
Percentage of holding (%) 51.20% 51.20% 51.20% 51.20%
d) Terms/rights attached to equity shares
Rs.2/- per share. Each holder of equity shares is entitled to one vote per
share. The dividend proposed by the board of directors and approved by
the shareholders in the annual general meeting is paid in Indian rupees. In
the event of liquidation of the Company, the holders of equity shares will
be entitled to receive remaining assets of the Company, after distribution
of all preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.
e) Shares issued to ESOS Trust
The Guidance note issued by The Institute of Chartered Accountants of
India on accounting for employee share-based payment requires that
shares allotted to a Trust but not transferred to the employees be reduced
from Share capital and Reserves. Accordingly, the Company has reduced
the Share capital by Rs. 104.80 Lacs (March 2013: Rs. 114.90 Lacs),
Securities premium reserve by Rs. 86.83 Lacs (March 2013: Rs. 112.70
Lacs) in respect of 52,39,841 equity shares of face value of Rs. 2/- each
(March 2013: 57,44,785 equity shares of face value of Rs. 2/- each) held
by the Trust, as at the year end pending allotment of shares to eligible
employees.
2. Reserves and surplus:
Rs. in Lacs
Capital redemption reserve:
Balance as at the beginning of the year 5000.00 5000.00
Add: Transfers during the year
5000.00 5000.00
Less: Deductions during the year
Balance as at the end of the year 5000.00 5000.00
Securities premium reserve:
Add: Additions during the year on
account of
i) Exercise of employee stock options 266.66 444.18
ii) Fresh issue of shares 85704.76
201824.74 202838.14
Less: Deductions during the year in respect
of share issue expenses 1280.06
Rs. in Lacs
Less: Premium on shares issued to ESOS
trust but not allotted to employees 86.83 112.70
Net balance as at the end of the year 201737.91 201445.38
Statutory reserve:
Add: Transfers from Surplus in the
Statement of prot and loss 17745.00 17654.00
81532.62 63787.62
General reserve:
Add: Transfers from Surplus in the
36176.78 27303.78
Employees stock options outstanding:
A) Employees stock options outstanding
Add: Fresh grant of options 289.16
1636.93 1804.70
Less: Transfers/reversals during the year
i) Transfers to Securities premium
reserve on exercise of options 266.66 444.18
ii) Reversals for options lapsed 36.46 12.75
Balance as at the end of the year (A) 1333.81 1347.77
B) Deferred employee compensation:
Add: Fresh grant of options 289.16
861.46 1101.19
Less: Amortisation during the year
i) Transfers to employee
compensation expenses 362.82 516.14
ii) Reversals for options lapsed 36.46 12.75
Balance as at the end of the year (B) 462.18 572.30
Balance as at the end of the year (A-B) 871.63 775.47
Surplus in Statement of prot and loss:
Add: Prot for the year transferred from the
224607.98 186253.61
Less: Appropriations:
General reserve 8873.00 8827.00
Statutory reserve 17745.00 17654.00
Proposed dividend on equity shares 21613.07 20475.54
Corporate dividend tax on equity shares 3544.75 3411.84
51775.82 50368.38
Total 498151.10 434197.48
384
Rs. in Lacs
3. Long-term borrowings:
a) Secured #
Non-convertible debentures (refer
note no. 44 (i) (a)) 321520.00 313960.00
Term loans:
from banks (refer note no. 44 (ii) (a)) 960495.23 708192.00
Foreign currency loans from banks
(refer note no. 44 (iii) (a)) 40305.51 27142.50
Total 1322320.74 1049294.50
b) Unsecured
Unsecured bonds (Subordinate
debts) (refer note no. 45 (i) (a)) 79410.00 59410.00
Term loans from banks (refer note no.
45 (ii) (a)) 10000.00
Loans and advances from related
parties (ICDs) (refer note no.45 (iii) (b)) 725.00 775.00
Fixed deposits (refer note no. 45 (iv) (b)) 277863.14 192053.19
Total 367998.14 252238.19
Total (a+b) 1690318.88 1301532.69
# All secured loans/debentures are
secured by paripassu charges on
Aurangabad ofce and exclusive
charge on receivables under loan
contracts, owned assets and
book debts to the extent of 100%
of outstanding secured loans/
debentures.
Deposits/advances received against
loan agreements (refer note no.34) 1333.08 1260.70
borrowings 15552.99 15983.12
Deferred subvention income 3031.55 3424.05
Unrealised gains on loan transfers
under securitisation transactions (refer
note no.37(d)) 6629.14 3629.32
Cash prot on loan transfers under
assignment transactions pending
recognition (refer note no.37(b)) 140.57
Derivative contract payables 954.49
Total 27641.82 24297.19
5. Long-term provisions
Provision for employee benets (refer
note no. 35) 987.23 702.43
Provision for Non-performing assets
(refer note no. 30 (a)) 17685.49 9552.06
Contingent provisions for Standard
assets (refer note no. 30 (b)) 6372.00 5220.00
Provision for estimated loss/expenses
on assignments 6756.55 15564.46
Total 31801.27 31038.95
6. Short term borrowings
a) Secured #
(refer note no. 46 (i))
Term loans from banks 55500.00 40500.00
Cash credit facilities with banks 57232.21 75027.03
Total 112732.21 115527.03
b) Unsecured
Loans from banks:
Term loans (refer note no.45 (ii) (b)) 2,200.00
Overdraft facilities 2019.79
Rs. in Lacs
parties (ICDs) (refer note no.45 (iii) (a)) 3565.00 4215.00
Fixed deposits (refer note no. 45 (iv) (a)) 5931.15 3362.41
Commercial Papers (CPs) (refer note
no. 46 (ii)) 5000.00
Total 11696.15 14597.20
Total (a+b) 124428.36 130124.23
# All secured loans are secured by
paripassu charges on Aurangabad ofce
and exclusive charge on receivables
under loan contracts, owned assets and
book debts to the extent of 100% of
outstanding secured loans.
7. Trade payables
Trade payables
Finance 30095.50 34932.38
Expenses 13690.26 12951.94
Total 43785.76 47884.32
8. Other current liabilities
Current maturities of long-term debt
a) Secured #
Non-convertible debentures (refer
note no.44 (i) (b)) 183520.00 167840.00
Term loans from banks (refer note
no.44 (ii) (b)) 306338.48 236298.67
Foreign currency loans from banks
(refer note no. 44 (iii) (b)) 11983.00 10809.57
501841.48 414948.24
b) Unsecured
Unsecured bonds (subordinate debts)
(refer note no. 45 (i) (b)) 3100.00
parties (ICDs) (refer note no. 45 (iii) (c)) 50.00 150.00
Fixed deposits (refer note no. 45 (iv) (c)) 76425.51 37377.62
76475.51 40627.62
Interest accrued but not due on borrowings 29745.21 14227.10
Unclaimed dividends 57.93 62.52
Deposits/advances received against loan
agreements (refer note no.34) 1647.04 1728.60
Amount received in advance from ESOS trust 191.63 227.60
Credit balances in current accounts with
banks as per books 7242.04 9430.67
Deferred subvention income 2623.37 1855.43
Unrealised gains on loan transfers under
securitisation transactions (refer note no.37(d)) 15910.53 7447.22
Cash prot on loan transfers under
assignment transactions pending
recognition (refer note no.37(b)) 168.42
Insurance premium payable 3694.88 3155.66
Payables under assignment/securitisation
transactions 6157.50 7590.56
Taxes deducted at source (TDS) 2333.20 1528.83
Others 1026.17 891.41
Total 649114.91 503721.46
# All secured loans/debentures are secured
by paripassu charges on Aurangabad ofce
and exclusive charge on receivables under
loan contracts, owned assets and book
debts to the extent of 100% of outstanding
secured loans/debentures.
385
Rs. in Lacs
9. Short-term provisions
Employee benets (refer note no. 35) 5168.37 3493.65
Others
Provision for estimated loss/
expenses on assignments 8807.92 4189.65
(refer note no. 30(a)) 45672.57 29319.30
Contingent provisions for Standard
assets (refer note no. 30 (b)) 5253.00 4295.00
Rs. in Lacs
Proposed dividend on equity shares # 21613.07 20475.54
Corporate dividend tax # 3544.75 3411.84
Total 90059.68 65184.98
# The Board of Directors have recommended a dividend of Rs.3.80 per share
on equity share of face value of Rs.2/- each (March 2013: Rs.3.60 per share
on equity share of face value Rs.2/-each) for the current nancial year. The
dividend will absorb a sum of Rs.25157.82 Lacs (March 2013: Rs. 23887.38
Lacs) including dividend distribution tax.
10. Fixed Assets
Rs. in Lacs
GROSS BLOCK AT COST DEPRECIATION & AMORTISATION NET BLOCK
Asset description
As at
1st April,
2013 Additions
Deductions/
adjustments
As at
31st March
2014
As at 1st
April,
2013 Additions
Deductions/
adjustments
As at
31st March
2014
As at
31st March
2014
As at
1st April,
2013
i) Tangible assets:
Premises 108.92 108.92 15.82 1.77 17.59 91.33 93.10
Computers 4529.66 709.09 1142.69 4096.06 2695.32 545.44 1141.66 2099.10 1996.96 1834.34
Furniture and
xtures 5734.20 775.54 257.56 6252.18 1812.81 453.15 233.13 2032.83 4219.35 3921.39
Vehicles 4050.98 1088.68 303.49 4836.17 1729.51 608.06 243.04 2094.53 2741.64 2321.47
Ofce equipment 4224.70 852.75 481.00 4596.45 1985.21 700.68 476.41 2209.48 2386.97 2239.49
Total (i) 18648.46 3426.06 2184.74 19889.78 8238.67 2309.10 2094.24 8453.53 11436.25 10409.79
March, 2013 15855.29 2977.07 183.90 18648.46 6240.82 2129.41 131.56 8238.67 10409.79 9614.47
ii) Intangible assets:
Computer software 1150.30 464.30 1614.60 999.98 120.52 1120.50 494.10 150.32
Total (ii) 1150.30 464.30 1614.60 999.98 120.52 1120.50 494.10 150.32
March, 2013 1000.17 150.13 1150.30 905.06 94.92 999.98 150.32 95.11
Total (i+ii) 19798.76 3890.36 2184.74 21504.38 9238.65 2429.62 2094.24 9574.03 11930.35 10560.11
March, 2013 16855.46 3127.20 183.90 19798.76 7145.88 2224.33 131.56 9238.65 10560.11 9709.58
11. Non-current investments:
Rs. in Lacs
A) Quoted (at cost): Trade
Government securities
(refer note no. 11(i) below) 37895.56 24168.13

(A) 37895.56 24168.13

B) Unquoted (at cost): Non-trade
(a) Equity investment in
subsidiary companies:
(i) Mahindra Insurance
Brokers Limited 47.98 47.98
(2190722 equity shares @
Rs.10/- each fully paid up)
(ii) Mahindra Rural Housing
Finance Limited
Fully paid-up: (40000000
equity shares of Rs.10/-
each fully paid up) 4000.00 4000.00
Partly paid-up (17520003
Equity shares of face
value of Rs.10/- each at
a premium of Rs.15/- per
share, Rs.12.50 paid up,
including premium of
Rs.7.50 per share) (refer
note no. 11 (ii) (a) below) 2190.00
Rs. in Lacs
(iii) Mahindra Business &
Consulting Services Pvt. Ltd. 1.00 1.00
(10000 equity shares of
(iv) Mahindra Asset
Management Company
Private Ltd. 5.00
(49998 equity shares of
(refer note no. 11 (ii) (b)
below)

6243.98 4048.98
(b) Equity investment in Joint
Venture:
49% Ownership in Mahindra
Finance USA, LLC 7788.05 5594.32
(Joint venture entity with De Lage
Landen Financial Services,INC
in United States of America)
(refer note no. 11(ii) (c) below)
(c) Investment in Bonds/Debentures:
70 11% Unsecured redeemable
non-convertible subordinate
debentures of face value
Rs.10.00 Lacs each issued
by Mahindra Rural Housing
Finance Limited 700.00 700.00
Note 9 (cont)
Note 11 (cont)
386
Rs. in Lacs
(Tenure: 5 years and 6 months ;
Maturity: 28th Dec, 2018)

(B) 14732.03 10343.30

Total (A + B) 52627.59 34511.43
Additional Information:
a) Aggregate amount of quoted
investments and market value
i) Aggregate amount 37895.56 24168.13
ii) Market value 36504.87 24709.68
b) Aggregate amount of unquoted
investments 14732.03 10343.30
Note: Having regard to the long-
term nature of the investments,
the decline in market value as
compared to carrying value
is considered other than
temporary, hence no provision
for diminution in value is
considered necessary.
i) Details of quoted Long-term investments in Government stock:
As on 31st March, 2014: Rs. In Lacs
Face value
(Rs.) Units Amount
Govt Stock 6.90%-13/07/2019 100 1000000 947.79
Govt Stock 6.90%-13/07/2019 100 1500000 1427.50
Govt Stock 6.90%-13/07/2019 100 1000000 932.55
Govt Stock 6.35%-02/01/2020 100 1000000 885.25
Govt Stock 7.80%-03/05/2020 100 500000 488.65
Govt Stock 10.25%-30/05/2021 100 1000000 1098.16
Govt Stock 8.13%-21/09/2022 100 1500000 1508.00
Govt Stock 8.20%-15/02/2022 100 1000000 1007.06
Govt Stock 8.20%-15/02/2022 100 1000000 1002.06
Govt Stock 8.13%-21/09/2022 100 500000 490.95
Govt Stock 8.13%-21/09/2022 100 500000 490.71
Govt Stock 8.13%-21/09/2022 100 1000000 955.80
Govt Stock 9.15%-14/11/2024 100 2500000 2683.23
Govt Stock 9.15%-14/11/2024 100 1000000 1123.16
Govt Stock 8.28%-21/09/2027 100 1500000 1380.75
Govt Stock 8.28%-21/09/2027 100 2000000 1868.10
Govt Stock 8.28%-21/09/2027 100 2000000 1867.90
Govt Stock 8.97%-05/12/2030 100 1000000 1029.99
Govt Stock 8.97%-05/12/2030 100 1000000 1031.42
Govt Stock 8.97%-05/12/2030 100 500000 517.58
Govt Stock 8.97%-05/12/2030 100 1000000 1035.60
Govt Stock 8.97%-05/12/2030 100 500000 528.28
Govt Stock 8.97%-05/12/2030 100 1000000 1045.56
Govt Stock 8.97%-05/12/2030 100 1500000 1607.06
Govt Stock 8.97%-05/12/2030 100 1000000 1118.72
Govt Stock 8.97%-05/12/2030 100 1000000 1100.08
Govt Stock 8.97%-05/12/2030 100 1500000 1450.20
Govt Stock 8.28%-15/02/2032 100 2500000 2401.50
Govt Stock 8.30%-02/07/2040 100 1500000 1359.30
Govt Stock 8.83%-12/12/2041 100 1000000 1018.81
Govt Stock 8.83%-12/12/2041 100 1000000 1024.52
Govt Stock 8.83%-12/12/2041 100 1500000 1469.33

Total 38000000 37895.56
As on 31st March, 2013:
Rs. in Lacs
Face value
(Rs.) Units Amount
Govt Stock 6.90%-13/07/2019 100 1000000 947.79
Govt Stock 6.90%-13/07/2019 100 1500000 1427.50
Govt Stock 6.90%-13/07/2019 100 1000000 932.55
Govt Stock 6.35%-02/01/2020 100 1000000 885.25
Govt Stock 7.80%-03/05/2020 100 500000 488.65
Govt Stock 10.25%-30/05/2021 100 1000000 1111.85
Govt Stock 8.13%-21/09/2022 100 1500000 1508.95
Govt Stock 8.20%-15/02/2022 100 1000000 1007.96
Govt Stock 8.20%-15/02/2022 100 1000000 1002.32
Govt Stock 8.13%-21/09/2022 100 500000 490.95
Govt Stock 8.13%-21/09/2022 100 500000 490.71
Govt Stock 8.13%-21/09/2022 100 1000000 955.80
Govt Stock 9.15%-14/11/2024 100 2500000 2700.47
Govt Stock 8.97%-05/12/2030 100 1000000 1031.78
Govt Stock 8.97%-05/12/2030 100 1000000 1033.30
Govt Stock 8.97%-05/12/2030 100 500000 518.64
Govt Stock 8.97%-05/12/2030 100 1000000 1037.74
Govt Stock 8.97%-05/12/2030 100 500000 529.97
Govt Stock 8.97%-05/12/2030 100 1000000 1048.29
Govt Stock 8.97%-05/12/2030 100 1500000 1613.47
Govt Stock 8.30%-02/07/2040 100 1500000 1359.30
Govt Stock 8.83%-12/12/2041 100 1000000 1019.49
Govt Stock 8.83%-12/12/2041 100 1000000 1025.41

Total 24000000 24168.13
Quoted investments of Rs. 37895.56 Lacs (March 2013: Rs. 24168.13 Lacs)
are in Government Stocks as Statutory Liquid Assets as required under
Section 45 IB of The Reserve Bank of India Act,1934 vide a oating charge
created in favour of public deposit holders through a Trust Deed with an
independent trust, pursuant to circular RBI/2006-07/225 DNBS (PD) C.C.No.
87/03.02.004/2006-07 dated 4
th
January,2007 issued by The Reserve Bank
of India.
ii) During the year, the Company has made following investments
a) Rs. 2190.00 Lacs in Mahindra Rural Housing Finance Ltd., its
subsidiary, by subscription to 1,75,20,003 Equity shares of Rs. 10/-
each for cash at a premium of Rs. 15/- per Equity share on a rights
basis on which Rs. 12.50 per Equity share (including premium of
Rs. 7.50 per Equity share) has been paid up.
b) Rs. 5.00 lacs being initial investment in 49998 equity shares of face
value of Rs. 10/- each in Mahindra Asset Management Company
Private Limited, a newly formed subsidiary, which was incorporated
on 20th June, 2013.
c) Rs. 2193.73 Lacs (US $ 3.84 million) (March 2013: Rs. 3062.69 Lacs
equivalent to US $5.68 million) being additional equity infusion in
Mahindra Finance USA LLC, a 49% joint venture company formed
jointly with De Lage Landen Financial Services Inc. in United States.
12. Deferred tax assets (net)
Rs. in Lacs
a) Deferred tax assets
Provision for non performing
assets/loss and expenses on
assignments 26825.77 19926.80
Provision for Standard assets 3951.34 3234.15
Other disallowances 748.64 675.02

(a) 31525.75 23835.97

387
Rs. in Lacs
b) Deferred tax liabilities
Difference between written
down value of books of account
and Income Tax Act, 1961 19.11 15.25

(b) 19.11 15.25

Net deferred tax assets (a-b) 31506.64 23820.72
13. Long-term loans and advances
Unsecured, considered good unless
otherwise stated:
Capital advances 38.64 133.27
Deposits for ofce premises/others 1656.70 1411.54
Loans and advances to related parties
(Portfolio purchased from Mahindra
Holidays & Resorts India Ltd.) 1091.74
Loans against assets (secured,
including overdue loans) # 1564715.80 1277141.69
Retained interest in Pass Through
Certicates under securitization
transactions (refer note no. 37 (f)) 828.43 2041.02
Retained interest under assignment
transactions (refer accounting policy
no. 3 (IV) (B) (ii) (a) and note no.
37(b)) 703.85
Interest Only Strip (I/O Strip) under
securitization transactions (refer note
no. 37(d)) 6629.14 3629.32
Loans and advances (including
overdue loans) @ 3081.69 4793.76
Inter corporate deposits 291.27 1736.64
# Includes non-performing assets of
Rs.34043.28 Lacs (March 2013:
Rs.16158.20 Lacs) (refer note no. 5, 9
and 30 (a))
@ Includes non-performing assets of
Rs.57.80 Lacs (March 2013: Rs.56.91
Lacs) (refer note no. 5, 9 and 30 (a))

Total 1577945.52 1291978.98
14. Other non-current assets
Term deposits with banks with
maturity greater than 12 months
Free 2500.00 5000.00
Under lien (refer note no. 17 (a)) 11093.00 11777.00
Derivative contract receivables 279.50

Total 13593.00 17056.50
i) Unquoted (at cost):
Certicate of deposits with banks # 24289.13 19585.34
Commercial Papers 10000.00 2000.00
(2000 CPs, face value of Rs. 5.00
Lacs each issued by Citicorp Finance
(India) Limited; March 2013: 400 CPs,
face value of Rs. 5.00 Lacs each
issued by Manappuram Finance
Limited)

Total 34289.13 21585.34
Additional Information:
Aggregate amount of unquoted investments 34289.13 21585.34
# Details of unquoted current investments in certicate of deposits:
As on 31st March 2014:
Rs. In Lacs
Particulars
Face value
(Rs.) Units Amount
Indian Bank 100000 5000 4924.83
Punjab National Bank 100000 2500 2297.66
Punjab National Bank 100000 2500 2297.66
Canara Bank 100000 5000 4944.74
Union Bank of India 100000 5000 4917.75
Indian Bank 100000 5000 4906.50

Total 25000 24289.13
# As on 31st March 2013:
Rs. In Lacs
Particulars
Face value
(Rs.) Units Amount
Indian Overseas Bank 100000 20000 19585.34

Total 20000 19585.34
Rs. in Lacs
Secured, considered doubtful
unless otherwise stated:
Trade receivable on hire purchase
transactions # 377.66 379.57
(outstanding for a period exceeding
six months)
otherwise stated:
Debts outstanding for a period
exceeding six months 0.12 35.85
Debts outstanding for a period not
exceeding six months 1057.58 565.88
# Includes non-performing assets
of Rs.377.66 Lacs (March 2013:
and 30 (a))

Total 1435.36 981.30
17. Cash and bank balance
Cash and cash equivalents:
Cash on hand 2542.72 2106.46
Cheques and drafts on hand 608.52 484.46
Balances with banks in current
accounts 19031.39 21756.00

22182.63 24346.92
Other bank balances:
Earmarked balances with banks
Unclaimed dividend accounts 59.25 63.83
Term deposits with maturity less than
12 months 5000.00
Term deposits under lien (refer note
no. 17 (a)) 28087.00 10132.00

33146.25 10195.83

Total 55328.88 34542.75
388
a) Details of Term deposits:
Rs. in Lacs
Cash
and bank
balances
Other
Non-current
assets
Total Cash
and bank
balances
Other
Non-current
assets
Total
Term deposits for
SLR (i) 17963.00 501.00 18464.00 6780.00 5960.00 12740.00
Collateral deposits
for securitization
transactions (ii) 9621.00 10575.00 20196.00 3349.00 5800.00 9149.00
Legal deposits (iii) 3.00 17.00 20.00 3.00 17.00 20.00
Margin deposits
towards
Constituent
Subsidiary General
Ledger (CSGL)
account (iv) 500.00 500.00
Total 28087.00 11093.00 39180.00 10132.00 11777.00 21909.00
# Term deposits with scheduled banks under lien include:
i) Rs. 18464.00 Lacs (March 2013: Rs. 12740.00 Lacs) being the Term
deposits kept with Banks as Statutory Liquid Assets as required
under Section 45 IB of The Reserve Bank of India Act,1934 vide a
oating charge created in favour of public deposit holders through
a Trust Deed with an independent trust, pursuant to circular
RBI/2006-07/225 DNBS (PD) C.C.No. 87/03.02.004/2006-07 dated
4th January,2007 issued by The Reserve Bank of India.
ii) Rs. 20196.00 Lacs (March 2013: 9149.00 Lacs) being collateral deposits
kept with banks as retained exposure under credit enhancements
pertaining to securitization transactions (refer note no.37 (f)).
iii) Rs. 20.00 Lacs (March 2013: Rs.20.00 Lacs) as special deposits
kept with banks towards guarantee against legal suits led by the
Company.
iv) Rs.500.00 Lacs (March 2013: Nil) as collateral deposits kept with
banks towards Constituent Subsidiary General Ledger (CSGL)
account for holding securities for SLR purpose.
18. Short-term loans and advances
Rs. in Lacs
otherwise stated:
Loans against assets (secured, including
overdue loans) # 1211606.40 966346.38
Certicates (PTC) under securitization
transactions (refer note no. 37(f)) 1387.00 1813.53
Retained interest under assignment
transactions (refer accounting policy no. 3
(IV) (B) (ii) (a) and note no. 37(b)) 914.35
Interest Only Strip (I/O Strip) under
securitization transactions (refer note no.
37(d)) 15910.53 7447.22
Loans and advances (including overdue
loans) @ 7914.21 13609.34
Bills of exchange 12333.78 7442.71
Trade Advances @ 118411.37 91907.73
Inventory funding (secured, including
overdue loans) 7674.70 4093.91
Inter corporate deposits given @ 1170.33 10445.00
(portfolio purchased from Mahindra
Holidays & Resorts India Ltd.) 1091.74 1817.37
Deposits for ofce premises/others 258.99 232.70
Rs. in Lacs
Advance payment of taxes (net of
provisions) 4847.36 6162.91
Other short term advances 231.56 541.58
# Includes non-performing assets
Rs.47037.31 Lacs) (refer note no. 5, 9 and
30 (a))
@ Includes non-performing assets
and 30 (a))

Total 1383752.32 1111860.38
19. Other current assets
Interest accrued on
Investments 742.74 505.57
Others deposits 2314.76 711.48
Derivative contract receivables 1083.00 1009.57

Total 4140.50 2226.62
a) Interest Income:
Income from loans 441807.79 340079.74
Income from hire purchase 61.35 53.30
Interest on term deposits/
Inter-corporate deposits/Bonds etc 3795.38 2469.27
Interest on retained interest in PTCs
under securitization transactions 211.79 26.92
Interest on government securities
Long term 2477.24 1432.49

(a) 448353.55 344061.72

b) Other nancial services
Service charges and other fees on
loan transactions 21053.37 18609.94
Income from hire purchase 0.21 0.58
Income from bills discounting 1383.25 1544.64
Income from lease 0.36 0.34
Income from assignment/securitisation
transactions (refer note no. 37) 21372.47 21454.93

(b) 43809.66 41610.43

Total (a+b) 492163.21 385672.15
21. Other income
Dividend income on
Current investments in mutual fund
units 56.61 10.62
Long-term investments in subsidiary
companies 400.10 1655.00
Prot/premium on sale/redemption of
Current investments 9.15 231.18
Prot on sale/retirement of owned
assets (net) 8.29 8.70
Income from shared services 2290.15 1607.28
Others 372.94 284.97

Total 3137.24 3797.75
389
Rs. in Lacs
22. Employees benets expense
Salary, bonus and incentives 26242.38 19293.24
Companys contribution to provident
funds and other funds 1667.34 1401.58
Employee stock compensation costs
(refer note no. 29 (f)) # 307.33 443.02

Total 29733.41 22340.20
# Inclusive of ESOP costs reimbursements
(net) to the holding company Rs.5.32
Lacs (March 2013: Rs. 7.97 Lacs) and net
of recoveries from subsidiary company
Rs.60.81 Lacs (March 2013: Rs. 81.07
Lacs)
23. Finance costs:
Interest expenses 216824.12 160121.87
Other borrowing costs 1977.33 1754.63

Total 218801.45 161876.50
24. Depreciation and amortization
expense
Depreciation on tangible assets 2309.10 2129.41
Amortization of intangible assets 120.52 94.92

Total 2429.62 2224.33
25. Loan provisions and write offs
Bad debts and write offs (refer note
no. 30 (c)) 23981.87 20922.86
(net) (refer note no.5,9 and 30 (a)) 24486.70 5814.48
General provision for Standard assets
(refer note no.5,9 and 30 (b)) 2110.00 1597.00

Total 50578.57 28334.34
26. Other expenses
Electricity charges 1378.77 1085.59
Rent 4572.80 3971.19
Buildings 444.69 746.57
Others 142.32 71.73
Insurance 858.08 805.85
Rates and taxes, excluding taxes on
income 812.29 236.42
Directors sitting fees and commission 147.02 110.34
Commission and brokerage 14746.34 12018.33
Legal and professional charges 5983.66 4150.39
Manpower outsourcing cost 15011.59 13823.84
Payments to the auditor
Audit fees 29.92 26.01
Taxation matters 4.49 6.39
Rs. in Lacs
Other services 11.76 39.98
Reimbursement of expenses 0.98 0.67
General and administrative expenses 15035.85 12539.56

Total 59180.56 49632.86
Above expenses includes following
expenditure incurred in foreign currency
Travelling expenses 40.76 30.35
Legal and professional fees 115.24 62.75
Other expenses 18.61 7.21
27. Exceptional items (net) income/
(expense)
Prot on sale of investments in
shares of subsidiary company # 6426.21
Additional general provision for
Standard assets (refer note no. 30 (b)) (3568.00)

Total 2858.21
# sale of 3,09,278 equity shares of face value of Rs.10/- each
representing 12.37% of holding in subsidiary company, Mahindra
Insurance Brokers Ltd. for a consideration aggregating Rs.6432.98
Lacs.
28. Disclosure under the Accounting Standard relating to Financial Reporting
of Interests in Joint Ventures (AS-27).
The Company has interest in the following jointly controlled entity.
i) Name of the entity
Country of
Incorporation % Holding
Mahindra Finance USA, LLC
United States
of America 49.00%
ii) Interest in the assets, liabilities, income and expenses with
respect to jointly controlled entity
Rs. In Lacs
Particulars March 2014 March 2013
I. ASSETS
Long-term loans and advances 91854.46 58689.98
Deferred tax assets 306.36
Cash and cash equivalents 395.53 224.14
Short-term loans and advances 21562.02 16844.83
II. LIABILITIES
Long-term borrowings 48549.09 24756.47
Other Long-term liabilities 59.74
Long term provisions 333.14 199.35
Short term borrowings 28664.24 30782.02
Other current liabilities 25810.16 13302.36
Short term provisions 77.40 57.30
III. INCOME
Revenue from operations 4782.11 2774.21
Other income 210.91 86.88
IV. EXPENSES
Finance costs 1677.26 943.95
Loan provisions and write-offs 251.15
Other expenses 1578.45 1225.05
390
Rs. In Lacs
Provision for current tax 823.54 259.83
Provision for deferred tax (307.94)
29. Employee Stock Option Plan
a) The Company had allotted 134,32,750 equity shares (face value of
Rs.2/- each) on 6th December 2005 and 48,45,025 Equity shares
(face value of Rs.2/- each) on 3rd February,2011, to Mahindra and
Mahindra Financial Services Limited Employees Stock Option Trust
set up by the Company. The Trust holds these shares for the benet
of the employees and issues them to the eligible employees as per
the recommendation of the Compensation Committee. The Trust
had issued 1,30,37,934 equity shares to employees (March 2013:
1,25,32,990 equity shares) up to 31st March, 2014, of which 5,04,944
equity shares (March 2013: 8,31,035 equity shares) were issued
during the current year.
The details of Employees stock option schemes are as under:
Scheme 2005 Scheme 2010
Type of
arrangement
Employees share based
payment plan administered
through ESOS Trust
Employees share
based payment plan
administered through
ESOS Trust
Contractual life 6 years from the date of grant 6 years from the date
of grant
Method of
settlement
By issue of shares at exercise
price
By issue of shares at
exercise price
Vesting
conditions
35% on expiry of 12 months
from the date of grant
20% on expiry of 12
months from the date
of grant
20% on expiry of 24
of grant
20% on expiry of 36
of grant
20% on expiry of 48
of grant
20% on expiry of 60
of grant
b) During the year, the Company has granted 1,17,625 stock options to
the eligible employees under the Employees Stock option scheme
2010. The details are as under:
Grant dated
22
nd
July,
2013
Grant dated
21
st
October,
2013
No. of options granted 48130 69495
Intrinsic value of shares based on latest
available closing market price (Rs.) 210.35 270.40
Total amount to be amortized over
the vesting period (Rs. in Lacs) 101.24 187.92
Charge to Statement of prot and loss
for the year (Rs. in Lacs) 34.67 40.38
Compensation in respect of lapsed
cases (Rs. in Lacs) Nil 11.05
Unamortized amount carried forward
(Rs. in Lacs) 66.57 136.48
The fair value of options, based on the valuation of the independent
valuer as on the date of grant are:
Vesting period in
years
Grant dated
22
nd
July, 2013
Grant dated
21
st
October, 2013
Expected
Vesting
Fair Value
(Rs.)
Expected
Vesting
Fair Value
(Rs.)
1 9626 13899
2 9626 13899
3 9626 198.64 13899 259.46
4 9626 13899
5 9626 13899
48130 69495
The key assumptions used in black-scholes model for calculating fair
value as on the date of grant are:
Variables Grant dated
22
nd
July,
2013
Grant dated
21
st
October,
2013
1) Risk free interest rate 7.61% 8.60%
2) Expected life 3.5 years 3.25 years
3) Expected volatility 35.53% 39.27%
3) Dividend yield 1.70% 1.32%
4) Price of the underlying share in the market at the
time of option grant (Rs.)
212.35 272.40
c) Summary of stock options
Summary of Stock Options March 2014 March 2013
No. of
stock
options
Weighted
average
exercise price
(Rs.)
No. of
stock
options
Weighted
average
exercise price
(Rs.)
Options outstanding at the
beginning of the year 16,44,675 21.61 24,85,550 24.59
Options granted during the year 1,17,625 2.00
Options forfeited/lapsed during
the year # 94,107 37.64 9,840 7.11
Options exercised during the year 5,04,944 34.57 8,31,035 30.69
Options outstanding at the end
of the year 11,63,249 12.70 16,44,675 21.61
Options vested but not exercised
at the end of the year 4,36,039 30.55 6,04,090 45.81
# including 4085 (March 2013: Nil) options forfeited/lapsed out of the
options granted during the year
d) Information in respect of options outstanding:
Grant date/Exercise price March 2014 March 2013
No. of
stock
options
Weighted
average
remaining life
No. of
stock
options
Weighted
average
remaining life
Scheme 2005:
24th July, 2007 at Rs. 42.20 82,985 12 months
25th March, 2008 at Rs. 60.80 1,99,915 11 months
18th September, 2008
at Rs. 46.60 2,79,150 5 months 3,84,680 17 months
(a) 2,79,150 6,67,580
Scheme 2010:
7th February, 2011 at Rs.2.00 6,34,749 18 months 7,90,985 27 months
25th January, 2012 at Rs.2.00 1,35,810 26 months 1,86,110 31 months
22nd July, 2013 at Rs.2.00 48,130 34 months
21st October, 2013 at Rs.2.00
# 65,410 37 months
(b) 8,84,099 9,77,095
Total (a + b) 11,63,249 16,44,675
# net of 4085 options forfeited/lapsed out of the options granted during
the year

391
e) Average Share price at recognised stock exchange (NSE) on the
date of exercise of the option are as under:
Date of exercise Average share price (Rs.)
25-Apr-2013 228.46
16-May-2013 251.69
20-Jun-2013 266.69
19-Jul-2013 251.01
20-Aug-2013 240.09
21-Aug-2013 234.40
23-Sep-2013 258.45
17-Oct-2013 270.36
22-Nov-2013 293.20
16-Dec-2013 303.71
17-Jan-2014 277.86
19-Feb-2014 254.59
21-Mar-2014 257.16
25-Mar-2014 253.40
f) Method used for accounting for share based payment plan
The Company has elected to use intrinsic value method to account
for the compensation cost of stock options to employees of the
Company. Intrinsic value is the amount by which the quoted market
price of the underlying share exceeds the exercise price of the
option. Employee stock compensation cost is amortized over the
vesting period.
g) Fair value of options
The fair value of options used to compute proforma net prot and
earnings per share in note 29 (h) have been estimated on the date of
grant using the black-scholes model. The key assumptions used in
black-scholes model for calculating fair value as on the date of grant
are:
Grants covered under Scheme 2005:
Variables 7-Dec-2005 24-Jul-2007 25-Mar-2008 18-Sep-2008
1) Risk free interest rate 5.8% to 6.6% 8.17% 7.31% 8.20%
2) Expected life 2.5 - 5 years 4.17 years 4.17 years 4.18 years
3) Expected volatility 0.50% 43.69% 43.61% 43.66%
4) Dividend yield 5% 1.59% 1.59% 1.64%
5) Price of the
underlying share in
the market at the time
of option grant (Rs.) 13.11* 46.00 63.62 50.35
* being fair value taken from an independent valuer as the Company was
unlisted as on the date of grant of option.
Grants covered under Scheme 2010:
Variables 7-Feb-2011 25-Jan-2012 22-Jul-2013 21-Oct-2013
1) Risk free interest rate 7.73% 8.11% 7.61% 8.60%
2) Expected life 4.5 years 5.5 years 3.5 years 3.25 years
3) Expected volatility 42.38% 46.08% 35.53% 39.27%
4) Dividend yield 2.28% 2.11% 1.70% 1.32%
5) Price of the
underlying share in
the market at the time
of option grant (Rs.) 138.60 133.14 212.35 272.40
h) Earnings Per Share
Earnings Per Share as required by Accounting Standard 20 read
with the Guidance Note on Accounting for Employee Share-based
Payments is as follows:
Intrinsic Value Method Fair Value Method *
Particulars
March
2014
March
2013
March
2014
March
2013
Net prot after tax (Rs. in
Lacs) 88722.75 88269.18 88753.64 88308.57
Weighted average number
of equity shares of Rs.2/-
each Basic 563184677 531949491 563184677 531949491
Weighted Average number
of equity shares of Rs.2/-
each Diluted 568764960 538178537 568764960 538178537
Basic Earnings Per Share
(Rs.) 15.75 16.59 15.76 16.60
Diluted Earnings Per Share
# (Rs.) 15.60 16.40 15.60 16.41
# Dilution in Earnings per share is on account of 52,39,841 equity shares
(March 2013: 57,44,785 equity shares) held by the Employees Stock
Option Trust issued under the Employees Stock Option Scheme.
* Earnings Per Share under Fair value method is computed on proforma
net prot after tax after adjusting for employee compensation costs under
fair value method. Employee compensation cost under fair value method
as compared to intrinsic value method is lower by Rs.30.89 Lacs (March
2013: Rs. 39.39 Lacs).
30. Loan provisions and write offs
a. The Company has made adequate provision for the Non-performing
assets identied, in accordance with the guidelines issued by The
Reserve Bank of India. As per the practice consistently followed, the
Company has also made additional provision on a prudential basis.
The cumulative additional provision made by the Company as on 31
st

March, 2014 is Rs. 35253.77 Lacs (March 2013: Rs. 19692.65 Lacs)
b. In accordance with the Notication No. DNBS.222/ CGM (US)-2011
dated 17.01.2011 issued by The Reserve Bank of India (RBI) vide
its directions to all NBFCs to make a general provision of 0.25%
on the Standard assets, the Company has made a provision of Rs.
2110.00 Lacs (March 2013: Rs. 5165.00 Lacs, including additional/
accelerated provision of Rs. 3568.00 Lacs, refer note no. 27).
The total amount of provision on Standard assets of Rs.11625.00
Lacs (March 2013: Rs. 9515.00 Lacs) is shown separately as
Contingent provision for Standard assets under Long-term and
Short-term provisions in the balance sheet (refer note no.5 and 9).
The said amount includes additional/accelerated provision of 0.15%
for Rs.4370.00 Lacs as at 31
st
March, 2014 (March 2013: Rs.3568.00
Lacs).
c. Bad debts and write offs includes loss on termination which mainly
represents shortfall on settlement of certain contracts due to lower
realisation from such hire purchase/leased/loan assets on account of
poor nancial position of such customers.
31. Commission and brokerage mainly represents amount incurred in respect
of acquisition of customers and mobilisation of public deposits.
32. The Company has single reportable segment Financial services for the
purpose of Accounting Standard 17 on Segment reporting.
33. In the opinion of the Board, Current assets, Loans and advances are
approximately of the value stated if realised in the ordinary course of business.
34. Deposits/advances received against loan agreements are on account of loan
against assets, which are repayable/adjusted over the period of the contract.
392
35. Employee benets
Dened benet plans as per actuarial valuation
Rs. in Lacs

Gratuity
(Funded)
Sick leave
(Non funded)
Privilege Leave
(Non funded)

March
2014
March
2013
March
2014
March
2013
March
2014
March
2013
I. Expense recognised in
the Statement of Prot
& Loss Account for
the year ended 31
st

1 Current service cost 559.24 439.63 86.49 74.60 572.34 109.25
2 Interest cost 76.35 58.79 10.06 8.58 49.84
3 Expected return on plan
assets (74.56) (52.14)
4 Actuarial (gains)/losses (112.83) (180.59) (59.84) (77.62) (173.57) 554.44
5 Fund amount to be
transferred from
MBCSPL gratuity
fund * (64.27)
6 Adjustment due to
change in opening
balance of plan assets (186.28)
7 Total expense 197.64 265.68 36.72 5.56 448.61 663.68
II. Net asset/(liability)
recognised in the
Balance Sheet as at 31
st

1 Present value of dened
benet obligation as
at 31
st
1192.46 855.07 147.88 111.16 846.55 564.13
2 Fair value of plan
assets as at 31
st
1111.98 776.20
3 Funded status (surplus/
(decit)) (80.48) (78.87) (147.88) (111.16) (846.55) (564.13)
4 Net asset/(liability) as
at 31
st
(80.48) (78.87) (147.88) (111.16) (846.55) (564.13)
III. Change in the
obligations during the
year ended 31
st

benet obligation at the
beginning of the year 855.07 644.20 111.16 105.60 564.13
3 Interest cost 76.35 58.79 10.06 8.58 49.84
4 Actuarial (gains)/losses (184.16) (220.18) (59.84) (77.62) (173.57) 554.44
5 Benets paid (114.04) (67.37) (166.20) (99.55)
benet obligation at the
year ended 31
st
1192.46 855.07 147.88 111.16 846.55 564.13
IV. Change in the fair value
of plan assets during
the year ended 31
st

assets at the beginning
of the year 776.20 484.50
2 Expected return on plan
assets 74.56 52.14
Rs. in Lacs

Gratuity
(Funded)
Sick leave
(Non funded)
Privilege Leave
(Non funded)

March
2014
March
2013
March
2014
March
2013
March
2014
March
2013
3 Contributions by
employer 199.26 334.56
4 Actuarial (Gains)/
Losses (74.56) (27.63)
5 Fund amount to be
transferred from
MBCSPL gratuity
fund * 64.27
6 Adjustment due to
change in opening
balance of Plan assets 186.28
7 Actual Benets paid (114.04) (67.37)
8 Fair value of plan assets
at the end of the year 1111.98 776.20
V. Major category of
plan assets as a
percentage of total
plan
Funded with LIC 100% 100% 100% 100% 100% 100%
1 Discount Rate (p.a.) 8% 8% 8% 8% 8% 8%
2 Expected rate of return
on plan assets (p.a.) 8% 8%
3 Rate of Salary increase
(p.a.) 5% 5% 5% 5% 5% 5%
4 In-service Mortality Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Rs. in Lacs
VII. Experience Adjustments
(Gratuity) Year ended 31st March
2010 2011 2012 2013 2014
1 Dened benet obligation at end of
the period 343.83 442.42 644.20 855.07 1192.46
2 Plan assets at the end of period 305.50 375.80 484.50 776.20 1111.98
3 Funded status surplus/ (decit) (38.33) (66.61) (159.71) (78.87) (80.48)
4 Experience adjustments on plan
liabilities (gain)/loss (40.37) (46.70) (73.01) (66.64) (77.52)
assets gain/(loss) (6.22) (7.89) (9.94) (16.07) (21.77)
* During the year, certain employees of Mahindra Business & Consulting
Services Private Limited (MBCSPL) were transferred to the payroll of the
Company w.e.f. 1
st
January, 2014. The liability on account of retirement
benets (gratuity and leave encashment) has been considered while arriving
at the employee benets liability for the current year. Pending the transfer of
funds lying with the MBCSPL Gratuity trust, the Company has considered
the said amount in the plan assets balance as at 31st March, 2014. The
Company expects to make a contribution to the Gratuity Fund of Rs. 439.42
lacs within a year.
393
36. Disclosure on derivatives
Outstanding derivative instrument and un-hedged foreign currency
exposures as on 31st March, 2014
The Company has outstanding Foreign Currency Non-Repatriable (FCNR
(b)) loans of US $ 872.71 Lacs (March 2013: US $ 699.13 Lacs). The
said loan has been xed to INR liability using a cross currency swap and
oating interest thereon in LIBOR plus rate has been swapped for xed
rate in Indian rupee. There is no un-hedged foreign currency exposure as
on 31
st
March, 2014.
37. Securitisation/assignment transactions
a) During the year, the Company has without recourse securitised on at
par basis vide PTC route loan receivables of 47122 contracts (March
2013: 54374 contracts) amounting to Rs. 126292.70 Lacs (March
2013: Rs. 143361.38 Lacs) for a consideration of Rs.126292.70 Lacs
(March 2013: Rs. 143361.38 Lacs) and de-recognised the assets
from the books.
b) During the year, the Company has without recourse assigned loan
receivables of 6490 contracts (March 2013: NIL contracts) amounting
to Rs.19850.83 Lacs (March 2013: Rs.NIL) for a consideration of
Rs.15554.19 Lacs (March 2013: Rs.NIL) towards 90% of receivables
assigned and de-recognised the assets from the books. Out the total
receivables, an amount of Rs.1985.08 Lacs equivalent to 10% of the
receivables have been recognized as Retained interest in assignment
transactions representing Minimum Retention Requirement (MRR)
as required under revised guidelines on securitization transactions
vide RBI Circular dated August 21, 2012 (refer note no. 13 and 18).
The amount of prot in cash of Rs.314.94 Lacs on this assignment
transaction has been held under an accounting head Cash prot on
loan transfers under assignment transactions pending recognition
and the same is amortized in line with above referred guidelines
(refer note no. 4 and 8).
c) Income from assignment/securitization transactions include write
back of provision for loss/expenses in respect of matured assignment
transactions amounting to Rs.4189.65 Lacs (March 2013: Rs. 3193.08
Lacs) considered no longer necessary (refer Accounting policy 3 (IV) A
(iii).
d) In terms of the accounting policy stated in 3 (IV) (B) (i) (c),
securitisation income is recognized as per RBI Guidelines dated
21
st
August, 2012. Accordingly, interest only strip representing
present value of interest spread receivable has been recognized
and reected under loans and advances (refer note no. 13 and 18)
and equivalent amount of unrealised gains has been recognised as
liabilities (refer note no. 4 and 8).
e) Excess interest spread redeemed during the year by the Special
Purpose Vehicle Trust (SPV Trust) has been recognised as income
and included in Income from assignment/securitisation transactions
amounting to Rs.5146.47 Lacs (March 2013: Rs. 106.98 Lacs)
f) Disclosures in the notes to the accounts in respect of
securitisation transactions as required under revised guidelines on
securitization transactions issued by RBI vide circular no.DNBS.
PD.No.301/3.10.01/2013-13 dated August 21, 2012.
Applicable for transactions effected after the date of circular:

Rs. in Lacs
S.
No.
Particulars
1 No of SPVs sponsored by the NBFC for
securitization transactions 8 5
2 Total amount of securitised assets as per
books of the SPVs sponsored by the NBFC 192645.41 141347.26
Rs. in Lacs
S.
No.
Particulars
3 Total amount of exposures retained by the
NBFC to comply with MRR as on the date
of balance sheet
a) Off-balance sheet exposures
* First loss
Credit enhancement in the form of
corporate undertaking (refer note
no.41 (i) (c)) 4782.00 2922.00
* Others
b) On-balance sheet exposures
* First loss
Cash collateral term deposits with
banks (refer note no.17 (a) (ii)) 18040.00 7293.00
* Others
Certicates (refer note no.13 and 18) 2213.95 3844.37
4 Amount of exposures to securitization
transactions other than MRR
a) Off-balance sheet exposures
i) Exposure to own securitizations
* First loss
* Loss
ii) Exposure to third party
securitizations
* First loss
* Others
b) On-balance sheet exposures
i) Exposure to own securitizations
* First loss
* Others
Cash collateral term deposits
with banks (refer note no.17 (a)
(ii)) 2156.00 1856.00
ii) Exposure to third party
securitizations
* First loss
* Others
38. There were 77 cases (March 2013: 28 cases) of frauds amounting to Rs.
560.32 Lacs (March 2013: Rs 450.31 Lacs) reported during the year.
The Company has recovered an amount of Rs.46.38 Lacs (March 2013:
Rs 31.53 Lacs) and has initiated appropriate legal actions against the
individuals involved. The claims for the un-recovered losses have been
lodged with the insurance companies.
39. The gold loans outstanding as a percentage of total assets is at 0.03%
(March 2013: 0.05%).
40. Related party disclosure as per Accounting Standard 18
394
A) List of the related parties and nature of relationship which have
transactions with our Company during the year:
Holding Company: Mahindra and Mahindra Limited
Subsidiary Companies: Mahindra Insurance Brokers Limited
Mahindra Business & Consulting
Services Private Limited
Mahindra Asset Management Company
Private Limited
Joint Ventures: Mahindra Finance USA, LLC
Fellow subsidiary
Companies:
Mahindra Trucks & Buses Ltd. (merged
with Mahindra & Mahindra Ltd. w.e.f.
April 01, 2013)
Mahindra USA, Inc.
Mahindra Holidays and Resorts India Ltd.
Bristlecone India Limited
Mahindra Yueda (Yancheng) Tractor
Co. Ltd.
Mahindra First Choice Wheels Ltd.
Mahindra Construction Company Ltd.
Mahindra Two Wheelers Ltd.
Mahindra First Choice Services Ltd.
Key Management
Personnel: Mr. Ramesh Iyer (Managing Director)
Relatives of Key
Management Personnel:
Ms Janaki Iyer
Ms Ramlaxmi Iyer
Mr Risheek Iyer
B) Related party transactions are as under:
Rs. in Lacs
Sr.
No.
Nature of transactions Holding
Company
Subsidiary
Companies
Fellow
subsidiary
Companies
Joint
Ventures
Key
Management
Personnel
1 Income
Loan income 1.79
(10.51)
Subvention income (iii) 2,322.68
(1,048.52) (431.58)
Other income 1.02 1,499.88 54.11
(3,262.17) (10.18)
2 Expenses
Interest 339.45 533.57 18.09
(334.41) (228.80) (16.75)
Other expenses 1,394.33 17,420.53 167.71
(1,404.97) (14,830.49) (58.57)
Remuneration to MD 274.80
(235.02)
3 Investment in share capital 2,195.00 2,193.73
(3,062.69)
4 Purchase of xed assets 421.36 5.85
(173.73) (2.97)
5 Finance
Fixed deposits 2,700.00 207.50
(168.00)
Fixed deposits matured 187.50

Dividend paid for previous year 10,483.48 18.99
(8,153.81) (15.11)
Inter corporate deposits taken 50,000.00 3,565.00
(50,000.00) (7,788.32)
Inter corporate deposits repaid 50,000.00 4,365.00
(50,000.00) (4,939.87)
395
Rs. in Lacs
Sr.
No.
Nature of transactions Holding
Company
Subsidiary
Companies
Fellow
subsidiary
Companies
Joint
Ventures
Key
Management
Personnel
Inter corporate deposits given 48,130.24
(56,794.20) (2,000.00)
Inter corporate deposits refunded 48,505.27 2,000.00
(59,771.55)
6 Other transactions
Reimbursement from parties 112.54

Reimbursement to parties 113.75

7 Balances as at the year end
Receivables (iii) 375.59 85.12 1,091.74
(48.41) (74.56) (3,289.26)

Loans given (including interest accrued
but not due) (ii) 334.33
(334.33)
Inter corporate deposits given
(including interest accrued but not
due) (ii) 1,437.16 113.38
(1,818.77) (2,122.01)
Payables 575.23 107.64
(754.42) (66.33)
Subordinate debts held (including
interest accrued but not due) 700.76
(700.76)
Inter corporate deposits taken
(including interest accrued but not due) 4,414.76
(5,215.39)
Fixed deposits (including interest
accrued but not due) 2,834.75 214.79
(195.24)
Notes:
i) Figures in bracket represent corresponding gures of previous year.
ii) An amount of Rs 113.38 lacs of inter corporate deposits and Rs 334.33 lacs of loan given to Mahindra Construction Co Ltd is provided as Non
Performing Asset in the books of account.
iii) Mahindra Trucks and Buses Ltd is merged with Mahindra & Mahindra Ltd (holding company) during the current year w.e.f. 01
st
April, 2013. However,
transactions in the form of subvention income of the previous year amounting to Rs 431.52 lacs and balance receivable as at March 31, 2013
amounting to Rs 380.15 lacs is disclosed in the column pertaining to fellow subsidiary companies..
C) The signicant related party transactions are as under:
Rs. in Lacs
Nature of transactions Holding Company Subsidiary
Companies
Fellow
subsidiary
Companies
Key
Management
Personnel
Income
Subvention income Mahindra and Mahindra Limited 2,322.68
(1,048.52)
Other income
Interest income on inter corporate
deposits/subordinate debt
Mahindra Rural Housing
Finance Limited 366.01
(808.70)
Mahindra Business &
Consulting Services Private
Limited 114.54
396
Rs. in Lacs
Companies
Fellow
subsidiary
Companies
Key
Management
Personnel
(174.26)
Dividend income Mahindra Rural Housing
(280.00)
Income from shared services Mahindra Rural Housing
(449.12)
Mahindra Insurance Brokers
Limited 102.64
(80.54)
Expenses
Interest
Interest expense on inter corporate
deposits, nonconvertible debentures and
xed deposits
339.45
(334.41)
Limited 533.57
(225.76)
Other expenses
Manpower outsourcing expenses Mahindra Business &
Limited 16,172.88
(14,010.96)
Handling charges Mahindra Insurance Brokers
Limited 1,247.65
(802.71)
Purchase of xed assets Mahindra and Mahindra Limited 421.36
(173.73)
Finance
Fixed deposits Mahindra Insurance Brokers
Limited 2,700.00

Fixed deposits matured Ramesh Iyer 44.50

Janaki Iyer 133.00

Dividend paid - for previous year Mahindra and Mahindra Limited 10,483.48
(8,153.81)
Inter corporate deposits taken Mahindra and Mahindra Limited 50,000.00
(50000.00)
Inter corporate deposits repaid Mahindra and Mahindra Limited 50,000.00
(50000.00)
Inter corporate deposits given Mahindra Rural Housing
(55015.95)
Inter corporate deposits refunded Mahindra Rural Housing
(58373.96)
Balances as at the year end
Receivables Mahindra Holidays & Resorts
India Limited 1,091.74
(2,909.11)
(48.41)
397
Rs. in Lacs
Companies
Fellow
subsidiary
Companies
Key
Management
Personnel
Loan given (including interest accrued
but not due)
Mahindra Construction
Company Limited 334.33
(334.33)
Payables Mahindra Insurance Brokers
Limited 387.75
(245.19)
Mahindra Business &
Limited 138.14
(437.67)
Inter corporate deposits taken (including
interest accrued but not due)
Limited 4,414.76
(5,215.39)
Mahindra Business &
Limited 884.33
(1,780.22)
(38.55)
Subordinate debt held (including interest
accrued but not due)
(700.76)
41. Contingent liabilities and commitments (to the extent not provided for):
Rs. in Lacs
i) Contingent liabilities
a) Demand against the Company
not acknowledged as debts
Income tax 7476.70 5472.52
Value Added Tax (VAT) 60.92
b) Corporate guarantees towards
assignment transactions 55631.29 71572.12
c) Credit enhancement in terms
of corporate guarantee for
securitization transactions (refer
note no. 37 (f)) 4782.00 2922.00
d) Legal suits led by customers
in consumer forums and civil
courts claiming compensation
from the Company 2726.48 2031.55

70677.39 81998.19

ii) Commitments
a) Estimated amount of contracts
capital account 438.05 624.91
b) Uncalled liability on shares
and other investments partly
paid (On 1,75,20,003 partly
paid equity shares of Mahindra
Rural Housing Finance Ltd. @
Rs.12.50/- per share) 2,190.00

2628.05 624.91

Total 73305.44 82623.10
42. Changes in provisions
Rs. in Lacs

March
2013
Additional
Provisions
Utilizations/
reversals
March
2014
Provision for
Standard assets 9515.00 2110.00 11625.00
Provision for
Non-performing assets 38871.36 40757.25 16270.55 63358.06
43. The Company has sent letters to suppliers covered under the Micro, Small
and Medium Enterprises Development Act, 2006 seeking information for
which replies are awaited. In view of this, information required under
Schedule VI of The Companies Act, 1956 is not given.
44. Secured long-term borrowings
i) Secured non-convertible debentures
As on 31
st
March, 2014
Rs. in Lacs
Rate range
(a)
Non-current
(b)
Current Total
1) Repayable on maturity:
Maturing between
3 years to 5 years 9.25% 10.25% 44550.00 44550.00
Maturing between
1 year to 3 years 9.00% 10.20% 252470.00 252470.00
Maturing within 1 year 9.04% 10.25% 169020.00 169020.00

Total 297020.00 169020.00 466040.00

2) Repayable in yearly
installments:
Maturing between 1 year to
3 years 9.95% 24500.00 24500.00
398
Rs. in Lacs
Rate range
(a)
Non-current
(b)
Current Total

Total 24500.00 14500.00 39000.00

Total (1+2) 321520.00 183520.00 505040.00

As on 31
st
March, 2013
Rs. in Lacs

Rate
range
(a)
Non-current
(b)
Current
maturity Total
Maturity beyond 5 years 9.34%9.43% 7350.00 7350.00
Maturity between 3 years
to 5 years 9.25%9.45% 5100.00 5100.00
Maturity between 1 year
to 3 years 9.23%10.25% 262510.00 262510.00
Maturity within 1 year 8.30%10.47% 151770.00 151770.00

Total 274960.00 151770.00 426730.00

2) Repayable in installments:
Yearly installments
Maturity between 1 year to
3 years 9.95% 14000.00 14000.00

Total 39000.00 16070.00 55070.00

Total (1+2) 313960.00 167840.00 481800.00

ii) Secured term loans from banks
As on 31
st
March, 2014
Rs. in Lacs
Rate
range
(a)
Non-current
(b)
Current
Total
Maturing between 3 years to
5 years 10.20% 25000.00 25000.00
3 years 9.70%10.40% 294000.00 294000.00
Maturing within 1 year 7.75%10.35% 62500.00 62500.00

Total for repayable on
maturity 319000.00 62500.00 381500.00

i) Bi-monthly
Maturing between
1 year to 3 years 10.25% 6,200.00 6200.00
Maturing within
1 year

Total 6200.00 6200.00

ii) Quarterly
Maturing between
3 years to 5 years 10.00% 10.25% 27314.28 27314.28
Maturing between
1 year to 3 years 10.00% 10.50% 49814.28 49814.28
Maturing within
1 year 10.00% 10.25% 44505.15 44505.15

Total 77128.56 44505.15 121633.71

iii) Half yearly
Maturing beyond
3 years 10.25% 81900.00 81,900.00
Maturing between
1 year to 3 years 10.20% 10.25% 321266.67 321266.67

Total 403166.67 144333.33 547500.00

iv) Yearly
Maturing beyond
3 years to 5 years
10.20%
10.25% 81666.67 81666.67
Maturing between 1
year to 3 years
10.20%
10.25% 73333.33 73333.33
Maturing within 1 year 9.25%
10.25% 55000.00 55000.00
Total 155000.00 55000.00 210000.00

Total for repayable in installments 641495.23 243838.48 885333.71

Total (1+2) 960495.23 306338.48 1266833.71

As on 31
st
March, 2013
Rs. in Lacs
Particulars
Rate
range
(a)
Non-current
(b)
Current Total
Maturity between 1 year to 3
years 7.75%10.35% 175000.00 175000.00

Total 202500.00 128500.00 331000.00

i) Quarterly
to 3 years 10.15%10.25% 55692.00 55692.00

Total 55692.00 23632.00 79324.00

ii) Half yearly
Maturity beyond 3 years 10.25% 91666.67 91666.67
to 3 years 10.20%10.25% 268333.33 268333.33

Total 360000.00 44166.67 404166.67

iii) Yearly
Maturity between 1 year to
3 years 9.25%10.25% 90000.00 90000.00
Maturity within 1 year 9.25% 40000.00 40000.00

Total 90000.00 40000.00 130000.00

Total for repayable in installments 505692.00 107798.67 613490.67

Total (1+2) 708192.00 236298.67 944490.67

iii) Foreign currency loans from banks
As on 31st March 2014
Rs. in Lacs

Rate
range
(a)
Non-current
(b)
Current Total
3 years 9.05%9.98% 40305.51 40305.51
Maturing within 1 year 9.60% 11983.00 11983.00

Total 40305.51 11983.00 52288.51

399
As on 31
st
March 2013
Rs. in Lacs
Rate
range
(a)
Non-current
(b)
Current
maturity Total
Repayable on maturity:
Maturity between 1 year to 3 years 9.60%11.65% 27142.50 10809.57 37952.07

Total 27142.50 10809.57 37952.07

45. Unsecured borrowings
i) Subordinated debts (long-term)
As on 31
st
March 2014
Rs. in Lacs
Rate range
(a)
Non-current
(b)
Current Total
5 years 10.50%12.00% 7860.00 7860.00
Maturing beyond 5 years 9.50%10.50% 71550.00 71550.00
Total 79410.00 79410.00
As on 31
st
March 2013
Rs. in Lacs
Rate
range
(a)
Non-current
(b)
Current
maturity Total
Maturing beyond 5 years 9.80%11.75% 52530.00 52530.00
5 years 10.50%12.00% 6880.00 6880.00
3 years
Maturing within 1 year 10.20%10.40% 3100.00 3100.00
Total 59410.00 3100.00 62510.00
ii) Unsecured term loans from banks
As on 31
st
March 2014
Rs. in Lacs
Rate
range
(a)
Non-current
(b)
Current Total
Maturing within 1 year 9.75% 2200.00 2200.00
3 years 10% 10,000.00 10000.00
Total 10000.00 2200.00 12200.00
As on 31
st
March,2013: Nil
iii) Inter-corporate deposits (ICDs)
As on 31
st
March, 2014
Rs. in Lacs
Long-term
Rate range
(a)
Short-Term
(b)
Non-current
(c)
Current Total
Maturing between
1 year to 3 years 9.40% 725.00 725.00
Maturing within
1 year 8.75%10.25% 3565.00 50.00 3615.00
Total 3565.00 725.00 50.00 4340.00
As on 31
st
March, 2013
Rs. in Lacs
Long-term
Rate range
(a)
Short-Term
(b)
Non-current
(c)
Current
maturity Total
Maturing between
1 year to 3 years 9.40%9.80% 775.00 775.00
Maturing within
1 year 8.50%9.75% 4215.00 150.00 4365.00
Total 4215.00 775.00 150.00 5140.00
iv) Fixed deposits
As on 31
st
March, 2014
Rs. in Lacs
Long-term
Rate range
(a)
Short-Term
(b)
Non-current
(c)
Current Total
Maturing beyond
3 years 9.4%10.25% 7308.37 7308.37
Maturing between
1 year to 3 years 8.65%10.75% 270554.77 270554.77
Maturing within
1 year 8.65%10.75% 5931.15 76425.51 82356.66
Total 5931.15 277863.14 76425.51 360219.80
As on 31
st
March, 2013
Rs. in Lacs
Long-term
Rate range
(a)
Short-Term
(b)
Non-current
(c)
Current
maturity Total
Maturing beyond
3 years 8.65%10.75% 116827.59 116827.59
Maturing between
1 year to 3 years 8.65%10.75% 75225.60 75225.60
Maturing within
1 year 8.65%10.50% 3362.41 37377.62 40740.03
Total 3362.41 192053.19 37377.62 232793.22
i) Secured term loans from banks and cash credit facilities
As on 31
st
March, 2014
Rs. in Lacs
Rate range Amount
Maturing within 1 year 10.25%13.25% 112732.21
Total 112732.21
As on 31
st
March, 2013
Rs. in Lacs
Rate range Total
Total 115527.03
400
ii) Commercial papers
As on 31
st
March 2014: Nil
As on 31
st
March 2013
Rs. in Lacs
Rate range Total
Total 5000.00
47. Managerial remuneration to Directors included in the Statement of
prot and loss
Rs. in Lacs
Salary and perquisites 197.06 167.36
Contribution to provident fund and other funds 13.20 11.57
Sitting fees and commission (including commission
to Managing Director)
147.02 110.34
Total 357.27 289.26
Above gures are excluding charge for gratuity, provision for leave
encashment as separate actuarial valuation gures are not available. Further,
perquisites do not include amortisation of Employees Stock Options.
48. During the current nancial year, the Company has incorporated Mahindra
Trustee Company Private Limited (MTCPL) and has proposed to subscribe
49,998 equity shares of Rs. 10/- each amounting to Rs. 4.99 Lacs being
99.99% of the shareholding as a promoter shareholder. However, the
Company has not made any investment during the year in MTCPL.
49. Schedule to the Balance Sheet of a Non-Banking Financial Company
as required in terms of Paragraph 13 of Non-Banking Financial (Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007.
Rs. in Lacs
Sr.
No. Particulars
Amount
Outstanding
Amount
Overdue
Amount
Outstanding
Amount
Overdue
Liabilities side:
(1) Loans and advances availed by
the NBFC inclusive of interest
accrued thereon but not paid:
(a) Debentures: Secured 524148.97 496997.56
: Unsecured
(other than falling within the
meaning of public deposits)
(b) Deferred Credits
(c) Term Loans 1334854.96 985276.37
(d Intercorporate loans and
Other Borrowings 4414.76 5215.39
(e) Commercial Paper 5000.00
(f) Public Deposits 359500.62 228746.82
(g) Fixed Deposits accepted
from Corporates 22023.38 15880.11
(h) FCNR Loans 52502.27 38092.45
(i) Subordinate debt 83663.23 65183.50
(j) Other Short Term Loans and
credit facilities from banks 57232.21 77046.82
(2) Break-up of (1) (f) above
(Outstanding public deposits
inclusive of interest accrued
thereon but not paid):
(a) In the form of Unsecured
debentures
(b) In the form of partly secured
debentures i.e.,debentures
where there is a shortfall in
the value of security
c) Other public deposits 359500.62 228746.82
Rs. in Lacs
Amount
Outstanding
Amount
Outstanding
Asset side:
(3) Break-up of Loans and Advances including bills
receivables [ other than those included in (4)
below ]:
(a) Secured 34048.00 19025.00
(b) Unsecured 144926.46 133604.13
(4) Break up of Leased Assets and stock on hire
and hypothecation loans counting towards AFC
activities:
(i) Lease assets including lease rentals under
sundry debtors:
(a) Financial lease
(b) Operating lease
(ii) Stock on hire including hire charges under sundry
debtors:
(a) Assets on hire
(b) Repossessed Assets
(iii) Other loans counting towards AFC activities:
(a) Loans where assets have been
repossessed 8752.63 5310.11
(b) Loans other than
(a) above 2705765.33 2201245.42
(5) Break-up of Investments:
Current Investments:
1. Quoted:
(i) Shares:
(a) Equity
(b) Preference
(ii) Debentures and Bonds
(iii) Units of mutual funds
(iv) Government Securities
(v) Investments in Certicate of Deposits
with Banks
2. Unquoted:
(i) Shares:
(a) Equity
(b) Preference
(v) Certicate of Deposits with Banks 24289.13 19585.34
(vi) Commercial Papers 10000.00 2000.00
Long Term Investments:
1. Quoted:
(i) Shares:
(a) Equity
(b) Preference
(iv) Government Securities 37895.56 24168.13
2. Unquoted:
(i) Shares:
(a) Equity 14032.03 9643.30
(b) Preference
(ii) Debentures and Bonds 700.00 700.00
401
Signatures to Signicant accounting policies and Notes to the nancial statements I and II
FRN: 105102W
Naresh Kumar Kataria Dhananjay Mungale Director
Partner V. Ravi Arnavaz Pardiwala M. G. Bhide Director
Membership No. 37825 Chief Financial Ofcer Company Secretary Piyush Mankad Director
Mumbai, 23
rd
April, 2014
6 Borrower group-wise classication assets nanced as in (3) and (4) above:
Category Amount net of provisions Amount net of provisions
Secured Unsecured Total Secured Unsecured Total
1. Related Parties
(a) Subsidiaries 1361.61 1361.61 1818.77 1818.77
(b) Companies
in the same
group 1091.74 1091.74 4917.74 4917.74
(c) Other related
parties
2. Other than related
parties 2748565.96 142473.11 2891039.07 2225580.53 126867.62 2352448.15
Total 2748565.96 144926.46 2893492.42 2225580.53 133604.13 2359184.66
(7) Investor group-wise classication of all investments ( current and long term) in
shares and securities (both quoted and unquoted):
Category Market
Value/
Break up
or fair
value or
NAV
Book
Value
(Net of
Provisions)
Market
Value/
Break-up
or fair
value or
NAV
Book
Value
(Net of
Provisions)
1. Related Parties
(a) Subsidiaries 6943.98 6943.98 4748.98 4748.98
(b) Companies in the same group 7788.05 7788.05 5594.32 5594.32
(c) Other related parties
2. Other than related parties 70794.00 72184.69 46295.02 45753.47
Total 85526.03 86916.72 56638.32 56096.77
(8) Other information
Particulars Amount Amount
(i) Gross Non-Performing Assets:
(a) Related parties 447.71 447.71
(b) Other than related parties 140121.41 75847.82
(ii) Net Non-Performing Assets:
(a) Related parties
(b) Other than related parties 57564.17 25992.87
(iii) Assets acquired in satisfaction of debt
50. Previous year gures have been regrouped/reclassied wherever found
necessary.
402
Statement pursuant to Section 212 of the Companies Act, 1956,
relating to subsidiary companies
Name of the Subsidiary
Companies
Number of Shares in the
Subsidiary Company held
by Mahindra & Mahindra
Financial Services Limited at
the nancial year ending date
The net aggregate of prots/(losses) of the Subsidiary Companies so
far as they concern the members of Mahindra & Mahindra Financial
Services Limited
For Current Financial Year For Previous Financial Years
Equity Extent of
holding
Dealt with in
the accounts
of Mahindra
& Mahindra
Financial
Services
Limited for the
year ended
31st March
2014
Not Dealt with
in the accounts
of Mahindra
& Mahindra
Financial
Services
Limited for the
year ended
31st March
2014
Dealt with in
the accounts
of Mahindra
& Mahindra
Financial
Services
Limited for the
year ended
31st March
2014
Not Dealt with
in the accounts
of Mahindra
& Mahindra
Financial
Services
Limited for the
year ended
31st March
2014
Nos. % Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs
Mahindra Insurance
Brokers Ltd. 21,90,722 85% 3569.71 8073.04
Finance Ltd. 4,00,00,000 87.5% 1969.37 3225.75
Mahindra Business &
Consulting Services Pvt.
Ltd. 10,000 100% 281.47 248.42
Mahindra Asset
Management Company
Pvt. Ltd. 49,998 99.996% (0.49) 0.00
Mahindra Trustee
Company Pvt. Ltd.* 49,998 99.996%
Note:
1) The nancial year of the subsidiary companies ended on 31
st
March 2014.
2) * Mahindra Trustee Company Private Limited (MTCPL) was incorporated as a subsidiary of the Company. The Company has
agreed to subscribe to 49,998 equity shares of Rs. 10/- each of MTCPL constituting 99.99% of the equity share capital of
MTCPL. The investment is yet to be made by the Company. The rst nancial year of MTCPL would be from 10
th
July, 2013
to 30
th
June, 2014.
M. G. Bhide Director
Pawan Goenka Director
V. Ravi Arnavaz Pardiwala Piyush Mankad Director
Chief Financial Ofcer Company Secretary Rama Bijapurkar Director
Mumbai, 23rd April, 2014
MAHINDRA INSURANCE BROKERS LIMITED
403
Your Directors have pleasure in presenting the 27
th
Annual Report along with the Audited Accounts of your Company for the year
ended 31
st
March, 2014.
Financial Results
(Amount in Rs.)
Particulars
For the year ended
31
st
March 2014
For the year ended
31
st
March 2013
Income 1,11,17,53,015 86,29,94,705
Prot before Interest, Depreciation and Taxation 64,11,52,476 51,52,58,767
Depreciation (35,21,086) (33,30,774)
Prot before Taxation 63,76,31,390 51,19,27,993
Provision for Taxation:
Provision for Current Tax (21,83,88,409) (16,76,00,000)
Provision for Deferred Tax 7,22,751 1,36,674
(21,76,65,658) (16,74,63,326)
Prot after Taxation 41,99,65,732 34,44,64,667
Balance of Prot for prior years 67,39,27,323 48,06,93,594
Amount available for Appropriation 1,09,38,93,055 82,51,58,261
Appropriations:
Transfer to General Reserve 4,20,00,000 3,50,00,000
Dividend on Equity Shares (Proposed) 2,57,73,200
Tax on Dividend (Proposed) 43,80,155
Dividend on Equity Shares (Interim) 10,00,00,000
Tax on Dividend (Interim) 1,62,30,938
Surplus carried to Balance Sheet 1,02,17,39,700 67,39,27,323
Dividend
Your Directors recommend a dividend of Rs.10 per Equity
Share on 25,77,320 Equity Shares of Rs.10 each, aggregating
to Rs. 2.6 crores. The above dividend, if approved, will be
paid to those Members whose names appear in the Register
of Members as on the Record Date xed for this purpose. The
dividend including dividend distribution tax, surcharge and
education cess will absorb a sum of Rs. 3.0 crores (as against
Rs. 11.6 crores on account of dividend of Rs. 40 per Equity
Share, paid for the previous year).
Operations
The year ended 31
st
March, 2014 marked the 10
th
year of
successful insurance broking operations of your Company.
In this journey of 10 years, your Company has been able to
service over 4 million insurance cases, largely in the rural and
semi-urban markets in India. Your Company has been able to
reach the benet of insurance to over 1,00,000 villages across
India. Your Company endeavors to further increase insurance
penetration in rural India as well as become a signicant player
in global insurance markets.
In March 2014, your Company crossed the 1 million mark in
terms of insurance cases serviced, with a total of 1,068,577
cases for both Life and Non-Life Retail business. The
customized Life insurance cover Mahindra Loan Suraksha
(MLS) continued to receive an encouraging response and
grew by 16% from 4,40,553 lives covered with a Sum Assured
of Rs. 11,798.2 crores in the nancial year 2012-13 to 5,09,864
lives covered with a Sum Assured of Rs.14,393.5 crores in
the nancial year 2013-14, with a substantial portion being
covered in the rural markets.
Your Company achieved a growth of 33% in Net Premium
generated for the Corporate and Retail business lines, increasing
404
from Rs. 553.8 crores (Gross Premium Rs.619.8 crores) in the
nancial year 2012-13 to Rs. 738.4 crores (Gross Premium
Rs. 825.2 crores) in the nancial year 2013-14.
The Income increased by 29% from Rs. 86.3 crores in the
nancial year 2012-13 to Rs. 111.2 crores in the nancial
year 2013-14. The Prot before Tax increased by 25% from
Rs. 51.2 crores to Rs. 63.8 crores, and the Prot after Tax
increased by 22% from Rs. 34.5 crores to Rs. 42.0 crores
during the same period.
During the year, your Company was awarded the Insurance
Broker of the Year Award by ABP News in February 2014.
This award, amongst other parameters, lays an emphasis on
how the particular broker has performed in the underserved
markets in India.
Directors
Mr. Rajeev Dubey and Mr. V. Ravi retire by rotation at the
forthcoming Annual General Meeting and, being eligible, offer
themselves for re-appointment.
Audit Committee
The Audit Committee of the Board of Directors of the Company
presently comprises of Mr. Rajeev Dubey (Chairman of the
Committee), Mr. Ramesh Iyer and Mr. V. Ravi. The Audit
Committee met four times during the year under review.
Remuneration Committee
The Remuneration Committee of the Board of Directors of the
Company presently comprises of Mr. Rajeev Dubey, Mr. Uday
Y. Phadke and Mr. Ramesh Iyer. The Committee met once
The Corporate Social Responsibility (CSR) Committee was
constituted by the Board of Directors at its meeting held on
5
th
March, 2014 to formulate, recommend and monitor the
CSR Policy and to recommend the amount to be spent on
CSR activities.
Mr. Rajeev Dubey is the Chairman of the Committee.
Mr. Ramesh Iyer, Mr. V. Ravi and Dr. Jaideep Devare are the
other members of the Committee. The Committee met once
Operating Management, and after due enquiry, conrm that:-
(i) In the preparation of the annual accounts, the applicable
(ii) They have, in the selection of the accounting policies,
as at 31
st
(iii) Proper and sufcient care has been taken for the
concern basis.
Auditors
Messrs. B. K. Khare & Co., Chartered Accountants, retire
as Auditors of the Company at the forthcoming Annual
General Meeting (AGM) and have given their consent for
re-appointment. As per Section 139(1) of the Companies Act,
2013 (the Act) read with the Companies (Audit and Auditors)
Rules, 2014, it is proposed to appoint the Auditors for a
period of 5 (ve) years to hold ofce from the conclusion of
this AGM till the conclusion of the thirty second AGM of the
Company to be held in the year 2019, subject to ratication
of their appointment by members at every AGM and x their
remuneration.
As required under the provisions of Section 224(1B) of the
Companies Act, 1956 and sections 139(1) read with 141 of
the Companies Act, 2013, the Company has obtained a
Public Deposits and Loans / Advances
etc., as required to be disclosed in the annual accounts of
the Company pursuant to Clause 32 of the Listing Agreement
of the parent company Mahindra & Mahindra Financial
Services Limited and the ultimate parent company Mahindra
& Mahindra Limited, with the Stock Exchanges, are furnished
separately.
Codes of Conduct
The Board of Directors of the Company had adopted separate
Codes of Conduct for Corporate Governance (the Codes) for
its Directors and Senior Management and Employees. These
declarations under the Codes from the Board Members, and
Outlook for the Current year
During the last nancial year, the Non-Life insurance industry is
estimated to have grown by 12% and Life insurance industry
405
estimated to register an increase of 12%. The Non-Life insurance
industry is expected to continue their growth trend, albeit at a
reduced rate due to macro-economic changes in the economy.
Your Company will continue to explore opportunities for expanding
its customer base in the Commercial and Retail segments.
Your Company will increase its thrust on the Reinsurance
Broking business and expand its domestic and international
customer base.
Particulars of Employees as required under Section 217(2A)
As required under Section 217(2A) of the Companies
Act, 1956 and Rules thereunder, a statement containing
particulars of the Companys employees who were in receipt
of remuneration of not less than Rs. 60,00,000 per annum
during the year ended 31
st
March 2014 or not less than
Rs. 5,00,000 per month during any part of the said year is
given in Annexure II to this Report.
Acknowledgements
Your Directors thank the Insurance Regulatory and Development
Authority for their continuous support and guidance rendered
to the Company. The Directors acknowledge the trust reposed
by the customers, the support of the shareholders and the
noteworthy performance of the employees.
Rajeev Dubey
Chairman
Mumbai, 14
th
April, 2014
406
PARTICULARS OF LOANS/ ADVANCES AND INVESTMENT BY LOANEES IN THE SHARES OF LISTED COMPANIES, THEIR
SUBSIDIARIES, ASSOCIATES, ETC., REQUIRED TO BE DISCLOSED IN THE ANNUAL ACCOUNTS OF THE COMPANY
PURSUANT TO CLAUSE 32 OF THE RESPECTIVE LISTING AGREEMENTS OF MAHINDRA & MAHINDRA FINANCIAL
SERVICES LIMITED, THE PARENT COMPANY AND MAHINDRA & MAHINDRA LIMITED, THE ULTIMATE PARENT COMPANY.
Loans and advances in the nature of loans to rms/companies in which Directors are interested are as given below:
(In Rupees)
Name of the Company Balance as on
31
st
March, 2014
Maximum outstanding
during the year
Mahindra & Mahindra Financial Services Limited 70,40,00,000 70,40,00,000
Mahindra Rural Housing Finance Limited 46,25,00,000 46,25,00,000
The Company has no subsidiaries or associates and no loans and advances in the nature of loans have been made by the
Company where there is no repayment schedule or repayment beyond seven years or where there is no interest or interest below
the limits prescribed under Section 372A of the Companies Act, 1956.
ST
MARCH, 2014
RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31
ST
MARCH, 2014
a. Energy Conservation measures taken: Though the activities of the Company are not energy-intensive, necessary
measures are taken to contain and bring about savings in power consumption through improved operational methods
and better housekeeping.
b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil
c. Impact of the measures taken at (a) & (b) above for reduction of energy consumption and consequent impact on the
cost of production of goods: These measures are expected to reduce energy consumption.
d. Total energy consumption and energy consumption per unit of production as per Form-A to the Annexure to the Rules
2. Benets derived as a result of the above efforts : Not applicable
The total Foreign Exchange Earnings and Outgo during the year under review are as follows :
Foreign Exchange Earnings : Rs. 2,30,34,415/- (F.Y. 2012-13 : 64,47,930)
Foreign Exchange Outow : Rs. 48,50,073/- (F.Y. 2012-13 : Rs. 29,58,426)
Rajeev Dubey
Chairman
Mumbai, 14
th
April, 2014
407
ST
MARCH, 2014
COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS REPORT FOR THE
YEAR ENDED 31
ST
MARCH, 2014
Name of
Employee
Designation /
Nature of Duties
Gross
Remuneration
(subject to income
tax)
Qualications Experience
(Years)
Age
(years)
Date of
Commencement
of Employment
Last Employment
held (Designation
and Organisation)
(Rs.)
Dr. Jaideep
R. Devare
Managing
Director
77,82,919 Ph.D. in
Management
(Thesis on
Insurance Industry
in India), Master
of Management
studies (MMS)
(Finance), Bachelor
of Engineering (B.E.)
Honors, (Production)
23 46 01/01/2009 Head - Business
Development (New
Initiatives) - Mahindra
& Mahindra Financial
Services Limited
Kumar R.
Pherwani
Principal Ofcer 70,95,733 Bachelor of
Commerce,
Associate of
Insurance Institute
of India, Diploma in
Export Management
39 58 01/01/2006 Head - Insurance &
Risk Management
Dept - Mahindra &
Mahindra Limited
Notes:
1. Nature of employment is contractual, subject to termination on three months notice on either side.
2. Terms and conditions of employment are as per Companys Rules / contract.
3. Gross Remuneration includes salary, taxable value of perquisites and Companys contribution to Provident and
Superannuation Funds.
4. The Company has made a provision for contribution to the Employees Gratuity Fund and Leave Encashment based on
the actuarial valuation. This amount has not been included in Gross Remuneration as no separate gures are available
for individual employee.
5. None of the above employees is a relative of any Director of the Company.
6. The above employees have adequate experience to discharge the responsibilities assigned to them.
7. The above employees do not hold by themselves or along with their spouse and dependent children, 2% or more of the
equity shares of the Company.
Rajeev Dubey
Chairman
Mumbai, 14
th
April, 2014
408
To
The Members of MAHINDRA INSURANCE BROKERS LIMITED
Mahindra Insurance Brokers Limited (the Company),
and the Statement of Prot and Loss and Cash Flow
preparation of these nancial statements that give a
true and fair view of the nancial position, nancial
performance and cash ows of the Company in
accordance with the Accounting Standards notied
under the Companies Act, 1956 (the Act) read with the
the Ministry of Corporate Affairs in respect of Section 133
of the Companies Act 2013. This responsibility includes
the design, implementation and maintenance of internal
control relevant to the preparation and presentation of
the nancial statements that give a true and fair view and
are free from material misstatement, whether due to fraud
or error.
opinion.
Opinion
accepted in India:
st
March 2014;
[prot/loss] for the year ended on that date; and
of the Order.
c. the Balance Sheet, the Statement of Prot and Loss
and Cash Flow dealt with by this Report are in
d. in our opinion, the Balance Sheet, the Statements
e. on the basis of written representations received from
is disqualied as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956.
H. P. Mahajani
Place: Mumbai, Partner
Date: 14
th
April 2014 M. No. 030168
409
1 (a) The Company has maintained proper records
physically veried by the Management during the
year at reasonable intervals and no discrepancies
the year.
2 Clause 4(ii) of the Companies (Auditors Report) Order
2003 is not applicable to the company.
3 Based on the records examined by us and according
Company has:
(i) Not granted any loans to parties covered in the
(ii) Not taken any loans from parties covered in the
control system.
5 According to the information and explanations given to
any deposits from the public. Consequently, no order has
been passed by the Company Law Board or National
Company Law Commission or Reserve Bank of India or
any court or any other tribunal on the Company.
8 On facts, the requirements of Para 4 (viii) requiring
maintenance of cost records are not applicable in case of
the Company.
9 (a) According to the records of the Company and
tax, Sales tax, Wealth tax and service tax, cess and
authorities.
(b) According to the records of the company and
information and explanations given to us there are no
disputed dues which have not been deposited with
the relevant authority.
10 The Company does not have accumulated losses as at
cash losses in such nancial year and in the immediately
Balance Sheet date.
12 Based on the records examined by us and according to
the information and explanations given to us, the Company
has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures, or other
securities.
13 The provisions of any applicable statute to Chit Fund,
Nidhi or Mutual Benet Fund / Society are not applicable
to the Company.
14 The Company is not dealing or trading in shares,
16 Based on the records examined by us and according to
17 On the basis of overall examination of the nancial
statements and other nancial information furnished, we
18 The Company has not made any preferential allotment of
maintained under section 301 of the Act;
19 On the basis of our examination of books of account
explanations given to us, the Company has not issued
any debentures.
20 The Company has not made any public issue of its shares
during the year.
21 During the course of our examination of the books and
to the information and explanations given to us, we have
neither come across any instances of fraud on or by the
Company noticed or reported during the year, nor have
we been informed of any such instances during the year.
H. P. Mahajani
Place: Mumbai, Partner
Date: 14
th
April 2014 M. No. 030168
410
In Rupees
Particulars Note No. March-14 March-13
(a) Share capital A 25,773,200 25,773,200
(b) Reserves and surplus B 1,303,533,301 913,720,924
1,329,306,501 939,494,124
(a) Trade payables 20,219,903 28,904,175
(b) Other current liabilities C 11,156,932 10,619,403
(c) Short-term provisions D 89,952,554 41,964,788
121,329,389 81,488,366
TOTAL 1,450,635,890 1,020,982,490
II. ASSETS
(a) Fixed assets
(i) Tangible assets E 19,172,928 19,097,533
(b) Non-current investments F 270,000,000
(c) Deferred tax assets (net) 1,170,833 448,082
(d) Long-term loans and advances G 87,621,967 94,508,955
377,965,728 114,054,570
(2) Current assets
(a) Trade receivables H 122,593,022 86,739,682
(b) Cash and cash equivalents I 66,530,286 142,035,948
(c) Short-term loans and advances J 834,206,734 651,755,273
(d) Other current assets K 49,340,120 26,397,017
1,072,670,162 906,927,920
TOTAL 1,450,635,890 1,020,982,490
}
The notes referred to above form an integral part of the Balance Sheet
For B. K. Khare & Co. For and on behalf of the Board
Firm Regn No. 105102W Rajeev Dubey Chairman
Uday Y. Phadke
H.P. Mahajani
Partner Ramesh Iyer
Membership No. 30168 Directors
V. Ravi
Hemant Sikka
Dr. Jaideep Devare Managing Director
Mumbai, 14
th
April 2014 Mumbai, 14
th
April 2014
411
In Rupees
Particulars Note No. March-14 March-13
I. Revenue from operations L 1,013,839,268 800,075,279
II. Other income 97,913,747 62,919,426
III. Total Revenue (I + II) 1,111,753,015 862,994,705
IV. Expenses:
Employee benets expense M 305,200,686 225,310,130
Depreciation and amortization expense N 3,521,086 3,330,774
Other expenses O 165,399,853 122,425,808
Total expenses 474,121,625 351,066,712
V. Prot before exceptional and extraordinary items and tax (III - IV) 637,631,390 511,927,993
VI. Exceptional items
VII. Prot before extraordinary items and tax (V - VI) 637,631,390 511,927,993
VIII. Extraordinary Items
IX. Prot before tax (VII - VIII) 637,631,390 511,927,993
X. Tax expense:
(1) Current tax 218,600,000 167,600,000
(2) Deferred tax (Asset)/Liability (722,751) (136,674)
(3) Income Tax adjustment for earlier year (net) (211,591)
XI. Prot/(Loss) for the period from continuing operations 419,965,732 344,464,667
XII. Prot/(Loss) for the period 419,965,732 344,464,667
XIII. Earnings per equity share:
(1) Basic 162.95 137.74
(2) Diluted 162.95 137.74
}
The notes referred to above form an integral part of the Prot & Loss Account.
Uday Y. Phadke
H.P. Mahajani
Partner Ramesh Iyer
V. Ravi
Hemant Sikka
Mumbai, 14
th
th
April 2014
412
CASH FLOW STATEMENT
In Rupees
March-14 March-13
Prot before taxes and contingencies 637,631,390 511,927,994
Add/(Less):
Depreciation & Amortisation 3,521,086 3,330,774
Interest Income (97,913,748) (62,915,246)
Provision for Doubtful Debts/Advances Writen-off (net) 230,000 205,000
(Prot)/Loss on sale/retirement of assets 549,255 1,087,391
Operating prot before working capital changes (I) 544,017,983 453,635,913
Less:
(Increase)/Decrease in Trade receivables (36,083,340) (23,129,165)
(Increase)/Decrease in Long Term Loans & Advances 1,886,988 (3,484,864)
(Increase)/Decrease in Short Term Loans & Advances (5,202,303) (3,090,316)
(Increase)/Decrease in Current Assets 862,282 (1,618,346)
(38,536,373) (31,322,691)
Add: Increase/(Decrease) in Current liabilities 537,529 1,549,849
Add: Increase/(Decrease) in Trade Payable (8,684,272) 18,435,475
Add: Increase/(Decrease) in Short Term Provision 20,168,620 5,287,606
(II) (26,514,496) (6,049,761)
Cash generated from operations (I + II) 517,503,487 447,586,152
Income Taxes paid (222,971,776) (161,743,527)
NET CASH FROM OPERATING ACTIVITIES (A) 294,531,711 285,842,625
Purchase of xed assets (4,658,419) (7,290,996)
Sale of xed assets 512,684 460,348
Fixed Deposit with Companies (270,000,000)
Intercorporate Deposits Placed (170,000,000) (268,800,000)
NET CASH FROM INVESTING ACTIVITIES (B) (370,037,373) (213,621,255)
Proceeds from Issue of Additional Equity Share Capital 159,723,343
Dividends paid (159,805,938)
NET CASH FROM FINANCING ACTIVITIES (C) (82,595)
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENT (A + B + C) (75,505,662) 72,138,775
CASH AND CASH EQUIVALENTS AS AT:
Beginning of the period 142,035,948 69,897,173
End of the period 66,530,286 142,035,948
}
Examined and found correct
Uday Y. Phadke
H.P. Mahajani
Partner Ramesh Iyer
V. Ravi
Hemant Sikka
Mumbai, 14
th
th
April 2014
413
A. Share Capital:
In Rupees
March-14 March-13
Authorised:
3,500,000
(Previous Year: 3,500,000)
Equity Shares of Rs. 10 each 35,000,000 35,000,000
Issued Capital:
2,577,320
Subscribed &
Paid up Capital:
2,577,320 TOTAL 25,773,200 25,773,200
Other quantitative Information:
Particulars March-14 March-13
a. Reconciliation of the number of shares -
Number of equity shares outstanding at
the beginning of the year 2,577,320 2,500,000
Add: Fresh allotment of shares during the
year:
1) Private placement to QIBs under QIP 0 77,320
2) Issue of Bonus/Rights shares 0 0
3) Shares issued under Employees'
Stock Option Scheme 0 0
4) Conversion of any convertible security 0 0
5) Any others (specify) 0 0
2,577,320 2,577,320
Less: Shares bought back during the year 0 0
the end of the period 2,577,320 2,577,320
b. Number of equity shares held by holding
company or ultimate holding Company
including shares held by its subsidiaries/
associates:
Holding company: Mahindra & Mahindra
Financial Services Limited 2,190,722 2,190,722
(Equity shares of Rs. 10/- Each)
Percentage of holding (%) 85 85
c. Shareholders holding more than 5
percent shares:
Mahindra & Mahindra Financial Services
Limited 2190722 2190722
Inclusion Resources Private Ltd. 386,598 386,598
d. Shares reserved for issue under options
and contracts/commitments for the sale
of shares/disinvestment, including the
terms and amounts : (specify, if any) 0 0
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2014
Particulars March-14 March-13
e. Shares allotted during the period of
ve years immediately preceding the
date as at which the Balance Sheet is
prepared :
Aggregate number and class of shares
allotted as fully paid up pursuant
to contract(s) without payment being
received in cash. 0 0
allotted as fully paid up by way of
bonus shares. 2,000,000 2,000,000
bought back. 0 0
B. Reserves and Surplus:
In Rupees
March-14 March-13
General Reserve:
As per last Balance Sheet 80,843,458 45,843,458
Add: Transfer during the period 42,000,000 35,000,000
Closing Balance 122,843,458 80,843,458
Securities Premium Account:
As per last Balance Sheet 158,950,143 0
Add: Additions during the year 0 160,052,400
Less: Share issue expenses 0 1,102,257
Closing Balance 158,950,143 158,950,143
Surplus in Statement of Prot and Loss:
Balance Prot (for earlier years) as per last
Balance Sheet 673,927,323 480,693,594
Add: Prot for the current year transferred
from Statement of Prot & Loss 419,965,732 344,464,667
1,093,893,055 825,158,261
Less: Allocations & Appropriations:
Transfer to General Reserve 42,000,000 35,000,000
Proposed Dividend (Final) 25,773,200 0
Corporate Dividend Tax (Final) 4,380,155 0
Interim Dividend Paid 0 100,000,000
Corporate Dividend Tax Paid 0 16,230,938
Balance in Prot & Loss Account 1,021,739,700 673,927,323
TOTAL 1,303,533,301 913,720,924
C. Other Current Liabilities:
In Rupees
March-14 March-13
Other Current Liabilities 11,156,932 10,619,403
11,156,932 10,619,403
D. Short Term Provisions:
In Rupees
March-14 March-13
Provision for Employee Benets 59,799,199 39,630,579
Proposed Dividend 25,773,200 0
Corporate Dividend Tax 4,380,155 0
Provision for Tax (net of advance tax) 0 2,334,209
89,952,554 41,964,788
414
E. Tangible Assets: In Rupees
Gross Block At Cost Depreciation Net Block
Description of
Assets
As at
1-Apr-13
Additions
for
Purch/Trf
Deductions
for
Sale/Trf
As at
31-Mar-14
Upto
1-Apr-13
Additions
/Trf
Deductions
/Trf
Upto
31-Mar-14
As at
1-Apr-13
As at
31-Mar-14
Vehicles 10,531,769 4,093,502 1,526,238 13,099,033 1,889,094 1,212,389 640,821 2,460,662 8,642,675 10,638,371
Furniture 1,077,968 38,475 1,116,443 359,190 96,103 455,293 718,778 661,150
Ofce Equipment 2,025,375 257,997 66,000 2,217,372 1,106,820 270,450 15,906 1,361,364 918,555 856,008
Computers 14,829,386 268,445 1,374,380 13,723,451 6,011,861 1,942,144 1,247,953 6,706,052 8,817,525 7,017,399
Total 28,464,498 4,658,419 2,966,618 30,156,299 9,366,965 3,521,086 1,904,680 10,983,371 19,097,533 19,172,928
As at 31-03-2013 23,349,803 7,290,996 2,176,301 28,464,498 6,664,753 3,330,774 628,562 9,366,965 16,685,050 19,097,533
F. Non Current Investments:
In Rupees
March-14 March-13
- Fixed Deposits with companies 270,000,000 0
TOTAL 270,000,000 0
G. Long Term Loans and Advances:
In Rupees
March-14 March-13
Loans and advances (unsecured,
considered good):
Inter Corporate Deposits Given (for more
than one year) with related parties 82,500,000 87,500,000
Other Advances recoverable in cash or kind
or for value to be received 2,736,615 5,583,711
Gratuity Plan Assets (Net) 1,181,352 221,244
Deposits for Ofce Premises/Others 1,204,000 1,204,000
TOTAL 87,621,967 94,508,955
H. Trade Receivables:
In Rupees
March-14 March-13
Sundry Debtors (Unsecured):
Outstanding for a period exceeding
six months
Considered good 2,590,651 1,027,035
Considered Doubtful 749,653 749,653
Less : Provision for Doubtful
Debts (Refer note
no. 10 (a)) 1,465,000 1,235,000
1,875,304 541,688
Others 120,717,718 86,197,994
TOTAL 122,593,022 86,739,682
I. Cash & Cash equivalents:
In Rupees
March-14 March-13
Cash & Bank Balances:
Cash and Cheques on hand 138,319 127,316
Balance with Scheduled Banks in
Current Account 15,391,967 16,908,632
Term Deposit with Scheduled Banks
(less than 12 months maturity) 45,000,000 119,000,000
Term Deposit with Scheduled Banks
[Under lien to IRDA for broking
license] (includes Rs. 1,000,000 with
more than 12 months maturity] 6,000,000 6,000,000
TOTAL 66,530,286 142,035,948
J. Short Term Loans and Advances:
In Rupees
March-14 March-13
Loans and advances (unsecured,
considered good):
Inter Corporate Deposits Given (for less
than one year) with related parties 814,000,000 639,000,000
Advance Payment of Tax (net of provision) 2,249,159 0
Deposits - Others 200,000 200,000
Other Advances recoverable in cash or kind
or for value to be received 17,757,575 12,555,273
TOTAL (B) 834,206,734 651,755,273
K. Other Current Assets:
In Rupees
March-14 March-13
Interest Accrued but not due Bank FD/
ICD/Investment 4,76,37,526 2,38,32,140
Other Current Assets 17,02,594 25,64,877
TOTAL 4,93,40,120 2,63,97,017
L. Revenue From Operations:
In Rupees
March-14 March-13
Brokerage 425,571,100 327,870,601
Broker Retainer Fees 463,943,444 398,856,236
Handling Charges 111,040,800 72,938,200
Consultancy Fees 13,283,924 410,242
TOTAL 1,013,839,268 800,075,279
M. Employee Benets Expense:
In Rupees
March-14 March-13
Salary, Bonus & Incentives 279,799,902 202,444,878
Company's Contribution to P.F. & Other Funds 13,446,809 11,348,506
Employee Compensation Expenses on
account of ESOPs 3,923,687 5,162,881
Staff Welfare 8,030,288 6,353,865
TOTAL 305,200,686 225,310,130
N. Depreciation:
In Rupees
March-14 March-13
Depreciation on tangible assets 3,521,086 3,330,774
TOTAL 3,521,086 3,330,774
415
O. Other Expenses:
In Rupees
March-14 March-13
OTHER EXPENSES:
Electricity charges 4,647,841 3,659,770
Rent 19,251,073 18,344,539
Administration Support Charges 9,134,925 7,168,255
Insurance 13,082,373 7,691,956
Rates and Taxes 723,957 864,196
Legal & Professional Charges 2,140,445 2,387,770
Loss on Sale/Retirement of Owned Assets 549,255 1,087,391
Travelling Expenses 39,560,228 25,396,908
Hotel Stay Expenses 11,106,496 5,409,119
Provision for Doubtful Debts - (Refer note
no 10(a)) 230,000 205,000
Manpower Outsourcing Charges 18,144,063 16,179,957
Audit Fees 900,000 300,000
Other Services 46,000 43,670
Donations 3,931,000 3,418,001
General & Administrative Expenses 41,952,197 30,269,276
TOTAL 165,399,853 122,425,808
P. SIGNIFICANT ACCOUNTING POLICIES (SAP)
1) Basis for Preparation of Accounts:
and the Accounting Standards notied under the said Act.
All assets & liabilities have been classied as current & non-current
as per the Companys normal operating cycle and other criteria set
out in the Schedule VI of the Companies Act, 1956. Based on the
nature of services and their realization in cash and cash equivalents,
the company has ascertained its operating cycle as 12 months
for the purpose of current & non-current classication of assets &
liabilities.
2) Use of Estimates:
during the reporting year. Management believes that the estimates
used in the preparation of the nancial statements are prudent and
current and future years.
3) Revenue Recognition:
General:
The Company generally follows the accrual method of accounting for
its income and expenditure.
a) Brokerage Income:
Brokerage income is recognized on receiving details of
the policy issued by the insurance company or brokerage
whichever is earlier. Brokerage Income, Handling Charges &
Broker Retainer Fees is accounted for net of Service Tax on
rendition of services.
b) Insurance Consultancy Fees:
Revenue from Insurance Consultancy is recognised net of
Service Tax in accordance with the terms of the contract.
4) Investments:
Investments held as long-term investments are stated at cost
comprising of acquisition and incidental expenses less permanent
diminution in value, if any. Investments other than long-term
investments are classied as current investments and valued at cost
or fair value whichever is less.
Provision for diminution in value of investments is made if management
perceives that there is permanent diminution in value of investments
in accordance with the Accounting Standard on Accounting for
Investments (AS 13) notied by Companies (Accounting Standards)
Rules, 2006.
5) Share Issue Expenses:
Expenses incurred in connection with fresh issue of share capital are
adjusted against Securities Premium Account in the year in which
they are incurred.
6) Fixed Assets:
Fixed Assets are stated at cost of acquisition (including incidental
expenses), less depreciation.
7) Depreciation:
Depreciation on xed assets is charged using the Straight Line
method at rates specied in Schedule XIV to the Companies Act,
1956, except for Ofce Equipment on which depreciation is charged
at the rate of 16.21% instead of 4.75% as prescribed in Schedule XIV.
Individual assets cost less than Rs. 5000/- are written off in the year
of purchase.
8) Employee Benets:
Retirement Benets in respect of gratuity at retirement/cessation are
provided for based on valuations, as the Balance Sheet date, made
by independent actuaries.
a. Dened Contribution Plans
Provident Fund, Superannuation and Labour Welfare Fund are
recognised in Prot & Loss Account.
b. Dened Benet Plan
Companys liabilities towards gratuity & leave encashment
is determined using the Projected Unit Credit Method which
considers each period of service as giving rise to an additional
unit of benet entitlement and measures each unit separately
to build up the nal obligation. Actuarial gains and losses are
recognized immediately in the statement of Prot and Loss
value of estimated future cash ow using a discount rate that is
determined by reference to market yields at the Balance Sheet
date on government bonds where the currency and terms of
the government bonds are consistent with the currency and
estimated terms of the dened benet obligation.
9) Segment Reporting:
The company has single reportable segment namely insurance
auxiliary services for the purpose of Accounting Standard 17 on
Segment Reporting.
10) Taxes on Income:
of taxable income for the year. Deferred tax is recognised, subject to
between taxable incomes and accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets arising on account of unabsorbed
depreciation or carry forward of tax losses are recognised only to
the extent that there is virtual certainty supported by convincing
evidence that sufcient future tax income will be available against
which such deferred tax assets can be realised.
11) Provisions and Contingent Liabilities:
a) Provision for doubtful debts is made on the basis of standard
norms and also, where required, on actual evaluation.
b) Provisions are recognised in accounts in respect of present
probable obligations, the amount of which can be reliably
estimated. Contingent liabilities are disclosed in respect of
possible obligations that arise from past events but their
existence is conrmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly
within the control of the company.
416
NOTES TO ACCOUNTS
1) The Composite Broking License of the company, has been
renewed by IRDA w.e.f. 17/05/2013 for next 3 years.
2) In the opinion of the Board, Current Assets, Loans & Advances are
of the value stated if realised in the ordinary course of business.
3) The company earns brokerage from several insurance companies.
The accounts of these insurance companies remain under
reconciliation and are subject to conrmation. The company does
not expect any signicant variation in the book balances.
4) Related Party Disclosure as per Accounting Standard 18:
List of the related parties:
Holding Companies:
Mahindra & Mahindra Limited*
Fellow subsidiary Companies:
Mahindra Business & Consulting Services
Private Limited
Key Management Personnel
Managing Director : Dr. Jaideep Devare
Related Parties Transactions are as under:
(in Rupees)
Sr.
No.
Companies*
Fellow
subsidiary
Companies
Key
Management
Personnel
1 INCOME
Interest (Gross) 5,33,56,433 3,81,64,844
(2,25,76,151) (2,79,74,552)
Handling Charges
(Gross of Service Tax)
12,47,65,442 Nil
(8,19,53,361) (Nil)
2 EXPENSE
Other Expenses (Gross
of Service Tax)
1,49,38,926 1,76,47,398 78,03,407
(1,41,57,471) (1,81,89,297) (63,88,204)
3 FINANCE
Inter Corporate
Deposits/FDs given
70,40,00,000 46,25,00,000
(51,40,00,000) (21,25,00,000)
Dividends Paid (for
previous year)
Nil Nil
(3,75,00,000)
Dividends Paid (for
current year)
Nil Nil
(10,00,00,000)
4 OUTSTANDINGS
Receivables 6,46,60,836 2,45,62,508
(3,94,73,327) (94,19,084)
Payables 56,27,218 4,26,805
(76,65,272) (31,69,390)
Amounts in brackets represent amounts pertaining to previous nancial year
* Mahindra Insurance Brokers Limited is a 85% subsidiary of Mahindra
& Mahindra Financial Services Limited, which in turn is a subsidiary of
Mahindra & Mahindra Limited.
Note: The above amount excludes payments towards reimbursement of
expenses.
5) Earnings in Foreign Currency Rs. 2,30,34,415/- (Previous Year
Rs. 64,47,930/-).
6) Expenditure incurred in Foreign Currency Rs. 48,50,073/- (Previous
Year Rs. 29,58,426/-).
7) The company has incurred a cost of Rs. 39,23,687/- (previous year
Rs. 51,62,881/-) for Employee Stock Options (ESOS) of the holding
company, Mahindra & Mahindra Financial Services Limited (MMFSL),
to employees of the company.
8) In accordance with the provisions of Accounting Standard 15
(revised) issued by the Institute of Chartered Accountants of India;
cost of employee benets in the form of compensated absences
for the period ended 31st March 2014 is Rs. 46,44,569/- (Previous
Year Rs. 27,01,805/-) and has been recognised in the Prot & Loss
Account as such. The Present Value of obligation on account of
such compensated absences is Rs. 79,75,107/-(Previous Year
Rs. 53,74,836/-) as on 31st March 2014.
9) Dened Employee Benets:
(Rupees)
Gratuity Funded Leave Non-Funded
March 2014 March 2013 March 2014 March 2013
I. Change in Obligation
during the year ended
31st March 2014
1. Present value of
obligation as the
beginning of the
year 6,580,303 4,641,070 5,374,836 4,166,530
2. Interest Cost 630,000 432,936 560,949 325,050
3. Current Service Cost 6,066,815 4,685,508 8,845,223 1,534,747
4. Actuarial (Gain)/Loss
on Obligations (4,529,873) (2,785,507) (6,805,901) (651,491)
5. Benets Paid (327,931) (393,704)
6. Present value of
Dened Benet
Obligation at the end
of the year. 8,419,314 6,580,303 7,975,107 5,374,836
II. Change in Assets
during the Year ended
31st March 2014
beginning of the
year 6,801,547 4,804,595
2. Expected return on
plan assets 544,887 403,280
3. Contributions by
Employer 2,799,119 1,996,952
4. Actual benets paid (327,931) (393,704)
5. Actual Gain/(Losses) (216,956) (9,576)
end of the year 9,600,666 6,801,547
III. Net Asset/(Liability)
recongnised in the
Balance Sheet as at
31st March 2014
1. Present Value of
Dened Obligation
as at 31st March
2014 8,419,314 6,580,303 7,975,107 5,374,836
2. Fair Value of plan
assets as at 31st
March 2014 9,600,666 6,801,547
3. Fund status
(Surplus/(Decit)) 1,181,352 221,244 (7,975,107) (5,374,836)
4. Net Assets/
(Liability) as at 31st
March 2014 1,181,352 221,244 (7,975,107) (5,374,836)
417
(Rupees)
Gratuity Funded Leave Non-Funded
March 2014 March 2013 March 2014 March 2013
IV. Expenses recognised
in the statement of
Prot and Loss for the
year ended 31st March
2014
1. Current Service cost 6,066,815 4,685,508 8,845,223 1,534,747
2. Interest Cost 630,000 432,936 560,949 325,050
3. Expected return on
Plan Assets (544,887) (403,280)
4. Net Actuarial
(Gains)/Losses
(Net of Opening
Actuarial Gain/(Loss)
adjustment) (4,312,917) (2,775,931) (6,805,901) (1,510,540)
5. Expenses
recognised in
statement of Prot &
Loss 1,839,011 1,939,233 2,600,271 349,257
V. The Major Categories
in Plan Assets as a
percentage of total
plan
1. Insurer Managed
Funds 100% 100%
VI. Method of Valuation: Projected
Unit Credit
Method
Projected
Unit Credit
Method
Projected
Unit Credit
Method
Projected
Unit Credit
Method
VII. Actuarial Assumption
1. Discount Rate 8% 8% 8% 8%
2. Expected rate of
return on plan
assets 9% 8%
3. Mortality Table LIC
(2006-08)
Ultimate
LIC
(1994-96)
Ultimate
LIC
(2006-08)
Ultimate
LIC
(2006-08)
Ultimate
4. Salary Increment
Rate 5% 5% 5% 5%
5. Retirement Age 60 Years 60 Years 60 Years 60 Years
6. Withdrawal Attrition
rate of 1%
up to the
age of 30
Years
Attrition
rate of 1%
up to the
age of 30
Years
Attrition
rate of 1%
up to the
age of 30
Years
Attrition
rate of 1%
up to the
age of 30
Years
VIII. Experience Adjustments:
Year ended
March 10 March 11 March 12 March 13 March 14
Dened Benet
obligation at end of
the period 2,308,369 3,389,211 4,641,070 6,580,303 8,419,314
Plan assets at the end
of period 3,004,595 3,804,595 4,804,595 6,801,547 9,600,666
Funded Status
Surplus/ (Decit) (696,226) (415,384) (163,525) (221,244) (1,181,352)
Experience
adjustments on plan
liabilities (gain)/loss (444,432) (625,820) (695,979) (598,464) (1,850,137)
Experience
adjustments on plan
assets gain/(loss) (46,895) (63,952) (83,037) (105,820) (133,924)
10) Earnings per share:
March-14 March-13
Amount used as numerator Balance of
Prot after Tax available for shareholders (Rs.) 41,99,65,732 34,44,64,667
used in computing basic earnings per share 2,577,320 25,00,847
used in computing diluted earnings per
share 2,577,320 25,00,847
Basic earnings per share (Rs.) (Face value
of Rs.10 per share) 162.95 137.74
Diluted earnings per share (Rs.) 162.95 137.74
11) In accordance with Accounting Standard 22 on Accounting for Taxes
on Income the company has accounted for Deferred Tax Asset of
Rs. 11,70,833/- (Previous Year Rs. 4,48,082/-) as at 31st March 2014.
The breakup of the Deferred Tax Asset as at 31st March 2014 is as under:
In Rupees
Particulars Deferred
Tax Asset/
(Liability)
March 2014
Deferred Tax
Asset/
(Liability)
March 2013
Provision for Doubtful Debts 4,97,954 4,19,777
Depreciation (17,04,298) (18,25,371)
Gratuity (4,01,542) (75,201)
Leave Encashment 27,10,739 18,26,907
Bonus and Incentive 67,980 1,01,970
TOTAL 11,70,833 4,48,082
12) There are no dues payable to Small Scale industrial undertakings in view
of the nature of the business of the Company.
13) Suppliers covered under the Micro, Small and Medium Enterprises
Development Act, 2006, has not furnished the information regarding
ling of necessary memorandum with appointed authority. In view of this
and legal opinion obtained by the Company, information required under
Section 22 of the said Act is not given.
Signatures to Notes to Accounts
Uday Y. Phadke
H.P. Mahajani
Partner Ramesh Iyer
V. Ravi
Hemant Sikka
Mumbai, 14
th
th
April 2014
}
MAHINDRA RURAL HOUSING FINANCE LIMITED
418
Your Directors have pleasure in presenting their Seventh Report together with the audited accounts of your Company for the year
ended 31
st
March, 2014.
FINANCIAL RESULTS Amount in Lacs
Income 21,252.10 14,040.02
Less: Finance Costs 8,898.96 5,555.86
Expenditure 8,529.71 5,635.36
Depreciation and Amortisation Expenses 143.22 108.26
Total Expenses 17,571.89 11,299.48
Prot Before Tax 3,680.21 2,740.54
Less: Provision for Tax
Current Tax 1,309.67 870.34
Deferred Tax (337.31) (161.58)
Prot/(Loss) for the year 2,707.85 2,031.78
Prot/(Loss) brought forward from previous year 1,837.09 899.57
Amount available for Appropriation 4,544.94 2,931.35
Appropriations:
Special Reserve 820.00 555.00
Additional Special Reserve (u/s 29C of NHB Act, 1987) 5.00 5.00
General Reserve 68.00
Proposed dividend on Equity Shares 612.98 457.14
Income-tax on proposed dividend 104.18 77.12
Surplus carried to Balance Sheet 2,934.78 1,837.09
OPERATIONS
During the year under review the total income was Rs. 212.52
crores as against Rs. 140.40 crores for the nancial year 2012-
13, registering a growth of 51% over the previous year. Prot
before tax was 34% higher at Rs. 36.80 crores as compared to
Rs. 27.41 crores for the previous year. Prot after tax was 33%
higher at Rs. 27.08 crores as compared to Rs. 20.32 crores for
the previous year.
Your Company has disbursed loans aggregating Rs. 630.56
crores (previous year Rs. 432.85 crores) achieving a growth of
45% over the previous year. The outstanding loan portfolio as
at 31
st
March, 2014 stood at Rs. 1,354.97 crores.
Your Company continued its focus on serving customers in
rural India. Majority of the loans disbursed were to customers
in villages with an average annual household income of less
than Rs. 1.5 lakhs. During the year under review, around
57,000 households were given home loans (in addition to
around 1,25,000 existing households as on 31
st
March, 2013).
Your Company has been expanding its geographical
presence, to provide affordable services for rural households.
During the year under review, operations were strengthened
in the states of Maharashtra, Gujarat, Rajasthan, Tamilnadu,
Andhra Pradesh, Kerala, Karnataka, Madhya Pradesh and
Bihar.
DIVIDEND
Your Directors recommend a dividend of Re. 1.10 per
Equity Share on 6,57,37,137 Equity Shares of Rs.10 each,
aggregating Rs. 6.13 crores (including proportionate dividend
on 2,00,22,857 Equity Shares allotted during the year). The
above dividend, if approved, will be paid to those Members
whose names appear in the Register of Members as on the
Record Date xed for this purpose. The dividend including
dividend distribution tax, surcharge and education cess will
absorb a sum of Rs. 7.17 crores (as against Rs. 5.35 crores
(including tax) on account of dividend of Re. 1 per Equity
Share, paid for the previous year).
GOLDEN JUBILEE RURAL HOUSING FINANCE SCHEME
During the year under review, your Company has disbursed
Rs. 410.83 crores in respect of 55,680 dwelling units under the
Golden Jubilee Rural Housing Finance Scheme (the Scheme)
of Government of India. The cumulative disbursements by the
Company at the end of the year under the Scheme stood at
Rs. 1,405.10 crores in respect of 1,78,038 dwelling units.
FINANCE
During the year under review, your Company has been
sanctioned Renance Assistance of Rs. 125 crores from
National Housing Bank (NHB). As on 31
st
March, 2014 the
outstanding borrowings from NHB cumulatively amounted to
Rs. 297.64 crores.
419
During the year under review, your Company has been
sanctioned Term loans of Rs. 200 crores from banks for tenures
of three to ve years. As on 31
st
March, 2014 the outstanding
borrowings from Banks amounted to Rs. 737.52 crores.
SHARE CAPITAL
During the year under review, your Company has issued
2,00,22,857 Equity Shares of Rs. 10 each at a premium of
Rs. 15 per share on rights basis envisaging capital infusion of
Rs. 50.06 crores. An amount of Rs. 12.5 per share (including
premium of Rs. 7.5 per share) on 2,00,22,857 equity shares
aggregating to Rs. 25.03 crores has been called and paid-up
during the year out of the said rights issue.
CREDIT RATING
During the year under review, CRISIL has upgraded its rating
on the long-term bank facilities of the Company to CRISIL
AA-/Stable from CRISIL A+/Stable and reafrmed the rating
on short term debt programme (including commercial paper)
of the Company at CRISIL A1+.
OUTLOOK FOR THE FINANCIAL YEAR 2014-15
The business potential for the Housing Finance Industry in India
is large. According to a World Bank report of 2008, Housing
Loans outstanding, as a percentage of the countrys GDP,
were just 9% for India as compared to 88% in the U.K., 81%
in the U.S.A. and 20% in China. According to the 2011 census,
close to 69% of the Indian population lives in rural areas.
Your Companys strategic decision to focus on Rural Housing
Finance stems from the low overall penetration of the housing
nance industry and the even lower penetration in rural India.
The Government of India has been taking steps directly and
through the NHB to bridge the housing shortage and increase
access to housing nance in rural areas. These steps will help
the Company to boost its growth.
ACHIEVEMENTS
During the year under review, your Company was awarded
for various prestigious recognitions at National & International
level. A few of those were:
Awarded Bronze for Product Excellence in the Global
CSR Summit & Awards 2013 in April 2013, held in Davao,
Philippines.
Won the Skoch Order of Merit for qualifying amongst
Indias best 2013 for corporate contribution to Indias
growth post liberalization in November 2013.
Awarded the Gold award in the Housing category at the
Skoch Awards for Corporate Leadership 2013.
Awarded the Most Admired Service Provider in Financial
Sector by the Banking, Financial Services & Insurance
Awards presented by ABP News on 14
th
February, 2014.
CAPITAL ADEQUACY
Consequent upon the allotment of Equity Shares issued on
a Rights basis, the paid-up share capital of the Company
has increased to Rs. 55.73 crores as on 31
st
March, 2014
from Rs. 45.71 crores as on 31
st
March, 2013. The securities
premium account has also been credited with Rs. 14.97 crores.
As a result of the increased net worth, your Company was able
to enhance the Capital to Risk Assets Ratio (CRAR) to 16.05
per cent as on 31
st
March, 2014 well above 12 per cent CRAR
prescribed by the NHB.
NON-PERFORMING ASSETS AND PROVISIONS FOR
CONTINGENCY
Your Company scrupulously adheres to the prudential guidelines
for Non-Performing Assets (NPAs), issued by NHB under
its Housing Finance Companies (NHB) Directions, 2010, as
amended from time to time. Your Company has made adequate
provision for the assets on which installments are overdue for
more than 90 days and on other assets, as required.
NATIONAL HOUSING BANK GUIDELINES
Your Company has complied with all the applicable
regulations of NHB. Your Company has scrupulously
adhered to various Circulars, Guidelines and Notications
issued by NHB from time to time. The Circulars and the
Notications issued by NHB are also placed before the
Board at regular intervals. NHB carries out inspections of
various Housing Finance Companies at regular intervals.
The Inspection Reports received by the Company from NHB
are also placed before the Board.
INSURANCE PROTECTION TO BORROWERS
Your Company has tied up with Kotak Mahindra Old Mutual
Life Insurance Limited and Cholamandalam MS General
Insurance Company Limited for insurance of its housing loan
products alongwith life insurance called Sampoorna Suraksha
Plan which covers the borrowers of the Company.
HUMAN RESOURCES AND TRAINING
Your Company took a number of initiatives to strengthen
human resources during the year.
In pursuance of the Companys commitment to develop
and retain the best available talent, the Company has
been sponsoring the employees for training programmes
organized by reputed professional institutions and training
programmes conducted by NHB for building capabilities
thereby upgrading the skill and knowledge of the employees
in different operational areas. Constant endeavors are
being made to offer professional growth opportunities and
recognitions, apart from imparting training to employees.
The Company has also conducted various engagement
surveys to understand the engagement levels across
employees for devising various policies which has helped in
boosting employees morale and engagement levels.
Your Company strongly believes in maintaining the dignity
of all its employees, irrespective of their gender or seniority.
Discrimination and harrassment of any type are strictly
prohibited. The Company has taken the necessary steps
to enhance awareness amongst its employees in respect
420
of the provisions of the Sexual Harrassment of Women at
Workplace (Prevension, Prohibition and Redressal) Act,
2013 and the Rules framed thereunder. During the year, the
Company has received two complaints of sexual harassment
which were duly resolved.
DIRECTORS
Mr. V. Ravi retires by rotation at the forthcoming Annual General
Meeting and, being eligible, offers himself for re-appointment.
consulted the Statutory Auditors and these have
at 31
st
March, 2014 and of the prot of the Company for
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;
concern basis.
AUDIT COMMITTEE
The Audit Committee of the Board presently comprises of
Mr. Ramesh Iyer (Chairman of the Committee), Mr. Uday Y.
Phadke and Mr. V. Ravi. The Audit Committee met twice during
the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The Board at its Meeting held on 15
th
April, 2014 has extended
the scope of terms of reference of Remuneration/Compensation
Committee in accordance with the section 178 of the
Companies Act, 2013 and renamed it as the Nomination and
Remuneration Committee. The Nomination and Remuneration
Committee of the Board presently comprises of Mr. Ramesh
Iyer, Mr. K. Chandrasekar and Mr. V. Ravi. The Committee met
once during the year under review.
ASSET LIABILITY COMMITTEE
The Asset Liability Committee (ALCO) of the Board presently
comprises of Mr. Ramesh Iyer(Chairman of the Committee),
Mr. K. Chandrasekar and Mr. V. Ravi. The ALCO Committee
met twice during the year under review. The Company
submits periodic reports to NHB on the management of the
Companys risks and assets and liabilities.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted a Corporate Social
Responsibility (CSR) Committee on 5
th
March, 2014
comprising Mr. Ramesh Iyer, Mr. K. Chandrasekar, Mr. V. Ravi
and Mr. Anuj Mehra. The Committee met once during the year
under review and framed the CSR Policy of the Company in
accordance with the Companies Act, 2013 (the Act) read
with the Companies (Corporate Social Responsibility Policy)
Rules, 2014. The CSR Committee shall, inter alia, allocate
the amount of expenditure to be incurred by the Company
on CSR activities as enumerated in Schedule VII to the Act
and monitor the CSR Policy of the Company periodically. The
CSR Policy of the Company is displayed on the website of
the Company.
During the year under review, your Company has spent
Rs. 22 lacs towards CSR activities for promotion of education
and improvement of health of the underprivileged section of
the society.
AUDITORS
Meeting, and have given their consent for re-appointment.
The shareholders would be required to elect Auditors from the
conclusion of this Annual General Meeting upto the conclusion
Companies Act, 1956 and Sections 139(1) read with 141
of the Companies Act, 2013, the Company has obtained a
written certicate from Messrs. B.K. Khare & Co., Chartered
The Company has not made any loans/advances in the nature of
loans which are otherwise required to be disclosed in the annual
accounts of the Company pursuant to Clause 32 of the Listing
Agreement of the parent company Mahindra & Mahindra
Financial Services Limited and the ultimate parent company
Mahindra & Mahindra Limited, with the Stock Exchanges.
CODES OF CONDUCT FOR CORPORATE GOVERNANCE
The Company has adopted Codes of Conduct for Corporate
Governance (the Codes) for its Directors and Senior
business and seek to reiterate the fundamental precept that
421
RULES MADE THEREUNDER
and Rules thereunder, a statement containing particulars of the
Companys employee who was in receipt of remuneration of
not less than Rs.60,00,000 during the year ended 31
st
March,
2014 or not less than Rs.5,00,000 per month during any part
of the said year is given in Annexure II to this Report. The
Company had no employee who was employed for a part of
less than Rs.5,00,000 per month during any part of the year.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their
sincere appreciation to National Housing Bank, the Companys
customers, bankers, shareholders and employees for the
support received from them during the year under review.
Ramesh Iyer
Chairman
Mumbai, 15
th
April, 2014
Registered Ofce:
Mahindara Towers,
P. K. Kurne Chowk, Worli,
Mumbai - 400018.
CIN: U65922MH2007PLC169791
Tel.: 91 22 6652 3500 Fax: 91 22 2497 2741
E-mail: customercare.mrh@mahn.com
Website: www.mahindrahomenance.com
422
ST
MARCH,
2014
ST
MARCH, 2014.
A. Conservation of Energy
a) Energy Conservation measures taken: The operations of your Company are not energy-intensive. However, adequate
b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil
impact on the cost of production of goods: These measures are expected to reduce the energy consumption.
d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules
in respect of Industries specied in the Schedule: Not Applicable
C. Foreign Exchange Earnings And Outgo
The Information on Foreign Exchange Outgo is furnished in Notes to Accounts. There were no foreign exchange earnings
Ramesh Iyer
Chairman
Mumbai, 15
th
April, 2014
423
ST
MARCH,
2014
COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS REPORT FOR THE
YEAR ENDED 31
ST
MARCH, 2014.
Name of
Employee
Designation/
Nature of
Duties
Gross
Remuneration
(subject to
income-tax)
(Rs. Lacs)
(Years)
Age
(Years)
Date of
Commencement
of Employment
Last Employment
held, Designation
and Organisation
Mr. Anuj Mehra Managing
Director
120.64 Bachelor in
Economics
P.G.D.M., I.I.M.
(Ahmedabad)
30 53 1
st
March,
2009
Vice President
Marketing
Mahindra Lifespace
Developers Limited
Notes:
1. Nature of employment is contractual, subject to termination on one months notice on either side.
2. The above employee is not a relative of any Director of the Company.
3. The above employee does not hold by himself or along with his spouse and dependent children 2% or more of the equity
shares of the Company.
4. Terms and conditions of employment are as per Companys Rules/contract.
5. Gross remuneration received as shown in the statement includes Salary, Bonus, House Rent Allowance or value of perquisites
for accommodation, car perquisites value/allowances applicable, employers contribution to Provident Fund, Superannuation
scheme and Gratuity Fund including group insurance premium, leave travel facility, reimbursement of medical expenses and
all allowances/perquisites and terminal benets as applicable.
Ramesh Iyer
Chairman
Mumbai, 15
th
April, 2014
424
To
The Members of
of Mahindra Rural Housing Finance Limited (the
March 31, 2014, and the Statement of Prot and Loss
and Cash Flow for the year then ended, and a summary
of signicant accounting policies and other explanatory
information.
opinion.
Opinion
accepted in India:
st
March 2014;
of the Order.
(b) in our opinion proper books of account as required
(d) in our opinion, the Balance Sheet, the Statements
(e) on the basis of written representations received from
Devdatta Mainkar
Partner
Mumbai: Dated 15
th
April 2014
425
physically veried by the Management during the
year at reasonable intervals and no discrepancies
the year.
2. Clause 4(ii) of the Companies (Auditors Report) Order
2003 is not applicable to the company.
3. (a) Based on the records examined by us and according
Company has:
control system.
any deposits from the public. Consequently, no order has
been passed by the Company Law Board or National
Company Law Commission or Reserve Bank of India or
any court or any other tribunal on the Company.
8. According to the information and explanation given to us,
the requirements of Para 4 (viii) requiring maintenance of
cost records are not applicable in case of the Company.
9. (a) According to the records of the Company and
tax, Sales tax, Wealth tax and Service tax, cess and
authorities.
(b) According to the records of the company and
information and explanations given to us there are no
disputed dues which have not been deposited with
the relevant authority.
10. The Company does not have accumulated losses as at
Balance Sheet date.
12. Based on the records examined by us and according to the
information and explanations given to us, the Company has
not granted any loans and advances on the basis of security
by way of pledge of shares, debentures, or other securities.
13. The provisions of any applicable statute to Chit Fund,
Nidhi or Mutual Benet Fund/Society are not applicable to
the Company.
14. The Company is not dealing or trading in shares,
16. Based on the records examined by us and according to
18. The Company has not made any preferential allotment of
19. On the basis of our examination of books of account
explanations given to us, the Company has not issued
any secured debentures during the year.
20. The Company has not made any public issue of its shares
during the year.
to the information and explanations given to us, no fraud
by the Company and no material fraud on the Company
were noticed or reported during the year, nor have we
been informed of any such instances during the year.
Devdatta Mainkar
Partner
Mumbai: Dated 15
th
April 2014
426
BALANCE SHEET AS AT MARCH 31
ST
, 2014
Rs. in Lacs Rs. in Lacs
a) Share Capital ..................................................................................... 1 5,572.57 4,571.43
b) Reserves and Surplus ....................................................................... 2 6,579.42 3,092.02
12,151.99 7,663.45
2) Non-Current Liabilities
a) Long Term Borrowings...................................................................... 3 90,783.60 56,864.75
b) Long Term Provisions ....................................................................... 4 1,215.91 604.64
91,999.51 57,469.39
3) Current Liabilities
a) Short Term Borrowings ..................................................................... 5 2,625.00 3,525.00
b) Trade Payables .................................................................................. 6 1,592.66 1,245.75
c) Other Current Liabilities .................................................................... 7 27,388.98 18,317.91
d) Short Term Provisions ....................................................................... 8 2,005.92 1,285.10
33,612.56 24,373.76
TOTAL....................................................................................................... 137,764.06 89,506.60
II. ASSETS
1) Non-Current Assets
a) Fixed Assets 9
i) Tangible Assets .......................................................................... 722.23 477.14
ii) Capital work-in-progress ............................................................ 17.94
b) Deferred Tax Assets (Net) ................................................................. 10 663.42 326.11
c) Long Term Loans and Advances ..................................................... 11 103,445.96 67,627.17
104,831.61 68,448.36
2) Current Assets
a) Cash and Cash Equivalents ............................................................. 12 653.21 517.28
b) Short Term Loans and Advances ..................................................... 13 32,279.24 20,540.96
32,932.45 21,058.24
TOTAL....................................................................................................... 137,764.06 89,506.60
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS I & II
The notes referred to above form an integral part of the Balance Sheet.
For B K Khare & Co. Ramesh Iyer Chairman
(FRN: 105102W) Anuj Mehra Managing Director
Devdatta Mainkar
Partner Uday Y. Phadke
Director
Membership No. 109795 V. Ravi
V. Rajan
K. Chandrasekar
Dharmesh Vakharia Harshada Pathak
Chief Financial Ofcer Company Secretary
Mumbai, 15th April 2014
427
STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31
ST
, 2014
I. Revenue from Operations .................................................................................. 15 21,243.53 14,036.37
II. Other Income ...................................................................................................... 16 8.57 3.65
III. Total Revenue (I + II) ....................................................................................... 21,252.10 14,040.02
IV. Expenses:
Employee Benet Expenses .............................................................................. 17 3,501.89 2,438.45
Finance Costs ..................................................................................................... 18 8,898.96 5,555.86
Depreciation and Amortization Expense ........................................................... 19 143.22 108.26
Provisions & Write Offs ....................................................................................... 20 1,066.40 478.63
Other Expenses .................................................................................................. 21 3,961.42 2,718.28
Total Expenses .................................................................................................. 17,571.89 11,299.48
V. Prot Before Tax (III - IV) ................................................................................. 3,680.21 2,740.54
VI. Tax expense:
(1) Current Tax .................................................................................................. 1,309.67 870.34
(2) Deferred Tax ................................................................................................ (337.31) (161.58)
VII. Prot/(Loss) for the period from Continuing Operations (V - VI) .............. 2,707.85 2,031.78
VIII. Prot/(Loss) for the period .............................................................................. 2,707.85 2,031.78
IX. Earnings per Equity Share (Rupees):
(1) Basic ............................................................................................................ 4.95 4.44
(2) Diluted .......................................................................................................... 4.95 4.44
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS I & II
The notes referred to above form an integral part of the Statement of Prot & Loss.
This is the Statement of Prot & Loss referred in our report of even date.
Devdatta Mainkar
Director
V. Rajan
K. Chandrasekar
428
CASH FLOW STATEMENT AS AT MARCH 31
ST
, 2014
Prot before tax from continuing operations 3,680.21 2,740.54
Prot before tax 3,680.21 2,740.54
Non-cash adjustment to reconcile prot before tax to net cash ows
Depreciation/amortization on continuing operation 143.22 108.26
Loss on Termination 55.12 19.33
Loss/(prot) on sale of xed assets 0.72
Interest expense 8,825.28 5,501.68
Provision for Non Performing Assets 837.15 325.90
General Provision on Standard Assets 174.13 133.40
Operating prot before working capital changes 13,715.11 8,829.83
Movements in working capital:
Increase/(decrease) in trade payables 346.91 442.65
Increase/(decrease) in long-term provisions 23.09 0.44
Increase/(decrease) in short-term provisions 115.38 79.93
Increase/(decrease) in other current liabilities 2,572.68 6,706.56
Decrease/(increase) in long-term loans and advances (35,822.05) (24,943.43)
Decrease/(increase) in short-term loans and advances (11,793.40) (9,636.87)
Cash generated from/(used in) operations (30,842.28) (18,520.91)
Direct taxes paid (net of refunds) (1,309.66) (808.23)
Net cash ow from/(used in) operating activities (A) (32,151.94) (19,329.14)
Purchase of xed assets, including CWIP and capital advances (368.15) (328.29)
Proceeds from sale of xed assets 1.04 3.52
Net cash ow from/(used in) investing activities (B) (367.11) (324.77)
Proceeds from issuance of equity share capital including premium 2,497.85
Increase/(Decrease) in long-term borrowings (net) 33,918.85 21,728.47
Increase/(Decrease) in short-term borrowings (net) (900.00) 325.00
Increase/(Decrease) in current maturities of long term loans (net) 6,022.55 2,412.66
Interest paid (8,349.44) (5,267.38)
Dividend paid on equity shares (457.14) (320.00)
Tax on equity dividend paid (77.69) (51.91)
Net cash ow from/(used in) in nancing activities (C) 32,654.98 18,826.83
429
Net increase/(decrease) in cash and cash equivalents (A + B + C) 135.92 (827.08)
Cash and cash equivalents at the beginning of the year 517.28 1,344.36
Cash and cash equivalents at the end of the year 653.21 517.28
Components of cash and cash equivalents
Cash on hand 315.38 108.97
With banks on cash credit account 1.78 3.29
With banks on current account 336.05 405.02
Total cash and cash equivalents (note 12) 653.21 517.28
Devdatta Mainkar
Director
V. Rajan
K. Chandrasekar
CASH FLOW STATEMENT AS AT MARCH 31
ST
, 2014 (CONTD.)
430
NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31
ST
, 2014.
Accounting Standard on Accounting for Investments (AS 13) notied by
Companies (Accounting Standards) Rules, 2006.
1.7 DEPRECIATION
Depreciation on xed assets is charged using Straight Line Method at
rates specied in Schedule XIV to The Companies Act, 1956 except for:
a. Ofce Equipment on which depreciation is charged at the rate of
16.21% instead of 4.75% as prescribed in Schedule XIV.
b. Assets costing less than Rs. 5,000/- are fully depreciated in the year
of purchase and
c. Vehicles used by employees are depreciated over the maximum
period of 48 months based on the useful life of vehicle for the
Company.
d. Computer software is amortized over the estimated useful life. The
maximum period of such amortization is 36 months.
1.8 LOAN AGAINST ASSETS
Loan against assets are stated at agreement value net of installments
received less unmatured nance charges.
1.9 SHARE ISSUE EXPENSES
Expenses incurred in connection with fresh issue of share capital are adjusted
against Securities premium reserve in the year in which they are incurred.
1.10 LEASE
Payments under operating lease arrangements are recognized as per the
terms of the lease.
1.11 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net prot or loss for
the period attributable to Equity Share holders by the weighted average
number of equity shares outstanding during the year. Earnings considered
in ascertaining the Companys earning per share is the net prot for the
year after deducting preference dividends and any attributable tax thereto
for the year. The weighted average number of equity shares outstanding
during the year and for all years presented is adjusted for events, such
as bonus shares, sub division of shares, etc. that have changed the
number of equity shares outstanding, without a corresponding change in
resources. For the purpose of calculating diluted earnings per share, the
net prot or loss for the period attributable to equity share holders and
the weighted average number of shares outstanding during the period is
adjusted for the effect of all dilutive potential equity shares.
1.12 TAX ON INCOME
The accounting treatment for Income-tax in respect of the Companys
income is based on Accounting Standard 22 (AS-22) Accounting for Taxes
on Income notied by Companies (Accounting Standards) Rules, 2006.
The provision made for Income-tax made in the accounts shall comprise
of Tax on current income and Deferred Tax. Current Tax is determined
as the amount of tax payable in respect of taxable income for the year.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of reversal
in one or subsequent periods. Deferred Tax assets arising on account of
unabsorbed depreciation or carry forward of tax losses are recognized
only to the extent that there is virtual certainty supported by convincing
evidence that sufcient future taxable income will be available against
which such deferred tax assets can be realized. The major components of
the respective balances of Deferred Tax assets and liabilities are disclosed
in the accounts.
1.13 MISCELLANEOUS EXPENDITURE
Preliminary Expenses: Preliminary and pre-operative expenses are charged
to Statement of Prot and Loss in the year of incurrence.
1.14 EMPLOYEE BENEFITS
Companys contribution paid/payable during the year to Provident
Fund and Labour Welfare Fund are recognized in the Statement of
Prot and Loss.
Note I
SIGNIFICANT ACCOUNTING POLICIES (SAP):
1.1 BASIS FOR PREPARATION OF ACCOUNTS:
The nancial statements have been prepared in accordance with the
Generally Accepted Accounting Principles (IGAAP) under the historical
cost convention as a going concern and on accrual basis and in
accordance with the provisions of the Companies Act, 1956 and the
Accounting Standards notied under the said Act. Read with the General
Circular 15/2013 dated September 13, 2013 of Ministry of Corporate Affairs
in respect of section 133 of The Companies Act 2013.
All assets & liabilities have been classied as current & non-current as per
the Companys normal operating cycle and other criteria set out in the
Schedule VI of the Companies Act, 1956. Based on the nature of services
and their realization in cash and cash equivalents, the company has
ascertained its operating cycle as 12 months for the purpose of current
noncurrent classication of assets & liabilities.
Further, the Company follows prudential norms for Income Recognition,
Assets classication and provisioning for Non-performing Assets as
prescribed by The National Housing Bank for Housing Finance Companies.
1.2 USE OF ESTIMATES
The preparation of nancial statements requires the management to make
estimates and assumptions considered in the reported amount of assets
and liabilities (including contingent liabilities) as on the date of nancial
statements and the reported income and expenses during the reporting
year. Management believes that the estimates used in the preparation
of the nancial statements are prudent and reasonable. Actual results
could differ from these estimates. Any revision to accounting estimates is
recognized prospectively in current and future years.
1.3 INFLATION
Assets and liabilities are recorded at historical cost to the Company. These
costs are not adjusted to reect the changing value in the purchasing
power of money.
1.4 REVENUE RECOGNITION
a. Interest and other income from Housing Loans:
The Company follows the accrual method of accounting for its
income and expenditure except delayed payment charges, service
charges and fee based income which on account of uncertainty of
ultimate collection are accounted on receipt basis. In accordance
with the guidelines issued by The National Housing Bank for Housing
Finance Companies, income on business assets classied as Non-
Performing Assets, is recognized on receipt basis.
b. Income from Investments:
i. Dividend from investments is accounted for as income when
the right to receive dividend is established.
ii. Interest income is accounted on accrual basis.
1.5 TANGIBLE & INTANGIBLE ASSETS
a. Tangible Assets:
Tangible assets are stated at cost of acquisition (including incidental
expenses), less accumulated depreciation. Assets held for sale or
disposals are stated at the lower of their net book value and net
realizable value.
b. Intangible Assets:
Computer software is initially measured at cost and amortized so
consumed.
1.6 INVESTMENTS
Investments held as long-term investments are stated at cost comprising
of acquisition and incidental expenses less permanent diminution in value,
if any. Investments other than long-term investments are classied as
current investments and valued at cost or fair value whichever is less.
Provision for diminution in value of investments is made if management
perceives that there is permanent diminution in value of investments or
in accordance with the norms prescribed by National Housing Bank and
431
b. Dened Benet Plan
Companys liabilities towards gratuity is determined using the
Projected Unit Credit Method which considers each period of
service as giving rise to an additional unit of benet entitlement
and measures each unit separately to build up the nal obligation.
Actuarial gains and losses are recognized immediately in the
statement of Prot and Loss as income or expense. Obligation is
measured at the present value of estimated future cash ow using a
discount rate that is determined by reference to market yields at the
Balance Sheet date on government bonds where the currency and
terms of the government bonds are consistent with the currency and
c. Liability on account of encashment of Privilege Leave & Sick Leave
to employees is considered as short term & long term compensated
expense provided as unfunded benet and recognized on the basis
of actuarial valuation using Projected Unit Credit Method determined
by appointed actuary.
1.15 BORROWING COST
of qualifying assets are capitalized as part of the cost of such assets. A
qualifying asset is one that necessarily takes a substantial period of time
to get ready for its intended use or sale. Ancillary expenditure incurred
in connection with the arrangement of borrowings is amortized over the
tenure of the respective borrowings. On early repayment of borrowings,
any unamortized expenditure is fully written off in that year.
1.16 IMPAIRMENT OF ASSETS
Management periodically assesses using external and internal sources
where there is an indication that an asset may be impaired. Impairment
occurs where the carrying value exceeds the present value of future
cash ows expected to arise from the continuing use of the asset and its
eventual disposal. The impairment loss to be expensed is determined as
the excess of the carrying amount over the higher of the assets net sales
price or present value as determined above.
1.17 PROVISIONS FOR NON PERFORMING ASSETS (NPA)
Housing loans are classied into Performing and Non Performing
assets in terms of guidelines laid down by the National Housing Bank.
The provisioning policy of the Company covers the minimum provisioning
required as per the NHB guidelines.
1.18 PROVISIONS & CONTINGENT LIABILITIES
Provisions are recognized in accounts in respect of present probable
obligations, the amount of which can be reliably estimated.
that arise from past events but their existence is conrmed only by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the company.
Note 1
Share Capital:
Authorised Capital:
100,000,000 Equity shares of Rs. 10/- each 10,000.00 10,000.00
(Previous year 100,000,000 shares of
Rs. 10/- each)
Issued Capital:
65,737,137 Equity shares of Rs. 10/- each 6,573.71 4,571.43
Rs. 10/- each)
Subscribed and Paid-up Capital:
45,714,280 Equity shares of Rs. 10/- each
fully paid up
20,022,857 Equity Shares of Rs. 10/- each
and Rs. 5/- called & paid up 5,572.57 4,571.43
Rs. 10/- each fully paid up)
Total 5,572.57 4,571.43
Other quantitative information:
a) Reconciliation of Number of Equity
Shares -
the beginning of the period 45,714,280 45,714,280
Add: Fresh allotment of shares during
the year:
1) Issue of Rights Shares 20,022,857
65,737,137 45,714,280
Less: Shares bought back during the
year
the end of the period 65,737,137 45,714,280
b) Reconciliation of Equity Shares in
Value
Amount of equity shares outstanding at
the beginning of the period 4,571.43 4,571.43
the period:
Call made for partly paid up shares
(Rs. 5 Per Equity Share) 1,001.14
Amount of equity shares outstanding at
the end of the period 5,572.57 4,571.43
c) Number of Equity Shares held by
holding company or ultimate holding
company including shares held by
its subsidiaries/associates -
Holding Company: Mahindra &
Mahindra Financial Services Limited 57,520,003 40,000,000
(Equity Shares of Rs. 10/- each)
(including 6 shares held jointly with
nominees)
Percentage of Holding (%) 87.50% 87.50%
d) Shareholders Holding more than 5%
Shares:
Mahindra & Mahindra Financial
Services Limited 57,520,003 40,000,000
Percentage of holding (%) 87.50% 87.50%
National Housing Bank 8,217,134 5,714,280
Percentage of holding (%) 12.50% 12.50%
Note 2
Reserves and Surplus:
Securities Premium Reserve:
Opening Balance as per last Balance Sheet
Add: Additions during the year 1,501.72
Less: Shares issue expenses 5.01
Closing Balance 1,496.71
Statutory Reserve
(As per Section 29C of the National Housing
Bank Act, 1987) {refer note no 22}
Opening Balance as per last Balance Sheet 1,254.93 694.93
Add: Addition during the Year 825.00 560.00
Less: Appropriation during the year
Closing Balance 2,079.93 1,254.93
432
General Reserve:
Opening balance as per last Balance Sheet
Add: Transfer during the year 68.00
Closing Balance 68.00
Surplus:
Balance Prot (for earlier years) as per last
Balance Sheet 1,837.09 899.57
Add: Prot for the current year transferred
from Statement of Prot & Loss 2,707.85 2,031.78
4,544.94 2,931.35
General Reserve 68.00
Special Reserve 820.00 555.00
Additional Special Reserve 5.00 5.00
Proposed Dividend On Equity Shares 612.98 457.14
Corporate Dividend Tax on Equity Shares 104.18 77.69
Excess Provision for Dividend Tax on Equity
shares for previous years (0.57)
1,610.16 1,094.26
Balance Prot carried to Balance Sheet 2,934.78 1,837.09
Total 6,579.42 3,092.02
Note 3
Long Term Borrowings:
a) Secured -
Term Loan from Banks {refer note
no 23 (i)} 66,389.47 37,251.75
National Housing Bank {refer note
no 23 (ii)} 23,544.13 18,774.49
Total 89,933.60 56,026.24
b) Unsecured -
Unsecured Bonds (Subordinate Debt)
{refer note no 24 (i)} 700.00 700.00
Loans and Advances from Related
Parties (ICDs) {refer note no 24 (ii)} 150.00 138.51
Total 850.00 838.51
Total (a+b) 90,783.60 56,864.75
Note 4
Long Term Provisions:
Provision for employee benets 67.33 44.24
Provision for Standard Assets 400.21 264.96
Total 1,215.91 604.64
Note 5
Short Term Borrowings:
a) Secured -
Loans from Bank {refer note 25} 1,500.00 1,500.00
Total 1,500.00 1,500.00
b) Unsecured -
Parties (ICDs) {refer note no 24 (ii)} 1,125.00 2,025.00
Total 1,125.00 2,025.00
Total 2,625.00 3,525.00
Note 6
Trade Payables:
Trade Payables for Finance 912.03 782.15
Trade Payables for Expenses & Others 680.63 463.60
Total 1,592.66 1,245.75
Note 7
Other Current Liabilities:
Current Maturities of Long Term Debt
a) Secured -
Loans Repayable
Term Loan from Banks {refer note
no 23 (i)} 5,862.28 5,445.61
National Housing Bank {refer note
no 23 (ii)} 6,219.68 4,487.68
12,081.96 9,933.29
b) Unsecured -
Parties (ICDs) {refer note no 24 (ii)} 3,873.88
3,873.88
Interest Accrued but not Due on
Borrowings 1,296.11 820.28
Credit balances in Current Accounts
with Banks 10,021.76 7,475.89
Statutory & Other Liabilities 115.27 88.45
Total 27,388.98 18,317.91
Note 8
Short-term provisions:
Provision for Employee Benets 450.24 334.86
Provisions against Standard Assets 117.61 78.73
Proposed Dividend* 612.98 457.14
Corporate Dividend Tax 104.18 77.69
Provision for Taxation (net of taxes paid) 62.30 62.29
Total 2,005.92 1,285.10
* The Board of Directors have recommended a dividend of Rs. 1.10 per share on
6,57,37,137 Equity Share of Rs. 10/- each for the current nancial year(including
proportionate dividend on 2,00,22,857 equity Shares). The dividend payout will
absorb a sum of Rs. 717.16 Lacs (including dividend distribution tax).
433
Note 9
Fixed Assets: Rs. in Lacs
GROSS BLOCK AT COST DEPRECIATION & AMORTISATION NET BLOCK
Asset Description
Balance
as at
1/04/2013
Additions
for
purchase/
transfer Sub Total
Deductions
for Sale/
transfer
Balance
as at
31/03/2014
Balance
as at
1/04/2013
Depreciation
for the year/
transfer
Deductions
for Sale/
transfer
Balance
as at
31/03/2014
Balance
as at
1/04/2013
Balance
as at
31/03/2014
i) Tangible Assets:
Computers 161.81 96.05 257.86 0.25 257.61 38.07 34.06 0.08 72.05 123.74 185.56
Furniture and Fixtures 83.80 26.96 110.76 1.00 109.76 39.79 12.66 0.13 52.32 44.01 57.44
Vehicles 183.75 130.48 314.22 314.22 47.41 48.18 95.59 136.34 218.63
Ofce Equipment 217.68 135.86 353.55 353.55 44.63 48.32 92.95 173.05 260.60
Total 647.04 389.35 1,036.39 1.25 1,035.14 169.90 143.22 0.21 312.91 477.14 722.23
As on 31-03-2013 282.89 373.94 656.83 9.79 647.04 67.19 108.26 5.55 169.90 215.69 477.14
Note 10
Deferred Tax Assets:
Deferred Tax Assets/(Liabilities) recognised in the current accounting year in
view of certainty of prots and accounted for in accordance with Accounting
Standard on Accounting for Taxes on Income (AS-22).
Provision on Standard Assets 176.01 116.82
Other Disallowances 22.18 25.20
Total 663.42 326.11
Note 11
Long Term Loans and Advances:
Capital Advances 0.56 3.82
Deposits for Ofce Premises & Others 49.72 29.89
Loans against Assets - Housing Loans
(Secured)
(Secured Considered good) 99,856.98 66,230.91
(Secured Non Performing Assets) 3,527.61 1,349.59
Employee Loans & Advances 4.63 6.11
Total 103,445.96 67,627.17
Note 12
Cash and Cash Equivalents:
Balance with Scheduled Banks in Current
Accounts 336.05 405.02
Balance with Scheduled Bank in Cash
Credit Accounts 1.78
Cheques, drafts on hand 3.29
Cash on Hand 315.38 108.97
Total 653.21 517.28
Note 13
Short Term Loans & Advances:
(Secured)
(Secured - Considered good) 29,343.73 19,664.49
(Secured - Non Performing Assets) 2,768.44 701.59
Deposits for Ofce Premises & Others 13.73 31.95
Employee Loans & Advances 18.64 15.74
Total 32,279.24 20,540.96
Note 14
Contingent Liabilities, Commitments (to
the extent not provided for) and Changes
in Provisions:
I Contingent Liabilities:
(a) Legal suits led by customers
in Consumer Forums and Civil
courts claiming compensation
from the company 29.07 4.52
Total 29.07 4.52
II Commitments:
(a) Estimated amount of contracts
capital account 7.69 13.35
Total 7.69 13.35
Note 15
Revenue from Operations:
a) Interest
Income from Loans 19,334.22 12,543.99
Interest on Term Deposits & Advances 27.70
Others (Employee Loans, etc) 1.26 1.82
19,335.48 12,573.51
b) Other Financial Services
Service Charges & Other Fees 1,908.05 1,462.86
1,908.05 1,462.86
Total (a + b) 21,243.53 14,036.37
434
Note 16
Other Income:
Other non-operating income 8.57 3.65
Total 8.57 3.65
Note 17
Employee Benet Expenses:
Salary, Bonus & Incentives 3,141.17 2,166.23
Companys Contribution to Provident Funds
& other funds 247.09 175.43
Employee Compensation Expense on
account of ESOPs 21.57 29.44
Staff Welfare Expenses 92.06 67.35
Total 3,501.89 2,438.45
Note 18
Finance Cost:
Interest Expense 8,825.28 5,501.68
Other Borrowing Costs 73.68 54.18
Total 8,898.96 5,555.86
Note 19
Depreciation and Amortization Expense:
Depreciation on Tangible Assets 143.22 108.26
Total 143.22 108.26
Note 20
Provision and Write Offs:
General Provision on Standard Assets 174.13 133.40
Bad Debts & Write Offs 55.12 19.33
Total 1,066.40 478.63
Note 21
Other Expenses:
Electricity Charges 21.23 10.32
Rent 103.58 67.65
Repairs & Maintenance -
- Buildings 16.28 10.91
- Others 1.84
Insurance 116.08 119.38
Rates & Taxes 13.73 8.32
Legal & Professional Charges 1,836.52 1,113.29
Travelling & Conveyance Expenses 631.35 453.40
Administration Support Charges 372.31 375.88
Loss on Sale/Disposal of Owned Assets 0.72
Payments to the Auditor -
(a) as auditor 5.04 2.12
(b) for other services 4.73 4.74
(c) for reimbursement of expenses 0.69 0.10
Donations 24.20 18.14
General & Administrative Expenses 815.68 531.47
Total 3,961.42 2,718.28
Note 22
Movement of Statutory Reserve
(As per Section 29C of the National
Housing Bank Act, 1987)
Balance at the beginning of the year
(a) Statutory Reserve u/s 29C of the
National Housing Bank Act, 1987 5.00
(b) Amount of special reserve u/s 36(1)
(viii) of Income Tax Act, 1961 taken into
account for the purposes of Statutory
Reserve under Section 29C of the NHB
Act, 1987 1,249.93 694.93
(c) Total 1,254.93 694.93
Addition/Appropriation/Withdrawal during
the year
Add: (a) Amount Transferred u/s 29C of
the NHB Act, 1987 5.00 5.00
(b) Amount of special reserve u/s
36(1)(viii) of Income Tax Act,
1961 taken into account for the
purposes of Statutory Reserve
under Section 29C of the NHB
Act, 1987 820.00 555.00
Less: (a) Amount appropriated from the
Statutory Reserve u/s 29C of the
NHB Act, 1987
(b) Amount withdrawn from the
Special Reserve u/s 36(1)(viii) of
Income Tax Act, 1961 which has
been taken into account for the
purposes of provision u/s 29C of
the NHB Act, 1987
Balance at the end of the year
(a) Statutory Reserve u/s 29C of the
National Housing Bank Act, 1987 10.00 5.00
(b) Amount of special reserve u/s 36(1)
(viii) of Income Tax Act, 1961 taken into
account for the purposes of Statutory
Reserve under Section 29C of the NHB
Act, 1987 2,069.93 1,249.93
(c) Total 2,079.93 1,254.93
435
Note: 23 (i)
SECURED - LONG TERM BORROWINGS
Secured Term Loans from Banks (Secured against Loan receivable & Book
debts)
As on 31st March, 2014 Rs. in Lacs
Particulars Rate Range (a) Non-Current (b) Current Total
a) Maturity beyond 3 years 10.20% -
10.50%
48,500.00 48,500.00
b) Maturing between 1 year
to 3 years

c) Maturing within 1 year
Total repayable on maturity 48,500.00 48,500.00
i) Quarterly:
10.80%
131.58 131.58
to 3 years
10.00% -
10.80%
5,157.89 5,157.89
c) Maturing within 1 year 10.00% -
10.80%
4,662.28 4,662.28
Total 5,289.47 4,662.28 9,951.75
ii) Half-Yearly:
a) Maturity beyond 3 years 10.25% 3,333.33 3,333.33
to 3 years
10.25% 9,266.67 9,266.67
c) Maturing within 1 year 10.25% 1,200.00 1,200.00
Total 12,600.00 1,200.00 13,800.00
iii) Yearly:
a) Maturity beyond 3 years
to 3 years

Total
Total repayable on
installments
17,889.47 5,862.28 23,751.75
Total (1+2) 66,389.47 5,862.28 72,251.75
10.25%
21,500.00 21,500.00
to 3 years
10.20% -
10.25%

Total repayable on maturity 21,500.00 21,500.00
i) Quarterly:
10.45%
2,710.52 2,710.52
to 3 years
9.70% -
10.45%
7,241.23 7,241.23
10.45%
4,245.61 4,245.61
Total 9,951.75 4,245.61 14,197.36
ii) Half-Yearly:
a) Maturity beyond 3 years 10.25% 2,733.33 2,733.33
to 3 years
10.25% 3,066.67 3,066.67
c) Maturing within 1 year 1,200.00 1,200.00
Total 5,800.00 1,200.00 7,000.00
iii) Yearly:
to 3 years

Total
Total repayable on installments 15,751.75 5,445.61 21,197.36
Total (1+2) 37,251.75 5,445.61 42,697.36
Note: 23 (ii)
Secured Term Loans from NHB (Secured against Loan receivable and Book
debts)
i) Quarterly:
a) Maturity beyond 3 years 6.00% - 10.30% 12,134.47 12,134.47
to 3 years
6.00% - 10.30% 11,409.66 11,409.66
c) Maturing within 1 year 6.00% - 10.30% 6,219.68 6,219.68
Total 23,544.13 6,219.68 29,763.81
i) Quarterly:
a) Maturity beyond 3 years 6.00% - 10.30% 9,881.26 9,881.26
to 3 years
6.00% - 10.30% 8,893.23 8,893.23
c) Maturing within 1 year 6.00% - 10.30% 4,487.68 4,487.68
Total 18,774.49 4,487.68 23,262.17
UNSECURED BORROWINGS
Note: 24 (i)
i) Subordinated Debts (Long Term)
Particulars Rate Range (a) Non-Current (b) Current (c) Current Maturity Total
a) Maturity beyond 3 years 11.00% 700.00 700.00
b) Maturing between 1 year to
3 years

Total repayable on maturity 700.00 700.00
a) Maturity beyond 3 years 11.00% 700.00 700.00
3 years

Total repayable on maturity 700.00 700.00
436
Note: 24 (ii)
ii) Inter - Corporate Deposits (ICD)
3 years
9.50% -
11.00%
150.00 150.00
10.50%
1,125.00 3,873.88 4,998.88
Total repayable on maturity 150.00 1,125.00 3,873.88 5,148.88
3 years
9.50% -
10.75%
138.51 138.51
9.60%
2,025.00 2,025.00
Total repayable on maturity 138.51 2,025.00 2,163.51
SHORT TERM BORROWINGS
Note: 25
Secured Short Term Loans
a) Maturing within 1 year 10.50% -
11.25%
1,500.00 1,500.00
Total 1,500.00 1,500.00
a) Maturing within 1 year 10.25% 1,500.00 1,500.00
Total 1,500.00 1,500.00
Note II
NOTES TO THE ACCOUNTS:
2.1 The Company has complied with norms prescribed under Housing Finance
Companies (NHB) Directions, 2010 for recognizing Non-performing Assets
in preparation of accounts.
Classication of loans are given below:
Rs. in Lacs
Particulars
Standard
Assets
Sub Standard
Assets
Bad & Doubtful
Assets Total
Housing Loans 129,200.71 4,923.87 1,372.19 135,496.77
Other Loans &
Advances 227.74 227.74
Percentage to Total
Loans 95.36% 3.63% 1.01% 100.00%
Housing Loans 85,895.40 1,368.94 682.24 87,946.58
Other Loans 21.85 21.85
Percentage to Total
Loans 97.66% 1.56% 0.78% 100.00%
2.2 The company has made adequate provision on Non Performing Assets
as prescribed under Housing Finance Companies (NHB) Directions, 2010.
The company also makes additional provision on prudential basis. The
cumulative additional provision made by the company as on 31
st
March
2014 is Rs. 140.91 Lacs (previous year Rs. 33.94 Lacs).
In line with notication no. NHB.HFC.DIR.3/CMD/2011 issue by National
housing Bank, the company has made a provision @ 0.40% on outstanding
Standard Assets.
Rs. in Lacs
Particulars Standard Sub Standard Doubtful Loss
Provisions made:
Housing Loans 516.90 857.61 397.04 152.33
Other Loans 0.92
Housing Loans 343.60 230.89 135.40 203.54
Other Loans 0.09
2.3 In accordance with Accounting Standard 29 (AS-29) Provisions,
Contingent Liabilities & Contingent Assets, the following are the details of
the movement in provisions for the year ending March 31
st
, 2014:
Rs. in Lacs
Particulars
As at April 1st,
2013
Additional
Provision
Utilizations/
Reversals
As at March
31st, 2014
Provision on Standard
Assets 343.69 174.13 517.82
Provision for Non
Performing Assets 569.83 947.09 109.94 1,406.98
2.4 Loan receivable includes Rs. 3,525.77/- Lacs outstanding towards
nancing of insurance as of March 31st, 2014 and Rs. 2,342.35/- Lacs as of
March 31
st
, 2013.
2.5 As per section 29C (i) of the National Housing Bank Act, 1987, the
Company is required to transfer at least 20% of its net prots every
year to a reserve before any dividend is declared. For this purpose
a Special Reserve created by the company under Section 36(1)(viii) of
the Income Tax Act, 1961 is considered to be an eligible transfer. The
company has transferred amount to Special Reserve in terms of 36(1)
(viii) of the Income Tax Act, 1961 and section 29C of the National
Housing Bank Act, 1987, as amended, at year end. The company does
not anticipate any withdrawal from Special Reserve in foreseeable
future.
2.6 The company is not required to make provision for diminution in value
of investments, as per NHB norms, as the company does not hold any
investment.
2.7 The company has not granted any loans or advances against collateral of
gold jewellery.
2.8 Bad Debts & Write offs includes loss on termination of Rs. 8.07 Lacs
(Previous year Rs. 19.33 Lacs) which mainly represents shortfall
on settlement of certain contracts due to lower realization from
such loan assets on account of poor nancial position of such
customers.
2.9 In the opinion of the Board, Current assets, Loans & Advances are of the
value stated, if realized, in the ordinary course of business.
437
2.10 Employee Benets:
Dened Benet Plans - As per Actuarial valuation on 31
st
March, 2014
Rs. in Lacs
Gratuity (Funded)
Sick leave (Non-
funded)
Privilage
leave
(Non-
funded)
Privilage
leave
(Non-
funded)
Mar-14 Mar-13 Mar-14 Mar-13 Mar-14 Mar-13
I. Expense recognised
in the Statement
of Prot & Loss
Account for the
quarter ending
31st March
2 Interest cost 3.83 2.39 0.48 0.38 6.99
3 Expected return on
plan assets
(3.66) (2.79)
Losses
(35.94) (23.18) (6.41) (7.40) (74.42) 24.68
5 Total expenses 18.91 15.31 2.95 0.64 18.02 42.46

II. Net asset/(liability)
recognised in the
Balance Sheet as
at March 31st,
2014
1 Present Value of
Dened Benet
obligation as at
31st March
60.14 39.61 8.27 5.32 55.26 41.20
assets as at
31st March
48.93 35.88
3 Funded status
(surplus/(decit))
11.21 3.72 (8.27) (5.32) (55.26) (41.20)
4 Net asset/(liability)
as at 30th
September
11.21 3.72 (8.27) (5.32) (55.26) (41.20)
III. Change in the
obligations during
the year ended
31st March
1 Present Value of
Dened Benet
obligation at the
beginning of the year
39.61 22.85 5.32 4.69 41.20
3 Interest cost 3.83 2.39 0.48 0.38 6.99
Losses
(35.94) (23.18) (6.41) (7.40) (74.42) 24.68
5 Benets paid (2.04) (1.34) (3.96) (1.26)
6 Present Value of
Dened Benet
obligation at the
end of the year
60.14 39.61 8.27 5.33 55.26 41.20
Rs. in Lacs
Gratuity (Funded)
Sick leave (Non-
funded)
Privilage
leave
(Non-
funded)
Privilage
leave
(Non-
funded)
Mar-14 Mar-13 Mar-14 Mar-13 Mar-14 Mar-13
IV. Change in the
fair value of plan
assets during the
year ended
31st March
assets at the
beginning of the
year
35.88 32.34
2 Expected return on
plan assets
3.66 2.79
3 Contributions by
employer
11.43 2.09
Losses

5 Actual Benets paid (2.04) (1.34)
assets at the end of
the year
48.93 35.88

V. Major category of
plan assets as a
percentage of total
plan

Others

VI. Actuarial
Assumptions

1 Discount Rate 8.00%
p.a.
8.00%
p.a.
8.00%
p.a.
8.00%
p.a.
8.00%
p.a.
8.00%
p.a.
2 Expected Rate
of return on plan
assets
8.00%
p.a.
8.00%
p.a.
3 Rate of Salary
increase
5.00%
p.a.
5.00%
p.a.
5.00%
p.a.
5.00%
p.a.
5.00%
p.a.
5.00%
p.a.
4 In-service Mortality Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate
Indian
Assured
Lives
Mortality
(2006-
08)
Ultimate

Experience Adjustments: Rs. in Lacs
Year Ending
31-03-10 31-03-11 31-03-12 31-03-13 31-03-14
1 Dened Benet obligation at end
of the period
7.36 12.95 22.85 39.61 60.14
2 Plan assets at the end of period 6.47 14.59 32.34 35.88 48.93
3 Funded Status Surplus/(Decit) (0.89) 1.64 9.48 (3.72) (11.21)
liabilities (gain)/loss
1.42 (3.70) (6.03) (6.77) (10.35)
assets gain/(loss)
---------- ---------- ---------- ---------- ----------
438
2.11 The Company has operations in only one business segment viz. Housing
Finance business Financial Services for the purpose of Accounting
Standard 17 (AS-17) Segment Reporting and all other activities are
incidental to the main business activity.
2.12 In accordance with Accounting Standard 20 (AS-20) Earnings per Share,
the EPS is calculated as follows:
Net Prot/(Loss) attributable to Equity
Share Holders (Rs. Lacs)
2707.85 2,031.78
Weighted Average Number of Shares
(Basic) (in Lacs)
546.83 457.14
Weighted Average Number of Shares
(Diluted) (in Lacs)
546.83 457.14
EPS (Basic) (Rs.) 4.95 4.44
EPS (Diluted) (Rs.) 4.95 4.44
2.13 The company has incurred a cost of Rs. 21.57/- Lacs (previous year
Rs. 29.41/- Lacs) towards ESOP granted to its employees by Mahindra &
Mahindra Financial Services Limited (MMFSL) and Rs. NIL/- (previous year
Rs. 0.03/-Lacs) towards ESOP granted to its employees by Mahindra &
Mahindra Limited.
2.14 The company has incurred an expenditure in Foreign Currency towards:
Foreign Travel Expenses Rs. 1.99/- Lacs (previous
year Rs. 0.59/- Lacs)
Conference Registration Charges Rs. 1.33/- (previous year
Rs. 1.56/- Lacs)
2.15 Related Party Disclosure as per Accounting Standard 18:
List of the related parties which have transactions with our Company
during the year:
Holding Company/Companies: Mahindra & Mahindra Limited *
Mahindra & Mahindra Financial
Services Limited
Fellow subsidiary Companies: Mahindra Insurance Brokers Limited
Mahindra Business & Consulting
Services Pvt. Ltd.
Mahindra First Choice Services Ltd.
Key Management Personnel: Mr. Anuj Mehra (Managing Director)
* Mahindra Rural Housing Finance Limited is a Subsidiary of Mahindra &
Mahindra Financial Services Limited, which in turn is a Subsidiary of
Related Parties transactions are as under: In Rupees Lacs
Sr.
No.
Nature of transactions
Holding
Companies
Fellow
Subsidiary
Companies
Key
Management
Personnel
1 Income
Interest Mahindra &
Mahindra Financial
Services Limited
(3.04)
2 Expenses
Interest Mahindra &
Mahindra Financial
Services Limited 366.01
(808.71)
Mahindra
Insurance Brokers
Limited 381.65
(279.75)
Sr.
No.
Holding
Companies
Fellow
Subsidiary
Companies
Key
Management
Personnel
Other Expenses Mahindra &
Mahindra Limited 12.72
(7.00)
Mahindra &
Mahindra Financial
(449.84)
Mahindra
Business &
Consulting
Services Private
Limited 1,674.88
(1,015.41)
Mahindra First
Choice Services
Limited 1.22

NBS International
Limited 0.06

Employee Cost Mahindra &
Mahindra Financial
(29.44)
Mr. Anuj Mehra 120.64
(80.70)
3 Issue of equity shares
(Call money including
Premium recd)
Mahindra &
Mahindra Financial
Services Limited 2,190.00

4 Finance
Unsecured
Subordinate Debts
placed (incl int
accd)
Mahindra &
Mahindra Financial
Services Limited
700.76
(700.76)
Dividend paid
for previous year
(FY12-13)
Mahindra &
Mahindra Financial
(280.00)
Proposed
Dividend for the
current year
Mahindra &
Mahindra Financial
(400.00)
Inter Corporate
Deposits
outstanding
(including interest
accrued but not
due)
Mahindra &
Mahindra Financial
Services Limited
552.83
(38.55)
Mahindra
Insurance Brokers
Limited 4,847.97
(2,188.66)
439
Sr.
No.
Holding
Companies
Fellow
Subsidiary
Companies
Key
Management
Personnel
5 Purchase of Fixed
Assets (including
CWIP & Capital
Advance)
Mahindra &
Mahindra Limited
103.48
(39.64)
NBS International
Limited 3.66

6 Sale of Fixed Assets Mahindra &
Mahindra Financial
Services Limited
(3.29)
7 Outstandings
Payables Mahindra &
Mahindra Limited 4.97
(1.48)
Mahindra &
Mahindra Financial
(30.01)
Sr.
No.
Holding
Companies
Fellow
Subsidiary
Companies
Key
Management
Personnel
Mahindra
Insurance Brokers
Limited 22.66
(30.53)
Mahindra
Business &
Consulting
Services Private
Limited 64.21
(107.18)
Mahindra First
Choice Services
Limited 0.15

2.16 The Company has sent letters to suppliers covered under the Micro, Small
and Medium Enterprises Development Act, 2006. No interest has been paid/
payable by the company during/for the year to these suppliers. The above
information takes into account only those suppliers who have submitted
their registration details or has responded to the inquiries made by the
company for this purpose.
2.17 Previous years gures have been regrouped/reclassied wherever
necessary to conform to current years classication.
Signatures to Notes 1 to 25
Devdatta Mainkar
Director
V. Rajan
K. Chandrasekar
440
Disclosure in the Balance Sheet
(as on: 31st March 2014)
I. Capital to Risk Assets Ratio (CRAR)
Items Current Year Previous Year
i) CRAR (%) 16.0% 16.0%
ii) CRAR Tier I capital (%) 14.7% 14.0%
iii) CRAR Tier II Capital (%) 1.4% 2.0%
II. Exposure to Real Estate Sector
(Rs. in Lacs)
Category Current Year Previous Year
a) Direct exposure
(i) Residential Mortgages
Lending fully secured by mortgages on residential property that is or will be occupied by the
borrower or that is rented 135,496.76 87,946.58
Of the above Individual housing loan upto Rs. 15 lakh 134,993.57 87,854.12
(ii) Commercial Real Estate
Lending secured by mortgages on commercial real estates (ofce buildings, retail space,
multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial
premises, industrial or warehouse space, hotels, land acquisition, development and construction,
etc.). Exposure would also include non-fund based (NFB) limits; Nil Nil
(iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures
a. Residential Nil Nil
b. Commercial Real Estate Nil Nil
b) Indirect Exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance
Companies (HFCs) Nil Nil
III. Asset Liability Management
Maturity pattern of certain items of assets and liabilities
(Rs. in Lacs)
1 day to 30-
31 days
(one month)
Over 1
month to 2
months
Over 2
months to
3 months
Over 3
months to
6 months
Over 6
months to
1 year
Over 1
year to 3
years
Over 3
to 5
years
Over 5
to 7
years
Over 7
to 10
years
Over 10
years
Total
Liabilities
Borrowings from banks 3,735 0 382 3,216 6,249 25,832 60,520 3,580 0 0 103,514
Market Borrowings 1,525 0 275 375 2,824 150 700 0 0 0 5,849
Assets
Advances 3,281 2,131 2,216 7,691 14,946 53,140 37,615 10,639 1,734 2,333 135,725
Investments 0 0 0 0 0 0 0 0 0 0 0
MAHINDRA BUSINESS & CONSULTING SERVICES PRIVATE LIMITED
441
Your Directors present their Sixth Report together with the audited accounts of your Company for the Financial Year ended
31
st
March, 2014.
FINANCIAL RESULTS
(Rs. in lacs)
For the year
ended
31
st
March, 2014
For the year
ended
31
st
March, 2013
Income 16842.60 14198.38
Prot/(Loss) before Interest and Taxation 552.72 429.21
Interest 114.54 174.26
Prot/(Loss) before Taxation 438.18 254.96
Provision for Taxation for the year
Deferred Tax 9.06 (14.30)
Prot/(Loss) for the year after Taxation 281.56 173.80
Balance of Prot/(Loss) from earlier years 248.30 74.62
Amount available for Appropriation 529.86 248.41
Proposed Dividend on Equity Shares 0.10
Income-tax on proposed dividend 0.02
Surplus carried to Balance Sheet 529.86 248.30
OPERATIONS
Your Company provides stafng services mainly for Mahindra &
Mahindra Financial Services Limited, the parent company,
Mahindra Insurance Brokers Limited and Mahindra Rural
Housing Finance Limited, subsidiaries of the parent company
and Mahindra & Mahindra Limited, the ultimate parent
company. As at 31
st
March, 2014, your Company had on rolls
4,532 employees who were deputed to these companies to
provide services under ongoing contracts. The Company
earns its income in the form of fees towards stafng services.
The Company registered a Prot after Tax of Rs. 281.56 Lacs
st
March, 2014 as compared to Rs. 173.80
Lacs in the previous year.
DIVIDEND
With a view to conserve the cash resources of the Company,
your Directors deem it prudent not to recommend a dividend for
the year.
DIRECTORS
Mr. Vinay Deshpande, Mr. Rajnish Agarwal and Mr. Rajesh
Vasudevan retire by rotation at the forthcoming Annual
General Meeting and, being eligible, offer themselves for
re-appointment.
judgements and estimates have been made so as to give
as at 31
st
concern basis.
AUDITORS
442
Meeting (AGM) and have given their consent for re-appointment.
As per Section 139(1) of the Companies Act, 2013 (the Act)
read with the Companies (Audit and Auditors) Rules, 2014, it is
proposed to appoint the Auditors for a period of 5 (ve) years
to hold ofce from the conclusion of this AGM till the conclusion
of eleventh AGM of the Company to be held in the year 2019,
subject to ratication of their appointment by members at every
AGM and x their remuneration.
Companies Act, 1956 and sections 139(1) read with 141
Accountants, proposed to be re-appointed to the effect that their
re-appointment, if made, would be in conformity with the criteria
specied in the said sections.
or its employees during the year under review. The Company
has not made any loans/advances which are required to be
disclosed in the annual accounts of the Company pursuant to
Clause 32 of the Listing Agreement of the parent Company
Mahindra & Mahindra Financial Services Limited and the
ultimate parent company Mahindra & Mahindra Limited, with
the Stock Exchanges.
CODE OF CONDUCT FOR CORPORATE GOVERNANCE
The Company had adopted Codes of Conduct for Corporate
Governance (the Codes) for its Directors and Senior
business and seeks to reiterate the fundamental precept that
the Employees of the Company afrming compliance with the
respective Codes.
less than Rs. 60,00,000 per annum during the year ended
31
st
March, 2014 or was employed for a part of the Financial
Year and was in receipt of remuneration of not less than
Rs. 5,00,000 per month during any part of the year.
Ramesh Iyer
Chairman
Mumbai, 14
th
April, 2014
443
ST
MARCH, 2014.
A. Conservation Of Energy
a) Energy Conservation measures taken : The operations of your Company are not energy-intensive. However, adequate
b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy : Nil
impact on the cost of production of goods : These measures are expected to reduce the energy consumption.
d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules
in respect of Industries specied in the Schedule : Not Applicable
C. Foreign Exchange Earnings and Outgo
There were no foreign exchange earnings or outgo during the year under review.
Ramesh Iyer
Chairman
Mumbai, 14
th
April, 2014
ANNEXURE TO THE DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31
ST
MARCH, 2014
444
To the Members of Mahindra Business & Consulting
of Mahindra Business & Consulting Services Private
Limited (the Company), which comprise the Balance
Sheet as at March 31, 2014, and the Statements of Prot
and Loss and Cash Flow for the year then ended, and
control relevant to the preparation and presentation of the
nancial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or
error.
opinion.
Opinion
accepted in India:
st
March, 2014;
of the Order.
(d) In our opinion, the Balance Sheet, the Statements
Devdatta Mainkar
Place: Mumbai Partner
Dated: 14
th
April, 2014 Membership No. 109795
445
1. The company does not have any xed assets and therefore
clause 4(i) is not applicable to the company.
2. The company is not engaged in any manufacturing activity
and therefore Clause 4(ii) of Companies (Auditors Report)
Order, 2003 is not applicable to the Company.
explanations provided to us, during the period, Company
has not granted any loans to parties covered under
During the year, Company has taken unsecured loans
from the parties covered in the register maintained under
section 301 of the Companies Act, 1956, the terms of
which are, prima facie, not prejudicial to the company.
explanations given to us the company is having an
adequate internal control system commensurate with
the size and the nature of its business, for the purchase
of xed assets and sale of services. The activities of the
company do not involve purchase of inventory and sale
of goods. No major weaknesses in internal control system
were noticed in the course of our audit.
explanations given to us all the particulars of contracts
and arrangements referred in section 301 of the Act have
been entered in the register required to be maintained
under that section.
explanations given to us each of these transactions in
respect of any such parties during the nancial year have
been made at prices, which are reasonable, having regard
to the prevailing market prices at the relevant time.
explanations given to us, provisions of sections 58A,
58AA and any other relevant provisions of the Act and the
rules framed there under, in respect of deposits accepted
from the public are not applicable to the company as the
company has not accepted any deposits from the public.
explanations provided to us the company has an internal
audit system, which is commensurate with its size and
8. In respect of the activities of the company, maintenance
of cost records has not been prescribed by the Central
Government under clause (d) of sub-section (1) of section
209 of the Act.
9. On the basis of our examination of books of accounts and
according to the information and explanations given to us
the company is regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income-
tax, Sales-tax, Wealth Tax and Service Tax, cess and other
applicable statutory dues with the appropriate authorities.
There are no disputed tax dues remaining to be deposited
with the relevant authority.
10. The Company does not have accumulated losses at the
end of the current year. The Company has not incurred
11. On the basis of our examination of books of accounts
explanations given to us the company has not defaulted
in repayment of dues to any nancial institution or bank or
debenture holders.
12. From the examination of books of accounts and according
to the information and explanations provided to us, the
company has not granted any loans or advances on the
basis of security by way of pledge of shares, debentures
and other securities.
13. The company is not a Chit fund, nidhi, mutual benet fund
or a society.
14. The company is not dealing or trading in shares, securities,
debentures or any other investments.
explanations given to us the company has not given
any guarantee for loans taken by others from bank or
nancial institutions, the terms and conditions whereof are
prejudicial to the interest of the company.
explanations given to us, during the year, the Company
has not taken any term loans.
report that the company has not used short-term funds for
long-term investments.
18. During the year, no preferential allotment of shares
was made to any of the entities covered in the register
1956.
19. Company has not issued any secured debentures.
20. During the year, the Company has not made any public
issue of its equity shares.
21. To the best of our knowledge and belief and according
were noticed or reported during the year.
Devdatta Mainkar
Dated: 14
th
ANNEXURE REFERRED TO IN PARA 7 OF OUR REPORT OF EVEN DATE
446
In Rupees
Particulars Note March 2014 March 2013
a) Share Capital ............................................................................... 1 100000 100000
b) Reserves and Surplus ................................................................. 2 52986017 24829717
53086017 24929717
2) Non-current liabilities
a) Long-term borrowings................................................................. 3 24126766 99672745
24126766 99672745
a) Trade payables ............................................................................ 4 19539143 51331318
b) Other current liabilities ................................................................ 5 72568093 95591344
c) Short term provisions .................................................................. 6 14433553 29979325
106540789 176901987
TOTAL ........................................................................................................ 183753572 301504449
II. ASSETS
1) Non-current assets
a) Deferred tax assets (Net) ............................................................ 7 4770939 5676806
b) Long-term loans and advances .................................................. 8 2886622 181154
7657561 5857960
2) Current assets
a) Trade receivables ........................................................................ 9 28032561 63654704
b) Cash and bank balance ............................................................. 10 4569559 14206278
c) Short-term loans and advances ................................................. 11 143493891 217785507
176096011 295646489
TOTAL ........................................................................................................ 183753572 301504449
Summary of signicant accounting policies and notes to the
nancial statements
I & II
For B K KHARE & CO. Ramesh Iyer Chairman
}
Firm Registration No. 105102W V Ravi
Vinay Deshpande
Rajesh Vasudevan
Devdatta Mainkar Anuj Mehra Director
Partner Dr. Jaideep Devare
Membership No. 109795 R Balaji
Rajnish Agarwal
447
In Rupees
Particulars Note March 2014 March 2013
I. Revenue from operations ........................................................................ 12 1676402650 1415079575
II. Other income ........................................................................................... 13 7856955 4758553
III. Total Revenue (I + II) ............................................................................ 1684259605 1419838128
IV. Expenses:
Employee benets expense .................................................................... 14 1316319575 1089532646
Finance costs ........................................................................................... 15 11454423 17425538
Other expenses ........................................................................................ 16 312667671 287384025
Total expenses ........................................................................................ 1640441669 1394342209
V. Prot before exceptional and extraordinary items and tax (III - IV) ....... 43817936 25495919
VI. Exceptional items..................................................................................... 0 0
VII. Prot before extraordinary items and tax (V - VI)................................... 43817936 25495919
VIII. Extraordinary Items .................................................................................. 0 0
IX. Prot before tax (VII - VIII) ....................................................................... 43817936 25495919
X. Tax expense:
(1) Current tax ........................................................................................ 14755769 9545833
(2) Deferred tax ...................................................................................... 905867 (1429565)
XI. Prot/(Loss) for the period from continuing operations (IX - X) .... 28156300 17379651
XII. Prot/(loss) from discontinuing operations ............................................. 0 0
XIII. Tax expense of discontinuing operations ............................................... 0 0
XIV. Prot/(loss) from Discontinuing operations (after tax) (XII - XIII)... 0 0
XV. Prot/(Loss) for the period (XI + XIV) ................................................ 28156300 17379651
XVI. Earnings per equity share (Rupees):
(1) Basic ................................................................................................. 19 2815.63 1737.97
(2) Diluted ............................................................................................... 19 2815.63 1737.97
Summary of signicant accounting policies and notes to the
nancial statements
I & II
The notes referred to above form an integral part of the Statement of Prot and Loss
This is the Statement of Prot and Loss referred in our report of even date.
}
Vinay Deshpande
Rajesh Vasudevan
Rajnish Agarwal
448
In Rupees In Rupees
Prot before taxes and contingencies ..................................................... 43817936 25495919
Add: Items considered separately:
Interest expense ....................................................................................... 11454423 17425538
11454423 17425538
Operating prot before working capital changes .................................... (I) 55272359 42921457
Add/Less:
(Increase)/Decrease in Trade receivables ............................................... 35622143 (19333840)
(Increase)/Decrease in Loans & Advances ............................................. (4673312) (826540)
30948831 (20160380)
Add: Increase/(Decrease) in Current Liabilities ....................................... (56306993) 43766753
(II) (25358162) 23606373
Cash generated from operations ............................................................. (I+II) 29914197 66527830
Advance taxes paid .................................................................................. 61503691 (52503245)
NET CASH FROM OPERATING ACTIVITIES (A) ................................. 91417888 14024585
NET CASH FROM INVESTING ACTIVITIES (B) ................................... 0 0
Increase/(Decrease) in Long Term Borrowings (net) .............................. (86040253) 11598030
Interest paid .............................................................................................. (15002654) (15018370)
Dividend paid ............................................................................................ (11700) 0
NET CASH FROM FINANCING ACTIVITIES (C) .................................. (101054607) (3420340)
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENT (A+B+C) ......................................... (9636719) 10604245
CASH AND CASH EQUIVALENTS AS AT:
Beginning of the year ............................................................................... 14206278 3602033
End of the year ......................................................................................... 4569559 14206278
CASH FLOW STATEMENT
Examined and found correct.
}
Vinay Deshpande
Rajesh Vasudevan
Rajnish Agarwal
449
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED MARCH 31, 2014
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) BASIS OF PREPARATION OF ACCOUNTS
All assets & liabilities have been classied as current & non current
nature of services and their realisation in cash and cash equivalents,
the company has ascertained its operating cycle as 12 months for the
purpose of current non current classication of assets & liabilities.
2) USE OF ESTIMATES
of assets and liabilities (including contingent liabilities) as on the date of
nancial statements and the reported income and expenses during the
reporting period. Management believes that the estimates used in the
preparation of the nancial statement are prudent and reasonable. Actual
results could differ from these estimates. Any revision to accounting
estimates is recognized prospectively in current and future periods.
3) REVENUE RECOGNITION
The Company adopts the accrual method for recognizing all income
and expenses.
Dividend from investments is accounted for as income when the right
to receive dividend is established.
4) CURRENT AND DEFERRED TAX
Tax expense for the period, comprising current tax and deferred tax,
are included in the determination of the net prot or loss for the period.
Current tax is measured at the amount expected to be paid to the tax
authorities in accordance with the provisions of the Income Tax Act, 1961.
periods is accounted for using the tax rates and tax laws enacted
or substantively enacted as on the balance sheet date. Deferred
tax assets arising on account of unabsorbed depreciation or carry
forward of tax losses are recognised only to the extent that there
future taxable income will be available against which such deferred
tax assets can be realised. Other deferred tax assets are recognised
only when there is a reasonable certainty of their realisation.
5) MISCELLANEOUS EXPENDITURE
a) Share Issue Expenses:
Expenses incurred in connection with fresh issue of share
capital are charged to the Prot & Loss Account in the year in
6) EMPLOYEE BENEFITS
a) Contribution to provident fund:
provident fund and labour welfare fund are recognised in the
b) Gratuity:
The Company provides for the gratuity, a dened benet
retirement plan covering all employees. The plan provides
for lump sum payments to employees upon death while in
employment or on separation from employment after serving
for the stipulated period mention ed under The Payment of
Gratuity Act, 1972. The Company accounts for liability of future
gratuity benets based on an external actuarial valuation on
projected unit credit method carried out for assessing liability
as at the reporting date. Actuarial gains/losses are immediately
taken to the statement of prot and loss and are not deferred.
c) Leave Encashment/Compensated absences:
The Company provides for the encashment of leave with
pay subject to certain rules. The employees are entitled
to accumulate leave subject to certain limits for future
number of days of unutilized leave at each balance sheet date
on the basis of an independent actuarial valuation
7) PROVISIONS AND CONTIGENT LIABILITIES
Provisions: Provisions are recognised when there is a present
obligation as a result of a past event and it is probable that an
outow of resources embodying economic benets will be required
to settle the obligation and there is a reliable estimate of the amount
of the obligation.
Contingent Liabilities: Contingent liabilities are disclosed when there
is a possible obligation arising from past events, the existence of which
will be conrmed only by the occurrence or non occurrence of one
or more uncertain future events not wholly within the control of the
company or a present obligation that arises from past events where it is
either not probable that an outow of resources will be required to settle
the obligation or a reliable estimate of the amount cannot be made.
II. NOTES TO THE FINANCIAL STATEMENTS:
1) Share Capital:
In Rupees
Authorised Capital:
1,00,000 Equity shares of Rs. 10/- each 1000000 1000000
(March 2013 : 1,00,000 shares)
Issued Capital :
10,000 Equity shares of Rs. 10/- each 100000 100000
(March 2013 : 10,000 shares)
Subscribed and Paid-up Capital :
10,000 Equity shares of Rs. 10/- each 100000 100000
(March 2013 : 10,000 shares)
Total 100000 100000
Number of
Shares Rupees
Number of
Shares Rupees
a) Reconciliation of the
number of shares -
Balance at the beginning of
the year 10000 100000 10000 100000
Add : Fresh allotment of
shares during the year: 0 0 0 0
10000 100000 10000 100000
Less : Shares bought back
during the year 0 0 0 0
Balance at the end of the
year 10000 100000 10000 100000
b) Number of equity shares
held by holding company
or ultimate holding
company including shares
held by its subsidiaries/
associates -
Holding company : Mahindra
& Mahindra Financial
Services Limited (Equity
shares of Rs. 10/- each) 10000 100000 10000 100000
Percentage of holding (%) 100.00 100.00 100.00 100.00
c) Shareholders holding more
than 5 percent shares :
Mahindra & Mahindra
Financial Services Limited 10000 100000 10000 100000
450
2) Reserves & Surplus:
In Rupees
Surplus in the Statement of prot and loss :
Balance as at the beginning of the year 24829717 7461766
Add : Prot for the current year transferred
from Statement of Prot & Loss 28156300 17379651
52986017 24841417
Less : Allocations & Appropriations :
Proposed Dividend On Equity Shares 0 10000
Corporate Dividend Tax on Equity Shares 0 1700
0 11700
Balance as at the end of the year 52986017 24829717
Total 52986017 24829717
3) Long-term Borrowings:
In Rupees
Unsecured -
Inter Corporate Deposits 24126766 99672745
Total 24126766 99672745
4) Trade Payables:
In Rupees
Trade payables for expenses 19539143 51331318
Total 19539143 51331318
5) Other Current Liabilities:
In Rupees
Intercorporate Deposits 59645582 70139856
Interest accrued but not due on borrowings 4660963 8209194
Other Current Liabilities 8261548 17242294
Total 72568093 95591344
6) Short-term provisions :
In Rupees
Provision for employee benets. 14433553 29967625
Proposed Dividend 0 10000
Corporate Dividend Tax 0 1700
Total 14433553 29979325
Leave Benets
I. Expense recognised in the Statement
of Prot & Loss for the year ended 31st
March
1. Current service cost 30156442 31413883
2. Interest cost 1582035 1180369
3. Expected return on plan assets 0 0
4. Actuarial (Gains)/Losses (43038161) (27356654)
5. Total expense (11299684) 5237598
Leave Benets
II. Net asset/(liability) recognised in the
Balance Sheet as at 31st March
obligation as at 31st March 5693994 17496705
2. Fair value of plan assets as at 31st
March 0 0
3. Funded status (surplus/(decit)) (5693994) (17496705)
4. Net asset/(liability) as at 31st March (5693994) (17496705)
III. Change in the obligations during the year
ended 31st March
obligation at the beginning of the
year 17496705 13090588
3. Interest cost 1582035 1180369
5. Benets paid (503027) (831481)
obligation at the end of the year 5693994 17496705
IV. Change in the fair value of plan assets
during the year ended 31st March
beginning of the year 0 0
3. Contributions by employer 0 0
4. Actuarial (Gains)/Losses 0 0
5. Actual Benets paid 0 0
6. Fair value of plan assets at the end
of the year 0 0
V. Major category of plan assets as a
percentage of total plan
Funded with LIC
Others
1. Discount Rate 8% p.a. 8% p.a.
2. Rate of Salary increase 5% p.a. 5% p.a.
3. In-service Mortality Indian
Assured
lives
Mortality
(2006-08)
Ultimate
Indian
Assured lives
Mortality
(2006-08)
Ultimate
7) Deferred tax assets (net):
In Rupees
Employee Benets 4770939 5676806
Net deferred tax assets 4770939 5676806
8) Long-term Loans & advances:
In Rupees
Other Loans & Advances:
Gratuity plan assets (net) 2886622 181154
Total 2886622 181154
451
In Rupees
Gratuity (Funded)
I. Expense recognised in the Statement of
Prot & Loss Account for the year ended
31st March
3. Expected return on plan assets (715857) (526761)
5. Fund amount to be transferred to
MMFSL gratuity fund 6426795 0
6. Adjustment due to change in opening
balance of Plan assets (675410) 0
7. Total expense 583566 3538116
II. Net asset/(liability) recognised in the
Balance Sheet as at 31st March
obligation as at 31st March 3430397 8598216
2. Fair value of plan assets as at 31st
March 6317019 8779370
3. Funded status (surplus/(decit)) 2886622 181154
4. Net asset/(liability) as at 31st March 2886622 181154
III. Change in the obligations during the year
ended 31st March
obligation at the beginning of the
year 8598216 5089355
5. Benets paid 0 0
obligation at the end of the year 3430397 8598216
IV. Change in the fair value of plan assets
during the year ended 31st March
beginning of the year 8779370 0
3. Contributions by employer 3289034 8779370
5. Fund amount to be transferred to
MMFSL gratuity fund (6426795) 0
6. Adjustment due to change in opening
balance of Plan assets 675410 0
7. Actual Benets paid 0 0
8. Fair value of plan assets at the end
of the year 6317019 8779370
V. Major category of plan assets as a
percentage of total plan
1. Discount Rate 8% p.a. 8% p.a.
2. Rate of Salary increase 5% p.a. 5% p.a.
3. In-service Mortality Indian
Assured lives
Mortality
(2006-08)
Ultimate
Indian
Assured lives
Mortality
(2006-08)
Ultimate
Experience Adjustments
Period Ending
31/3/2012 31/3/2013 31/3/2014
1. Dened Benet obligation at
end of the period 5089355 8598216 3430497
2. Plan assets at the end of
period
8779370 6317019
3. Funded Status Surplus/
(Decit)
(5089355) 181154 2886622
4. Experience adjustments on
plan liabilities (gain)/loss (2631717) (3275416) (11427682)
5. Experience adjustments on
plan assets gain/(loss) (175587) (189096)
9) Trade Receivables:
In Rupees
Sundry Debtors:
a) Debts Outstanding for a period
exceeding six months 0 0
b) Other Debts 28032561 63654704
Total 28032561 63654704
10) Cash and bank balance:
In Rupees
Balance with Scheduled Banks in Current
Accounts 4569559 14206278
Total 4569559 14206278
11) Short-term loans and advances:
In Rupees
Other Loans & Advances
Employees 5615544 3640902
Service tax credit available 6180 0
Advance payment of tax (net of provisions) 137872167 214131627
Total 143493891 217785507
12) Revenue from operations:
In Rupees
a) Income from Sale of services 1631561050 1375596575
b) Income from Service charges 44841600 39483000
Total 1676402650 1415079575
13) Other Income:
In Rupees
Interest Income 7856955 4758553
Total 7856955 4758553
14) Employee benets expense:
In Rupees
Salary, Bonus & Incentives 1227437400 1008258794
Companys Contribution to Provident
Funds. & other funds 88812647 81214819
Staff Welfare Expenses 69528 59033
Total 1316319575 1089532646
452
15) Finance Costs:
In Rupees
Interest on
Inter Corporate Deposits 11454423 17425538
Total 11454423 17425538
16) Other Expenses:
In Rupees
Insurance 11375052 6612546
Rates & Taxes, excluding taxes on income 374873 708548
Legal & Professional Charges 1495660 147775
Conveyance 268577822 250636205
Travelling Expenses 18498752 17462864
Bank Charges 19282 22043
(a) as auditor 50000 50000
(b) for other services 55000 55000
General & Administrative Expenses 12221230 11689044
Total 312667671 287384025
17) In the opinion of the Board, Current assets, Loans & Advances are
approximately of the value stated, if realized, in the ordinary course of
business.
18) The company has only one reportable segment of business viz. Manpower
Supply business for the purpose of AS 17 Segment Reporting and all other
activities revolve around the main business of Manpower Supply.
19) In Accordance with the Accounting Standard on Earning Per Share (AS
20) issued by the Institute of Chartered Accountants of India, the EPS are
as follows:
In Rupees
Particulars FY 2013-14 FY 2012-13
Net Prot/ (Loss) attributable to Equity
Share Holders 2,81,56,300 1,73,79,651
Weighted Average Numbers of Shares 10,000 10,000
EPS (Basic) 2,815.63 1,737.97
EPS (Diluted) 2,815.63 1,737.97
20) There are no dues payable to Small Scale industrial undertakings in view
of the nature of the business of the Company.
21) Suppliers covered under the Micro, Small and Medium Enterprises
Development Act, 2006 have not furnished the information regarding
ling of necessary memorandum with appointed authority. In view of this
and legal opinion obtained by the Company, information required under
Schedule VI of the Companies Act, 1956 to that extent is not given.
A) List of the related parties and nature of relationship which have
transactions with our Company during the year:
Holding Company/Companies : Mahindra & Mahindra Limited
Limited
Fellow subsidiary Companies : Mahindra Insurance Brokers Limited
Mahindra Rural Housing Finance Ltd.
Mahindra Trucks and Buses Ltd
In Rupees
Sr.
No. Nature of transactions
Holding
Companies
Fellow
Subsidiary
Companies
1. Income
Manpower supply 1,698,470,812 185,135,206
(1,470,262,246) (119,721,165)
2. Expenses
Interest 11,454,423
(17,425,538)
Other Expenses 1,348,320
(1,348,320)
3. Finance
Inter Corporate Deposits
outstanding (including
interest accrued but not
due) 88,433,311
(178,021,795)
4. Outstandings
Receivables 21,184,416 6,848,145
(49,767,020) (13,887,684)
Figures in bracket represent corresponding gures of previous year.
23) The results for the year have been impacted on account of transfer of 5122
employees from the Company to the holding or other group companies.
24) Previous year gures have been regrouped wherever found necessary.
Signatures to Signicant accounting policies and Notes to the nancial statements I and II
}
Vinay Deshpande
Rajesh Vasudevan
Rajnish Agarwal
MAHINDRA ASSET MANAGEMENT COMPANY PRIVATE LIMITED
453
Your Directors present their First Report together with the Audited Accounts of your Company for the period ended 31
st
March, 2014.
The Company
Your Company was incorporated as a subsidiary of Mahindra & Mahindra Financial Services Limited on 20
th
June, 2013. The
Companys ultimate holding company is Mahindra & Mahindra Limited.
Financial Results
(Amount in Rs. Lakhs)
31
st
March, 2014
Income 0.00
Prot before Interest and Taxation (0.49)
Less : Interest 0.00
Prot / (Loss) before Taxation (PBT) (0.49)
Less : Provision for Taxation 0.00
Prot / (Loss) after Tax for the year (0.49)
Balance carried forward to Balance Sheet (0.49)
Operations
Your Company will be engaged as an investment manager
to the proposed Mahindra Mutual Fund, currently awaiting
regulatory approval from Securities and Exchange Board of
India (SEBI). During the period under review, the Company
has not commenced any business activities.
Dividend
In view of losses incurred by the Company, your Directors do
not recommend any dividend for the period under review.
Directors
Mr. Ramesh G. Iyer and Mr. V. Ravi were named in the
Articles of Association as the First Directors of the Company.
Mr. Gautam R. Divan was appointed as an Additional Director
at the Board Meeting of the Company held on 17
th
July, 2013.
Mr. Ramesh G. Iyer, Mr. V. Ravi and Mr. Gautam R. Divan hold
ofce up to the date of rst Annual General Meeting and, being
eligible, offer themselves for re-appointment.
The Company has received notices from its member(s),
signifying the intention to propose Mr. Ramesh G. Iyer,
Mr. V. Ravi and Mr. Gautam R. Divan as candidates for the
ofce of Director at the forthcoming Annual General Meeting
of the Company.
your Directors, based on the representation received from
the Operating Management, and after due enquiry, conrm
that:-
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 31
st
March,
2014 and of the loss of the Company for the year ended on
that date;
concern basis.
Auditors
Messrs. B. K. Khare & Co., Chartered Accountants, retire
as Auditors of the Company at the forthcoming Annual
General Meeting (AGM) and have given their consent for
re-appointment. As per Section 139(1) of the Companies Act,
2013 (the Act) read with the Companies (Audit and Auditors)
Rules, 2014, it is proposed to appoint the Auditors for a period
of 5 (ve) years to hold ofce from the conclusion of this AGM
till the conclusion of Sixth AGM of the Company to be held in
the year 2019, subject to ratication of their appointment by
members at every AGM and x their remuneration.
As required under the provisions of Section 224(1B) of the
Companies Act, 1956 and Sections 139(1) read with 141
454
The Company has not accepted deposits from the public or
its employees during the period under review. The Company
has not made any loans/advances of the nature which are
otherwise required to be disclosed in the annual accounts of
the Company pursuant to Clause 32 of the Listing Agreement
of the parent company Mahindra & Mahindra Financial
Services Limited and the ultimate parent company Mahindra &
Mahindra Limited, with the Stock Exchanges.
The Company had no employee who was in receipt of
remuneration of not less than Rs. 60,00,000 per annum during
the period ended 31
st
March, 2014 or was employed for a part
of the Financial Year and was in receipt of remuneration of not
less than Rs. 5,00,000 per month during any part of the year.
Ramesh Iyer
Chairman
Mumbai, 17
th
April, 2014
455
ANNEXURE I TO THE DIRECTORS REPORT FOR THE PERIOD ENDED 31
ST
MARCH, 2014
ST
MARCH, 2014
a. Energy Conservation measures taken:
The operations of your Company are not energy-intensive. However, adequate measures have been initiated to reduce
energy consumption.
cost of production of goods: These measures are expected to reduce energy consumption.
d. Total energy consumption and energy consumption per unit of production as per Form-A to the Annexure to the Rules
There were no foreign exchange earnings or outgo during the period under review.
Ramesh Iyer
Chairman
Mumbai, 17
th
April, 2014
456
TO THE MEMBERS OF
MAHINDRA ASSET MANAGEMENT COMPANY PRIVATE LTD
of Mahindra Asset Management Company Private Ltd
(the Company), which comprise the Balance Sheet as
at March 31, 2014, and the Statement of Prot and Loss
information.
opinion.
Opinion
6. In our opinion and to the best of our information and according
to the explanations given to us, the nancial statements
give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
st
March 2014;
[loss] for the year ended on that date; and
(Amendment) Order, 2004, issued by the Central
227 of the Act (hereinafter referred to as the Order), and
on the basis of such checks of the books and records of
the Company as we considered appropriate and according
to the information and explanations given to us, we give
in the Annexure a statement on the matters specied in
paragraphs 4 and 5 of the Order.
appears from our examination of those books ;
agreement with the books of account ;
d. In our opinion, the Balance Sheet, the Statements
FOR B. K. KHARE & CO.
Padmini Khare Kaicker
Partner
Mumbai: Dated 17
th
April 2014
457
(Referred to in paragraph 7 of the Independent Auditors
Report of even date to the members of Mahindra Asset
Management Company Private Limited)
i. The Company does not have xed assets and therefore
the provisions of clause 4(i) of the Order are not applicable
to the Company.
ii. Clause 4(ii) of the Companies (Auditors Report) Order
iii. According to the information and explanations given
to us, the Company has neither granted nor taken any
loans, secured or unsecured to or from companies, rms
or other parties covered in the register maintained under
Section 301 of the Companies Act, 1956, and accordingly
clause 4 (iii) (b), (c), (d), (f) and (g) of the Order are not
iv. In our opinion and according to the information and
explanation given to us, there is an adequate internal
its rendering of services. On the basis of our examination
and according to the information and explanations given
to us, we have neither come across nor have we been
informed of any major weakness in internal control system.
v. According to the information and explanation given to
us, there are no transactions with parties that need to be
entered in the register maintained under Section 301 of
the Companies Act, 1956, and therefore the provisions
of clause 4(vi)(b) of the Order are not applicable to the
Company.
vi. In our opinion and according to the information and
any deposits from the public to which provisions of
Sections 58A, 58AA or any other relevant provisions of the
Companies Act, 1956, and the rules framed there under
and therefore provision of clause 4(vi) of the Order is not
vii. In our opinion and according to the information and
explanations provided to us the Company has an internal
audit system, which is commensurate with its size and
viii. According to the information and explanations given
to us, the Central Government has not prescribed
the maintenance of cost records under clause (d) of
subsection (1) Of Section 209 of the Companies Act, 1956.
Therefore the provisions of clause 4(viii) of the Order are
not applicable to the Company.
ix. (a) According to the information and explanations given
to us and according to the books and records
produced and examined by us, in our opinion the
Company has generally been regular in depositing
undisputed statutory dues in respect of Provident
Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, cess and other applicable
statutory dues with the appropriate authorities.
(b) As at 31 March 2014, according to information and
explanation given to us, there are no outstanding
dues on account of Income Tax and Service Tax that
have not been deposited on account of any dispute.
x. The company has been registered for a period of less than
ve years and hence we are not required to comment on
whether or not the accumulated losses at the end of the
nancial year is fty per cent or more of its net worth and
whether it has incurred cash losses in the current nancial
year and in the immediately preceding nancial year.
xi. The Company has not taken any loans from the nancial
institution or banks and therefore the provisions of clause
4(xi) are not applicable to the Company.
xii. According to the information and explanations given to
us, the Company has not granted loans and advances on
the basis of security by way of pledge of shares and other
securities.
xiii. The provisions of any applicable statute to Chit Fund,
Nidhi or Mutual Benet Fund / Society are not applicable
to the Company.
xiv. In our opinion, the Company is not dealing in or trading
in shares, securities, debentures and other investments
therefore provision of the clause 4(xiv) of the Order is not
xv. According to the information and explanations given to
xvi. The Company has not taken any loans from the nancial
institution or banks and therefore the provisions of clause
4(xvi) are not applicable to the Company.
xvii. The Company has not raised any funds during the year
and therefore the provisions of clause 4(xvii) are not
xviii. The Company has not made any preferential allotment
of shares to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix. The Company has not issued any debentures during the
year and therefore the provision of clause 4(xix) of the
Order is not applicable to the Company.
xx. The Company has not made any public issue of its shares
during the year.
xxi. Based on the audit procedures performed and information
and explanations given by the management, we report
that no fraud on or by the Company has been noticed or
FOR B. K. KHARE & CO.
Partner
Mumbai, Dated 17
th
April, 2014
458
(Amount in `)
Particulars Notes March 2014
a) Share Capital........................................................................................................ 1 500,000.00
b) Reserves and Surplus ......................................................................................... 2 (49,218.00)
450,782.00
a) Trade payables ..................................................................................................... 3 16,854.00
16,854.00
Total ........................................................................................................... 467,636.00
II. ASSETS
1) Current assets
a) Cash and bank balance ...................................................................................... 4 465,782.00
b) Short-term loans and advances .......................................................................... 5 1,854.00
467,636.00
Total ........................................................................................................... 467,636.00
Summary of signicant accounting policies and notes to the nancial statements ... I & II
Firm Regn No. 105102W
Ramesh Iyer
Chairman
Gautam Divan
Director
Partner
Neeraj Verma
Company Secretary
V. Ravi
Director
Place : Mumbai
Date : April 17, 2014
459
STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDED MARCH 31, 2014
(Amount in `)
Particulars Notes March 2014
I. Revenue from operations .........................................................................................
II. Other income ............................................................................................................
III. Total Revenue (I + II) .............................................................................................
IV. Expenses:
Other expenses ........................................................................................................ 6 49,218.00
Total expenses ........................................................................................................ 49,218.00
V. Prot before tax (III - IV) ...................................................................................... (49,218.00)
VI. Tax expense:
(1) Current tax ..........................................................................................................
(2) Deferred tax ........................................................................................................
VII Prot (Loss) for the year (V - VI) ......................................................................... (49,218.00)
VIII Earnings per equity share (Rupees): ................................................................. 7
(1) Basic .................................................................................................................... (0.98)
(2) Diluted ................................................................................................................. (0.98)
Summary of signicant accounting policies and notes to the nancial statements ... I & II
Ramesh Iyer
Chairman
Gautam Divan
Director
Partner
Neeraj Verma
Company Secretary
V. Ravi
Director
Place : Mumbai
460
CASH FLOW STATEMENT
(Amount in `)
Particulars March 2014
A. Cash ows from operating activities
Prot before taxes and contingencies ..................................................................... (49,218)
Add: Items considered separately:
Interest expense .......................................................................................................

Operating prot before working capital changes ................................................... (I) (49,218)
Add/Less:
(Increase)/Decrease in Loans & Advances ............................................................. (1,854)
(1,854)
Add: Increase in Current Liabilities & Provisions .................................................. 16,854
(II) 15,000
Cash generated from operations ........................................................................... (I+II) (34,218)
Advance taxes paid .................................................................................................
Net cash from operating activities (A) ................................................................ (34,218)
B. Cash ows from investing activities
Net cash ows from investing activities (B) .......................................................
C. Cash ows from nancing activities
Issue of Equity Shares (net of issue expenses) ..................................................... 500,000
Net cash from nancing activities (C) ................................................................. 500,000
Net increase/(decrease) in cash and cash equivalents (A+B+C) .................. 465,782
Cash and cash equivalents as at:
Beginning of the year ............................................................................................
End of the year ....................................................................................................... 465,782
Examined and found correct.
Ramesh Iyer
Chairman
Gautam Divan
Director
Partner
Neeraj Verma
Company Secretary
V. Ravi
Director
Place : Mumbai
461
I. Summary of signicant accounting policies:
1) Basis of preparation of accounts
Companies Act 2013.
nature of services and their realisation in cash and cash equivalents,
the company has ascertained its operating cycle as 12 months for the
purpose of current non current classication of assets & liabilities.
2) Use of estimates
make estimates and assumptions considered in the reported amounts
of assets and liabilities as on the date of the nancial statements
and the reported income and expenses during the reporting period.
Management believes that the estimates used in preparation of the
nancial statements are prudent and reasonable. Actual results could
differ from these estimates.
3) Current and deferred tax
Tax expense for the period, comprising current tax and deferred
tax, are included in the determination of the net prot or loss for the
period. Current tax is measured at the amount expected to be paid
to the tax authorities in accordance with the provisions of the Income
Tax Act, 1961.
taxable income and accounting income that originate in one period
and are capable of reversal in one or more subsequent periods is
accounted for using the tax rates and tax laws enacted or substantively
enacted as on the balance sheet date. Deferred tax assets arising on
account of unabsorbed depreciation or carry forward of tax losses are
recognised only to the extent that there is virtual certainty supported
by convincing evidence that sufcient future taxable income will be
Other deferred tax assets are recognised only when there is a
reasonable certainty of their realisation.
4) Provisions and contigent liabilities
Provisions are recognised in accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
occurrence or non-occurrence of one or more certain future events
not wholly within the control of the company.
II. Notes to the nancial statements:
1) Share Capital:
(Amount in `)
Authorised Capital:
50,00,000 Equity shares of `10/- each 5,00,00,000
(March 2013: NIL shares)
Issued Capital:
50,000 Equity shares of `10/- each 5,00,000
Subscribed and Paid-up Capital:
50,000 Equity shares of `10/- each 5,00,000
Total 5,00,000
Number of
Shares Rupees
a) Reconciliation of the number of
shares
the beginning of the year
the year: 50,000 5,00,000
50,000 5,00,000
Less: Shares bought back during the year
the end of the year 50,000 5,00,000
b) Number of equity shares held by
holding company or ultimate holding
company including shares held by its
subsidiaries/associates
Holding company: Mahindra & Mahindra
Financial Services Limited (Equity
shares of ` 10/- each) 49,998 4,99,980
Percentage of holding (%) 99.996 99.996
c) Shareholders holding more than
5 percent shares:
Limited 49,998 4,99,980
2) Reserves & Surplus:
(Amount in `)
Surplus:
Balance Prot (for earlier years) as per last Balance Sheet
Add: Prot for the current year transferred from
Statement of Prot & Loss (49,218)
Balance Prot carried to Balance Sheet (49,218)
Balance as at the end of the year (49,218)
Total (49,218)
3) Trade Payables:
(Amount in `)
Trade payables for expenses 16,854
Total 16,854
4) Cash and bank balance:
(Amount in `)
Balance with Scheduled Banks in Current Accounts 4,65,782
Total 4,65,782
5) Short-term loans and advances:
(Amount in `)
Service tax credit available 1,854
Total 1,854
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31
ST
MARCH, 2014
462
6) Other Expenses:
(Amount in `)
Rates and Taxes 3,708
Directors sitting fees 30,000
Filing fees 510
(a) as auditor 15,000
Total 49,218
7) In Accordance with the Accounting Standard on Earning Per Share
(AS 20) issued by the Institute of Chartered Accountants of India, the EPS
are as follows:
(Amount in `)
Particulars FY 2013-14
Net Prot/(Loss) attributable to Equity Share Holders (49,218)
Weighted Average Numbers of Shares 50,000
EPS (Basic) (0.98)
EPS (Diluted) (0.98)
8) The Company Mahindra Asset Management Company Private Limited
(the Company) was incorporated under the Companies Act, 1956 on
June 20, 2013. The company is a subsidiary of Mahindra & Mahindra
Financial Services Ltd. This is the rst year of operations of the Company.
The company is incorporated to function as an investment manager to
the proposed Mahindra Mutual Fund. The company is in the process of
applying for a license from SEBI. Consequently, during the period under
audit the company has not started its operations.
A) List of the related parties and nature of relationship which have transactions
with our Company during the year:
Holding Company: Mahindra & Mahindra Financial Services Limited
(Amount in `)
Sr. Nature of transactions
Holding
Company
1 Issue of Share Capital 4,99,980
10) Previous year gures have been regrouped wherever found necessary.
Signatures to Signicant accounting policies and Notes to the nancial statements
I and II
(FRN:105102W)
Partner
Ramesh Iyer
Chairman
Neeraj Verma
Company Secretary
V. Ravi
Director
Gautam Divan
Director
MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED
463
Dividend
Your Directors are pleased to recommend a dividend of
Rs. 4/- per Equity Share of the face value of Rs.10 each for
st
March, 2014. The dividend, if
approved at the ensuing Annual General Meeting, will be paid
to the Shareholders whose names appear on the register of
members of the Company as on the Book Closure Date. The
equity dividend outgo for the nancial year 2013-14, inclusive
of tax on distributed prots would absorb a sum of Rs. 4,155
lakh (as against Rs.4,155 lakh comprising the dividend of
Rs. 4 per Equity Share paid for the previous year).
Operations and Financial Overview
Club Mahindra, the Companys agship brand in the vacation
ownership business, continued to drive the Companys
business during the year. The Company added around twelve
thousand members to its vacation ownership business, taking
the total membership to around 1.70 lakh at the end of the
year. The new member addition was lower during the year for
two reasons. On the macroeconomic front, high interest and
ination rates resulted in deterioration in consumer sentiments,
which in turn affected discretionary purchase decisions.
Second, changes in TRAI guidelines on telemarketing, which
is an important way your Company reaches out to prospective
customers, warranted a signicant change in processes.
While room inventory increased marginally during the
year, your Companys focus is now on addition of units by
greeneld developments and expansion of existing properties.
The Companys strategy of combining inventory acquisition
with building inventory is being successfully leveraged. In line
with this strategy the Company is currently undertaking four
projects: Assanora (Goa), Kanha (Madhya Pradesh), Naldhera
(Shimla), and second phase at Virajpet (Coorg). In addition the
Company is also expanding its inventory in Munnar (Kerala)
by adding additional units. Further, the project work related to
second phase at Tungi (Lonavala) has been completed. These
projects will add over 500 units to the Companys inventory
over the next couple of years.
During the year, the Company continued with its strategy
for following a Member rst philosophy, in order to provide
priority focus and service to its members. This has resulted
substantial improvement in the member satisfaction. These are
reected in continued improvement in post-holiday feedback
Your Directors are pleased to present their Eighteenth Report together with the audited accounts of your Company for the year
ended 31
st
March, 2014.
Financial Highlights
(Rs. Lakh)
2014 2013
Income:
Income from sale of Vacation Ownership and other services 77,752 70,155
Other Income 2,141 1,439
Total Income 79,893 71,594
Expenditure:
Less: Employee Cost & other expenses (61,851) (53,430)
Prot before Depreciation, Interest and Taxation 18,042 18,164
Less: Depreciation (3,803) (2,119)
Interest (97) (160)
Prot for the year before tax 14,142 15,885
Less: Provision for Tax Current Tax (2,910) (4,731)
Deferred tax (net) (1,779) (456)
Net Prot for the year after tax 9,453 10,698
Balance brought forward from earlier years 33,335 27,861
Balance carried forward 42,788 38,559
APPROPRIATIONS:
General Reserve (945) (1,069)
Proposed Final Dividend on Equity Shares (3,551) (3,551)
Income Tax on Proposed Final Dividend (604) (604)
Surplus carried to Balance Sheet 37,688 33,335
464
scores, higher occupancy, substantial increase in unique
member holidays and increase in members getting their
rst choice of holiday. Further, substantial investment in the
Technology during the last 2-3 years is yielding benet in the
overall functioning of the Company. These investments have
added the cutting edge to our member engagement, helping
your company to create member delight.
Your Company during the year, unveiled a fresh new brand
identity for its agship brand Club Mahindra, which is
inspired by the thought make every moment magical. The
thought reects the ethos of the organisation which strives to
create magical experiences for the entire family during their
holidays.
In spite of subdued macroeconomic environment, the
Company performed creditably during the year. Your
Companys total income (including other income) grew at 12
per cent from Rs. 71,594 lakh in 2012-13 to Rs. 79,893 lakh in
2013-14. Prot After Taxes (PAT) declined from Rs.10,698 lakh
in 2012-13 to Rs. 9,453 lakh in 2013-14 mainly due to higher
operational expenses (due to investment in system, process
and branding) and higher depreciation (due to completion of
greenelds projects). Diluted Earnings Per Share (EPS) of the
Company was Rs. 10.75 in 2013-14, down from Rs.12.75 in
the previous year.
Corporate Social Responsibility Initiatives
Your Company continued to carry out initiatives aimed at
contributing to the socio-economic well being and development
of the communities and the ecosystem that it interacts with.
These are discussed in the Management Discussion and
Analysis Report forming part of this Annual Report.
During the year, your directors have constituted the Corporate
Social Responsibilities (CSR) Committee comprising Mr. A K
Nanda as Chairman, Mr. Uday Phadke and Mr. Cyrus Guzder
are other members. The said committee has been entrusted
with the responsibilities of formulating and recommending
to the Board, a CSR Policy indicating the activities to be
undertaken by the Company, monitoring the implementation
of the framework of the CSR Policy and recommending to the
Board the amount to be spent on CSR activities. The CSR
policy is available on the website of the Company.
Sustainability
In line with the philosophy of the Mahindra Group, your
Company is committed to preserve the ecological integrity of
environment by following sustainable practices in its operations.
The details of the initiatives taken by your Company in this
regard are discussed in the section on Sustainability in the
Management Discussion and Analysis Report forming part of
this Annual Report.
Initial Public Offer (IPO)
During 2009-10, your Company had successfully carried out
an Initial Public Offer of 9,265,275 Equity Shares which was
oversubscribed by more than nine times. The issue comprised
a fresh issue of 5,896,084 Equity Shares of Rs. 10 each and
offer for sale of 3,369,191 Equity Shares by the Promoters of
the Company. The net proceeds to the Company from the
issue was Rs. 17,688 lakh and the shares were listed on the
National Stock Exchange of India Limited and the BSE Limited
on 16
th
July, 2009.
Your Directors are pleased to inform you that during the year
under review your Company completed the utilisation of entire
funds raised from the IPO towards the objects of the issue, as
amended.
Institutional Placement Programme (IPP)
During the year under review, your Company had successfully
carried out an Institutional Placement Programme (IPP) and
allotted the shares to Qualied Institutional Buyers (QIBs)
under Chapter VIII-A of Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations,
2009, as amended from time to time, in order to meet the
minimum public shareholding requirements of 25 per cent.
Accordingly on 12
th
April, 2013, your Company issued and
allotted 4,141,084 Equity Shares of Rs. 10 each at a premium
of Rs. 245 per share aggregating to Rs. 10,560 lakh to QIBs
under IPP.
As on 31
st
March, 2014, the Company has utilised Rs. 7,314
lakh out of the funds raised from the IPP proceeds towards
objects of the Issue.
Corporate Governance Report
A Report on Corporate Governance along with a Certicate
from the Statutory Auditors of the Company regarding the
compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement forms part
of the Annual Report.
A detailed analysis of the Companys operational and nancial
performance as well as the initiatives taken by the Company
in key functional areas such as Human Resources, Quality
and Information Technology is separately discussed in the
Management Discussion and Analysis Report, which forms
part of this Annual Report. This report also discusses in detail,
initiatives taken by the Company in the areas of Corporate
Social Responsibility and Sustainability.
Scheme of Amalgamation and Arrangement
Bell Tower Resorts Private Limited (BTRPL), wholly owned
subsidiary of the Company owns a resort consisting of 106
rooms in the name of Emerald Palms at Varca, Goa. In order
to create a larger entity resulting in optimal management and
synergy benets beside creating economies of cost, enhancing
exibility and pooling of managerial resources your Board felt
that it is in the best interest of the Company to merge BTRPL
with the Company.
Accordingly, during the year under review, your Board has
approved the Scheme of Amalgamation and Arrangement of
BTRPL with the Company and their respective shareholders and
creditors (the Scheme). The Appointed Date of the Scheme is
1
st
April, 2013 and the Scheme shall be effective from the last
of the dates on which the certied or authenticated copies of
the orders of the Honble High Court of Bombay at Goa, Panaji,
465
and Honble High Court of Madras are led with the Registrar of
Companies, Goa and Chennai (Tamil Nadu) respectively.
Subsequent to the approval of the Scheme by the shareholders
of the Company at a Court Convened Meeting held on
19
th
February, 2014, your Company has led a Petition before
Honble High Court of Judicature at Madras for its approval of
the Scheme. Further, BTRPL has obtained the approval on the
Scheme from the Honble High Court of Bombay at Goa on
2
nd
May, 2014. However, pending the approval of the Scheme
from the Honble High Court of Madras, no impact of the
Scheme is given in the nancial statements of the Company
as of 31
st
March, 2014.
Stock Options
Your Company has formulated the Mahindra Holidays &
Resorts India Limited Employees Stock Option Scheme
2006 (MHRIL ESOS). The MHRIL ESOS is administered and
implemented by Mahindra Holidays & Resorts India Limited
Employees Stock Option Trust (the Trust) in accordance with
the directions of the Nomination and Remuneration Committee
(the Committee) and in accordance with the Securities and
and Employee Stock Purchase Scheme) Guidelines, 1999, as
amended (the SEBI Guidelines).
During the year under review, on the recommendation of the
Committee, 35,000 new Options were granted out of lapsed
option available with the Trust under the MHRIL ESOS. Details
required to be provided under the SEBI Guidelines are set out
in Annexure I to this Report.
The Company has received a certicate from the Auditors of
the Company that the MHRIL ESOS has been implemented
in accordance with the SEBI Guidelines and the resolution
passed by the shareholders. The certicate would be placed
at the Annual General Meeting for inspection by members.
Directors
Mr. Rajiv Sawhney, Managing Director & CEO resigned from
the services of the Company and also as member of the Board
with effect from the closure of business hour on 31
st
March,
2014. The Board places on record its recognition of the
services rendered by Mr. Sawhney during his tenure as a
Managing Director & CEO of the Company.
During the year under review, Mr. Sanjeev Aga who was
appointed as an Additional Director with effect from 18
th
April,
2013, was appointed as a Director at the Annual General
Meeting of the Company held on 29
th
July, 2013.
In terms of the Articles of Associations of the Company and
the erstwhile provisions of the Companies Act, 1956, Mr. A K
Nanda (Non Executive Non Independent Director), Mr. Rohit
Khattar and Mr. Sridar Iyengar, Independent Directors, will
retire by rotation, at the ensuing Annual General Meeting.
Mr. Nanda, being eligible, offers himself for re-appointment.
In terms of the provisions of Section 149 and other applicable
provisions of the Companies Act, 2013, Mr. Khattar and
Mr. Iyengar being eligible and seeking re-appointment, are
proposed to be appointed as Independent Directors, not liable
to retire by rotation for a period of ve consecutive years.
Further, Mr. Cyrus J Guzder and Mr. Sanjeev Aga, being
Independent Directors, whose period of ofce is liable to
determination by retirement of directors by rotation under the
erstwhile applicable provisions of the Companies Act, 1956
are proposed to be appointed as Independent Directors, not
liable to retire by rotation, for a term of 5 years from the date
of the Annual General Meeting in terms of the provisions of
Section 149 of the Companies Act, 2013.
The Company has received requisite notices in writing from
members proposing Mr. Khattar, Mr. Iyengar, Mr. Guzder and
Mr. Aga for appointment as Independent Directors. A brief
resume of Mr. Khattar, Mr. Iyengar, Mr. Guzder and Mr. Aga,
are provided in the Report on Corporate Governance, which
The Company has received declarations from all the
Independent Directors of the Company conrming that they
meet with the criteria of independence as prescribed both
under sub-section (6) of Section 149 of the Companies Act,
2013 and under Clause 49 of the Listing Agreement with the
Stock Exchanges.
as at 31
st
concern basis.
During the year under review, MHR Hotel Management GmbH,
Austria and BAH Hotelanlagen AG, Austria ceased to be
subsidiaries of your Company consequent upon divestment
of the entire investments in these companies with effect from
29
th
November, 2013.
The statement pursuant to Section 212 of the Companies
Act, 1956, containing details of the Companys subsidiaries
is attached.
466
In accordance with the General Circular issued by Ministry
of Corporate Affairs, Government of India, the Balance
Sheet, Statement of Prot & Loss and other documents of
the subsidiary companies are not being attached with the
Balance Sheet of the Company. The Annual Accounts of the
subsidiary companies and the related detailed information
will be made available to any Shareholder of the Company
who may be interested in obtaining the same. Further, the
Annual Accounts of the subsidiaries would also be available
for inspection by any Shareholder at the Registered Ofce of
the Company and at the Ofce of the respective subsidiary
companies, during working hours up to the date of the
Consolidated Financial Statement
The Consolidated Financial Statements of the Company and
its subsidiaries, prepared in accordance with Accounting
Standard AS21 form part of this Annual Report.
The Consolidated Financial Statements presented by the
Company include the nancial results of its subsidiary
companies and a joint venture company.
Auditors
Messrs Deloitte Haskins & Sells, Chartered Accountants,
Chennai, Statutory Auditors of the Company, hold ofce till the
conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
As required under the provisions of Sections 139 and 141 of
the Companies Act, 2013, the Company has obtained a written
certicate from the above auditors proposed to be reappointed
conformity with the provisions specied in the said sections.
Public Deposits, Loans and Advances
or its employees during the year under review. The details of
loans or advances which are required to be disclosed in the
Annual Accounts of the Company pursuant to Clause 32 of the
Listing Agreement are furnished separately.
Conservation of Energy, Technology Absorption and Foreign
Your Company continuously strives to conserve energy,
adopt environment friendly practices and employ technology
for more efcient operations. These initiatives have been
discussed in greater detail in the section on Sustainability in
the Management Discussion and Analysis report.
Annexure II to this Report.
of the Companies Act, 1956 and Rules made thereunder
The Company had 6 employees who were in receipt of
remuneration of not less than Rs. 60,00,000 during the year
ended 31
st
March, 2014 or not less than Rs. 5,00,000 per
month during any part of the said year. However, as per the
provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the Directors Report and Accounts are being sent to
all the shareholders of the Company excluding the statement
of particulars of employees. Any shareholder interested in
obtaining a copy of the statement may write to the Company.
Acknowledgement and Appreciation
Your Directors take this opportunity to thank the Companys
customers, shareholders, suppliers, bankers, nancial
institutions and the Central and State Governments for their
unstinted support. The Directors would also like to place on
record their appreciation to employees at all levels for their
hard work, dedication and commitment.
A K NANDA
Chairman
Place: Mumbai
Date: 3
rd
June, 2014
467
ANNEXURE I TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
INFORMATION TO BE DISCLOSED UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEE STOCK OPTION
SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999:
a) Options granted 1,951,350
b) The pricing formula Grant II - Granted
on 30
th
March,
2007
Grant III - Granted
on 1
st
November,
2007
Grant V - Granted
on 1
st
November,
2008
Grant VI - Granted
on 21
st
February,
2012
Grant VII - Granted
on 21
st
February,
2012
Grant VIII - Granted
on 21
st
February,
2013
Grant IX - Granted
on 29
th
January,
2014
The options were granted prior to the listing of Companys
shares. These options were granted, based on the valuation done
by an independent Chartered Accountant using Discounted Cash
Flow Method
Average price
preceding the
specied date -
25
th
July, 2011
Average price
preceding the
specied date -
29
th
October, 2011
Average price
preceding the
specied date -
31
st
January, 2013
Average price
preceding the
specied date -
29
th
January, 2014
Average price average of the daily high and low of the prices of the Companys Equity Shares quoted on National Stock Exchange of India Limited
during the 15 days preceding the specied date.
The specied date Date on which the Remuneration Committee decided to recommend to the Mahindra Holidays & Resorts India Limited Emloyees
Stock Option Trust to grant the Options.
c) Options vested 1,232,222 Options stand vested on 31
st
March, 2013.
d) Options exercised 895,865
e) The total number of
shares arising as a result
of exercise of options
895,865 Equity Shares of Rs. 10/- each. These were transferred from the Trust to the Eligible Employees.
f) Options lapsed 558,833
g) Variation of terms of
options
The Mahindra Holidays & Resorts India Limited Employees Stock Option Scheme 2006 formulated prior to the Initial Public Offering (IPO) of the Company
was ratied by the Company subsequent to IPO on 16
th
December, 2009 by seeking the consent of shareholders through Postal Ballot.
h) Money realised by
exercise of options
Rs. 24,296,840.00
i) Total number of options
in force
496,652
j) Employee-wise details of options granted to:
i) Senior Managerial
Personnel
Names of Directors and
Senior Managerial Persons
to whom stock options have
been granted
Number
of options
granted in
March,
2007*
Number
of options
granted in
November,
2007**
Number
of options
granted in
November,
2008 ***
Number
of options
granted in
February,
2012#
Number
of options
granted in
February,
2012#
Number
of options
granted in
February,
2013#
Number
of options
granted in
January,
2014##
Mr. A K Nanda 9,510 10,500
Mr. Rajiv Sawhney (Resigned
w.e.f 31
st
March, 2014) 400,000
Mr. Uday Y Phadke 3,170 3,500
Mr. Cyrus J Guzder
Mr. Rohit Khattar
Mr. Vineet Nayyar 10,000
Mr. Sridar Iyengar 27,500
Mr. Ravindera Khanna 3,570 2,830
Ms. Vimla Dorairaju 3,910 3,090
Mr. Mohit Bhatia 54,000
Mr. Rohit Malik 60,000
Mr. Dinesh Shetty 40,000
Mr. Sujit Paul 30,000
Mr. Indranil Chakraborthy
(Resigned w.e.f
30
th
June, 2013 65,000
Mr. Aloke Ghosh (Resigned
w.e.f 31
st
December, 2013) 40,000
Ms. Deepali Naair 35,000
* All the above Options have been exercised.
** 56,700 options have been vested till 31
st
March, 2014, of which 55,114 options have been exercised by the eligible employees.
*** 160,600 options have been vested till 31
st
March, 2014, of which 139,684 options have been exercised by the eligible employees.
# Options vested during the year but not exercised
## fresh Grant of Options made during the year.
468
ii) Any other employee who receives a grant in any one year of option
amounting to 5% or more of option granted during that year
Names Number
of options
granted in
February 2012
Names Number
of options
granted in
February 2013
Names Number
of options
granted in
January 2014
Mr. Rajiv Sawhney
(Resiged w.e.f 31
st

March, 2014)
400,000 Mr. Rohit
Malik
60,000 Ms. Deepali
Naair
35,000
Mr. Indranil
Chakraborthy
(Resiged w.e.f 30
th

June, 2013)
65,000 Mr. Dinesh
Shetty
40,000
Mr. Aloke Ghosh
(Resiged w.e.f 31
st

December, 2013)
40,000 Mr. Sujit Paul 30,000
Mr. Mohit Bhatia 54,000
iii) Identied employees 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 NIL
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. 10.75
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 prots 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, the employee compensation cost would have been higher by
Rs. 10.27 lakhs, Prot after tax lower by Rs. 10.27 lakhs and the basic and diluted earnings per share
would have been lower by Rs. 0.01.
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 Grant Date Exercise Price (Rs.) Fair Value (Rs.)
30
th
March, 2007 52.00 16.36
1
st
November, 2007 52.00 16.55
1
st
November, 2008 52.00 16.04
21
st
February, 2012 370.00 113.81
21
st
February, 2012 323.00 129.93
21
st
February, 2013 323.00 94.43
29
th
January, 2014 253.00 83.75
n) A description of the method and signicant 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 have been calculated using Black Scholes Options Pricing Model
and the signicant assumptions made in this regard are as follows:
Grant
dated
30
th
March,
2007
Grant
dated
1
st
November,
2007
Grant
dated
1
st
November,
2008
Grant
dated
21
st
February,
2012
Grant
dated
21
st
February,
2012
Grant
dated
21
st
February,
2013
Grant
dated
29
th
January,
2014
(i) risk-free interest rate, 7.92% 7.72% 7.34% 8.00% 8.00% 7.78% 8.81%
(ii) expected life, 5.00 5.00 5.00 6.00 6.00 3.50 3.50
(iii) expected volatility, Nil Nil Nil 0.33 0.33 0.31 0.29
(iv) expected dividends, and Nil Nil Nil Rs.4.00 Rs.4.00 1.38% 1.66%
(v) the price of the underlying share in market at the time of option grant. Not Applicable as the shares of the
Company are not listed at the time
of option grant. 329.80 329.80 290.10 240.35
Note:
(i) The entire options granted under Grant - IV on 4
th
February, 2008 were either lapsed or surrendered.
(ii) The options granted under Grant I, Grant II & Grant III stand augmented by 5 Bonus options for every 3 existing options on account of 5:3 Bonus Issue made in November, 2007.
(iii) Grant I either has been exercised or lasped.
469
ANNEXURE II TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
ST
MARCH, 2014
The operations of your Company are not energy
intensive. However, adequate operational measures
have been initiated to reduce energy consumption.
b. Additional investments and proposals, if any, are
being implemented for reduction of consumption of
energy:
1. Replacement of high watts CFL by low watts
CFL/LED.
2. Solar hot water system in resorts.
3. Installation of Chiller.
4. Installation of motion and time control for lighting
systems.
c. Impact of the measures taken/to be taken at (a) &
consequent impact on the cost of production of
goods:
No Major impact due to the renovation period.
d. Total energy consumption and energy consumption
per unit of production as per FormA of the Annexure
to the Rules in respect of industries specied in the
schedule:
Not Applicable
1. Areas in which R&D is
carried out
: Not Applicable
2. Benets derived as a result
of the above efforts
: Not Applicable
3. Future plan of action : Nil
4. Expenditure on R&D : Nil
5. Technology absorption,
adaptation and innovation
: Nil
6. Imported technology for
last 5 years
: Nil
Nil
A K NANDA
Chairman
Place: Mumbai
Date: 3
rd
June, 2014
Annexure to Loans and Advances as per Clause 32 of the Listing Agreement:
Particulars of loans and advances, and investments 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 with the
Company and its holding company Mahindra & Mahindra Limited.
Loans and advances in the nature of loans to subsidiary:
(Rs. in lakh)
Name of the Company Balance as on
31
st
March, 2014
Maximum outstanding
during the year
Heritage Bird (M) Sdn Bhd. 940.16 940.16
Bell Tower Resorts Private Limited 6506.83 6506.83
Holiday on Hills Resorts Private Limited 2922.71 2922.71
Divine Heritage Hotels Private Limited 1687.00 1687.00
Innity Hospitality Group Company Limited 2520.80 2520.80
MH Boutique Hospitality Limited 515.20 515.20
Gables Promoters Private Limited 1076.06 1076.06
470
Mahindra Holidays & Resorts India Limited (Mahindra Holidays
or the Company) is a leading player in the leisure hospitality
industry. It has established vacation ownership in India, and is
the market leader in the business. It offers complete holiday
solutions to its customers that are designed for the discerning
and differentiated needs of families.
This chapter presents an overview of the markets and
opportunities as well as the operational and nancial
performance of the Company during 2013-14. It also highlights
Mahindra Holidays strategy, and discusses important initiatives
taken by the Company during the year to achieve its growth
and performance objectives.
Introduction and Key Achievements
During 2013-14, Mahindra Holidays continued to work
towards its strategic objective of ensuring that its growing
membership gets the best holiday experience. It has registered
substantial success in upgrading the membership experience
across all customer touch points be it in membership
related transactions, holiday planning or at the resorts.
The investments in technology and focus on improving
and standardising its business processes have contributed
signicantly to this progress.
Here are the key highlights.
Mahindra Holidays added around twelve thousand
members to its vacation ownership business in 2013-
14 after considering the net cancellation the total
membership base stood at around 1.70 lakh at the
close of 2013-14. This is creditable for two reasons.
First, the subdued macroeconomic environment over
the last couple of years along with high ination and
interest rates have resulted in a deterioration of consumer
sentiment and affected discretionary purchase decisions.
Second, changes in TRAI guidelines on telemarketing
impacted customer acquisition through the channel
under the prevailing processes. Although the Company
has successfully introduced processes that meet the
new guidelines and implemented newer ways to reach
out to potential customers, it did constrain growth in the
intervening period. These have been discussed in greater
detail in the sections on Markets and Opportunities and
Business Performance.
With signicant addition to the room inventory in the
previous two years, the Companys focus in 2013-14 was
on taking a longer-term view and building its own properties
which can provide a more complete experience to our
members. Mahindra Holidays is working on greeneld
and expansion projects across the country that will add
around 500 units to the inventory in the next couple of
years. It is also aggressively pursuing opportunities for
greeneld projects and long-term leases in new areas
and destinations, including international destinations
preferred by Indian travellers. Key developments have
been covered in greater detail in the section on Properties
and New Projects.
There has been a consistent increase in member
satisfaction as a result of the initiatives carried
out across all customer facing processes. These
are reected in improved Customer as Promoter
(CAP) scores, post-holiday feedback scores, higher
occupancy, increase in unique member holidays
and increase in members getting their rst choice of
holiday. Online services continued to grow during the
year with the launch of a more robust website which
now provides a more complete set of services to our
members. This is especially important as a large majority
of our current and potential membership base is active
online. A more exhaustive discussion on these initiatives
and their impact can be found in the sections on Member
Relations and Operations.
The signicantly upgraded information technology (IT)
infrastructure continued to actively contribute to the
Companys growth and performance objectives. Today,
all operating locations and ofces of the Company are
connected to its ERP exchanging real-time information
and benetting from an integrated IT infrastructure. During
the year, the Company implemented a more robust CRM
solution which has added signicant efciencies to
customer acquisition and member relations processes.
In another development, the Company launched
SellSmart, a technology enabled software solution, to
provide potential customers with a compelling all-round
view of the product. More on other important technology
initiatives can be found in the section on Information
Technology.
The Companys performance during the year should be looked
at in the context of the following two sets of factors.
First, the adverse macroeconomic and policy environment.
Mahindra Holidays markets a high-value discretionary
product and the marked deterioration in consumer
condence did impact immediate performance.
Second, realignment of its strategic priorities. Several
initiatives were carried out during the year to address
higher costs as a result of a larger member base as well
as change in business processes. Besides, the Company
is looking to add substantial inventory through greeneld
projects and expansions over the next couple of years.
These will yield results in the long run.
The key nancial results for 2013-14 were:
Total income of the Company (including other income)
grew at 12 per cent from Rs.715.9 crore in 2012-13 to
Rs. 798.9 crore in 2013-14.
471
Prot after tax (PAT) declined from Rs.106.9 crore in
2012-13 to Rs. 94.53 crore in 2013-14. Net margin (PAT/
Total income) stood at 12 per cent during 2013-14.
Diluted EPS was Rs. 10.75 in 2013-14, down from Rs.
12.75 in the previous year.
In the rest of this chapter, we will discuss in greater detail
markets and opportunities, the operational and nancial
performance of the Company, initiatives in the areas of quality,
sustainable development, and key functional areas such as
human resources and information technology (IT). We shall
end the chapter with a discussion on risks and concerns, and
the outlook of the Company for the future.
Markets and Opportunities
Mahindra Holidays is a leading player in the leisure hospitality
industry in India. Built on the vacation ownership model, the
Companys principal business is to offer vacation ownership
products that provide holiday entitlements to its members over
the life of the product.
The addressable market for its products is urban families
with a capability to incur discretionary expenditure. India has
seen a signicant growth in the size of this market in the last
10-15 years. Besides, the changing socio-economic character
and lifestyles of a large sections of the society has resulted
in an increased willingness to holiday for leisure, which was
traditionally restricted to visiting family members or religious
tourism. And, this is not limited to the younger generations. In
fact, extended family holidays is an emerging trend which is
likely to become a huge market in the next few years.
As far as the vacation ownership industry in India is concerned,
the market penetration levels are still very low. If one were to
look at the 11.5 million households who own a car as a proxy
for the addressable market, only one in over thirty car owners
has a vacation ownership membership. Similarly, if one
compares the Indian vacation ownership industry with the US
in terms of its share of the total hospitality sector, the scope for
growth in India is over 5 times its current size. Clearly, there is
a signicant headroom for growth.
Business Performance
Mahindra Holidays believes that there is a signicant potential
for growth of vacation ownership business in India. During the
year, it has taken several measures to tap this opportunity.
First, as most of its addressable market is very active online,
the Company has made a conscious effort to focus on digital,
both as a channel for future membership growth and to build its
brand. As a result, response times to customer leads, queries
or online mentions are being cut drastically during the year.
Second, the Company is actively looking at moving sales
and marketing beyond the top metropolitan and Tier I cities.
During the year, the distribution network for the business
was expanded from around 100 locations to 120 locations.
Most of this expansion was in Tier II cities through third party
distribution agents. While this will continue, the Company is
also looking at increasing its footprint in international markets
with sizeable Indian population.
Third, the Company launched SellSmart, a technology
enabled software solution, across its entire sales and
distribution network. This solution provides the sales person
an interactive presentation on a touchscreen device to deliver
potential customer with a compelling all-round view of the
product. This has been very successful and improved the
conversion rate of potential leads to members.
Finally, with the increase in satisfaction levels, the Company
is looking at innovative ways to reach out to its members and
seek their participation in promoting the product. New referral
programme is being introduce for our members and is also
offering to them opportunity to upgrade their membership level.
These measures implemented during the year have been
successful in countering immediate challenges faced by the
Company due to subdued demand and restrictions placed
by TRAI on tele-marketing. But, greater benets will accrue in
2014-15 as these measures remain active for the full nancial
year and the market situation improves.
During the year, the Company unveiled a fresh new brand
identity for its agship brand Club Mahindra, which is
inspired by the thought make every moment magical. The
thought reects the ethos of the organisation which strives to
create magical experiences for the entire family during their
holidays.
Vacation Ownership
Club Mahindra is the Companys agship product in the
business, which entitles a weeks holiday every year for a
period of 10 or 25 years. Mahindra Holidays has recorded
signicant growth in the membership of its vacation ownership
business over the last ve years. During 2013-14, the Company
added around twelve thousand members and taking the total
membership to around 1.70 lakh as on 31
st
March, 2014.
The Company also markets a corporate product called Club
Mahindra Fundays, which allows enrolled organisations to
offer holiday entitlements to its employees or group vacations
either as a part of their reward and recognition programme
or as an employment perquisite or compensation. During the
year, there was a substantial increase in the number of room
nights utilised under the product. The overall performance of
the product in terms of new business was also satisfactory.
Travel Business
Club Mahindra Travel is the travel integration service for Club
Mahindra members to take care of their entire range of travel
needs. The business also provides a complete range of travel
services including Meetings, Incentives, Conferences, and
Exhibitions (MICE) for corporate clients.
Properties and New Projects
Mahindra Holidays currently has a pan-India presence through
its extensive network of resorts across a cross-section of
472
destinations including hill stations, beaches, backwaters,
wildlifes, forts and heritages. It is also present in international
destinations such as Bangkok, Innsbruck (Austria), Kuala
Lumpur and Dubai.
Building inventory and adding new destinations has been a key
strategic objective for the Company. With signicant addition
to room inventory during the last couple of years, the focus
during 2013-14 was on greeneld developments, which allows
the Company to offer the complete Club Mahindra experience
to its members.
Development activity is currently in progress for greeneld
projects in Goa, Kanha (Madhya Pradesh) and Naldhera
(Shimla) and expansion in our project at Virajpet (Coorg)
and Munnar (Kerala). These will add around 500 units to the
inventory in the next couple of years.
Apart from this, the Company has land bank at several
destinations. Efforts are also on to expand this further. Other
than this, some of our existing resorts also have additional land
that can be utilised for further expansion of these properties like
Ashtamudi and Munnar. This will provide the exibility to build
destinations and add customised inventory on an ongoing basis.
At the end of 2013-14, Mahindra Holidays had an inventory
of around 2,400 units and offered its members a choice of 40
resorts something that no other company in India currently
offers to its customers.
Resort Operations
Efcient resort operations are central to delivering a holiday
experience that meets the expectations of our members. This
encompasses three key areas: infrastructure and facilities,
holiday activities, and food and beverage (F&B).
Mahindra Holidays continued its initiative on institutionalising
post-holiday feedback as the chief mechanism to measure
its success in delivering quality holiday experience to its
customers and addressing their concerns. We are happy to
report that the feedback scores have consistently improved
during the year. Efforts are in progress to further improve the
coverage of the feedback, both in terms of processes and
resort locations.
As a Company marketing long duration products and
services to its members, Mahindra Holidays ensures that
quality of infrastructure and facilities are well maintained and
upgraded regularly to meet customer expectations. Signicant
investments were made to upgrade around 300 rooms across
multiple locations.
The Company has a unique distinction of having 15 RCI
Gold Crown resorts in India, which bears testimony to
the high standards of resort facilities, amenities and
services that our resorts offer. Adding up to the RCI
awards, we have achieved 15 Trip Advisor awards, 17
Holiday IQ awards during the year.
Holiday activities continues to be an important focus area.
Depending on the terrain and type of holiday a destination
offers, these activities are built around the themes of learning,
adventure, relaxation and local experience. The resorts are
being continuously upgraded with infrastructure as well as
activities and experts who help members get the most out of
the holiday. Recently, we have inducted 30 young smart Fun
Rovers across the resorts after a 60 days intensive skill training
in performing arts and other skills. Adventure activities such as
Rock climbing, Zip line, Burma Bridge have been introduced
in at least three of our resorts. A minimum of four pre-decided
special events are conducted per month at our resorts on
a regular basis. These efforts have resulted in a continuous
growth in the PHF Scores and revenues from holiday activities.
In the area of food and beverage (F&B), efforts are continuously
made to increase the variety and make the dining experience
more exciting. This included introduction of a new concept
called Outrageous Food during the year. Activities are also
regularly carried out to showcase local cuisine, celebrate
festivals and events. Besides, new restaurants are being
planned for larger resorts and the concept of Gourmet
Express is being rolled-out to all resorts. The Company has
institutionalised internal training programmes to build the
capabilities necessary to implement these changes.
Mahindra Holidays resorts in Dharamsala, Kumbhalgarh,
Puducherry, Munnar and Ooty received Branch Hygiene
Code certication during the year. This certication is
awarded upon meeting prescribed standards of hygiene
in all activities related to F&B from procurement of raw
materials to preparation and serving it to the customers.
Member Relations
As a company that markets long-duration discretionary product,
member satisfaction is the key to Mahindra Holidays success.
Responsive and effective member relations are critical to meet
the Companys objectives in this regard. During 2013-14, the
Company witnessed signicant improvement in the overall
member satisfaction levels. Deployment of technology and
improvement in processes have played a dening role in this
progress. Some of the key achievements are discussed below.
Online Services: The percentage of online bookings
increased to 45 per cent in 2013-14, from 29 per cent
in the previous year. During the year, the Company
upgraded its website, which now offers almost all
facilities available at the Companys call centre. These
have not only increased the transparency, but also
increased the efciency of booking process contributing
to a superior member experience.
Getting Members to Holiday: This has been an
important focus area for the Company, and was achieved
through proactive campaigns and follow-up using voice
calls, targeted email and SMS contact. During 2013-
14, approximately 13,000 additional members availed a
holiday through these campaigns and follow ups. Further,
approximately 50 per cent of the active but the non-
holidayed member base availed of their holidays due to
473
these efforts. Overall, there was a 17 per cent increase
in the number of unique members availing a holiday
over the previous year. As a result, while the effective
inventory went up by 18 per cent, the total number of
rooms occupied went up by 22 per cent. Occupancy
rate increased by 2 percentage points to 83 per cent
in 2013-14.
Choice of Holiday: Another measure of success is the
conversion rate of holidays once a member displays
intent at any of the Companys contact points. During
the year, 90 per cent of members who demanded a
holiday ended up holidaying with us at least once, up
from 85 per cent in the previous year. Besides, regular
sample checks reveal that 73 per cent of members got
their rst choice of holiday. This is signicant given the
wide choice of resorts and dates that is available to the
members and augurs well for the long-term satisfaction of
our members.
New member on-boarding: Another area where the
Company achieved signicant success was new member
on-boarding. Currently, over 94 per cent of membership
kits are dispatched within 10 days of registration. Also,
the Company reaches out proactively to help new
members book their rst holidays.
As mentioned earlier, an increased focus of the Company to
listen and understand member feedback and their concerns
has been instrumental in realising these improvements. During
2013-14, there has been a sizeable increase in loyalty scores
based on feedback received through both the Companys
internal feedback generation mechanisms as well as external
surveys. Overall member complaints, especially those related
to reservations, have come down sharply over the year.
Human Resources (HR)
Mahindra Holidays is a pioneer in the vacation ownership
industry in India. Given the highly specialised nature of the
business and the large number of locations where we operate,
attracting and nurturing the right people is at the core of the
Companys strategy for success and growth. Accordingly, the
HR function at Mahindra Holidays is organised into three key
areas: customer acquisition, resort operations and corporate.
During the year, the Company successfully inducted people to
meet the needs of the growing business both from outside as
well as through talent management and capability development
initiatives aimed at development of existing employees. The
key developments are discussed below.
Standardising the customer acquisition process is a key
area of focus for the Company. In the previous year, it had
established the Club Mahindra One Sales Process which
required all sales personnel to go through an intensive
training and certication programme. During 2013-14, the
Company build on it by extending it to all front line sales and
tele-marketing executives. An intensive training programme
was also implemented during the year to enable the launch
of SellSmart which takes the Company a step further in
its journey of standardising the customer acquisition process.
The coverage of these training programmes is 100 per cent of
eligible executives.
In the area of resort operations, the Company introduced
certication programmes of the prestigious American Hotel
and Lodging Educational Institute (AHLEI) during the year. It
already has institutionalised talent development programmes
such as Club Mahindra Executive Trainee (CMET) programme
for resort operations and Sous Chef Live for executive training
in F&B. These programmes have been extremely successful
and contributed signicantly to the stafng of our new resorts
in the last few years.
On the corporate and organisational development front, the
Company regularly nominates executives to participate in
development programmes and workshops to enhance their
skills. Specic activities and programmes are undertaken to
align the employees with the culture and business goals of the
organisation. In line with this, the Company has institutionalised
a strong employee engagement initiative which encourages
them and recognises their achievements.
Overall employees received an average of 6 man days of
training during the year. Going forward, focus will be on all
increasing the coverage of executive training to cover all
consumer facing roles within the Company. As on 31
st
March,
2014, there were 3,128 people on the rolls of the Company.
Industrial and employee relations remained cordial throughout
the year. Pursuant to the provisions of The Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 [the Act] and Rules framed thereunder,
the Company has aligned its existing Policy to bring it in
line with the provisions of the Act and has taken necessary
steps to ensure compliance with the Act. During the year, two
complaints were received by the Company and the same were
disposed off in line with Policy.
Quality
Mahindra Holidays has adopted the principles of Total Quality
Management (TQM) under the banner of The Mahindra Way
the Mahindra Groups integrated approach to promote
excellence in all spheres of its operations. Through relentless
focus on quality over the last few years, the Company has
successfully institutionalised systems in the three critical
business processes resort operations, customer acquisition
and member relations and is in the process of extending it
to other functions. Some of the key developments during the
year are discussed below.
During the year, participation increased signicantly with
all businesses undertaking process improvement projects
embracing principles of TQM, Kaizen and Daily Work
Management (DWM). In an important development, DWM and
Kaizen trainings are now being conducted by the in-house
business excellence team which has resulted in better clarity
and execution of the improvement projects. During 2013-14,
474
the Company reached a signicant milestone of completing
100 Mahindra Yellow Belt (MYB) projects.
Last year, the Company had established an audit system for
its DWM and MYB projects to assess their implementation.
Accordingly, audits were successfully carried out in 6 resorts
during the year and follow-up actions were initiated where
required. With the implementation of the audit and follow-up
procedures, the Company has successfully established the
plan-do-check-act (PDCA) cycle, which is a critical requirement
for building a quality oriented organisations. Implementation
of the audit systems will be extended to customer acquisition
and member relations in 2014-15.
In a signicant move, standardisation through implementation
of Standard Operating Procedures (SOPs) was extended to
Travel Business and Administration department during the
year. Also, the SOPs for the resort operations were revised to
reect the current best practices and were made available on
the Companys intranet. This was also followed-up with a round
of audit. Similarly, the member relations department added 15
new SOPs in their processes by implementing change control
system in line with the ISO 9000 standard.
Going forward, the focus for the organisation will be to move
towards visual/video SOPs which will enable much more
effective dissemination and training of employees in the business
processes. This has already been initiated for resort operations.
Given the importance of interactions between different functional
areas, the Company is also actively looking to institutionalise
concepts such as cross-functional teams, quality circles and
Failure Mode and Effects Analysis (FEMA) to move forward on
its journey of building a quality and systems driven organisation.
Information Technology (IT)
Mahindra Holidays believes that technology today plays an
active role in providing a competitive edge in the market and
contributes directly to meeting business goals. Over the last
few years, the Company has invested signicant resources
in large-scale upgrading of its IT architecture and is actively
beneting from these investments in all key spheres of its
operations be it customer acquisition, resort operations or
member services.
The Company has a SAP based property management
system and the nance module for its existing resorts. As
a result, the inventory information ows in real-time, which
has signicantly improved the utilisation of assets. Today, all
operating locations and ofces of the Company are connected
to its ERP exchanging real-time information and benetting
from an integrated IT infrastructure. During the year, the
Company implemented a more robust CRM solution called
SIEBEL which has added signicant efciencies to customer
acquisition and member relations processes. It also carried
out a data centre consolidation by moving to a Tier-3 data
centre and established a disaster recovery site.
In the area of customer acquisition, we have already mentioned
the launch of SellSmart. As the solution is linked to the core
IT infrastructure, all information provided by the customers
is seamlessly exchanged through the solution for follow-up
action. Besides, this also enables the Company to monitor the
efcacy of its sales process and at the same time deliver a
consistent experience to our customers. In another initiative,
the Company has revamped its digital leads management
systems, so that all leads generated on the internet are now
responded in less than two working hours.
The Company also upgraded its website during the year,
which now is not only faster, but also offers almost all facilities
available at the Companys call centre. Travel Business of the
Company is now integrated with the Club Mahindra website.
These online features such as managing membership account,
holiday bookings, payments, amendments and utilisation of
vouchers have become very popular with the members. The
impact of these changes on member satisfaction has already
been presented in the section on Member Relations.
As a part of the Mahindra Group, your Company has been
at the forefront of taking afrmative action as a responsible
organisation that seeks to contribute to the socio-economic well-
being and development of the communities and the ecosystem
that it interacts with in carrying out its business. In recognition
of its efforts, Mahindra Holidays received the Rotary Binani
Zinc CSR Excellence Award for the year 2013-14.
Apart from working with local NGOs and contributing resources
for socially relevant projects, the Company also encourages
community service by its employees by involving them in the
implementation of these CSR activities through its Employee
Social Options Programme. During the year, employees
volunteered 12,725 man hours on CSR initiatives. Some of
these were:
Education: The Company sponsored the education of
1,119 girls through the Nanhi Kali project. In activities
carried across its resort locations, educational material
and amenities were provided to underprivileged students
and schools, training and development programmes
were carried out for self-help groups and youth,
information sessions were carried out in the areas of
career awareness and opportunities, personal grooming,
hygiene, cleanliness and safety.
Environment: Around 36,000 trees were planted during
the year as a part of Mahindra Hariyali a initiative
of Mahidnra Group for tree plantation. Awareness
programmes are regularly carried out to sensitise the local
communities on environmental issues and promoting
green practices. Other regular initiatives included
cleanliness drives on beaches and other ecologically
sensitive areas, and Say No To Plastic campaign all
of which were carried out at several locations.
Health: The Company regularly carries out blood donation
and medical check-up camps, awareness sessions in the
475
areas of health, natural remedies, and HIV/AIDS to benet the
local communities in which it operates. Several such activities
were carried out across most of the Companys resorts.
Sustainability
Sustainable development aims at achieving economic growth
and improvements in well-being while preserving the natural
resources and ecosystem for future generations. As a part of
the Mahindra Group, the Company recognises the importance
of sustainability, and is committed to conserve the ecological
integrity of its locations through responsible business practices,
and by greater accountability and transparency.
Mahindra Holidays initiatives in this sphere are carried out in
line with a ve-year Sustainability Roadmap, which identies
the key areas of focus and parameters that will be tracked
to measure the progress of the Company in its sustainability
journey. Some of the key areas that have been identied for
implementing sustainable practices include conservation of
biodiversity, environment, energy and water as well as sourcing
and community development.
During the year, signicant number of activities were carried
out across resort locations in these areas. These include use
of solar power; environment-friendly, energy and water saving
equipment; timers and motion sensors for lighting of pathways
and common areas; eco-friendly bio-block sewage treatment
plants and organic waste pulveriser for wet garbage disposal.
Awareness drives were conducted for the employees at resorts
about climate change, environment and biodiversity. Training
programmes for segregation of waste were successfully
implemented at several resort locations.
The Company actively participates in the Mahindra Groups
journey for Corporate Sustainability Reporting. The
Sustainability Report of the Group is prepared in accordance
with the internationally accepted framework specied by the
Global Reporting Initiative (GRI). This framework sets out the
principles and indicators that should be used to measure
and report economic, environmental and social performance.
During 2013-14, several large resorts of the Company
participated in sustainability reporting of the Group.
Financials
Table 1: Abridged Prot and Loss Statement
(Rs. Crore)
2013-14 2012-13
Operating Income 777.52 701.55
Total Income 798.93 715.94
Operating & Other Expenses 618.51 534.30
Financial Expenses 0.97 1.60
Total Expenditure 657.51 557.09
PBDIT 180.42 181.64
(Rs. Crore)
2013-14 2012-13
PBDT 179.45 180.04
PBIT 142.39 160.45
PBT 141.42 158.85
Tax 46.89 51.87
PAT 94.53 106.98
Diluted EPS (Rs.) 10.75 12.75
Table 1 presents the abridged prot and loss statement of the
Company as a standalone entity. Here are the key highlights
of the nancial performance.
Total income, which includes both operating and other
income, grew at 12 per cent from Rs.716 crore in 2012-
13 to Rs.799 crore in 2013-14. In spite of a decline in
the number of net member addition during 2013-14 as
compared to 2012-13, the growth is primarily on account
of increase in annuity based income and increase in F&B
revenue. The growth in income is partially compensated
by decrease in securitisation income from Rs.11.61 crore
in 2012-13 to Rs 3.77 crore in 2013-14
Operating and other expenses grew at 16 per cent from
Rs.534 crore in 2012-13 to Rs.619 crore in 2013-14.
The key elements of this increase are resorts operation
cost which in line with increase in revenue from resorts,
upgrading of current resorts and marketing expenses on
account of launch of new brand identity.
Depreciation grew by Rs 17 crore from Rs 21.19 crore
in 2012-13 to Rs 38.03 crore in 2013-14. The increase
is in primarily on account of SAP implementation and
completion of projects at various locations.
Prot after tax (PAT) declined from Rs.107 crore in 2012-
13 to Rs.95 crore in 2013-14. Diluted EPS was Rs.10.75 in
2013-14, down from Rs.12.75 in the previous year.
Mahindra Holidays continues to be a zero long-term debt
company. The liquidity situation of the Company remained
comfortable during the year.
Internal Controls
The Company has an adequate internal control system,
commensurate with the size and nature of its business. The
system is supported by documented policies, guidelines and
procedures to monitor business and operational performance
which are aimed at ensuring business integrity and promoting
operational efciency.
The Company has an internal audit function. However, given
the size of its operations in terms of number of resort locations
and nature of its business, it also uses independent audit rms
to conduct periodic internal audits in line with an audit plan
that is drawn at the beginning of the year. This audit plan is
approved by the Audit Committee and the Board of Directors.
The scope of the exercise includes ensuring adequacy of
476
internal control systems, adherence to management policies
and compliance with the laws and regulations of the country.
Internal auditors also report on the implementation of their
recommendations.
The Company has migrated to a new ERP and as the ERP
system stabilises, appropriate controls are being embedded
in processes and systems, to reduce the need and reliance
for compensating manual controls. Concurrently, all existing
controls (manual/system) are being comprehensively reviewed
to further strengthen controls over nancial reporting.
Reports of the internal auditors are placed every quarter before
the Audit Committee of the Board of Directors, which reviews
the adequacy and effectiveness of the internal control systems
and suggests improvements for strengthening them.
Threats, Risks and Concerns
Mahindra Holidays has a risk management framework in place
for identication of risks, assessment of their nature, severity
and potential impact, and measures to mitigate them. This
framework has established mechanisms for adequate and
timely reporting and monitoring. Risks are reviewed periodically
and updated to reect the business environment and change
in the size and scope of the Companys operations.
Macroeconomic Risks
The macroeconomic and policy environment in India continues
to be subdued. The tight monetary policy followed by the
RBI to check high ination has kept interest rates high and
affected Indias growth prospects. These factor have created
a negative consumer sentiment, especially when it comes to
discretionary spend such as holidays.
The Company recognises these risks and has initiated
measures to minimise their impact. This includes focusing
on customer acquisition and experience and expanding the
addressable market base. Other initiatives include renewed
focus on vacation ownership product for corporate clients.
Operational Risks
Operational risks mainly relate to meeting customer
expectations in terms of quality of service and maintaining
a balance between the inventory of resorts and growth of
customers. These assume signicance given the long service
duration of the key products. As there are multiple choices, there
could be occasion where the rst choice of holiday requested
by the customers may not be available. The Company may
not be able to make available the choice of location / dates as
desired by customers on every occasion, which could result
in dissatisfaction. Another operational risk is in the ability to
consistently attract, retain and motivate managerial talent and
other skilled personnel, especially in a high growth industry
with unique characteristics. Further, some of the Companys
resorts are located in remote areas and during any natural
calamities situations like earthquake, ood, etc may affect the
accessibility of the resort to the members and also affect the
online connectivity with the resorts.
The Company has invested signicant resources in systems and
processes to ensure quality of service and overall experience
of the customers to mitigate these risks. As noted earlier, there
has been a consistent improvement across all parameters that
we track for customer satisfaction. Transparent and automated
booking process helps in reducing the level of customer
dissatisfaction. Regarding room inventory, the Company will
continue to be judicious in the use of different options
fresh developments, expansions and leases to meet the
expectation of our customers and at the same time maintain
a balance between the demand and supply. As far as talent
management and retention is concerned, the management
believes that its human resource practices enhance employee
engagement and satisfaction to mitigate these risks.
Financial Risks
The Companys business involves signicant investments in
building resorts for its operations. These expose it to risks in
terms of timely and adequate availability of funds at competitive
rates to nance its growth. Besides, the Company offers its
customers schemes to nance the purchase of the vacation
ownership and similar products, which exposes it to credit
risks. Another nancial risk that the Company is exposed to
is potential non-payment or delayed payment of membership
instalments / Annual Subscription Fee by members resulting in
higher outstanding receivables.
Currently, Mahindra Holidays has a strong and stable capital
structure to raise capital for further expansion, if necessary.
The Company undertakes comprehensive assessment of the
prole of its customers and carefully monitors its exposure
to credit risk. The Company is currently carrying out a
comprehensive review of the payment and overdue collection
process to streamline for better efciency. This will aid the
management to form an early informed judgement regarding
the reasonableness or otherwise of ultimate collection of its
receivables and take suitable action.
Regulatory and Legal Risks
Mahindra Holidays is exposed to regulatory and legal risks.
These include cumbersome processes and risks relating to
land acquisition, conversion of land for commercial usage
and development of properties, environmental clearances and
activities related to development of new resorts. There are also
other regulatory and legal risks pertaining to tax proceedings,
legal proceedings on properties, customer complaints, non-
compliance of regulations including environmental regulations
and those pertaining to the hospitality sector.
The Company has systems and controls in place to mitigate
these risks and minimise instances of non-compliance.
Outlook
Even as the global economic environment showed signs of
revival during the year, the situation in India continued to be
subdued. The tight monetary policy followed by the RBI has
kept interest rates high which has hurt both investment and
477
demand.
As far as Mahindra Holidays is concerned, it has been directly
affected by the decline in this macroeconomic situation which
resulted in lower consumer spending. Policy decisions such
as changes TRAI guidelines warranted immediate changes to
the customer acquisition processes, which also affected the
performance in the interim. In this environment, the Company has
performed creditably. Our inventory position is comfortable and
the greeneld investments are on track. Our member satisfaction
levels both for transactions and holiday experience have
improved consistently over the last couple of years.
Even as the current market situation poses challenges, we
believe that there is signicant room for growth. The focus, going
forward, will be to capitalise on the opportunity leveraging the
scalability that the Company has achieved through its investments
in technology and processes. In line with this, the Company has
taken concrete steps to build alternate channels and tap newer
markets. Therefore, the outlook for 2013-14 is optimistic.
Cautionary Statement
Certain statements in the Management Discussion and Analysis
describing the Companys 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 Companys operations include poor macroeconomic
growth and consumer condence, inability to add resorts and
increase the inventory of room, cyclical demand and pricing
in the Companys principal markets, changes in tastes and
preferences, government regulations, tax regimes, economic
development within India and other incidental factors.
478
CORPORATE GOVERNANCE REPORT
Corporate Governance Philosophy
Mahindra Holidays & Resorts India Limited (Mahindra
Holidays or the Company) is committed to sound corporate
governance practices. This has been integral to the way the
Company conducts its business since its inception. Mahindra
Holidays corporate governance philosophy is built around the
values of transparency, professionalism and accountability.
Accordingly, the Company has put in place appropriate
systems and procedures for reporting, monitoring and control,
which ensure a balance of accountability between the Directors
and the Management.
In India, corporate governance standards for listed companies
are regulated by the Securities and Exchange Board of India
(SEBI) through Clause 49 of the Listing Agreement of the
Stock Exchanges. The Company remains fully compliant with
it as on 31
st
March, 2014. This chapter reports the Companys
compliance with the Code of Corporate Governance as
prescribed under the Clause 49 of Listing Agreement.
Board of Directors
The Board appointed Mr. Sanjeev Aga as an Additional Director
on the Board of the Company with effect from 18
th
April, 2013
and subsequently his appointment was approved by the
shareholders at their meeting held on 29
th
July, 2013. He is
a Non-Executive Independent Director. Mr. Rajiv Sawhney,
Managing Director & CEO, resigned from the services of the
Company with effect from the closure of business hour on
31
st
March, 2014. In view of the resignation, your Company
would be required to appoint Managing Director or Chief
Executive Ofcer or Manager within the period as specied
under the Companies Act, 2013 (2013 Act).The Company
is in the process of complying with the requirements of the
provisions of the 2013 Act.
The composition of the Board is in conformity with
Clause 49 of the Listing Agreement. The Chairman of the
Board is a Non-Executive Director and half of the Board
comprises Independent Directors. During the year ended
31
st
March, 2014, the Management of the Company was
headed by the Managing Director & CEO who operated under
the supervision and control of the Board. The Board reviews
and approves strategy and oversees the actions and results
of management to ensure that the long-term objectives of
enhancing stakeholders values are met.
The Non-Executive Independent Directors have the
requisite qualications and experience in general corporate
management, nance, hospitality, telecom, nancial services,
and other allied elds which enable them to contribute
effectively to the Company in their capacity as Directors, while
participating in its decision making process.
Mr. A K Nanda, Non-Executive Non-Independent Director and
Chairman of the Company, is currently a Non-Executive Non-
Independent Director of Mahindra & Mahindra Limited (M&M),
the holding company. Mr. Uday Y Phadke, Non-Executive
Director of the Company has been in whole-time employment
of the holding company, Mahindra & Mahindra Limited and is
currently Principal Advisor (Finance) of the holding company and
draws remuneration from it. Mr. Vineet Nayyar, Non-Executive
Director of the Company is in the whole-time employment of an
Associate company of your holding company, Tech Mahindra
Limited and draws remuneration from it.
Apart from the above and apart from the reimbursement
of expenses incurred in discharge of their duties and the
remuneration that the Independent Directors and Managing
Director & CEO would be entitled to under the Companies
Act, 2013 (erstwhile Companies Act, 1956), none of the
Directors have any other material pecuniary relationships or
transactions with the Company, its Promoters, its Directors, its
Senior Management or its holding company, its subsidiaries
and associate companies which in their judgement would
affect their independence except as referred to in Related
Party Transaction of this report. None of the Directors of the
Company are inter se related to each other.
Board conrming that there are no material, nancial and /
or commercial transactions between them and the Company
which could have potential conict of interest with the Company
at large.
Mr. Rajiv Sawhney, Managing Director & CEO, resigned from
the Directorship of the Company with effect from the closure
of business hours on 31
st
March, 2014. As on 31
st
March,
2014, the Board comprised of seven Directors. The names
and categories of Directors, the number of Directorships and
Committee positions held by them in companies as, at the end
of the year under review, 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 across all the companies
in which they are Directors.
As on 31
st
March, 2014*
Directors Category Committee
Memberships^
Committee
Chairmanships^
Directorships#
Mr. A K
Nanda
Non-
Executive
Chairman
7 4 12
Mr. Rajiv
Sawhney**
Managing
Director &
CEO
1 Nil 2
Mr. Uday
Y Phadke
Non-
Executive
Director
8 Nil 7
Mr. Vineet
Nayyar
Non-
Executive
Director
1 Nil 7
Mr. Cyrus
J Guzder
Independent
Director
2 Nil 3
Mr. Rohit
Khattar
Independent
Director
2 Nil 5
Mr. Sridar
Iyengar
Independent
Director
4 4 5
Mr. Sanjeev
Aga
Independent
Director
4 1 6
479
* Excludes private limited companies, foreign companies and
companies registered under Section 8 of the Companies Act,
2013 (erstwhile Section 25 of the Companies Act, 1956).
^ Committees considered are Audit Committee and Shareholders/
Investors Grievance Committee (Stakeholders Relationship
Committee), including that of Mahindra Holidays & Resorts
India Limited.
# Excludes Alternate Directorships but includes Additional
Directorships and Directorship in Mahindra Holidays & Resorts
India Limited.
** Resigned with effect from the closure of business hours on
31
st
March, 2014.
Board Meetings and Attendance
Seven Board Meetings were held during the nancial year
1
st
April, 2013 to 31
st
March, 2014 on: 24
th
April, 2013, 29
th
July,
2013, 17
th
September, 2013, 29
th
October, 2013, 13
th
November,
2013, 3
rd
January, 2014, and 29
th
January, 2014. The gap
between two Meetings did not exceed four months. These
Meetings were well attended. The Seventeenth Annual General
Meeting (AGM) of the Company was held on 29
th
July, 2013.
The Chairman of the Audit Committee was present at the AGM.
Directors Number of Board
Meetings
Attendance at
the last AGM
Held Attended
Mr. A K Nanda 7 7 Yes
Mr. Rajiv Sawhney # 7 7 Yes
Mr. Uday Y Phadke 7 7 Yes
Mr. Vineet Nayyar* 7 3 No
Mr. Cyrus J Guzder 7 6 Yes
Mr. Rohit Khattar 7 5 No
Mr. Sanjeev Aga 7 7 Yes
Mr. Sridar Iyengar 7 5 Yes
* In addition to attending three Board Meetings Mr. Nayyar
participated in two Board Meeting through a conference call.
# Resigned from the services of the Company from the closure of
the Business hours on 31
st
March, 2014.
Board Procedure
A detailed agenda is sent to each Director in advance of Board
and Committee Meetings. To enable the Board to discharge
its responsibilities effectively, the Managing Director & CEO
apprises the Board at every meeting of the overall performance
of the Company. A detailed functional report is also placed at
Board Meetings.
The Board 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, if any. The Board also
reviews major legal issues, minutes of the Board Meetings
of Companys unlisted subsidiary companies, signicant
transactions and arrangements entered into by the unlisted
subsidiary companies, adoption of nancial results, transactions
pertaining to purchase or disposal of properties, 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 ofcers just below
the Board level, including the Chief Financial Ofcer, Company
Secretary and the Compliance Ofcer.
Directors seeking Re-Appointment/Appointment
Mr. A K Nanda, Mr. Rohit Khattar and Mr. Sridar Iyengar,
Directors, retire by rotation at the forthcoming Annual General
Meeting. Mr. Nanda being eligible, has offered himself for
re-appointment. Mr. Khattar and Mr. Iyengar being eligible
and seeking re-appointment, are proposed to be appointed
as Independent Directors, not liable to retire by rotation for a
period of ve consecutive years.
Further, Mr. Cyrus J Guzder and Mr. Sanjeev Aga, being
Independent Directors, whose period of ofce is liable to
determination by retirement of directors by rotation under the
erstwhile applicable provisions of the Companies Act, 1956 are
proposed to be appointed as Independent Directors, not liable
to retire by rotation, for a term of upto 5 years from the date
of the Annual General Meeting in terms of the provisions of
Brief resumes of Directors seeking re-appointment/appointment
are given below.
Mr. A K Nanda
Mr. A K Nanda is Non Executive Non Independent Chairman of
the Company. He holds a degree in Law from the University of
Calcutta and is a fellow member of the Institute of Chartered
Accountants of India (FCA) and the Institute of Company
Secretaries of India (FCS). He has also participated in a Senior
Executive Program at the London Business School.
He joined the Board of holding company in 1992. He resigned as
Executive Director in 2010 to focus on the social sector and was
immediately reappointed as non-executive director on the Board
of holding company. The Founder, Director, and Chairman of
Mahindra Holidays & Resorts India Limited (MHRIL), Mr. Nanda
has contributed around 40 years to Mahindra Group in a
series of key positions in Compliance, Corporate Governance,
Investments, Strategic Planning, Corporate Communications,
and identifying new business opportunities.
Mr. Nanda is also on the Board of various other Companies. He
is also on the Advisory Boards of Advent India and TechnoServe
India, and a Trustee of Integrity Action, U.K., Helpage India,
and The Bombay City Policy Research Foundation.
Mr. Nanda is also Chairman of the Confederation of Indian
Industry (CII) Western Region, Chairman Emeritus of the
Indo-French Chamber of Commerce, member of the governing
Boards of the council of EU Chambers of Commerce in India
and Bombay First. He was the Chairman of the CII National
Committee on Water from April 2007 to March 2009.
Mr. Nandas outstanding career achievements have been
recognized with several awards, including Chevalier de la Legion
dHonneur from President Sarkozy of the French Republic,
Real Estate Person of the Year from GIREM Leadership Awards
(Triple Tree) in India, Business Achiever AwardCorporate
from the Institute of Chartered Accountants of India in 2009,
and the 2010 Golden Star Lifetime Achievement Award for his
contribution to the Hospitality Industry and the Service Sector.
480
Mr. A K Nanda is a member of the following Board Committees:
Name of the Company Names of the Committee Position held
Mahindra & Mahindra
Limited
Share Transfer and Shareholders/
Investors Grievance Committee
Chairman
Corporate Social Responsibility
Committee
Member
Loans and Investment Committee Member
Mahindra Holidays &
Resorts India Limited
Inventory Approval Committee Chairman
Loans and Investment Committee Chairman
Remuneration Committee Member
Stakeholders Relationship
Committee (earlier known as
Share Allotment/Transfer cum
Investor Grievance committee)
Chairman
Committee
Chairman
Strategy and Review Committee Chairman
Company Limited
Mahindra Lifespace
Developers Limited
Stakeholders Relationship
Investors and Share Holders
Chairman
Loans and Investment Committee Chairman
Nomination and Remuneration
Remuneration Committee)
Member
Share Allotment Committee Member
Committee for Residential
Projects in Joint Venture
Member
Committee for Large Format
Development
Member
Committee
Member
Qualied Institutions Placement
Committee
Member
Mahindra Infrastructure
Developers Ltd.
Audit Committee Member
Mahindra World City
(Jaipur) Limited
Capital Issue committee Member
Remuneration Committee Chairman
Mahindra Holding
Limited
Audit Committee Chairman
Mahindra World City
Developers Limited
Mahindra Consulting
Engineers Limited
Mumbai Mantra Media
Limited
Mr. A K Nanda holds 594,630 Equity Shares in the Company.
Mr. Rohit Khattar
Mr. Rohit Khattar is a Non Executive Independent Director on
the Board of the Company. He graduated in 1985 from the
School of Hotel, Restaurant and Institutional Management,
Michigan State University, U.S.A. He is the founder, Chairman
and Managing Director of Old World Hospitality Private Limited
which operates performing arts and convention centers such
as Habitat World, India Habitat Centre and Epicenter, Gurgaon,
hotels and restaurants including those in London. He is also
Chairman of Mumbai Mantra Media Limited, a Mahindra group
company. He has over 23 years experience in the hospitality
industry.
Mr. Khattar was recently featured amongst The Big 10 of the
F&B industry and amongst the 99 superstars who changed our
lives (across India) by TimeOut in 2013. He was honored by the
IFCA Award of Excellence by the Indian Federation of Culinary
Associations in appreciation of his outstanding contribution to
the development of the culinary profession and society.
Mr. Rohit Khattar is a Member of the following Board
Committees:
Name of the
Company
Names of the Committee Position held
Mahindra Holidays &
Nomination and
Remuneration Committee
(earlier known as
Remuneration
Committee)
Member
Strategy and Review
Committee
Member
Mumbai Mantra Media Audit Committee Member
Mr. Rohit Khattar holds 26,700 Equity Shares in the Company.
Mr. Sridar Iyengar
Mr. Sridar Iyengar is a Non Executive Independent Director on
the Board of the Company. Mr. Iyengar graduated with B.Com
(Hons) from the University of Calcutta and is a Fellow of the
Institute of Chartered Accountants in England and Wales. He
is associated with Bessemer Venture Partners and a board
member of various companies. Mr. Iyengar was the Partner in
charge of KPMGs Emerging Business Practice. He has held a
number of leadership roles within KPMGs global organisation
particularly in setting up and growing new practices. He has
the distinction of having worked as a partner in all three of
KPMGs regions Europe, America and Asia Pacic as well as
KPMGs disciplines assurance, tax consulting and nancial
advisory services. Mr. Iyengar served as Chairman and Chief
Executive Ofcer of KPMGs operations in India between
1997 and 2000 and during that period was a member of the
Executive Board of KPMGs Asia Pacic practice.
Prior to that, he headed the International Services practice
in the West Coast. On his return from India in 2000, he was
asked to lead KPMGs effort on delivering audit and advisory
services to early stage companies. He served as a member of
the Audit Strategy group of KPMG LLP.
Mr. Sridar Iyengar is a Member of the following Board
Committees:
481
Name of the
Company
(Chairman/
Member)
ICICI Venture
Funds Management
Company Limited
Compensation and
Committee
Member
Dr. Reddys
Laboratories Limited
Risk Committee Member
Mahindra Holidays &
Rediff.com India
Limited
CL Educare Limited Audit Committee Chairman
Cleartrip Private
Limited
Compensation Committee Chairman
Details of Committee Membership in Foreign Companies not
included.
Mr. Sridar Iyengar does not hold any Equity Shares in the
Company.
Mr. Cyrus Guzder
Mr. Cyrus Guzder is a Non-Executive Independent Director
on the Board. He has an Honours Degree and a Masters
Degree from Trinity College, University of Cambridge. He is the
Chairman and Managing Director of AFL Private Limited. He
also serves as a Director on the Board of BP (India) Limited,
the Great Eastern Shipping Company Limited and The Indian
Institute Human Settlements. Mr. Guzder has also served on
the Boards of Air India Limited, Tata Infomedia Limited, Tata
Honeywell Limited and Alfa Laval India Limited.
He has held leadership position of CIIs National Council of
Civil Aviation and CIIs National Committee on Logistics and
also served on the Local Advisory Board of Barclays Bank,
India and the Board of Governors of Reserve Bank of Indias
Banking Codes and Standard Board of India. He represents
the Republic of Ireland as Honorary Counsel General for
Mumbai and Western India.
Mr. Cyrus Guzder is a Member of the following Board
Committees:
Name of the
Company
Names of the Committee Position Held
The Great Eastern
Shipping Limited
Mahindra Holidays &
Resorts Limited
Inventory Approval
Committee
Member
Corporate Social
Responsibility Committee
Member
Strategy and Review
Committee
Member
Mr. Cyrus Guzder holds 26,700 Equity Shares in the Company.
Mr. Sanjeev Aga
Mr. Sanjeev Aga is a Non Executive Independent Director on
the Board of the Company. Mr. Aga held senior positions in
Asian Paints, Chellarams (Nigeria) and Jenson & Nicholson.
He had also worked with Blow Plast Mattel Toys in 1990, and
in January 1993 was appointed Managing Director of Blow
Plast with multi-business responsibility including the agship
VIP Luggage business.
In November 1998, he was appointed CEO of the telecom JV,
Birla AT&T. He led the company through a period of fast-paced
change, through expansions, mergers and acquisitions to be
CEO of Birla Tata AT&T, which was renamed Idea Cellular.
In July 2002, Aga left Idea to be with the Aditya Birla Group,
where from May 2005 until October 2006, he was Managing
Director of Aditya Birla Nuvo, a conglomerate with interests
spanning diverse group businesses.
Mr. Aga now engages in advisory and consultant roles for
corporates and not-for-prot organizations. Mr. Aga is an
Honours graduate in Physics from St. Stephens College,
Delhi (1971) and a post graduate from the Indian Institute of
Management, Kolkata (1973).
Name of the
Company
(Chairman/
Member)
Idea Cellular Limited Finance Committee Member
Shareholder Grievance
Committee
Member
Securities Allotment
Committee
Member
Subex Limited Audit Committee Member
Investor Grievance
Committee
Chairman
ING Vysya Bank Customer Service
Committee
Member
Corporate Service
Committee
Member
Committee
Member
IT Strategy Committee Member
Mahindra Holidays &
Strategy and Review
Committee
Member
482
Remuneration to Directors
Remuneration Policy
While deciding on the remuneration for Directors, the Board and
the Remuneration Committee consider the performance of the
Company, the current trends in the industry, the qualications of
the appointee(s), their experience, past performance and other
relevant factors. The Board and the Remuneration Committee
regularly tracks 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
Companys remuneration policies.
Remuneration Paid
The Remuneration paid to Non-Executive Directors including
Independent Directors is by way of sitting fees and
reimbursement of expenses incurred in attending the Board
and Committee Meetings. The Non-Executive Directors are
also eligible for commission of up to 1 per cent per annum of
the net prots of the Company. A commission of Rs. 100 lakh
has been provided as payable to the eligible Non-Executive
Directors in the accounts of the year under review.
The remuneration paid to Managing Director & CEO was
xed by the Remuneration Committee which is subsequently
approved by the Board of Directors and Shareholders at a
General Meeting.
During the year under review, the Non-Executive Directors were
paid a commission of Rs. 90 lakh (provided in the accounts
of the year ended 31
st
March, 2013), distributed amongst
themselves as shown in the table below.
Detailed information of Directors remuneration paid during the year 2013-14:
(Rs. lakh)
Name of Directors Category Sitting
Fees
(Note 1)
Commission Salary,
Performance
pay and
Perquisites
Superannuation
and Provident
Fund (Note 2)
Total
Mr. A K Nanda Non-Executive Chairman 2.00 60.00 Nil Nil 62.00
Mr. Rajiv Sawhney*
(Note 3)
Managing Director & CEO Nil Nil 273.91 14.96 288.87
Mr. Uday Y Phadke Non-Executive Nil Nil Nil Nil Nil
Mr. Vineet Nayyar Non-Executive Nil Nil Nil Nil Nil
Mr. Cyrus J Guzder Independent 2.55 10.00 Nil Nil 12.55
Mr. Rohit Khattar Independent 2.10 10.00 Nil Nil 12.10
Mr. Sridar Iyengar Independent 2.10 10.00 Nil Nil 12.10
Mr. Sanjeev Aga Independent 1.45 Nil Nil Nil 1.45
* Resigned from the services of the Company from the closure of the Business hours on 31
st
March, 2014.
Notes:
1. Non-Executive Chairman and Independent Directors are paid sitting fees of Rs. 20,000 per meeting for attending meetings of Board/
Audit Committee and for attending all other Committee Meetings is Rs. 5,000.
2. Aggregate of the Companys contributions to Superannuation Fund and Provident Fund.
3. Salary to Mr. Rajiv Sawhney
a. Salary and Allowances of Rs. 202.52 lakh
b. Perquisites of Rs. 8.00 lakh
c. Performance Pay of Rs. 78.35 lakh
4. The Company has not advanced loans to any Director during the year.
5. The nature of employment of the Managing Director & CEO with the Company was contractual and can be terminated by giving
3 months notice from either party. The contract does not provide for any severance fees.
483
Shares and Convertible Instruments held by Directors
Details of ownership of any shares in the Company by the Directors either on their own or for any other person on a benecial
basis is given below:
Name of Directors Category Shares
held as
on 31
st

March,
2014
No. of
Options
granted
in March,
2007*
(Note 1)
No. of
Options
granted in
November,
2007*
(Note 2)
No. of
Options
granted in
November,
2008*
(Note 3)
No. of
Options
granted in
February,
2012*
(Note 4)
No. of
Options
granted in
February,
2012
(Note 5)
Mr. A K Nanda Non-Executive
Chairman
594,630** Nil 9,510 10,500 Nil Nil
Mr. Rajiv Sawhney# Managing Director
& CEO
Nil Nil Nil Nil 400,000 Nil
Mr. Uday Y Phadke Non-Executive 17,362 Nil 3,170 3,500 Nil Nil
Mr. Vineet Nayyar Non-Executive 26,700 Nil 10,000 Nil Nil Nil
Mr. Cyrus J Guzder Independent 26,700 Nil Nil Nil Nil Nil
Mr. Rohit Khattar Independent 26,700 Nil Nil Nil Nil Nil
Mr. Sridar Iyengar Independent Nil Nil Nil Nil Nil 27,500
Mr. Sanjeev Aga Independent Nil Nil Nil Nil Nil Nil
* All Options vested have been exercised.
** In addition 102,050 Equity Shares are held by relatives of Mr. A K Nanda.
# Resigned with effect from the closure of business hours on 31
st
March, 2014.
Notes:
Date of Grant Vesting Period Exercise Period Exercise Price
1 30
th
March,
2007
Four equal installments in March 2008,
2009, 2010 and 2011
On the date of vesting or at the end of
each year for a period of ve years from
the date of vesting
Rs. 52/-
2 1
st
November,
2007
Four equal installments in November
2008, 2009, 2010 and 2011
the date of vesting
Rs. 52/-
3 1
st
November,
2008
Four equal installments in November
2009, 2010, 2011 and 2012
the date of vesting
Rs. 52/-
4 21
st
February,
2012
Four equal installments in February 2013,
2014, 2015 and 2016
the date of vesting
Rs. 370/-
5 21
st
February,
2012
Four equal installments in February 2013,
2014, 2015 and 2016
the date of vesting
Rs. 323/-
The Options granted in July 2006, March 2007 and November 2007 stand augmented by 5 Bonus options for every 3 existing
options on account of 5:3 Bonus Issue made in November 2007.
484
Committees of the Board
Audit Committee
As on 31
st
March, 2014, the Committee comprised 4 Directors:
Mr. Cyrus J Guzder, Mr. Uday Y Phadke, Mr. Rohit Khattar and
Mr. Sridar Iyengar. Mr. Cyrus J Guzder was the Chairman of the
Committee till 28
th
January, 2014 and Mr. Sridar Iyengar became
Chairman of the Committee thereafter. Mr. Sridar Iyengar,
Mr. Cyrus Guzder and Mr. Rohit Khattar are Independent
Directors. All members of the Committee have good knowledge
of accounting and nancial management. The Company
Secretary is the Secretary to the Committee.
The terms of reference of the Committee are in accordance
with the requirements of Clause 49 of the Listing Agreement
and Section 177 of the Companies Act, 2013 (erstwhile
Section 292A of the Companies Act, 1956) which became
effective on 1st April, 2014. The Audit Committee has been
granted powers as prescribed under Clause 49II(C) of the
Listing Agreement. Generally, all items listed in Clause 49II(D)
are covered in the terms of reference and inter-alia include:
Acting as a link between the statutory and the internal
auditors and the Board of Directors of the Company;
Selecting and establish accounting policies, review reports
of the statutory and the internal auditors and meet them
to discuss their ndings, suggestions and other related
matters;
Reviewing the remuneration payable to the statutory
auditors, their appointment/re-appointment and to
recommend a change of auditors, if felt necessary;
Reviewing nancial 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 arms length basis.
The Committee met six times during the year under review
and the gap between two Meetings did not exceed four
months. During the nancial year 1
st
April, 2013 to 31
st
March,
2014, the Committee met on: 24
th
April, 2013, 15
th
July, 2013,
29
th
July, 2013, 17
th
September, 2013, 29
th
October, 2013 and
29
th
January, 2014. The attendance at the Meetings is as under:
Members Number of Meetings
Held Attended
Mr. Cyrus J Guzder 6 6
Mr. Uday Y Phadke 6 6
Mr. Sridar Iyengar 6 6
Mr. Rohit Khattar 6 5
Invitees to the Meetings of the Audit Committee include
Chairman of the Board, Managing Director & CEO, Statutory
Auditors, Chief Financial Ofcer, Chief Internal Auditor & Head
Corporate Management Services of Mahindra & Mahindra
Limited, the holding company, Internal Auditors and Resident
Internal Auditor.
Stakeholders Relationship Committee (earlier known as
Share Allotment/Transfer cum Investor Grievances
Committee)
In view of the provisions of Companies Act, 2013, it requires
the Company to constitute a Stakeholders Relationship
Committee. The Board of Director, by way of Circular Resolution
dated 27
th
March, 2014, had changed the nomenclature
of Share Allotment/Transfer cum Investor Grievances
Committee to Stakeholders Relationship Committee.
Mr. Rajiv Sawhney, Managing Directors & CEO resigned
from the services of the Company with effect from closure of
business hours on 31
st
March, 2014. Currently, the Companys
Stakeholders Relationship Committee functions under the
Chairmanship of Mr. A K Nanda, Chairman of the Board and
a Non-Executive Director. Mr. Uday Y Phadke is the other
member of the Committee. Mr. Dinesh Shetty, Company
Secretary, is the Compliance Ofcer of the Company.
The Committee meets as and when required, to inter-alia deal
with matters relating to its terms of reference which include
transfer of shares and monitoring redressal of complaints
from shareholders relating to transfers, non-receipt of balance
sheet, non-receipt of dividends declared, etc.
The Committee met four times during the year 1
st
April,
2013 to 31
st
March, 2014 on: 24
th
April, 2013, 29
th
July, 2013,
29
th
th
January, 2014. The attendance at
the Meetings is as under:
Held Attended
Mr. A K Nanda 4 4
Mr. Rajiv Sawhney 4 4
During the year, 10 complaints were received from the
Shareholders, all of which have been attended to/resolved. As
of 31st March, 2014, there are no pending share transfers or
complaints from the shareholders.
Nomination and Remuneration Committee (earlier known
as Remuneration Committee)
In view of the provisions of Companies Act, 2013, it requires
the Company to constitute Nomination and Remuneration
Committee. The Board of Directors, by way of Circular
Resolution dated 27
th
March, 2014, changed the nomenclature of
Remuneration Committee to Nomination and Remuneration
Committee. The Board also, vide the same resolution,
amended the Terms of Reference of the Committee in line with
the provisions of Companies Act, 2013.
The role of the Nomination and Remuneration Committee is
to review market practices and to decide on remuneration
packages applicable to the Managing Director, Directors,
Key Managerial Personnel and Senior Management of the
Company. The broad terms of reference of the Committee
are, to recommend to the Board about the Companys policy
on appointment and remuneration package for Directors, Key
Managerial Personnel and Senior Management and to advise
the Board in framing the remuneration policy of the Company
from time to time, to give directions for administration of the
ESOP scheme and to attend to any other responsibility as may
be entrusted by the Board within the terms of reference.
485
The Committee has formulated the Mahindra Holidays & Resorts
India Limited Employees Stock Option Scheme (MHRIL ESOS)
which is administered and implemented by Mahindra Holidays
& Resorts India Limited Employees Stock Option Trust in
accordance with the directions of the Committee and in terms
of the Deed of Trust. The Committee also attends to such other
matters as may be prescribed from time to time.
The Remuneration Committee consists of Mr. A K Nanda,
Mr. Cyrus J Guzder, Mr. Vineet Nayyar, Mr. Rohit Khattar and
Mr. Sridar Iyengar. Mr. Cyrus J Guzder is the Chairman of the
Committee.
The Committee met twice during the year 1
st
April, 2013 to
31
st
March, 2014 on: 29
th
July, 2013 and 29
th
January, 2014.
The attendance at the Meetings is as under:
Held Attended
Mr. A K Nanda 2 2
Mr. Vineet Nayyar 2 1
Mr. Cyrus J Guzder 2 2
Mr. Rohit Khattar 2 2
Mr. Sridar Iyengar 2 2
Loans & Investment Committee
The Loans & Investment Committee approves the loans,
investment, subscription/acquisition, sale/transfer and all
related aspects of these transactions. The Committee consists
of Mr. A K Nanda, Chairman and Mr. Rajiv Sawhney, Managing
Director & CEO as the members (resigned from the closure of
business hour on 31
st
March, 2014). There were no meetings
of the Committee during 2013-14.
IPP Issue Committee
The IPP Committee formed to oversee all activities and
matters pertaining to Issue of equity Shares by the Company
through an Institutional Placement Programme (IPP) under
SEBI Regulations. Mr. A K Nanda is the Chairman of the
Committee and Mr. Rajiv Sawhney (resigned from the closure
of business hour on 31
st
March, 2014), Mr. Uday Y Phadke
and Mr. Cyrus J Guzder are other Members of the Committee.
The Committee met three times during the year 1
st
April, 2013
to 31
st
March, 2014 on: 6
th
April, 2013, 10
th
April, 2013 and
12
th
April, 2013. The attendance of the Meeting is as under:
Held Attended
Mr. A K Nanda 3 3
Mr. Rajiv Sawhney 3 2
Mr. Cyrus J Guzder 3 Nil
Since, the purpose of the IPP Issue Committee was completed,
the Board dissolved the IPP Issue Committee with effect from
6
th
May, 2014.
Inventory Approval Committee
Inventory Approval Committee was constituted by the Board
for evaluating and approving property acquisition by way of
outright purchase as well as long term lease proposals of the
Company. Mr. A K Nanda, Mr. Rajiv Sawhney (resigned from the
closure of business hours on 31
st
March, 2014) and Mr. Cyrus
J Guzder are the members of the Committee. The Committee
met once during the year 1
st
April, 2013 to 31
st
March, 2014
on: 29
th
January, 2014. All the members attended the meeting.
Strategy and Review Committee:
During the year under review, the Board of Directors at their
meeting held on 13
th
November, 2013 constituted Strategy
and Review Committee of the Board, to evaluate and review
the business plan and make necessary recommendations and
also review the performance of the Company. Mr. A K Nanda,
is the Chairman and Mr. Rajiv Sawhney, Managing Director &
CEO (resigned with effect from the closure of the business hour
on 31
st
March, 2014), Mr. Cyrus J Guzder, Mr. Rohit Khattar and
Mr. Sanjeev Aga are the other members of the Committee.
Committee met once during the year 1
st
April, 2013 to 31
st
March,
2014 on: 19
th
December, 2013. Except Mr. Cyrus J Guzder all
the other members attended the Meeting.
Corporate Social Responsibility Committee:
During the year under review, the Board of Directors vide
Circular Resolution dated 27
th
March, 2014 constituted
Corporate Social Responsibility Committee as required under
the provisions of Companies Act, 2013 (2013 Act), to inter alia
overview the CSR activities of the Company. Mr. A K Nanda, is
the Chairman and Mr. Uday Y Phadke and Mr. Cyrus J Guzder
are the other members of the Committee. The brief terms of
reference of the Committee are as follows:
1. formulate and recommend to the Board, a Corporate
Social Responsibility Policy which shall indicate the
activities to be undertaken by the company as specied
in Schedule VII of the 2013 Act;
2. recommend the amount of expenditure to be incurred on
the activities referred to in clause; and
3. monitor the Corporate Social Responsibility Policy of the
company from time to time.
Committee met once during the year 1
st
April, 2013 to
31
st
March, 2014 on: 28
th
March, 2014. Except Mr. Cyrus J
Guzder all the other members attended the meeting.
Disclosures
Code of Conduct
The Board has laid down two separate Codes of Conduct
(Codes), one for Board Members and other for Senior
Management and Employees of the Company. These Codes
have been posted on the Companys website www.clubmahindra.
com. All Board Members and Senior Management personnel
of the Company have afrmed compliance with these Codes.
In view of vacation of ofce of Managing Director consequent
upon resignation of Mr. Rajiv Sawhney, the Certicate is being
signed by the Chairman and the same is attached at the end
of this report.
CEO/CFO Certication
Upon resignation of Mr. Rajiv Sawhney with effect from the
closure of business hours on 31
st
March, 2014, the ofce of the
Managing Director is vacated. The Company is in the process
of nding a suitable candidate for the aforementioned Ofce.
In view of same, the Chief Financial Ofcer has certied to the
486
Board regarding the nancial statements, and matters related
to internal controls in the prescribed format for the year ended
31
st
March, 2014, as required under Clause 49 V of the Listing
Agreement with the Stock Exchanges.
Risk Management
Your Company has a well-dened risk management framework
in place which is reviewed periodically. This has been
discussed in greater detail in the Management Discussion and
Analysis Chapter of this Annual Report.
Clause 49 denes 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 per cent of the consolidated turnover or net worth
respectively, of the listed holding company and its subsidiaries
in the immediately preceding accounting year.
Under this denition, the Company did not have any material
non-listed Indian subsidiary during the year under review. The
subsidiaries of the Company function independently, with
an adequately empowered Board of Directors and sufcient
resources. The minutes of Board Meetings of subsidiaries of
the Company are placed before the Board of Directors of the
Company.
Related Party Transactions
During the nancial year 2013-14, there were no materially
and its Promoters, Directors or the management, holding
company, subsidiaries or relatives that may have potential
conict with the interests of the Company at large except the
agreement executed between the Company and A K Nanda
HUF (through Mr. A K Nanda as its Karta) and their relatives
for the arrangement of services, consequent to approval
received from Central Government. Further, details of related
party transactions form part of notes to the accounts of the
Annual Report.
Accounting Treatment in Preparation of Financial Statements
The Company has followed the Accounting Standards laid
down by The Institute of Chartered Accountants of India
and The Companies (Accounting Standards) Rules, 2006
in preparation of its nancial statements and the generally
accepted accounting principles in India.
Details of Non-compliance Relating to Capital Markets
The Company has complied with all the requirements of
regulatory authorities with respect to capital markets. There
were no instances of non-compliances by the Company and
no penalties 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 during the year under review.
The Company has instituted a comprehensive Code of
Conduct for Prevention of Insider Trading for its Designated
Employees, in compliance with Securities and Exchange Board
of India (Prohibition of Insider Trading) Regulations, 1992, as
amended from time to time. The Code lays down Guidelines,
through which it advises the designated employees on
procedures to be followed and disclosures to be made, while
dealing with shares of the Company, and cautions them of the
consequences of violations.
Proceeds from Public Issues
The Audit Committee has been monitoring the uses and
applications of funds Raised through Initial Public Offer (IPO)
and Institution Placement Program (IPP) by major category
such as capital expenditure, sales and marketing, working
capital, etc., on a quarterly basis as part of its quarterly
declaration of nancial results. The Company has not utilised
the funds generated out of public issue (IPO and IPP under
Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009, as amended) for
any purpose other than those stated in the offer document/
prospectus, as amended.
During the year under review, the Company has completed
the utilisation of entire fund raised from the IPO towards the
objects of the issue, as amended.
Details of Unclaimed Shares
As per the provisions of Clause 5A of the Listing Agreement,
the Company has a Demat account titled Mahindra Holidays
& Resorts India Limited - Unclaimed Shares Demat Suspense
Account (Demat Suspense Account) for transferring the
unclaimed shares which were allotted pursuant to Initial Public
Offer (IPO) of the Company.
The Company has 9 shareholders with 370 outstanding shares in
the suspense account lying at the year ended 31
st
March, 2014.
The voting rights on these shares shall remain frozen till the
rightful owner of such shares claims the shares. The details as
required to be disclosed in the Annual Report are given below:
Particulars No. of
cases
No. of
shares
Aggregate number of shareholders and
the outstanding shares in the suspense
account lying at the beginning of the
year i.e. 1
st
April, 2013
9 370
Number of shareholders who approached
Issuer/Registrar and Share Transfer Agent
for transfer of shares from suspense
account during the year 2013-14
Nil Nil
Number of shareholders to whom shares
were transferred from suspense account
during the year
Nil Nil
Aggregate number of shareholders and
account lying at the end of the year
i.e. 31
st
March, 2014
9 370
Management Discussion and Analysis Report (MDA) has been
attached as a separate chapter and forms part of this Annual
Report.
487
Compliance with Clause 49
The Company has complied with all the mandatory
requirements of Clause 49 of the Listing Agreement relating to
Corporate Governance.
As regards the non-mandatory requirements, the Company has
set up the Nomination and Remuneration Committee of the
Board of Directors, the details of which have been provided under
the section Committees of the Board. During the year under
review, there is no audit qualication in the Companys nancial
statements. The Company continues to adopt best practices to
ensure that its nancial statements remained unqualied. The
Company has not adopted any other non-mandatory requirement
specied in Annexure 1D of the Clause 49.
General Shareholder Information
Eighteenth Annual General Meeting
Date : 27
th
August, 2014 (Wednesday)
Time : 3.00 PM
Venue : Vani Mahal, Main Hall,
T. Nagar, Chennai 600 017.
Details of Annual General Meetings held during past three
years and Special Resolutions passed
Year Date Time Venue Special
Resolutions
Passed
2011 25
th

July,
2011
3.00
PM
Tapovan Hall,
Chinmaya Heritage Centre,
No. 2, 13
th
Avenue,
Harrington Road, Chetpet,
Chennai 600 031.
1. Remuneration
to Managing
Director &
CEO.
2. Remuneration
by way of
Commission
to Non-
Executive
Directors.
2012 25
th
July,
2012
3.00
PM
Tapovan Hall,
No. 2, 13
th
Avenue,
Chennai 600 031.
Amendment
of Articles of
Association of
the Company.
2013 29
th

July,
2013
3.00
PM
Tapovan Hall,
No. 2, 13
th
Avenue,
Chennai 600 031.
No Special
Resolution was
passed.
Details of Extraordinary General Meeting (EGM) held during
the past three years and Special Resolutions passed
Year Date Time Venue Special Resolutions
Passed
2013 23
rd

February,
2013
3.00
PM
Mahindra Towers,
4
th
Floor, 17/18,
Patullos Road,
Chennai 600 002.
Approval for further
Issue of Shares
under Institutional
Placement
Programme (IPP).
2014 19
th

February,
2014*
3.00
PM
Mahindra Towers,
4
th
Floor, 17/18,
Patullos Road,
Chennai 600 002.
Approval of
the Scheme of
Amalgamation &
Arrangement of
Bell Tower Resorts
Private Limited with
Mahindra Holidays
& Resorts India
Limited and their
shareholders and
creditors.
* Meeting of the Equity Shareholders of the Company pursuant
to the Orders of the Honble High Court of Judicature at Madras
dated 9
th
December, 2013 directing the said meeting to be held.
No Extra Ordinary General Meetings was held during 2011-12.
No Special Resolution was passed through Postal Ballot during
2011-12, 2012-13 and 2013-14.
Dates of Book Closure/Record Date
Dates of book closure for dividend will be from 18
th
August,
2014 to 27
th
August, 2014 both days inclusive.
Dividend Payment Date
Dividend, if declared at the Annual General Meeting will be
paid on or after 28
th
August, 2014 but before 5
th
September, 2014.
Financial Year
st
April to 31
st
March.
Financial Reporting for 2014-15
The First Quarter Results
30
th
June, 2014
By end of July, 2014
The Half Yearly Results
30
th
September, 2014
By end of October, 2014
Third Quarter Results
31
st
December, 2014
By end of January, 2015
Approval of Annual Accounts
31
st
March, 2015
By end of April, 2015
488
Means of Communication
The quarterly, half-yearly and yearly results as required under
Clause 41 of the Listing Agreement are normally published in
Business Standard (English editions) and Makkal Kural (Tamil
edition). These are not sent individually to the Shareholders.
The Companys results and ofcial news releases are displayed
on the Companys website at www.clubmahindra.com.
Presentations are also made to international and national
institutional investors and analysts, which are also put up on
the website of the Company.
Listing on Stock Exchanges
The Equity Shares of the Company are listed on National
Stock Exchange of India Limited (NSE) and BSE Limited
(BSE). The requisite listing fees have been paid in full to the
Stock Exchanges where the Companys shares are listed.
Mahindra Holidays & Resorts India Limiteds (MHRIL)
Stock Exchange Codes
BSE 533088
NSE MHRIL
Demat International Security Identication Number (ISIN)
in NSDL and CDSL for Equity Shares
ISIN: INE998I01010
Stock Performance
BSE and NSE Monthly High/Low and Volumes
National Stock Exchange BSE Limited
High (Rs.) Low (Rs.) Monthly Volume High (Rs.) Low (Rs.) Monthly Volume
April, 2013 269.90 249.05 359,873 280.00 250.00 286,833
May, 2013 266.00 241.35 506,422 264.45 240.75 85,925
June, 2013 251.90 230.00 917,871 252.95 227.40 216,084
July, 2013 297.00 241.15 1,163,735 265.80 242.25 1,413,074
August, 2013 256.90 213.00 635,293 254.30 212.60 163,284
September, 2013 226.70 205.10 6,00,505 234.00 206.00 71,859
October, 2013 227.80 210.15 2,056,865 226.00 210.15 136,721
November, 2013 273.50 219.85 832,116 273.20 221.00 176,674
December, 2013 271.35 236.00 588,416 270.50 236.00 175,579
January, 2014 273.00 229.90 1,019,451 274.35 230.00 297,285
February, 2014 244.00 218.00 269,204 244.00 219.00 43,194
March, 2014 243.90 228.45 783,037 245.00 222.20 545,609
Performance in comparison to BSE Sensex, NSE Nifty and BSE 500 Index
Month MHRILs Closing Price on
NSE on the last trading
day of month (Rs.)
BSE Sensex at the
Close of last trading
day of the month
NSE Nifty at the Close
of last trading day of
the month
BSE 500 Index at the
Close of last trading
day of the month
April, 2013 258.65 19504.18 5930.20 7385.25
May, 2013 247.45 19760.30 5985.95 7441.89
June, 2013 245.50 19395.81 5842.20 7164.06
July, 2013 250.05 19345.70 5742.00 6985.56
August, 2013 215.10 18619.72 5471.80 6673.96
September, 2013 214.50 19379.77 5735.30 7019.96
October, 2013 219.50 21164.52 6299.15 7656.62
November, 2013 250.35 20791.93 6176.10 7598.21
December, 2013 259.55 21170.68 6304.00 7828.34
January, 2014 230.20 20513.85 6089.50 7499.02
February, 2014 238.25 21120.12 6276.95 7709.75
March, 2014 233.65 22368.27 6704.20 8295.26
489
Mahindra Holidays Share Performance versus BSE Sensex
Note: Share price of Mahindra Holidays and BSE Sensex have
been indexed to 100 on 1 April 2013
Mahindra Holidays Share Performance versus NSE NIFTY
Note: Share price of Mahindra Holidays and NSE NIFTY have
Mahindra Holidays Share Performance versus BSE 500
Note: Share price of Mahindra Holidays and BSE 500 have
Share Transfer System
Trading in equity shares of the Company through recognised
Stock Exchanges 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.
The Stakeholders Relationship Committee (earlier known
as Share Allotment/Transfer cum - Investors Grievance
Committee) meets as and when required to consider the other
transfer proposals and attend to Shareholders grievances.
As of 31
st
March, 2014, there are no pending share transfers
pertaining to the year under review.
Distribution of Shareholding as on 31
st
March, 2014
Number of Shares Number
of
Shareholders
Percentage
of
Shareholders
Total
Number of
Shares
Percentage
of
Shareholding
1 to 100 10,775 75.54 417,041 0.47
101 to 500 2,466 17.29 596,397 0.67
501 to 1,000 454 3.18 355,851 0.40
1,001 to 5,000 413 2.90 940,052 1.06
5,001 to 10,000 54 0.38 393,305 0.44
10,001 to 50,000 65 0.46 1,604,843 1.81
50,001 to 100,000 10 0.07 765,821 0.86
100,001 & above 27 0.19 83,707,546 94.29
Total 14,264 100.00 88,780,856 100.00
Shareholding Pattern as on 31
st
March, 2014
Category of Shareholders Total
Holdings
Holdings in
Percentage
Promoters holdings 66,585,642 75.00
Mutual Funds 1,416,346 1.60
Banks, Financial Institutions &
others 46,527 0.05
Foreign Institutional Investors 10,711,451 12.07
Bodies Corporate 2,871,078 3.23
NRIs/OCBs/Foreign Nationals 970,051 1.09
Indian Public 6,179,761 6.96
Total 88,780,856 100.00
As on 31
st
March, 2014, 99.98 per cent of the paid-up Equity
Share Capital is held in dematerialised form with National
Securities Depository Limited and Central Depository
Services (India) Limited. The market lot is one share, as
trading in the Equity Shares of the Company on exchanges
is permitted only in dematerialised form. Non-Promoters
holding is 25 per cent.
Outstanding ADRs/GDRs/Warrants or any Convertible
Instruments, conversion date and likely impact on Equity
The Company has not issued any ADRs/GDRs/Warrants or
any convertible instruments.
Ofces of the Company
Registered Ofce:
Mahindra Towers, 2
nd
Floor,
No.17/18, Patullos Road,
Chennai 600 002.
Tel: 044 - 3988 1000
Fax: 044 - 3027 7778
490
Corporate Ofce:
Mahindra Towers, 1
st
Floor,
A Wing, Dr. G. M. Bhosle Marg,
P. K. Kurne Chowk,
Worli, Mumbai 400 018.
Tel: 022 - 3368 4722 Fax: 022 - 3368 4721
Apart from the registered & corporate ofce, the Company has
an extensive network of branch ofces, including site ofces at
the resorts to carry out the business of the Company. Details
of these ofces can be found at the Companys website
www.clubmahindra.com.
Registrar and Share Transfer Agents
M/s. Karvy Computershare Private Limited
Unit: Mahindra Holidays & Resorts India Limited
Plot No. 17-24, Vittalrao Nagar, Madhapur,
Hyderabad 500 081,
Andhra Pradesh, India.
Tel: 040 - 44655000 Fax: 040 - 23431551
E-mail: einward.ris@karvy.com
Address for Correspondence
Shareholders may correspond with the Company at its
Corporate Ofce or with the Registrar and Transfer Agents
M/s. Karvy Computershare Private Limited at the above
mentioned address in respect of all matters relating to transfer/
dematerialisation of shares, payment of dividend and any other
query relating to Equity Shares of the Company.
Company Secretary & Compliance Ofcer
Mr. Dinesh Shetty
Mahindra Towers, 1
st
Floor,
A Wing, Dr. G. M. Bhosale Marg,
P. K. Kurne Chowk, Worli, Mumbai 400 018.
Tel: 022 - 3368 4722 Fax: 022 - 3368 4721
Companys Investor E-mail ID
The Company has also designated
investors@mahindraholidays.com as an exclusive email ID for
Shareholders for the purpose of registering complaints. This
has also been displayed on the Companys website.
Companys website
www.clubmahindra.com
Declaration on Codes of Conduct
To
The Members of Mahindra Holidays & Resorts India Limited
I, A. K. Nanda, Chairman of Mahindra Holidays & Resorts India Limited declare that all the Members of the Board of Directors
and Senior Management Personnel have afrmed compliance with the Code of Conduct for the year ended 31
st
March, 2014.
A. K. Nanda
Mumbai, 6
th
May, 2014 Chairman
CERTIFICATE
To
The Members of Mahindra Holidays & Resorts India Limited
We, Deloitte Haskins & Sells, statutory auditors of Mahindra Holidays & Resorts India Limited (the Company) have examined
the compliance of Conditions of Corporate Governance by the Company for the year ended on 31
st
March 2014, as stipulated in
Clause 49 of the Listing Agreement of the Company with the Stock Exchanges.
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been
limited to a review of the procedures and implementation thereof, adopted by the Company, for ensuring compliance with the
conditions of the Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression on the nancial
statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by
the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as
stipulated in Clause 49 of the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efciency or
(Registration No. 008072S)
B. Ramaratnam
Place: Chennai Partner
Date: June 3
rd
, 2014 Membership No. 21209
491
of MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED
(the Company), which comprise the Balance Sheet as at
31
st
March, 2014, the Statement of Prot and Loss and the
Cash Flow Statement for the year then ended, and a summary
of the signicant accounting policies and other explanatory
information.
dated 13
th
September 2013 of the Ministry of Corporate
misstatement.
opinion.
Opinion
st
March, 2014;
and
5 of the Order.
th
September 2013 of the
st
st
of the Act.
(Firms Registration No. 008072S)
B. Ramaratnam
Partner
Mumbai, May 6, 2014
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MAHINDRA HOLIDAYS &
RESORTS INDIA LIMITED
492
(i) Having regard to the nature of Companys business/
activities/result during the year, clauses, (vi), (xii), (xiii),
(xiv), (xvi) and (xix) of paragraph 4 of the Order are not
opinion, do not constitute a substantial part of the
xed assets of the Company and such disposal has,
in our opinion, not affected the going concern status
of the Company.
explanation given to us, the procedures of physical
verication.
explanations given to us, the Company has neither
granted nor taken any loans, secured or unsecured, to/
from Companies, rms or other parties covered in the
Register maintained under Section 301 of the Companies
Act, 1956
of inventory and xed assets and for the sale of goods
and services and during the course of our audit we have
not observed any continuing failure to correct major
weaknesses in such internal control system.
(vi) According to the information and explanations given to us
and to the best of our knowledge and belief there are no
contracts or arrangements that need to be entered in the
(vii) In our opinion, the internal audit functions carried out
during the year by a rm of Chartered Accountants
with the size and the nature of its business.
(viii) In our opinion and according to the information and
explanations given to us the Central Government has not
prescribed maintenance of cost records under Section
209(1)(d) of the Companies Act 1956 in respect of the
Companys services.
State Insurance, Income-tax, Sales Tax, VAT, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess and
Fund, Employees State Insurance, Income-tax, Sales
Tax, VAT, Wealth Tax, Service Tax, Custom Duty,
in arrears as at March 31, 2014 for a period of more
(c) Details of dues of Income tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty and Cess which have
not been deposited as on March 31, 2014 on account
of disputes are given below:
Name
of the
statute
Nature of
the dues
Forum where
dispute is
pending
Period to which
the amount
relates
Amount
involved
(Rs.)
Income
Tax Act
Income
Tax
Commissioner
of Income Tax
Appeals
2009-10 &
2010-11
1,304,317,880
Finance
Act
Service
Tax
Central Excise
& Service
Tax Appellate
Tribunal
2005 to 2011 607,217,070
Commissioner
(Appeals)
2011-12 1,053,030
(x) The Company does not have accumulated losses at
Annexure referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of Independent
Auditors report to the members of Mahindra Holidays & Resorts India Limited on the accounts for the year ended
March 31, 2014
493
(xi) According to the information and explanations given to us,
the Company has not given guarantees for loans taken by
others from banks and nancial institutions.
in the repayment of dues to the banks. The Company has
neither borrowed funds from the Financial Institution nor
issued any debentures.
raised on short term basis have, prima facie, not been
used during the year for long term investment.
(xiv) During the year the Company has not made any preferential
allotment of shares to the parties and companies covered
in the Register maintained under Section 301 of the
(xv) The Management has disclosed the end use of money
raised by public issues in the notes to the nancial
statements and we have veried the same.
(xvi) To the best of our knowledge and according to the
B. Ramaratnam
Partner
Mumbai, May 6, 2014
494
In Rs.
Particulars
As At As At
Note March 31, 2014 March 31, 2013
Shareholders funds:
Share Capital ................................................................................................................. 3 880,241,730 838,808,840
Reserves and Surplus ................................................................................................... 4 7,017,906,333 5,504,348,616
7,898,148,063 6,343,157,456
Deferred tax liabilities (net) ........................................................................................... 5 589,831,266 411,977,286
Deferred Income - Advance towards members facilities
(See note 2 (vi) (a)) ....................................................................................................... 13,930,730,395 12,531,050,078
Other long term liabilities .............................................................................................. 6 71,077,452 54,022,941
Long term provisions ..................................................................................................... 7 40,942,408 40,700,289
14,632,581,521 13,037,750,594
Current liabilities
Short term Borrowings .................................................................................................. 8 29,135,656 19,499,418
Trade payables .............................................................................................................. 9 921,608,234 774,218,674
Deferred Income - Advance towards members facilities
(See note 2 (vi) (a)) ....................................................................................................... 751,102,920 600,741,180
Other current liabilities................................................................................................... 10 1,461,693,946 1,248,682,708
Short term provisions .................................................................................................... 11 417,244,359 419,213,009
3,580,785,115 3,062,354,989
26,111,514,699 22,443,263,039
ASSETS
Non-current assets
Fixed Assets 12
Tangible assets .............................................................................................................. 6,669,436,338 4,488,378,043
Intangible assets ............................................................................................................ 226,273,994 33,240,771
Capital work in progress ............................................................................................... 42 636,433,993 2,314,208,454
Intangible assets under development........................................................................... 45,531,430 212,034,682
7,577,675,755 7,047,861,950
Non-current investments ............................................................................................... 13 1,460,749,621 1,756,886,093
Long term loans and advances .................................................................................... 14 1,771,176,688 1,512,398,986
Other Non-Current Assets ............................................................................................. 15 3,844,171,488 3,296,266,068
7,076,097,797 6,565,551,147
Current assets
Current investments ....................................................................................................... 16 126,646,207 102,240,551
Inventories ...................................................................................................................... 17 95,900,702 63,795,957
Trade receivables ........................................................................................................... 18 8,434,161,810 6,259,833,216
Cash and cash equivalents ........................................................................................... 19 386,790,271 338,439,896
Short term loans and advances .................................................................................... 20 2,211,639,326 1,974,968,792
Other current assets ...................................................................................................... 21 202,602,831 90,571,530
11,457,741,147 8,829,849,942
26,111,514,699 22,443,263,039
See accompanying notes forming part of the nancial statements.
B. Ramaratnam
Partner
A.K. Nanda Cyrus J. Guzder
Chairman Director
Vasant Krishnan Dinesh Shetty
Place: Mumbai
Date: May 6, 2014
Place: Mumbai
Date: May 6, 2014
495
In Rs.
Particulars Note
Year ended
March 31, 2014
Year ended
March 31, 2013
REVENUE:
Revenue from operations .................................................................................................... 22 7,775,195,726 7,015,484,752
Other Income ......................................................................................................................... 23 214,103,801 143,910,069
Total Revenue ....................................................................................................................... 7,989,299,527 7,159,394,821
EXPENDITURE:
Employee benets expense ............................................................................................... 24 1,741,628,832 1,495,243,973
Finance Costs ........................................................................................................................ 25 9,684,184 16,000,114
Depreciation and amortisation expense .......................................................................... 12 380,269,427 211,907,063
Other expenses ..................................................................................................................... 26 4,443,516,435 3,847,722,020
Total Expenditure ................................................................................................................ 6,575,098,878 5,570,873,170
Prot before tax ...................................................................................................... 1,414,200,649 1,588,521,651
Less : Tax expense ...............................................................................................................
- Current tax ......................................................................................................................... 291,000,000 473,100,000
- Deferred tax ......................................................................................................................... 177,853,979 45,644,700
Prot for the year ................................................................................................................ 945,346,670 1,069,776,951
Earnings per share:
Basic ........................................................................................................................................ 10.76 12.76
Diluted ...................................................................................................................................... 10.75 12.75
See accompanying notes forming part of the nancial statements.
B. Ramaratnam
Partner
Chairman Director
Place: Mumbai
Date: May 6, 2014
Place: Mumbai
Date: May 6, 2014
496
In Rs.
Year ended
March 31, 2014
Year ended
March 31, 2013
Prot before tax ....................................................................................................... 1,414,200,649 1,588,521,651
Adjustments:
Depreciation and amortisation expense ................................................................. 380,269,427 211,907,063
Finance costs ........................................................................................................... 9,684,184 16,000,114
Interest income ........................................................................................................ (161,585,419) (91,954,180)
Dividend income ...................................................................................................... (37,411,294) (51,955,889)
Gain on sale of investment in subsidiaries ............................................................ (15,107,088)
Loss/(Gain) on xed assets sold/scrapped (net) ................................................... 3,305,618 3,924,498
Bad debt expenses.................................................................................................. 1,886,810
Provision for doubtful debts .................................................................................... 7,942,068 385,452
188,984,306 88,307,058
Operating prot before working capital changes ................................................... 1,603,184,955 1,676,828,709
Changes in:
Deferred income - Advance towards members facilities ....................................... 1,550,042,057 1,901,442,314
Trade and other receivables ................................................................................... (2,743,669,121) (999,062,608)
Inventories ................................................................................................................ (32,104,745) (27,091,847)
Trade and other payables ....................................................................................... 345,075,715 72,650,371
(880,656,094) 947,938,230
Income taxes paid ................................................................................................... (404,794,467) (495,920,679)
NET CASH FROM OPERATING ACTIVITIES ...................................................... 317,734,394 2,128,846,260
Purchase of xed assets including capital work in progress
and expenditure pending allocation ....................................................................... (923,316,274) (1,030,671,198)
Proceeds from sale of xed assets......................................................................... 2,482,852 2,255,883
Investments in subsidiaries and jointventure ......................................................... (16,809,707) (933,665,265)
Proceeds from sale of investments in subsidiaries................................................ 328,053,267
Bank balances not considered as part of Cash and cash equivalents ................ (142,644)
Advances to subsidiaries and joint venture ........................................................... (335,947,774) (737,654,884)
Interest received ...................................................................................................... 19,630,087 7,800,623
497
In Rs.
Year ended
March 31, 2014
Year ended
March 31, 2013
Dividend income ...................................................................................................... 37,411,294 51,955,889
NET CASH (USED IN)/FROM INVESTING ACTIVITIES ..................................... (888,638,899) (2,639,978,952)
Repayments of borrowings ..................................................................................... 9,636,238 11,578,228
Dividends paid ......................................................................................................... (355,057,356) (338,559,088)
Dividend distribution tax paid ................................................................................. (60,353,226) (54,922,748)
Proceeds from issue of equity shares through IPP ............................................... 1,055,976,420
Loan recovered from ESOP Trust ........................................................................... 3,000,000 4,000,000
Finance costs ........................................................................................................... (9,684,184) (16,000,114)
NET CASH (USED IN)/FROM FINANCING ACTIVITIES .................................... 643,517,892 (393,903,722)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS (A+B+C) ................................................................. 72,613,387 (905,036,414)
CASH AND CASH EQUIVALENTS:
Opening balance ..................................................................................................... 437,437,779 1,342,474,193
Closing balance ....................................................................................................... 510,051,166 437,437,779
72,613,387 (905,036,414)
Reconciliation between Cash and Cash equivalents with the Balance Sheet
Cash and cash equivalents as per Balance Sheet ................................................ 386,790,271 338,439,896
Less: Bank balances not considered as Cash and cash equivalents .................. 3,385,312 3,242,668
Net Cash and cash equivalents .............................................................................. 383,404,959 335,197,228
Add: Current investments considered as part of Cash and cash equivalents
(Investment in units of Mutual Funds) .................................................................... 126,646,207 102,240,551
Cash and cash equivalents at the end of the year ........................................... 510,051,166 437,437,779
B. Ramaratnam
Partner
Chairman Director
Place: Mumbai
Date: May 6, 2014
Place: Mumbai
Date: May 6, 2014
498
1 Corporate Information
The company was incorporated on September 20, 1996, and is in the
business of selling vacation ownership and providing holiday facilities.
(i) Basis for preparation of nancial statements:
notied under Section 211(3C) of the Companies Act, 1956 (the
1956 Act) (which continue to be applicable in respect of Section
133 of the Companies Act, 2013 (the 2013 Act) in terms of General
th
September, 2013 of the Ministry of
Corporate Affairs) and the relevant provisions of the 1956 Act/2013
accrual basis under the historical cost convention The accounting
Use of estimates:
The preparation of nancial statements in conformity with Indian
GAAP requires the management to make estimates and assumptions
the year. The management believes that the estimates used in
between the actual results and the estimates are recognised in the
years in which the results are known/materialise.
(ii) Fixed assets:
Fixed assets are carried at cost less accumulated depreciation/
amortisation and accumulated impairment losses, if any. Cost
comprises of purchase price and other directly attributable costs of
bringing the asset to its working condition for its intended use and
includes interest on moneys borrowed for construction/acquisition of
xed assets up to the period the assets are ready for use. Projects
under which assets are not ready for their intended use and other
capital work-in-progress are carried at cost, comprising direct cost,
related incidental expenses and attributable interest.
Depreciation is calculated on straight line method at the rates and in
the manner prescribed in Schedule XIV of the Companies Act, 1956
except for the following categories of assets:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over
the useful life of 25 years.
(c) Furniture and Fixtures in Club Mahindra Holiday World
are amortised over a period of 36 months from the date of
capitalisation.
(d) Motor vehicles provided to employees are depreciated over a
period of 48 months. Other assets provided to employees are
depreciated over a period of 60 months.
(e) Intangible assets representing vacation ownership is
amortised over a period of 10 years.
(f) Expenditure incurred towards software is amortised over a
period of 36 months.
(g) Expenditure on product design and development & web
portal is amortised over the estimated useful life of the asset
i.e. 3/4 years.
(h) Non-compete fee is amortised over a period of 5 years.
(i) Assets individually costing less than Rs. 5,000/- each are fully
depreciated in the year of capitalisation.
The estimated useful life of the intangible asset and the
amortisation period are reviewed at the end of the each
nancial year and the amortisation method is revised to reect
the changed pattern.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
(iii) Expenditure during construction period
Revenue expenses incurred in connection with construction of
resorts insofar as such expenses relate to the period prior to the
date the resort is put to use are treated as part of project cost and
capitalised.
(iv) Inventories:
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in-First-out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is estimated at the expected selling price less estimated costs
of procurement and sales.
(v) Investments:
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(vi) Revenue recognition:
(a) The companys business is to sell Vacation ownership and
provide holiday facilities to members for a specied period
each year, over a number of years, for which membership fee
is collected either in full up front, or on a deferred payment
basis. Admission fee, which is non-refundable, is recognized as
income on admission of a member. Entitlement fee (disclosed
under Advance towards Members facilities), which entitles the
vacation ownership member for the vacation ownership facilities
over the membership usage period, is recognized as income
equally over the usage period. Requests for cancellation
of membership is accounted for when it is accepted by the
Company. In respect of instalments considered doubtful
of recovery by the management, the same is treated as a
cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as
income on an accrual basis.
(c) Interest on instalment sales is recognised as income on an
accrual basis.
(d) Income from resorts includes income from room rentals, food
and beverages, etc. and is recognised when services are
rendered.
(e) Securitised assets are derecognised as the contractual
rights therein are transferred to the third party. On being
derecognised, the excess of consideration received over
the principal amounts of receivable from members (net of
reversals in respect of cancelled members) is recognised as
income from Securitisation.
(f) Income from travel services includes commission on tickets/
hotel booking, service charges from customers, etc. and is
recognised when services are rendered.
(g) Income from home stays is recognized when services are
rendered.
(h) Interest income from loans is accounted on time proportion
basis and dividend income from mutual funds is accounted as
and when right to receive is established.
(vii) Foreign currency transactions and translations:
Transactions in foreign currencies entered into by the Company
are accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction. Exchange differences arising on settlement/
restatement of foreign currency monetary assets and liabilities of the
Company are recognised as income or expense in the Statement of
Prot and Loss.
Foreign currency monetary items of the Company, outstanding at the
balance sheet date are restated at the year-end rates. Non-monetary
items of the Company are carried at historical cost.
499
(viii) Employee benets:
Employee benets include provident fund, superannuation fund,
employee state insurance scheme, gratuity fund and compensated
absences.
(a) Short term employee benet plans
All short term employee benet plans such as salaries, wages,
bonus, special awards and, medical benets which fall due
within 12 months of the period in which the employee renders
the related services which entitles him to avail such benets
are recognized on an undiscounted basis and charged to the
statement of prot and loss.
(b) Long term employee benet plans
The Company has dened contribution and dened benet
plans. The plans are nanced by the Company and in the case
of some dened contribution plans employees also contribute
to the plan.
Dened Contribution Plan
The Companys contribution to provident fund, superannuation
fund and employee state insurance scheme are considered
as dened contribution plans and are charged as an expense
based on the amount of contribution required to be made and
when services are rendered by the employees.
Dened Benet Plan
For dened benet plans in the form of gratuity fund, the cost
of providing benets is determined using the Projected Unit
Credit method, with actuarial valuations being carried out
at each balance sheet date. Actuarial gains and losses are
recognised in the Statement of Prot and Loss in the period in
which they occur. Past service cost is recognised immediately
to the extent that the benets are already vested and otherwise
is amortised on a straight-line basis over the average period
until the benets become vested. The retirement benet
obligation recognised in the Balance Sheet represents the
present value of the dened benet obligation as adjusted for
unrecognised past service cost, as reduced by the fair value
of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
(ix) Taxes on income:
Current tax is the amount of tax payable on the taxable income
for the year as determined in accordance with the provisions of the
Income Tax Act, 1961.
Deferred tax is recognised on timing differences, being the
differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or
more subsequent periods. Deferred tax is measured using the tax
rates and the tax laws enacted or substantively enacted as at the
reporting date. The carrying amount of deferred tax assets and
liabilities are reviewed at each Balance Sheet date.
(x) Share issue expenses:
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xi) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalized as part of cost of
such asset till such time as the asset is ready for its intended to
use or sale. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as expenses in the period
in which they are incurred.
(xii) Impairment of assets:
The carrying values of assets/cash generating units at each
balance sheet date are reviewed for impairment. If any indication of
impairment exists the recoverable amount of such asset is estimated
and impairment is recognised,if the carrying amount of these assets
exceed their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash ows to their present values
based on an appropriate discount factor. When there is indication
that an impairment loss recognised for an asset in earlier accounting
period no longer exists or may have decreased, such reversal of
impairment loss is recognised in the statement of prot and loss,
except in the case of re-valued asset.
(xiii) Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with banks.
Cash equivalents are short-term balances (with an original maturity
of three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash
and which are subject to insignicant risk of changes in value.
(xiv) Cash ow statements:
(loss) before extra-ordinary items and tax is adjusted for the effects of
transactions of non cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash ow from operating,
investing and nancing activities of the company are segregated
(xv) Provision & contingencies:
A provision is recognised when the Company has a present
outow of resources will be required to settle the obligation
in respect of which reliable estimate can be made. Provisions
settle the obligation at the Balance sheet date. These are reviewed
estimates. Contingent Liabilities are disclosed in the notes.
(xvi) Earnings per share:
Basic earnings per share is computed by dividing the prot/(loss)
after tax (including the post tax effect of extraordinary items, if any)
by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
prot/(loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges
to expense or income relating to the dilutive potential equity shares,
by the weighted average number of equity shares considered for
deriving basic earnings per share and the weighted average number
of equity shares which could have been issued on the conversion of
all dilutive potential equity shares. Potential equity shares are deemed
to be dilutive only if their conversion to equity shares would decrease
the net prot per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The dilutive
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value (i.e. average market
value of the outstanding shares). Dilutive potential equity shares are
determined independently for each period presented. The number of
equity shares and potentially dilutive equity shares are adjusted for
share splits/reverse share splits and bonus shares, as appropriate.
(xvii) Leases:
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classied as nance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is
created for an equivalent amount. Each lease rental paid is allocated
between the liability and the interest cost so as to obtain a constant
periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental
to ownership of an asset substantially vest with the lessor are
recognised as operating leases. Lease rentals under operating
leases are recognised in the Statement of Prot and Loss on a
straight-line basis.
500
(xviii) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted/
expected to be admitted and to the extent that the amount recoverable
can be measured reliably and it is reasonable to expect ultimate collection.
(xix) Service tax input credit:
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there
is no reasonable certainty in availing/utilising the credits.
(xx) Operating cycle:
Based on the nature of services/activities of the Company and the
normal time between acquisition of assets and their realisation in
cash or cash equivalents, the Company has determined its operating
cycle as 12 months for the purpose of classication of its assets and
liabilities as current and non-current.
Note 3 : Share Capital
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Authorised:
100,000,000 equity shares of Rs.10 each ... 1,000,000,000 1,000,000,000
1,000,000,000 1,000,000,000
Issued Subscribed & Paid up:
Equity: (Net of shares issued to ESOP
Trust but not allotted to employees)
84,639,772 (previous year 84,639,772) equity
shares of Rs. 10 each fully paid (of the
above 66,585,642 (previous year 66,585,642)
equity shares are held by the holding
company,Mahindra & Mahindra Limited) ........ 846,397,720 846,397,720
Add: 4,141,084 (previous year NIL) shares
issued during the year through Institutional
Placement Programme (Note 39) ................. 41,410,840
Less: 756,683 (previous year 758,888)
equity shares of Rs. 10 each fully paid up
issued to Mahindra Holidays and Resorts
India Limited Employees Stock Option Trust
but not excercised by employees ............... 7,566,830 7,588,880
880,241,730 838,808,840
Notes:
3 a) The above includes 48,995,228 equity shares allotted as fully paid-up by
way of Bonus shares by capitalisation of balance in Statement of Prot &
Loss and General Reserve on November 24, 2007 in the ratio of 5 equity
shares for every 3 shares held.
3 b) Terms/rights attached to equity shares:
i) The company has only one class of shares referred to as equity
shares having a par value of Rs. 10/-. Each holder of equity share is
entitled to one vote per share.
ii) The dividends proposed by the Board of Directors is subject to
approval of the shareholders in the Annual General Meeting.
iii) For the year ended March 31, 2014, the amount of dividend proposed
to be distributed to equity shareholders is Rs. 355,123,424 at Rs. 4 per
share (Previous year Rs. 355,123,424 at Rs. 4 per share).
iv) Repayment of capital will be in proportion to the number of equity
shares held.
3 c) Shares in the company held by each shareholder holding more than 5%
shares specifying the number of shares held.
Name of share holder No. of shares % held as at
March 31, 2014
No. of shares % held as at
March 31, 2013
Mahindra & Mahindra
Limited (Holding
Company) ..................... 66,585,642 75.00% 66,585,642 78.67%
3 d) The reconciliation of the number of shares outstanding as at March 31,
2014 and March 31, 2013 is set out below:-
(Shares) (In Rs.) (Shares) (In Rs.)
No of Shares at the
beginning ................... 83,880,884 838,808,840 83,845,604 838,456,040
Add: Shares issued -
pursuant to an
Institutional Placement
Programme (IPP) ....... 4,141,084 41,410,840
Add: Shares issued on
exercise of employee
stock options ............. 2,205 22,050 35,280 352,800
Number of shares at the
end ............................ 88,024,173 880,241,730 83,880,884 838,808,840
3 e) Under the Employee Stock Option Scheme equity shares are allotted to the Mahindra Holidays & Resorts India Limited Employees Stock Option Trust (the trust)
set up by the company. The trust holds these shares for the benet of the eligible employees/Directors as dened under the scheme and issues the shares to
them as per the recommendation of the remuneration committee.
i) The details of the Employees Stock Option Schemes are as under:
Type of Arrangement Equity settled option plan administered through Employee Stock Option Trust.
Method of Settlement By issue of shares at Exercise Price.
Grant Grant I Grant II Grant III Grant V ** Grant VI # Grant VII ## Grant VIII ** Grant IX **
Date of Grant 15/07/2006 30/03/2007 1/11/2007 1/11/2008 21/02/2012 21/02/2012 21/02/2013 29/01/2014
Exercise Price (In Rs.) 16.00 52.00 52.00 52.00 370.00 323.00 323.00 253.00
Average Exercise Price
(after bonus issue) (In Rs.)
6.00 19.50 19.50 52.00
Vesting Period in Years 5 4 4 4 4 4 4 4
Number of Options Granted 759,325 122,235 56,700 261,590 400,000 186,500 130,000 35,000
Contractual life 6 years from
the date of
grant.
5 years from the date of each vesting.
Vesting Conditions Refer note (a)
below
25% each on expiry of 12, 24, 36 and 48 months from the date of grant.
No. of options exercisable in each tranche Minimum of 25 and a maximum of all options vested till that date.
Note (a) 35%,30%,15%,10% and 10% on expiry of 12,24,36,48 and 60 months from the date of grant respectively.
501
ii) Summary of Stock options (including bonus shares)
Particulars Grant I
(15/07/2006)
Grant II
(30/03/2007)
Grant III
(1/11/2007)
Grant V **
(1/11/2008)
Grant VI #
(21/02/2012)
Grant VII ##
(21/02/2012)
Grant VIII **
(21/02/2013)
Grant IX **
(29/01/2014)
Total
Options
outstanding as
on 1.4.2013
5,265 4,253 23,751 400,000 186,500 130,000 749,769
Options
granted
35,000 35,000
Options vested
during the
year
100,000 20,375 32,500 152,875
Options
exercised
during the
year
2,205 2,205
Options lapsed
during the
year
1,530 19 630 200,000 78,750 280,929
Options
outstanding as
on 31.03.2014
3,735 4,234 20,916 200,000 107,750 130,000 35,000 501,635
Options
vested but not
exercised
3,735 4,234 20,916 200,000 67,000 32,500 328,385
** Issued out of lapsed options.
# Out of the above 90,000 shares has been issued out of lapsed options.
## Out of the above 86,500 shares has been issued out of lapsed options.
iii) In accordance with the Guidance Note issued by the Institute of Chartered
Accountants of India, the shares allotted to the trust including bonus
shares but not excercised by the employees have been reduced from the
share capital by Rs. 7,566,830 and securities premium account reduced by
Rs. 145,499,758. The said shares will be added to the issued share capital
as and when the trust issues the shares to the concerned persons on their
exercising the option and till such shares are issued the amount received
from the trust is disclosed under current liabilities.
iv) The company has adopted the intrinsic value method in accounting for
employee cost on account of ESOS for grant I to V. For grant VI, VII, VIII
& IX fair value method adopted. The intrinsic value of the shares granted
under grant I to V based on the valuations obtained from an independent
valuer is Rs. 16 per equity share as on 31
st
March, 2006, Rs. 52 per equity
share as on 1
st
January, 2007, 31.08.2008 and 01.11.2008, based on the
Discounted Cash Flow Method. The fair value of the shares granted under
grant VI, VII, VIII & IX is based on the fair value market price is Rs. 370,
Rs. 323, Rs. 323 and Rs. 253 per share respectively. As the difference
between the intrinsic value/fair value and the exercise price per share is
Rs. Nil no employee compensation cost has been charged.
v) The fair value of options based on the valuation of the independent valuer
for grants I to V as of the respective dates of grant i.e. 15
th
July 2006,
30
th
March 2007, 1st November 2007 and 1
st
November 2008 is Rs. 4.28,
Rs. 16.36, Rs. 16.55 and Rs. 16.04 respectively.
The fair value of options based on the valuation of the independent valuer
as of the respective dates of grant i.e. 21
st
February 2012 is Rs. 113.81 for
grant VI and Rs. 129.93 for grant VII, 21
st
February 2013 is Rs. 94.43 for
grant VIII, 29
th
January 2014 is Rs. 83.75 for grant IX.
Had the company adopted the fair value method in respect of options
granted, the total amount that would have been amortised over the vesting
period is Rs. 10,383,964 and the impact on the nancial statements would be:
(in Rs.)
Years ended
Mar 31, 2014 Mar 31, 2013
Increase in employee
compensation cost ................................. 1,026,858 2,076,793
Decrease in prot after tax ..................... 1,026,858 2,076,793
Decrease in basic & diluted
earnings per share ................................. (0.01) (0.02)
The fair value has been calculated using the Black Scholes Options Pricing
Model and the signicant assumptions made in this regard are as follows:
Particulars Grant dated
Grant dated Grant dated Grant dated Grant dated Grant dated Grant dated Grant dated
15
th
July,
2006
30
th
March,
2007
1
st
November,
2007
1
st
November,
2008
21
st
February,
2012
21
st
February,
2013
29
st
January,
2014
Risk free
interest rate 7.82% 7.92% 7.72% 7.34% 8.00% 7.78% 8.81%
Expected life 4.5 5 5 5 6 3.5 3.5
Expected volatility Nil Nil Nil Nil 0.33 0.31 0.29
Expected dividend
yield Nil Nil Nil Nil Rs.4.00 1.38% 1.66%
Note 4: Reserves & Surplus
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Capital Reserve ....................................... 1,474,577 1,474,577
General Reserve
As per last balance sheet......................... 594,642,245 487,749,290
Add : Transfer from Statement of Prot and
Loss Account ............................................. 94,534,667 106,977,695
Less : Bonus shares issued on exercise of
stock options ............................................ 84,740
689,176,912 594,642,245
Securities Premium Account
As per last balance sheet......................... 1,720,261,044 1,577,361,044
Premium on shares issued during the
year through Institutional Placement
Programme ............................................... 1,014,565,580
Premium on shares issued to Mahindra
Holidays and Resorts India Limited
Employees' Stock Option Trust ................ 142,900,000
2,734,826,624 1,720,261,044
Less: Share issue expenses on account of
Institutional Placement Programme ........ 30,877,883
Less: Premium on shares issued to
Mahindra Holidays and Resorts India
Limited Employees' Stock Option Trust but
not alloted to employees .......................... 145,499,758 145,499,758
2,558,448,983 1,574,761,286
Surplus in Statement of Prot & Loss
As per last balance sheet......................... 3,333,470,508 2,786,147,902
Prot for the Current Year ........................ 945,346,670 1,069,776,951
4,278,817,178 3,855,924,853
Appropriations:
Transfer to General Reserve..................... 94,534,667 106,977,695
Proposed Dividend ................................... 355,123,424 355,123,424
Tax on Proposed Dividend ....................... 60,353,226 60,353,226
510,011,317 522,454,345
3,768,805,861 3,333,470,508
7,017,906,333 5,504,348,616
502
Note 5 : Deferred Tax Liability (net)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Deferred tax asset
Provision for doubtful receivables ............ 3,344,993 645,484
Provision for compensated absences ..... 14,517,169 12,564,040
Others ............................................................. 17,103,041 11,993,047
34,965,203 25,202,571
Difference between book and tax
depreciation .............................................. 624,796,469 437,179,857
Deferred tax liability (net) ...................... 589,831,266 411,977,286
Note 6 : Other Long Term Liabilities
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Others:
Payables on purchase of xed assets ..... 71,077,452 54,022,941
71,077,452 54,022,941
Note 7 : Long Term Provisions
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Compensated absences .......................... 40,942,408 40,700,289
40,942,408 40,700,289
Note 8 : Short Term Borrowings
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Secured:
from Banks ............................................. 29,135,656 19,499,418
29,135,656 19,499,418
Loans from banks are secured by an exclusive charge on inventories, receivables
and other moveable assets.
Note 9: Trade Payables
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Trade Payables:
Total outstanding dues to micro and small
enterprises ................................................
Others ........................................................ 921,608,234 774,218,674
921,608,234 774,218,674
Note 10 : Other Current Liabilities
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Unpaid dividend ........................................ 180,456 114,388
Amounts received from ESOP Trust ........ 150,023,708 150,045,758
Dues to Statutory Authorities (PF, ESI &
other taxes) ............................................... 43,360,137 56,594,643
Unearned Revenue ................................... 699,598,203 553,703,963
Other payables ......................................... 494,312,288 394,348,480
Gratuity ...................................................... 6,916,716 10,249,690
Commission payable to non whole time
Directors .................................................... 10,000,000 9,000,000
Payables on purchase of xed assets ..... 57,302,438 74,625,786
1,461,693,946 1,248,682,708
There are no amounts due and outstanding to be credited to Investor Education
and Protection Fund as at March 31, 2014.
Note 11 : Short Term Provisions
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Compensated absences .......................... 1,767,709 3,736,359
Proposed Dividend ................................... 355,123,424 355,123,424
Tax on Proposed Dividend ....................... 60,353,226 60,353,226
417,244,359 419,213,009
Note 12 : Fixed Assets
In Rs.
Description of Assets Gross block (at cost) Depreciation/Amortisation Net block
As at April 1,
2013
Additions Deductions/
Adjustments
As at March 31,
2014
As at April 1,
2013
For the year Deductions/
Adjustments
As at March 31,
2013
As at March 31,
2014
As at March 31,
2013
A: Tangible Assets
Land ........................ 1,021,491,999 1,021,491,999 1,021,491,999 1,021,491,999
938,691,999 82,800,000 1,021,491,999 1,021,491,999 938,691,999
Land - Leasehold ..... 864,000 864,000 113,442 8,726 122,168 741,832 750,558
864,000 864,000 104,716 8,726 113,442 750,558 759,284
Buildings .................. 2,635,452,094 1,634,419,032 569,736 4,269,301,390 304,486,378 69,211,783 785,732 372,912,429 3,896,388,961 2,330,965,716
2,598,956,423 36,495,671 2,635,452,094 256,110,391 48,375,987 304,486,378 2,330,965,716 2,342,846,032
Buildings - Leasehold 15,608,588 15,608,588 10,204,187 655,722 10,859,909 4,748,679 5,404,401
15,608,588 15,608,588 8,316,084 1,888,103 10,204,187 5,404,401 7,292,504
Plant and Equipments 991,093,322 444,539,317 275,380 1,435,357,259 335,341,814 93,420,777 3,644,959 425,117,632 1,010,239,627 655,751,508
503
In Rs.
As at April 1,
2013
Additions Deductions/
Adjustments
As at March 31,
2014
As at April 1,
2013
For the year Deductions/
Adjustments
As at March 31,
2013
As at March 31,
2014
As at March 31,
2013
929,739,840 77,917,863 16,564,381 991,093,322 282,329,821 65,655,462 12,643,469 335,341,814 655,751,508 647,410,019
Furniture and Fittings 829,167,036 321,400,247 5,087,656 1,145,479,627 460,572,186 91,656,185 4,572,950 547,655,421 597,824,206 368,594,850
760,168,427 74,857,518 5,858,909 829,167,036 402,679,508 61,816,272 3,923,594 460,572,186 368,594,850 357,488,919
Vehicles ................... 68,065,043 28,612,369 20,452,447 76,224,965 30,817,561 6,685,354 17,476,089 20,026,826 56,198,139 37,247,482
58,140,280 10,935,242 1,010,479 68,065,043 25,741,579 5,781,463 705,481 30,817,561 37,247,482 32,398,701
Ofce Equipment ..... 187,379,535 22,184,283 17,340 209,546,478 119,208,006 9,111,679 576,102 127,743,583 81,802,895 68,171,529
176,978,388 10,524,748 123,601 187,379,535 109,305,183 10,007,268 104,445 119,208,006 68,171,529 67,673,205
Sub Total A ............. 5,749,121,617 2,451,155,248 26,402,559 8,173,874,306 1,260,743,574 270,750,226 27,055,832 1,504,437,968 6,669,436,338 4,488,378,043
Previous Year ......... 5,479,147,945 293,531,042 23,557,370 5,749,121,617 1,084,587,282 193,533,281 17,376,989 1,260,743,574 4,488,378,043 4,394,560,663
B: Intangible Assets
Software .................. 99,154,648 302,552,424 401,707,072 67,481,000 107,952,078 175,433,078 226,273,994 31,673,648
63,205,080 35,949,568 99,154,648 53,742,970 13,738,030 67,481,000 31,673,648 9,462,110
Development
Expenditure .............. 38,540,065 38,540,065 38,540,065 38,540,065
38,540,065 38,540,065 37,904,313 635,752 38,540,065 635,752
Non-Compete Fees .. 20,000,000 20,000,000 18,432,877 1,567,123 20,000,000 1,567,123
20,000,000 20,000,000 14,432,877 4,000,000 18,432,877 1,567,123 5,567,123
Vacation ownership
weeks ...................... 6,226,938 6,226,938 6,226,938 6,226,938
6,226,938 6,226,938 6,226,938 6,226,938
Sub Total B ............. 163,921,651 302,552,424 466,474,075 130,680,880 109,519,201 240,200,081 226,273,994 33,240,771
Previous Year ......... 127,972,083 35,949,568 163,921,651 112,307,098 18,373,782 130,680,880 33,240,771 15,664,985
TOTAL (A+B) .......... 5,913,043,268 2,753,707,672 26,402,559 8,640,348,381 1,391,424,454 380,269,427 27,055,832 1,744,638,049 6,895,710,332 4,521,618,814
Total Previous Year ..
5,607,120,028 329,480,610 23,557,370 5,913,043,268 1,196,894,380 211,907,063 17,376,989 1,391,424,454 4,521,618,814 4,410,225,648
Figures in italic are in respect of the previous year.
Note 13 : Non current investments
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Long term Investments
(At Cost, Un-Quoted):
Investment in Equity Shares (non trade,
fully paid up)
Mahindra World City Developers Ltd. ....... 10 10
(1 equity share of Rs. 10 each.)
Investment in Equity Shares
(trade, fully paid up)
Subsidiaries :
Mahindra Holidays and Resorts USA Inc .... 45,503 45,503
(100 equity shares of US$ 0.10 each.)
(See Note 45)
MHR Hotel Management GmbH - sold
during the year .......................................... 1,567,125
(Shares equivalent in value to Euros 26,250
out of total share capital of Euros 35,000)
Heritage Bird (M) Sdn. Bhd. ..................... 4,026,772 4,026,772
(300,002 shares of one Ringgit each.)
Mahindra Hotels and Residences
India Ltd. ................................................... 499,940 499,940
(49,994 equity shares of Rs. 10 each.)
BAH Hotelanlagen AG - sold during the year 311,379,054
(1385 shares of Euro 50 each.)
Bell Tower Resorts Private Limited ........... 505,452,424 505,452,424
(199,38,674 Shares of Rs. 10/- each.)
Divine Heritage Hotels Private Limited ..... 92,497,545 92,497,545
(700,000 Shares of Rs. 10/- each.)
Gables Promoters Private Limited ............ 136,378,036 136,378,036
(132,00,000 Shares of Rs. 10/- each.)
Holiday on Hill Resort Private Limited ...... 438,739,417 438,739,417
(10,00,000 Shares of Rs. 10/- each.)
MH Boutique Hospitality Limited .............. 9,538,138 9,538,138
(49,000 shares of THB 100 each.)
Innity Hospitality Group Company
Limited ...................................................... 268,110,663 256,512,129
(734,850 shares of THB 100 each.)
Joint venture :
Arabian Dreams Hotels and Aparments
LLC ............................................................. 5,211,172
(147 shares of AED 1000 each.)
(See Note B)
Others :
Mahindra Hotels and Resorts Limited ...... 1
(20,011 shares of Rs. 10 each acquired
during the year) (See Note C)
Investment in Preference Shares
(non trade fully paid up)
Guestline Hospitality Management and
Development Services Limited .................. 250,000 250,000
(25,000 7% non-cumulative redeemable
participating optionally convertible
preference shares of Rs. 10 each.)
(See Note A)
1,460,749,621 1,756,886,093
Aggregate value of unquoted investments ... 1,460,749,621 1,756,886,093
NOTE:
a) The preference shares of Guestline Hospitality Management and
Development Services Limited will be redeemed at par at the option of the
investee at any time after ve years but before twenty years from the date
of allotment viz 14.01.2003 or at the option of the holder be convertible into
fully paid equity shares of the face value of Rs. 10 each anytime after thirty
six months from the date of allotment.
b) On March 26, 2013, the Company has subscribed for 49% of the share
capital of Arabian Dreams Hotels Aparments LLC, Dubai, which operates
a 75 room hotel and the remittance was made in April 2013.
c) On February 20, 2014, the company acquired 19.97% of equity share
capital of Mahindra Hotels and Resortss Ltd.
504
Note 14 : Long Term Loans & Advances (Unsecured, considered good)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Capital advances ..................................... 344,326,736 278,108,333
Security deposits ..................................... 411,095,151 342,525,543
Loans and advances to related parties ...... 94,687,287 84,492,063
Payments towards Income Tax
(net of provisions) .................................... 921,067,514 807,273,047
1,771,176,688 1,512,398,986
Note 15 : Other Non-Current Assets (Unsecured, considered good)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Long Term Trade receivables due for
payment after one year ........................... 3,844,171,488 3,296,266,068
3,844,171,488 3,296,266,068
Note 16 : Current investments
In Rs.
Units Value Units Value
Investment in Mutual
Funds (unquoted)
Units:
Birla Sun Life Cash
Plus - Reg - Dly
Dividend 1,671 3,522,513
Birla Sun Life
Savings Fund 1,342 34,616 40,307 4,034,502
DWS Insta Cash
Plus Fund - Super
IP - Dly Dividend 1,242 1,364,159
Tata Treasury
Manager Fund Plan
A-DDRE 1,542 1,556,202
ICICI Prudential
Flexible Income
PlanPremium 242,083 25,596,646
ICICI Prudential Ultra
Short Term - Regular
Plan-DDRE 4,219 27,157,515
IDFC Ultra Short
Term Fund - Reg -
Dly Dividend 26,325 36,823,427
JM Money Manager
Fund Super Plus
Plan - Daily Dividend 2,163,849 21,651,475
Kotak Liquid
Scheme - Plan A -
Dly Dividend 116 3,417,235
Kotak Floater Long
Term 17,388 20,175,266
UTI Treasury
Advantage Fund -
IP - Dly Dividend 228 1,609,503
Kotak Flexi Debt
Scheme Inst DDRE 2,548,297 25,604,019
Sundaram Money
Fund - Reg - Dly
Dividend 16,052 3,475,697
Templeton India
Ultra Short Bond
Fund - Super IP -
Dly Dividend 29,318 22,876,495
In Rs.
Units Value Units Value
Templeton India
TMA - Super IP -
Dly Div 192 6,189,781
TTMSHD Tata
Treasury Manager
SHIP DDRE 23,555 23,797,707
126,646,207 102,240,551
Aggregate value
of unquoted
investments 126,646,207 102,240,551
Note 17 : Inventories (At lower of cost & net realisable value)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Stores
Food, beverages and smokes ................. 10,860,164 10,780,650
Operating supplies ................................... 85,040,538 53,015,307
95,900,702 63,795,957
Note 18 : Trade Receivable (Unsecured)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Trade Receivables outstanding for more
than six months from the date they are
due for payment
Considered good ...................................... 2,996,340,744 2,920,333,820
Considered doubtful ................................. 9,841,109 1,899,041
Less: Allowance for trade receivables ..... 9,841,109 1,899,041
2,996,340,744 2,920,333,820
Others 5,437,821,066 3,339,499,396
5,437,821,066 3,339,499,396
8,434,161,810 6,259,833,216
Note 19 : Cash & Cash equivalents
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Cash on hand .......................................... 6,783,135 1,465,141
6,783,135 1,465,141
Balances with Banks
Current accounts ...................................... 172,367,033 333,732,087
Deposit account - with maturity of less than
3 months ................................................... 204,254,791
Deposit account - others .......................... 2,503,902 2,503,902
Earmarked accounts
Margin money deposits ............................ 624,378 624,378
Unpaid dividend accounts ....................... 257,032 114,388
380,007,136 336,974,755
386,790,271 338,439,896
505
Note 20 : Short Term Loans & Advances (Unsecured, considered good)
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Inter corporate deposits, loan & advances
to subsidiaries & Joint Venture ................ 1,734,490,371 1,398,542,597
Claims Receivable .................................... 40,592,139 101,075,975
Loan to ESOP Trust .................................. 125,000,000 128,000,000
Balances with Statutory Authorities ......... 91,921,056 86,099,994
Advances to Suppliers ............................. 160,961,120 152,554,163
Loans and advances to Employees ........ 15,287,451 18,736,149
Prepaid Expenses ..................................... 43,387,189 88,542,181
Other advances ........................................ 1,417,733
2,211,639,326 1,974,968,792
Note 21 : Other Current Assets
In Rs.
As At
March 31, 2014
As At
March 31, 2013
Interest accrued on Inter corporate
deposits, loans and advances:
Subsidiaries & Joint Venture .................... 199,305,115 90,571,530
Others ........................................................ 3,297,716
202,602,831 90,571,530
Note 22 : Revenue from Operations
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Revenue from Operations
Income from operations
Income from sale of vacation Ownership .. 4,826,007,078 4,458,558,633
Income from Resorts :
- Room rentals ......................................... 107,219,623 115,342,437
- Food and beverages ............................. 705,022,559 568,398,353
- Wine and liquor ..................................... 27,452,549 22,026,133
- Others .................................................... 241,821,508 225,654,874
Annual Subscription Fee .......................... 1,327,343,011 1,137,975,192
Income from travel services & home stays 66,935,150 57,415,802
7,301,801,478 6,585,371,424
Other Operating Income :
Interest Income on Instalment sales ........ 455,981,405 304,738,652
Income from securitization (refer note 27) ... 3,776,696 116,132,195
Miscellaneous income .............................. 13,636,147 9,242,481
473,394,248 430,113,328
7,775,195,726 7,015,484,752
Note 23 : Other Income
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Dividend income:
Dividend income from current investments... 37,411,294 51,955,889
Interest income:
On deposits with bank ............................ 21,757,745
On others ................................................. 139,827,674 91,954,180
Gain on sale of Investment in
subsidiaries ............................................... 15,107,088
214,103,801 143,910,069
Note 24 :Employee benets expense
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Salaries, wages and bonus 1,590,747,364 1,394,575,882
Contribution to Provident &
other funds ................................................ 62,685,628 44,498,356
Staff welfare .............................................. 88,195,840 56,169,735
1,741,628,832 1,495,243,973
Note 25 : Finance costs
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Interest on short term borrowings ........... 9,684,184 16,000,114
9,684,184 16,000,114
Note 26 : Other expenses
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Food Beverages and smokes
Consumed
Opening Stock ........................... 10,780,650 9,784,841
Add: Purchases ......................... 220,984,813 182,125,421
231,765,463 191,910,262
Less: Closing Stock ................... 10,860,164 10,780,650
220,905,299 181,129,612
Operating Supplies ..................... 354,359,015 226,274,466
Power and fuel........................... 266,556,681 220,374,327
Rent (including lease rentals) ..... 605,267,646 412,450,688
Rates and taxes ......................... 37,598,502 22,776,040
Insurance ................................... 18,692,816 12,619,594
Repairs and maintenance :-
-Buildings and Resort
Renovations .............................. 120,944,508 105,913,406
-Ofce Equipment ...................... 25,300,218 12,472,748
-Others ...................................... 126,366,296 83,967,311
Communication .......................... 75,467,208 75,751,854
Software Charges ...................... 19,072,549 29,001,032
Consultancy charges ................. 103,373,229 96,159,406
Advertisement ............................ 87,257,688 100,621,753
Sales commission ..................... 252,164,063 328,710,946
Sales promotion expenses ......... 1,399,112,025 1,307,477,856
Discounts .................................. 176,482,536 102,246,205
Travelling ................................... 198,213,781 178,808,582
Service Charges ........................ 131,881,890 172,614,161
Bad debts .................................. 1,886,810
receivables................................. 7,942,068 385,452
Auditors' remuneration includes:
Audit fees .................................. 3,500,000 3,500,000
506
In Rs.
Year ended
March, 2014
Year ended
March, 2013
Other services ........................... 7,120,000 1,050,000
Reimbursement of expenses/
levies ...................................... 12,441
Directors fees ........................... 1,025,000 700,000
Commission to non whole time
directors .................................... 10,000,000 9,000,000
Loss on exchange uctuation
(net) .......................................... 1,488,689 2,025,717
Loss on xed assets sold/Writeoff
(net) ...................................... 3,305,618 3,924,498
Bank Charges ............................ 63,209,776 60,662,779
Miscellaneous ............................ 125,010,083 97,103,587
4,443,516,435 3,847,722,020

27 Securiti sation
The company has been securitising amounts receivable including future
interest receivable thereon. The excess of consideration received over the
principal amounts of receivable from members (net of reversals in respect
of cancelled members) is recognised as income from Securitisation.
In Rs.
Year ended March 31,
2014 2013
Value of Accounts receivable ......... 603,524,597 2,934,934,145
Less: Future interest receivable ..... 131,965,238 651,517,010
Principal amount of receivables ..... 471,559,359 2,283,417,135
Consideration received ................... 500,000,000 2,450,000,000
Prot on securitisation .................... 28,440,641 166,582,865
Less: Reversals ............................... 24,663,945 50,450,670
Income from securitisation ............. 3,776,696 116,132,195
28 Contingent Liabilities
In Rs.
As at March 31,
2014 2013
(A) Receivables securitised, with
recourse.
Certain specied Receivables have
been securitised with a bank for
availing nance. In case a member
defaults in payment to the bank, the
bank would have recourse to the
company. In such cases, the company
has recourse to the customer .............. 2,689,790,487 3,844,877,592
(B) Claims against the company not
acknowledged as debts
1) Luxury tax claimed on membership,
room revenue and other services
provided to members, which has
been disputed by the company .... 74,671,145 72,350,714
2) Service tax demands for various
years disputed by the company .... 638,770,100 589,846,508
In Rs.
As at March 31,
2014 2013
3) Income tax matters
(a) Time share income
i) The Income Tax
Departments appeal
against the orders of the
CIT(A) for the assessment
years 1998-99 to 2003-04
and 2005-06 to 2009-10 in
respect of issues relating
to revenue recognition,
was decided in favour
of the Company by
the Appellate Tribunal.
Amount under dispute
was Rs. 2,710,025,658
(including interest of
Rs. 676,551,721)
ii) For the assessment
years 2004-05,
2010-11 & 2011-12, the
companys appeal is
pending with CIT(A).
The amount of demand
is Rs. 1,824,923,160/-
(including interest of
Rs. 475,881,114/-)
(b) Other matters disputed
which are timing differences
Demand raised on account of
disallowance of expenditure
during construction,
software expenses, website
development expenses,
renovation expenses and
Project design cost
Rs. 160,641,473/-(including
interest of Rs. 36,348,559/-).
Rs. 142,707,705 (including
interest of Rs. 32,469,862)
However even if these
liabilities crystalise, there
would be future tax benets
available on account of timing
differences, except on the
outcome of the appeals
(c) Other disallowances
Interest on other disallowances
included in the contingent
liability is Rs. 30,254,625
(as at March 31, 2013
Rs. 26,616,570) ................. 123,079,473 115,055,341
The above are exclusive of
consequential effect of similar matters
in respect of the assessments
remaining to be completed
The above amounts are based on
demands raised, which the company
is contesting with the concerned
authorities. Outows, if any, arising
out of these claims would depend
on the outcome of the decision of
the appellate authorities and the
companys rights for future appeals.
No reimbursements are expected.
507
(C) Other matters under appeal
(i) The Government of Kerala issued an Order dated July 3, 2007
cancelling the assignment of land underlying the Munnar resort
and directed repossession of land on the grounds that it is
agricultural land and cannot be used for commercial purposes.
The Company has led an appeal before the Commissioner
of Land Revenue against the Order stating that the patta
issued does not specify that the land should be used only for
agricultural purpose and also obtained a Stay Order from the
Kerala High Court against eviction from the property.
The Commissioner of Land Revenue, Trivandrum vide his
Order dated November 22, 2007 dismissed the appeal led by
the Company against the Order of the Sub-Collector, District
of Devikulam dated July 3, 2007 cancelling the assignment of
land underlying the Munnar Resort and directing repossession
of land on the grounds that it is agricultural land and cannot
be used for commercial purposes. The Company led a writ
petition before the Kerala High Court against the said Order
and on December 13, 2007, the Court granted an interim stay
of all further proceedings.
(ii) The Company engaged a building contractor for construction
of a resort. As the construction did not proceed as per agreed
timelines the Company terminated the contract. The contractor
has claimed Rs. 12.56 Crores as damages for termination
of the Contract. The Company has made a counter claim of
Rs. 20.03 Crores towards liquidated damages and other losses.
The matter is pending before the Arbitrator.
(iii) The Regional Provident Fund Commissioner, Chennai had
issued Summons initiating proceedings under Section 7A of the
Employees Provident Fund Act for failing to remit contributions
on allowances relating to employees for the period from
March 2011 to Feb 2013 in respect of Indian employees
and from April 2010 to Feb 2013 in respect of international
employees. The PF Authorities have made a claim of
Rs. 1.89 Crores. The Company has led a Writ Petition before
the Madras High Court and the Court has granted an Interim
stay of the above proceedings.
In Rs.
29 Capital commitments As at March 31,
2014 2013
Estimated amount of contracts
remaining to be executed on capital
account and not provided for (net
of advances) ................................... 369,926,295 422,275,060
In Rs.
30 CIF Value of Imports Year ended March 31,
2014 2013
Capital goods.................................. 11,552,423 18,093,987
In Rs.
31 Expenditure in foreign currency Year ended March 31,
2014 2013
Salaries ............................................ 61,453,334 46,970,395
Travel ............................................... 695,360 382,265
Consultancy .................................... 21,379,965 29,064,846
Marketing expenses........................ 29,579,023 38,964,548
Lease rent ....................................... 50,705,355
Others .............................................. 15,142,175 21,876,451
In Rs.
32 Earnings in foreign exchange Year ended March 31,
2014 2013
Room rentals and restaurant sales ... 3,720,654 7,202,724
Sale of vacation ownership ............ 104,030,210 114,766,311
Interest (including Inter corporate
deposits, loan & advances to
subsidiaries and joint venture) ....... 44,551,294 7,800,623
33 Particulars of consumption
In Rs.
Consumption 2013-14 2012-13
% of total
value
Consumption
Rs
% of total
value
Consumption
Rs
Provisions, beverages
(excluding wine, liquor and
smokes) .................................. 97 213,699,847 97 175,715,784
Wine, Liquor and Smokes ........ 3 7,205,452 3 5,413,828
100 220,905,299 100 181,129,612
Indigenous ............................... 100 220,905,299 100 181,129,612
Imported ..................................
100 220,905,299 100 181,129,612
34 Employee Benets
The following table sets out the funded status of the dened benet scheme and
amount recognised in the nancial statements.
In Rs.
Gratuity 2013-14 2012-13
a. Net Asset/(Liability) recognized
in the balance sheet
Present value of funded obligation .. 27,951,110 27,354,662
Fair value of plan assets ................ 21,034,394 17,104,972
Net asset/(Liability) ......................... (6,916,716) (10,249,690)
b. Expense recognized in the
Statement of prot and loss
Current service cost ....................... 8,700,463 8,732,779
Interest cost .................................... 2,045,035 1,401,143
Expected return on plan assets ..... (1,694,432) (1,320,484)
Actuarial (gains)/losses .................. (6,571,128) 1,436,252
Total expense .................................. 2,479,938 10,249,690
c. Change in present value of
obligation
obligation as at the beginning of
the year ........................................... 27,354,662 19,152,550
Current service cost ...................... 8,700,463 8,732,779
Interest cost ................................... 2,045,035 1,401,143
Actuarial (gains)/losses ................. (6,565,606) 1,408,978
Benets paid ................................... (3,583,445) (3,340,788)
obligation as at the end of the year 27,951,110 27,354,662
508
d. Change in fair value of plan
assets
Plan assets at the beginning of the
year.................................................. 17,104,972 12,655,898
Expected return on plan assets ..... 1,694,433 1,320,484
Actuarial (gains)/losses ................. 5,522 (27,274)
Contributions by employer ............. 5,812,912 6,496,652
Benets paid ................................... (3,583,445) (3,340,788)
e. Principal actuarial assumptions
1 Discount rate ................................... 9.15% 8.00%
2 Expected return on plan assets ..... 9.30% 9.30%
3 Mortality table ................................. IALM (2006-2008)
ULT
IALM (2006-2008)
ULT
f. Estimates of future salary increases considered in actuarial valuation
take account of ination, seniority, promotions, increments and other
relevant factors such as supply and demand in the employment market.
g. Experience Adjustment to the extent provided by actuary:
2013-14
2014 2013 2012 2011 2010
Present
value of
commitments 27,951,110 27,354,662 19,152,550 15,398,391 12,978,631
Fair value of
the Plans 21,034,394 17,104,972 12,655,898 13,579,177 13,870,609
Surplus/
(Decit) (6,916,715) (10,249,690) (6,496,652) (1,819,214) 891,978
Experience
adjustment on
plan liabilities (15,152,629) 56,790 56,790
Experience
adjustment on
plan assets 5,522 1,923,330 1,923,330
h.
In the absence of the relevant information from the actuary/insurer, the
above details do not include the composition of plan assets and the
estimated amount of contribution in the immediate next year.
35 Segment Reporting:
The Company has a single reportable segment namely sale of Vacation
Ownership and other services for the purpose of Accounting Standard 17
on Segment Reporting. Business segment is considered as the primary
segment.
Rs.
2013-14
Secondary Segment Information 2014 2013
Within India
Sales ................................................ 7,671,165,516 6,900,718,441
Segment assets ............................... 22,975,914,223 19,279,571,020
Capital expenditure incurred during
the year ............................................ 923,225,238 1,028,074,652
Outside India
Sales ................................................ 104,030,210 114,766,311
Segment assets ............................... 627,137,134 497,292,328
the year ............................................ 91,036 2,549,516
Total
Sales ................................................ 7,775,195,726 7,015,484,752
Segment assets ............................... 23,603,051,357 19,776,863,348
the year ............................................ 923,316,274 1,030,624,168
36 Earnings per share:
In Rs.
2013-14
2014 2013
Net prot after tax (in Rs.) ..............
945,346,670 1,069,776,951
Weighted average number of
Equity Shares used in computing
basic earnings per share (Nos) ..... 87,898,313 83,867,274
Equity Shares used in computing
diluted earnings per share (Nos) on
account of ESOP ............................ 87,915,815 83,889,749
Earnings Per Share Basic (in Rs.) .. 10.76 12.76
Earnings per share Diluted (in Rs.) .. 10.75 12.75
Par value of shares (in Rs.) ............. 10.00 10.00
37 The year end foreign currency exposures that have not been hedged by
a derivative instrument or otherwise are given below:
As at March 31,
2014 2013
Value in foreign currency
Receivables (in UAE Dirham) ......... 8,783,464 6,241,226
Loan to Malaysian Subsidiary
(in Malaysian Ringgit) ..................... 5,131,914 4,763,836
Loan to Thailand Subsidiaries
(in Thai Baht) .................................. 179,209,892 169,582,233
Loan & Advances to Arabian
Dreams Hotels Apartments LLC
(in UAE Dirham) .............................. 3,395,834
Trade Payable (in UAE Dirham) ..... 9,528
Trade Payable to Innity Hospitality
(in Thai Baht) .................................. 7,250,988
Trade Payable to Heritage Bird
(in Malaysian Ringgit) ..................... 673,215
Value in INR
Receivables ..................................... 144,425,013 93,117,117
Loan to Malaysian Subsidiary ........ 94,016,661 83,863,051
Loan to Thailand Subsidiaries........ 329,746,696 317,002,697
Loan & Advances to Arabian
Dreams Hotels Apartments LLC ... 55,837,123
Trade Payable ................................. 155,305
Trade Payable to Innity
Hospitality ....................................... 14,054,589
Trade Payable to Heritage Bird ...... 12,333,299
38 In June 2009, the Company made an Initial Public Offer of 58,96,084 equity
shares of Rs. 10 each for cash at a premium of Rs. 290 per equity share,
aggregating to Rs. 17,688.25 lacs of which Rs. 16,242.51 lacs were utilised
for construction of resorts and Rs. 1,445.74 lacs towards issue expenses.
39 On April 12, 2013, the Company allotted 41,41,084 equity shares of
Rs. 10 each for cash at a premium of Rs. 245 per equity share aggregating
to Rs. 10,559.76 lakhs, pursuant to shares issued under an Institutional
Placement Programme (IPP). Out of the total proceeds, the Company
has spent Rs. 308.78 lakhs towards issue expenses, Rs. 7,313.68 lakhs
509
towards capital expenditure and the balance has been invested in debt
schemes of mutual funds/Fixed Deposits with Bank/lying in bank account.
40 The particulars regarding dues to Micro enterprises and small enterprises
have been determined to the extent such parties have been identied on
the basis of information available with the Company. This has been relied
upon by the auditors. There are no dues payable to such parties as at the
balance sheet date.
41 Related Party Transactions:
(i) Names of related parties and nature of relationship where control
exists:
A. Holding Company Mahindra & Mahindra Limited
B. Subsidiary Companies Mahindra Holidays and Resorts USA Inc.
Mahindra Hotels & Residences India
Limited
MHR Hotel Management GmbH (till
29
th
November, 2013)
Heritage Bird (M) Sdn Bhd.
Bell Tower Resorts Private Limited
BAH Hotelanlagen AG
(till 29
th
November, 2013)
Divine Heritage Hotels Private Limited
Gables Promoters Private Limited
Holiday on Hills Resorts Private Limited
Limited *
MH Boutique Hospitality Limited **
C. Fellow Subsidiaries with
whom the company has
transactions during the
year
Mahindra Intertrade Limited
Mahindra Consulting Engineers Limited
Mahindra First Choice Wheels Ltd
Mahindra First Choice Services Limited
Mahindra Navistar Automotives Limited
Mahindra Reva Electric Vehicles Private
Limited
Mahindra Lifespace Developers Limited
Mahindra Retail Private Limited
Mahindra Two Wheelers Limited
Mahindra Vehicle Manufacturers Limited
Mahindra Shubhlabh Services Limited
Mahindra Automobile Distributor Private
Limited
Mahindra EPC Services Private Limited
Mahindra Steel Service Centre Limited
Bristlecone Inc.
Defence Land Systems India Private
Limited
EPC Industries Limited
Mahindra Defence Systems Limited
Mahindra Integrated Township Ltd
Mahindra Integrated Business Solutions
Private Limited
Mahindra Solar One P Ltd.
Mahindra Steel Services Centre Ltd
Mahindra World City (Jaipur) Ltd
Mahindra World City Developers Ltd
D. Other entities under the
control of the company
Limited Employees Stock Option Trust
E. Entity in which the
company has joint control
Arabian Dreams Hotels Apartments LLC
F. Key Management
Personnel
Mr Rajiv Sawhney (Managing Director
& CEO)
* By virtue of management control. Further MH Boutique Hospitality
Limited holds balance 51% equity.
** By virtue of management control.
(ii) Related Party Transactions and balances
March 31,
2014
March 31,
2013
Holding company
Transactions for the year ended:
Sale of services....................................... 485,998,501 494,025,127
Purchases of xed assets ...................... 82,800,000
Purchase of services .............................. 70,659,156 65,620,000
Dividend paid .......................................... 266,342,568 279,942,568
Balances as at:
Outstanding: Payable ............................. 47,688,211 7,033,075
Outstanding: Receivable ........................ 73,019,356 64,142,088
Subsidiary companies
Investments made:
Bell Tower Resorts Private Limited ........
Divine Heritage Hotels Private Limited ..... 92,497,545
Gables Promoters Private Limited ......... 136,378,036
Holiday on Hills Resorts Private
Limited ..................................................... 438,739,420
Limited ..................................................... 11,598,534 256,512,129
MH Boutique Hospitality Limited ........... 9,538,138
ICD, loans and advances given:
Bell Tower Resorts Private Limited ........ 2,000,000
Divine Heritage Hotels Private Limited .... 103,700,000 65,000,000
Limited ..................................................... 6,200,000 286,071,000
Gables Promoters Private Limited ......... 107,606,000
Limited ..................................................... 255,189,900
MH Boutique Hospitality Limited ........... 52,155,600
Sale of services:
Bell Tower Resorts Private Limited ........
Purchase of services:
Bell Tower Resorts Private Limited ........ 41,634,321 36,889,329
Limited ..................................................... 19,557,500 5,206,215
Heritage Bird (M) Sdn Bhd. ................... 15,933,409 12,200,878
Limited ..................................................... 16,875,071 5,359,000
BAH Hotelanlagen AG ............................ 619,544
Interest Income:
Bell Tower Resorts Private Limited ........... 61,627,988 58,381,450
Divine Heritage Hotels Private Limited ...... 9,095,846 3,958,767
Gables Promoters Private Limited ......... 728,321
510
March 31,
2014
March 31,
2013
Holiday on Hills Resorts Private Limited .. 27,186,427 11,249,783
Limited ..................................................... 24,877,240 9,304,637
MH Boutique Hospitality Limited ........... 5,084,399 1,914,082
Balances as at:
Investment:
BAH Hotelanlagen AG ............................ 311,379,054
Limited ..................................................... 499,940 499,940
MHR Hotel Management GmbH ............ 1,567,125
Mahindra Holidays and Resorts USA Inc. ..... 45,503 45,503
Gables Promoters Private Limited ......... 136,378,036 136,378,036
Holiday on Hills Resorts Private Limited ... 438,739,420 438,739,420
Limited ..................................................... 268,110,663 256,512,129
Loans and Advances:
Limited ..................................................... 670,625 629,012
ICD Outstanding:
Holiday on Hills Resorts Private Limited ...... 326,863,589 296,195,804
Gables Promoters Private Limited ........ 108,261,488
Limited ..................................................... 272,435,460 263,199,262
Outstanding: Receivable
Holiday on Hills Resorts Private Limited ...... 39,417,604 2,616,878
Outstanding: Payable
Limited ..................................................... 14,054,589 5,359,000
Heritage Bird (M) Sdn Bhd. ................... 12,333,299
Fellow Subsidiaries
Sale of xed assets:
Mahindra First choice Wheels Limited ... 680,000
Sale of services:
Mahindra Logistics Limited ................... 42,667
Mahindra Intertrade Ltd .......................... 2,675,430 5,618,236
Mahindra Navistar Automotives Limited. ...... 1,806,074 384,059
Mahindra First Choice Wheels Ltd ......... 471,532 95,574
Mahindra First Choice Services Limited ... 471,299
Mahindra Lifespace Developers Ltd ...... 4,400,232 2,947,469
Limited ..................................................... 101,316 403,382
Mahindra Retail Private Limited ............. 172,309
Mahindra Two Wheelers Limited ............ 4,341,991 431,235
Mahindra Vehicle Manufacturers Limited...... 283,859
March 31,
2014
March 31,
2013
Mahindra Shubhlabh Services Limited ..... 908,950 138,025
Mahindra Solar One P Ltd. ...................... 54,586
Mahindra Integrated Township Ltd ............ 29,339
Mahindra World City Developers Ltd......... 1,956,406
Mahindra World City (Jaipur) Ltd ........... 1,806,199
Mahindra Steel Service Centre Limited .... 84,296
Mahindra Defence Systems Limited ...... 2,940,026
Bristlecone India Limited. ....................... 19,500
Bristlecone Inc. ....................................... 308,682
Defence Land Systems India Private
Limited ..................................................... 438,314
EPC Industries Limited ............................. 21,901
Mahindra Consulting Engineers Limited.... 1,012,732
Mahindra EPC Services Private Limited .... 8,580,780 6,928,902
Purchase of services:
Mahindra Consulting Engineers Limited .. 208,500
Mahindra Logistics Limited ................... 88,987 662,820
Mahindra Integrated Business
Solutions Private Limited ........................ 250,000
Mahindra Defence Systems ................... 310,000
Balances as at:
Mahindra Logistics Limited .................... 3,519
Mahindra First Choice Wheels Ltd ......... 386,726
Mahindra Lifespace Developers Ltd ...... 402,834 752,012
Mahindra Consulting Engineers Limited ... 1,021,716
Mahindra Engineering Services Limited ... 515,839 825,800
Mahindra Intertrade Limited. .................. 1,483,688 938,521
Mahindra Automobile Distributor Private
Limited .....................................................
Mahindra Shubhlabh Services Limited. ..... 145,899 155,738
Mahindra EPC Services Private Limited 1,315,936 273,558
Mahindra Two Wheelers Limited ............ 3,697,724 23,595
Mahindra First Choice Wheels Ltd ......... 90,302
Mahindra World City Developers Ltd ..... 25,173
Mahindra World City (Jaipur) Ltd ............. 177,393
Mahindra Defence Systems Limited .......... 1,704,000
Mahindra Navistar Automotives Limited ....... 516,730
Bristlecone India Limited ........................ 19,500
Defence Land Systems India Pvt Ltd .... 439,910
Limited ..................................................... 173,510
Entity in which the company has
joint control
Investments made: .............................. 5,211,172
ICD, loans and advances given: ........ 46,044,914
Purchase of services: ......................... 52,520,144
Interest Income: .................................. 3,537,065
Balances as at: ....................................
Outstanding: Receivable .................... 6,322,845
ICD Outstanding: ................................ 49,514,278
511
March 31,
2014
March 31,
2013
Other entities under the control of
the company
Balances as at:
Limited Employees Stock Option Trust.... 150,023,708 150,045,758
Limited Employees Stock Option Trust ... 125,000,000 128,000,000
Managerial remuneration:
Mr Rajiv Sawhney ................................... 28,886,988 24,320,437
42 Capital work in progress and expenditure during construction
pending allocation included therein.
Description As at March 31
2014 2013
Capital Work-in-progress ................ 636,433,993 2,314,208,454
Expenditure during construction pending allocation included above:
Salaries,Wages & Bonus ................ 100,732,036 189,287,921
Staff welfare Expenses ................... 1,042,167 2,929,987
Power & Fuel .................................. 204,397 3,547,017
Rent ................................................. 539,627 2,650,292
Rates & Taxes ................................. 434,549 2,394,571
Repairs-Others ................................ 2,193,677 2,722,658
Travelling ......................................... 18,203,344 37,541,608
Communication ............................... 2,095,479 4,502,894
Printing & Stationery ....................... 865,930 1,503,834
Insurance ........................................ 15,074 29,932
Consultancy Charges ..................... 28,744,380 55,913,239
Freight ............................................. 1,889,717 5,365,373
Interest - Others .............................. 4,477,769 16,145,664
Bank Charges ................................. 115,442 2,324,346
Miscellaneous ................................. 129,880 524,101
Total ................................................ 161,683,468 327,383,437
43 Joint Venture Disclosures
i. Interest in Joint Ventures
Name of the Jointly Controlled
Entity Country of
Incorporation
Proportion
of ownership
interest
Arabian Dreams Hotels Apartments
LLC, Dubai (since March 26, 2013)
United Arab
Emirates 49%
ii. Interest in assets, liabilities, income, expenses and capital
commitment with respect to the Jointly controlled entity is as
follows:
In Rs.
Particulars 2013-2014 2012-13
Liabilities :
Short term borrowings 27,122,526
Other current liabilities 1,982,948
Assets :
Long term loans and advances 900,534
Short term loans and advances 6,889,474
Trade receivables 4,914,385 189,386
Cash and cash equivalents 801,759
Income
54,673,821 1,055,353
Expenses
72,840,122 865,967
Contingent liabilities/Capital
commitments NIL NIL
44 During the year, the Board of Directors at their Meeting held on 17
th

September, 2013 approved the Scheme of Amalgamation and Arrangement
of Bell Tower Resorts Private Limited (wholly owned subsidiary) with the
Company. The Scheme was approved by the share holders at the Court
Convened Meeting held on 19
th
February 2014. The appointed date under
the Scheme is 1
st
April, 2013 and the Scheme will be effective upon the
lling of certied copies of the Orders of the High Court of Madras & High
Court of Bombay at Goa with respective Registrar of Companies. The
Company has obtained the approval of the High Court of Bombay at Goa,
while the approval of High Court of Madras is awaited. Consequently no
impact of the Scheme has been given in the nancial statements for the
year ended 31
st
March, 2014.
45. The Board of Directors at their Meeting held on 29
th
January, 2014 has
resolved to liquidate by way of voluntary dissolution of its wholly owned
subsidiary company in USA, Mahindra Holidays and Resorts USA Inc.,
subject to requisite approvals in USA. Accordingly, the subsidiary is in the
process of completing the voluntary dissolution formalities and the impact
on account of this on the operations of the Company is immaterial.
46 The gures for the previous year have been regrouped/reclassied to
For and on behalf of the Board of Directors.

A. K. Nanda
Chairman
Cyrus J. Guzder
Director
Vasant Krishnan
Chief Financial Ofcer
Dinesh Shetty
Company Secretary
Place: Mumbai
Date: May 06, 2014
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MAHINDRA HOLIDAYS AND RESORTS USA INC.
513
DIRECTORS REPORT
The following shall constitute a report of the Board of Directors
relating to the activities of the Company during the nancial
year ended 31
st
March, 2014.
Your Company continues to be a wholly owned subsidiary
of Mahindra Holidays & Resorts India Limited, a company
incorporated in India.
Your Company was formed in the State of Delaware to
carry on the business of building, renting, managing, and
promoting resorts, hotels, vacation facilities, leisure activities
and engaging in the business of sales, rentals, transfers,
exchanges and sharing those facilities.
During the year under review, your Company has made an
application for dissolution before the local authorities.
Mr. A. K. Nanda, Mr. Dinesh Shetty (appointed w.e.f. 1
st
January,
2014) and Mr. Ravindera Khanna (appointed w.e.f. 21
st
March,
2014) are the Directors of the Company. During the year under
review, Mr. Aloke Ghosh and Mr. Rajiv Shawney resigned from
the Directorship of the Company with effect from 1
st
January,
2014 and 21
st
March, 2014 respectively. The Board places
on record its sincere appreciation for the valuable services
rendered and guidance received from them during their tenure
as Directors of the Company.
For Mahindra Holidays and Resorts USA Inc.
Dinesh Shetty Ravindera Khanna
Director Director
Dated: 21
st
April, 2014
Place: New York
514
Board of Directors and Shareholder
Mahindra Holidays and Resorts USA Inc,
New York, NY
Mahindra Holidays and Resorts USA Inc. which comprise the
Balance sheet as of March 31, 2014, and the related statements
of operations, and cash ows for the year then ended and the
related notes to the nancial statements.
Managements Responsibility for the nancial statements
the accounting principles generally accepted in the United
States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation
misstatement.
judgment, including the assessment of the risks of the material
fraud or error. In making those risks assessments, the auditor
opinion.
Opinion
presents fairly, in all material respects, the nancial position of
Mahindra Holidays and Resorts USA Inc. as of March 31, 2014
and the results of its operations and its cash ows for the year
then ended in conformity with accounting principles generally
accepted in the United States of America.
Baldwin, NY
April 21, 2014 Stuart G Lang, CPA, PC
515
a wholly owned subsidiary of Mahindra Holidays and Resort India Limited,
an Indian corporation
BALANCE SHEET AS AT 31ST MARCH, 2014
F-2014
In USD
F-2014
In INR
F-2013
In USD
F-2013
In INR
ASSETS
Current Assets
Cash 98,711 5,928,583 111,386 6,689,844
Income taxes receivable 20,624 1,238,677 35,101 2,108,167
Interest receivable 18,929 1,136,877 18,929 1,136,877
Less allowance for non-collention of interest receivable (18,929) (1,136,875) (18,929) (1,136,876)
Total current assets 119,335 7,167,262 146,487 8,798,012
Total Assets 119,335 7,167,262 146,487 8,798,012
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Tax Payable 500 30,030 500 30,030
Accrued interest payable to parent
Total current liabilities 1,744 104,745 4,572 274,594
Common stock 10,000 shares authorised, $0.10 par value
100 shares issued and outstanding 10 601 10 601
Paid in capital 990 59,459 990 59,459
Accumulated decit (154,513) (9,280,050) (130,189) (7,819,150)
Accumulated other comprehensive income 271,104 16,282,507 271,104 16,282,508
Total stockholder's equity 117,591 7,062,517 141,915 8,523,418
Total Liabilities and Stockholder's equity 119,335 7,167,262 146,487 8,798,012
The accompanying notes are an integral part of these nancial statements.
516
FOR THE YEAR ENDED MARCH 31, 2014
DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE INCOME
F-2014
In USD
F-2014
In INR
F-2013
In USD
F-2013
In INR
INCOME
Interest income
Total income
EXPENSES
Interest expenses
Accounting and auditing fee 12,375 743,243 13,951 837,867
Baddebt provision for interest receivable
Legal fees 6,442 386,907 2,614 157,003
Licences 200 12,012
Registered agent's fee 530 31,832 642 38,580
Bank Charges
Ofce expenses 500 30,030 500 30,030
Total expenses 19,847 1,192,012 17,907 1,075,492
NET LOSS BEFORE INCOME TAXES (19,847) (1,192,012) (17,907) (1,075,492)
Income Tax Benet (4,477) (268,889) 4,477 268,889
NET LOSS (24,324) (1,460,901) (13,430) (806,603)
OTHER COMPREHENSIVE INCOME
Balance April 1 140,915 8,463,358 154,345 9,269,961
Balance March 31 116,591 7,002,457 140,915 8,463,358
Note: Exchange Rate
Foreign Currency (FC) amounts are translated for convenience into Indian Rupees at the exchange rate of Rs. 60.06 = USD 1
which is the average of the telegraphic transfer buying and selling rates quoted by the Mumbai Branch of State Bank of India on
31st March 2014.
517
F-2014
In USD
F-2014
In INR
F-2013
In USD
F-2013
In INR
CASH FLOW FROM OPERATING ACTIVITIES
Net Prot (Loss) (24,324) (1,460,901) (13,430) (806,603)
Total income (24,324) (1,460,901) (13,430) (806,603)
Adjustment to reconcile net loss to cash used by
operating activities:
Changes in operating assets and liabilities
Interest receivable
Prepaid expenses
Accured expenses (2,828) (169,850) (3,318) (199,279)
Income taxes receivable 14,477 869,489 (4,477) (268,889)
Due to parent
Interest payable to parent
Net Cash Used by Operating Activities (12,675) (761,262) (21,225) (1,274,771)
CASH FLOW FROM INVESTING ACTIVITIES
Notes receivable
CASH FLOW FROM FINANCING ACTIVITIES
Net change in Cash and Cash Equivalents (12,675) (761,262) (21,225) (1,274,771)
Cash and Cash Equivalents April 1 111,386 6,689,844 132,611 7,964,617
Cash and Cash Equivalents March 31 98,711 5,928,583 111,386 6,689,844
Note: Exchange Rate
Foreign Currency (FC) amounts are translated for convenience into Indian Rupees at the exchange rate of Rs. 60.06 = USD 1
which is the average of the telegraphic transfer buying and selling rates quoted by the Mumbai Branch of State Bank of India on
31st March 2014.
518
Notes on Financial Statements March 31, 2014
1. NATURE OF ORGANISAZATION:
Mahindra Holidays and Resorts USA Inc. (MHRUSA) is a wholly owned
subsidiary of Mahindra Holidays & Resorts India Limited (MHR), which
is incorporated in the country of India. MHRUSA was incorporated in
the State of Delaware in October 2003 and will build, rent, manage and
promote resorts, hotels, vacations facilities, leisure activities and engage
in the business of sales, rentals, transfers, exchanges and sharing those
facilities.
A meeting of the shareholders of MHRUSA was held on February 20,
2014. The shareholders unanimously adopted a resolution to withdraw
from activities in New Jersey and dissolve the corporation. The process is
expected to be completed within the next couple of months.
2. USE OF ESTIMATES:
The nancial statements of MHRUSA have been prepared on the accrual
basis of accounting. The preparation of nancial statements in conformity
with U.S generally accepted accounting principles requires management
to make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from those
estimates.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Cash consists of a checking account. The account where the funds are on
deposit may, at times, exceed federally insured limits. MHRUSA has not
experienced any losses on such account and believes it is not exposed to
any signicant credit risk on cash and cash equivalents.
The nancial statements are presented in US dollars.
4. TRANSACTIONS WITH RELATED PARTIES:
MHRUSA incurred legal fees from its attorney who is also an ofcer of the
Company in the amount of $ 6489 (Rs 389,729) for the year ended March
31, 2014.
5. NOTE RECEIVABLE:
The interest receivable as of March 31, 2014 represents 14,000 Euros (Rs.
967,650) at the exchange rate utilized as of March 31, 2010. The exchange
rate variance for the year ended March 31, 2014 was immaterial.
6. INCOME TAXES:
For the year ended March 31, 2014, the net tax expense reects carry
back/carry forward claims that will not be used as the company will be
dissolved in the next few months. The components are as follows:
Federal Benet $ 4,477 Rs. 268,889
7. COMMITMENTS AND CONTINGENCIES:
There are no commitments or contingencies.
8. OTHER COMPREHENSIVE INCOME:
Accumulated decit April 1, 2013 $ (130,189) Rs. (7,819,151)
Loss for the year ended March 31, 2014 $ (24,324) Rs. (1,460,901)
$ (154,513) Rs. (9,280,052)
Comprehensive Income
Balance March 31, 2013 $ 140,915 Rs. 8,463,355
Balance March 31, 2014 $ 116,591 Rs. 7,002,454
9. SUBSEQUENT EVENTS:
Activity in these nancial statements are reected through April 8, 2014.
10. EXCHANGE RATE:
Foreign Currency (FC) amounts are translated for convenience into Indian
Rupees at the exchange rate of Rs. 60.06 = USD 1 which is the average
of the telegraphic transfer buying and selling rates quoted by the Mumbai
Branch of State Bank of India on 31
st
March 2014.
The exchange rate adopted for EURO is Rs. 69.49 =EURO 1.
MAHINDRA HOTELS AND RESIDENCES INDIA LIMITED
519
Your Directors present the Seventh Annual Report together
with the audited accounts of your Company for the year ended
31
st
March, 2014.
OPERATIONS:
The Company has not commenced any operations during the
year under review. During the year the company had a net loss
of Rs. 0.53 lakhs.
DIVIDEND
In view of losses, your Directors do not recommend any
HOLDING COMPANY:
of Mahindra Holidays & Resorts India Limited and in turn a
subsidiary of the ultimate holding company, Mahindra &
Mahindra Limited.
DIRECTORS:
Pursuant Section 152(6) of the Companies Act, 2013,
Ms. Vimla Dorairaju retires by rotation at the forthcoming
Annual General Meeting, and being eligible, offers herself for
re-appointment.
Mr. Dinesh Shetty, Mr. Ravindera Khanna and Mr. Ajay Agarwal
were appointed as an Additional Directors of the Company with
effect from 1
st
January, 2014, 19
th
March, 2014 and 3
rd
June,
2014 respectively. They hold ofce upto the date of the ensuing
Annual General Meeting of the Company. Your Company
has received a Notice from a member under Section 160 of
the Companies Act, 2013, signifying its intention to propose
Mr. Dinesh Shetty, Mr. Ravindera Khanna and Mr. Ajay Agarwal
as candidates for the ofce of Directors at the forthcoming
During the year under review, Mr. Aloke Ghosh and Mr. Rajiv
Sawhney resigned from the Directorship of the Company with
effect from 1
st
th
March, 2014 respectively.
The Board places on record its sincere appreciation for the
valuable services rendered and guidance received from them
during their tenure as Directors of the Company.
DIRECTORS RESPONSIBILITY STATEMENT:
as at 31
st
concern basis.
AUDITORS:
Messrs Anil Nair & Associates, Chartered Accountants,
Chennai, retire as Auditors of the Company at the ensuing
Annual General Meeting and have given their consent for
re-appointment. The members are requested to appoint
Auditors from the conclusion of the forthcoming Annual
General Meeting till the conclusions of sixth Annual General
Meeting to be held in year 2019, with a yearly ratication of
such appointment and to x their remuneration.
As required under the provisions of Sections 139 of the
certicate from the above Auditors proposed to be re-appointed
conformity with the limits specied in the said Section. Further,
the Company has also received a certicate to the effect that
the Auditors proposed to be re-appointed satises the criteria
provided in section 141 of the Companies Act, 2013.
PUBLIC DEPOSITS AND LOANS/ADVANCES:
The Company has not made any loans/advances of the nature,
which are otherwise required to be disclosed in the annual
Agreements of the parent companies Mahindra Holidays &
Resorts India Limited and Mahindra & Mahindra Limited with
ABSORPTION:
In view of the nature of activities which are being carried on by
the Company, Rule 2A and 2B of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988,
concerning conservation of energy and technology absorption
respectively are not applicable to the Company.
FOREIGN EXCHANGE EARNING AND OUTGO:
There were no foreign exchange earnings and outgo during
PARTICULARS OF EMPLOYEES:
31
st
March, 2014, or was employed for a part of Financial
ACKNOWLEDGEMENT
The Board expresses its gratitude and appreciates the
assistance and co-operation received from the Creditors,
Banks, Government Authorities, Customers and Employees
Director Director
Place : Mumbai
Date : 3
rd
June, 2014
CIN : U55101TN2007PLC063285
520
TO THE MEMBERS OF M/S MAHINDRA HOTELS AND RESIDENCES INDIA LIMITED
We have audited the accompanying nancial statements of M/S
(the Company) which comprise the balance sheet as at
31 March 2014, the statement of prot and loss and the cash ow
statement for the year then ended and a summary of signicant
nancial statements that give a true and fair view of the nancial
position, nancial performance and cash ows of the Company
in accordance with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956
(the Act) read with the General Circular 15/2013 dated 13
September 2013 of the Ministry of Corporate Affairs in respect
of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of
the nancial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
misstatement of the nancial statements, whether due
to fraud or error. In making those risk assessments, the
Opinion:
(i) In the case of the Balance Sheet, of the state of affairs of
the Company as at 31 March 2014;
(ii) In the case of the Statement of Prot and Loss, of the
(iii) In the case of the Cash Flow Statement, of the cash ows
2003 (the Order), as amended, issued by the Central
227 of the Companies Act 1956, we give in the Annexure
5 of the Order.
2. As required by section 227(3) of the Companies Act 1956,
we report that:
b. In our opinion proper books of account as required
c. The Balance Sheet, statement of prot and loss and
cash ow statement dealt with by this Report are in
d. In our opinion, the balance sheet, statement of prot
and loss and cash ow statement comply with the
Accounting Standards referred to in sub-section (3C)
of section 211 of the Companies Act, 1956 read with
the General Circular 15/2013 dated 13 September
2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.; and
e. On the basis of written representations received from
the directors as on 31 March 2014, and taken on
is disqualied as on 31 March 2014, from being
f. Since the Central Government has not issued any
notication as to the rate at which the cess is to be
paid under section 441A of the Companies Act, 1956
nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be
paid, no cess is due and payable by the Company.
For ANIL NAIR & ASSOCIATES
Firm Regn No: 000175S
P. NARAYANAN
Partner
Membership No: 201758
Place : Chennai
Date : 02-05-2014
521
(Referred to in the paragraph 2 of our Report of even date)
1. The Company has no xed asset and accordingly
paragraph 4(i) of the Companies (Auditors Report) Order,
2. There is no inventory carried by the company and
accordingly paragraph 4(ii) of the Companies (Auditors
Report) Order, 2003 is not applicable to the Company.
3. In respect of loans, secured or unsecured, granted or
taken by the Company to/from companies, rms or other
parties covered in the register maintained under section
301 of the Companies Act ,1956:-
a. In our opinion and according to the information and
explanations given to us the Company has taken loan
unsecured from a Company covered in the register
maintained under section 301 of the Companies
Act 1956.
b. In our opinion the terms and conditions of the loan
was not prima facie prejudicial to the interest of the
Company.
explanations given to us, there are adequate internal
control procedures commensurate with the size of the
company and the nature of its business for rendering
services. During the course of our audit, we have not
observed any weaknesses in the internal control system.
explanation givento us and the audit procedures
applied by us, we are of the opinion that the contracts
of arrangements that need to be entered in the resister
maintained in pursuance of the section 301 of the
Companies Act, have been properly entered in the said
register.
6. The Company has not accepted any deposits from the public.
Therefore the provisions of clause (vi) of paragraph 4
of the Companies (Auditor Report) Order 2003 are not
7. In our opinion, the company has an internal audit system,
which is commensurate with the size and nature of its
business.
8. As informed to us the maintenance of cost records has not
been prescribed by the Central Government under Clause
(d) of sub section 1 of section 209 of the Companies
Act, 1956 in respect of the activities of the company.
Accordingly Clause 4(viii) of the Companies (Auditor
Report) Order 2003 is not applicable to the company.
us there were no undisputed amounts payable in respect
of income tax, Wealth Tax, Sales Tax, Customs Duty and
Excise Duty as at 31.3.2014 which were outstanding for
became payable.
10. The Company does have accumulated losses at the end
of the nancial year and it has incurred cash losses in the
nancial year under report and has incurred cash losses
in the immediately preceding nancial year.
11. The company does not have borrowings from nancial
institutions and has not issued any debentures. Therefore
Clause 4(xi) of the Companies (Auditors Report) Order
2003 are not applicable to the Company.
explanations given to us, no loans and advances have
been granted by the company on the basis of security by
way of pledge of shares, debentures and other securities.
according to the explanations given to us the company is
not a Chit Fund nor a Nidhi / Mutual Benet Fund/ Society.
Accordingly in our opinion the provisions of Clause 4(xiii)
of the Companies (Auditors Report) Order 2003 is not
applicable to the company.
14. As per the records of the Company and the information
and explanations given to us by the management, the
company has not entered into transactions and contracts
in respect of trading in securities, debentures and other
investments during the year, therefore Clause 4(xiv) of
the Companies (Auditors Report) Order 2003 are not
15. According to the records of the Company and the
information and explanations provided by the management,
the company has not given any guarantee for loans taken
by others from banks or nancial institutions.
16. There is no term loans raised by the Company during
the year and accordingly a provision of Clause 4(xvi) of
Companies (Auditors Report) Order 2003 is not applicable
to the Company.
17. No funds have been raised by the company and
accordingly provision of Clause 4(xvii) of Companies
(Auditors Report) Order 2003 is not applicable to the
Company.
18. The company has not made any preferential allotment of
shares to a party covered in the Register maintained U/s.
19. During the year covered by our audit report the company
has not issued any debentures.
20. During the year the company has not raised money by
way of public issue.
21. To the best of our knowledge and belief, and according to
the information and explanations given to us, there have
been no cases of fraud on or by the Company noticed or
For ANIL NAIR & ASSOCIATES
Firm Regn. No.000175S
P. NARAYANAN
Partner
Place: Chennai
Date : 02-05-2014
522
ST
MARCH, 2014
In Rs.
Particulars Note
Year ended
31-Mar-14
Year ended
31-Mar-13
Shareholders funds:
Share capital 1.1 500,000 500,000
Reserves and surplus 1.2 (1,202,833) (1,149,984)
(702,833) (649,984)
Other current liabilities 1.3 704,333 651,484
704,333 651,484

1,500 1,500
ASSETS
Current assets:
Cash and Bank balances 1.4 1,500 1,500

1,500 1,500
1,500 1,500
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 2
The Notes referred above forms an integral part of Balance Sheet
This is the Balance Sheet
referred to in our report of even date
For Anil Nair & Associates On behalf of the Board
P. Narayanan
Partner
VIMLA DORAIRAJU
Director
RAVINDERA KHANNA
Director
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
523
ST
MARCH, 2014
In Rs.
Particulars Note
No
Year ended
31-Mar-14
Year ended
31-Mar-13
Total Revenue
EXPENDITURE:
Other expenses 1.5 52,849 55,095
Total Expenses 52,849 55,095
Prot before tax (52,849) (55,095)
Less : Tax expense
Current tax
Deferred tax
Prot/(loss) for the year (52,849) (55,095)

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 2
The Notes referred above forms an integral part of the Statement of Prot & Loss
P. Narayanan
Partner
VIMLA DORAIRAJU
Director
RAVINDERA KHANNA
Director
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
524
ST
MARCH, 2014
In Rs.
Year ended
31-Mar-14
Year ended
31-Mar-13
Net prot before taxation & extraordinary items (52,849) (55,095)
Adjustment for:
Operating Prot before working capital changes (52,849) (55,095)
Adjustment for changes in working capital
Decrease in Sundry creditors and Other Payables 52,849 (444,905)
52,849 (444,905)
Cash generated from Operation (500,000)
Less: Taxes Paid
Net Cash used in Operating Activity (500,000)
B. CASH FLOW FROM INVESTING ACTIVITY
Net Cash used in Investing Activity
C. CASH FLOW FROM FINANCING ACTIVITY
Net cash from Financing Activity
Net decrease in Cash & Cash Equivalent (500,000)
Cash & Cash Equivalents:
Opening Balance (See Note: 1.4) 1,500 501,500
Closing Balance (See Note: 1.4) 1,500 1,500
Note to the cash ow statement
1. Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and balances with banks.
Cash and cash equivalents included in the cash ow statement comprise the
following balance sheet amounts.
31-Mar-14
Rs.
31-Mar-13
Rs.
Cash on Hand & Balance with Bank 1,500 1,500
Cash and cash equivalents as restated 1,500 1,500
P. Narayanan
Partner
VIMLA DORAIRAJU
Director
RAVINDERA KHANNA
Director
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
525
NOTES ON ACCOUNTS
Note 1.1: Share Capital
In Rs.
Particulars As at
31-Mar-14
Nos
As at
31-Mar-14
Amount
As at
31-Mar-13
Nos
As at
31-Mar-13
Amount
A) Authorised:
50,000 equity shares of
Rs. 10 each 50,000 500,000 50,000 500,000
50,000 500,000 50,000 500,000
B) Issued and Subscribed:
Equity:
50,000 equity shares of
Rs. 10 each 50,000 500,000 50,000 500,000
50,000 500,000 50,000 500,000
Notes:
1) The company has only one class of shares referred to as equity shares
having a par value of Rs. 10/-. Each holder of equity share is entitled to one
vote per share.
2) In the event of liquidation of the Company, the holders of equity shares
will be entitled to receive any of the remaining assets of the company,
after distribution of all preferential amounts. However,no such preferential
amounts exist currently. The distribution will be in proportion to the number
of equity shares held by the shareholders.
3) Shares in the company held by each shareholder holding more than 5%
Name of share holder No of shares % held as
at 31
st
March
2014
% held as
at 31
st
March
2013
Mahindra Holidays &
Resorts India Ltd., 49,994 99.99% 99.99%
Note 1.2: Reserves & Surplus
In Rs.
Particulars As at
31-Mar-14
As at
31-Mar-13
Surplus/(Decit) in Prot & Loss Account:-
Opening balance (1,149,984) (1,094,889)
Add:-
Prot/(Loss) for the Year (52,849) (55,095)
Closing Balance (1,202,833) (1,149,984)
Note 1.3: Other Current Liabilities
In Rs.
Particulars 31-Mar-14 31-Mar-13
Due to Holding Company 670,625 617,776
Audit Fees Payable 33,708 33,708
704,333 651,484
Note 1.4: Cash & Bank Balances
Cash & Cash Equivalents
Cash on hand

Other Bank Balances
On current account 1,500 1,500
1,500 1,500
1,500 1,500
Note 1.5: Other Expense
Rates and taxes 600 600
Legal and Professional Charges 18,541 20,787
Auditors remuneration 33,708 33,708
52,849 55,095
526
NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS AS AT
AND FOR THE YEAR ENDED MARCH 31, 2014
1. Accounting Convention
a. The nancial statements have been prepared under Historical Cost
Convention and in accordance with the accounting standards referred
to in Section 211 (3C) of the Companies Act, 1956.
b. The company generally follows mercantile system of accounting and
recognizes income and expenditure on accrual basis except those with
signicant uncertainties.
2. Fixed Assets
There were no xed assets in the company during the year ended March 31,
2014.
3. Revenue Recognition
a. The company had not commenced commercial operations during the
year ended March 31, 2014.
4. Inventories
The company did not have inventories during the year ended March 31,
2014.
5. Retirement Benets
The company did not have any employees on rolls during the year ended
March 31, 2014.
6. Taxes on Income
Since the company did not have any commercial operations during the year,
the question of income tax/deferred tax does not arise.
7. Earnings per share
Since the company did not have any commercial operations during the year
ended March 31, 2014 the Accounting Standard (AS) 21 on Earnings Per
Share, issued by the Institute of Chartered Accountants of India would not
be applicable to the company.
8. Related party Transactions
There are transactions with related parties, required to be disclosed as
per AS 18 on Related Party Disclosure issued by Institute of Chartered
Accountants of India, during the year ended March 31, 2014.
(i) Names of related parties and nature of relationship where control exists:
Name of the Related Party Nature of Relationship
Mahindra Holidays and Resorts India
Limited
Holding Company
(ii) The related party transactions are as under:
Name of transactions Holding company
Outstanding Year ended
March 31, 2014
Payable 6,70,625
9. Segment Reporting:
The Company did not commence commercial operations during the year
ended March 31, 2014. Hence, the disclosure requirement as per AS 17 on
Segment Reporting would not be applicable to the company.
As per our report of even date: For and on behalf of the Board
For Anil Nair & Associates
Chartered Accountants For Mahindra Hotels & Residences India Limited
P. Narayanan
Partner
VIMLA DORAIRAJU
Director
RAVINDERA KHANNA
Director
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
Place : Chennai
Date : 02-05-2014
527
HERITAGE BIRD (M) SDN. BHD.
The Directors hereby submit their report together with the
audited nancial statements of the Company for the nancial
year ended 31
st
March, 2014.
PRINCIPAL ACTIVITY
The Companys principal activities are holding of investment
properties and provision of time-sharing services.
There have been no signicant changes in the nature of the
principal activities during the nancial year under review.
FINANCIAL RESULTS
RM INR
Net prot for the year before taxation 3,059 56,041
Less: Taxation (9,400) (172,208)
Net loss for the year after taxation (6,341) (116,167)
DIVIDENDS
No dividends were paid or proposed for the nancial year
under review.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or
provisions during the nancial year under review.
ISSUE OF SHARES AND DEBENTURES
The Company did not issue any shares and debentures during
the nancial year.
OPTIONS
No option has been granted during the nancial year under
review to take up unissued shares in the Company.
DIRECTORS
The name of the Directors of the Company who held ofce
since the date of incorporation and at the date of this
report are:-
Ravindera Nath Khanna
Vimla Dorairaju
Koh Yeow York
Koh Tong Ngee
During the year under review, Mr. Rajiv Shawney resigned from
st
March,
2014. The Board places on record its sincere appreciation for
the valuable services rendered and guidance received from
him during his tenure as Director of the Company.
DIRECTORS INTEREST
According to the register of directors shareholding, none of
Directors in ofce at the end of the nancial year had interest
in the ordinary shares of the Company.
DIRECTORS REPORT
DIRECTORS BENEFITS
During the year, no arrangements subsisted to which the
Company is a party, with the object or objects of enabling
Directors of the Company to acquire benets by means of the
acquisition of shares or debentures of the Company or any
other body corporate.
No Director has, since the end of the previous nancial year,
received or become entitled to receive a benet (other than a
benet in the aggregate amount of emolument received or due
and receivable by Directors as shown in the nancial statements,
or the xed salary of a full-time employee of the Company or
a related corporation) by reason of a contract made by the
Company or a related corporation with the Director or with a
rm of which the Director is a member, or with a company in
which the Director has a substantial nancial interest.
BAD AND DOUBTFUL DEBTS
Before the income statement and the balance sheet were
made out, the Directors took reasonable steps to ascertain
that action has been taken in relation to the write-off and the
provision for doubtful debts, and have satised themselves that
all known bad debts have been written off and that adequate
provision has been made for doubtful debts.
At the date of this report, the Directors are not aware of any
circumstances which would render the amounts written off for
bad debts or the amount of the provision for doubtful debts
in the nancial statements of the Company inadequate to any
substantial extent.
CURRENT ASSETS
Before the income statement and the balance sheet were made
out, the Directors took reasonable steps to ensure that any
current assets, other than debts, which were unlikely to realise
in the ordinary course of business and their values as shown
in the accounting records of the Company have been written
down to an amount which they might be expected to realise.
circumstances which would render the values attributed to
current assets in the nancial statements of the Company
misleading.
VALUATION METHODS
circumstances which have arisen which render adherence to
the existing method of valuation of assets or liabilities of the
Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:-
a) any charge on the assets of the Company which has
arisen since the end of the nancial year which secures
the liabilities of any other person; or
b) any contingent liability of the Company which has arisen
since the end of the nancial year.
528
No contingent or other liability has become enforceable or is
likely to become enforceable within the year of twelve months
after the end of the nancial year which, in the opinion of the
Directors, will or may affect the ability of the Company to meet
its obligations when they fall due.
CHANGE OF CIRCUMSTANCES
circumstances not otherwise dealt with in this report or the
nancial statements which would render any amounts stated
in the nancial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Company for the nancial
year under review were not, in the opinion of the Directors,
substantially affected by any item, transaction or event of a
material and unusual nature.
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
There has not arisen in the interval between the end of the
nancial year and the date of this report any item, transaction
or event of a material and unusual nature likely, in the opinion
of the Directors, which would substantially affect the results of
the operations of the Company for the nancial year in which
this report is made.
HOLDING COMPANY
The holding company is Mahindra Holidays & Resorts India
Limited, a company incorporated in India, which holds the
entire issued and paid up capital of the Company.
AUDITORS
The auditors, Messrs. Lloyds.Earle.Panicker, Chartered
Accountants, have intimated their willingness to continue in
ofce in accordance with Section 172(2) of the Companies
Act, 1965.
Signed on behalf of the Board of Directors in accordance with
a Resolution of the Directors.
Vimla Dorairaju Ravindera Khanna
Director Director
Place : Kuala Lumpur
Dated : 25
th
April, 2014
529
Company No 780072-K
(Incorporated in Malaysia)
We have audited the nancial statements of Heritage Bird
(M) Sdn. Bhd., which comprise the balance sheet as at 31
March 2014, and the income statement, statement of changes
in equity and cash ow statement for the year then ended,
and a summary of signicant accounting policies and other
explanatory notes, as set out on pages 8 to 19.
The directors of the Company are responsible for the
preparation and fair presentation of these nancial statements
in accordance with Financial Reporting Standards and the
Companies Act 1965 in Malaysia. This responsibility includes:
designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of nancial
statements that are free from material misstatement, whether
due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are
reasonable in the circumstances.
statements based on our audit.We conducted our audit
in accordance with approved standards on auditing in
Malaysia.Those standards require that we comply with ethical
reasonable assurance whether the nancial statements are
free from material misstatement.
statements. The procedures selected depend on our judgment,
including the assessment of risks of material misstatement
of the nancial statements, whether due to fraud or error. In
making those risk assessments, we consider internal control
relevant to the Companys preparation and fair presentation
of the nancial statements in order to design audit procedures
purpose of expressing an opinion on the effectiveness
evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the
nancial statements.
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF HERITAGE BIRD (M) SDN.BHD.
Opinion
In our opinion, the nancial statements have been properly
drawn up in accordance with Private Entity Reporting Standards
and the Companies Act 1965 in Malaysia so as to give a true
and fair view of the nancial position of the Company as of 31
March 2014 and of its nancial performance and cash ows for
the period then ended.
Emphasis of matter
While qualifying our opinion, we wish to draw attention to
Note 15 to the nancial statements, where the Company has
incurred losses which exceed the issued and fully paid up
capital of the Company, although the nancial statements have
been prepared on a going concern basis, which is dependent
upon the future protable operation and additional nance
sufcient to sustain operations.
In accordance with the requirements of the Companies Act
1965 in Malaysia, we also report that in our opinion the
accounting and other records and the registers required by
the Act to be kept by the Company have been properly kept
in accordance with the provisions of the Act.
Other Matters
This report is made solely to the members of the Company, as
a body, in accordance with Section 174 of the Companies Act
1965 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
LLOYDS.EARLE.PANICKER KESAVAN K. PANICKER
A.F. 0604 761/03/11(J)
Chartered Accountants Chartered Accountant
Place : Kuala Lumpur
Dated : 25
th
April, 2014
Company No 780072-K
530
BALANCE SHEET AS AT 31 MARCH, 2014
F-2014 F-2014 F-2013 F-2013
Note In MYR In INR In MYR In INR
NON CURRENT ASSETS
Property, plant and equipment 5 4,348,168 79,658,438 4,446,990 81,468,857
CURRENT ASSETS
Trade and other receivables 6 728,544 13,346,926 57,048 1,045,119
Cash at Bank 7 84,051 1,539,814 223,340 4,091,589
812,595 14,886,740 280,388 5,136,708
CURRENT LIABILITIES
Trade and other payables 8 295,706 5,417,334 233,458 4,276,951
Amount due to holding company 9 5,131,914 94,016,664 4,763,836 87,273,476
Taxation 9,400 172,208
5,437,020 99,606,206 4,997,294 91,550,427
Net Current Liabilities (4,624,425) (84,719,466) (4,716,906) (86,413,719)
Total (276,257) (5,061,028) (269,916) (4,944,862)
FINANCED BY:
Share Capital 10 300,002 5,496,037 300,002 5,496,037
Accumulated loss (576,259) (10,557,065) (569,918) (10,440,898)
SHAREHOLDER'S EQUITY (276,257) (5,061,028) (269,916) (4,944,861)
The notes form an integral part of these Financial statements
531
Company No 780072-K
INCOME STATEMENT FOR THE YEAR ENDED MARCH 31, 2014
F-2014 F-2014 F-2013 F-2013
Note In MYR In INR In MYR In INR
Revenue 11 897,550 16,443,116 808,500 14,811,720
Cost of Sales 280,413 5,137,166 328,191 6,012,459
Gross Prot 617,137 11,305,950 480,309 8,799,261
Administration Expenses 205,103 3,757,487 213,246 3,906,667
Prot from operations 12 412,034 7,548,463 267,063 4,892,594
Finance Charges 13 408,975 7,492,422 408,975 7,492,422
Net Loss before taxation 3,059 56,041 (141,912) (2,599,828)
Taxation 14 (9,400) (172,208)
Net Loss for the year (6,341) (116,167) (141,912) (2,599,828)
The notes form an integral part of these nancial statements.
Company No 780072-K
532
F-2014 F-2014 F-2013 F-2013
In MYR In INR In MYR In INR
CASH FLOW FROM OPERATING ACTIVITIES
Net loss before taxation 3,059 56,041 (141,912) (2,599,828)
Adjustment:
Depreciation on property, plant & equipments 98,822 1,810,419 108,872 1,994,535
Operating loss before working capital changes 101,881 1,866,460 (33,040) (605,293)
Changes in inventories
Changes in receivables (671,496) (12,301,807) (3,003) (55,015)
Changes in payables 62,248 1,140,383 (192,711) (3,530,466)
Cash generated from operations (507,367) (9,294,964) (228,754) (4,190,774)
Taxes paid
Net cash from operating activities (507,367) (9,294,964) (228,754) (4,190,774)

Net cash from Investing Activities
Amount due to holding company 368,078 6,743,189 (92,773) (1,699,601)
Net cash from/(used in) nancing activities 368,078 6,743,189 (92,773) (1,699,601)
Net increase/(decrease) in cash and cash equivalents (139,289) (2,551,775) (321,527) (5,890,375)
Cash and cash equivalents brought forward 223,340 4,091,589 544,867 9,981,963
Cash and cash equivalents carried forward 84,051 1,539,814 223,340 4,091,588
533
Company No 780072-K
DETAILED INCOME STATEMENT FOR THE YEAR ENDED MARCH 31, 2014
F-2014 F-2014 F-2013 F-2013
In MYR In INR In MYR In INR
REVENUE 897,550 16,443,116 808,500 14,811,720
LESS: COST OF SALES 280,413 5,137,166 328,191 6,012,459
GROSS PROFIT 617,137 11,305,950 480,309 8,799,261
EXPENDITURE
Administration Expenses
Audit fee 11,000 201,520 11,000 201,520
Accountancy fee 30,000 549,600 30,000 549,600
Assessment and quit rent 703 12,879
Astro 15,396 282,055 16,477 301,859
Bank charges 131 2,400 145 2,656
Courier charges
Depreciation 98,822 1,810,419 108,872 1,994,535
Directors fee
Electricity Charges 26,938 493,504 25,468 466,574
Insurance 1,717 31,455
Loss/(Gain) on forex 1,463 26,802
Printing & stationery 3,266 59,833 2,575 47,174
Professional Fees 6,230 114,134 2,230 40,854
Secretarial fees 1,613 29,550 2,640 48,365
Upkeep of premises 7,060 129,339 4,555 83,448
Water Charges 3,944 72,254 6,104 111,825
205,103 3,757,487 213,246 3,906,667
Prot from operations 13 412,034 7,548,463 267,063 4,892,594
Finance Charges 14 408,975 7,492,422 408,975 7,492,422
NET LOSS BEFORE TAXATION 3,059 56,041 (141,912) (2,599,828)
TAXATION 15 (9,400) (172,208)
NET LOSS FOR THE YEAR (6,341) (116,167) (141,912) (2,599,828)
Company No 780072-K
534
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2014
Share
Capital
Accumulated
Losses Total
Note In MYR In MYR In MYR
Balance as at 31
st
March, 2012 300,002 (428,006) (128,004)
Loss for the year (141,912) (141,912)
Balance as at 31
st
March, 2013 300,002 (569,918) (269,916)
Loss for the year (6,341) (6,341)
Balance as at 31
st
March, 2014 300,002 (576,259) (276,257)
Share
Capital
Accumulated
Losses Total
Note In INR In INR In INR
Balance as at 31
st
March, 2012 5,496,037 (7,841,070) (2,345,033)
Loss for the year (2,599,828) (2,599,828)
Balance as at 31
st
March, 2013 5,496,037 (10,440,898) (4,944,861)
Loss for the year (116,167) (116,167)
Balance as at 31
st
March, 2014 5,496,037 (10,557,065) (5,061,028)
535
Company No 780072-K
Notes to the Financial Statements 31 March 2014
1. PRINCIPAL ACTIVITIES
The Companys principal activities are holding of investment properties
and timesharing services.
2. BASIS OF PREPARATION
applicable approved accounting standards in Malaysia and the provisions
3. FINANCIAL RISK MANAGEMENT POLICIES
The Companys nancial risk management policy seeks to ensure that
adequate nancial resources are available for the development of the
Companys business whilst managing its risks. The Company operates
within clearly dened guidelines that are approved by the Board and the
Companys policy is not to engage in speculative transactions.
The main areas of nancial risks faced by the Company and the policy in
respect of the major areas of treasury activity are set out as follows:-
a) Liquidity and cash ow risks
The Company ensures that there are adequate funds to meet all their
obligations in a timely and cost-effective manner.
b) Foreign currency risk
The Company is exposed to foreign currency risk as a result of its
normal trading activities, where the currency denomination differs
from the local currency, Ringgit Malaysia (RM). The company
manages its exposure to foreign currency risk by monitoring
uctuations in foreign exchange and by timing its payment in foreign
currencies accordingly.
Apart from the above, the Company does not face any material
nancial risks in other areas such as credit risk, interest rate risk,
market risk, etc.
4. ACCOUNTING POLICIES
a) Basis of accounting
The nancial statements of the Company have been prepared under
the historical cost convention, unless otherwise indicated.
b) Cash and cash equivalents
Cash comprises cash at bank and in hand including bank overdraft
and deposits. Cash equivalents comprises investments maturing
within three months from the date of acquisition and which are
readily convertible to known amount of cash which are subject to an
insignicant risk of change in value.
c) Income tax
Income tax on the prot or loss for the year comprises current and
deferred taxes. Current tax is the expected amount of income taxes
payable in respect of the taxable prot for the year. It is measured
using the tax rates that have been enacted at the balance sheet date.
Deferred tax is recognized using the liability method for all temporary
differences between the carrying amounts of assets and liabilities
and their tax bases at the balance sheet date. Deferred tax liabilities
are recognized for all taxable temporary differences. Deferred tax
assets are recognized for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is
probable that future taxable prot will be available against which the
deductible temporary differences, unused tax losses and unused
tax credits can be utilized. Deferred tax assets and liabilities are
not recognized on temporary differences arising from goodwill or
negative goodwill or from the initial recognition of an asset or liability
in a transaction which is not a business combination and at the time
of the transaction, affects neither accounting prot nor taxable prot.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the period when the assets are realised or
the liabilities are settled. The carrying amount of a deferred tax asset
is reviewed at each balance sheet date and is reduced to the extent
that it becomes probable that sufcient future taxable prot will be
available.
Deferred tax is recognized in the income statement, except when it
arises from a transaction which is recognized directly in equity. In
this case the deferred tax is charged or credited directly in equity.
When the deferred tax arises from a business combination that is
an acquisition, it is in included in the resulting goodwill or negative
goodwill.
d) Financial instruments
Financial instruments carried on the balance sheet include cash
and bank balances, trade and other receivables and payables and
borrowings. The accounting policies on recognition and measurement
of these items are disclosed in the individual accounting policies with
each item.
Financial instruments are classied as liabilities or equity in
accordance with the substance of the respective contractual
arrangements. Interest, dividends, gains and losses relating to a
nancial instrument classied as a liability are reported as expense
or income. Distributions to holders of nancial instruments classied
as equity are charged directly to equity. Financial instruments are
offset when the Company has a legally enforceable right to offset
and intends to settle either on a net basis or to realize the asset and
settle the liability simultaneously.
e) Provisions
Provisions are recognized when the Company has a present legal
and constructive obligation as a result of past events, when it is
probable that an outow of resources embodying economic benets
will be required to settle the obligation, and when a reliable estimate
can be made of the amount of the obligation.
f) Foreign currency transactions and balances
Transactions in foreign currencies are recorded in Ringgit Malaysia
at rates of exchange ruling at the time of the transaction. Foreign
currency monetary assets and liabilities are translated at the
exchange rate ruling at the balance sheet date.
g) Trade receivables
Trade receivables are carried at anticipated realizable value. Bad
debts are written off in the period in which they are identied.
An estimate is made for doubtful debts based on a review of all
outstanding amounts at the period end.
h) Property, plant and equipment
depreciation and less any impairment losses.
Depreciation is provided on the straight line method to write off each
asset over its estimated useful life. No depreciation is provided on
freehold land and building. The principal rates used are as follows:
Furniture and ttings 10%
Freehold building 2%
i) Impairment of assets
The carrying values of assets are reviewed for impairment when
there is an indication that the assets might be impaired. Impairment
is measured by comparing the carrying values of the assets with
their recoverable amounts. The recoverable amount is the higher of
an assets net selling price and its value in use, which is measured
by reference to discounted future cash ows. Recoverable amounts
are estimated for individual assets, or if it is not possible, for the
cash-generating unit.
An impairment loss is charged to the income statement immediately,
unless the asset is carried at revalued amount. Any impairment loss
of a revalued asset is treated as a revaluation decrease to the extent
of previously recognized revaluation surplus for the same asset.
Subsequent increase in the recoverable amount of an asset is
treated as reversal of the previous impairment loss and is recognized
to the extent of the carrying amount of the asset that would have
determined (net of amortization and depreciation) had no impairment
loss been recognized. The reversal is recognized in the income
statement immediately, unless the asset is carried at revalued
amount. A reversal of an impairment loss on a revalued asset is
credited directly to revaluation surplus. However, to the extent that
an impairment loss on the same revalued asset was previously
recognized as an expense in the income statement, a reversal of that
impairment loss is recognized as income in the income statement.
j) Revenue recognition
Revenue is recognized on invoiced value of sales, less credit notes
issued.
Company No 780072-K
536
5. PROPERTY PLANT AND EQUIPMENT
F-2014 F-2014 F-2013 F-2013
Furniture
and ttings
Freehold
Building
Total
(In MYR)
Total
(In INR) (In MYR) (In INR)
Net Book Value:
Opening balance 4,446,990 4,446,990 81,468,857 4,555,862 83,463,392
Depreciation charge (98,822) (98,822) (1,810,419) (108,873) (1,994,553)
Closing balance 4,348,168 4,348,168 79,658,438 4,446,989 81,468,839
As at 31 March 2014
Cost 50,254 4,941,100 4,991,354 91,441,605 4,991,354 91,441,605
Accumulated
depreciation (50,254) (592,932) (643,186) (11,783,168) (544,364) (9,972,748)
Net book value 4,348,168 4,348,168 79,658,437 4,446,990 81,468,857
6. TRADE AND OTHER RECEIVABLES
F-2014 F-2014 F-2013 F-2013
Total
(In MYR)
Total
(In INR) (In MYR) (In INR)
Trade receivables: 681,114 12,478,007 9,618 176,202
Deposits: 47,430 868,918 47,430 868,918
728,544 13,346,925 57,048 1,045,120
7. CASH & BANK BALANCES
Cash at bank 84,051 1,539,814 223,340 4,091,589
84,051 1,539,814 223,340 4,091,589
8. TRADE AND OTHER PAYABLES
Trade payables 173,825 3,184,474 98,942 1,812,617
Other payables 117,881 2,159,580 100,766 1,846,033
Prepayments 30,000 549,600
Deposit received 4,000 73,280 3,750 68,700
295,706 5,417,334 233,458 4,276,950
Prepayment refers to income from timesharing sales received in advance,
which are apportioned and recognised as income on a periodical basis.
9. AMOUNT DUE TO HOLDING COMPANY
The holding company is Mahindra Holidays & Resorts India Ltd, a
company incorporated in India, which holds the entire issued and paid up
capital of the company.
The amount due to holding company, consisting of non-trade balances, is
unsecured and without any xed terms of repayment.
10. SHARE CAPITAL
F-2014 F-2013
No of
Shares
In MYR In INR No of
Shares
In MYR In INR
Authorised ordinary
shares of MYR 1 each
Balance b/f 500,000 500,000 9,160,000 500,000 500,000 9,160,000
Created during the
year
Balance c/f 500,000 500,000 9,160,000 500,000 500,000 9,160,000
Issued and fully paid
ordinary shares of MYR
1 each Balance b/f 300,002 300,002 5,496,037 300,002 300,002 5,496,037
Issued during the year
Balance c/f 300,002 300,002 5,496,037 300,002 300,002 5,496,037
11. REVENUE
Revenue represents income from time-sharing sales and rental income receivable.
12. PROFIT FROM OPERATIONS
The following items have been charged in arriving at prot from operations:-
Audit fee 11,000 201,520 9,000 164,880
Assessment and
quit rent 703 12,879
Depreciation of
property, plant and
equipment 108,872 1,994,535 108,873 1,994,553
Directors fee 14,000 256,480
13. FINANCIAL CHARGE
Interest on loan paid
to holding company 408,975 7,492,422 408,975 7,492,422
14. TAXATION
Current years
provision
Under provision for
previous year
Deferred taxation

A reconciliation of income tax expense applicable to prot before taxation
at the statutory income tax rate to income tax expense at the effective
income tax rate of the Company is as follows:
Prot before tax 3,059 56,041 (141,912) (2,599,827)
Tax at statutory
income tax rate of
20% 612 11,211 (28,382) (519,955)
Tax effect of
expenses that are
not deductible for
tax purposes 1628 29,825 973 17,825
Deferred tax not
recognised in the
nancial statements 16,699 305,926 21,775 398,918
Utilised Capital
allowance Nil Nil 5,634 103,212
Unutilised losses (9,539) (174,754)
9,400 172,207
15. GOING CONCERN
The Company has net current liabilities and deciency in shareholders
funds amounting to RM4,624,425 (Rs.84,719,466) (2013: RM4,716,906
(Rs.86,413,719) and RM276,257 (Rs.50,61,028) (2013:RM269,916
(Rs.49,44,861) respectively.
However, the nancial statements have been prepared on a going concern
basis, as the directors are of the opinion that the efciency in shareholders
fund may be overcome by appreciation in the market value of the
Companys freehold land and building. The management will be actively
pursuing any investment and business opportunities in the foreseeable
future that will reduce and gradually eliminate the said deciencies.
The nancial statements of the Company do not include any adjustments
relating to amounts and classications of assets and liabilities that might be
necessary should the Company be unable to continue as going concern.
16. RELATED PARTY TRANSACTIONS
(In MYR) (In INR) (In MYR) (In INR)
F-2014 F-2014 F-2013 F-2013
Revenue (838,215) (15,356,099) (780,000) (14,289,600)
Interest on Loan 408,975 7,492,422 408,975 7,492,422
The directors are of the opinion that the above transactions have been
entered into in normal course of business and have been established on
a negotiated basis.
17. EMPLOYEES
The number of employees of the Company as at 31 March 2014 is Nil.
(2012: Nil)
18. DATE OF AUTHORISATION FOR ISSUE OF THE FINANCIAL
STATEMENTS
The nancial statements were authorised for issue by the Board of
Directors on 10 April 2014.
19. EXCHANGE RATES
Rupees at the exchange rate of Rs.18.32 = MYR 1, which is the average
st
March 2014.
BELL TOWER RESORTS PRIVATE LIMITED
537
Your Directors present the Nineteenth Annual Report together
31
st
March, 2014.
OPERATIONS:
During the year under review, your Company earned income
of Rs. 1016 lakh as compared to Rs. 820 lakh during the
previous nancial year, resulting in decrease in net loss to
Rs. 870 lakhs as against Rs. 1063 lakh during the previous
nancial year.
DIVIDEND:
In view of the losses, your Directors do not recommend any
Dividend for the year under review.
SCHEME OF AMALGAMATION AND ARRANGEMENT
During the year under review, the Board approved the Scheme
of Amalgamation and Arrangement (the Scheme) of the
Company with Mahindra Holidays & Resorts India Limited,
the holding company (MHRIL) and their respective
shareholders and creditors. The appointed date under the
Scheme is 1
st
April, 2013.
The Honble High Court of Bombay judicature at Goa vide
its order dated 6
th
December, 2013 dispensed the Company
from convening Meeting of the Equity Shareholders and the
Secured/unsecured Creditors of the Company.
The Honble High Court of Bombay Judicature at Goa,
vide its order dated 2
nd
May, 2014, approved the Scheme
of Amalgamation and Arrangement of the Company with
Mahindra Holidays & Resorts India Limited. Approval of
Honble High Court of Madras of the said Scheme is awaited.
The Scheme will be effective from the last of the dates on
which the certied or authenticated copies of the orders of the
Honble High Court of Bombay at Goa, Panaji, and Honble
High Court of Madras are led with the Registrar of Companies,
Goa and Chennai (Tamil Nadu) respectively.
DIRECTORS:
Mr. Harinder Singh retires by rotation at the forthcoming
Annual General Meeting and, being eligible, offers himself for
re-appointment.
During the year under review, Mr. Ravindera Nath Khanna
was appointed as an Additional Director with effect from 5
th

March, 2014. He holds ofce upto the date of ensuing Annual
General Meeting of the Company. Your Company has received
a Notice from a member under Section 160 of the Companies
Act, 2013, signifying its intention to propose Mr. Ravindera
Khanna as candidate for the ofce of Director of the Company
at the forthcoming Annual General Meeting.
Mr. Rajiv Sawhney and Mr. Aloke Ghosh tendered their
resignations from the Directorship of the Company with effect
from 11
th
October, 2013 and 1
st
January, 2014 respectively.
valuable service rendered and guidance received from them
During the year under review, Mr. Srikantan R was appointed
as Manager of the Company with effect from 1
st
May, 2013.
as at 31
st
preventing and detecting fraud and other irregularities; and
concern basis.
HOLDING COMPANY:
of Mahindra Holidays & Resorts India Limited and in turn
subsidiary of the ultimate holding company Mahindra &
Mahindra Limited.
538
ABSORPTION:
Your Company continuously strives to conserve energy, adopt
environment friendly practices and employ technology for
more efcient operations.
The particulars relating to energy conservation and technology
absorption, as required under Section 217(1)(e) of the
Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988
are given in the Annexure to this Report.
The total foreign exchange earnings and outgo during the
st
March, 2014 of the Company is
shown in the notes to the accounts.
31
st
ACKNOWLEDGEMENTS:
Director Director
Date: 5
th
May, 2014
Place: Mumbai
CIN: U92419GA1995PTC004768
539
ANNEXURE TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
ST
MARCH, 2014.
a. Energy Conservation measures taken: The operations of your Company are not energy-intensive. However, adequate
b. Additional investments and proposals, if any, are being implemented for reduction of consumption of energy:
1. Installation and retrotting of energy efcient CFL/LED lights.
2. Installation of motion and time control for lighting systems.
c. Impact of the measures taken/to be taken at (a) & (b) above for reduction of energy consumption and consequent
The above measures have resulted in reduction of Energy consumption.
d. Total energy consumption and energy consumption per unit of production as per FormA of the Annexure to the Rules
in respect of industries specied in the schedule: Not Applicable
1. Areas in which R&D is carried out : The Company has not carried out any R&D activities
during the year.
3. Future plan of action : Not Applicable
5. Technology absorption, adaptation and innovation : Nil
6. Imported technology for last 5 years : Nil
Director Director
Date: 5
th
May, 2014
Place: Mumbai
CIN: U92419GA1995PTC004768
540
TO THE MEMBERS OF
BELL TOWER RESORTS PRIVATE LIMITED (the Company)
st
March, 2014, the
for the year then ended and a summary of the signicant
The Management is responsible for the preparation of these
nancial position, nancial performance and cash ows of
dated 13th September 2013 of the Ministry of Corporate
material misstatements, whether due to fraud or error.
we comply with the ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the
nancial statements are free from material misstatement.
and the reasonableness of the accounting estimates made by
the Management, as well as evaluating the overall presentation
sufcient and appropriate to provide a basis for our unqualied
audit opinion.
Opinion
the Company as at 31st March, 2014;
of the Company for the year ended on that date and
Emphasis of Matter
We draw attention to Note 34 to the nancial statements. The
Company incurred a net loss of Rs. 86,974,584 during the year
ended 31st March, 2014 and, as of that date; the Companys
current liabilities exceeded its total assets by Rs. 343,060,058.
These conditions may indicate the existence of a material
uncertainty that may cast a doubt about the Companys
ability to continue as a going concern. However, the nancial
statements have been prepared on the assumption that the
Company is a going concern having regard to the Scheme of
Amalgamation and Arrangement between the Company and
its Parent, described in Note 33 to the nancial statements,
which is awaiting the necessary approvals. Till such approvals
are obtained, based on the nancial support extended by the
Parent [which includes loans having an outstanding amount of
Rs. 810,763,913 (including interest accrued Rs. 122,691,828)
as at the year-end] as well as the Parents commitment of
future nancial support to enable the Company to meet its
nancial obligations, the nancial statements of the Company
have been prepared on a going concern basis.
1. As required by the Companies (Auditors Report) Order, 2003
(the Order) issued by the Central Government in terms of
Section 227(4A) of the Act, we give in the Annexure a statement
on the matters specied in paragraphs 4 and 5 of the Order.
2. As required under provisions of Section 227(3) of the Act,
we report that:
(c) The Balance Sheet, the Statement of Prot and Loss
(d) In our opinion, the Balance Sheet, Statement of Prot
and Loss and Cash Flow Statement comply with the
Accounting Standards notied under the Act (which
continue to be applicable in respect of section 133 of
the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September 2013 of the Ministry of
Corporate Affairs).
(e) On the basis of written representations received from the
directors as on 31st March, 2014 taken on record by the
Board of Directors, none of the directors is disqualied
as on 31st March, 2014 from being appointed as a
director in terms of Section 274(1)(g) of the Act.
For DELOITTE HASKINS & SELLS LLP
(Firm Registration No. 117366W/W-100018)
Sanjiv V. Pilgaonkar
Partner
MUMBAI, 5
th
May, 2014
541
even date)
activities/results during the year, the provisions of clause
(xiii) of paragraph 4 of the Order are not applicable to
the Company.
(ii) In respect of the Companys xed assets:
to us, the Company has maintained proper records
details and location of all xed assets.
(b) The xed assets were physically veried by the
Management during the year ended March 2012 in
accordance with a regular programme of verication
of all assets once in three years which, in our
The discrepancies noticed on such verication have
been properly dealt with in the books of account.
(c) There have been no disposals of xed assets during
the year.
(iii) In respect of the Companys inventories:
(a) In our opinion and according to the information
and explanations given to us, the inventories
were physically veried during the year by the
Management at reasonable intervals.
and explanation given to us, the procedures of
physical verication of inventories followed by the
Management were reasonable and adequate in
relation to the size of the Company and the nature
of its business.
verication.
parties covered in the Register maintained under section
control system.
(vi) According to the information and explanations given
to us, the Company has not entered into any contract
or arrangement with other parties, which need to be
entered in the Register maintained under section 301 of
(viii) In our opinion, the internal audit functions carried out
during the year by a rm of Chartered Accountants
business.
(ix) In our opinion and according to the information and
explanations given to us, the Central Government has
not prescribed maintenance of cost records under
Section 209(1)(d) of the Companies Act, 1956 in respect
of the Companys services.
(x) According to the information and explanations given to
us in respect of statutory and other dues:
(a) The Company has been regular in depositing
undisputed statutory dues including Provident Fund,
Employees State Insurance, Income-tax, Luxury
tax, Value added tax, Service tax and other material
statutory dues applicable to it with the appropriate
authorities. We have been informed that no sums
were payable in respect of Investor Education and
Protection Fund, Sales Tax and Excise Duty.
given to us, no undisputed dues payable in respect
Income-tax, Luxury tax, Value added tax, Service tax
and other material statutory dues were in arrears as
at 31st March 2014 for a period of more than six
to us, there are no dues of Income-tax, Sales tax,
Value added tax, Service tax, Customs duty, Wealth
tax, Excise duty and Cess which have not been
deposited as on 31st March, 2014, on account of
any dispute.
us, the accumulated losses as at the year-end exceed
fty per cent of its net worth at the end of nancial year.
Further, the Company has incurred cash losses during
the nancial year covered by our audit and also in the
542
us, the Company has not borrowed any sum from banks,
nancial institutions nor has it issued debentures that
were outstanding during the year. Therefore provisions
of paragraph 4(xi) of the Order are not applicable to the
Company.
(xiii) According to the information and explanations given to
us, the Company has not granted loans and advances
debentures and other securities. Therefore provisions of
paragraph 4(xii) of the Order are not applicable to the
Company.
(xiv) According to the information and explanations given
to us, the Company is not a dealer or trader in shares,
securities or debentures and other investments.
Therefore, the provisions of paragraph 4(xiv) of the
Order are not applicable to the Company.
taken by others from banks and nancial institutions
during the year.
(xvi) According to the information and explanations given
to us, no terms loans were obtained during the year.
Therefore provisions of paragraph 4(xvi) of the Order are
not applicable to the Company. For the purpose of this
Clause, short term borrowings from the Parent have not
been regarded as term loans.
of the Balance Sheet of the Company, we report that the
Company has used funds raised on short term basis for
long term investments. On an overall basis an amount of
Rs. 796,579,999 have been used for long term purposes
as on balance sheet date.
(xviii) According to the information and explanations given
to us, the Company has not made any preferential
allotment of shares to parties and companies covered
Companies Act, 1956 during the year. Therefore, the
provisions of paragraph 4(xviii) of the Order are not
us, the Company has not issued any debentures during
the year. Therefore, the provisions of paragraph 4(xix) of
us, the Company has not raised any money by public
issue during the year. Therefore, the provisions of
paragraph 4(xx) of the Order are not applicable to the
Company.
(xxi) To the best of our knowledge and belief and according
has been noticed or reported during the year.
(Registration No. 117366W/W-100018)
Partner
MUMBAI, 5
th
May, 2014
543
ST
MARCH 2014
As at
31
st
March 2014
As at
31
st
March 2013
Rupees Rupees
Shareholders funds
Share capital 3 199,386,740 199,386,740
Reserves and surplus 4 (543,051,249) (456,076,665)
(343,664,509) (256,689,925)
Deferred tax liabilities (net) 5 -
Long term provisions 6 604,451 544,995
604,451 544,995
Current liabilities
Short term borrowings 7 688,072,085 673,448,870
Trade payables 8 25,638,093 17,929,853
Other current liabilities 9 127,168,160 76,087,064
Short term provisions 10 445,012 660,141
841,323,350 768,125,928
TOTAL 498,263,292 511,980,998
ASSETS
Non-current assets
Fixed assets 11
Tangible assets 444,526,876 463,081,185
Intangible assets 428,380 1,032,469
444,955,256 464,113,654
Long term loans and advances 12 8,564,685 180,800
453,519,941 464,294,454
Current assets
Inventories 13 4,156,840 3,404,415
Trade receivables 14 1,170,150 1,054,408
Cash and cash equivalents 15 36,760,626 33,779,407
Short term loans and advances 16 2,059,355 8,783,230
Other current assets 17 596,380 665,084
44,743,351 47,686,544
TOTAL 498,263,292 511,980,998
For Deloitte Haskins & Sells LLP
Partner
Place : Mumbai
Date : May 5
th
2014
Harinder Jeet Singh Dinesh Shetty
Director Director
Arun Khandelwal
Company Secretary
Place : Mumbai
Date : May 5
th
2014
544
ST
MARCH 2014
Year ended
31
st
March 2014
Year ended
31
st
March 2013
Rupees Rupees
Revenue
Revenue from operations 18 97,698,895 79,122,711
Other income 19 3,902,516 2,885,320
Total revenue 101,601,411 82,008,031
Expenses
Cost of food and beverages consumed 20 12,087,312 11,333,817
Purchase of stock in trade (traded goods) 2,747,427 1,454,847
Changes in inventories of stock in trade 21 (379,983) (437,499)
Employee benets expense 22 36,327,774 33,340,607
Finance costs 23 61,782,669 58,463,634
Depreciation and amortisation expense 11 21,678,871 22,254,660
Other operating and general expenses 24 54,331,925 61,868,045
Total expenses 188,575,995 188,278,111
Loss before tax (86,974,584) (106,270,080)
Tax expense
Current tax expenses relating to prior years 68,042
Loss for the year (86,974,584) (106,338,122)
Earnings per share basic and diluted 28 (4.36) (5.33)
Face value per share 10.00 10.00
Partner
Place : Mumbai
Date : May 5
th
2014
Director Director
Arun Khandelwal
Company Secretary
Place : Mumbai
Date : May 5
th
2014
545
ST
MARCH 2014
Year ended
31
st
March 2014
Rupees
Year ended
31
st
March 2013
Rupees
A Cash ow from operating activities
Loss before tax (86,974,584) (106,270,080)
Adjustments for non-cash and other items
Interest expense 61,627,988 58,381,450
Interest income (2,740,049) (2,675,719)
Depreciation and amortisation expense 21,678,871 22,254,660
Bad debts written off 422,155
Provision for employee benets (155,673) 627,754
80,411,137 79,010,300
Operating loss before working capital changes (6,563,447) (27,259,780)
Changes in working capital
Inventories (752,425) (842,320)
Trade receivables (115,742) 6,011,856
Short term loans and advances 1,561,890 135,786
Long term loans and advances 19,000 48,818
Trade payables 7,708,240 5,476,301
Other liabilities (1,544,034) 1,770,106
6,876,929 12,600,547
Cash generated from operations 313,482 (14,659,233)
Income tax payments (3,303,400) (3,601,501)
Net cash used in operating activities [A] (2,989,918) (18,260,734)
B Cash ow from investing activities
Capital expenditure of xed assets including capital advances and capital creditors (5,298,033) (2,645,191)
Movement in restricted deposits (margin money deposits) (1,828,219) 213,350
Net cash (used in)/from investing activities [B] (4,317,499) (214,881)
546
Year ended
31
st
March 2014
Rupees
Year ended
31
st
March 2013
Rupees
C Cash ow from nancing activities
Loans taken 12,623,215 24,766,085
Inter corporate deposit taken 2,000,000
Interest paid (6,162,798) (5,838,146)
Net cash from nancing activities [C] 8,460,417 18,927,939
Net increase/(decrease) in cash and cash equivalents [A]+[B]+[C] 1,153,000 452,324
Cash and cash equivalents at the beginning of the year 3,827,327 3,375,003
Cash and cash equivalents at the end of the year 4,980,327 3,827,327
1 Cash and cash equivalents as per cash ow statement 4,980,327 3,827,327
Add: Restricted deposits (margin money deposits) 31,780,299 29,952,080
Cash and cash equivalents as per note 15 36,760,626 33,779,407
2 Figures in brackets represent outows
3 See accompanying notes forming part of the nancial statements - 1 to 35
ST
MARCH 2014
Partner
Place : Mumbai
Date : May 5
th
2014
Director Director
Arun Khandelwal
Company Secretary
Place : Mumbai
Date : May 5
th
2014
547
Bell Tower Resorts Private Limited (the Company) is engaged in the business
of rendering hospitality services at a full service hotel. The Company is an
unlisted public limited company that is a wholly owned subsidiary of Mahindra
Holidays & Resorts India Limited, (the Parent). The Company owns a hotel
in Goa at which it provides hospitality services to the upscale market.
2. Signicant accounting policies
(a) Basis of accounting and preparation of nancial statements:
The nancial statements of the Company have been prepared in accordance
with the Generally Accepted Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards notied under the Companies Act,
1956 (the 1956 Act) (which continue to be applicable in respect of Section
133 of the Companies Act, 2013 (the 2013 Act) in terms of General Circular
15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and
the relevant provisions of the 1956 Act/2013 Act, as applicable. All assets
and liabilities have been classied as current and non-current as per the
companys normal operating cycle and other criteria set out in the schedules
VI (revised) to the Companies Act, 1956. The nancial statements have
been prepared on accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the nancial statements
are consistent with those followed in the previous year.
(b) Use of estimates:
The preparation of nancial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent liabilities)
and the reported income and expenses during the year. The management
believes that the estimates used in preparation of the nancial statements are
prudent and reasonable. Future results could differ from these estimates and
the differences between the actual results and the estimates are recognised
in the periods in which the results are known/materialise.
(c) Inventories:
Stock of food and beverages, stock in trade (traded goods) and operating
supplies are carried at lower of cost and net realisable value. Cost is
determined on Moving Weighted Average basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable value is
estimated at the expected selling price less estimated costs of procurement
and sales.
(d) Cash ow statements:
The cash ow statement is prepared in accordance with Indirect Method
as explained in the Accounting Standard (AS) 3 on Cash Flow Statements.
Cash and bank balances and current investments that have insignicant risk
of change in value, which have durations up to three months, are included
in the Companys cash and cash equivalents in the Cash Flow Statement.
(e) Revenue recognition:
Revenue is primarily derived from hotel operations including rental of
rooms and sale of food and beverages and other allied services. Revenue
is recognised when the rooms are occupied and the services have been
rendered. Revenues exclude value added tax, luxury tax and service tax.
Interest income is recognised on a time proportion basis by reference to the
principal outstanding and at the rate applicable. Dividends are credited to
the Statement of Prot and Loss when the right to receive such dividend is
established.
(f) Tangible xed assets:
Tangible xed assets of the Company are stated at acquisition cost less
accumulated depreciation and accumulated impairment losses, if any. All
costs relating to the acquisition and installation of xed assets are capitalised
and include nancing costs relating to borrowed funds attributable to
construction or acquisition of qualifying xed assets, upto the date the asset
is ready for intended use. Such nancing costs include foreign currency
translation differences arising from foreign currency borrowings to the extent
that they are regarded as an adjustment to the interest costs. Subsequent
expenditure related to an item of xed asset is added to its book value only
if it increases future benets from the existing asset beyond its previously
assessed standard of performance.
Losses arising from the retirement of and gains or losses arising from
the disposal of xed assets which are carried at cost less accumulated
depreciation are recognised in the Statement of Prot and Loss.
Depreciation is provided on a pro-rata basis using the straight line method
over the estimated useful life of the assets or the rates prescribed in the
schedule XIV of the Companies Act 1956, whichever is higher as follows:
Assets Rate
Building 1.63%
Plant and Machinery 4.75%
Computers 16.21%
Ofce Equipment 4.75%
Furniture and Fixtures 9.50%
Vehicles 9.50%
All tangible xed assets costing less than Rs 5,000 each are fully depreciated
in the year of purchase.
(g) Intangible assets:
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises its
purchase price, including any import duties and other taxes (other than
those subsequently recoverable from the taxing authorities), and any directly
attributable expenditure on making the asset ready for its intended use and
net of any trade discounts and rebates. Subsequent expenditure on an
intangible asset after its purchase/completion is recognised as an expense
when incurred unless it is probable that such expenditure will enable
the asset to generate future economic benets in excess of its originally
assessed standards of performance and such expenditure can be measured
and attributed to the asset reliably, in which case such expenditure is added
to the cost of the asset.
Gains or losses arising from the retirement or disposal of intangible assets
are determined as a difference between the net disposal proceeds and the
carrying amount of the asset are recognised as income or expenses in the
Intangible assets are amortised on a straight line basis over the assets
anticipated useful life estimated by the management. The amortisation rates
used are:
Assets Rate
Computer software licenses 16.21%
(h) Foreign currency transactions:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the transaction.
Foreign currency monetary assets and liabilities outstanding at the Balance
Sheet date are restated at year end rates. Exchange differences arising on
settlement of transactions and translation of monetary items are recognised
as income or expense in the year in which they arise and charged to the
Any premium or discount arising at the inception of the forward exchange
contract is recognised as income or expense over the life of the contract. Any
prot or loss arising on cancellation of such a forward exchange contract is
recognised as income or expense during the year in which such cancellation
occurs.
(i) Investments:
Investment that are readily realisable and are intended to be held for not
more than one year from the date on which such investments were made are
classied as current investments. All other investments are classied as long-
term investments. Long-term investments are carried at cost less provision
for diminution other than temporary, in the value of such investments, such
diminution being determined and made for each investment individually.
Current investments are carried individually, at the lower of cost and fair
value. Cost of investments includes acquisition charges such as brokerage,
fees and duties.
ST
MARCH 2014
548
(j) Employee benets:
i. Short term
Short term employee benets include salaries and performance
incentives. The undiscounted amount of short-term employee benets
expected to be paid in exchange for the services rendered by employees
are recognised as an expense in the Statement of Prot and Loss during
the year when the employees render the service to the Company.
ii. Long term
The Company has dened contribution and dened benet plans. The
plans are nanced by the Company and in the case of some dened
contribution plans by the Company along with its employees.
Dened-contribution plans
The Companys contribution to provident fund and family pension
fund made to regulatory authorities and where the Company has
no further obligation are considered as dened contribution plans
and are charged as an expense in the Statement of Prot and Loss
as they fall due based on the amount of contribution required to be
Dened-benet plans
Expenses for dened-benet gratuity plans are calculated as at the
balance sheet date by independent actuaries (using the projected
unit credit method) in a manner that distributes expenses over the
employees working life. These commitments are valued at the
present value of the expected future payments, with consideration
for calculated future salary increases, using a discount rate
corresponding to the interest rate estimated by the actuary having
regard to the interest rate on government bonds with a remaining
term that is almost equivalent to the average balance working period
of employees. Actuarial gains/losses are recognised in the Statement
of Prot and Loss in the year in which they arise.
iii. Other employee benets
Compensated absences which accrue to employees and which can be
carried to future periods but are expected to be encashed or availed
in twelve months immediately following the year end are reported as
expenses during the year in which the employees perform the services
that the benet covers and the liabilities are reported at the undiscounted
amount of the benets after deducting amounts already paid. Where
there are restrictions on availment of encashment of such accrued
benet or where the availment or encashment is otherwise not expected
to wholly occur in the next twelve months, the liability on account of the
benet is actuarially determined using the projected unit credit method.
(k) Borrowing costs:
Borrowing costs include interest, amortisation of ancillary costs incurred
and exchange differences arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the interest cost. Costs in
connection with the borrowing of funds to the extent not directly related to
the acquisition of qualifying assets are charged to the Statement of Prot
and Loss over the tenure of the loan. Borrowing costs, allocated to and
utilised for qualifying assets, pertaining to the period from commencement
of activities relating to construction/development of the qualifying asset upto
the date of capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the Statement
of Prot and Loss during extended periods when active development activity
on the qualifying assets is interrupted.
(l) Leases:
Rentals paid under operating lease are recognised as expenses in the
Statement of Prot and Loss on straight line basis over the period of lease.
Rentals received on assets given on operating leases are recognised as
income in the Statement of Prot and Loss on a straight-line basis over the
period of the lease as per the terms of agreement.
(m) Earnings per share:
Basic earnings per share is computed by dividing the prot/ (loss) after
tax attributable to equity shareholders by the weighted average number of
equity shares in issue during the year.
(n) Taxes on income:
i. Companys income taxes include taxes on the taxable income,
adjustments attributable to earlier periods and changes in deferred taxes.
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income tax
Act, 1961.
ii. Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax assets
in respect of unabsorbed depreciation and carry forward of losses are
future taxable income available to realise such assets. Deferred tax
assets are recognised for timing differences of other items only to
the extent that reasonable certainty exists that sufcient future taxable
income will be available against which these can be realised. Deferred
tax assets and liabilities are offset if such items relate to taxes on income
levied by the same governing tax laws and the Company has a legally
enforceable right for such set off. Deferred tax assets are reviewed at
each Balance Sheet date for their realisability.
(o) Impairment of assets:
The carrying value of the assets (tangible or intangible) is reviewed at each
Balance Sheet date for impairment. If any indication of impairment exists,
the recoverable amount of such assets is estimated and impairment is
recognised, if the carrying amount of these assets exceeds their recoverable
amount. The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the future cash
ows to their present value based on an appropriate discount factor. When
there is indication that an impairment loss recognised for an asset in earlier
accounting periods no longer exists or may have decreased such reversal
of impairment loss is recognised in the Statement of Prot and Loss.
(p) Accounting for Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognised when the Company has a present obligation
as a result of past events and it is probable that an outow of resources
will be required to settle the obligation in respect of which a reliable
estimate can be made. Provisions (excluding retirement benets) are
not discounted to their present value and are determined based on best
estimate required to settle the obligation at the Balance Sheet date. A
contingent liability is disclosed unless the possibility of an outow of
resources embodying economic benets is remote. A contingent asset is
neither recognised nor disclosed.
ST
MARCH 2014
549
As at
31
st
March 2014
Rupees
As at
31
st
March 2013
Rupees
3. Share capital
Authorised
20,000,000 (March 31, 2013,
each with voting rights
200,000,000 200,000,000
19,938,674 (March 31, 2013,
each with voting rights 199,386,740 199,386,740
199,386,740 199,386,740
a. The number of equity shares
outstanding at the beginning and at
the end of each reporting years is
same (i.e. 19,938,674 equity shares)
and hence reconciliation between the
two numbers has not been provided.
b. The Company has only one class of
shares referred to as equity shares
having a par value of Rs. 10. Each
holder is entitled to one vote per
share. In the event of liquidation
of the Company, the equity share
holders are eligible to receive the
remaining assets of the Company
after settlement of all preferential
amounts, in proportion to the number
of equity shares held.
c. Details of shares held by each
shareholder holding more than 5%
shares :
Name of share holder Number of
shares
%
held
Number of
shares
%
held
Mahindra Holidays & Resorts India Limited,
the Parent 19,938,674 100% 19,938,674 100%
(including benecial ownership of
100 shares held by the parent company
jointly with its managing director Mr. Rajiv
Sawhney)
d. For the period of ve years
immediately preceding 31
st
March
2014 and 31
st
March 2013, there were:
no shares allotted as fully paid
up pursuant to contract without
payment being received in cash,
no shares allotted as fully paid up
by way of bonus shares and
no shares bought back.
As at
31
st
March 2014
Rupees
As at
31
st
March 2013
Rupees
Decit in Statement of Prot and Loss
Opening loss balance (456,076,665) (349,738,543)
Add:- Loss for the year (86,974,584) (106,338,122)
(543,051,249) (456,076,665)
NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT 31
ST
MARCH 2014
As at
31
st
March 2014
Rupees
As at
31
st
March 2013
Rupees
5. Deferred tax
Depreciation 55,058,991 51,002,384
Deferred tax asset
Unabsorbed depreciation (55,058,991) (51,002,384)
Net deferred tax liability/(asset)
The recognition of deferred tax
asset on unabsorbed depreciation
has been restricted to the extent
of deferred tax liability on account
of timing difference in respect of
depreciation, the reversal of which is
virtually certain. As at the year end,
the Company also had other deferred
tax assets, on timing differences
and carried forward business losses
which have not been recognised.
6. Long term provisions
For gratuity 604,451 544,995
604,451 544,995
Also see note no. 29
Loans and advance from related
parties (unsecured)
From holding company:
Inter corporate deposit (See note (a)
below) 650,682,785 648,682,785
Unsecured loan payable on demand 37,389,300 24,766,085
688,072,085 673,448,870
a. Inter corporate deposit from the
related party is repayable within one
year and carries an interest rate of
9.50% per annum (previous year
9% per annum) which is due on
maturity.
8. Trade payables
Other than acceptances
Others 25,638,093 17,929,853
25,638,093 17,929,853
a. Trade payable ("Others") include:
Accrued payroll 2,281,590 1,669,687
Accrued expenses 3,847,565 4,827,088
550
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
Interest accrued but not due on borrowings 15,197,983 14,533,586
Interest accrued and due on borrowings 107,493,845 52,693,052
Other payables
Payables on purchase of xed assets 277,032 3,117,092
Statutory remittances 3,557,011 4,836,892
Advance collections against reservations 634,588 689,289
Trade deposits received 200,000
Recoveries from employees 7,701 17,153
127,168,160 76,087,064
As at
31
st
March
2014
Rupees
As at
31
st
March
2013
Rupees
10. Short term provisions
For gratuity 42,746 10,558
For compensated absences 402,266 649,583
445,012 660,141
Also see note no. 29
ST
MARCH 2014
11. FIXED ASSETS
Rupees
Type of Assets Gross block Depreciation Net block
Opening as at
1
st
April, 2013
Additions Deletions Closing as at 31
st

March, 2014
Upto 31
st

March, 2013
For the
year
On
deletions
Upto 31
st

March, 2014
As at 31
st

March, 2014
As at 31
st

March, 2013
Tangible assets
Freehold land 8,275,505 8,275,505 8,275,505 8,275,505
(8,275,505) () () (8,275,505) () () () () (8,275,505) (8,275,505)
Building 323,704,073 323,704,073 29,008,133 5,260,225 34,268,358 289,435,715 294,695,940
(323,704,073) () () (323,704,073) (23,715,600) (5,292,533) () (29,008,133) (294,695,940) (299,988,473)
Plant and equipment 173,132,868 799,559 173,932,427 49,162,722 8,239,814 57,402,536 116,529,891 123,970,146
(172,198,252) (934,616) () (173,132,868) (41,088,887) (8,073,835) () (49,162,722) (123,970,146) (131,109,365)
Furniture and xtures 75,387,208 443,224 75,830,432 41,212,046 6,892,166 48,104,212 27,726,220 34,175,162
(73,863,917) (1,523,291) () (75,387,208) (34,344,089) (6,867,957) () (41,212,046) (34,175,162) (39,519,828)
Vehicles 731,986 25,780 757,766 298,988 89,031 388,019 369,747 432,998
(731,986) () () (731,986) (229,449) (69,539) () (298,988) (432,998) (502,537)
Ofce equipment 331,250 917,607 1,248,857 103,312 50,048 153,360 1,095,497 227,938
(257,040) (74,210) () (331,250) (90,381) (12,931) () (103,312) (227,938) (166,659)
Computers 5,274,629 334,303 5,608,932 3,971,133 543,498 4,514,631 1,094,301 1,303,496
(4,380,112) (894,517) () (5,274,629) (3,323,379) (647,754) () (3,971,133) (1,303,496) (1,056,733)
Total 586,837,519 2,520,473 589,357,992 123,756,334 21,074,782 144,831,116 444,526,876 463,081,185
March 31, 2013 (583,410,885) (3,426,634) () (586,837,519) (102,791,785) (20,964,549) () (123,756,334) (463,081,185) (480,619,100)
Intangible assets
Computer software
licences (acquired) 8,027,202 8,027,202 6,994,733 604,089 7,598,822 428,380 1,032,469
(8,027,202) () () (8,027,202) (5,704,622) (1,290,111) () (6,994,733) (1,032,469) (2,322,580)
Total 8,027,202 8,027,202 6,994,733 604,089 7,598,822 428,380 1,032,469
March 31, 2013 (8,027,202) () () (8,027,202) (5,704,622) (1,290,111) () (6,994,733) (1,032,469) (2,322,580)
Grand Total 594,864,721 2,520,473 597,385,194 130,751,067 21,678,871 152,429,938 444,955,256 464,113,654
March 31, 2013 (591,438,087) (3,426,634) () (594,864,721) (108,496,407) (22,254,660) () (130,751,067) (464,113,654) (482,941,680)
Note: Figures in brackets represent previous year.
551
As at
31
st
March 2014
Rupees
As at
31
st
March 2013
Rupees
12. Long term loans and advances
Unsecured considered good unless
otherwise stated
Capital advances 62,500
Deposits 99,300 118,300
Taxes deducted at source 8,465,385 5,161,985
8,564,685 5,342,785
13. Inventories
(At lower of cost or net realisable
value)
Food and beverages 639,514 794,464
Stock in trade (for traded goods) 889,476 509,493
Stores and operating supplies 2,627,850 2,100,458
4,156,840 3,404,415
Unsecured
Others, considered good 1,170,150 1,054,408
1,170,150 1,054,408
Cash on hand 433,913 246,016
Balances with banks
On current accounts 4,546,414 3,581,311
In earmarked accounts
Balance held as margin money
(Refer footnote b)
31,780,299 29,952,080
36,760,626 33,779,407
Footnotes:
a. Of the above, the balances that
meet the denition of cash and
cash equivalents as per AS 3
Cash Flow Statements is 4,980,327 3,827,327
b. Includes deposits with remaining
maturity of more than 12 months
from the Balance Sheet date 5,652,080 3,952,080
otherwise stated)
Loans & advances to related parties 6,186
Balance with government authorities
Service tax credit receivable 83,796 280,268
Advances to suppliers 442,005 1,348,318
Advance to employees 44,386 107,838
Deposits 50,000 18,000
2,059,355 3,621,245
Interest accured on margin money
deposits
596,380 665,084
596,380 665,084
For the year ended
31
st
, March 2014
For the year ended
31
st
, March 2013
18. Revenue from
operations
Room, restaurants,
banquets and other
services
Room income 41,377,449 36,389,794
Food and beverage
income 44,529,895 35,398,660
Other services 7,712,179 5,207,390
93,619,523 76,995,844
Sale of traded goods 3,513,825 1,853,282
Other operating
income
565,547 273,585
97,698,895 79,122,711
Also see note no 27
19. Other income
Interest income 2,740,049 2,675,719
Net gain on foreign
currency transactions
and translations 13,459
Operating lease
rentals
1,162,467 196,142
3,902,516 2,885,320
20. Cost of food and
beverages consumed
Food and beverages
consumed
Opening stock 794,464 541,698
Add: Purchases 11,932,362 11,586,583
12,726,826 12,128,281
Less: Closing stock 639,514 794,464
12,087,312 11,333,817
21. Changes in
inventories of stock
in trade
Inventories at the
beginning of the year 509,493 71,994
Inventories at the end
of the year 889,476 509,493
(379,983) (437,499)
22. Employee benets
Contribution to
provident and other
funds 1,450,923 1,435,412
Gratuity 248,041 268,385
36,327,774 33,340,607
Also see note no 29
and 30
ST
MARCH 2014
552
For the year ended
31
st
March 2014
For the year ended
31
st
March 2013
23. Finance costs
Interest expense 61,627,988 58,381,450
Other borrowing costs 154,681 82,184
61,782,669 58,463,634
Also see note no 30
24. Other operating and
general expenses
Operating expenses
Linen and room
supplies
3,209,341 4,363,178
Catering supplies 863,608 741,700
Fuel, power and light 18,552,660 19,651,511
Repairs to buildings 5,869,285 11,768,695
Repairs to machinery 2,842,811 3,362,938
Repairs to others 3,974,916 2,364,291
Commission 586,615 439,542
Cable rentals 1,929,448 1,237,393
Payment to orchestra
staff, artists and others 1,155,507 1,555,632
Other operating
expenses 4,796,721 5,010,112
43,780,912 50,494,992
General expenses
Rates and taxes 2,433,188 3,000,365
Insurance 1,794,849 1,267,428
Advertising and
publicity
69,357 440,005
Printing and stationery 520,313 594,727
Communication
expenses
496,430 445,852
Passage and travelling 191,789 337,355
Security expenses 2,681,027 2,094,843
Professional fees 517,325 685,576
Payments to auditors
Audit fees 913,480 786,520
Tax audit fees 75,000 75,000
Out of pocket
expenses
29,341 25,430
Service tax 9,270
Bad debt written off 422,155
Other general
expenses
819,644 1,197,797
10,551,013 11,373,053
54,331,925 61,868,045
Also see note no 30
ST
MARCH 2014
25. Contingent liabilities
The Company had imported capital goods under the Export Promotion
Capital Goods Scheme (EPCG Scheme) and executed bonds aggregating
Rs. 40,408,978 in favour of Customs authorities. The Company is liable to pay
the whole of the customs duty saved on such imported goods, along with
interest at 15% per annum from the date of clearance of goods till the date
of payment of duty, if it fails to discharge its export obligations as prescribed
under the EPCG Scheme. Under the EPCG Scheme, the Company has to earn
foreign currency worth Rs. 165,965,093 in aggregate. The obligations are to
be fullled within a period of 8 years from the date of issue of import licences.
Import licenses have been issued at various points in time and the time limit of
8 years for each of them ends between the periods of 01
st
January 2015 to 29
th

May 2015. As, at the year end, the balance obligation is Rs. 17,116,199 (March
31, 2013 Rs. 18,996,563) which is to be fullled by earning foreign exchange
from hotel operations.
Based on its business plans the Company does not expect any liability to
devolve in respect of the above and therefore no provision has been held in
the accounts.
26. Estimated amount of contract remaining to be executed on capital account
st
March 2014, Rs. 1,933,906 (Previous year Rs. Nil)
27. Earnings in foreign currency
Year ended
31
st
March 2014
(Rupees)
Year ended
31
st
March 2013
(Rupees)
Room revenue/Food and Beverage
income 1,983,708 2,499,505
28. Earnings per share
Year ended
31
st
March 2014
Year ended
31
st
March 2013
Amount used as the numerator:
Loss as per Statement of Prot
and Loss attributable to equity
share holders (Rupees) (1) (86,974,584) (106,338,122)
Number of ordinary shares used
as denominator:
ordinary shares in issue (2) 19,938,674 19,938,674
Nominal value of ordinary shares
in use (Rs.) (3) 10 10
Loss per share (Basic and
Diluted) (Rs.) (1)/(2) (4.36) (5.33)
29. Employee benets
Dened-Contribution Plans
The Company offers its employees benets under dened contribution
plans in the form of provident fund and family pension fund. Provident
fund and family pension fund cover substantially all regular employees.
Contributions are paid during the year into separate funds under certain
statutory arrangements. Both the employees and the Company pay
predetermined contributions into the provident fund and pension fund. The
contributions are normally based on a certain proportion of the employees
salary.
A sum of Rs. 1,450,923 (March 31, 2013, Rs. 1,435,412) has been charged
to the Statement of Prot and Loss towards contributions to provident and
family pension fund.
553
Dened-Benets Plans
The Company offers its employees benets under a dened-benet plan in
the form of a gratuity scheme (a lump sum amount). Benets under the
dened benet plan are typically based either on years of service and the
employees compensation (immediately before retirement). The gratuity
scheme covers substantially all regular employees. Commitments are
actuarially determined at year-end. Actuarial valuation is based on Projected
Unit Credit method. Gains and losses of changed actuarial assumptions are
charged to the Statement of Prot and Loss.
The net value of the dened-benet commitment is detailed below:
As at
31
st
March 2014
(Rupees)
As at
31
st
March 2013
(Rupees)
Present value of commitment 647,197 555,553
Fair value of plan assets
Net liability recognised in the
balance sheet 647,197 555,553
As at
31
st
March 2014
(Rupees)
As at
31
st
March 2013
(Rupees)
Opening balance 555,553 287,171
Interest cost 61,332 35,326
Current service cost 221,196 122,910
Benets paid (156,397)
Actuarial (gain)/loss (34,487) 110,146
Closing balance 647,197 555,553
Net liability is bifurcated as follows:
Current 42,746 10,558
Non-current 604,451 544,995
The dened benet commitments have not been funded as at the year end.
Expenses on dened benet plan recognised in the Statement of Prot and
Loss:
Year ended
31
st
March 2014
(Rupees)
Year ended
31
st
March 2013
(Rupees)
Interest expenses 61,332 35,329
Expected return on investments
Net actuarial (gain)/loss (34,487) 110,146
Expenses accounted in the
Statement of Prot and Loss 248,041 268,385
The actuarial calculations used to estimate dened benet commitments
and expenses are based on the following assumptions, which if changed,
would affect the dened benet commitments size, funding requirements
and pension expense.
Year ended
31
st
March 2014
Year ended
31
st
March 2013
Rate for discounting liabilities 9.10% 7.95%
Expected salary increase rate 10% for the
rst 4 years &
7% thereafter
10% for the
rst 5 years &
7% thereafter
Expected return on scheme assets
Withdrawal rates 2%-25% 2%-5%
Mortality table used Indian Assured
Lives Mortality
(2006-08)
Ult table
Indian Assured
Lives Mortality
(2006-08)
Ult table
The estimates of future salary increases, considered in the actuarial
valuation, take account of ination, seniority, promotion and other relevant
factors. The above information is actuarially determined.
Experience Adjustment:
Year
ended
31
st
March
2014
(Rupees)
Year
ended
31
st
March
2013
(Rupees)
Year
ended
31
st
March
2012
(Rupees)
Year
ended
31
st
March
2011
(Rupees)
Year
ended
31
st
March
2010
(Rupees)
Present value
of commitment 647,197 555,553 287,171 267,115 287,170
Fair value of
the Plans
Surplus/(Decit) (647,197) (555,553) (287,171) (267,115) (287,170)
Experience
adjustment on
plan liabilities 161,602 (9,354) (235,129) (205,555) (206,656)
Experience
adjustment on
plan assets
The contribution expected to be made by the Company during nancial year
2014-2015 is Rs. 42,746.
30. Related Party Disclosure
A. Related Parties with whom transactions have taken place during the
year and key managerial person:
Name of the Party Relationship
Limited
Holding Company
Divine Heritage Hotels Private Limited Fellow Subsidiary Company
Mr. R Srikantan Key Managerial Personnel
B. Disclosures in respect of transactions with related parties:
Sr.
No.
Name of the
Related Party
Nature of the
Transaction
Year ended
31
st
March
2014
(Rupees)
Year ended
31
st
March
2013
(Rupees)
1 Mahindra Holidays
& Resorts India
Limited
Reimbursement of
expenses
9,211,038 6,833,416
Recovery of expenses 5,698,156 3,774,051
Purchase of xed
assets
434,059
Purchase of goods
and services
72,939
Sale of services 44,183,419 36,889,329
Inter corporate
deposit received
2,000,000
Interest accrued 61,627,988 58,381,450
Advances received 12,623,215 24,766,085
2 Divine Heritage
Hotels Private
Limited
Recovery of expenses 22,400 6,186
Reimbursement of
expenses
253,119
ST
MARCH 2014
554
C. Disclosure in respect of related party balance as on 31
st
March 2014
Sr.
No.
Particulars Party As at 31
st

March 2014
(Rupees)
As at 31
st

March 2013
(Rupees)
1 Unsecured loan
and ICD Payable
Mahindra Holidays &
[includes interest
accrued but not
due Rs. 15,197,983
(Previous year
Rs. 14,533,586) and
interest accrued and
due Rs. 107,493,845
(Previous year
Rs. 52,693,052]
810,763,913 740,675,508
Trade payables Mahindra Holidays &
11,660,904 1,857,234
2 Trade payables Divine Heritage Hotels
Private Limited
224,533
Receivables Divine Heritage Hotels
Private Limited
6,186
31. The Companys primary (business) segment is singular viz Hoteliering.
There is no geographical segment to be reported since its property is
located in and the operations are undertaken in India. Therefore segment
information required as per Accounting Standard (AS 17) on Segment
Reporting is not furnished.
32. Micro and Small enterprises
There are no dues payable to Micro and Small enterprises as at the year-
end requiring disclosures under Schedule VI of the Companies Act, 1956
and the Micro, Small and Medium Enterprises Development Act, 2006.
This information has been compiled in respect of parties to the extent to
which they could be identied as micro or small enterprises on the basis
of intimation received from the suppliers regarding their status under the
Micro Small and Medium Enterprises Development Act, 2006.
33. The Board of Directors at their meeting held on 17
th
September, 2013 has
approved a Scheme of Amalgamation and Arrangement (the Scheme)
between Bell Tower Resorts Private Limited (the Company) and Mahindra
Holidays and Resorts India Limited (the Parent). The Scheme provides
for the transfer of the entire business and whole of the undertaking of the
Company as a going concern to the Parent.
The Scheme is subject to the approval of the Honorable High Court of
Bombay at Goa and High Court of Madras, where it has been led and
other statutory authorities.
34. The accumulated losses of the Company amounting to Rs. 543,051,249
as at the year-end exceed its paid up capital of Rs. 199,386,740. The
Company incurred a net loss of Rs. 86,974,584 during the year ended
31
st
March, 2014 and, as of that date; its current liabilities exceed its total
assets by Rs. 343,060,058. However, the nancial statements have been
prepared on the assumption that the Company is a going concern having
regard to the Scheme of Amalgamation and Arrangement described in
Note 33 above. Till clearances on the Scheme are obtained and having
regard to the nancial support extended by the Parent during the year
(which includes loans aggregating Rs. 810,763,913 outstanding as at
the year-end along with interest accrued but not due Rs. 15,197,983 and
interest accrued and due Rs. 107,493,845, which sum has been included
as a part of the total liabilities) as well as their commitment of future
nancial support to enable the Company to meet its nancial obligations
and continue as a going concern, the nancial statements have been
prepared on a going concern basis.
35. Previous years gures have been reclassied wherever necessary, to
correspond and conform with the current years classication/disclosures
ST
MARCH 2014
Director Director
Arun Khandelwal
Company Secretary
Place : Mumbai
Date : May 5
th
2014
DIVINE HERITAGE HOTELS PRIVATE LIMITED
555
Your Directors take pleasure in presenting the Seventh Annual
Report together with the audited accounts of your Company
st
March, 2014.
OPERATIONS:
of Rs. 192 Lakh as compared to Rs. 79 Lakh in the previous
nancial year due to good responses from customers resulting
in higher revenues from operations. The net loss for the year
was Rs. 106 Lakh as against a loss of Rs. 286 Lakh in previous
nancial year.
During a part of the year, your Companys Resort property
at Jaisalmer was not operational due to renovation and
upgradation.
During the year under review, your Company purchased two
land parcels at Village Tung, near Lonavala, Pune.
DIVIDEND:
In view of losses your Directors do not recommend any
dividend for the nancial year 2013-14.
HOLDING COMPANY:
of Mahindra Holidays & Resorts India Limited and in turn
subsidiary of the ultimate holding company Mahindra &
Mahindra Limited.
DIRECTORS:
Pursuant to Section 152(6) of the Companies Act, 2013
Mr. Dinesh Shetty, retires by rotation, and being eligible, offers
himself for re-appointment.
During the year under review, Mr. Ajay Agarwal, was appointed
as an Additional Director, who holds ofce, in terms of Section
161(1) of the Companies Act, 2013, up to the ensuing Annual
General Meeting. Your Company has received a notice under
Section 160 of the Companies Act, 2013 from a member
proposing the candidature of Mr. Agarwal as a Director.
Your Board recommends Mr. Agarwals appointment to the
members for their approval.
During the year under review, Mr. Aloke Ghosh resigned as
st
January, 2014.
The Board places of record its sincere appreciation for the
valuable services rendered and guidance received from him
during his tenure as Director of the Company.
as at 31
st
concern basis.
AUDITORS:
Messrs S.C. Bapna & Associates, Chartered Accountants,
Jaipur retire as Auditors of the Company at the ensuing
Annual General Meeting and have given their consent for re-
appointment. The members are requested to appoint Auditors
from the conclusion of the forthcoming Annual General Meeting
till the conclusion of sixth Annual General Meeting to be held
in year 2019, with a yearly ratication of such appointment,
conformity within the limits specied in the said Section. Further,
the Company has also received a certicate from the Auditors,
to the effect, that the Auditors proposed to be re-appointed
satises the criteria provided in Section 141 of the Companies
Act, 2013.
There is no reservation, qualication or adverse remark
contained in the Auditors Report attached to the Balance
Sheet as at 31
st
March, 2014. Information referred in the
Auditors Report are self-explanatory and do not call for any
further comments.
or its employees during the year 2013 14, under review.
Your Company has not made any loans/advances of the
nature, which are otherwise required to be disclosed in the
annual accounts of the Company and of the parent companies
- Mahindra Holidays & Resorts India Limited and Mahindra
& Mahindra Limited pursuant to Clause 32 of the Listing
Agreements with the Stock Exchanges.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
556
The particulars relating to the energy conservation and
technology absorption, as required under Section 217(1)(e) of
the Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988
are given in the Annexure I to this Report.
st
March, 2014.
31
st
SECRETARIAL COMPLIANCE CERTIFICATE:
In accordance with the provisions of Section 383A of the
Companies Act, 1956, a certicate from M/s V. M. Associates,
Practicing Company Secretary, Jaipur, certifying that the
Company has complied with all the provisions of the
Companies Act, 1956 is given in the Annexure II to this Report.
ACKNOWLEDGEMENTS:
Director Director
Place : Mumbai
Date: 3
rd
June, 2014
CIN: U55101RJ2008PTC025734
557
ST
MARCH, 2014.
d. Total energy consumption and energy consumption per unit of production as per FormA of the Annexure to the
Rules in respect of industries specied in the schedule:
Not Applicable.
1. Areas in which R&D is carried out : The Company has not carried out any R&D activities
during the year
Director Director
Place : Mumbai
Date : 3
rd
June, 2014
CIN : U55101RJ2008PTC025734
ST
MARCH, 2014
558
To,
The Members,
Divine Heritage Hotels Private Limited,
No. 24, 25 & 26, Mahindra Towers,
Durga Vihar Colony, Tonk Road,
Jaipur 302 018.
We have examined the registers, records, books and papers of
DIVINE HERITAGE HOTELS PRIVATE LIMITED, (the Company) as
required to be maintained under the Companies Act, 1956, (the Act)
and the rules made thereunder and also the provisions contained in
the Memorandum and Articles of Association of the Company for the
nancial year ended on 31
st
March, 2014. In our opinion and to the
best of our information and according to the examination carried out
by us and explanations furnished to us by the Company, its ofcers,
we certify that in respect of the aforesaid nancial year:
1. the Company has kept and maintained all registers as stated in
Annexure A to this Certicate, as per the provisions and the
rules made thereunder and all entries therein have been duly
recorded.
2. the Company has led the forms and returns as stated in Annexure
B to this certicate with the Registrar of Companies through the
Ministry of Corporate Affairs, with additional ling fees, as the
case may be, as prescribed under the Act and the rules made
there under. However, no forms and returns were required to be
led with the Regional Director, Central Government, Company
Law Board or other authorities.
3. the Company being private limited company has the minimum
prescribed paid-up capital and maximum number of members
during the said nancial year were 2 (Two) excluding its present
and past employees. The Company during the year under
scrutiny:
(i) has not invited public to subscribe for its shares or
debentures; and
(ii) has not invited or accepted any deposits from persons other
than its members, Directors or their relatives.
4. the Board of Directors duly met 4 (Four) times respectively on
12.04.2013, 27.09.2013, 26.11.2013 and 28.01.2014 in respect
of which proper notices were given and the proceedings were
properly recorded and signed in the Minutes Book maintained
for the purpose. However, no circular resolution has been passed
during the nancial year ended 31
st
March, 2014.
5. the Annual General Meeting for the nancial year ended on 31
st

March, 2013 was held on 27.09.2013 after giving due notice to
the members of the Company and the resolutions passed thereat
were duly recorded in Minutes Book maintained for the purpose.
6. during the nancial year under review, 1 (one) Extra-Ordinary
General Meeting was held on 29.11.2013, after obtaining consent
of the member for a shorter notice under Section 171(2) of the
Companies Act, 1956, and resolution passed thereat were duly
recorded in the Minutes Book for the purpose.
7. there were no transaction, which were required to be entered in
the register maintained under Section 301 of the Act.
8. the Company has duly complied with the requirements of Section
217 of the Act.
9. the Board of Directors of the Company is duly constituted. During
the year under review, Mr. Dinesh Shetty, Mr. Aloke Ghosh and
Mr. Ravindera Nath Khanna, who were appointed as Directors,
regularized in the AGM held on 27.09.2013. Mr. Aloke Ghosh
resigned from the directorship of the company w.e.f. 01.01.2014.
However, there was no appointment of alternate directors and
directors to ll casual vacancy during the nancial year.
10. the Directors have disclosed their interest in other rms/
companies to the Board of Directors pursuant to the provisions
of the Act and the rules made thereunder.
11. the Company has complied with the provisions of Section 58A
and 58AA read with Rule 2 (b)(iv) of the Companies (Acceptance
of Deposit) Rules, 1975 only to the extent of unsecured loans
taken from body corporate, being exempted.
12. the Company has during the year under review, borrowed
monies in excess of the paid up share capital and free reserves
in compliance with the provisions of Section 293(1)(d) of the Act.
13. the Company has deposited both Employees and Employers
contribution to Provident Fund, with prescribed authorities
pursuant to section 418 of the Act. However, there was delay of
four days in depositing it.
14. other paragraphs of the Companies (Compliance Certicate)
Rules, 2001 are NIL or NOT APPLICABLE for the nancial year
ended 31
st
March, 2014.
For V. M. & Associates
Company Secretaries

CS Manoj Maheshwari
Partner
CERTIFICATE OF PRACTICE NO.: 1971
Place: JAIPUR
Dated: 26.04.2014
Manoj Maheshwari Ofce: 403 Royal World,
Company Secretary S.C. Road, Jaipur - 302001
(FCS: 3355; CP No.:1971)
COMPLIANCE CERTIFICATE
CIN : U55101RJ2008PTC025734
Nominal Capital: Rs. 75,00,000/-
559
Annexure B
Forms and Returns as led by the Company with the Registrar of Companies, Rajasthan through Ministry of Corporate Affairs,
during the nancial year ending on 31
st
March, 2014:
1. E-Form No. 66 along with Compliance Certicate led u/s 383A for the nancial year ended on 31.03.2013, led within time
on 28.09.2013.
2. E-Form No. 23AC & 23ACA in XBRL alongwith Balance Sheet and Prot & Loss Account for the year ended on 31.03.2013
was led within time on 30.09.2013.
3. E-Form No. 32 dated 27.09.2013 for change in designation of Mr. Dinesh Shetty, Mr. Aloke Ghosh and Mr. Ravindera Nath
Khanna from Additional Director to Director of the Company was led within time on 30.09.2013.
4. E-Form No. 20B along with Annual Return under Schedule V, for the Annual General Meeting held on 27.09.2013, led within
time on 12.11.2013.
5. E-Form No. 32 dated 01.01.2014 for cessation of Mr. Aloke Ghosh from the Directorship of the Company was led with
additional ling fees on 06.02.2014.
6. E-Form No. 23 dated 25.11.2013 to borrow money was led with additional ling fees on 24.02.2014
Annexure A
Registers as maintained by the Company:
1. Register of Members u/s 150
2. Minutes Book of Board and General Meeting u/s 193
3. Register of Contracts u/s 301
4. Register of Directors u/s 303
5. Register of Directors Shareholding u/s 307
6. Books of Accounts u/s 209
7. Register of Share Transfer
8. Register of Directors Attendance
560
TO THE MEMBERS
1. We have audited the accompanying Financial Statements
of DIVINE HERITAGE HOTELS PRIVATE LIMITED Which
comprise the Balance Sheet as at March, 31, 2014, and
the statement of Prot & Loss for the year then ended,
and the summary of signicant accounting policies and
other explanatory information, which we have signed
under reference to this report.
2. The companys Management is responsible for the
true and fair view of the nancial position and nancial
performance of the company in accordance with the
accounting standards referred to in sub section (3C) of
section 211 of the Companies Act, 1956 of India (the Act).
our audit in accordance with the standards of Auditing
issued by the Institute Of Chartered Accountants Of
India. Those standards require that we comply with
statements are free from material misstatements.
evidence, about the amounts and disclosures in the
assessments, the auditors consider internal control relevant
to the companys preparation and fair presentation of the
that are appropriate in the circumstances. An audit also
opinion.
Opinion
6. In our opinion, and to the best of our information
and according to the explanations given to us, the
accompanying nancial statements give the information
required by the Act in the manner so required and give
a true and fair view in conformity with the accounting
(a) In the case of the Balance Sheet, of the State of
Affairs of the Company as at March, 31, 2014 and;
(b) In the case of the Statement of Prot & Loss, of the
Losses for the year ended on that date.
(c) In the case of the Cash Flow Statement, of the cash
Emphasis of Matter
7. Without qualifying, attention is drawn as under:
(a) Note No. 32 to the nancial statement regarding write
back of depreciation of Rs. 207.96 Lacs due to the
change in the method of charging depreciation from
Written Down Value to Straight Line Method, due to
which prot for the year and reserve are higher by
Rs. 322.66 Lacs.
(b) With regard to Note no. 31 to the nancial
statements, it is stated that the company has incurred
a accumulated loss of Rs. 576.05 Lacs as at 31st
March, 2014 and, as of that date, the Companys
current liabilities exceeded its total assets by
Rs. 301.78 Lacs The conditions may indicate that
existence of the uncertainty that may caste a doubt
about the companys ability to continue as a going
concern. However, the nancial statements have
been prepared on the assumption that the company
is a going concern having regard to the nancial
support extended by the holding company (which
includes loans aggregating Rs. 1687.00 Lacs. as well
as their commitment of future nancial support to
enable the company to meet its nancial obligations
and continue as a going concern.
order, 2003, as amended by the companies (Auditors
Report) (Amendment) order, 2004, issued by the central
government of India in terms of sub section (4A) of section
227 of the Act (hereinafter referred to as the order) and
the company as we considered appropriate and according
to the information and explanation given to us, we give
paragraphs 4 and 5 of the said order.
9. As required by section 227 (3) of the Act, we report that:
which, to the best of our knowledge and belief, were
561
(b) In our opinion, proper books of accounts as required
by law have been kept by the company so far as
(c) The Balance Sheet and Statement of Prot and Loss
dealt with by this report are in agreement with the
books of Accounts;
(d) In our opinion, the Balance Sheet and Statement of
Prot & Loss dealt with by this report comply with the
accounting standards referred to in sub section (3C)
of section 211 of the Act.
(e) On the basis of written representation received
from the directors as on March, 31, 2013 and taken
directors is disqualied as on March, 31, 2014, from
of sub section (1) of section 274 of the act.
For S. C. BAPNA & ASSOCIATES
Chartered Accountant
(Vikesh Jain)
Place : Jaipur Partner
Dated : 26.04.2014 M. No. 406182
562
(i) (a) According to the information and explanation given
to us, the company is in process of compiling its
xed assets register.
(b) We have been explained that physical verication
was conducted by the management during the year
with the item wise lists of all its xed assets and the
value of the assets as per the books of account of
the Company, which in our opinion, is reasonable
having regard to the size of the Company and the
nature of its assets and we are informed that no
material discrepancy have been noticed on such
verication.
(c) During the year no substantial part of xed assets
has been disposed off which may effect the going
concern status of the Company.
(ii) (a) It is explained that the management has physically
conducted the physical verication of inventory at
(b) The procedure of physical verication of inventory
followed by management is reasonable and
(c) The Company is maintaining proper records of
inventory and no material discrepancy was noticed
on physical verication.
(iii) (a) (i) The Company has not granted loans to other
parties covered in the register maintained u/s
301 of the Act.
(b) (i) The Company has not taken loans from
companies, rms or other parties covered in the
register maintained u/s 301 of the Act.
(iv) There is an adequate internal control procedure
commensurate with the size of the Company and the
nature of its business, for the purchase of inventory
and xed assets and for the sale of goods. There are
no continuing failures to correct major weaknesses in
internal control.
(v) (a) The transactions that need to enter into a register in
pursuance of section 301 of the Act have been so
entered.
(b) All these transactions have been made at prices
which are reasonable having regard to the prevailing
market prices at the relevant time.
(vi) During the year the company has not accepted any
deposit from the public. Except some deposit have
been accepted by the shareholders as per the terms
and conditions stipulated by nancial institutions.
(vii) The company has not appointed any internal auditors
but the company has internal audit systems by their own
staff which is commensurate with the size and nature of
its business.
(viii) The Central Government has not prescribed the
maintenance of cost records under section 209(1)(d)
of the Companies Act, 1956 for any products of the
Company.
(ix) (a) The company is regular in depositing undisputed
statutory dues including Provident Fund,
Employees state Insurance, Income Tax, Sales Tax,
Wealth Tax Custom Duty, Excise Duty, Cess and
other Statutory dues with the appropriate authority.
There is no arrears of outstanding statutory
dues as at the last date of nancial year for a
period of more than 6 months from the date they
become payable.
(b) There are no disputed outstanding statutory dues.
(x) According to the information and explanation given to us,
the accumulated losses as at the year end exceed 50%
of its net worth at the end of nancial year. Further, the
company has incurred cash losses during the nancial
year and as well as in the immediately preceding
nancial year.
(xi) In our opinion and according to information and
explanation given to us the company has not defaulted
in repayment in dues to Banks. The company does not
have any borrowing from nancial institutions or by way
of debentures.
(xii) The company has not granted loans and advances
(xiii) In our opinion, the Company is not a Nidhi/Mutual Benet
Fund/Society. Hence provisions are not applicable.
(xiv) In our opinion, the company is not dealing or trading in
shares, securities, debentures and other investments.
(xv) In our opinion, the company has not given any guarantee
for loans taken by others from Bank or nancial
institutions.
(xvi) According to the information and explanation given to
us, the term loans have been applied for the purpose for
which they were raised.
(xvii) According to the information and explanation given to us
and on overall examination of the Balance Sheet of the
563
company, we report that no funds raised on short term
basis have not been used for long term investments. No
long terms funds have been used to nance short term
assets except permanent working capital.
(xviii) The company has not made any preferential allotment of
shares to parties and Companies covered in the register
maintained u/s 301 of the Act.
(xix) The company has not issued debentures during the year
and hence no securities have been created.
(xx) During the year the company has not raised money by
public issue.
(xxi) According to the information and explanation given to
us, no fraud on or by the company has been noticed or
reported during the course of our Audit.
Chartered Accountant
(Registration No.115649W)
(Vikesh Jain)
Place : Jaipur Partner
Dated : 26.04.2013 M. No. 406182
564
BALANCE SHEET AS AT 31ST MARCH, 2014
In Rupees
Particulars Note
As at
31.03.2014
As at
31.03.2013
Shareholders Funds
Share Capital 2 7,000,000 7,000,000
Reserves and Surplus 3 (37,240,526) (26,625,999)
(30,240,526) (19,625,999)
Deferred tax liabilities (net) 4
Long Term Provisions 5 62,282
62,282
Current Liabilities
Short- Term Borrowings 6 280,173,766 129,060,349
Trade Payables 7 2,658,464 10,656,360
Other Current Liabilities 8 36,949,271 9,399,796
Short Term Provisions 9 3,841
319,785,343 149,116,506
TOTAL 289,607,098 129,490,507
ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 10 266,552,679 119,942,780
Work in progress 10 9,057,439 3,338,343
Long-Term Loans and Advances 11 346,880 34,880
275,956,998 123,316,003
Current Assets
Inventories 12 550,448 306,799
Trade Receivables 13 2,662,799 2,509,685
Cash and Cash Equivalents 14 8,879,279 2,635,370
Other Current Assets 15 1,557,573 722,650
13,650,100 6,174,504
TOTAL 289,607,098 129,490,507

Other Notes to the nancial statements. 2534
Signicant Accounting Policies 1
In terms of our report attached For & on behalf of Board of Directors
For S C Bapna & Associates
(FRN : 115649W)
(Vikesh Jain)
Ravindera Khanna
Dinesh Shetty
Partner Director Director
M. No. 406182
Place : Jaipur
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
565
STATEMENT OF PROFIT & LOSS FOR THE YEAR 31ST MARCH, 2014
In Rupees
Particulars Note
For the
year ended
31.03.2014
For the
year ended
31.03.2013
Revenue from operations 16 18,592,940 7,875,094
Other income 17 601,675 64,275
Total Revenue 19,194,615 7,939,369
Expenses:
Cost of materials consumed 18 4,980,571 1,121,414
Operating and Direct Expenses 19 6,343,356 1,457,507
Employees Benet Expenses 20 10,282,271 3,889,491
Finance Costs 21 9,173,709 6,833,919
Depreciation and Amortization Expense 10 (15,413,819) 10,266,495
Other Expenses 22 14,443,055 11,850,174
Total Expenses 29,809,143 35,419,000
Prot/(Loss) before Exceptional items & tax (10,614,528) (27,479,631)
Prior Period Expenses 23 1,104,496
Prot/(Loss) before tax (10,614,528) (28,584,127)
Tax Expenses:
(1) Current tax
(2) Deferred tax
Prot(Loss) for the period (10,614,528) (28,584,127)
Earnings Per equity share (Equity Share of Rs. 10 each) 22
(1) Basic and Diluted (15.16) (40.83)
Other Notes to the nancial statements. 25 - 34
(FRN : 115649W)
(Vikesh Jain)
Ravindera Khanna
Dinesh Shetty
M. No. 406182
Place : Jaipur
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
566
CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2014
In Rupees
Particulars
As At
31st March,
2014
As At
31st March,
2013
Net Prot before tax as per Prot & Loss Account (10,614,528) (28,584,127)
Adjusted for:
Depreciation (15,413,819) 10,266,495
Finance Cost 9,173,709 6,833,919
Interest Income
Operating Prot before working capital changes (16,854,638) (11,483,713)
Adjusted for:
(Increase)/Decrease in Inventories (243,649) (3,645,142)
(Increase)/Decrease in Trade Receivables (153,114) 881,531
(Increase)/Decrease in Loans & Advances (312,000) 262,433
(Increase)/Decrease in Other current assets (834,923) (719,550)
(Increase)/Decrease in Other non-current assets 3,100
Increase/(Decrease) in Trade payables (7,997,896) 5,757,786
Increase/(Decrease) in Other current liabilities 19,363,215 3,501,096
Increase/(Decrease) in Short Term Provisions 3,841
Cash Flow from Operating Activities before Tax and
Extra Ordinary Items
(7,029,165) (5,442,460)
Less: Income Tax Paid (Previous Year)
Net cash ow from Operating Activities A (7,029,165) (5,442,460)
B. Cash Flow from Investing Activities
Purchase of Fixed Assets (136,915,176) (65,092,356)
Interest received
Net cash ow from Investing Activities B (136,915,176) (65,092,356)
C. Cash Flow from Financing Activities
Proceeds/(Repayment) of Long Term Borrowings (50,573,485)
Proceeds/(Repayment) of Short Term Borrowings 151,113,416 129,587,850
Proceeds/(Repayment) of Long Term Provisions 62,282
Finance Cost (987,449) (6,833,919)
Net cash ow from Financing Activities C 150,188,249 72,180,447
Net increase/(decrease) in cash and cash equivalents A+B+C 6,243,909 1,645,630
Opening Balance of cash and cash equivalents 2,635,370 989,740
Closing Balance of cash and cash equivalents 8,879,279 2,635,370
(FRN : 115649W)
(Vikesh Jain)
Ravindera Khanna
Dinesh Shetty
M. No. 406182
Place : Jaipur
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
Place : Chennai
Date : 26.04.2014
567
NOTES ON ACCOUNTS FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2014
NOTE 1
ACCOUNTING POLICIES:
A. Basis of Accounting and Preparation of Financial Statement
The nancial statements of the company have been prepared in accordance
with the Generally Accepted Accounting Principles in India (Indian GAAP)
to comply with the Accounting Standards notied under the Companies
(Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. All assets and liabilities have
been classied as current and noncurrent as per the Companys normal
operating cycle and other criteria set out in the Schedule VI (Revised to
the Companies Act, 1956. The nancial statements have been prepared on
accrual basis under the historical cost convention. The accounting policies
adopted in the preparation of the nancial statements are consistent with
those followed in the previous year.
B. Revenue Recognition
Revenue is primarily derived from hotel operations including rental of
rooms and sale of food and beverages and other allied services. Revenue
is recognized when the rooms are occupied and the services have been
rendered. Taxes collected and deposited with taxing authorities are not
recorded in revenue.
C. Preliminary Expenses:
Preliminary expenses are to be written off in ve years commencing from
this nancial year.
D. Fixed Assets & Depreciation
Fixed assets are capitalized at acquisition cost, including directly
attributable cost of bringing the assets to its working condition for the
intended use.
Till the previous year, the company had been following written down
value method of depreciation. From the current year, depreciation in
the Company is provided, on pro-rata basis, on the straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956,
E. Pre-operative Expenses
Pre-operative expenses up to the date of commencement of commercial
operations are capitalized.
F. Taxes on income:
adjustments attributable to earlier periods and changes in deferred
taxes.
Current tax is the amount of tax payable on the taxable income for
the year as determined in accordance with the provisions of the
Income tax Act, 1961.
between the taxable income and the accounting income that
subsequent periods. Deferred tax is measured using the tax rates
and the tax laws enacted or substantively enacted as at the reporting
date. Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty that
there will be sufcient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufcient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set
off. Deferred tax assets are reviewed at each Balance Sheet date for
their realisability.
G. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalized for the period until the
asset is ready for its intended use. Other borrowing costs are recognized
as expense in the year in which they are incurred.
H. Inventories
Inventories have been valued at cost.
I. Foreign Currency Transactions
Transactions in foreign exchange are accounted for at the exchange rate
ruling at the transaction date. Gains and losses arising out of subsequent
uctuations are accounted for on actual payment / realization. Gains /
losses if any, at the year end in respect of current assets and current
liabilities are accounted for.
J. Employee benets
i. Short term
incentives. The undiscounted amount of short-term employee
benets expected to be paid in exchange for the services rendered
by employees are recognised as an expense in the Statement of
Prot and Loss during the year when the employees render the
service to the Company.
ii. Long term
The Company has dened contribution and dened benet plans.
The plans are nanced by the Company and in the case of
some dened contribution plans by the Company along with its
employees.
Provident Fund
The eligible employees of the company are entitled to receive post
employment benet in respect of provident fund, in which both
employees and the Company make monthly contribution at a specied
percentage of the employees eligible salary. The contributions are
made of the Regional Provident Fund Commissioner. Provident Fund
is classied as Dened Contribution Plans as the Company has no
further obligation beyond making the contribution.
The Companys contribution to the Dened Contribution Plans are
charged to the statement of prot and loss as incurred
iii. Other Employee Long-Term Benets Plan- Compensated Absences
The Company provides for encashment of leave with pay subject
to certain rules. The employees are entitled to accumulate leave
subject to certain limits for future encashment/availment. The liability
is provided based on the number of days of unutilised leave at
each balance sheet date on the basis of an independent actuarial
valuation. Actuarial gains and losses are recognised in the statement
of prot and loss.
K. Earning Per Share
Basic earning per share is computed by dividing the prot/(loss) after tax
by the weighted average number of equity shares issued during the year.
L. Cash Flow Statement
The cash ow statement is prepared in accordance with Indirect Method
as explained in accounting standard (AS)3 on Cash Flow Statement.
Cash and bank balances and current investments that have insignicant
risk of change in value which have duration up to the 3 months are
included in the companys cash and cash equivalents in the cash ow
statement.
M. Accounting for Provision, Contingent Liabilities and Contingent Assets
A provision is recognized when the company has a present obligation as
a result of past events and it is probable that an outow of resources will
be required to settle the obligation in respect of which a reliable estimate
can be made. A contingent liability is disclosed unless the possibility of an
outow of resources embodying economic benet is remote. A contingent
asset is neither recognized nor disclosed.
N. Impairment of Assets
The carrying value of the assets (tangible or intangible) is reviewed at
each balance sheet date for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and impairment
is recognized, if the carrying amount of these assets exceeds their
recoverable amount. When there is an indication that an impairment loss
568
recognized for an asset in earlier accounting period no longer exists or
may have decreased, such reversal of impairment loss is recognized in the
statement of prot and loss account.
O. Investments
Investments that are readily releasable and indented to be held for not
more than one year from the date on which such investments were
made are classied as current investments. All other investments are
classied as long term investments. Long term investments are carried
at cost less provision for diminution other than temporary, in the value of
such investments, such diminution being determined and made for each
investment individually. Current investments are carried individually, at
the lower of cost or fair value. Cost of investments includes acquisition
charges such as brokerage, fees and duties.
(FRN : 115649w)
(Vikesh Jain)
Partner
M.No. 406182
Place : Jaipur
Date : 26.04.2014
ON BEHALF OF THE BOARD OF
DIRECTORS
Ravindera Khanna Dinesh Shetty
Place : Chennai Place : Chennai
Date : 26.04.2014 Date : 26.04.2014
NOTES ON FINANCIAL STATEMENTS AS ON 31ST MARCH, 2014
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 2
Share Capital
Authorised
7,50,000 Equity Share of Rs. 10/- Each 7,500,000 7,500,000
Issued, Subscribed & Paid up
7,00,000 Equity Shares of Rs. 10/- each
fully paid-up (previous year 7,00,000
Equity Share) 7,000,000 7,000,000
TOTAL 7,000,000 7,000,000
2.1 The number of equity shares outstanding at the beginning and at the end
of each reporting years is same (i.e. 7,00,000 equity shares) and hence
reconciliation between the two numbers has not been provided.
2.2 The Company has only one class of shares referred to as equity shares
having a par value of Rs. 10/-. In the event of liquidation of the Company,
the equity share holders are eligible to receive the remaining assets of the
company, after settlement of all preferential payments, in proportion to the
number of equity shares held.
2.3 The details of Shareholders holding more than 5% shares:
As at 31.03.2014 As at 31.03.2013
Name of Shareholder No. of Shares % held No. of Shares % held
Mahindra Holidays & Resorts
India Limited, the parent
company (including benecial
ownership of 100 shares held
by the parent company jointly
with its managing director)
700,000 100.00 700.000 100.00
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 3
Reserves & Surplus
Surplus
Balance as per last Balance Sheet (46,990,499) (18,406,372)
Add: Prot/(Loss) for the year (10,614,528) (28,584,127)
(57,605,026) (46,990,499)
Securities premium Account 20,364,500 20,364,500
Balance Carried Forward to Balance Sheet (37,240,526) (26,625,999)
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 4
Deferred tax
Depreciation 10,613,128 766,989
Deferred tax asset
Unabsorbed depreciation 10,613,128 766,989
4.1 The recognition of deferred tax asset on unabsorbed depreciation has
been restricted to the extent of deferred tax liability on account of timing
difference in respect of depreciation, the reversal of which is virtually
certain. As at the year end, the Company also had other deferred tax
assets, on timing differences and carried forward business losses which
have not been recognised.
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 5
Long Term Provisions
Provision for Compensated absences 62,282
62,282
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 6
Short Term Borrowings
Unsecured Loans & Advances from
related parties
From Parent Company
Inter Corporate Deposit 168,700,000 65,000,000
Others Advacnes 111,473,766 64,060,349
280,173,766 129,060,349
6.1 Inter Corporate Deposit received from parent company i.e Mahindra
Holidays & resorts India Limited is repayable on demand. The Interest on
the said loan is @9.50% p.a.
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 7
Trade Payables
Others 2,658,464 10,656,360
2,658,464 10,656,360
7.1 The Company has not received any memorandum (as required to be
led by the suppliers with the notied authority under the Micro, Small
and Medium Enterprises Development Act, 2006) claiming their status
as micro, small or medium enterprises. Consequently the amount paid/
payable to these parties during the year is nil.
7.2 Balance of Trade Payables are subject to conrmation. In the opinion of
directors they represent exact amount and are considered good and fully
payable in due course.
569
Note 10
FIXED ASSETS In Rupees
GROSS BLOCK DEPRECIATION NET BLOCK
Item Rate Gross
Block
Addition Total Opening
Balance
Depreciation
Reversal
from WDV
to SLM
Depr. for
the year
Total
Dep.
Net Block
31.03.2014
Net Block
31.03.2013
TANGIBLE ASSETS
Freehold Land 0.00% 2,257,700 75,010,520 77,268,220 77,268,220 2,257,700
Building 1.63% 89,435,008 29,923,398 119,358,406 15,675,320 (12,840,966) 1,606,121 4,440,474 114,917,932 73,759,688
Furniture & Fixtures 6.33% 21,727,397 17,692,037 39,419,434 7,237,178 (4,154,104) 1,716,437 4,799,511 34,619,922 14,490,219
Plant and machinery 4.75% 15,025,395 4,097,770 19,123,165 2,396,409 (1,456,774) 786,482 1,726,118 17,397,048 12,628,986
Electrical & Electronic Equip. 4.75% 10,086,031 4,314,853 14,400,884 430,499 (283,492) 541,415 688,423 13,712,461 9,655,532
Computers & Printers 16.21% 1,274,689 58,953 1,333,642 197,229 (117,302) 211,392 291,319 1,042,323 1,077,460
Sports Equipment 4.75% 241,219 98,549 339,768 127,398 (122,940) 12,881 17,339 322,429 113,821
Vehicles 9.50% 1,657,527 1,657,527 150,491 (95,271) 157,465 212,685 1,444,842 1,507,036
Misc. xed assets 4.75% 7,359,191 7,359,191 2,906,853 (1,724,726) 349,562 1,531,689 5,827,502 4,452,338
149,064,157 131,196,080 280,260,237 29,121,377 (20,795,575) 5,381,756 13,707,558 266,552,679 119,942,780
Previous year's gures 83,971,801 65,092,356 149,064,157 18,854,881 10,266,495 29,121,376 119,942,780 65,116,918
Capital Work In
Progress
Capital Work In Progress 3,338,343 57,439 3,395,782 3,338,343 3,338,343 57,439 3,338,343
Capital Advance for Land 9,000,000 9,000,000 9,000,000
3,338,343 9,057,439 12,395,782 3,338,343 3,338,343 9,057,439 3,338,343
10.1 In order to follow uniform accounting policy for consolidation of the nancials and to be in line with the parent company, the company has change the method
of charging deprecation from written down value method to straight line method during the year. As a result of the change, the depreciation charge for the
year is lower by Rs. 114.70Lacs and the depreciation of the earlier years amounting to Rs. 207.96 Lacs has been reversed. Consequently, the prot for the
year is higher by Rs. 322.66 Lacs.
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 8
Other Current Liabilities
TDS Payable 570,997 309,570
Interest Accrued on ICD 11,749,151 3,562,891
Service tax Payable 23,526 79,431
VAT Payable 69,672 70,935
Service Charge Payable 432,031 346,030
Luxury tax payable 162,361 38,150
Work Contract Tax payable 963,151 1,464,465
Labour Cess 514,424
Other Payables 795,402 166,174
Retention Payable 2,128,399 2,847,726
PF Payable 54,581
Security Deposit from MHIRL 20,000,000
36,949,271 9,399,796
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 9
Short Term Provisions
Provision for Compensated absences 3,841
3,841
570
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 11
Long-term Loans and Advances
Security Deposit Telephone 4,500 4,500
Security Deposits Electricity 250,000
LPG Gas Security 25,500 25,500
Soft Drinks Carrat Security 4,880 4,880
Security Deposit for staff accomodation 62,000
346,880 34,880
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 12
Inventories
(as taken, valued and certied by
management)
Consumable(Food & Beverages) 550,448 306,799
550,448 306,799
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 13
Trade Receivables
Unsecured and Considered Good
Outstanding for a period exceeding six
months from the date they are due for
payment
1,886,963
Less then six months 149,557 600,915
Others 626,279 1,908,770
2,662,799 2,509,685
Note 13.1
Balance of Trade Receivables are subject to conrmation. In the opinion of
directors they represent exact amount and are considered good and fully
realizable in due course.
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 14
Cash and Bank Balances
Cash on Hand 271,194 232,464
Balances with scheduled banks :
in Current Accounts 8,608,086 2,402,906
8,879,279 2,635,370
In Rupees
Particulars
As at
31.03.2014
As at
31.03.2013
Note 15
Other Current Assets
Prepaid Exp. 48,385
Advance To Staff 3,500
TDS Receivable 1,342,750 471,280
Mobilization Advance 103
Imprest front ofce 5,000 5,000
Imprest for Purchase 5,000
Advance to Suppliers & others 204,823 194,382
1,557,573 722,650
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 16
Food & Beverages Income 8,962,323 3,566,562
Room Income 9,217,227 3,746,476
Other Services 413,390 562,056
18,592,940 7,875,094
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 17
Other Income
Service Charge 26,281
Misclenious Income 601,675 24,907
Discount Received 13,087
601,675 64,275
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 18
Cost of materials consumed
Opening Stock of Consumables 306,799
Add : Purchase of Consumable Groceries 5,224,220 1,428,213
5,531,019 1,428,213
Less: Closing Stock of Consumables 550,448 306,799
4,980,571 1,121,414
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 19
Operating and Direct Expenses
Cooking Gas and Charcoal 825,207 353,802
Electrical & Water Expenses 2,604,641 613,536
Repairs and Maintenance 952,620 100,988
Power and Fuel 1,357,960 106,157
House Keeping expenses 457,557 225,990
Kitchen & Crockery Items 25,890
Frieght & Cartage Exp. 145,371 31,144
6,343,356 1,457,507
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 20
Employees Benets Expenses
Remuneration to Directors 240,000
Salary to Staff 8,271,288 2,958,083
Staff Welfare Exp. 1,895,051 691,408
Contributions to provident and other
funds 115,932
10,282,271 3,889,491
571
20.1 Liabilities on accounts of gratuity has not been ascertained and provided
for as none of the employee has completed the qualifying years of service.
20.2 None of the employee of the Company either employed for whole or part
of the year was in receipt or entitled to receive emoluments in amounting
exceeding the statutory limit.
20.3 Directors Remuneration Rs. NIL. (Previous Year Rs. 2,40,000/-).
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 21
Finance costs
Bank interest 311,800
Interet on term loan-RIICO 2,097,102
Pre Payment Charges-RIICO 447,706
Interest on Unsecured Loan (ICD) 9,095,846 3,958,767
Bank Commission & Charges 77,863 18,544
9,173,709 6,833,919
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 22
Pre-opening & Other Expenses
Pre-opening Expenses 5,115,471 8,482,930
Laundry Exp. 321,541 108,067
Printing & Stationery 232,718 46,465
Postage & Courier 37,571 -
Travelling & Conveyance 604,307 199,748
Interest on Taxes 62,935 133,786
Telephone & Internet 307,227 75,618
Ofce Rent 16,900
Entertainment Expenses 640,014 198,825
Holiday Activity Expenses 299,198 86,347
Event Expenses 298,500
Vehicle Exp 195,903 11,532
Pest Control 169,803 40,450
Contract Services
Contract Service (Security) 1,337,160 220,834
Contract Service (F&B & Horticulture) 697,916 117,460
Contract Service (Front Ofce) 105,777 24,348
Contract Service (House Kepping) 152,272 99,662
Contract Service (Engineering) 20,000 26,129
Preliminary Expenses W/off - 3,100
Insurance Expenses 113,195 48,385
Auditors Fees 252,810 134,832
Legal, Consultancy & Filing Fees 241,355 32,472
Licences Fees 132,736
Annual Subscription Fees 51,979
Repair & Maintenance
Repair and Maintenance-Building 1,472,214
Reapirs and Maintenance-others 5,387
Repair and Maintenance-Plant &
Machinery 689,933 696,112
Reapirs and Maintenance-Furniture 328,930
Other Miscellenous Expenses
Other Miscellenous Expenses 556,204 1,046,172
14,443,055 11,850,174
In Rupees
Particulars
Year ended
31.03.2014
Year ended
31.03.2013
Note 23
Prior Period Expenses
Prior period Expenses 1,104,496
1,104,496
In Rupees
Particulars Unit 31.03.2014 31.03.2013
Note 24: Earning per Share
1. Prot/(Loss) after tax amount used as
the numerator
Rs. (10,614,528) (28,584,127)
2. Weighted average number of equity
shares used as the denominator
No. 700,000 700,000
3. Nominal value of shares Rs. 10 10
Loss per share (Basic & Diluted) Rs. (15.16) (40.83)
Other Notes:
In Rupees
Particulars 31.03.2014 31.03.2013
Note 25: Payment made to Auditors
Payment to Auditors
As Auditor 140,450 84,270
for Taxation matters 56,180 50,562
for Other services 56,180
Total 252,810 134,832
Note 26: Employee Benets:
A. Dene Contribution Plans -
Contribution to dened Contribution plans, recognized in the statement of
prot and loss account for the year, under employee benets expenses in
Note no. 20
In Rupees
Particulars 31.03.2014 31.03.2013
Employers Contribution to Provident Fund 49,809
49,809
B. Other long-term benet plans - Compensated absences -
Compensated absences charged in the statement of prot and loss for
the year, under employee benets expense in Note no. 20, is Rs. 66123/-
(Previous Year ; Rs. Nil)
Note 27: Foreign Exchange Transactions -
Foreign Exchange Earning NIL
Foreign Exchange Outgo NIL
Note 28: Contingent Liability NIL
Note 29
Related Party Disclosure
A. Related Parties with whom transactions have taken place during the year.
Name of the party Relationship
limited
Holding Company on and from
09.08.2012
Bell Tower Resorts Private Limited Fellow Subsidiary Company of the
Holding Company
572
CURRENT YEAR
Nature of Transaction Parent
company
Key
Management
Personnel
Fellow
Subsidiary
Company
I. Transactions during the
period
Inter Corporate Deposit taken 103,700,000
Other Advances 47,413,417
Security Deposit Received 20,000,000
Room Rent Received 9,136,600
Interest Paid 9,095,846
Deputed Personnel Expense 224,533
II. Amount outstanding as at
balance sheet date
Interest Payable on ICD 11,749,151
Security deposit 20,000,000
Trade Receivable 224,533
PREVIOUS YEAR
Nature of Transaction Parent
company
Key
Management
Personnel
Relatives
of Key
Management
Personnel
I. Transactions during the
period
Room Rent Received 3,548,000
Directors Remuneration 240,000
Deputed Personnel Expense 6,186
II. Amount outstanding as at
balance sheet date
Interest Payable on ICD 3,562,891
Trade Receivable 6,186
Note 30
The Companys primary (business) segment is singular viz Hoteliering. There
is no geographical segment to be reported since its property is located in and
the operations are undertaken in India. Therefore segment information required
as per Accounting Standard (AS 17) on Segment Reporting is not furnished.
Note 31
The accumulated losses of the Company amounting to Rs. 575.39 Lacs as at
31.03.2014- exceed its paid up capital of Rs. 70 Lacs. The Company incurred
a net loss of Rs. 106.15 Lacs during the period ending on 31.03.2014 and, as
of that date; its current liabilities exceed its total assets by Rs. 301.78 Lacs.
However, the nancial statements have been prepared on the assumption that
the Company is a going concern having regard to the nancial support extended
by the holding company, Mahindra Holidays & Resorts India Ltd during the
year (which includes loans aggregating Rs. 1687.00 Lacs outstanding as at
31.03.2014 as well as their commitment of future nancial support to enable
the Company to meet its nancial obligations and continue as a going concern.
Note 32
In order to follow uniform accounting policy for consolidation of the nancials
and to be in line with the parent company, the company has change the method
of charging deprecation from written down value method to straight line method
during the year. As a result of the change, the depreciation charge for the year
is lower by Rs. 114.70Lacs and the depreciation of the earlier years amounting
to Rs. 207.96 Lacs has been reversed. Consequently, the prot for the year is
higher by Rs. 322.66 Lacs.
Note 33
Estimated amounts of contracts remaining to be executed on capital account is
Rs. Nil ( Previous year Nil)
Note 34
Figures of the previous year have regrouped/restated to make them comparable,
wherever necessary
(FRN : 115649w)
(Vikesh Jain)
Partner
M.No. 406182
Place : Jaipur
Date : 26.04.2014
FOR & BEHALF OF BOARD OF DIRECTORS
Place : Chennai Place : Chennai
Date : 26.04.2014 Date : 26.04.2014
GABLES PROMOTERS PRIVATE LIMITED
573
Your Directors present the Third Annual Report together with
the audited accounts of your Company for the year ended
31
st
March, 2014.
OPERATIONS:
During the year under review, your Company has not
commenced any commercial operations. Further, the
Companys Resort Property at Naldhera, Shimla is under
construction.
DIVIDEND:
HOLDING COMPANY:
Your Company continues to be a wholly owned subsidiary of
Mahindra Holidays & Resorts India Limited and in turn a subsidiary
of the ultimate holding company, Mahindra & Mahindra Limited.
DIRECTORS:
Pursuant Section 152(6) of the Companies Act, 2013
Mr. Ravindera Nath Khanna, retires by rotation, and being
eligible, offers himself for re-appointment.
as an Additional Director, who holds ofce, in terms of
Section 161(1) of the Companies Act, 2013, upto the ensuing
Annual General Meeting, your Company has received a notice
under Section 160 of the Companies Act, 2013 from a member
During the year under review, Mr. Aloke Ghosh resigned from
st
January,
2014. The Board places on record its sincere appreciation for
the valuable services rendered and guidance received from
him during his tenure as Director of the Company.
MANAGER OF THE COMPANY:
During the year under review, your Company appointed
Mr. Dineshwar Datt Sharma as Manager of the Company with
effect from 1
st
November, 2013 for a period of three years.
as at 31
st
concern basis.
AUDIT COMMITTEE:
During the year under review, Audit Committee was constituted
with Mr. Dinesh Shetty, Mr. Ravindera Khanna and Mr. Aloke
Ghosh as members. Consequent upon resignation of Mr. Aloke
Ghosh from the Directorship of the Company, Mr. Ajay Agarwal
was appointed as member of the Audit Committee.
Two Meetings of Audit Committee were held during the year
under review on 23
rd
April, 2013 & 28
th
October, 2013 and the
same were well attended.
AUDITORS:
Messrs Vinod Kumar Arora & Associates, Chartered
Accountants, Haryana retire as Auditors of the Company at
the ensuing Annual General Meeting and have given their
consent for re-appointment. The members are requested
to appoint Auditors from the conclusion of the forthcoming
Annual General Meeting until the conclusion of next Annual
As required under the provisions of Sections 139 of the Companies
Act, 2013, the Company has obtained a written certicate from
the above Auditors proposed to be re-appointed to the effect
that their re-appointment, if made, would be in conformity within
the limits specied in the said Section. Further, the Company
has also received a certicate from the Auditor to the effect that
provided in section 141 of the Companies Act, 2013.
ABSORPTION:
In view of the nature of activities which are being carried on by
the Company, Rule 2A and 2B of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988,
concerning conservation of energy and technology absorption
respectively are not applicable to the Company.
st
March, 2014.
31
st
ACKNOWLEDGEMENTS:
Director Director
Place : Mumbai
Date : 03
rd
June, 2014
CIN: U45209CH2012PTC033473
574
AUDITORS REPORT
TO THE MEMBERS OF
We have audited the attached Balance Sheet of Gables
Promoters Private Limited as at March 31, 2014 and the
Statement of Prot and Loss for the period and Cash ow
Statement for the period ended on that date, annexed
thereto.
The Companys Management is responsible for the
preparation of these nancial statements that gives a true
and fair view of nancial positions, nancial performances
& cash ow of the company in accordance with the
Accounting standard referred to in section 211(3C) of the
Companies Act, 1956 (the Act) and in accordance with
the accounting principles generally accepted in India.
Our responsibility is to express an opinion on these
nancial statements based on our audit.
1. We have conducted our audit in accordance with
auditing standards generally accepted in India. Those
standards require that we plan and perform the audit to
statements are free of material misstatement. An audit
includes, examining on a test basis, evidence supporting
the amounts and disclosures in the nancial statements.
An audit also includes assessing the accounting principles
used and signicant estimates made by management, as
well evaluating the overall nancial statement presentation.
sufcient and appropriate to provide a reasonable basis
for our opinion.
2. As required by the Companies (Auditors Report) Order
(Amendment), 2004 issued by the Central Government of
India in terms of Section 227(4A) of the Companies Act,
1956, we enclose in the Annexure a statement on the
matters specied in paragraph 4 and 5 of the said order.
3. Further to our comments in Annexure referred to the
paragraph 2 above,we report as follows:
a) We have obtained all the information and explanations,
which to the best of our knowledge and belief, were
b) In our opinion, proper books of accounts as required
by the law have been kept by the company, so far as
c) The Balance Sheet, Statement of Prot & Loss and
Cash Flow statement dealt with by this report are in
d) In our opinion, the Balance Sheet, Statement of
Prot & Loss and Cash Flow statement dealt with
by this report comply with the Accounting Standards
referred to in sub section 3(C) of section 211 of the
e) On the basis of the written representations received
from the directors as on March 31, 2014 and taken
on record by the Board of Directors, we report that
none of the directors is disqualied as on March 31,
2014 from being appointed as director in terms of
clause (g) of sub-section (1) of section 274 of the
f) In our opinion and to the best of our information and
according to the explanations given to us, the said
accounts read together with the notes on accounts
attached thereto, give the information required by the
Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with accounting
i. In the case of the Balance Sheet, of the state of
affairs of the Company as at March 31, 2014 and
ii. In the case of Statement of Prot and Loss, the
Loss of the Company for the period ended on
that date.
ii. In the case of Cash Flow Statement of Cash Flow
for the period ended on that date.
For Vinod Kumar Arora & Associates,
Firm Regn. No. 012099N
(Vinod Kumar Arora)
Proprietor
Membership Number : 91264
Place : Panchkula
Dated : 26
th
April, 2014
575
(Referred to in paragraph 3 of our report of even date)
In terms of the information and explanation given to us and the
books and records examined by us and on the basis of such
checks as we considered appropriate, we further reports as under:
1. (a) Not Applicable, As company has no xed assets during
the Year Except Land and Work on progress thereon
(b) Not Applicables
(c) During the year the company has not sold/disposed
off substanial part of xed assets.
2. (a) Not Applicables
(b) Not Applicables
(c) Not Applicables
3. (a) The Company has not granted any loans secured or
unsecured to companies, rms and/or other parties
listed in the register maintained under section 301 of
the The Act.
(b to d) Not Applicable
3 ((e to f)
The company has taken loan from company covered in
the register maintained under section 301 of the Act 1956.
The total and maximum amount involved /outstanding as at
the year ended 31/03/2014 was Rs. 107,606,008/- (besides
interest). In our Opinion,the rate of interest and other terms
and condition on which these loans were taken are not
prima facie prejudicial to the interest. Amount Payable on
account of Interest is Rs. 655,489/- as on 31/03/2014
explanation given to us, there are adequate internal control
procedures commensurate with the size of the Company
and the nature of its business. for the purchase xed
assets. The company sofar has not started its operations.
5. (a) According to the information and explanation given
to us the company has not entered into transaction
which requires to be recorded in a register in
pursuance of section 301 of the Companies Act.
(b) Not applicable
6. (a) In our opinion and according to explanations given
to us, the company has complied with the provisions
of section 58A and 58AA of the Companies Act, 1956
and the rules framed thereunder wherever applicable.
7. As reported, the Company has in place an internal audit
mechanism, which is commensurate with the size and
8. The maintenance of cost records have not been applicable
so far as prescribed by the Central Government under
section 209(1)(d) of the Companies Act, 1956.
9. (a) The company is regular in depositing the statutory
dues in respect of TDS and Service Tax. There is no
arrears of outstanding statutory dues as at the last
day of the nancial year for a period of more than
Six Month from the date they became payable except
WCT. The amount involved is Rs. 468,012/- (till date it
is Rs. 1,289,667/-). Pending due to registration under
the said act.
(b) According to the information and explanations given to
us, no dues in case of sales tax/ income tax/custom tax
/ wealth tax / excise duty/ cess / have been outstanding
on account of dispute with the concerned department.
10. The company has accumulated losses at the end of the
nancial year 2013-2014 is Rs. 303,852/- and it has incurred
Rs. 209,263/- as cash losses in the current nancial year.
11. According to the information and explanations given to us
and the records examined by us, the company has not
granted any loans & advances on the basis of security by
way of pledge of shares, debentures and other securities.
12. In our opinion, the company is not a Chit Fund or Nidhi/
Mutual Benet Fund/Society, moreover, the nature of the
activities of the company does not attract any special
statute applicable to Chit Fund and Nidhi/Mutual Benet
Fund/Society. Therefore, the provisions of clause 4 (xiii)
of the Companies (Auditors Report) Order, 2004 are not
applicable to the company.
13. The Companies is not dealing in or trading in shares,
explanations given to us and the records examined by
us, the company has not given any guarantees for loan
explanations given to us and the overall examination of the
balance sheet and cash ows of the company, no term loan
has been raised/availed during the year by the company.
explanations given to us and the overall examination of
the balance sheet and cash ows of the company, we
report that the company has not utilised any funds raised
on short term basis for long term investments and vice-
versa except permanent working capital.
explanations given to us and the records examined, the
company has not made any preferential allotment of shares
to parties or companies covered under section 301 of the Act.
18. According to the Information and explanation given to
us,during the period covered by our audit report, the
company has not issued any debentures.
19. According to the Information and explanation given to
us,during the period covered by our audit report,the
company has not raised any money through a public issue.
20. Based upon the audit procedures performed and the
information and explanation given by the management,
we report that no fraud on or by the company has been
noticed or reported during the year.
For VINOD KUMAR ARORA & ASSOCIATES
Firm Regn. No. 012099N
(VINOD KUMAR ARORA)
Place : Panchkula Proprietor
Dated : 26
th
April, 2014 Membership Number : 91264
576
ST
MARCH, 2014
(In Rs.)
31
st
March,
2014
As at
31
st
March,
2013
Shareholders funds
(a) Share capital 2 132,000,000 132,000,000
(b) Reserves and surplus 3 (303,852) (59,589)
131,696,148 131,940,411
Current liabilities
(a) Short-term borrowings 4 107,606,008
(b) Other current liabilities 5 5,906,556 25,000
113,512,564 25,000
TOTAL 245,208,712 131,965,411
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets 6 128,400,010 128,400,010
(ii) Capital work-in-progress 7 93,119,593 2,639,247
221,519,603 131,039,257
(b) Other non-current assets 8 797,303 797,303
222,316,906 131,836,560
Current assets
(a) Cash and cash equivalents 9 22,683,206 5,251
(b) Short term loans and advances 10 208,600 123,600
22,891,806 128,851
TOTAL 245,208,712 131,965,411
Signicance Accounting Policies 1
Notes forming part of the nancial statements 2-10
For Vinod Kumar Arora & Associates For and on behalf of the Board of Directors
Firm Registration No. 012099N
Vinod Kumar Arora
Proprietor
Ravindera Khanna
Director
Dinesh Shetty
Director
Place : Panchkula
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
577
ST
MARCH, 2014
(In Rs.)
Particulars
Note No. For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
1 Revenue from operations ...........................................................................
Total revenue
2 Expenses
(a) Employee Benet Exps ........................................................................ 11 169,000
(b) Other expenses ................................................................................... 12 75,263 47,988
Total expenses 244,263 47,988
3 Prot/(Loss) before tax (1 2) .............................................................. (244,263) (47,988)
4 Tax expense:
(a) Current tax expense for current year .................................................

5 Prot/(Loss) for the year ......................................................................... (244,263) (47,988)
Notes forming part of the nancial statements .................................... 11, 12
Vinod Kumar Arora
Proprietor
Ravindera Khanna
Director
Dinesh Shetty
Director
Place : Panchkula
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
578
(In Rs.)
PARTICULARS
For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
CASH FLOW FROM OPERATING ACTIVITIES:
Prot before tax .................................................................................................................... (244,263) (47,988)
Operating prot before working capital changes ................................................................ (244,263) (47,988)
Changes in :
Trade and other receivables ................................................................................................ (85,000) (123,600)
Preliminary Exps ................................................................................................................... (777,000)
Trade and other payables .................................................................................................... 5,881,556 (6,539)
5,796,556 (907,139)
NET CASH FROM OPERATING ACTIVITIES ................................................................... 5,552,293 (955,127)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of xed assets including capital work in progress and
expenditure pending allocation ..........................................................................................
(90,480,346) (131,039,257)
Proceeds from Issue of Share Capital
(include Share issued agt introduction of land valued Rs. 120000000/ Previous year) ... 131,900,000
NET CASH (USED IN)/FROM INVESTING ACTIVITIES .................................................. (90,480,346) 860,743
CASH FLOW FROM FINANCING ACTIVITIES:
Increase/(Decrease) in unsecured Loan- from Related parties .......................................... 107,606,008 (300,000)
NET CASH (USED IN)/FROM FINANCING ACTIVITIES ................................................. 107,606,008 (300,000)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) .................. 22,677,955 (394,384)
Opening balance ........................................................................................................... 5,251 399,635
Closing balance ........................................................................................................... 22,683,206 5,251
22,677,955 (394,384)

Reconciliation between Cash and Cash equivalents with
the Balance Sheet (31-03-2014)
Cash and cash equivalents as per Balance Sheet ............................................................ 22,683,206 5,251
Less: Bank balances not considered as Cash and cash equivalents ...............................
Net Cash and cash equivalents ........................................................................................... 22,683,206 5,251
(Investment in units of Mutual Funds) .................................................................................
Cash and cash equivalents at the end of the period .................................................... 22,683,206 5,251
CASH FLOW STATEMENT FOR THE PERIOD FROM APRIL 1, 2013 TO MARCH 31, 2014
Vinod Kumar Arora
Proprietor
Ravindera Khanna
Director
Dinesh Shetty
Director
Place : Panchkula
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
579
NOTE: 1 SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS
AS AT AND FOR THE YEAR ENDED MARCH 31, 2014
a) Accounting Convention
(Indian GAAP) to comply with the Accounting Standards notied under the
Companies Act, 1956 (the 1956 Act) (which continue to be applicable in
respect of Section 133 of the Companies Act, 2013 (the 2013 Act) in terms
of General Circular 15/2013 dated 13 September, 2013 of the Ministry of
Corporate Affairs) and the relevant provisions of the 1956 Act/2013 Act, as
applicable. The nancial statements have been prepared on accrual basis
under the historical cost convention. The accounting policies adopted
in the preparation of the nancial statements are consistent with those
followed in the previous year.
b) Fixed Assets
There were no other xed assets except land in the company during the
year ended March 31, 2014.
c) Revenue Recognition
The company had not commenced commercial operations during the year
ended March 31, 2014.
d) Inventories
The company did not have inventories during the year ended
March 31, 2014.
e) Retirement Benets
The company has one employee on rolls during the year ended
March 31, 2014.
f) Taxes on Income
Since the company did not have any commercial operations during the
year, the question of income tax/deferred tax does not arise.
g) Earnings per share
Since the company did not have any commercial operations during the
year ended March 31, 2014 the Accounting Standard (AS) 21 on Earnings
Per Share, issued by the Institute of Chartered Accountants of India would
not be applicable to the company.
h) Preliminary Expenses
Preliminary Expenses include all expenses incurred in connection with
registration of the company. These will be amortized over a period of ve
years after commencement of the activities of the company.
i) Related party Transactions
There are transactions with related parties, required to be disclosed as
per AS 18 on Related Party Disclosure issued by Institute of Chartered
Accountants of India, during the year ended March 31, 2014.
A. Names of related parties and nature of relationship where control exists:
Name of the Related Party
Nature of
Relationship
Mahindra Holidays and Resorts India Limited ..................... Holding Company
B. Disclosures in respect of transactions with related parties:
Name of the
Related Party
Nature of the
Transaction
Year ended
31
st
March
2014
(In Rs.)
Year ended
31
st
March
2013
(in Rs.)
Mahindra Holidays
& Resorts India
Limited
Inter corporate deposit
received 107,606,008 Nil
Interest accrued
(Before TDS). 728,321 Nil
C. Disclosures in respect of transactions with related parties:
Sr.
No. Particulars Party
As at
31st March
2014
(in Rs.)
As at
31st March
2013
(in Rs.)
1 Payables Mahindra Holidays
& Resorts India
Limited (includes
interest accrued and
due Rs. 655,489)
(After TDS) 108,261,497 Nil
j) Segment Reporting: The Company did not commence commercial
operations during the year ended March 31, 2014. Hence, the disclosure
requirement as per AS 17 on Segment Reporting would not be applicable
to the company.
k) Foreign Transactions
There is no earning, expenditure or remittance is made in foreign exchange
during the year ended March 31, 2014.
l) Auditors Remuneration:
Audit Fees: Rs. 35000/
m) Based on the information available with the company, the balance due to
Micro and Small Enterprises as dened under the MSMED Act, 2006 is
Rs. NIL as on March 31, 2014.
As per our report of even date For and on behalf of the Board of Directors

For Vinod Kumar Arora &
Associates
Firm Regn. No : 012099N
Vinod Kumar Arora
Proprietor
Ravindera Khanna
Director
Dinesh Shetty
Director
Place : Panchkula
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Notes No. (In Rs.)
Particulars 31
st

March, 2014
31
st

March, 2013
2 Share Capital
Equity Share Capital
Authorised Capital divided into 135,00,000
Shares of Rs. 10/ each ................................ 135,000,000 100,000
135,000,000 100,000
Issued, Subscribed & Paid up 1,32,00,000
shares of Rs. 10/ each fully Paid up ........... 132,000,000 132,000,000
132,000,000 132,000,000
(a) Share Capital Reconciliation
Equity share of
Rs. 10/ each
fully paid 31
st
March, 2014 31
st
March, 2013
Nos. of Share (in Rs.) Nos. of Share (in Rs.)
At the Opening of
the Year
13,200,000 132,000,000 10,000 100,000
Add Fresh Issue ........
13,190,000 131,900,000
Closing Balance .........
13,200,000 132,000,000 13,200,000 132,000,000
Neither Bonus Share allotted nor there is any buy back during the nancial
Year 20132014
NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD 1
ST
APRIL 2013 TO 31
ST
MARCH 2014
580
(b) Details of Shares held by each share holder holding more than 5% Share
Equity share of Rs. 10/
each fully paid
As at
31
st
March, 2014
As at
31
st
March, 2013
Nos. of
Share
% age of
holding
Nos of
Share
% age of
holding
Mahindra Holidays &
Resorts India Limited ........ 13,199,900 100.00% 13,199,900 100.00%
Mahindra Holidays &
Jointly with Mr.Dinesh
Shetty ............................... 100 0.00% 100 0.00%
13,200,000 100.00% 13,200,000 100.00%
Notes No. (In Rs.)
Particulars 31
st
March, 2014
31
st
March, 2013
3 Reserves and Surplus
Opening Balance ........................................... (59,589) (11,601)
Add: Prot/(Loss) for the Year ..................... (244,263) (47,988)
Closing Balance ............................................. (303,852) (59,589)
4 Short Term Borrowing
Loans repayable on demand ........................
From Related Persons Unsecured 107,606,008
(Inter Corporate deposit from Mahindra
Holidays & Resorts India Ltd., payable
on demand @ 9.5% Per annum)
107,606,008
5 Other Current Liabilities
Statutory Liabilities ......................................... 1,476,854 25,000
Payables relating to Project in progress ...... 3,683,646
Expenses payable ......................................... 90,567
Interest Accrued ............................................. 655,489
5,906,556 25,000
FIXED ASSETS
(As per Companies Act, 1956)
Note 6 (Amt in Rupees)
DESCRIPTION OF
ASSETS
OPENING
BALANCE
1.4.2013
ADDITIONS TOTAL
AS ON
31.03.2014
RATE
OF DEP.
%
UP TO
1.04.13
DURING
THE PERIOD
TOTAL
AS ON
31.03.2014
AS ON
31.03.2014
AS ON
31.03.2013
LAND ................................ 128,400,010 128,400,010 128,400,010 128,400,010
TOTAL RUPEES
(20132014) ...................... 128,400,010 128,400,010 128,400,010 128,400,010
TOTAL RUPEES
(20122013) ...................... 128,400,010 128,400,010 128,400,010
Notes No. (In Rs.)
Particulars 31
st

March, 2014
31
st

March, 2013
7 Capital Work In Process
Opening 2,639,247
Add :Cost of Construction, Labour
charges and other related Exps 90,480,346 2,639,247
93,119,593 2,639,247
8 Others Non Current Assets
others
Preliminary Exps Not written off 797,303 797,303
797,303 797,303
(a) Cash on hand
(b) Balance with banks
(i) In Current Account with IOB 22,683,206 5,251
22,683,206 5,251
10 Short Term Loans & Advances
(a) Loan & advance to employees
Unsecured and considered Goods 85,000
(b) Loans and advances to Others
Unsecured Considered Good more
than Six Month
C P Kukereja & Associates 123,600 123,600
208,600 123,600
Notes No. (In Rs.)
Particulars 31
st

March, 2014
31
st

March, 2013
11 Employee Benet Exps
Salary
169,000
169,000
12 Other Expenses
Bank Charges ............................................... 436 2,488
Professional Charges ................................... 39,827 20,000
Rates Fees & Taxes ...................................... 500
Audit Fees ..................................................... 35,000 25,000
75,263 47,988

For Vinod Kumar Arora &
Associates
Firm Regn. No : 012099N
Vinod Kumar Arora
Proprietor
Ravindera Khanna
Director
Dinesh Shetty
Director
Place : Panchkula
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
Place : Chennai
Date : 26
th
April, 2014
HOLIDAY ON HILLS RESORTS PRIVATE LIMITED
581
Your Directors present the Eighteenth Annual Report together
31
st
March, 2014.
OPERATIONS:
of Rs. 590 lakh as against Rs. 418 lakh during the previous
nancial year resulting in Net Prot of Rs. 121 lakh for the F.Y.
2013-14 as against a Net Loss of Rs. 218 lakh in the previous
nancial year 2012-13.
DIVIDEND:
In view of accumulated losses of the Company, your Directors
do not recommend any Dividend for the year under review.
HOLDING COMPANY:
of Mahindra Holidays & Resorts India Limited and in turn a
subsidiary of the ultimate holding company, Mahindra &
Mahindra Limited.
DIRECTORS:
Pursuant to Section 152(6) of the Companies Act, 2013 Mr. Dinesh
Shetty, retires by rotation, and being eligible, offers himself for
re-appointment.
as an Additional Director, who holds ofce, in terms of Section
161(1) of the Companies Act, 2013, up to the ensuing Annual
General Meeting. Your Company has received a notice under
Section 160 of the Companies Act, 2013 from a member
During the year under review, Mr. Aloke Ghosh and Mr. Sanjeev
Khanna resigned from the Directorships of the Company with
effect from 1
st
st
March, 2014 respectively.
valuable services rendered and guidance received from them
as at 31
st
March, 2014 and of the accumulated loss of the
Company for the year ended on that date;
concern basis.
AUDITORS:
Messrs K. N. Chandla & Co., Chartered Accountants, Shimla
at the ensuing Annual General Meeting retire as Auditors of
the Company and have given their consent for re-appointment.
Members are requested to appoint Auditors from the
conclusion of the forthcoming Annual General Meeting till the
conclusion of sixth Annual General Meeting to be held in the
year 2019, with a yearly ratication of such appointment and
x their remuneration.
conformity with the limits specied in the said Section. Further,
the Company has also received a certicate to the effect that
provided in Section 141 of the Companies Act, 2013.
ABSORPTION:
The particulars relating to the energy conservation and
technology absorption, as required under Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure
of Particulars in the Report of the Board of Directors) Rules,
1988 are given in the Annexure I to this Report.
st
March, 2014.
582
31
st
SECRETARIAL COMPLIANCE CERTIFICATE:
Companies Act, 1956, a certicate from Mr. Ajay Arora,
Company Secretary in Whole-time Practice, certifying that
the Company has complied with all the provisions of the
Companies Act, 1956 is given in the Annexure II.
ACKNOWLEDGEMENTS:
Director Director
Place: Mumbai
Date: 3
rd
June, 2014
CIN: U55101HP1996PTC017806
583
ST
MARCH, 2014
ST
MARCH, 2014.
The above measures have resulted in reduction of energy consumption.
d. Total energy consumption and energy consumption per unit of production as per FormA of the Annexure to the
Rules in respect of industries specied in the Schedule: Not Applicable
1. Areas in which R&D is carried out: The Company has not carried out any R&D activities during the year.
Director Director
Date: 3
rd
June, 2014
Place: Mumbai
CIN: U55101HP1996PTC017806
584
TO,
THE MEMBERS,
Holiday On Hills Resorts Private Limited,
Vill Sichara, The Kandaghat,
Distt Solan,
Himachal Pradesh.
We have examined the registers, records, books and papers
of HOLIDAY ON HILLS RESORTS PRIVATE LIMITED, the
Company as required to be maintained under the Companies
Act, 1956 and rules made there under and also the provisions
contained in the Memorandum and Articles of Association of
the company for the nancial year ended on 31
st
March, 2014.
to the examinations carried out by us and explanations
furnished to us by the Company, its ofcers and agents, we
certify that in respect of the aforesaid nancial year:
1. The Company has kept and maintained all registers
as stated in Annexure A to this certicate, as per the
provisions and rules made thereunder and all entries
therein have been duly recorded.
2. The Company has duly led the forms and returns as
stated in Annexure B to this certicate with the Registrar
of Companies, Himachal Pradesh within the prescribe
time. However no forms have been lled with Regional
Director, Central Government, Company Law Board, or
other authorities.
3. The Company being a Private Limited Company has
the minimum prescribed paid up capital and maximum
number of members during the said nancial year were
within the prescribed limits excluding its present and
past employees and the Company during the year under
scrutiny:
(i) has not invited public to subscribe for its shares or
debentures; and
(ii) has not invited or accepted any deposits from persons
other than its members, directors or their relatives.
4. The Board of directors duly met 4 (Four) times respectively
on 22.04.2013, 29.08.2013, 28.10.2013 and 19.02.2014
and the proceedings were properly recorded and signed
including the circular resolutions passed in the Minutes
Book maintained for the purpose.
5. The Company was not required to close its register of
members since there was no declaration of Dividend /
Bonus / Rights issue during the nancial year.
6. The Annual General Meeting for the nancial year ended
on 31
st
March, 2013 was held on 29
th
August, 2013 after
giving due notice to the members of the Company and
the resolutions passed thereat were duly recorded in the
Minutes Book kept for the purpose.
7. No Extra-Ordinary General Meeting was held during the
nancial year under review.
8. The Company has not advanced any loans or given
guarantee or provided securities to its Directors or
persons or rms or Companies referred to under
Section 295 of the Act.
9. The Company, as per the information provided to us, has
not entered into any contracts falling within the purview of
Section 297 of the Act during the year under review.
10. There were no transaction, which were required to be
entered in the register maintained under Section 301 of
the Act.
11. As there were no instances falling within the purview
of Section 314 of the Act, thus the Company was not
required to obtained any approvals from the Board of
Directors, members or Central Government.
12. The Company has not issued any duplicate share
certicates during the nancial Year.
13. The Company:
(i) has not made any allotment / transfer / transmission
of shares during the period under review.
Ofce: S.C.O. 64-65, First oor
Sector 17-A, Madhya Marg, Chandigarh 160017
Ajay Arora
Company Secretary
(FCS: 2191; CP No.: 993)
COMPLIANCE REPORT
CIN NO. : U55101HP1996PTC017806
Authorised Capital : Rs. 10,000,000/-
Paid-up Share Capital : Rs. 10,000,000/-
585
(ii) the company has not deposited any amount in a
separate Bank account as no dividend was declared
(iii) has no amounts in unpaid dividend account,
application money due for refund, matured deposits,
matured debentures and the interest accrued thereon
which remained unclaimed or unpaid for a period of
seven years.
(iv) has duly complied with the requirements of Section 217
of the Act.
14. The Board of Directors of the Company is duly constituted.
There was no appointment of additional directors, alternate
Directors and Directors to ll the casual vacancies during
the nancial year. Two Directors, Mr. Aloke Ghosh and
Mr. Sanjeev Khanna, resigned from the directorship during
the year with effect from 1
st
st
March,
2014 respectively.
15. The Company was not required to appoint Managing
Director / Whole-Time Director under the Companies Act,
1956 under review.
16. The Company has not appointed any sole selling agents
17. The company was not required to obtain any approval(s)
of the Central Government, Company Law Board,
Regional Director, Registrar and/or such other authorities
as may be prescribed under the various provision of the
Act during the nancial year.
18. Directors have disclosed their interest in other rms/
Companies to the Board of Directors pursuant to the
provisions of the Act and the rules made there under.
19. The Company has not issued any shares/debentures/
other securities during the nancial year.
20. The Company has not bought back any shares during the
nancial year.
21. There was no redemption of preference shares or
debentures during the nancial year.
22. There were no transactions necessitating the company to
keep in abeyance the rights to dividend, rights shares and
bonus shares pending registration of transfer of shares
23. The Company has complied with the provisions of Section
58A and 58AA read with Rule 2 (b)(iv) of the Companies
(Acceptance of Deposit) Rules, 1975 only to the extent
of unsecured loans taken from body corporate, being
exempted.
24. The amount borrowed by the company only from its
member, holding company during the nancial year
ending on 31
st
March, 2014 are within the borrowing limits
of the Company and that necessary resolutions as per
Section 293 (1) (d) of the Act have been passed in the
duly convened general meeting.
25. The Company has not made any loans or advances or
given guarantee or provided securities to other bodies
corporate and consequently no entries have been made
in the register kept for the purpose.
26. The Company has not altered the provisions of the
memorandum with respect to situation of Companys
Registered Ofce from one State to another during the
year under scrutiny.
27. The Company has not altered the provisions of
memorandum with respect to the objects of the Company
during the year under scrutiny.
memorandum with respect to the name of the Company
memorandum with respect to share capital of the
Company during the year under scrutiny.
30. The Company has not altered its Articles of Association
31. There was no prosecution initiated against the company
or no nes or penalties or any other punishment was
imposed on the Company for offenses under the Act, as
per the information provided to us, during the nancial
year.
32. The Company has not received any money as security
from its employees during the nancial year.
33. The Company has deposited both employees and
employers contribution to Provident Fund with the
prescribed authorities pursuant to Section 418 of the Act
as per the information provided to us.
Ajay Arora
Company Secretary
FCS 2191, C.P.No. : 993
Place: Chandigarh
Date: 26
th
April, 2014
586
ANNEXURE A
Registers as maintained by the Company.
1. REGISTER OF MEMBERS
2. REGISTER OF MANAGER AND DIRECTORS U/S 303
3. DIRECTORS MINUTE BOOK
4. SHARE HOLDERS MINUTE BOOK
5. REGISTER OF DIRECTORS INTEREST U/S 301
6. REGISTER OF DIRECTORS SHAREHOLDING U/S 307
7. REGISTER OF CHARGES
8. REGISTER OF SHARE TRANSFER.
9. REGISTER OF INVESTMENTS.
ANNEXURE B
Forms and Returns as led by the company with the Registrar of Companies, Regional Director, Central Government or
other authorities during the nancial year ending on 31
st
March, 2014.
Sr.
No.
FORM NO.\RETURN FILED UNDER
SECTION
FOR Date of Filing
1. BALANCE SHEET FORM 23 AC & ACA 220 31/03/2013 03/09/2013
2. ANNUAL RETURN FORM 20B 159 29/08/2013 07/10/2013
3. COMPLIANCE CERTIFICATE FORM 66 383-A 31/03/2013 02/09/2013
4. E-FORM 32 303 Change in Directorship 05/09/2013
06/02/2014
5. E-FORM 32 303 Change in Directorship 06/02/2014
6. E-FORM 23 293(1)(a)(d) Borrowing Powers
(For previous year)
26/06/2013
7. E- FORM 17 138 Satisfaction of Charges 08/08/2013
587
AUDITORS REPORT TO THE MEMBERS OF HOLIDAY ON HILLS RESORTS PRIVATE LIMITED
of India in terms of Section 227 (4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the
matters specied in paragraphs 4 and 5 of the said Order.
5. Further to our comments in paragraph 3 above and the
Annexure referred to in paragraph 4 above, we report that:
(d) in our opinion, the Balance Sheet, the Statement
of Prot and Loss and the Cash Flow Statement
dealt with by this report are in compliance with the
Accounting Standards referred to in Section 211(3C)
(e) in our opinion and to the best of our information
and according to the explanations given to us, the
said accounts give the information required by the
Companies Act, 1956 in the manner so required
and give a true and fair view in conformity with the
(i) in the case of the Balance Sheet, of the state of
affairs of the Company as at 31
st
March, 2014;
(ii) in the case of the Statement of Prot and Loss,
of the prot of the Company for the year ended
on 31
st
March, 2014; and
(iii) in the case of the Cash Flow Statement of the cash
ows for the year ended on 31
st
March, 2014.
6. On the basis of written representations received from the
directors as on 31
st
March, 2014, and taken on record
by the Board of Directors, we report that none of the
directors is disqualied as on 31
st
appointed as a director in terms of section 274(1)(g) of
For K. N. Chandla & Co.
(Registration No. 001326N)
Dinesh Kumar Sood
Partner
SHIMLA : 26/04/2014 Membership No. 088343
1. We have audited the attached Balance Sheet of HOLIDAY
ON HILLS RESORTS PRIVATE LIMITED (the Company)
as at 31
st
and the Cash Flow Statement of the Company for year
ended on that date, both annexed thereto. These nancial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion
on these nancial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the nancial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the nancial statements.
An audit also includes assessing the accounting
principles used and signicant estimates made by the
Management, as well as evaluating the overall nancial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
3. Without qualifying our opinion, we draw attention to
(a) Note No. 31 of the accounts, the Company incurred
a net prot of Rs. 1,20,93,692. during the year
ended 31
st
March, 2014 mainly due to write back
of depreciation for the earlier years amounting to
Rs. 302.67 lakhs and, as of that date; the Companys
current liabilities exceeded its total assets by
Rs. 3,70,89,602. These conditions may indicate the
existence of an uncertainty that may cast a doubt
about the Companys ability to continue as a going
concern. However, the nancial statements have been
prepared on the assumption that the Company is a
going concern having regard to the nancial support
extended by the holding company [which includes
loans aggregating Rs. 32,68,63,589. outstanding as at
the year-end (including interest accrued but not due
Rs. 3,45,92,589. which sum has been included as a
part of current liabilities) as well as their commitment
of future nancial support to enable the Company to
meet its nancial obligations and continue as a going
concern.
(b) Note No. 32 regarding depreciation for the current
year being lower by Rs. 125.43 Lakh and write back
of depreciation of Rs. 302.67 Lakh due to change in
method of charging depreciation from written down
value to straight line method, due to which prot for
the year is higher and accumulated loss are lower by
Rs. 428.10 Lakh
4. As required by the Companies (Auditors Report) Order, 2003,
(CARO / the Order) issued by the Central Government
588
activities, the provisions of clause (xiii) of paragraph 4 of
CARO are not applicable.
(ii) In respect of the Companys xed assets:
to us, the Company has maintained proper records
and location of all xed assets.
discrepancies were noticed on such verication. The
discrepancies noticed on such verication have been
properly dealt with in the books of account.
of the Company.
(iii) In respect of the Companys inventories:
(a) In our opinion and according to the information
and explanations given to us, the inventories were
physically veried during the year by the Management
at reasonable intervals.
verication.
(iv) The Company has not granted any loans secured or
unsecured, to companies, rms or other parties covered
in the Register maintained under section 301 of the
In respect of loans, secured or unsecured, taken by the
Company from companies, rms or other parties covered
Companies Act, 1956, according to the information and
explanations given to us:
(a) The Company has taken unsecured loans
aggregating Rs. 32,68,63,589. outstanding as at the
year end (including interest accrued but not due
(Referred to in paragraph 4 of our report of even date)
Rs. 3,45,92,589. which sum has been included as
a part of current liabilities) from holding company
Mahindra Holiday & Resorts Limited during the year
covered in the register maintained under section 301
of the Companies Act, 1956. At the year end, the
outstanding balance of such loan aggregated Rs.
32,68,63,589. and the maximum amounts involved
(i.e. aggregate outstanding to such party on a given
day) during the year amounted to Rs. 32,68,63,589.
(b) In our opinion the rate of interest and other terms
and conditions of the said loans are not, prima facie,
prejudicial to the interest of the Company.
(c) The loan aggregating Rs. 32,68,63,589. is repayable
after one year or on demand. The repayments of
principal amounts and interest there on is payable on
maturity of the loan and no amount has fallen due for
payment during the year.
purchases of inventory and xed assets and the sale
of goods. During the course of our audit, we have not
observed any major weakness in such internal control
system.
(vi) In respect of contracts or arrangements entered in the
Companies Act, 1956, in our opinion and to the best of
our knowledge and belief and according to the information
and explanations given to us:
(a) the particulars of contracts or arrangements referred
to in the said Section 301 that were required to be
entered in the Register maintained under the said
Section have been so entered; and
(b) where each of such transaction is in excess of Rs.5
lakhs in respect of any party, the transactions have
been made at prices which are prima facie reasonable
having regard to the prevailing market prices at the
relevant time.
(viii) According to the information and explanations given to
us, the internal audit functions carried out during the year
by the management itself and report of internal audit and
the areas planned to be covered by the internal audit
have not be conveyed to us. Therefore, in our opinion
the internal audit carried out during the year has not been
commensurate with the size of the Company and the
589
explanations given to us, the Central Government has not
prescribed maintenance of cost records under Section
209(1)(d) of the Companies Act, 1956 in respect of the
Companys services.
(x) According to the information and explanations given to us
in respect of statutory and other dues:
(a) The Company has been generally regular in
depositing undisputed dues including Provident Fund,
Employees State Insurance, Income-tax, Luxury
Tax and other material statutory dues applicable to
it with the appropriate authorities, although in the
case of Taxes deducted at source, Provident Fund
and Employees State Insurance some delays were
noticed. We have been informed that no sums
were payable in respect of Investor Education and
Protection Fund, Sales Tax and Excise Duty.
to us, no undisputed dues payable in respect of
Provident Fund, Employees State Insurance, Luxury
Tax, Income Tax, State Value Added Tax, Service Tax
and other material statutory dues were in arrears
as at 31
st
March 2014 for a period of more than six
to us, there are no dues of Income-tax, Sales Tax,
State Value Added Tax, Service Tax, Customs Duty,
Wealth Tax, Excise Duty and Cess which have not
been deposited as on 31
st
March, 2014, on account
of any dispute.
us, the accumulated losses as at the year-end exceed
fty per cent of its net worth at the end of nancial year.
Further, the Company has incurred cash losses during the
nancial year covered by our audit and in the immediately
(xii) According to the information and explanations given to us,
the Company has not defaulted in repayment of its dues
to banks. The Company has not borrowed any sum from
public nancial institutions nor has it issued debentures
that were outstanding during the year.
(xiii) According to the information and explanations given to us,
the Company has not granted loans and advances on the
and other securities. Therefore provisions of paragraph
4(xii) of the Order are not applicable to the Company.
(xiv) According to the information and explanations given
to us, the Company is not a dealer or trader in shares,
securities or debentures and other investments.
Therefore, the provisions of paragraph 4(xiv) of the Order
taken by others from banks and nancial institutions
during the year.
(xvi) According to the information and explanations given to
us, the term loans have been applied for the purposes
for which they were obtained.
of the Balance Sheet, we report that funds raised on
short term basis amounting to Rs. 32,68,63,589. have
been used for long term investment.
(xviii) According to the information and explanations given to
us, the Company has not made any preferential allotment
of shares to parties and companies covered in the
Act, 1956 during the year. Therefore, the provisions of
paragraph 4(xviii) of the Order are not applicable to the
Company.
us, the Company has not issued any debentures during
the year. Therefore, the provisions of paragraph 4(xix) of
us, the Company has not raised any money by public
issue during the year. Therefore, the provisions of
paragraph 4(xx) of the Order are not applicable to the
Company..
(xxi) To the best of our knowledge and belief and according
has been noticed or reported during the year.
(Registration No. 001326N)
Dinesh Kumar Sood
Partner
SHIMLA : 26/04/2014 Membership No. 088343
590
In Rs.
Particulars Note As At
March 31, 2014
As At
March 31, 2013
SHAREHOLDERS FUNDS:
Share Capital ................................................................................................... 2 10,000,000 10,000,000
Reserves and Surplus ..................................................................................... 3 (47,588,144) (59,681,836)
(37,588,144) (49,681,836)
Deferred tax liabilities(net) ............................................................................... 4
Long term Borrowings ..................................................................................... 5 203,266 442,128
Long term provisions ....................................................................................... 6 295,276
Current liabilities
Short term Borrowings .................................................................................... 7 292,601,148 286,463,052
Trade payables ................................................................................................ 8 3,536,153 2,880,251
Other current liabilities..................................................................................... 9 77,999,372 15,415,154
Short term provisions ...................................................................................... 10 8,002 160,598
374,144,675 304,919,055
337,055,073 255,679,347
ASSETS
Non-current assets
Fixed Assets
Tangible assets ......................................................................................... 11 312,373,789 196,639,018
Capital work in progress .......................................................................... 1,292,542 52,151,128
313,666,331 248,790,146
Long term loans and advances ...................................................................... 12 4,213,603 2,154,749
Current assets
Inventories ........................................................................................................ 13 1,847,809 1,311,425
Trade receivables ............................................................................................. 14 445,718 217,474
Cash and cash equivalents ............................................................................. 15 13,719,075 1,617,896
Short term loans and advances ...................................................................... 16 3,162,537 1,587,657
19,175,139 4,734,452
337,055,073 255,679,347
For K.N. Chandla & Co.
(CA Dinesh Kumar Sood) Ravindera Khanna Dinesh Shetty
Membership No.: 088343 Director Director
Place: Shimla Place: Chennai Place: Chennai
Date: 26/04/2014 Date: 26/04/2014 Date: 26/04/2014
591
ST
MARCH, 2014
In Rs.
Particulars Note Year ended
31 March 2014
Year ended
31 March 2013
REVENUE:
Revenue from operations ................................................................................. 17 59,019,118 41,518,249
Other Income .................................................................................................... 18 29,320 251,049
Total Revenue .................................................................................................. 59,048,438 41,769,298
EXPENDITURE:
Employee benets expense ............................................................................. 19 11,052,270 10,729,042
Finance Costs ................................................................................................... 20 27,277,053 16,249,327
Depreciation and amortisation expense .......................................................... 11 (23,814,198) 10,314,703
Other expenses ................................................................................................. 21 32,439,621 26,303,308
Total Expenditure ............................................................................................ 46,954,746 63,596,380
Prot before tax .............................................................................................. 12,093,692 (21,827,082)
Less: Tax expense
Current tax ..........................................................................................
Deferred tax ........................................................................................
Prot for the year ............................................................................................ 12,093,692 (21,827,082)
Earnings per share:
Basic .......................................................................................................... 12.09 (21.83)
Diluted ........................................................................................................ 12.09 (21.83)
Date: 26/04/2014 Date: 26/04/2014 Date: 26/04/2014
592
In Rs.
Year ended
March 31,
2014
Year ended
March 31,
2013
Prot/Loss before tax ........................................................................................................... 12,093,692 (21,827,082)
Adjustments for non-cash and other items
Depreciation ..........................................................................................................................
(23,814,198) 10,314,703
Finance costs ....................................................................................................................... 27,277,053 16,249,327
Provision for employee benets .......................................................................................... (242,180) 550,078
3,220,675 27,114,108
Operating loss before working capital changes ................................................................. 15,314,367 5,287,026
Changes in:
Trade and other receivables ................................................................................................ (1,839,124) 1,537,776
Inventories ............................................................................................................................ (536,384) (36,474)
Trade and other payables .................................................................................................... 39,157,194 2,461,002
36,781,686 3,962,304
Income taxes paid ................................................................................................................ (2,022,854) (985,591)
Net cash from operating activities [A] 50,073,199 8,263,739
Purchase of xed assets including capital work in progress and expenditure
pending allocation .................................................................................................................
(41,061,986) (5,536,603)
Net cash used in investing activities [B] (41,061,986) (5,536,603)
Borrowings taken/(Repaid) .................................................................................................. 5,899,234 4,209,994
Finance costs paid ............................................................................................................... (2,809,268) (6,124,523)
Net cash from nancing activities [C] ............................................................................. 3,089,966 (1,914,529)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) ......... 12,101,179 812,607
Opening balance .................................................................................................................. 1,617,896 805,289
Closing balance .................................................................................................................. 13,719,075 1,617,896
12,101,179 812,607
Reconciliation between Cash and Cash equivalents with the Balance Sheet
Cash and cash equivalents as per Balance Sheet ............................................................. 13,719,075 1,617,896
Less: Bank balances not considered as Cash and cash equivalents ...............................

Net Cash and cash equivalents ........................................................................................... 13,719,075 1,617,896
(Investment in units of Mutual Funds) .................................................................................
Cash and cash equivalents at the end of the period .................................................... 13,719,075 1,617,896
Date: 26/04/2014 Date: 26/04/2014 Date: 26/04/2014
593
Intangible assets are amortised on a straight line basis over the assets
anticipated useful life estimated by the management. The amortisation
rates used are:
Assets Rate
Computer software licences 16.21%
(e) Holiday On Hills Resorts Private Limited (The Company) is engaged
in the business of rendering hospitality services at a full service hotel.
The company is an unlisted public limited company, that is a wholly owned
subsidiary of Mahindra Holidays & Resorts India Limited, (the parent).
The company owns one full service hotel at which it provides hospitality
services to the upscale market.
(f) Impairment of assets:
The carrying value of the assets (tangible or intangible) is reviewed at each
Balance Sheet date for impairment. If any indication of impairment exists,
there is indication that an impairment loss recognised for an asset in earlier
accounting periods no longer exists or may have decreased, such reversal
of impairment loss is recognised in the Statement of Prot and Loss.
(g) Leases:
Rentals paid under operating lease are recognised as expenses in the
Statement of Prot and Loss on straight line basis over the period of lease.
Rentals received on assets given on operating leases are recognised as
income in the Statement of Prot and Loss on a straight-line basis over the
period of the lease as per the terms of agreement.
(h) Investments:
Investment that are readily realisable and intended to be held for not
more than one year from the date on which such investments were
made were classied as current investments. All other investments are
classied as long-term investments. Long-term investments are carried at
cost less provision for diminution other than temporary, in the value of
such investments, such diminution being determined and made for each
investment individually. Current investments are carried individually, at
the lower of cost and fair value. Cost of investments includes acquisition
(i) Inventories:
Stock of food and beverages and operating supplies are carried at lower
of cost and net realisable value. Cost is determined on First-in-First-out
basis. Cost includes the purchase price, non refundable taxes and delivery
handling cost. Net realisable value is estimated at the expected selling
price less estimated costs of procurement and sales.
(j) Revenue recognition:
Revenue is primarily derived from hotel operations including rental of rooms and
sale of food and beverages and other allied services. Revenue is recognised
when the rooms are occupied and the services have been rendered. Taxes
collected and submitted to taxing authorities are not recorded in revenue.
Interest income is recognised on a time proportion basis by reference to
the principal outstanding and at the rate applicable. Dividends are credited
to the Statement of Prot and Loss when the right to receive such dividend
is established.
(k) Foreign currency transactions:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the transaction.
Foreign currency monetary assets and liabilities outstanding at the
Balance Sheet date are restated at year end rates. Exchange differences
arising on settlement of transactions and translation of monetary items
are recognised as income or expense in the year in which they arise and
charged to the Statement of Prot and Loss.
Any premium or discount arising at the inception of the forward exchange
contract is recognised as income or expense over the life of the contract.
Any prot or loss arising on cancellation of such a forward exchange
contract is recognised as income or expense during the year in which
such cancellation occurs.
Note 1: Signicant accounting policies
(a) Basis of accounting and preparation of nancial statements :
Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. All assets and liabilities
have been classied as current and non-current as per the companys
normal operating cycle and other criteria set out in the Schedule VI
(revised) to the Companies Act 1956. The nancial statements have
are consistent with those followed in the previous year
(b) Use of estimates:
The preparation of nancial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered
in the reported amounts of assets and liabilities (including contingent
liabilities) as of the date of nancial statements and the reported income
and expenses during the reporting period. The management believes that
the estimates used in preparation of the nancial statements are prudent
and reasonable. Future results could differ from these estimates and the
differences between the actual results and the estimates are recognised in
the periods in which the results are known / materialise.
(c) Tangible xed assets:
Tangible xed assets of the Company are stated at acquisition cost
less accumulated depreciation and accumulated impairment losses,
if any. All costs relating to the acquisition and installation of xed assets
are capitalised and include nancing costs relating to borrowed funds
attributable to construction or acquisition of qualifying xed assets, upto
the date the asset is ready for intended use. Such nancing costs include
foreign currency translation differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to the
interest costs, subsequent expenditure related to an item of xed asset is
added to its book value only if it increases future benets from the existing
assets beyond its previously accessed standard of performance.
Losses arising from the retirement of and gains or losses arising from the
disposal of xed assets which are carried at cost are recognised in the
Depreciation is provided on a pro-rata basis on straight line method using
rates and in the manner prescribed in the schedule XIV of the Companies
Act 1956.
In order to follow uniform accounting policy for consolidation of the
nancials and to be in line with parent company, the company has
changed the method of charging depreciation from written down value
method to straight line method during the year. As a result of the change,
the depreciation charge for the current year is lower by Rs. 125.43 Lakh
and the depreciation for the earlier year amounting to Rs.302.67 Lakhs
has been reversed. Consequently, the prot for the year is higher by
Rs. 428.10 Lakh.
(d) Intangible assets:
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises its
purchase price, including any import duties and other taxes (other than
those subsequently recoverable from the taxing authorities), and any
directly attributable expenditure on making the asset ready for its intended
use and net of any trade discounts and rebates. Subsequent expenditure
on an intangible asset after its purchase / completion is recognised as
an expense when incurred unless it is probable that such expenditure
will enable the asset to generate future economic benets in excess of
its originally assessed standards of performance and such expenditure
can be measured and attributed to the asset reliably, in which case such
expenditure is added to the cost of the asset.
Gains or losses arising from the retirement or disposal of an intangible
assets are determined as a difference between the net disposal proceeds
and the carrying amount of the asset are recognised as income or
expenses in the Statement of prot and loss account.
FOR THE YEAR ENDED 31
ST
MARCH 2014
594
(l) Borrowing costs:
Borrowing costs include interest, amortisation of ancillary costs incurred
and exchange differences arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the interest cost. Costs in
connection with the borrowing of funds to the extent not directly related to
the acquisition of qualifying assets are charged to the Statement of Prot
and Loss over the tenure of the loan. Borrowing costs, allocated to and
utilised for qualifying assets, pertaining to the period from commencement
of activities relating to construction / development of the qualifying asset
upto the date of capitalisation of such asset is added to the cost of the
assets. Capitalisation of borrowing costs is suspended and charged to
the Statement of Prot and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
(m) Employee benets:
i. Short term
incentives. The undiscounted amount of short-term employee
benets expected to be paid in exchange for the services rendered
by employees are recognised as an expense in the Statement of
prot and loss during the year when the employees render the
service to the company.
ii. Long term
The Company has dened contribution and dened benet plans.
The plans are nanced by the Company and in the case of some
dened contribution plans by the Company along with its employees.
The Companys contribution to provident fund and family
pension fund made to the regulatory authorities and the
Company has future obligation are considered as dened
contribution plans and are charged as an expense in the
Statement of prot and loss as they fall due based on the
amount of contribution required to be made.
Dened-benet plans
Expenses for dened-benet gratuity plans are calculated as
at the balance sheet date by independent actuaries using
the projected unit credit method in a manner that distributes
expenses over the employees working life. These commitments
are valued at the present value of the expected future payments,
with consideration for calculated future salary increases, using
a discount rate corresponding to the interest rate estimated by
the actuary having regard to the interest rate on government
bonds with a remaining term that is almost equivalent to the
average balance working period of employees. Actuarial gains/
losses are recognised in the Statement of prot and loss in the
year in which they arise.
iii. Other employee benets
Compensated absences which accrue to employees and which
can be carried to future periods but are expected to be encashed
or availed in twelve months immediately following the year end
are reported as expenses during the year in which the employees
perform the services that the benet covers and the liabilities are
reported at the undiscounted amount of the benets after deducting
amounts already paid. Where there are restrictions on availment
of encashment of such accrued benet or where the availment or
encashment is otherwise not expected to wholly occur in the next
twelve months, the liability on account of the benet is actuarially
determined using the projected unit credit method.
(n) Taxes on income:
adjustments attributable to earlier periods and changes in deferred
taxes.
Income tax Act, 1961.
enacted or substantively enacted as at the reporting date. Deferred
tax liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there will
be sufcient future taxable income available to realise such assets.
Deferred tax assets are recognised for timing differences of other items
only to the extent that reasonable certainty exists that sufcient future
taxable income will be available against which these can be realised.
Deferred tax assets and liabilities are offset if such items relate to taxes
on income levied by the same governing tax laws and the Company
has a legally enforceable right for such set off. Deferred tax assets are
reviewed at each Balance Sheet date for their realise ability.
(o) Earnings per share:
Basic earnings per share is computed by dividing the prot/ (loss) after tax
by the weighted average number of equity shares in issue during the year.
(p) Cash ow statements:
The cash ow statement is prepared in accordance with Indirect
Method as explained in the Accounting Standard (AS) 3 on Cash Flow
Statements.
Cash and bank balances and current investments that have insignicant
risk of change in value, which have durations up to three months, are
included in the Companys cash and cash equivalents in the Cash Flow
Statement.
(q) Accounting for Provisions, Contingent Liabilities and Contingent Assets:
be made. Provisions (excluding retirement benets) are not discounted to
their present value and are determined based on best estimate required
to settle the obligation at the Balance Sheet date. A contingent liability
is disclosed unless the possibility of an outow of resources embodying
economic benets is remote. A contingent asset is neither recognised nor
disclosed.
Note 2: Share Capital
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Authorised:
100,000,000 equity shares of Rs. 10 each 10,000,000 10,000,000
10,000,000 10,000,000
Issued and Subscribed:
Equity:
1,000,000 (previous period 1,000,000) equity
shares of Rs. 10 each fully paid (the above
equity shares are held by the holding company,
Mahindra Holidays & Resorts India Ltd.) 10,000,000 10,000,000
10,000,000 10,000,000
Note:
2a) Terms/rights attached to equity shares:
i) The company has only one class of shares referred to as equity shares
having a par value of Rs. 10/-. Each holder of equity share is entitled to
one vote per share.
ii) Repayment of capital will be in proportion to the number of equity shares
held.
2b) Shares in the company held by each shareholder holding more than 5%
Name of share
holder
No of shares % held as at
March 31, 2014
No of shares % held as at
March 31, 2013
Mahindra Holidays
& Resorts India
Limited (#), The
Holding Company 1,000,000 100.00% 1,000,000 100.00%
1,000,000 100.00% 1,000,000 100.00%
595
2c) The reconciliation of the number of shares outstanding as at March 31,
2014 and March 31, 2013 is set out below:-
(Shares) (In Rs.) (Shares) (In Rs.)
No of Shares at
the beginning (#) 1,000,000 10,000,000 1,000,000 10,000,000
Number of shares
at March, 31,
2014 (#) 1,000,000 10,000,000 1,000,000 10,000,000
#(including benecial ownership of 10 shares held by the Holding
company jointly with Mr. Dinesh Shetty)
2d) For the ve years immediately preceding 31
st
March, 2014
No shares allotted as fully paid up persuant to contract without payment
being received in cash.
No shares allotted as fully paid by way of Bonus shares and
No shares were bought back.
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Capital Reserve 3,000,000 3,000,000
As per last balance sheet (62,681,836) (40,854,754)
Prot for the Current Year 12,093,692 (21,827,082)
(50,588,144) (62,681,836)
(47,588,144) (59,681,836)
Note 4: Deferred Tax liabilities (net)
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Depreciation 29,599,607
Deferred tax asset
Unabsorbed depreciation 29,599,607
The recognition of deferred tax asset on unabsorbed depreciation has been
restricted to the extent of deferred tax liability on account of timing difference in
respect of depreciation, the reversal of which is virtually certain. As at the year
end, the Company also had other deferred tax assets, on timing differences and
carried forward business losses which have not been recognised.
Note 5: Long Term Borrowings
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Term Loan (Secured)
From Bank (Repayable by Monthly
Instalments)
ICICI Bank (Hypothication of Vehicle) 182,951 295,012
UCO Bank, Kandaghat (Hypothication
of Vehicle) 20,315 147,116
203,266 442,128
Note: 5.1 Note on maturity of Secured/Unsecured Term Loan is as follows:-
In Rs.
Particulars 1-2 Years 2-3 Years
ICICI Bank 182,951
UCO Bank 20,315
The vehicle loans are secured by hypothecation of the assets funded.
Note 6: Long Term Provisions
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Compensated absences 152,282
Gratuity 142,994
295,276
Note 7: Short Term Borrowings
In Rs.
As at
March 31,
2014
As at
March 31,
2013
UnSecured:
Loans & Advances From Related Parties (*) 292,271,000 286,071,000.00
Secured
From Bank (Instalment Due) (#) 330,148 392,052.00
292,601,148 286,463,052
(*) The Loan from related party is from Mahindra Holiday & Resorts India Limited
is repayable in one year and carries an interest rate of 9.5% per annum which
is due on maturity
(#) The vehicle loans are secured by hypothecation of the assets funded.
Note 8: Trade Payables
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Trade Payables:
Total outstanding dues to micro and small
enterprises

Others 3,536,153 2,880,251
3,536,153 2,880,251
Note 9: Other Current Liabilities
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Dues to Statutory Authorities
(PF,ESI & other taxes) 1,953,704 1,278,582
Accrued Expenses 1,755,161 946,410
Accrued Interest 34,592,589 10,124,804
Gratuity 4,620 389,480
Advance from Customer 923,298 2,675,878
Security Deposit 38,770,000
77,999,372 15,415,154
Note 10: Short Term Provisions
In Rs.
As at
March 31,
2014
As at
March 31,
2013
Compensated absences 8,002 160,598
8,002 160,598
596
Note 12: Long Term Loans & Advances (Unsecured, considered good)
In Rs.
As at
31st March,
2014
As at
31st March,
2013
Security deposits 635,510 599,510
Payments towards Income Tax (net of provisions) 3,578,093 1,555,239
4,213,603 2,154,749
Note 13: Inventories (At lower of cost & net realisable value)
In Rs.
As at
31st March,
2014
As at
31st March,
2013
Food, beverages and smokes 725,526 691,415
Operating supplies 1,122,283 620,010
1,847,809 1,311,425
Note 14: Trade Receivable (Unsecured)
In Rs.
As at
31st March,
2014
As at
31st March,
2013
Trade Receivables outstanding for less than six
months from the date they are due for payment
Considered good 445,718 217,474
445,718 217,474
Note 15: Cash & Cash equivalents
In Rs.
As at
31st March,
2014
As at
31st March,
2013
a. Cash on hand 97,007 283,144
97,007 283,144
b. Balances with Banks
Current accounts 13,622,068 1,334,752
13,622,068 1,334,752
13,719,075 1,617,896
Note 16: Short Term Loans & Advances (Unsecured, considered good)
In Rs.
As at
31st March,
2014
As at
31st March,
2013
Advances to Suppliers 2,551,126 937,100
Loans to Employees 27,727
Prepaid Expenses 611,411 622,830
3,162,537 1,587,657
Note 17: Revenue from Operations
In Rs.
Year ended
Mar-14
Year ended
Mar-13
Sales of Services
Income from Resorts:
Room rentals 24,415,891 17,507,092
Food and beverages 30,137,369 20,325,027
Wine and liquor 2,493,475 1,715,069
Others 1,972,383 1,971,061
59,019,118 41,518,249
Note 18: Other Income
In Rs.
Year ended
Mar-14
Year ended
Mar-13
Miscellaneous income 29,320 251,049
29,320 251,049
Note 19: Employee benets expense
In Rs.
Year ended
Mar-14
Year ended
Mar-13
Salaries, wages and bonus 8,944,383 8,395,750
Contribution to Provident & other funds 341,701 685,696
Staff welfare 1,766,186 1,647,596
11,052,270 10,729,042
Note 11: Fixed Assets
In Rs.
As at
April 1,
2013
March 31,
2014
As at
April 1, 2013
For the
period
Deductions/
Adjustments
As at
March 31,
2014
As at
March 31,
2014
As at
March 31,
2013
A: Tangible Assets
Land 4,146,549 4,146,549 4,146,549 4,146,549
Buildings 222,872,109 68,129,562 291,001,671 44,799,015 3,725,119 28,645,473 19,878,661 271,123,010 178,073,095
Plant and Equipments 18,514,836 17,014,406 35,529,242 10,574,463 1,134,652 4,255,464 7,453,651 28,075,591 7,940,374
Furniture and Fittings 10,532,846 6,184,251 16,717,097 5,712,565 1,124,116 (1,813,388) 8,650,069 8,067,028 4,820,281
Vehicles 1,707,234 258,640 1,965,874 1,114,114 182,719 (654,543) 1,951,376 14,498 593,120
Ofce Equipment 14,951 75,602 90,553 11,651 988 4,618 8,021 82,532 3,300
Computer 1,663,161 258,112 1,921,273 600,860 285,486 (170,346) 1,056,692 864,581 1,062,301
Sub Total A 259,451,686 91,920,573 351,372,259 62,812,668 6,453,080 30,267,278 38,998,470 312,373,789 196,639,018
Previous Period 256,427,547 3,024,139 259,451,686 52,497,965 10,314,703 62,812,668 196,639,018
597
Note 20: Finance costs
In Rs.
Year ended
Mar-14
Year ended
Mar-13
Interest on short term borrowings 27,277,053 16,249,327
27,277,053 16,249,327
Note 21: Other expenses
In Rs.
Year ended
Mar-14
Year ended
Mar-13
Food Beverages and smokes
Consumed
Opening Stock 691,415 912,085
Add: Purchases 8,500,104 5,215,458
9,191,519 6,127,543
Less: Closing Stock (725,526) (691,415)
8,465,993 5,436,128
Operating Supplies 4,809,715 2,295,250
Power and fuel 6,368,362 4,032,427
Rates and taxes 302,481 178,966
Insurance 380,846 384,263
Repairs and maintenance:-
Buildings 481,045 2,517,094
Resort Renovations 1,686,548
Ofce Equipment 406,887 400,691
Others 1,028,776 1,810,198
Communication 309,107 272,219
Consultancy charges 86,627 952,292
Travelling 553,154 286,100
Auditors
Audit fees 112,360 112,360
Other Services 56,180
Directors fees 210,000
Bank Charges 237,397 174,988
Printing & stationery 290,635 309,075
Balances Written off 1,112,812
Service charges 7,744,997 2,253,167
Housekeeping Expenses 1,060,579
Legal Expenses 300,000 122,373
Miscellaneous 314,285 695,778
Sales Promotion 190,774
32,439,621 26,303,308
Note: 22
There are no Contingent Liabilities existing on the Balance sheet date
Note 23: Employees Benets
Dened Contribution Plans
The company offers its employees benets under dened contribution plans in
the form of provident fund and family pension fund. Provident Fund and Family
Pension Fund covers substantially all regular employees. Contribution are paid
during the year into separate funds under certain statutory type arrangements.
Both the employees and company pay predetermined contribution in provident
fund and pension fund. The contributions are normally based upon certain
proportion of employees salary.
A sum of Rs. 3,41,701/- has been charged to statement of prot & loss for the
period towards contribution to provident fund & pension fund.
Dened Benet Plans
The company offers its employees benets under dened benet plans in
the form of gratuity scheme (a lump sum amount). Benets under dened
benet plans are typically based either on years of service and the employees
compensation (immediately before retirement). The gratuity scheme covers
substantially all regular employees. Commitments are actuarially determined at
the year end. Actuarial valuation is based on Projected Unit credit method.
Gains & Losses of changed actuarial assumptions are charged to the statement
of Prot & Loss.
As at
31
st
March
2014
(Rs.)
As at
31
st
March
2013
(Rs.)
Fair value of plan assets
Net liability recognised in the balance sheet 147,614 389,480
As at
31
st
March
2014
(Rs.)
As at
31
st
March
2013
(Rs.)
Opening balance 389,480
Interest cost 31,158
Current service cost 17,687 389,480.00
Benets paid
Actuarial (gain)/loss (290,711)
Closing balance 147,614 389,480.00
Net liability is bifurcated as follows:
Current 4,620 14,229.00
Non current 142,994 375,251.00
The dened benet commitments have not been funded as at the year end.
Year ended
31
st
March
2014
(Rs.)
Year ended
31
st
March
2013
(Rs.)
Interest expenses 31,158
Expected return on investments
Net actuarial (gain)/loss (290,711)
Benets paid that were not funded by the plan
Expenses accounted in the Prot and Loss
account (241,866) 389,480
The actuarial calculations used to estimate dened benet commitments and
expenses are based on the following assumptions, which if changed, would
affect the dened benet commitments size, funding requirements and pension
expense.
Year ended
31
st
March
2014
(Rs.)
Year ended
31st March
2013
(Rs.)
Rate for discounting liabilities 9.00% 8.00%
Expected salary increase rate 5.00% 5.00%
Expected return on scheme assets
Withdrawal rates 3% 3%
Mortality table used IALM
(2006-08) Unit
IALM
(2006-08) Unit
The estimates of future salary increases, considered in the actuarial valuation,
take account of ination, seniority, promotion and other relevant factors such
as supply and demand in the employment market. The above information is
actuarially determined.
Year ended
31
st
March
2014
(Rs.)
Year ended
31
st
March
2013
(Rs.)
Fair value of the Plans
Surplus/(Decit) -147,614 -389,480
Experience adjustment on plan liabilities (272,722)
Experience adjustment on plan assets
598
Note: 24 Related Party Disclosure
A related Parties with whom transactions have been taken place during the
period
a) Name of the Party
Relationship
Mahindra Holiday & Resorts India Limited Holding Company
on and from
25
th
October, 2012
b) Disclosure in respect of transaction with related party
Name of the Party Nature of
Transaction
April 1, 2013 to
31
st
March, 2014
April 1, 2012 to
31
st
March, 2013
Mahindra Holiday &
Loan received 6,200,000 286,071,000
Interest Accrued
but not due 24,467,785 10,124,804
Interest Expense 27,186,427 11,249,783
Income from
Room rentals 19,557,500 5,206,125
c) Disclosure in respect of related party balance as on 31
st
March, 2014.
Name of the Party Particulars As at
31
st
March, 2014
Amount in Rs.
As at
31
st
March, 2013
Amount in Rs.
Mahindra Holiday
& Resorts India
Limited
Loan received 292,271,000 286,071,000
Interest Accrued but
not due
34,592,589 10,124,804
Advances-others 647,604 2,616,878
Security Deposit 38,770,000
Note 25: Expenditure in Foreign Currency
Particulars As at
31
st
March, 2014
Amount in Rs.
As at
31
st
March, 2013
Amount in Rs.
Reservation,Membership fee and
Commission
Nil Nil
Interest on Foreign Currency Term Loan Nil Nil
Note 26: Earning in Foreign Currency
Particulars As at
31
st
March, 2014
Amount in Rs.
As at
31
st
March, 2013
Amount in Rs.
Room Revenue/Food and Beverages
Income
Nil Nil
Note 27: Earning Per Share
Earnings per share: April 1, 2013 to
31
st
March, 2014
April 1, 2012 to
31
st
March, 2013
Net prot after tax (Amount in Rs) 12,093,692 (21,827,082)
Weighted average number of Equity
Shares used in computing basic
earnings per share (Nos)
1,000,000 1,000,000
Earnings Per Share Basic (in Rs.) 12.09 (21.83)
Earnings per share Diluted (in Rs.) 12.09 (21.83)
Nominal value of shares (in Rs.) 10.00 10.00
Note 28: Forward Contracts and Foreign Currency Exposures:
The Year End Foreign Currency Exposures is Nil
Note 29:
The Companys primary (business) segment is singular viz Hoteliering.
There is no geographical segment to be reported since its property is located
in and the operations are under taken in India. Therefore segment information
required as per Accounting Standard (AS 17) on Segment Reporting is not
furnished.
Note: 30 Micro & Small enterprises
There are no dues payable to micro & small enterprises as at the year end
requiring disclosure under Schedule VI of Companies Act, 1956 and the Micro
Small and Medium Enterprises development Act, 2006. This information is
complied in respect of parties to the extent to which they could be identied as
Micro or Small Enterprises on the basis of information received from suppliers
regarding their status under Micro, Small and Medium Enterprises Development
Act, 2006.
Note: 31
The accumulated Losses of the company amounting to Rs. 5,05,88,144 as at the
year end exceeds its paid up capital of Rs. 10,000,000. the Company incurred a
net prot of Rs. 1,20,93,692. However the nancial statements are prepared on the
assumption that the company is a going concern having regard to the nancial
support extended by the holding company Mahindra Holiday & Resorts India limited
during the year (which includes the loans aggregating Rs. 36,62,81,194/- outstanding
as at the year end including interest accrued but not due Rs. 3,45,92,589.00, which
sum has been included as a part of current liabilities) as well as their commitment
of future nancial support to enable the company to meet its nancial obligations
and continue as going concern.
Note: 32
In order to follow uniform accounting policy for consolidation of the nancials
and to be in line with parent company, the company has changed the method
of charging depreciation from written down value method to straight line method
during the year. As a result of the change, the depreciation charge for the
current year is lower by Rs. 125.43 Lakh and the depreciation for the earlier
year amounting to Rs.302.67 Lakhs has been reversed. Consequently, the prot
for the year is higher by Rs. 428.10 Lakh
Note 33: Payment Made to Auditors
Payment to Auditors:
As Auditor 112,360 112,360
for taxation matters
for other services 56,180
Total 168,540 112,360
Note: 34
Previous Years Figures have been re-classied wherever necessary, to
correspond and conrm with the current year classication and disclosures.
Date: 26/04/2014 Date: 26/04/2014 Date: 26/04/2014
MH BOUTIQUE HOSPITALITY LIMITED
599
DIRECTORS REPORT
year ended 31
st
March, 2014.
Your Company continues to be a subsidiary of Mahindra
Holidays & Resorts India Limited, a company incorporated in
India.
Your Company was incorporated to carry on the business of
buying, obtaining, receiving, renting, leasing, buying on hire-
purchase, owning, possessing, improving, using, constructing,
modifying, developing or otherwise managing any property
whatsoever as well as fruits thereof.
Your Company continues to hold 51% of ordinary shares of
Innity Hospitality Group Company Limited.
Mr. Dinesh Shetty, Mr. Ravindera Khanna, Mr. Noppun
Muangkote and Mr. Helmut Mekelburg (appointed w.e.f.
31
st
March, 2014) are Directors of the Company. During the year
under review, Mr. Trilok Narain resigned from the Directorship
of the Company with effect from 31
st
March, 2014. The Board
places on record its sincere appreciation for the valuable
services rendered and guidance received from him during his
tenure as Director of the Company.
For MH Boutique Hospitality Limited
Director Director
Dated: 6
th
April, 2014
Place: Bangkok
600
Report of Independent Auditor
To the Shareholders of MH Boutique Hospitality Limited
I have audited the accompanying nancial statements of MH
Boutique Hospitality Limited, which comprise the statements
of nancial position as at 31
st
March, 2014, and the related
statement of Income and changes in shareholders equity for
the year then ended, and a summary of signicant accounting
Managements Responsibility for the nancial Statements
presentation of these nancial statements in accordance
with Thai Financial Reporting Standards for Non-Publicly
Accountable Entities, Standards, and for such internal control
as management determines is necessary to enable the
preparation of nancial statements that are free from material
My responsibility is to express an opinion on these nancial
statements based on my audits. I conducted my audit
accordance with Thai Standards on Auditing. Those standards
require that I comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about
misstatement.
fraud or error. In making those risks assessments, the auditor
by management as well as evaluating the overall Presentation
I believe that the audit evidence I had obtained is sufcient
and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the nancial statements referred to above
present fairly, in all material respects, the nancial position of
MH Boutique Hospitality Limited as at 31
st
March 2014, and its
nancial performance for the year then ended in accordance
with the Thai Financial Reporting Standards for Non-Publicly
Accountable Entities.
(Danai Tangwimolwuttiwong)
Certied Public Accountant (Thailand) No. 9329
Bangkok
April 6, 2014
601
Currency : Baht Currency : INR Currency : Baht Currency : INR
Notes 31 Mar 2014 31 Mar 2014 31 Mar 2013 31 Mar 2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents 62,233 114,509 20,015,880 36,829,219
TOTAL CURRENT ASSETS 62,233 114,509 20,015,880 36,829,219
NON-CURRENT ASSETS
Investment in subsidiaries 4 38,000,000 69,920,000 38,000,000 69,920,000
TOTAL NON-CURRENT ASSETS 38,000,000 69,920,000 38,000,000 69,920,000
TOTAL ASSETS 38,062,233 70,034,509 58,015,880 106,749,219
CURRENT LIABILITIES
Trade and other payable 5 3,759,081 6,916,709 1,070,521 1,969,759
Other current liabilities 0 0 20,000,000 36,800,000
TOTAL CURRENT LIABILITIES 3,759,081 6,916,709 21,070,521 38,769,759
NON-CURRENT LIABILITIES
Long-term loan 6 28,000,000 51,520,000 28,000,000 51,520,000
TOTAL NON-CURRENT LIABILITIES 28,000,000 51,520,000 28,000,000 51,520,000
TOTAL LIABILITIES 31,759,081 58,436,709 49,070,521 90,289,759
SHAREHOLDERS EQUITY
Authorized share capital
51,000 preference shares of Baht 100 each 7 5,100,000 9,384,000 5,100,000 9,384,000
49,000 ordinary shares of Baht 100 each 4,900,000 9,016,000 4,900,000 9,016,000
Issued and paid-up share capital
51,000 preference shares of Baht 100 each 5,100,000 9,384,000 5,100,000 9,384,000
49,000 ordinary shares of Baht 100 each 4,900,000 9,016,000 4,900,000 9,016,000
Retained earnings (Decits) 3,696,848 6,802,200 1,054,641 1,940,540
Equity attributable to owners of the parent 6,303,152 11,597,800 8,945,359 16,459,460
TOTAL SHAREHOLDERS EQUITY 6,303,152 11,597,800 8,945,359 16,459,460
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 38,062,233 70,034,509 58,015,880 106,749,219
602
STATEMENTS OF INCOME FOR THE PERIOD FROM 1 APRIL 2013 TO 31 MARCH 2014
Currency : Baht Currency : INR Currency : Baht Currency : INR
Notes 31 Mar 2014 31 Mar 2014 31 Mar 2013 31 Mar 2013
REVENUES
Other income 3 46,821.57 86,152.00 16,332.97 30,053.00
TOTAL REVENUES 46,821.57 86,152.00 16,332.97 30,053.00
EXPENSES
Other expenses 3 29,028.22 53,412.00 28,453.33 52,354.00
TOTAL EXPENSES 29,028.22 53,412.00 28,453.33 52,354.00
EARNINGS BEFORE FINANCIAL COST 17,793.35 32,740.00 (12,120.36) (22,301.00)
Financial costs 2,660,000.00 4,894,400.00 1,042,521.00 1,918,239.00
NET PROFIT (LOSS) (2,642,206.65) (4,861,660.00) (1,054,641.36) (1,940,540.00)
603
1. GENERAL INFORMATION
Company status
MH Boutique Hospitality Limited, The Company , is a limited company
under Thai Civil and Commercial Code and domiciled in Thailand. It was
incorporated on 10 October 2012 with registration no. 0105555151500
Place of company
33/118-119 23
th
Floor Wall street Tower, Surawongse, Suriyawongse,
Bangrak, Bangkok
Business and operation
The objective of the Company is to become a partner with limited liability
in a partnership or a shareholder in a private limited company and a public
limited company.
2. BASIC OF FINANCIAL STATEMENT PREPARATION
The consolidated and company nancial statements have been prepared
in accordance with Generally Accepted Accounting Principles and Thai
Financial Reporting Standards for Non-Publicly Accountable Entities
enunciated on Notication of Federation of Accounting Professions (FAP)
no. 20 (B.E.2554) under the Accounting Profession Act B.E.2547 which
is effective on the nancial statements for scal year beginning on or after
1 January 2011.
The presentation of the nancial statements has been made in compliance
with the Notication of the Department of Business Development; Dene
Financial statement abstract B.E.2554 dated 28 September 2011, issued
under the Accounting Act B.E.2543 which is effective on the nancial
statements for scal year beginning on or after 1 January 2011.
The consolidated and company nancial statements have been prepared
under the historical cost convention, except those explain in accounting
policies.
3. SUMMARIZED SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents is consist of cash on hand and deposit at
banks including time deposit and temporary investment which is not over
than 3 months to maturity date excepted cash deposit with obligation.
3.2 Inventories - net
Inventories are stated at the lower of cost or net realizable value. Cost
being determined on rst-in, rst-out method. The Company determine
to accrue provision for decline in value of inventories on deteriorated or
obsolescent inventories.
3.3 Revenue and expense recognition
The company record other revenue and expenses based on accrual
basis.
4. INVESTMENT
On November 5, 2012, the company invested in 51% of Innity Hospitality
Limited as a subsidiary company, which had authorised capital of Baht 150
million divided into 150,000 ordinary shares at a par value of Baht 100.
Details of the companys subsidiaries , as at 31 March, 2014 are as follows:
Name of the entity Type of
business
Country of
incorporation
Ownership
interest (%)
Investment in subsidiaries
Innity Hospitality Group Co., Ltd. Hotel Thailand 51
NOTES TO FINANCIAL STATEMENTS AS AT 31 MARCH 2014
5. TRADE AND OTHER PAYABLES
Consist of: Currency : Baht Currency : INR Currency : Baht Currency : INR
31 Mar 2014 31 Mar 2014 31 Mar 2013 31 Mar 2013
Accrued interest expenses Related parties (Note 6) 3,147,143 5,790,743 886,143 1,630,503
Accrued interest expenses for withholding tax 555,378 1,021,896 156,378 287,736
Advance payment 28,560 52,550
Total 3,759,081 6,916,709 1,070,521 1,969,759
604
6. RELATED PARTIES TRANSACTIONS
Enterprises and individuals that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common control
with, the company, including holding companies, subsidiaries and fellow
subsidiaries are related parties of the company. Associates and individuals
owning, directly or indirectly, an interest in the voting power of the company
that gives them signicant inuence over the enterprise, key management
personnel, including directors and ofcers of the company and close
members of the family of these individuals and companies associated with
these individuals also constitute related parties.In considering each possible
related-party relationship, attention is directed to the substance of the
relationship, and not merely the legal form
Relationship with related parties were as follows:
Name of entities Country of
incorporation/
nationality
Nature of
relationships
Limited
India 49% shareholder
The Pricing policies for particular types of transactions are explained further
below:
Transactions Pricing policies
Interest charged Contractually agreed rate
Relationships with related parties that control or jointly control the Company
or are being controlled or jointly controlled by the Company or have
transactions with the Group were as follows:
Currency :
Baht
Currency :
INR
Currency :
Baht
Currency :
INR
31 Mar
2014
31 Mar
2014
31 Mar
2013
31 Mar
2013
Expenses
India Limited 2,660,000 4,894,400 1,042,521 1,918,239
Payable
India Limited 3,147,143 5,790,743 886,143 1,630,503
Loan from related parties
India Limited 28,000,000 51,520,000 28,000,000 51,520,000
Interest Rate 9.50% 9.50% 9.00% 9.00%
NOTES TO FINANCIAL STATEMENTS AS AT 31 MARCH 2014
7. SPECIAL RESOLUTION FOR CAPITAL INCREASE
On October 26, 2012, the extraordinary shareholders meeting passed a
special resolution to increase the registered capital of the Company for
Baht 9,900,000 by issuing 50,490 new preference shares and 48,510 new
ordinary shares at Bath 100 per share. The resolution was registered with the
Registrar of Partnerships and Companies on November 2, 2012. According
to the above share capital increase , registered capital of the Company is
Baht 10,000,000 which are comprised of 51,000 preference shares and
49,000 ordinary shares with Bath 100 of par value.
8. APPROVAL OF FINANCIAL STATEMENT
These nancial statement were authorized for issue by companys authorized
director on April 6, 2014.
9. Exchange Rate
Rupees at the exchange rate of Rs.1.84 = THB 1, which is the average of the
telegraphic transfer buying and selling rates quoted by the Mumbai Branch
of State Bank of India on 31
st
March 2014.
INFINITY HOSPITALITY GROUP COMPANY LIMITED
605
year ended 31
st
December, 2013.
Your Company continues to be a subsidiary of MH Boutique
Hospitality Limited and in turn subsidiary of Mahindra
Holidays & Resorts India Limited, a company incorporated in
India.
During the year under review, your Company has earned
a revenue of THB 34,995,024 (INR 66,202,537) as against
THB 29,780,518 (INR 56,337,891) for previous year.
During the year under review, your Company made an
application with local authorities for changing the nancial
year from 1
st
January - 31
st
December to 1
st
April - 31
st
March
of each year.
DIRECTORS REPORT
Mr. Dinesh Shetty, Mr. Ravindera Khanna and Mr. Helmut
Mekelburg (appointed w.e.f. 31
st
March, 2014) are Directors of
the Company. Mr. Trilok Narain resigned from the Directorship
st
March, 2014. The Board
places on record its sincere appreciation for the valuable
services rendered and guidance received from him during his
tenure as Director of the Company.
For Innity Hospitality Group Company Limited
Director Director
Dated: 7
th
April, 2014
Place: Bangkok
606
To the Shareholders of Innity Hospitality Group Company
Limited.
I have audited the accompanying nancial statements of Innity
Hospitality Group Company Limited, which comprise the
statements of nancial position as at 31 December 2013, and
the related statement of income and changes in shareholders
equity for the year then ended, and a summary of signicant
presentation of these nancial statements in accordance
with Thai Financial Reporting Standards for Non-Publicly
Accountable Entities, Standards, and for such internal control
as management determines is necessary to enable the
preparation of nancial statements that are free from material
My responsibility is to express an opinion on these nancial
statements based on my audits. I conducted my audit
accordance with Thai Standards on Auditing. Those standards
require that I comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about
misstatement.
by management as well as evaluating the overall Presentation
I believe that the audit evidence I has obtained is sufcient
and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the nancial statements referred to above
Innity Hospitality Group Company Limited as at 31 December
2013, and its nancial performance for the year then ended
in accordance with Thai Financial Reporting Standards for
Non-Publicly Accountable Entities.
(Danai Tangwimolwuttiwong)
Certied Public Accountant (Thailand) No. 9329
Bangkok
April 7, 2014
REPORT OF INDEPENDENT AUDITOR
607
AS AT 31 DECEMBER 2013
ASSETS
Notes 2013 2012
Currency: Baht Currency: INR Currency: Baht Currency: INR
CURRENT ASSETS
Cash and cash equivalents ............................. 2,554,461.41 4,832,453.00 2,312,573.17 4,374,857.00
Temporary investment ...................................... 399,098.21 755,002.00 390,000.00 737,790.00
Trade and other receivables ............................ 4 5,879,951.48 11,123,516.00 1,075,901.75 2,035,359.00
Inventory ........................................................... 5 173,225.02 327,702.00 226,000.00 427,540.00
Other current assets ......................................... 486,863.23 921,033.00 473,385.35 895,536.00
TOTAL CURRENT ASSETS ................................... 9,493,599.35 17,959,706.00 4,477,860.27 8,471,082.00
NON-CURRENT ASSETS
Property, plant and equipment - net ............... 6 192,743,001.90 364,625,429.00 198,052,978.46 374,670,683.00
Intangible assets - net ...................................... 7 95,367.21 180,413.00 48,026.32 90,855.00
Other non-current assets ................................. 395,000.01 747,249.00 395,000.01 747,249.00
TOTAL NON-CURRENT ASSETS.......................... 193,233,369.12 365,553,091.00 198,496,004.79 375,508,787.00
TOTAL ASSETS .................................................... 202,726,968.47 383,512,797.00 202,973,865.06 383,979,869.00
608
AS AT 31 MARCH 2013 (Contd)
Notes 2013 2012
CURRENT LIABILITIES
Bank overdrafts and short-term loan from
nancial institution .............................................
Trade and other payable ................................... 8 11,401,267.49 21,568,576.00 3,371,541.53 6,378,181.00
Current portion of hire purchase ...................... 9 19,350.74 36,607.00
Other current liabilities ...................................... 545,958.53 1,032,828.00 237,880.33 450,015.00
TOTAL CURRENT LIABILITIES .............................. 11,947,226.02 22,601,404.00 3,628,772.60 6,864,803.00
Long-term loan .................................................. 10 137,000,000.00 259,172,490.00 137,000,000.00 259,172,490.00
TOTAL NON-CURRENT LIABILITIES .................... 137,000,000.00 259,172,490.00 137,000,000.00 259,172,490.00
TOTAL LIABILITIES ................................................. 148,947,226.02 281,773,894.00 140,628,772.60 266,037,293.00
SHAREHOLDERS EQUITY
Authorized share capital
1,500,000 ordinary shares of
Baht 100 each ........................................... 150,000,000.00 283,765,500.00 150,000,000.00 283,765,500.00
Issued and paid-up share capital
1,500,000 ordinary shares of
Baht 100 each ............................................ 150,000,000.00 283,765,500.00 150,000,000.00 283,765,500.00
Retained earnings (Decits) .............................. (96,220,257.55) (182,026,597.00) (87,654,907.54) (165,822,924.00)
TOTAL SHAREHOLDERS EQUITY ....................... 53,779,742.45 101,738,903.00 62,345,092.46 117,942,576.00
TOTAL LIABILITIES
AND SHAREHOLDERS EQUITY .............................. 202,726,968.47 383,512,797.00 202,973,865.06 383,979,869.00
609
FOR THE YEAR ENDED 31 DECEMBER 2013
Notes 2013 2012
REVENUES 3
Revenue from rent and services ....................... 34,978,521.16 66,171,317.00 27,103,609.80 51,273,796.00
Other income ..................................................... 16,502.99 31,220.00 2,676,908.33 5,064,095.00
TOTAL REVENUES .................................................. 34,995,024.15 66,202,537.00 29,780,518.13 56,337,891.00
EXPENSES 3
Cost of rent and services .................................. 14,388,231.30 27,219,224.00 11,892,703.13 22,498,259.00
Selling expenses ............................................... 11,826,880.21 22,373,737.00 10,588,554.97 20,031,111.00
Administrative expenses ................................... 4,497,877.42 8,508,950.00 6,347,183.61 12,007,412.00
TOTAL EXPENSES .................................................. 30,712,988.93 58,101,911.00 28,828,441.71 54,536,781.00
EARNINGS BEFORE FINANCIAL COST .............. 4,282,035.22 8,100,626.00 952,076.42 1,801,110.00
Financial costs ................................................... (12,847,385.23) (24,304,298.00) (12,495,385.11) (23,638,395.00)
EARNINGS BEFORE CORPORATE INCOME TAX ... (8,565,350.01) (16,203,672.00) (11,543,308.69) (21,837,285.00)
NET PROFIT (LOSS) ............................................... (8,565,350.01) (16,203,672.00) (11,543,308.69) (21,837,285.00)
610
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Currency : Baht
Issued and paid-up Retained earnings Total
share capital (Decits)
Beginning balance as of year 2012 ....................................... 150,000,000.00 (76,111,598.85) 73,888,401.15
Changes in shareholders equity for year 2012
Net prot (loss) for the year ...................................................... (11,543,308.69) (11,543,308.69)
Ending balance of year 2012 ................................................. 150,000,000.00 (87,654,907.54) 62,345,092.46
Net prot (loss) for the year ............................................... (8,565,350.01) (8,565,350.01)
Ending balance of year 2013 ................................................. (96,220,257.55) 53,779,742.45
Currency : INR
Issued and paid-up Retained earnings Total
share capital (Decits)
Beginning balance of year 2012 ............................................ 283,765,500.00 (143,985,639.00) 139,779,861.00
Net prot (loss) for the year ...................................................... (21,837,285.00) (21,837,285.00)
Ending balance of year 2012 ................................................. 283,765,500.00 (165,822,924.00) 117,942,576.00
Net prot (loss) for the year ............................................... (16,203,672.00) (16,203,672.00)
Ending balance of year 2013 ................................................. (182,026,597.00) 101,738,903.00
611
AS AT 31 DECEMBER 2013
1 GENERAL INFORMATION
Company status
Innity Hospitality Group Company Limited, The Company, is a limited
company under Thai Civil and Commercial Code and domiciled in Thailand.
It was incorporated on 6 May 2005, with registration no. 0105548060791
Place of company
20, Soi Sukhumvit 7 (Lerdsin 2), Sukhumvit Rd., North Klongtoey, Wattana,
Bangkok, Thailand
Business and operation
The objective of the Company are services and rent of hotel, apartment,
mansion and condominium.
2 BASIC OF FINANCIAL STATEMENT PREPARATION
Generally Accepted Accounting Principlesand Thai Financial Reporting
Standards for Non-Publicly Accountable Entities enunciated on
Notication of Federation of Accounting Professions (FAP) no. 20
(B.E.2554) under the Accounting Profession Act B.E.2547 which is
effective on the nancial statements for scal year beginning on or after
1 January 2011.
The management of the Company assessed that there is no material
effects of this standard for the period in which they are initially applied.
The presentation of the nancial statements has been made in compliance
with the Notication of the Department of Business Development; Dene
Financial statement abstract B.E.2554 dated 28 September 2011, issued
under the Accounting Act B.E.2543 which is effective on the nancial
statements for scal year beginning on or after 1 January 2011.
The nancial statements have been prepared on a historical cost basis
except where otherwise disclosed in the accounting policies.
3 SUMMARIZED SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents is consist of cash on hand and deposit
at banks including time deposit and temporary investment which is
not over than 3 months to maturity date excepted cash deposit with
obligation.
3.2 Inventories - net
Inventories are stated at the lower of cost or net realizable value.
Cost being determined on rst-in, rst-out method. The Company
determine to accrue provision for decline in value of inventories on
deteriorated or obsolescent inventories.
3.3 Property, plant and equipment - net
Land are stated at cost, Buiding and Equipment are stated at cost
less accumulated depreciation.
Depreciation is calculated by a straight-line method over their
estimated useful life as follows:
Useful life
Building 20 Years
Ofce equipment 5 Years
Computer and Equipment 5 Years
Vehicles 5 Years
3.4 Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
Amortisation is calculated by reference to their costs on the straight-
line basis over the expected future period, for which the assets are
expected to generate economic benet, as follows:
Year life
Computer software 5 Years
3.5 Employee benets
Salaries, wages and contributions to the social security fund are
recognized as expenses when incurred.
3.6 Provisions and contigent liabilities
The Company recongnized provision in the best estimated amount
of expenses which have to be paid on current obligation as at the
end of accounting period.
3.7 Revenue and expenses recognition
Hotel revenues from rooms, food and beverage and other services
are recognised when the rooms are occupied, food and beverage
are sold and the services are rendered. The company record other
revenue and expenses base on accrual basis.
3.8 Income tax expense
The Company record income tax as expenses by calculating on
prot and loss of tax regulation basis.
4 TRADE AND OTHER RECEIVABLES
Consist of:
2013 2013 2012 2012
Currency:
Baht
Currency:
INR
Currency:
Baht
Currency:
INR
Accounts Receivable -
Trade
215,632 407,927 188,244 356,115
Accrued income -
related parties (Note 10) 5,436,588 10,284,773 776,400 1,468,770
Prepaid expenses 180,000 340,519 111,258 210,474
Other receivables 47,732 90,297
Total 5,879,951 11,033,219 1,075,902 2,035,359
5 INVENTORY
Consist of:
2013 2012 2013 2012
Currency :
Baht
Currency :
INR
Currency :
Baht
Currency :
INR
Finished Goods 173,225 327,702 226,000 427,540
Total 173,225 327,702 226,000 427,540
612
6 PROPERTY, PLANT AND EQUIPMENT - NET
Currency : Baht
Consist of: Land Building Ofce Equipment Computer Vehicles Total
Cost
As at 31 December 2012 114,770,000.00 108,968,618.24 4,768,577.79 175,000.00 228,682,196.03
Acquisitions 762,207.15 8,691.59 770,898.74
Disposals (249,813.08) (249,813.08)
Adjustment/Reclassication (371,960.00) (371,960.00)
As at 31 December 2013 114,770,000.00 108,968,618.24 4,909,011.86 8,691.59 175,000.00 228,831,321.69
Accumulated depreciation
As at 31 December 2012 26,495,998.96 3,963,956.69 169,261.92 30,629,217.57
Depreciation for the year 5,448,430.81 620,504.41 713.65 5,737.10 6,075,385.97
Depreciation on disposals (249,812.08) (249,812.08)
As at 31 December 2013 31,944,429.77 3,968,177.35 713.65 174,999.02 36,088,319.79
Net book value
As at 31 December 2012 114,770,000.00 82,472,619.28 804,621.10 0.00 5,738.08 198,052,978.46
As at 31 December 2013 114,770,000.00 77,024,188.47 940,834.51 7,977.94 0.98 192,743,001.90
Depreciation for the year
2012 (Included in cost and administrative expenses) 6,641,549.54
2013 (Included in cost and administrative expenses) 6,075,385.97
6 PROPERTY, PLANT AND EQUIPMENT - NET
Currency : INR
Consist of: Land Building Ofce Equipment Computer Vehicles Total
Cost
As at 31 December 2012 217,118,443.00 206,143,563.00 9,021,052.00 331,060.00 432,614,118.00
Acquisitions 1,441,921.00 16,442.00 1,458,363.00
Disposals (472,589.00) (472,589.00)
As at 31 December 2013 217,118,443.00 206,143,563.00 9,286,721.00 16,442.00 331,060.00 432,896,229.00
As at 31 December 2012 50,124,336.00 7,498,894.00 320,205.00 57,943,435.00
Depreciation for the year 10,307,178.00 1,173,852.00 1,350.00 10,853.00 11,493,233.00
Depreciation on disposals (472,587.00) (472,587.00)
As at 31 December 2013 60,431,514.00 7,506,879.00 1,350.00 331,058.00 68,270,801.00
Net book value
As at 31 December 2012 217,118,443.00 156,019,227.00 1,522,158.00 10,855.00 374,670,683.00
As at 31 December 2013 217,118,443.00 145,712,048.00 1,779,842.00 15,092.00 2.00 364,625,429.00
2012 (Included in cost and administrative expenses) 12,564,284
613
AS AT 31 DECEMBER 2013 (Contd)
7 INTANGIBLE ASSETS - NET
Currency: Baht
Consist of: Computer
Software
Total
Cost
As at 31 December 2012 74,000.00 74,000.00
Acquisitions 70,524.00 70,524.00
Disposals
Adjustment/Reclassication 371,960.00 371,960.00
As at 31 December 2013 516,484.00 516,484.00
As at 31 December 2012 25,973.68 25,973.68
Depreciation for the year 28,671.44 28,671.44
Depreciation on disposals
Adjustment/Reclassication 366,471.67 366,471.67
As at 31 December 2013 421,116.79 421,116.79
Net book value
As at 31 December 2012 48,026.32 48,026.32
As at 31 December 2013 95,367.21 95,367.21
2012 (Included in cost and administrative expenses) 606,862
7 INTANGIBLE ASSETS - NET
Currency: INR
Consist of: Computer
Software
Total
Cost
As at 31 December 2012 139,991 139,991
Acquisitions 133,415 133,415
Disposals
Adjustment/Reclassication 703,663 703,663
As at 31 December 2013 977,069 977,069
As at 31 December 2012 49,136 49,136
Depreciation for the year 54,240 54,240
Depreciation on disposals
Adjustment/Reclassication 693,280 693,280
As at 31 December 2013 796,656 796,656
Net book value
As at 31 December 2012 90,855 90,855
As at 31 December 2013 180,413 180,413
8 TRADE AND OTHER PAYABLES
Consist of:
2013 2013 2012 2012
Currency:
Baht
Currency:
INR
Currency:
Baht
Currency:
INR
Trade payables 657,017 1,242,924 269,428 509,695
Post date cheque
payables 5,992 11,335
Advance received 123,733 234,074 214,027 404,890
Accrued interest
expenses - related
parties (Note 10) 8,334,949 15,767,806 1,722,822 3,259,183
Accrued interest
expenses for
withholding tax 1,470,873 2,782,554 304,027 575,150
Accrued expenses 814,696 1,541,217 855,245 1,617,927
Total 11,401,267 21,568,576 3,371,542 6,378,181
9 HIRE PURCHASE - NET
Consist of:
2013 2013 2012 2012
Currency:
Baht
Currency:
INR
Currency:
Baht
Currency:
INR
Installment from hire
purchase 20,640 39,046
Less Deferred Interest 1,289 2,439
Balance 19,351 36,607
Less Current portion of
hire purchase, presented
under current liabilities 19,351 36,607
Hire purchase - net
Financial costs 1,289 2,439 14,630 27,678
On 31 December 2012, the Company has hire purchase agreements as followed:
Type of Property
Date of First
installment
Number of
periods
Payment
(THB)
Payment
(INR)
Coffee machine 1 May 2011 24 5,521.20 10,445
10 RELATED PARTIES TRANSACTIONS
Enterprises and individuals that directly, or indirectly through one or
more intermediaries, control, or are controlled by,or are under common
control with, the company, including holding companies, subsidiaries and
fellow subsidiaries are related parties of the company. Associates and
individuals owning, directly or indirectly, an interest in the voting power of
the company that gives them signicant inuence over the enterprise, key
management personnel, including directors and ofcers of the company
and close members of the family of these individuals and companies
associated with these individuals also constitute related parties.
In considering each possible related-party relationship, attention is directed
to the substance of the relationship, and not merely the legal form.
Relationship with related parties were as follows:
Name of entities
Country of
incorporation/
nationality
Nature of
relationships
India Limited India 49% shareholder
MH Boutique Co., Ltd. Thailand 51% shareholder
The Pricing policies for particular types of transactions are explained
further below:
Transactions Pricing policies
Revenue from rent and services The average of market prices
Interest charged Contractually agreed rate
Relationships with related parties that control or jointly control the
Company or are being controlled or jointly controlled by the Company or
have transactions with the Group were as follows:
2013 2013 2012 2012
Currency:
Baht
Currency:
INR
Currency:
Baht
Currency:
INR
Income
Mahindra Holidays &
(Included VAT 7%) 8,928,000.00 16,889,723 776,400.00 1,468,770
Expenses
Mahindra Holidays &
Resorts India Limited 12,846,095.97 24,301,859 2,026,849.32 3,834,333
Receivable
Mahindra Holidays &
Resorts India Limited 5,436,857.50 10,285,284 776,400.00 1,468,770
Payable
Mahindra Holidays &
Resorts India Limited 8,334,948.70 15,767,806 1,722,821.92 3,259,183
Loan from related parties
Mahindra Holidays &

137,000,000.00 259,172,490 137,000,000.00 259,172,490
Interest rate 9, 9.5% 9, 9.5% 9% 9%
11 APPROVAL OF FINANCIAL STATEMENT
These nancial statement were authorized for issue by companys
authorized director on April 6, 2014.
12 Exchange Rate
Rupees at the exchange rate of Rs.1.89 = THB 1, which is the average
st
December 2013.
MAHINDRA LIFESPACE DEVELOPERS LIMITED
614
Directors Report to the Members
Your Directors present their Fifteenth report together with the audited accounts of your Company for the year ended 31
st
March,
2014.
Financial Highlights (Stand-alone)
(` lakh)
2014 2013
Operating Income 30,707 35,152
Other Income 11,426 7,073
Total Income 42,133 42,225
Prot Before Depreciation, Interest and Taxation 14,306 14,383
Less : Depreciation 232 177
Prot Before Interest and Taxation 14,074 14,206
Less : Interest & Finance charges 3,935 618
Prot Before Taxation 10,139 13,588
Less : Provision for Taxation
Current Tax 2,467 3,965
Deferred Tax (including MAT Credit) (101) (126)
Prot After Tax 7,773 9,749
Add : Balance of Prot for earlier years 35,527 29,620
Amount available for appropriation 43,300 39,369
Proposed Dividend on Equity Shares (including tax on distributed prots) 2,867 2,867
Less : Transfer to General Reserve 777 975
Less: Transfer to Debenture Redemption Reserve 3,136
Balance carried forward 36,520 35,527
Dividend
Your Directors have recommended a dividend of ` 6 per equity
share of the Company, i.e. 60 per cent of the face value of ` 10
for each share, for the year 2013-14.
The equity dividend (including tax on distributed prots)
amounts to ` 2,867 lakhs (previous year ` 2,867 lakhs), and
shall be paid out of prots for the current year.
Operations
Economic performance in India continued to be subdued during
2013 -14. According to the advance estimates released by the
Central Statistical Organisation (CSO), Indias GDP growth is
pegged at 4.9 per cent in 2013-14, similar to 4.5 per cent during
the previous year. This could have been worse had the Agriculture
sector not registered a signicant uptick in performance.
In contrast, both the Industry and Services sectors recorded a
deceleration in growth during the year. In fact, the manufacturing
sector, which is the largest segment of Industry, witnessed a
contraction for the rst time since 1991-92. The construction
sector remained at-growing at a marginally higher 1.7 per cent
during 2013-14 as compared to 1.1 per cent during 2012-13.
Even as the real estate industry operated in a difcult economic
environment, both operational segments of your Company -
residential and integrated developments - showed progress
during the year.
In the residential segment, the Company launched two new
projects, in Pune and Mahindra World City, Chennai. In addition,
fresh inventory in three of its existing project was also launched
during the year. During 2013-14, the Company sold over 700
residential units across its ongoing and newly launched projects,
including projects of its subsidiary companies in the residential
space. Your Company is currently developing 4.68 million
square feet of residential projects. Besides, 6.59 million square
feet are available in the form of new phases of ongoing projects
or new projects that are at different stages of planning. These
are expected to be launched in the near future.
In the large format developments, there was improvement
in demand from businesses aimed at the domestic market,
but the Special Economic Zone (SEZ) demand remained
subdued. Mahindra World City, Jaipur, saw a considerable
increase in activity during the year with closure of several lease
agreements. During 2013-14, the Company leased out around
52 acres, most of which were in the Domestic Tariff Area (DTA).
On account of the challenging environment faced by the industry,
the nancial performance of Mahindra Lifespaces was impacted.
Even though the Total Income of the Company remained stable,
the protability witnessed a decline during the year due to
product-mix changes and increased interest outows.
The consolidated total income of your Company came down
marginally from ` 77,249 lakhs in 2012-13 to ` 75,620 lakhs
615
in 2013-14. The consolidated PBT stood at ` 16,094 lakhs in
2013-14 as compared to ` 23,607 lakhs in 2012-13, whereas
the consolidated PAT after minority interest was ` 10,063 lakhs
as compared to ` 14,137 lakhs during 2012-13.
Total income of your Company as a standalone entity was
` 42,133 lakhs as compared to ` 42,225 lakhs in 2012-13. Prot
before tax (PBT) was ` 10,139 lakhs as compared to ` 13,588
lakhs in 2012-13, whereas prot after tax (PAT) was ` 7,773 lakhs
as compared to ` 9,749 lakhs in 2012-13. Total income includes
a dividend income of ` 953 lakhs received from its subsidiary
Mahindra World City Developers Limited and ` 518 lakhs
received from its subsidiary Mahindra World City (Jaipur) Limited,
during the year as compared to ` 473 lakhs and ` 356 lakhs from
Mahindra World City Developers Limited and Mahindra World
City (Jaipur) Limited respectively in 2012-13.
Awards and Recognition
Your Company and its subsidiaries received several awards
and recognitions during 2013-14. Some of the prestigious
awards are:
Mahindra Lifespaces was recognised as one of the Top
10 Builders in India by the Construction World Architect
and Builder Awards 2013
Mahindra Lifespaces strong commitment to sustainable
development was recognised with the award for
Outstanding Contribution in Real estate in Green
Building project category at the EPC World awards. It
was also felicitated for its Contribution to Green Building
Movement by CII-IGBC
Mahindra Lifespaces won the Emerging Markets Most
Improved in Adoption of Best Practices merit award at
the annual Asia Pacic Real Estate Association (APREA)
Best Practices Awards. The award recognises those listed
real estate companies who perform best in the area of
governance and disclosure.
Capital
During the year, the Company allotted 8,700 equity shares
of ` 10 each to the eligible grantees pursuant to exercise of
Stock options granted under Employee Stock Option Scheme
- 2006 (ESOS - 2006) and Employee Stock Option Scheme -
2012 (ESOS - 2012). Accordingly, issued equity share capital
has increased from ` 408,805,010 to ` 408,892,010 and the
subscribed and paid up equity share capital of the Company
has increased from ` 408,396,500 to ` 408,483,500.
The allotment of 40,851 equity shares of the Company has
been kept in abeyance in accordnace with Section 206A of
the Companies Act, 1956, till such time the title of the bonade
owner of the shares is certied by the concerned Stock
Exchange or The Special Court (Trial of offenses relating to
transactions in Securities).
Issue & allotment of Non-convertible Debentures
On 4
th
April, 2013, the Company issued and allotted 5,000
Secured Listed Rated Redeemable 10.78 per cent YTM,
Non-Convertible Debentures (NCDs) with a face value of
` 1,000,000 (Rupees Ten lakhs Only) each for cash at par,
aggregating ` 500 crores vide Series I, Series II, and Series III
on Private Placement basis.
The funds are being utilised to part nance any of the following
or any combination thereof: (a) General Corporate purposes
(b) Working Capital requirements (c) Real Estate Development (d)
Land Acquisitions (e) Cost of Construction, (f) to invest into any
existing/to be incorporated subsidiary company being Special
Purpose Vehicle (SPV) company, to enable it to part nance the
cost of land acquisition and preliminary development expenditure
for the residential projects proposed to be undertaken in the
SPV and (g) pending full utilization of issue proceeds to invest
the temporary surplus of the issue proceeds in money market
instruments, mutual funds and deposits with banks.
Employee Stock Options Scheme
In accordance with the Employee Stock Option Scheme
2006 (ESOS 2006), the Remuneration Committee
(now Nomination and Remuneration Committee) has on
25
th
April, 2008, approved grant of 678,359 Stock Options
to the employees at an exercise price of ` 428 per share. In
accordance with ESOS 2006, the Remuneration Committee,
on 4
th
August, 2012, approved grant of 10,000 Stock Options
to Dr. Prakash Hebalkar, a Non-executive Independent Director
of the Company at an exercise price of ` 325 per share.
As of 31
st
March, 2014, 28,500 Stock Options were exercised
under ESOS - 2006.
In accordance with the Employee Stock Option Scheme
(ESOS 2012), the Remuneration Committee (now Nomination
and Remuneration Committee) has on 4
th
August, 2012 and on
24
th
July, 2013, approved grant of 101,000 and 26,500 Stock
Options,respectively, at an exercise price of ` 10 each which
is equal to the face value of the equity share of the Company.
As of 31
st
March, 2014, 6,200 Stock Options were exercised
under ESOS - 2012.
Exchange Board of India (Employee Stock Options Scheme
provided as Annexure 1 to this Report.
Holding Company
The promoters of the Company i.e. Mahindra & Mahindra
Limited (M&M) hold 20,846,126 equity shares which represents
51.03 per cent of the paid-up equity capital of the Company.
Your Company continues to be a subsidiary company of M&M.
The developments during the year in key subsidiary companies
are provided below:
Mahindra World City Developers Limited (MWCDL) a 89:11 SPV
between your Company and Tamil Nadu Industrial Development
Corporation (TIDCO), has developed Indias rst integrated
business city and corporate Indias rst SEZ near Chennai. The
three sector-specic SEZs cater to the industry sectors viz. IT
(services and manufacturing), Apparel & Fashion Accessories,
and Auto Ancillaries and the Domestic Tariff Area caters to a
wide range of manufacturing segments. The total development
currently stands at 1,524 acres. MWCDL for its second project in
616
Tamil Nadu, is in the process of procuring the land. It is the rst
township in India to receive Green Township Certication
(Stage I Gold certication) from IGBC.
Mahindra Integrated Township Limited (MITL) is engaged as
a co-developer in developing the residential township area
at Mahindra World City. Its current developments include
Iris Court and Nova. MITL has a balance of approximately
140 acres to be developed in phases for offering products in
different formats and segments. MITL is 74 per cent owned by
your Company and 26 per cent by MWCDL.
Mahindra Residential Developers Limited (MRDL), which is
awholly owned subsidiary of Mahindra Integrated Township
Limited (MITL), is developing a gated residential community
in approximately 55 acres within Mahindra World City, New
Chennai under the name, Aqualily.
Mahindra Bebanco Developers Limited (MBDL) is a 70:30
joint venture between your Company and B.E. Billimoria &
Co. Limited, one of the leading construction companies in
India. This company is developing a residential complex
across approximately 25 acres at Multi-modal International
Hub Airport at Nagpur (MIHAN).
Mahindra World City (Jaipur) Limited (MWCJL) is a 74:26
SPV between your Company and Rajasthan State Industrial
Development & Investment Corporation Limited (RIICO) and
is developing an integrated business city near Jaipur spread
over approximately 3,000 acres of land. Currently, the project
has ve zones, IT/ITES SEZ, Handicrafts SEZ, Engineering
& Related Industries SEZ, Gems & Jewellery SEZ and a
Domestic Tariff Area.
Joint Venture Company
Mahindra Homes Private Limited, a 50:50 joint venture
between your company and SCM Real Estate (Singapore)
Private Limited, is developing a group housing project at
NCR on approximately 6.79 acres and a residential project at
Bangalore on approximately 5.85 acres.
The statement pursuant to Section 212 of the Companies
Act,1956, containing details of the Companys subsidiaries,
viz. Mahindra World City Developers Limited, Mahindra
Integrated Township Limited, Mahindra Residential Developers
Limited, Mahindra World City (Jaipur) Limited, Mahindra
World City (Maharashtra) Limited, Knowledge Township
Limited, Industrial Township (Maharashtra) Limited, Mahindra
Bebanco Developers Limited, Raigad Industrial & Business
Park Limited, Mahindra Infrastructure Developers Limited,
Anthurium Developers Limited, and Mahindra Housing Private
Limited is attached.
The consolidated nancial statements of the Company
prepared in accordance with Accounting Standard 21
prescribed by The Institute of Chartered Accountants of India,
form part of the Annual Report and Accounts. The summary of
nancial performance of the subsidiaries has been separately
furnished forming part of the Annual Report.
Ministry of Corporate Affairs (MCA), Government of India
(GOI), vide its General Circular No. 2/2011 dated 8
th
February,
2011 has granted a general exemption from the requirement
of attaching the Balance Sheet and Statement of Prot &
Loss and Notes forming part of the Accounts, Report of the
Board of Directors, Report of the Auditors etc., of subsidiary
companies with the Annual Accounts of the Company under
Section 212(8) of the Companies Act, 1956, subject to
compliance of conditions mentioned therein.
In terms of the aforesaid general exemption granted by MCA,
the Board of Directors of the Company has given its consent
for not attaching the Balance Sheet and Statement of Prot &
Loss and Notes forming part of the Accounts, Report of the
Board of Directors, Report of the Auditors etc., of its aforesaid
twelve subsidiaries with the Annual Accounts of the Company,
in relation to the nancial year ending on 31
st
March, 2014.
The Company Secretary will make these documents available
upon receipt of a request from any member of the Company
interested in obtaining the same. These documents will
also be available for inspection at the Registered Ofce of
your Company and the Registered Ofces of the respective
subsidiary companies during working hours up to the date of
the Annual General Meeting.
The Management Discussion and Analysis Report, which gives
a detailed account of operations of your Company forms a
part of this Annual Report.
A report on Corporate Governance along with a certicate
from the Auditors of the Company regarding the compliance of
conditions of corporate governance as stipulated under Clause
49 of the Listing Agreement forms a part of this Annual Report.
Sustainable Development
Your Company is committed to the principles of sustainable
development and consistently carries out initiatives to benet
the communities that it interacts with during the course of
its business. A detailed account of these initiatives has been
presented in the Management Discussion and Analysis chapter
of the Annual Report.
Your Company has followed the Global Reporting Initiative (GRI)
Sustainability Reporting G3.1 Guidelines which is the most
widely adopted non-nancial reporting framework in the world
and used to help communicate sustainability performance
while encouraging transparency and accountability.
Your Companys Sustainability Report has achieved an
A+ rating for meeting the requirements of GRI G3.1 guidelines.
Besides this, the Company continues to report its triple
bottom-line performance as a part of the Mahindra Groups
sustainability report.
Your Companys CSR strategy is to contribute to the local
communities that it operates in by focusing on three key
areas of intervention: education, skill development, health and
environment.
Your Company has been investing 1 per cent of its prots
after tax every year into CSR activities. The Company in every
617
nancial year commencing from 1
st
April, 2014, in line with the
new Companies Act 2013, pledges to spend, at least 2 per cent
of the average net prots made during the three immediately
preceding nancial years specically towards CSR initiatives.
Directors
Pursuant to Section 152 of the Companies Act, 2013, Mr. Arun
Nanda (DIN : 00010029), Non-executive and Non-independent
Director retires by rotation at the 15
th
of the Company and is eligible for re-appointment.
Pursuant to Section 149 and Section 152 of the Companies Act,
2013 read with the Companies (Appointment and Qualication
of Directors) Rules, 2014, Mr. Shailesh Haribhakti (DIN : 0007347),
retires by rotation at the forthcoming Annual General Meeting
of the Company. He is eligible for re-appointment as an
Independent Director not liable to retire by rotation. It is
proposed that he be appointed as an Independent Director of
the Company, not liable to retire by rotation, from the date of
15
th
Annual General Meeting till the conclusion of the 16
th
Annual
General Meeting of the Company. Pursuant to Section 149
and Section 152 of the Companies Act, 2013 read with the
Companies (Appointment and Qualication of Directors) Rules,
2014, it is proposed that Mr. Sanjiv Kapoor (DIN : 00004005),
Mr. Anil Harish (DIN : 00001685), and Dr. Prakash Hebalkar
(DIN : 00370499), existing Directors who meet the criteria of
Independence, be appointed as Independent Directors of
the Company, not liable to retire by rotation, from the date of
15
th
th
Annual
General Meeting of the Company.
All the above Directors i.e. Mr. Arun Nanda, Mr. Shailesh
Haribhakti, Mr. Sanjiv Kapoor, Mr. Anil Harish, and Dr. Prakash
Hebalkar are not disqualied from being re-appointed as
Directors by virtue of the provisions of Section 164 of the
Companies Act, 2013 (erstwhile section 274(1)(g) of the
Companies Act, 1956).
the Directors, based on the representations received from the
operating management and after due enquiry, conrm that:
consulted the 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
st
March,
2014 and of the prot of the Company for the year ended
on that date;
concern basis.
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai,
retire as Auditors at the forthcoming Annual General Meeting.
The members will be required to appoint Auditors in terms of
relevant provisions of the Companies Act, 2013 and x their
remuneration.
As required under the provisions of Section 139 and 141
of the Companies Act, 2013, the Company has received a
written consent and certicate from M/s. B. K. Khare & Co.,
Chartered Accountants, Mumbai, proposed to be re-appointed
as Auditors for one year i.e. upto conclusion of the 16
th
Annual
General Meeting of the Company, to the effect that their
specied in the said Section.
Deposits, Loans and Advances
or its employees during the year under review. The details of
loans and advances, which are required to be disclosed in the
annual accounts of the Company pursuant to Clause 32 of the
Listing Agreement with the Company, are furnished separately.
Annexure 2 to this report.
The Company had 13 (Thirteen) employees who were in receipt
of remuneration of not less than ` 6,000,000 per annum during
the year ended 31
st
March, 2014 or not less than ` 500,000
the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the Directors Report and Accounts which are being
sent to the shareholders need not include this Annexure. Any
shareholder interested in obtaining a copy of the Annexure
may write to the Company Secretary at the Registered Ofce
of the Company.
Acknowledgment
The Directors would like to thank all shareholders, customers,
bankers, contractors, suppliers, joint venture partners and
associates of your Company for the support received from
them during the year. The Directors would also like to place
on record their appreciation of the dedicated efforts put in by
the employees of the Company.
For and on behalf of the Board,
Arun Nanda
Chairman
DIN : 00010029
Mumbai, 22
nd
April, 2014
618
ANNEXURE 1 TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
Information to be disclosed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999:
Description ESOS 2006 ESOS 2012
(a) Total Number of Options
granted
678,359 + 10,000* 1,01,000 + 26,500
(b) The Pricing formula Average price preceding the specied date 25
th
April, 2008
*Average Price preceding the specied date 4
th
Aug, 2012
Face Value ` 10
Average price Average of the daily high and low of the prices for the
Companys Equity Shares quoted on Bombay Stock Exchange Limited
during 15 days preceding the specied date.
Specied date Date on which the Remuneration Committee decided to
recommend granting of Stock Options to the employees and Directors of the
Company and its holding/subsidiary companies under an Employees Stock
Option Scheme.
(c) Number of Options
vested
6,80,859 20,200
(d) Number of Options
exercised
28,500 6,200
(e) Total No. of Shares
arising as a result of
exercise of Options
28,500 6,200
(f) Number of Options
lapsed/cancelled
156,003 12,500
(g) Variation of terms of
Options
The terms of the exercise of Options were revised, during the nancial year 2010
- 2011 (i) to provide for exercise of vested Stock Option by eligible employee
at any time during a period of ve years from the respective date of vesting
instead of earlier option of exercising only on the anniversary of their vesting
and (ii) subject to other terms in this regard, retired/resigned employees are
allowed to exercise the vested Stock Option at any time during the period of
ve years from respective date of vesting as against exercise of Options within
3 months from the date of retirement/ resignation. (iii) on 22
nd
April, 2014, the
terms for exercise of options were further revised by having a uniform last date
for exercise of vested Options as 24
th
April, 2017.
NIL
(h) Money realized by
exercise of Options
during the year
812,500 62,000
(i) Total Number of
Options in force
503,856 108,800
(j) Employee-wise details
of Options granted to:
Name of the Senior managerial personnel to whom
Stock Options have been granted
Options granted in
April, 2008
Name of the
Senior managerial
personnel to whom
Stock Options have
been granted
Options
granted
in August,
2012
(i) Senior managerial
personnel and
Directors
Mr. Arun Nanda 200,000 Ms. Anita Arjundas 10,000
Mr. Hemant Luthra (Resigned as Director w.e.f.
30
th
Jan 2009)
10,000 Ms. Sangeeta
Prasad
6,000
Mr. Uday Y. Phadke 10,000
Mr. Anil Harish 10,000
Mr. Sanjiv Kapoor 10,000
Mr. Shailesh Haribhakti 10,000
Dr. Prakash Hebalkar (Grant Date 4
th
August, 2012) 10,000
Mr. Pawan Malhotra (Resigned as MD and Director
w.e.f. 23
rd
June 2009 as his services were then
transferred to the holding company Mahindra &
Mahindra Limited)
50,000
Ms. Anita Arjundas 50,000
* Refers to Stock Options granted to Dr. Prakash Hebalkar on 4
th
August 2012.
619
Description ESOS 2006 ESOS 2012
(ii) Any other employee who receives a grant
in any one year of Option amounting
to 5 per cent or more of Option granted
during that year
Nil 101,000 Options were granted on 4
th
August,
2012
Employees receiving grant of 5 per cent or
more of the above :
1) Ms. Anita Arjundas 10,000
2) Ms. Sangeeta Prasad 6,000
26,500 Options were granted on 24
th
July, 2013
Employees receiving grant of 5 per cent or
more of the above :
1) Mr. Deepak Ahluwalia 1,500
2) Mr. Kamal Sharma 1,500
3) Mr. Sanjay Bhagat 1,500
4) Mr. Sundaresan Vaidyanathan 2,500
5) Ms. Smeeta Neogi 4,000
6) Mr. Riyaz Bhada 2,500
7) Mr. Tirthankar Chatterjee 4,000
8) Mr. Rajesh Sriramshetty 1,500
9) Mr. Parcha Radha Kishan 1,500
10) Mr. Akhilesh Ayyappan 1,500
11) Ms. Arti Shinde 1,500
12) Mr. R. Guru Shankar 1,500
13) Mr. Rajendra Gadekar 1,500
(iii) Identied employees who were granted
Option, during any one year, equal to or
exceeding 1 per cent of the issued capital
(excluding outstanding warrants and
conversions, if any) of the company at the
time of grant
Nil Nil
(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
NA NA
(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 prots 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 the employee compensation cost
would have been lower by ` 18.66 lakhs.
Had the fair value method been used the prot after tax would have been higher by
` 14.28 lakhs.
Had the fair value method been used the basic and diluted earnings per share would have
been higher by ` 0.04.
(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.
Option Grant
Date
Exercise
price
Fair value Option Grant
Date
Exercise
price
Fair value
25
th
April, 2008 ` 428.00 ` 291.04 4
th
August, 2012 ` 10.00 ` 294.06
4
th
August, 2012 ` 325.00 ` 294.06 24
th
July, 2013 ` 10.00 ` 409.27
(n) A description of the method and signicant
assumptions used during the year to estimate
the fair values of Options, including the following
weighted-average information:
N.A.
(i) risk-free interest rate, (i) 8.31 per cent - 8.39 per cent
(ii) expected life, (ii) 6 - 9 years
(iii) expected volatility, (iii) 47.63 per cent
(iv) expected dividends, and (iv) 1.31 per cent
(v) the price of the underlying share in market
at the time of Option grant.
(v) ` 454.09
The Company has adopted intrinsic value method on ESOS 2006 for computing the compensation cost for the Options granted. The exercise
price of the shares is based on the average of the daily high and low of the prices for the Companys Equity Shares quoted on the Bombay Stock
Exchange Limited, during the 15 days preceding the grant of the Options. The Intrinsic value i.e. the difference between the market price of the
share and the exercise price is being amortised as employee compensation cost over the vesting period.
The Company has granted ESOS 2012 at an exercise price of ` 10 each, which is equal to the face value of the equity share of the Company.
620
ANNEXURE 2 TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
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 31
ST
MARCH, 2014.
a. Energy Conservation measures taken : As a part of sustainable development adequate measures have been initiated to
reduce energy consumption. With respect to providing an Energy Efcient nal
product to its customers, the Company is developing Green Buildings.
Green building increases the resource efciency (energy, water, and materials),
while reducing impact on human health and the environment, through better
selection of sites, design, construction, operation, maintenance, i.e. the complete
building life cycle.
b. Additional investments and proposals, if
any, are being implemented for reduction of
consumption of energy
: Nil
Energy consumption is being minimized through the following in green buildings:
Energy efficient building envelopes for walls and roofs including Low E glass
in selective areas
Energy efficient electronic ballast & all lighting system
Heat Reflective paint
Artificial lighting control via daylight sensor
Adoption of high efficiency light fittings
Adoption of high efficiency pumps, motors
Group control mechanism for lifts
LED lamps for common areas & pathways
Solar thermal water heaters for hot water generation in selective areas
Solar street lighting
c. Impact of the measures taken/to be taken
at (a) & (b) above for reduction of energy
consumption and consequent impact on the
cost of production of goods
: Not Applicable
d. Total energy consumption and energy
consumption per unit of production as per
FormA of the Annexure to the Rules in respect
of industries specied in the schedule
: Not Applicable
1 Areas in which Research & Development is
carried out
: The Company had carried out one laboratory based R&D activity during the
year on a Nano-Technology based 360 degree curing and waterproong system.
However in the second stage of trial, it was observed the results are not meeting
the requirements hence could not be continued further. The company is in talks
with various technical institutes and waterproong manufacturers to develop or
alter the product which will actually lead to a 360 degree curing cum waterproong
system. The Company has also carried out various eld research and testing for
innovative building materials and methods which includes Ground Granulated
Blast Furnace Slag(GGBS) based concrete replacing 55 per cent cement, Floor
tile using tile adhesives, Readymade cut & bend steels, Stamp concrete, Stain
concrete, Pervious concrete for hardscapes etc.
2 Benets derived as a result of the above efforts : The Major benets of all innovative/alternate material, methods, processes trials at
site is to get a good quality product and reducing time, cost. The major benet of
the R&D efforts done in 360 degree curing cum waterproong system would be to
completely eliminate the water curing process (i.e. water conservation) and create
leak proof structures in a cost effective manner.
621
3 Future plan of action : The Company is studying various construction technologies and methods that
will lead to improvement in Quality, cost, Time and safety. These technologies
or methods or processes will be implemented in upcoming developments after
evaluations.
4 Expenditure on R&D : Nil
5 Technology absorption, adaptation and
innovation
: Various construction technologies have been evaluated during the year including
Pre-cast construction, Composite construction. The Company has decided to use
Pre-cast construction technology for one of its upcoming project in Alibaug.
The major benet of choosing Pre-cast construction technology is Enhancement
of Quality of constructions in terms of superior concrete nishes & reduction in
manpower requirement & reduction of time-cycle of construction to a great extent
as most of the components are made in a controlled factory environment and
erected at site with few skilled labours with cranes.
6 Imported technology : In case of imported technology (imported during the last 5 years reckoned from the
beginning of the nancial year), following information may be furnished:
(a) Technology imported Aluminium form work system
(b) Year of import FY13
(c) Has technology been fully absorbed ? - Yes
(d) If not fully absorbed, areas where this has not taken place, reasons there for
and future plans of action. - N. A.
Details of foreign exchange earnings and outgo during the year under review are furnished in the Notes to Accounts.
Arun Nanda
Chairman
DIN: 00010029
Mumbai, 22
nd
April, 2014
Particulars of loans and advances, and investments 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 with the Company and its holding company
Loans and advances in the nature of loans to subsidiaries:
(` in lakhs)
Name of the Company
Balance as on
31
st
March, 2014
Maximum outstanding
during the year
Mahindra Integrated Township Limited 8,370.00 9,487.00
Mahindra Bebanco Developers Limited 2,054.17 2,054.17
Knowledge Township Limited 2,413.25 2,413.25
Mahindra World City Developers Limited 9,200.00 9,900.00
Industrial Township (Maharashtra) Limited 0.00 1,074.27
Mahindra Homes Private Ltd (formerly known as Watsonia Developers Private Ltd and before
that as Watsonia Developers Limited)
0.00 44,666.00
622
Mahindra Lifespace Developers Limited (Mahindra Lifespaces
or the Company) is one of the leading real estate development
companies in India. Over the years, the Company has created
a respected name for itself by delivering an array of highly
successful projects and establishing industry benchmarks in
environment friendly and sustainable developments.
Mahindra Lifespaces, along with its subsidiary companies,
is engaged in the development of residential projects and
large format integrated developments such as business cities,
industrial parks and SEZs. This chapter presents an overview
of the operational and nancial performance of the Company
during 2013-14 and its strategy for future growth.
Introduction
Economic performance in India continued to be subdued during
2013-14, with the slowdown getting increasingly worrisome
as the year progressed. According to the advance estimates
released by the Central Statistical Organisation (CSO), Indias
GDP growth is pegged at 4.9 per cent in 2013-14, similar to
4.5 per cent during the previous year. This could have been
worse had the Agriculture sector not registered a signicant
uptick in performance (See Chart A).
In contrast, both the Industry and Services sectors recorded a
deceleration of growth during the year. In fact, the manufacturing
sector, which is the largest segment of Industry, witnessed a
contraction during the year - growing at -0.2 per cent for the
rst time since 1991-92. The construction sector remained at
- growing at a marginally higher 1.7 per cent during 2013-14
as compared to 1.1 per cent during 2012-13.
In spite of poor growth, the easing of monetary policy at the
beginning of the year was reversed in May 2013, owing to
persistent high ination in India and to counter the effects of
tapering of quantitative easing programme of the US Federal
Reserve. Even as the risks on the external front have come
down with the narrowing on the current account decit and a
lower trade decit as the year progressed, the focus of the RBI
continues to be managing the high inationary expectations.
As a result, the monetary policy continues to be tight, putting
further pressure on output growth.
The real estate sector came under signicant pressure during
2013-14 due to this decline in the growth momentum, high
interest rate on home loans as well as accompanying fall
in consumer sentiment. According to a research report by
property consultants Knight Frank India Pvt. Limited in March
2014, the sales volume of 15 listed real estate companies out
of the top-25 that they track, declined by 43 per cent during
the third quarter of 2013-14, and almost halved over the past
eight quarters. Besides, delays in approvals and high cost
of funds have increased the project execution cost and log
jammed construction activity across the country.
Reversing this bleakoutlook for the real estate sector will
depend on the pace of progress on several fronts. First, easier
monetary conditions and a softer interest rate regime which
will make investment in property more affordable for the end
user as well as de-risk balance sheets of the sector and
bring down project execution costs. Second, there is a need
for a more responsive regulatory framework, faster approval
cycles and removing uncertainty resulting from impending
legislations. Finally, it is essential to revitalise economic growth
so as to restore business and consumer condence.
Performance Highlights
In an industry which is largely unorganised in India, Mahindra
Lifespaces is one of the few companies with the experience of
successfully serving consumers as well as businesses through
its two segments of operations - residential projects and large
format integrated developments. This continues to be the
strategic direction in which the Company is moving, even as it
looks to expand its presence in newer segments in residential
market or augment the product offering in the integrated
development space with a design and planning paradigm that
shapes communities of the future. These have been discussed
in greater detail in the section on Markets and Opportunities.
Mahindra Lifespaces has a reputation for building and executing
high quality and value added projects, with an uncompromising
focus on sustainable development and environment friendly
practices. These have been well recognised. During the year,
the Company won the Outstanding Contribution in Real
estate in Green Building project category at the EPC World
awards. It also received a Certicate of Commendation at
the CIIITC Sustainability Award 2013 and was felicitated
for its Contribution to Green Building Movement by
CII-IGBC. The Company benets from the Mahindra brand
- a name associated with honesty, transparency and fairness,
which enhances its reputation as a professionally managed
real estate player.
The Companys strategy of being present in two segments
and its core values of being a responsible corporate citizen
have been a signicant source of comfort in the challenging
economic environment that the real estate industry faced
during the year. During the year, it was recognised as one
of the Top 10 Builders in India by the Construction World
Architect and Builder Awards. Both the business segments
made progress during the year.
In the residential segment, the Company launched two new
projects - Lartista and Nova in the luxury and budget home
segments respectively. In addition, fresh inventory in three of its
existing projects were also launched during the year. During
2013-14, the Company sold over 700 residential units across
623
its ongoing and newly launched projects, including projects
of its subsidiary companies in the residential space.
In the large format developments, there was improvement in
demand from businesses aimed at the domestic market, even
as the SEZ demand remained subdued. Mahindra World City,
Jaipur, saw a considerable increase in activity during the year
with closure of several lease agreements. The Companys
mature project in the segment, Mahindra World City, Chennai,
where most of the development is currently in residential and
social infrastructure, also saw closure of a few industrial land
leases in the Domestic Tariff Area.
Although, this enabled the Company to contain the impact of the
adverse macro economic environment faced by the Industry and
the economy as a whole, the nancial performance did witness a
decline. Consolidated Income of the Company was ` 756 crores
in 2013-14 as compared ` 772 crores in 2012-13. Prot after taxes
(PAT) came down from ` 156 crores in 2012-13 to ` 110 crores in
2013-14. After accounting for minority interest, the consolidated
net prot (PAT) of the Company came down from ` 141 crores
to ` 101 crores during 2013-14. Diluted earnings per share (EPS)
of the Company stood at ` 24.64 in 2013-14 as compared to
` 34.61 in the previous year.
The drop in protability was driven by product mix changes
with higher margin projects in Mumbai being completed in the
previous year. Increased interest outows also impacted prots.
The Company has focused in the last year on augmenting its
portfolio of residential projects for the future, thereby requiring
the capital for the same purpose. Also Mahindra World City
Chennai, which was a signicant contributor to projects in
the previous year through industrial land leases, saw a drop
in revenue and prots due to non availability of approved
industrial land for leasing.
The Company has taken several steps during the year in the
area of sales and marketing as well as project management
and delivery to improve its efciencies and counter the difcult
macro economic environment facing the industry. These have
been discussed in greater detail in subsequent sections on
Operations, Quality and Safety. The report also presents
initiatives taken in the area of Sustainability and Human
Resources. We close the report with a discussion on nancial
performance, risks and concerns and the outlook for the future.
Markets and Opportunities
Residential
The market for the residential segment witnessed mixed
trends during the year. Among the important geographies in
which the Company traditionally has a strong presence, while
the Mumbai and Delhi NCR market had a dip in absorption,
the demand situation was stable in Pune. However, none of
these markets witnessed a signicant correction in prices, even
as there were instances where developers offered additional
benets and services to close sales. The demand situation was
also stable in Bangalore, where the Company, through its joint
venture company Mahindra Homes Private Limited, is coming up
with its rst project. In Hyderabad, where the Company launched
its rst project in 2012-13, the offtake was satisfactory although
the market slowed down towards the second half of the year.
As far as growth opportunities for the immediate future are
concerned, the Company will continue to focus on the top
six cities of Mumbai, Pune, NCR, Chennai, Hyderabad and
Bangalore. In terms of market segments, even as mid and
premium will continue to drive the volumes, the Company is
actively looking at other opportunities. It has made signicant
progress in this regard during the year with the launch of a
project in the luxury home segment in Pune and a budget
home segment in Mahindra World City, Chennai.
Subject to receiving necessary approvals, 2014-15 will see
launches in other differentiated segments such as weekend
homes and affordable housing. The affordable housing
segment, in particular, will offer the Company an opportunity
to address a large, underserved market with a carefully
crafted strategy and product, details of which are presented
in Box 1. The Companys pilot projects in the segment will
be launched under a new brand endorsed by Mahindra
Lifespaces.
Box 1: Mahindra Lifespaces Affordable Housing Product
Rationale: There is a large demand for appropriately
designed low-cost housing solutions from consumers
who cannot afford the lowest price homes currently on
offer, but at the same time do not qualify for government-
supported housing.
Product and Market: Quality homes and community
living to meet the needs and aspirations of households
with a combined monthly family income of ` 20,000 to
` 40,000 in the top 25 cities.
Key Differentiators: Focus on locations that are
accessible; design principles that are customer centric
and promote usability; construction technology which
is both cost-effective and scalable; nancial inclusions
and an unmatched experience of honesty, fairness and
trust as one of the few established brands in the real-
estate industry in the segment.
Current Status: The Company has acquired land for
two pilot projects in Chennai and Mumbai Metropolitan
Region and is in the process of obtaining the required
approvals for the same.
Large Format Integrated Developments
The market for industrial land lease witnessed a marginal revival
in demand from businesses servicing the domestic market. In
contrast, the demand situation continued to be subdued for
land in the Special Economic Zone (SEZ) segment. Both the
integrated business cities of the Company - Mahindra World
City, Chennai and Mahindra World City, Jaipur - beneted from
the improvement in demand in the domestic zones.
In terms of its strategy for growth in this segment, the
Company is actively considering moving to upcoming
industrial destinations and diversifying its portfolio to create
a network of industrial clusters. Procurement of land is in
progress for a smaller industrial cluster towards the North of
Chennai, which is home to large industries in the engineering
and automobile sector.
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Operations
Residential
Mahindra Lifespaces residential business has its presence
across the value chain of real estate development that covers
identifying a suitable piece of land and conducting thorough
due-diligence on its title and development potential, acquiring
the land, product conceptualisation and design management,
obtaining requisite statutory approvals, project management
and quality assurance. The Company also undertakes the
projects branding, marketing and sales while ensuring timely
delivery and upkeep of the property until it is handed over to
the customers fully.
The Companys model in residential business is to view land
as inventory and it therefore endeavours to shorten the time
period between land procurement and to launch of the project.
Various process improvements have been carried out to this
effect and there has been a marked improvement in the time
taken for initiating the approvals submission process after
purchase of land. The Company has also devised a robust
New Product Development framework that includes work-
streams on design and product denition, market demand-
supply analysis, branding, marketing and pricing strategy,
contracting and sourcing, site management, sales and channel
partner strategy. This approach ensures that the company is
well prepared to launch the project as soon as all the required
approvals and clearances have been secured.
The Company is increasing its market penetration through a
greater focus on branding at the project and the company
level, broadening the channel partnership platforms, and
reaching out to newer customer segments such as corporates
and NRIs. It has also initiated focused online activity covering
various property portals and social media. The Company
will continue investing in its brand and further build on the
customers trust, which is a strong differentiator for it in the
industry.
The Company has been focused on putting in place systems
and processes which will be scalable and instrumental in
achieving unmatched quality, safety, transparency, cost
management and timely completion of its projects. Substantial
progress was made on this front during the year with the
successful implementation of improved processes in Project
Management. These have been discussed in greater detail
in the subsequent sections on Quality and Safety. This has
resulted in signicant improvement in timely delivery, with the
Company achieving key project milestones in ten operational
phases during the year.
As of 31
st
March 2014, the Company along with its subsidiaries
has completed projects covering 7.70 million square feet of
which 7.43 million square feet is in the residential segment.
It is currently developing 4.68 million square feet (Ongoing).
Besides, another 6.59 million square feet are available in the
form of new phases of ongoing projects or fresh projects that
are at different stages of planning and will be launched in the
near future(Forthcoming).A snapshot of the Company and its
subsidiaries project portfolio is presented below.
Table 1: Projects Snapshot 2013-14 (million square feet
estimated saleable area)
Location Completed# Ongoing Forthcoming
Chennai* 1.38 1.64 1.21
Mumbai 2.81 1.04
Pune 1.56 0.61 1.10
NCR 1.95 0.97 1.10
Nagpur 0.59 0.95
Hyderabad 0.87 0.21
Bangalore 0.98
TOTAL 7.70 4.68 6.59
# Does not include selected projects that were completed
by GESCO
* Includes residential developments in MWC Chennai
Completed and Ongoing Projects
During the year, the Company completed multiple phases
of Aqualily and Phase I of Iris Court in Mahindra World City,
Chennai. Two new projects and new phases of 3 existing projects
were launched during the year, which are at different stages of
construction. The project-wise details are provided below.
Eminente a premium high-rise residential complex in
Goregaon, Mumbai, is spread over 5.58 acres covering
0.57 million square feet of saleable area. All units in this project
have been sold and the construction of the second and third
phase was completed in the previous year. During 2013-14,
handover of units in Phase II was completed and was nearing
completion for the nal phase (Phase III).
Splendour in Bhandup, Mumbai, is spread over 8.46 acres
and has a total saleable area of 0.78 million square feet. All units
in this project have been sold. During the year, construction
of the second phase covering 0.35 million square feet was
completed and the handover of the units is in progress.
Aqualily is a premium project within Mahindra World City,
Chennai. Spread across 55 acres of land, the project offers villas
and apartments covering 1.57 million square feet. This project is
being implemented by Mahindra Residential Developers Limited.
During 2013-14, the Company completed the construction of
the last three phases of the villas (1B, 1C, 1D) and the rst
phase of apartments (2A), taking the total completed area
under the project to 0.61 million square feet. Handover of units
to the customers is in progress. Construction for the next two
phases of apartments (2B, 2C) covering 0.78 million square feet
is progressing as per schedule. 67 per cent of the total units
launched in this project have been sold upto March 2014.
Iris Court, located in Mahindra World City, Chennai,is spread
over 18 acres with a total saleable area of 0.86 million square
feet. This project is being implemented by Mahindra Integrated
Township Limited. During 2013-14, the rst phase of the
project covering 0.27 million square feet was completed. The
handover of units in this phase is also nearing completion and
over 100 families have already moved in. Construction in the
remaining two phases is underway and progressing as per
schedule. 82 per cent of the total units launched in this project
have been sold upto March 2014.
625
Aura in Gurgaon, National Capital Region, is spread over
17 acres and has saleable area of 1.24 million square feet.
The rst phase of the project is complete and the handover of
the units will start once the occupancy certicate is received.
Construction for the second and third phase is in advanced
stages and progressing as per schedule for the remaining two
phases. 98 per cent of the total units launched in this project
have been sold upto March 2014.
Bloomdale in Nagpur, Maharashtra, is conceived as a gated
community spanning over 25.2 acres and has a saleable
area of 1.55 million square feet, offering a choice of low-
rise apartments, row houses and duplex homes. It is being
implemented by Mahindra Bebanco Developers Limited
(MBDL). During the year, the second phase (2A and 2C) of the
project was launched, taking the total saleable area launched
to 0.59 million square feet. Construction work for the new
phase also started during 2013-14 and is progressing as per
schedule. While construction in phase 1 (A, B and C) is in
advanced stages, 84 per cent of the total units launched in this
projects have been sold upto March 2014.
Antheia in Pimpri, Pune, is spread over 25 acres with a
saleable area of 1.60 million square feet. Phase I of the project,
which was launched during 2012-13, was expanded to a total
saleable area of 0.52 million square feet during the year. The
project has received good response and the construction
activity for the rst phase is in progress. 72 per cent of the total
units launched in this project have been sold upto March 2014.
Ashvita is Mahindra Lifespaces rst project in Hyderabad
which was launched in 2012-13. The project is located at
Kukatpally near Hi-tech city and is spread across 9.70 acres with
a saleable area of 1.1 million square feet. The project is being
developed in the joint development format with the Companys
share at 80 per cent and the land owners share at 20 per cent.
Two phases of the project comprising 0.42 million square feet
were launched during the year, taking the total launched area to
0.87 million square feet. The construction of both these phases
also commenced during the year while construction in the other
two phases is underway. 62 per cent of total units launched in
this project have been sold as of March 2014.
LArtista in Puneis the Companys rst project in the luxury
homes segment. Located in the heart of the city, it offers
spacious three and four bedroom ats with ultra-modern
amenities and common spaces amidst green surroundings.
The project was launched during the year and will have 21 units
with an estimated saleable area of around 0.09 million square
feet of which the Companys share is 0.07 million square feet.
The construction activity has also started and is progressing
as per schedule.
Nova in Mahindra World City, Chennai is spread over
7.26 acres with a saleable area of 0.54 million square feet.
During the year, the Company launched the rst phase of the
project which has 360 units. This project is being implemented
by Mahindra Integrated Township Limited. The construction
work also started along with the launch and is progressing as
per schedule.51 per cent of total units launched have been
sold as of March 2014.
New Projects
The Company is in various stages of planning new residential
developments- projects for which design development or
approvals are underway:
Avadi, Chennai: This will be the rst pilot project in the
affordable housing segment for the Company, with an
estimated saleable area of 0.73 million square feet. The
design development phase of the project is complete and
is currently awaiting approvals.
Boisar, Mumbai: This will be the Companys second
pilot project in the affordable housing segment, with an
estimated saleable area of 0.54 million square feet. The
design development phase of the project is complete and
is currently awaiting approvals.
Alibaug, Mumbai: This project is conceived as a
weekend home project. The project will have villas with
an estimated saleable area of 0.17 million square feet. The
design and development phase of the project is complete
and is currently awaiting approvals.
Andheri, Mumbai: This will be a premium residential
project in Andheri (East) with an estimated saleable area
of 0.37 million square feet. The design development
phase of the project is underway.
Bannerghata, Bangalore: This is the rst land parcel that
the Company has acquired in Bangalore for residential
development. The project will have an estimated saleable
area of 0.98 million square feet. The design development
phase of the project is underway. The project will be
implemented by a 50:50 JV company with SCM Real
Estate (Singapore) Private Limited, namely Mahindra
Homes Private Limited.
Gurgaon, NCR: This will be a premium project of the
Company spread across 6.8 acres and a saleable area of
1.10 million square feet. The project will be implemented
in collaboration with the landowners by Mahindra Homes
Private Limited. The design development phase of the
project is complete and is currently awaiting approvals.
Large Format Integrated Developments
Mahindra Lifespaces is the rst company in the private sector
to have successfully developed an integrated business city in
India Mahindra World City, Chennai. This is also the rst
operational Special Economic Zone (SEZ) from the corporate
sector. Besides this project, the Company has another project
in this segment in Rajasthan Mahindra World City, Jaipur.
Built on the concept of Livelihood, Living, Life, these integrated
developments seek to balance three key aspects: business and
economic activity, housing and associated amenities as well
as cultural and community development. Today, the Mahindra
World City brand has become a highly successful name in the
large format integrated developments segment.
Mahindra World City, Chennai
Mahindra World City, Chennai, is implemented by Mahindra
World City Developers Limited (MWCDL), jointly promoted
by Mahindra Lifespaces and the Tamil Nadu Industrial
626
Development Corporation Limited (TIDCO). During the year,
Mahindra Lifespaces increased its stake in MWCDL by 6 per
cent through the purchase of stake from other shareholders,
taking its total shareholding to 89 per cent.
It has three sector specic Special Economic Zones (SEZs)
IT (services and manufacturing), Apparel and Fashion
Accessories, and Auto Ancillaries, and a Domestic Tariff Area
(DTA) for businesses catering to the Indian market. Integrated to
the business zone is a Residential and Social Infrastructure zone.
It is the rst township in India to receive Green Township
Certication (Stage I Gold certication) from IGBC.
Mahindra World City, Chennai, completed 11 years of its
operations in September 2013. At the end of 2013-14, the
project had a total area of 1,524 acres. In terms of new
customers, it added two MNCs to the portfolio in the DTA
Heat and Control (USA), ranked amongst the leading food
processing equipment manufacturers in the world and Dorma
(Germany), world leaders in door controls.
Two new companies started their operations in the DTA during
the year. At the end of the year, the business zone in the project
had 63 clients of which 27 were in the SEZs and 36 in the DTA.
Currently, 49 companies operate out of Mahindra World City,
Chennai and 2 are expected to start functioning soon. During
the year, direct employment in the business city increased
from 31,000 to around 33,000. Exports also increased from
` 6,100 crores in 2012-13 to over ` 7,200 crores during 2013-14.
Even as the business zone continues to grow, most of the focus
going forward will be on residential and social infrastructure. In its
planning, Mahindra World City, Chennai, has allocated 285 acres
for the development of residential and social infrastructure
that will cater to the requirements of over 7,000 families. With
handing over of units in some phases of Aqualily and Iris Court
during the year, the city has three operational residential projects
which together have around 300 families living there. A new
residential project Nova was launched during the year. Details
of the current residential projects have already been provided in
the previous section on Residential segment.
On the retail and social infrastructure front, considerable
progress was made during the year. Holiday Inn Express started
its 140 room business hotel with conference and banquet
facilities. Construction of the hospital and the club mentioned
in our previous report is in progress and is expected to be
completed during 2014-15. In another important development,
Mahindra World City, Chennai signed up with SSBM Realty
and Hospitality to set up a Hostel for working professionals.
The Hostel is planned for 500 rooms of which 200 rooms will
be in Phase I. Besides these, the offerings at the commercial
centre, The Canopy, were further strengthened with the
addition of restaurants and nancial service providers.
Mahindra World City, Chennai, continued to build on its
community development and engagement initiatives during
the year. This included a marathon run in aid of Nanhi Kali,
an inter-company sports tournament, Mindspace-the open
quiz competition and the second edition of Conuence - a
thought leadership event on Planned Urbanisation: Way
Ahead for India. These were received well by the participants
and residents.
Mahindra World City, Jaipur
Mahindra World City, Jaipur, is being implemented by Mahindra
World City (Jaipur) Limited (MWCJL), a 74:26 joint venture
between Mahindra Lifespaces and Rajasthan State Industrial
Development & Investment Corporation Limited (RIICO), a
Government of Rajasthan enterprise. Mahindra World City,
Jaipur is proposed to be developed as a Multi Product Special
Economic Zone and a Domestic Tariff Area across 3,000 acres,
of which 2,949 acres have already been acquired.
In the previous year, the Company received approval for the
master plan for 500 acres of development in the Domestic
Tariff Area (DTA). During 2013-14, the Company was able to
leverage this by leasing around 51 acres to eight customers
and building a pipeline of MoUs for future business. It has also
added customers in the Handicrafts SEZ and Evolve the
multi-tenanted IT park which will be spread over approximately
25 acres. At the end of the year, the Company had over 50
customers in its business zone - across DTA and SEZ.
Seven companies have started their development activities
during 2013-14. These are expected to become operational
in the near future. Five new companies became operational
in Mahindra World City Jaipur taking the total number of
operational companies to 19. These companies have created
direct employment for around 5,000 people, which is a growth
of 42 per cent over the previous year. Exports by MWCJL
clients grew by over 64 per cent to reach ` 1,077 crores in
2013-14.
Integrated Management System (IMS)
Mahindra Lifespaces has embraced an Integrated
Management System covering three International Standards
ISO 9001:2008 (Quality Management System), ISO 14001:2004
(Environmental Management System) and OHSAS 18001:2007
(Occupational Health and Safety Management System).
The main thrust of this approach is to build and institutionalise
project execution capabilities through scalable systems and
processes that aid in timely delivery, quality of product and
safety during construction, with the ultimate goal of adding
value to our customers.
Quality
Mahindra Lifespaces has always stressed on the importance
of its strong quality management system, which is set up as
per the requirement of the International Standard, ISO since
1999. During 2013-14, the Company revised its quality policy,
aligning it further with its business objectives to ensure its
continuing suitability.
Improvement projects were systematically identied and
implemented as Group Kaizens under an annual Quality
Improvement Plan. During the year, the Company carried out
23 such projects through cross-functional teams. It also carried
out a detailed study to benchmark international product quality
assessment systems for developing and adopting a similar
product quality system within the Company.
627
Apart from this, the Company continued to explore innovative
ways to improve the quality of product and processes, bring
down the construction cycle time, improve productivity and
make operations more competitive. Many of these have been
successfully implemented in the Companys projects. Mahindra
Lifespaces regularly interacts with technical institutions such as
IIT Mumbai, IIT Chennai and VJTI Mumbai for their expertise
in testing of building materials and innovations in the area of
construction technology.
With these initiatives, the Company has sustained its maturity
level in applying the principles of The Mahindra Way, in the
pursuit of excellence through the application of Total Quality
Management.
Going forward, the Company intends to implement an
in-process snagging and inspection system and a worker skill
up-gradation program to take quality to the next level.
Safety
Since 2009, the Company has an established Safety Policy
which underscores its commitment to take measures to prevent
accidental injuries and occupational ill health of all employees
and associates working at the ofces and project sites. During
the year, the Company put in place Behaviour Based Safety
(BBS) practices by establishing SOPs and providing required
training.
These safety initiatives have helped the Company reduce lost
time injuries and improved the overall safety performance,
which is measured using an index called Frequency Severity
Index (FSI). The FSI came down from 0.20 in 2012-13 to
0.17 in 2013-14, reecting a 15 per cent improvement. The
Company is taking measures to further strengthen the safety
management system to bring the FSI down.
Going forward, the Company intends to establish and
implement near miss reporting culture, and safety performance
evaluation policy for contractors and employees to take safety
to the next level.
Mahindra Lifespaces has been at the forefront of the real
estate industry in India to achieve the mission of Transforming
urban landscapes by creating sustainable communities. The
Company has done this by making its residential and large
format integrated developments environment friendly and
promoting sustainable construction practices while ensuring
nancial prudence.
During the year, Mahindra Lifespaces continued with its focus
on building environment friendly and energy efcient Green
Buildings in line with the standards established by the Indian
Green Building Councils (IGBC) Green Home Rating System.
During the year, the Company received IGBC Green pre-
certication for its two new projects. With these, the Company
now has a total of 2 certied projects and 11 pre-certied projects.
The Company voluntarily participated in the Climate Disclosure
Leadership Index (CDLI), which involves measuring and
disclosing an organisations impact on the environment
and natural resources, and actions taken to reduce them.
Mahindra Lifespaces is the only real estate company in India
to participate in this global initiative. It is also carrying out a
Life Cycle Assessment of its project Antheia in Pune, which
involves measuring the impact of all stages of a project on the
environment and making it more environment friendly. In another
initiative, it is carrying out a Living Building Assessment of
its completed project Splendour, Mumbai, to evaluate living
conditions and the factors affecting the human life within a
building like air, water, lighting level and indoor environment.
In the large format integrated developments space, the
Company carried out a social impact assessment study for
Mahindra World City, Chennai, to capture the dynamics and
nature of socio-economic transformation that has taken place
in the local communities and the environment as a result of
the project. This will help in identifying areas for engagement
with local communities and dene the scope of involvement
for replication and scalability in other similar projects.
Mahindra World City, Jaipur is a partner project of Clinton
Climate Initiative (CCI), a foundation promoted by Former US
President Bill Clinton for sustainable development.
The company released its second edition of sustainability
report (2012-13), based on the Global Reporting Initiative (GRI)
guidelines. After completion of the review process, the report
has been assessed at A+ as per the GRIG3.1 guidelines,
indicating the highest level of transparency and voluntary
disclosure. Besides this, the company continues to report
its triple bottom-line performance as a part of the Mahindra
Groups sustainability report.
Mahindra Lifespaces CSR strategy is to contribute to the local
communities that it operates in by focusing, amongst others,
on key areas of intervention: education, skill development,
health and environment.
In the area of education and skill development, the Company
expanded its Gyandeep initiative an informal school
to provide basic education and a safe environment for the
children of construction workers in and around its sites
in Nagpur, Gurgaon, Pune and Jaipur. Another important
initiative is a community college in Mahindra World City to
provide employability training to local youth from the villages
around Mahindra World City, Chennai. Around 200 people
beneted from the continuing skill development programme
for school dropouts and unemployed youth at Mahindra World
City, Jaipur. Apart from these, the Company regularly carries
out awareness programmes and supports education-related
needs of the disadvantaged sections in the local communities.
In the area of environment, the Company has tree plantation
initiative called Mahindra Hariyali, which was started in
2008-09. During the year, over 22,500 trees were planted
across multiple locations: Jaipur, Pune, Mumbai, Chennai and
Nagpur. It also regularly promotes education on environment
and sustainability at its project sites and nearby schools by
carrying our awareness programmes.
As part of the focus on health, cleanliness drives, vaccination
camps, blood donation drives, general health and eye-check
628
camps as well as HIV awareness programmes are regularly
conducted for construction workers and their families, and
disadvantaged communities around our operational sites. Apart
from these, awareness programmes on health, safety and hygiene
are also carried out from time-to-time in the neighbourhood.
Mahindra Lifespaces has been investing 1 per cent of its
prot after tax every year from 2005-06 in CSR activities. The
Company, in every nancial year commencing from 1
st
April,
2014, in line with the new Companies Act, 2013, pledges to
spend, 2 per cent of the average net prots made during
the three immediately preceding nancial years specically
towards CSR initiatives.
Human Resources
Mahindra Lifespaces recognises that its people are the key to
the success of the organisation and in meeting its aspirations.
During the year, the Company continued its efforts to streamline
its HR policies and processes to attract and retain the best
talent in the industry.
In the previous year, the Company had integrated the performance
management system with career planning to improve the
efciency of the process and introduced reverse feedback.
During 2013-14, the focus was to build on these to increase the
fairness and transparency of the appraisal system. An important
initiative was the use of functional talent councils to review ratings
and promotions. In the previous year, the Company made further
grant of 26,500 Stock Options under Employee Stock Options
Scheme - 2012 to thirteen Eligible Employees.
Catering to the learning and development needs of its
employees continues to be a key focus area for the Company.
Apart from structured training initiatives, a number of new
customised programmes were carried out during the year:
customer service excellence, leadership communication and
executive presence, basic project management, strategic
business orientation and innovation led transformation. In a
new initiative to improve employee engagement, the Company
organised off-sites for functional teams in the areas of Projects,
Sales Marketing & CRM and HR.
Mahindra Lifespaces endeavours to keep its workplaces safe,
transparent and friendly for people to work in. Understanding
employees and giving them the condence that their workplace
is fair, transparent and safe has been a core philosophy and
to that effect the Company has enacted many polices and
established standards which are constantly reviewed and
upgraded to ensure they are relevant and effective. Last year,
the Company formed a Diversity Council with the objective
of creating an inclusive environment to leverage the unique
talents of diverse individuals in the workplace. The Company
believes that this will enable greater innovation and higher
productivity in the long term.
Mahindra Lifespaces has also recently made changes to its
policy on Sexual Harassment, which has been in existence for
several years. The new policy is aligned to the recently released
Act on Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. Internal Complaints
Committees (ICCs) were set up from the senior management
with women employees constituting majority and a senior level
woman employee appointed as the Presiding Ofcer. The ICC
is responsible for redressal of complaints related to sexual
harassment and follows the guidelines provided in the Policy.
During the year ended 31
st
March 2014, the ICC did not receive
any complaint pertaining to sexual harassment.
As of 31
st
March, 2014, the Company had 248 employees
and its subsidiary companies had 78 employees. Employees
relations during the year remained cordial.
Financials
Table 2 presents the abridged prot and loss statement of
Mahindra Lifespace Developers Limited as a standalone and
consolidated entity.
Table 2: Abridged Prot and Loss Statement
(` crores)
Standalone Consolidated
2013-14 2012-13 2013-14 2012-13
Operating Income 307.1 351.5 705.3 738.3
Other Income 114.3 70.8 50.9 34.2
Total Income 421.3 422.3 756.2 772.5
Project and Operating
Expenses
218.7 225.8 425.6 397.8
Employee and Other
Expenses
59.5 52.6 109.4 98.7
Financial Expenses 39.4 6.2 50.2 31.2
Depreciation 2.3 1.8 10.1 8.7
Total Expenditure 319.9 286.4 595.3 536.4
PBDIT 143.1 143.8 221.2 276.0
PBDT 103.7 137.7 171.0 244.8
PBIT 140.7 142.1 211.1 267.3
PBT 101.4 135.9 160.9 236.1
Tax 23.7 38.4 50.9 79.9
PAT 77.7 97.5 110.0 156.2
Minority Interest 9.4 14.8
PAT (After Minority
Interest) 100.6 141.4
Diluted EPS (`) 19.0 23.9 24.6 34.6
Given the challenging environment faced by the industry, the
nancial performance of Mahindra Lifespaces was impacted.
Even as the Total Income of the Company remained stable, the
protability witnessed a decline during the year due to change
in the product mix, coupled with a higher interest charge. Also,
the performance at Mahindra World City, Chennai was muted
as the company is awaiting some approvals to release its last
tranches of industrial land inventory.
Net prot (PAT) for the standalone entity came down from
` 97.5 crores in 2012-13 to ` 77.7 crores in 2013-14. This was
primarily due to the increase in nance costs during the year.
Net prot (PAT) after minority interest for the consolidated entity
came down from ` 141.4 crores in 2012-13 to ` 100.6 crores
in 2013-14.
As of 31
st
March, 2014, Mahindra Lifespaces has standalone debt
equity ratio of 0.61:1 and consolidated debt equity ratio of 1.11:1.
The liquidity situation of the Company during the year remained
comfortable and surplus funds generated during the year have
been invested in credit worthy instruments, including money
market instruments, mutual funds and deposits with banks.
629
Threats, Risks and Concerns
Mahindra Lifespaces has appropriate risk management
systems in place for identication and assessment of risks,
measures to mitigate them, and mechanisms for their proper
and timely monitoring and reporting.
Economic Risks
The Indian economy is going through a signicant economic
downturn. Even as the RBI is unlikely to raise rates further, the
policy stance taken by the RBI to rein in ination means that
interest rates are unlikely to come down in the near term. This
can have a direct impact on the performance of the real estate
sector and the Company. Secondly,even as there are signs of
revival in the advanced economies, especially in the US, it is
yet to translate into investment outlays in Indian businesses,
especially those in export oriented industries.
Mahindra Lifespaces is conscious of these risks and is taking
measures to mitigate them. For instance, the Companys
focus on both residential and integrated developments has
been a signicant source of comfort during periods of poor
economic performance. Besides, the Companys prudent
nancial management has also kept it relatively insulated from
the economic downturn and the Company is well placed to
raise capital at competitive interest rates.
Operational Risks
Key operational risks faced by the Company include longer
gestation period for procurement of land, time taken for
approvals, inability to sell the project as per plan, inability to
complete and deliver projects according to the schedule leading
to additional cost of construction and maintenance, erosion of
brand value, appointment and retention of quality contractors,
inability to attract and retain talent, poor customer satisfaction,
fraud and unethical practices, failure to comply with laws and
regulations leading to nes, penalties and lengthy litigations.
The Company addresses these issues within a well structured
framework which identies the desired controls and assigns
ownership to monitor and mitigate the risks. The Company
has also invested signicant resources in an Enterprise
Resource Planning (ERP) solution and transparent customer
friendly processes, which are expected to go a long way to
address some of these risks. The Company also has a Code
of Conduct for all its Employees. The Companys Corporate
Governance policies ensure transparency in operations, timely
disclosures and adherence to regulatory compliances, leading
to enhanced stakeholder value.
Policy and Regulatory Risks
The real estate industry is easily affected by changes in government
policies and regulations. There are considerable procedural
delays with respect to approvals related to acquisition and use
of land. This problem is accentuated as this is an industry which
has traditionally been quite unorganised. Unfavourable changes
in the government policies and the regulatory environment can
adversely impact the performance of the Company.
The Company, with its approach towards acquisition of land
based on due diligence, fairness and trust, and transparent
processes in developing the projects, has effectively mitigated
risks with respect to land acquisition. The focus on environment
friendly and sustainable practices also help in mitigating
risks associated with environmental regulations and norms.
Besides, the Companys plans for innovative offerings in the
affordable housing and smaller integrated developments will
also go a long way in mitigating some of the risks associated
with execution and cost of land acquisition.
Internal Controls
The Company has adequate internal control systems,
commensurate with the size and nature of its business. The
system is supported by documented policies, guidelines and
procedures to monitor business and operational performance
including an ERP solution, all of which are aimed at ensuring
business integrity and promoting operational efciency.
An independent internal audit rm appointed by the Company
conducts periodical audits to ensure adequacy of internal
control systems, adherence to management policies and
compliance with the laws and regulations of the country. Their
scope of work also includes internal controls on accounting,
efciency and economy of operations. The internal auditors
also report on the implementation of their recommendations.
Reports of the internal auditors are regularly reviewed at the
Audit Committee meetings. The Audit Committee of the Board
reviews the adequacy and effectiveness of the internal control
systems and suggests improvements for strengthening them.
Outlook
The global economic environment witnessed a gradual
recovery towards the end of 2013-14. The advanced
economies, especially the US, have reported signs of revival.
However, there are still considerable downside risks. On the
domestic front, the situation continues to be worrisome. The
monetary policy stance aimed at keeping ination under check
is hurting the investment-growth cycle. This has impacted both
business and consumer sentiment.
The real estate market in India, too, has been affected by
the adverse macro economic environment. In this situation,
Mahindra Lifespaces has delivered a credible performance.
This has been possible only because of its strategy to focus
on the right market segments and geographies.
Even as the macro economic outlook for the immediate future
is not very encouraging, the Company believes that the medium
to longer term outlook for domestic growth remains positive.
Till such time, the Company is relying on its ability to innovate
and execute to tide over the impact of adverse economic and
regulatory environment. However, given that there are still
credible risks, the outlook for 2014-15 remains cautious.
Certain statements in the Management Discussion and Analysis
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 Companys
operations include labour and material availability, and prices,
cyclical demand and pricing in the Companys principal markets,
changes in government regulations, tax regimes, economic
development within India and other incidental factors.
630
Corporate Governance Report
1. Corporate Governance Philosophy
Mahindra Lifespaces is committed to good corporate
governance and endeavours to implement its Code of
Corporate Governance in its true spirit. The philosophy of the
Company in relation to corporate governance is to ensure
transparency in all its operations, make disclosures, and
enhance shareholder value without compromising in any way
on compliance with the laws and regulations. The Company
believes that good governance brings about sustained
corporate growth and long-term benets for stakeholders.
In India, corporate governance standards for listed
companies are regulated by the Securities and Exchange
Board of India (SEBI) through Clause 49 of the Listing
Agreement of the Stock Exchanges. The stipulations
mandated by Clause 49 became applicable to the
Company in March, 2001 and have been complied with
since then. As a Company which believes in implementing
corporate governance practices, the Company has
adopted practices mandated in the revised Clause 49
and has established procedures and systems to remain
compliant with it as on 31
st
March, 2014. This chapter,
along with the chapter on Additional Shareholders
Information reports the Companys compliance with the
existing Clause 49.
2. Board of Directors
The composition of the Board is in conformity with Clause 49
of the Listing Agreement. The Company has a Non-Executive
Chairman and over one half of the total number of Directors
comprises Independent Directors. The Management of the
Company is entrusted in the hands of the Key Management
Personnel of the Company and is headed by the Managing
Director & Chief Executive Ofcer who operates under the
supervision and control of the Board. The Board reviews
and approves strategy and oversees the actions and results
of management to ensure that the long-term objective of
enhancing stakeholders value is met.
The Managing Director & Chief Executive Ofcer is an
executive of the Company and draws remuneration
from the Company. The Non-Executive Chairman and
Independent Directors receive sitting fees for attending
the meeting of the Board and the Committees thereof. The
Non-Executive Chairman and Independent Directors would
be entitled to the remuneration under the Companies Act,
2013. However, as per Section 149 (9) of the Companies
Act, 2013, henceforth the Independent Directors will not
be entitled to fresh grant of any Stock Options.
Director is the Principal Advisor (Finance) at M&M and
receives remuneration from M&M. Apart from the above
and apart from the reimbursement of expenses incurred
in discharge of their duties and the remuneration that
the Independent Directors would be entitled to under the
Companies Act, 2013, none of the Directors have any
other material pecuniary relationships or transactions
with the Company, its Promoters, its Directors, its Senior
Management, its Subsidiaries and Associates which in their
judgment would affect their independence. The Directors
of the Company are not inter se related to each other.
The Senior Management has made disclosures to the
Board conrming that there are no material, nancial and/or
commercial transactions between them and the Company,
which could have potential conict of interest with the
Company at large.
a) Number of Board Meetings
Eight Board meetings were held during the year
under review, 1
st
April, 2013 to 31
st
March, 2014, on
the following dates: 22
nd
April, 2013; 6
th
June, 2013;
24
th
July, 2013; 31
st
August , 2013; 22
nd
October, 2013,
24
th
January, 2014; 14
th
March, 2014, and 26
th
March,
2014. The maximum gap between any two meetings
did not exceed four months.
b) Composition, Status, Attendance at the Board
Meetings and at the last AGM
As on 31
st
March, 2014, the Companys Board
comprised seven members. The Chairman of the
Board is a Non-Executive, Non-Independent Director.
The Managing Director & Chief Executive Ofcer is an
Executive of the Company. Four members of the Board
are Independent Directors. One member of the Board
is a Non-Executive, Non-Independent Director. The
names and categories of Directors, their attendance at
the Board Meetings held during the year and at the
last Annual General Meeting are given below:
Name of the
Director
DIN No. Status No. of Board
Meetings
Attendance
at the last
AGM
Held Attended
Mr. Arun
Nanda,
Chairman
00010029 Non-Executive
Non
Independent
8 8 Yes
Mr. Uday Y
Phadke
Non
Independent
8 8 Yes
Mr. Sanjiv
Kapoor
Independent
8 7 Yes
Mr. Shailesh
Haribhakti
Independent
8 7 No
Mr. Anil
Harish
Independent
8 8 No
Dr. Prakash
Hebalkar
Independent
8 7 Yes
Ms. Anita
Arjundas,
Managing
Director
& Chief
Executive
Ofcer
00243215 Executive 8 8 Yes
c) Details of Directorships/Committee Memberships
as of 31
st
March, 2014
As mandated by Clause 49, none of the Directors is
a member of more than ten Board level Committees
nor is any of them a Chairman of more than ve
Committees in which they are members. The number
of Directorships and Committee positions held by
them in Public companies are given below:
631
Name of the
Director
Status Director
of Public
Companies*
Membership
in
Committee**
Chairmanship
in
Committee**
Mr. Arun Nanda,
Chairman
Non-Executive
Non
Independent
12 6 4
Mr. Uday Y.
Phadke
Non-Executive
Non
Independent
7 8
Mr. Sanjiv
Kapoor
Non-Executive
Independent
7 7 5
Mr. Shailesh
Haribhakti
Non-Executive
Independent
12 7 5
Mr. Anil Harish Non-Executive
Independent
14 10 4
Dr. Prakash
Hebalkar
Non-Executive
Independent
2 3
Ms. Anita
Arjundas,
Managing
Director &
Chief Executive
Ofcer
Executive 10 3 2
* Including Directorship/Committee Memberships in Mahindra
Lifespace Developers Limited as of 31
st
March, 2014.
** Committees considered are Audit Committee and
Stakeholders Relationship Committee (earlier known
as Shareholders & Investors Grievance Committee)
including that of Mahindra Lifespace Developers Limited.
d) 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 responsibility effectively,
the Managing Director & Chief Executive Ofcer of
the Company briefs the Board at every meeting on
the overall performance of the Company. A detailed
operations report is also presented at every Board
Meeting. Amongst other things, the Board also
reviews strategy and business plans, annual operating
and capital expenditure budgets, remuneration of
Non-Executive Directors, compliance with statutory/
regulatory requirements and review of major legal
issues, adoption of quarterly/half-yearly/annual results,
risk management policies, investors grievances,
investment limits, use of capital issue proceeds,
major accounting provisions and write-offs, corporate
restructuring, minutes of meetings of the Audit
Committee and other Committees of Directors of the
Board, etc. The Board reviews a compliance certicate
issued by the Managing Director & Chief Executive
Ofcer regarding compliance with the requirements
of various Statutes, Regulations and Rules as may be
applicable to the business of the Company.
3. Directors seeking Appointment/Re-Appointment
Pursuant to Section 152 of the Companies Act, 2013,
Mr. Arun Nanda retires by rotation at the forthcoming
Annual General Meeting of the Company and is eligible for
re-appointment.
Pursuant to Section 149 and Section 152 of the Companies
Act, 2013, read with the Companies (Appointment and
Qualication of Directors) Rules, 2014, Mr. Shailesh
Haribhakti retires by rotation at the forthcoming Annual
General Meeting of the Company and is eligible for re-
appointment from the date of the AGM as an Independent
Director not liable to retire by rotation. It is proposed
that he be appointed as an Independent Director of the
Company, not liable to retire by rotation, from the date
of this Annual General Meeting till the conclusion of the
16
th
Annual General Meeting of the Company. Pursuant to
Section 149 and Section 152 of the Companies Act, 2013
read with the Companies (Appointment and Qualication
of Directors) Rules, 2014, it is proposed that Mr. Sanjiv
Kapoor, Mr. Anil Harish, and Dr. Prakash Hebalkar existing
Directors who meet the criteria of Independence, be
appointed as Independent Directors of the Company, not
liable to retire by rotation, from the date of this Annual
General Meeting till the conclusion of the 16
th
Annual
General Meeting of the Company.
All the above Directors are not disqualied from being
re-appointed as Directors by virtue of the provisions
of Section 164 of the Companies Act, 2013 (erstwhile
Section 274(1)(g) of the Companies Act, 1956).
Brief resumes of Directors seeking appointment/
re-appointment are given below.
Mr. Arun Nanda
Mr. Arun Nanda holds a Degree in Law from the University
of Calcutta, is a fellow member of the Institute of Chartered
Accountants of India (FCA) and a fellow member of the
Institute of Company Secretaries of India (FCS). Mr. Nanda
has also participated in a Senior Executive Programme at
the London Business School. He joined the Mahindra Group
in 1973. He has held several important positions within the
Group over the 40 years he was with the company.
He was inducted to the Board of Mahindra & Mahindra Limited
(M&M) in August 1992 and resigned as Executive Director
in March 2010 to focus on the social sector and create a
favourable ecosystem for senior citizens. He was immediately
re-appointed as a non-executive Director of M&M.
He is also the Chairman on the Advisory Board of
3i Investments plc, Member of the Advisory Board of
TechnoServe India, and a Trustee of Integrity Action, U.K.,
Helpage India and The Bombay City Policy Research
Foundation. He was a Member of the Task Force set up
by the B20 on Anti-Corruption which presented the policy
paper to President Sarkozy at the G20 Summit held in
Cannes in November 2011 and to President Putin in
St. Petersburg in June 2013.
He is also Chairman Emeritus of the Indo-French Chamber
of Commerce, Member of the Governing Board of the
Council of EU Chambers of Commerce in India. He was
the Chairman of CII Western Region for 2010-2011 and
Chairman of CII National Committee on Water.
Mr. Nanda was honoured with an award of Chevalier
de la Legion dHonneur (Knight of the National Order
of the Legion of Honour) by the President of the French
Republic, Mr. Nicolas Sarkozy in 2008. Mr. Nanda has
received the Real Estate Person of the Year Award from
GIREM Leadership Awards in India in 2008.
632
Mr. Nanda was awarded with the CA Business Achiever
Award - Corporate at The Institute of Chartered Accountants
of India Award 2009 and Lifetime Achievement Award
for his outstanding contribution to the Hospitality Industry
and the Service Sector by the Golden Star Awards 2010.
Recently, Mr. Nanda was awarded with the Aatithya Ratna
Award by the Business Hotels Network and Horwath
HTL for exemplifying the true spirit of Hospitality and
contributing to the success of the Hospitality.
Mr. Nanda is also a Director on the Board of Mahindra &
Mahindra Limited, Mahindra Construction Company Limited,
Mahindra Holidays & Resorts (India) Limited, Mahindra
Consulting Engineers Limited, Mahindra Infrastructure
Developers Limited, Mumbai Mantra Media Limited,
Knowledge Township Limited, Mahindra World City (Jaipur)
Limited, Mahindra Water Utilities Limited, Mahindra Holdings
Limited and Mahindra World City Developers Limited.
Mr. Nanda is on the Committees of the Board mentioned
hereunder:
Name of Company Name of Committee Position
Held
Mahindra Lifespace
Developers Limited
Stakeholders Relationship (earlier known
as Shareholder & Investors Grievance
Committee)
Chairman
Nomination and Remuneration (earlier
known as Remuneration Committee)
Member
Qualied Institutions Placement Member
Loans & Investment Chairman
Share Allotment Member
Committee for Large Format Development Member
Committee for Residential Projects in Joint
venture
Member
Corporate Social Responsibility Member
Mahindra & Mahindra
Limited
Share transfer and Shareholder/Investors
Grievance
Chairman
Loans & Investment Member
Corporate Social
Responsibility (CSR )
Member
Mahindra Consulting
Engineers Limited
Remuneration Member
Mahindra World City
Developers Limited
Remuneration Member
Mahindra World City
(Jaipur) Ltd.
Audit Member
Remuneration Member
Capital Issue Member
Developers Ltd.
Audit Member
Company Limited
Remuneration Member
Mahindra Holidays &
Resorts (India) Ltd.
Share Allotment/Transfer cum Investor
Grievance
Chairman
Remuneration Member
Loans & Investment Chairman
Inventory Approval Chairman
IPP Issue Chairman
Strategy and Review Chairman
Mahindra Holdings
Limited
Audit Chairman
Mumbai Mantra Media
Limited
Remuneration Member
Mr. Arun Nanda holds 60,114 equity shares and his spouse
jointly with Mr. Arun Nanda holds 600 equity shares in the
Company. Mr. Uday Nanda, son of Mr. Arun Nada holds
350 equity shares.
Mr. Shailesh Haribhakti
Mr. Shailesh Haribhakti, is a Chartered and Cost
Accountant, and a Certied Internal Auditor by the
Institute of Internal Auditors, Inc., Financial Planner by
the Financial Planning Standards Board India & Associate
Member of the Association of Certied Fraud Examiners.
Given a career span of four decades, he has experience in
outsourcing of knowledge processes, engaged investing,
and efciency & effectiveness enhancement in social,
commercial and governmental organisations.
Mr. Haribhakti lends his expertise to several professional
and regulatory bodies, and has played a leadership role
across several of these bodies.
Mr. Haribhakti is an active speaker at several seminars,
conferences and training programs and has been associated
with IIM-Ahmedabad as visiting faculty from 1981 to 1983.
He frequently contributes his views on request to television
channels, leading newspapers and business magazines.
Mr. Haribhakti is also a Director on the Board of Blue Star
Limited, ACC Limited, Ambuja Cement Limited, J K Paper
Limited, Raymond Limited, L&T Finance Holdings Limited,
Torrent Pharmaceuticals Limited, NSDL E-Governance
Infrastructure Limited (Formerly National Securities
Depository Limited), Future Lifestyle Fashions Limited,
Milestone Capital Advisors Limited, Karam Chand Thapar
& Bros. (Coal Sales) Limited, Quadrum Solutions Pvt.
Limited, J M Financial Asset Reconstruction Pvt. Limited,
MentorCap Management Pvt. Limited, Haribhakti Moti
India Pvt Limited, Planet People & Prot Consulting Pvt.
Limited, AAA Infrastructure Consulting & Engineers Pvt.
Limited, Reliance Enterprises & Ventures Pvt. Limited,
ADA Enterprises & Ventures Pvt. Limited, AAA International
Capital Pvt. Limited, AAA Industries Pvt. Limited, HB
Advisory Services Pvt. Limited, DH Consultants Pvt. Limited.
Mr. Haribhakti is on the Committees of the Board mentioned
hereunder:
Name of the Company Name of Committee Position
Held
Torrent Pharmaceuticals Limited Audit Chairman
Nomination & Remuneration Chairman
L&T Finance Holdings Limited Audit Chairman
Nomination & Remuneration Chairman
Raymond Limited Audit Chairman
Nomination & Remuneration Member
Future Lifestyle Fashions Limited Audit Chairman
Nomination & Compensation Chairman
Blue Star Limited Audit Chairman
Business restructuring
Committee
Member
Mahindra Life space Developers
Limited
Audit Member
Nomination and
Remuneration (earlier known
Member
Committee for Residential
Projects in Joint Venture
Member
Placement
Member
633
Name of the Company Name of Committee Position
Held
NSDL e-Governance
Infrastructure Limited
Audit Member
Committee to review
undertaking of software
development activity
Member
Ambuja Cements Limited Nomination & Remuneration Member
Compliance Member
Share Transfer Member
Management Member
ACC Limited Compliance Member
Compensation Member
Corporate Social
Responsibility
Chairman
J M Financial Asset
Reconstruction Co. Private
Limited
Audit Chairman
Allotment Member
Mr. Shailesh Haribhakti does not hold any equity shares of
the Company.
Mr. Sanjiv Kapoor
Mr. Sanjiv Kapoor, also is a commerce graduate and a
Fellow Chartered accountant. Mr. Sanjiv Kapoor, as senior
partner of M/s. S.K. Kapoor & Co, Chartered Accountants,
has conducted audits of number of large organisations
such as Reserve Bank of India, Life Insurance Corporation
of India, N.T.P.C Ltd., Indian Oil Ltd., U.T.I., Bharat Sanchar
Nigam Ltd., Bank of India, Bank of Baroda etc.
Mr. Kapoor has been a Director of Mahindra & Mahindra
Limited, Ballarpur Industries Limited, Indian Bank,
Corporation Bank, UPSE Securities Limited, Sahara Asset
Management Company Private Limited, Sahara India Life
Insurance Company Limited, U.P. Stock Exchange Limited
and Ambey Valley Limited.
He was the president of Kanpur Chartered Accountants Society
in the year 1988-89. He has been a member of Northern
Railway Users Consultative Committee, Kanpur Telephonic
Advisory Committee. He was also the Vice President of Upper
India Chamber of Commerce in the year 1996-97.
Mr. Kapoor is also a Director on the Board of Mahindra
World City Developers Limited, Mahindra Ugine Steel Co.
Limited, Sahara India Medical Institute Limited, HLL Life
care Limited, General Insurance Corporation of India, and
HLL Biotech Limited.
Mr. Kapoor is on the Committees of the Boards mentioned
hereunder:
Held
Mahindra Lifespace Developers
Limited
Audit Chairman
Nomination and
Remuneration (earlier
known as Remuneration
Committee)
Chairman
Mahindra World City Developers
Limited
Audit Chairman
Held
Mahindra Ugine Steel Co.
Limited
Audit Chairman
Remuneration Chairman
Sahara India Medical Institute
Limited
Audit Chairman
Remuneration Member
HLL Life Care Limited Audit Chairman
Strategy Formulation &
Investment Committee
Member
General Insurance Corporation
of India
Audit Member
Ethics Committee Member
HLL Biotech Limited Audit Member
Mr. Kapoor does not hold any equity shares of the company.
Mr. Anil Harish
Mr. Anil Harish, is a lawyer and Partner of the Law Firm,
D. M. Harish & Co. which was founded by his father, late
Mr. D. M. Harish. Mr. Anil Harish has expanded the scope of
his practice to include many diverse areas property, domestic
and international taxation, corporate law, joint ventures and
mergers and acquisitions, exchange control, Wills etc. He
has been an ofce bearer of several institutions in the legal
eld such as the Society of Indian Law Firms, of which he
was the Executive Vice President. As a specialist in the eld
of real estate, Mr. Anil Harish is on the advisory board of the
magazine Property Scape as well as the Accommodation
Times Institute of Real Estate Management. Mr. Anil Harish
has been ranked by the prestigious legal directory of
Chambers & Partners as a leading tax lawyer having a solid
clientele of both domestic and overseas organizations.
Mr. Anil Harish has authored several articles which have
been published in the Times of India, Hindustan Times
and several professional journals. He is a Director of
several prestigious public limited companies in India.
He is involved with several educational and charitable
trusts and is the former President of the Hyderabad
(Sind) National Collegiate Board, which runs more than
25 educational institutions and has about 50,000 students.
Mr. Anil Harish is a much sought after speaker in India and
abroad and has given several professional speeches at
prestigious events such as the India Calling Summit in Brussels,
Belgium (2009) organized by the Indian Merchants Chamber.
He has also addressed audiences in London, Dubai, Doha,
Muscat and Jakarta on several occasions on topics such as
FEMA, Taxation Collaborations and the legal requirements to
operate a business in India, and at many Seminars in India
and is a regular speaker on the Annual Budget.
Mr. Harish is also a Director on the Board of Valecha
Engineering Limited, Hinduja Ventures Limited, Advani
Hotels & Resorts (India) Limited, Hotel Leela Venture
Limited, Mukta Arts Limited, Unitech Limited, Future Retail
Limited, Ador Welding Limited, Hinduja Global Solutions
Limited, Future Consumer Enterprise Limited, Ashok
634
Leyland Limited, Obeori Realty Limited, Hinduja Leyland
Finance Limited, Trans Atlantic Consultants Pvt. Limited,
Helpyourngo.com (India) Pvt. Limited, Freight Connection
(India) Pvt. Limited, Cenmar Maritime Agencies (India)
Pvt. Limited, Oasis Preprint Services Pvt. Limited, Mordril
Properties ( India) Pvt. Limited, Astoria Maritime Pvt. Limited
Mr. Harish is on the Committees of the Boards mentioned
hereunder:
Held
Mahindra Lifespace
Developers Limited
Audit Member
Nomination and
Remuneration (earlier
known as Remuneration
Committee)
Member
Corporate Social
Responsibility
Member
Valecha Engineering Limited Audit Member
Hinduja Ventures Limited Audit Chairman
Advani Hotels & Resorts
(India) Limited
Remuneration Member
Hotel Leelaventure Limited Audit Member
Committee of Director
for Issue of Shares
Member
Unitech Limited Audit Member
Ador Welding Limited Audit Chairman
Ashok Leyland Limited Audit Chairman
Hinduja Global Solutions
Limited
Audit Chairman
Compensation Chairman
Oberoi Realty Limited Audit Member
Future Retail Limited Remuneration Member
Future Consumer Enterprise
Limited
Audit Member
Mr. Harishs son and daughter each hold 3,500 equity
shares of the Company jointly with Mr. Anil Harish,
aggregating 7,000 equity shares.
Dr. Prakash Hebalkar
Dr. Prakash Hebalkar is the Founder President of the
corporate strategy consulting organisation ProTech.
ProTech is an International Business Consulting rm
focused on providing Strategic Advice to Corporates from
the US Fortune Global 1000 list and the Indian ET500 list
of companies. Dr. Hebalkar brings with him over 30 years
of international senior executive experience following
a Doctorate in computer science and economics from
Massachusetts Institute of Technology in the U.S.A.
Dr. Hebalkar pioneered software exports from India in the
mid-1970s at TCS and later developed Tata Burroughs
(now known as Tata Infotech) from its inception in 1978
into the nations largest software exporter in just ve years.
Dr. Hebalkar is the author of several innovative Economic
and Public-policy concepts. Dr. Hebalkars initiatives in the
Infrastructure area include numerous pioneering projects
done through his own erstwhile company MaxReach
Consultants Private Limited.
Dr. Hebalkars international work experience has taken him
from IBM Research in the U.S.A. where he managed and
participated in software research for the Research Division,
to the house of Tata, the leading industrial house in India.
Dr. Hebalkar has served as international adviser on
public policy to the United Nations and WIPO as well as
the Government of India and has actively participated
in several bilateral business councils and chambers of
commerce (such as the Indo-U.S., Indo-Japan, Indo-
U.K., Indo-German and Indo-EEC Business Councils) in
promotion of bilateral trade and technology co-operation
as well as in major national business organizations in
India such as the Confederation of Indian Industry (CII),
Associated Chambers of Commerce (ASSOCHAM) and the
National Association of Software and Service Companies
(NASSCOM). He is a former President of the Western
Region of the Indo-American Chamber of Commerce.
He has pioneered several tax administration reforms as
a key member of the Ministry of Finance Empowered
Committee headed rst by Dr. Vijay Kelkar and then by
Dr. Partho Shome.
Dr. Hebalkar writes frequently on matters of economic
policy and international trade for leading publications,
and for some 15 years wrote a regular column entitled
Strategic Perspectives in Business India.
Dr. Hebalkar is also a Director on the Board of Bluestar
Infotech Limited.
Dr. Hebalkar is on the committees of the Board mentioned
hereunder:
Held
Bluestar Infotech Limited Audit Member
Shareholder Grievance Member
Compensation Member
Mahindra Lifespace
Developers Limited
Stakeholders
Relationship Committee
(earlier known as
Shareholder & Investors
Member
Committee for
investment in Large
Format Developments
Member
Dr. Hebalkar holds 2,500 equity shares in the Company.
Ms. Anita Arjundas
Ms. Anita Arjundas is the Managing Director & Chief
Executive Ofcer of Mahindra Lifespace Developers
Limited; CEO of the Real Estate Sector of the Mahindra
Group. As the CEO of the Real Estate Sector, she
is responsible for setting the strategic direction that
will enable the business to drive sustainable urban
transformation in India.
635
Ms. Arjundas joined the Mahindra Group in 2002 as Vice
President Marketing in one of the subsidiary companies
of Mahindra Lifespaces, Mahindra World City, Indias rst
integrated business city in a public-private partnership.
In 2006, she took over prot centre responsibility for the
Company and in 2009 moved to Mumbai to head the Real
Estate Sector with prot centre responsibility for both the
business units of the sector Residential Real Estate
and Industrial Real Estate/Integrated Cities. Ms.Arjundas
is also a member of the Mahindra Group Executive Board
from April, 2010.
Prior to her career with the Mahindra Group, Ms.Arjundas
spent 3 years in the IT industry and 10 years in the
consumer goods space. She is Chairperson of the
Federation of Indian Chambers of Commerce and Industry
(FICCI) - Real Estate Committee. Ms.Arjundas is also a
member of the Asia Society.
Ms. Anita has a bachelors degree in science from the
University of Madras and a masters degree in business
administration from Bharathidasan University. She is a
Wharton AMP Alumnus and has a Masters degree in
Business Administration from BIM, India.
Ms. Anita is also a Director on the Board of Mahindra
Integrated Township Limited, Mahindra World City
(Jaipur) Limited, Mahindra World City Developers Limited,
Knowledge Township Limited, Mahindra World City
(Maharashtra) Limited, Mahindra Residential Developers
Limited, Industrial Township (Maharashtra) Limited,
Mahindra Bebanco Developers Limited, Mahindra
Infrastructure Developers Limited, Mahindra Knowledge
Park (Mohali) Limited, Mahindra Homes Pvt. Limited.
Ms. Anita is on the committees of the Board mentioned
hereunder:
Name of Company Name of Committee Position Held
Mahindra Lifespace
Developers Limited
Share Allotment Member
Committee for
Residential Projects in
Joint Venture
Member
Committee for
investment in Large
Format Developments
Member
Corporate Social
Responsibility
Member
Placement
Member
Mahindra World City
Developers Limited
Remuneration Member
Corporate Social
Responsibility
Member
Mahindra World City
(Jaipur) Limited
Contract Committee Member
Mahindra Integrated
Township Limited
Remuneration Member
ESOP Committee Member
Name of Company Name of Committee Position Held
Mahindra Holidays and
Resorts Limited
ESOP Committee Member
Knowledge Township
Limited
Audit Chairperson
Industrial Township
(Maharashtra) Limited
Audit Chairperson
Developers Limited
Audit Member
Mahindra Residential
Developers Limited
Corporate Social
Responsibility
Member
4. Codes of Conduct
The Board of Directors of the Company has laid down
two separate Codes of Conduct one for Directors
and another for Senior Management and Employees.
These codes are posted on the Companys website
www.mahindralifespaces.com
All Board Members and Senior Management personnel
have afrmed compliance with the respective Code of
Conduct for the year under review. A Declaration signed
by Managing Director & Chief Executive Ofcer to this
effect is annexed to this report.
On 22
nd
April, 2014, the Board adopted the Code
for Independent Directors as per Schedule IV of the
5. CEO/CFO Certication
As required under Part V of the Clause 49 of the Listing
Agreement with the Stock Exchanges, the Managing
Director & Chief Executive Ofcer and the Chief Financial
Ofcer of the Company have certied to the Board regarding
their review on the Financial Statements, Cash Flow
Statements and other matters related to internal controls in
the prescribed format for the year ended 31
st
March, 2014.
6. Remuneration Paid to Directors
Remuneration Policy
While deciding on the remuneration for Directors, the
Board and Nomination and Remuneration Committee
(Committee) considers the performance of the Company,
the current trends in the industry, the qualications 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 Companys remuneration policies. The Non-Executive
Chairman and Independent Directors are paid sitting fees
and reimbursement of expenses incurred in attending the
Board and Committee meetings.
The Board determines the remuneration, if any, of Non-
Executive Directors, subject to requisite approvals, if any.
At the 12
th
Annual General Meeting of the Company held
on 21
st
July, 2011, the shareholders had approved revision
in the terms of payment of commission in a manner that
commission may be distributed without any sub-limits
amongst and paid to such Directors in such proportions as
the Board may decide from time to time for period of ve
years commencing 1
st
April, 2010. Accordingly, the Board at
its meeting held on 22
nd
April, 2014 has approved payment
of commission in line with revised resolution.
636
Detailed information of Directors remuneration for the year
2013-14 is set forth below:
(` lakhs)
Name of the Director Status Sitting
Fees
(Note a)
Commission
(Note f)
Salary,
Performance
Pay and
Perquisites
Aggregate of
Companys
contributions to
Superannuation &
Provident Fund
Total
Mr. Arun Nanda,
Chairman
Non-
Executive Non
Independent
2.05 75.00 Nil Nil 77.05
Mr. Uday
Y Phadke
Non-
Executive Non
Independent
Nil Nil Nil Nil Nil
Mr. Sanjiv Kapoor Non-Executive
Independent
2.70 7.50 Nil Nil 10.20
Mr. Shailesh
Haribhakti
Non-Executive
Independent
3.15 7.50 Nil Nil 10.65
Mr. Anil Harish Non-Executive
Independent
3.15 7.50 Nil Nil 10.65
Dr. Prakash
Hebalkar
Non-Executive
Independent
1.50 7.50 Nil Nil 9.00
Ms. Anita
Arjundas,
Managing
Director & Chief
Executive Ofcer
(Note b)
Executive N.A. Nil 179.52 23.04 202.56
Notes:
a. Non-Executive Non-Independent Chairman and Non-
Executive Independent Directors are paid sitting fees
of ` 20,000 per meeting for attending meetings of the
Board and Audit Committee and ` 5,000 per meeting for
other committee meetings of the Board of Directors of
the Company. The Managing Director & Chief Executive
Ofcer and Non-Executive Non-Independent Director do
not receive sitting fees for attending meetings of the Board/
Committees of the Board of Directors of the Company.
b. (i) Ms. Arjundas prior to her appointment as Managing
Director & Chief Executive Ofcer in the Company,
in her capacity as an employee of the Company, is
in receipt of 50,000 Stock Options under Employee
Stock Options Scheme-2006 (ESOS-2006) granted
to her on 25
th
April, 2008 of which she has exercised
1,000 Options. In her capacity as MD & CEO, she is
in receipt of 10,000 Stock Options under Employee
Stock Options Scheme-2012 (ESOS-2012) granted
on 4
th
August, 2012 of which she has exercised 2,000
Options and will continue to hold balance Options in
terms of the Grant. She shall be eligible for additional
Stock Options/Grants, as and when the event happens.
(ii) Salary to Ms. Anita Arjundas, MD & CEO includes:
Salary and Allowances of ` 122.08 lakhs
Perquisites of ` 17.50 lakhs
Performance pay of ` 39.94 lakhs.
The nature of employment of the Managing Director & Chief
Executive Ofcer with the Company is contractual and can
be terminated by giving three months notice from either
party. The contract does not provide for any severance fees.
c. The Company has not advanced any loan to any Director.
d. The Company has granted Stock Options under ESOS-
2006 to the following Directors during the year 2008-09
and 2012-13:
Name of the Director No. of Stock
Options Granted
on 25
th
April,
2008
No. of Stock
Options Granted
on 4
th
August,
2012
No. of Stock
Options Exercised
as on 31
st
March,
2014*
Mr. Arun Nanda,
Chairman
200,000
Mr. Uday Y. Phadke
10,000 2,500
Mr. Sanjiv Kapoor
10,000
Mr. Shailesh Haribhakti
10,000 5,000
Mr. Anil Harish
10,000
Dr. Prakash Hebalkar
10,000 2,500
Ms. Anita Arjundas
50,000 1,000
Total 290,000 10,000 11,000
*As of 31
st
March, 2014, total 28,500 Stock Options have been
exercised by the grantees, out of which 11,000 Stock Options have
been exercised by the above Directors and 17,500 Stock Options
have been exercised by other grantees under ESOS 2006.
e. ESOS-2012: As of 31
st
March, 2014, total 6,200 Stock
Options have been exercised by the grantees, out of
which 2,000 Stock Options have been exercised by
Ms. Anita Arjundas, Managing Director & CEO and 4,200
Stock Options have been exercised by other grantees
under ESOS-2012.
f. Employee Stock Option and Commission are the
only components of Directors remuneration that are
performance-linked. All other components are xed.
Shares and Convertible Instruments held by Directors
The details of the Stock Options granted to the Directors is
given under Note (b)(ii) and (d) of the previous section on
Remuneration Policy.
As on 31
st
March, 2014:
Mr. Arun Nanda holds 60,114 equity shares and his spouse
jointly with Mr. Arun Nanda holds 600 equity shares in the
Company. Mr. Uday Nanda, son of Mr. Arun Nada holds
350 equity shares.
Mr. Anil Harishs son and daughter hold 3,500 equity
shares each of the Company jointly with Mr. Anil Harish,
aggregating 7,000 equity shares.
Mr. Uday Y. Phadke holds 2,500 equity shares in the
Company.
Ms. Anita Arjundas holds 3,000 equity shares in the
Company.
637
Dr. Prakash Hebalkar holds 2,500 equity shares in the
Company.
Mr. Sanjiv Kapoor and Mr. Shailesh Haribhakti do not hold
any shares in the Company either on their own or for any
other person on a benecial basis.
7. Committees of the Board
Audit Committee
The Audit Committee of the Company comprises of
three independent Directors, namely Mr. Sanjiv Kapoor,
Mr. Shailesh Haribhakti, Mr. Anil Harish and one Non-
Executive Non-Independent Director, Mr. Uday Y. Phadke.
Mr. Sanjiv Kapoor is the Chairman of the Committee.
The terms of reference of the Committee were enhanced
in the Board meeting held on 26
th
March, 2014 pursuant
to Section 177 of the Companies Act, 2013, which inter-
alia includes:
Review and monitor the auditors independence and
performance, and effectiveness of audit process;
Approval or any subsequent modication of transac-
tions of the company with related parties;
Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the company,
wherever it is necessary;
Monitoring the end use of funds raised through public
offers and related matters.
The terms of reference of the Committee are also in
accordance with the requirements of Clause 49 of the
Listing Agreement. The Audit Committee has been granted
powers as prescribed under Clause 49 II (C) of the Listing
Agreement. Generally, all items listed in Clause 49 II (D) are
covered in the terms of reference and inter-alia include:
Overview of the Companys nancial reporting
process and the disclosure of its nancial information
to ensure that the nancial statement is correct,
sufcient and credible.
Recommending to the Board, the appointment,
re-appointment and, if required, the replacement or
removal of the statutory auditor and the xation of
their fees.
Approval of payment of fees to statutory auditors for
any other services rendered by the Statutory Auditors.
Review of the internal control systems with the
management, internal Auditors and Statutory Auditors.
Review with the management, the annual nancial
statements before submission to the Board for
approval, with special emphasis on accounting
policies and practices, compliance and other legal
requirements concerning nancial statements.
Review the adequacy of internal audit function,
signicant internal audit ndings and follow-ups
thereon.
Review Management Discussion and Analysis.
Review Material Individual Transactions with related
parties not in normal course of business or which are
not on an arms length basis.
Approval of appointment of CFO (i.e., the whole-
time Finance Director or any other person heading
the nance function or discharging that function)
after assessing the qualications, experience &
background, etc. of the candidate.
Review nancial statements and investment of
unlisted subsidiary companies.
During the year under review, 1
st
April, 2013 to 31
st
March,
2014, seven meetings of the Committee were held
on following dates: 22
nd
April, 2013; 24
th
July, 2013;
31
st
August, 2013; 22
nd
October, 2013; 16
th
January,
2014, 24
th
th
March, 2014. The
maximum gap between any two meetings did not exceed
four months. All members attended all the meetings
except Mr. Sanjiv Kapoor who attended six meetings.
Mr. Sanjiv Kapoor, Chairman of the Audit Committee,
was present at the Annual General Meeting of the
Company held on 24
th
July, 2013. The Chairman, the
Managing Director & Chief Executive Ofcer, Chief
Operating Ofcer(s), Chief Financial Ofcer, the Internal
and Statutory Auditors are regularly invited to attend the
Audit Committee Meetings. The Company Secretary is the
Secretary to the Committee.
All members of the Audit Committee possess strong
knowledge of accounting and nancial management.
Stakeholders Relationship Committee (earlier known
as Shareholders Investors Grievance Committee)
Pursuant to Section 178 of the Companies Act, 2013, the Board
of Directors in its meeting held on 26
th
March, 2014 renamed
the Committee as Stakeholders Relationship Committee.
The Stakeholders Relationship Committee of the
Company comprises of one Non-Executive Non-
Independent Director, Mr. Arun Nanda and one Non-
Executive Independent Director, Dr. Prakash Hebalkar.
Mr. Arun Nanda is the Chairman of the Committee.
The Committees objective is to attend to investors
complaints pertaining to transfers/transmission of shares,
non-receipt of dividend/interest and any other related matter.
During the year under review the Committee met once
on 24
th
January, 2014. Mr. Arun Nanda and Dr. Prakash
Hebalkar attended the meeting.
Nomination and Remuneration Committee (earlier
known as Remuneration Committee)
Pursuant to Section 178 of the Companies Act, 2013, the
Board of Directors in its meeting held on 26
th
March, 2014
renamed the Committee as Nomination and Remuneration
Committee and enhanced the terms of reference.
inter alia, includes:
(i) Formulating the criteria for determining qualications,
positive attributes and independence of a Director and
(ii) Recommending to the Board a Policy, relating to
the remuneration for the Directors, Key Managerial
Personnel and other employees.
The Nomination and Remuneration Committee of the
Company comprises of three Independent Directors,
Mr. Sanjiv Kapoor, Mr. Shailesh Haribhakti and Mr. Anil
Harish, and one Non-Executive Non-Independent Director,
Mr. Arun Nanda. Mr. Sanjiv Kapoor is the Chairman of the
Committee. The terms of reference of the Remuneration
638
Committee, inter-alia comprise of determining the
remuneration payable to the Executive Directors,
recommendation for appointment/re-appointment of the
Executive Directors, revision in the remuneration of the
existing Executive Director(s) of the Company from time
to time, recommendations on grant of Employee Stock
Options etc.
During the year under review, the Committee met twice on
24
th
July, 2013 and 22
nd
October, 2013. All members of the
committee attended both the meetings.
Loans & Investment Committee
The Loans & Investment Committee of the Board of
the Company comprises of three Non-Executive Directors,
Mr. Arun Nanda, Mr. Uday Y. Phadke and Mr. Anil Harish
who is also an Independent Director. The Committees
objective is to nalise within the parameters set by the
Board, the terms on which the borrowings/investments
would be made by the Company from time to time.
Mr. Arun Nanda is the Chairman of the Committee.
Share Allotment Committee
The Board of Directors at its meeting held on 24
th
July,
2013 enhanced the terms of reference to additionally
provide for the issue, and allotment of equity shares
in accordance with ESOS-2012 in addition to issue
and allotment of equity shares in accordance with the
ESOS-2006 and allotment of shares/securities/convertible
instruments as per the terms of any other Issue of shares /
securities/convertible instruments as may be approved by
the Board/shareholders from time to time.
The Committee of Directors comprises of Mr. Arun Nanda,
Mr. Uday Y. Phadke and Ms. Anita Arjundas.
During the year under review, the Committee met thrice
on 22
nd
October, 2013, 24
th
th
March,
2014. All the members attended all the meetings.
Committee for Residential Projects in Joint Venture
The Committee for Residential Projects in Joint Venture
comprises of Mr. Arun Nanda, Mr. Shailesh Haribhakti and
Ms. Anita Arjundas. The objective of the Committee is to
evaluate business plans and investments in Residential
projects to be undertaken in Joint Venture.
Committee for Large Format Developments
The Committee for Large Format Developments
comprises of Mr. Arun Nanda, Dr. Prakash Hebalkar and
Ms. Anita Arjundas. The objective of the Committee is to
evaluate business plans and investments in large format
development projects. During the year under review the
Committee met once on 31
st
August, 2013. All members
attended the meeting.
Qualied Institutional Placement Committee
The Committee comprises of Mr. Arun Nanda,
Mr. Uday Y. Phadke, Mr. Sahilesh Haribhakti and Ms. Anita
Arjundas. The objective of the Committee is to nalise the
terms of issue of equity shares to Qualied Institutional
Buyers, and to nalise and approve the Preliminary
Placement Document/Placement Document etc. During
the year under review, the Committee met once on
6
th
September, 2013. All the members attended the
meeting.
The Committee comprises of Mr. Arun Nanda,
Ms. Anita Arjundas and Mr. Anil Harish. The objective of
the Committee is to:
(i) To formulate and recommend a CSR policy to the
Board and to recommend amount of expenditure to
be incurred on CSR activities;
(ii) To monitor the CSR policy of the Company from time
to time;
(iii) To institute a transparent monitoring mechanism for
implementation of the CSR projects or programs or
activities undertaken by the Company.
During the year under review, the Committee met once on
26
th
March, 2014. All members attended the meeting.
8. General Shareholder Information
Fifteenth Annual General Meeting
Day/Date : Thursday 7
th
August, 2014
Time : 3.00 p.m.
Venue : Y. B. Chavan Centre,
Gen. Jagannathrao Bhonsle Marg,
Next to Sachivalaya Gymkhana,
Mumbai 400 021
Details of Annual/Extraordinary General Meetings held
during past three years
Year Date Time Venue
2011 21
st
July, 2011
12
th
AGM
3.00 p.m. Y. B. Chavan Centre,
Mumbai
2012 24
st
July, 2012
13
th
AGM
Mumbai
2013 24
th
July, 2013
14
th
AGM
Mumbai
Details of special resolutions passed in Annual/Extra-
ordinary General Meetings held during past three years
12
th
AGM
21
st
July, 2011
Increase in borrowing limits.
Commission to Nonexecutive
Directors.
13
th
AGM
21
st
July, 2012
Revision in Remuneration payable
to Managing Director & Chief
Executive Ofcer.
New Employee Stock Option
Scheme-2012 for the benet of the
Employees/Directors of the Company.
Extending the benet of the
New Employee Stock Options
Scheme-2012 to the employees of
subsidiary companies.
Alteration of Articles of Association to
provide for video conference facility
for the Board / General meeting.
14
th
AGM
24
th
July, 2013
Increase in limit for investment by FIIs
from 30% to 49% of the Companys
paid up equity share capital.
639
No Extraordinary General Meeting (EGM) was held during
last three years. In last year, on 22
nd
October, 2013, an
Ordinary Resolution for Re-classication of authorized share
capital and consequential amendment to Memorandum of
Association and a Special Resolution under Section 81(1A)
and other applicable provisions of Companies Act, 1956 for
issue of Equity Shares under QIP, was passed through postal
ballot. A Special Resolution is proposed to be passed through
Postal Ballot for xing the limit for creation of charge over the
assets of the Company pursuant to Section 180(1)(a) of the
Companies Act, 2013 w.r.t. borrowing of the Company.
Dates of Book Closure
Monday, 1
st
August, 2014 to 7
th
August, 2014 (both days
inclusive).
Dividend Payment Date
Dividend, if declared, will be credited/dispatched between
8
th
August, 2014 and 12
th
August, 2014.
Financial Year
st
April to 31
st
March.
Financial reporting for 2014-15 (Tentative)
For Quarter ending
30
th
June, 2014
By end of July, 2014
For Half Year ending
30
th
September, 2014
By end of October, 2014
For Quarter ending
31
st
December, 2014
By end of January, 2015
For year ending
31
st
March, 2015
By end of April, 2015
Listing on Stock Exchanges
A. Equity Shares
The equity shares of the Company are listed on Bombay
Stock Exchange Limited and National Stock Exchange of
India Limited. Listing fees have been paid to the Stock
Exchanges for the period up to 31
st
March, 2014.
Mahindra Lifespace Developers Limiteds (MLDL)
Stock Exchange Codes
BSE 532313
NSE MAHLIFE
Demat International Security Identication Number (ISIN)
in NSDL and CDSL for Equity Shares INE813A01018
B. Non-Convertible Debentures
The Non-Convertible Debentures (NCDs) of the Company
are listed on BSE and the Company has paid the riquisite
listing fees in full.
Debenture Trustees for the Companys NCDs:
Axis Trustees Services Limited
Axis House, 2
nd
Floor, Bombay Dyeing Mills Compound,
Pandurang Budhkar Marg, Worli, Mumbai 400 025
Contact details: 022 - 24252525
BSE and NSE Monthly High/Low and Volumes
Year Month BSE NSE
High
(`)
Low
(`)
Monthly
Volume
High
(`)
Low
(`)
Monthly
Volume
2013 April 420.90 362.70 27,377 422.00 362.25 152,408
2013 May 424.35 391.10 28,452 427.00 393.10 174,564
2013 June 424.40 372.35 73,303 422.00 380.15 277,224
2013 July 472.00 370.00 120,617 475.00 416.05 537,720
2013 August 463.90 396.05 39,900 460.00 397.55 401,543
2013 September 428.00 327.20 19,423 427.70 394.65 110,922
2013 October 454.00 402.00 228,181 439.50 404.50 506,582
2013 November 430.00 385.00 14,008 439.50 386.60 54,415
2013 December 412.00 381.00 23,917 412.00 384.00 99,023
2014 January 409.40 369.00 39,855 409.75 370.10 151,438
2014 February 392.85 347.50 17,406 384.50 321.50 127,180
2014 March 383.30 341.00 38,662 374.00 340.05 337,795
Performance in comparison to BSE Sensex, NSE Nifty,
BSE 500 Index and BSE Realty Index
Year Month Closing Price on Last Trading Day of the Month
MLDL at
BSE
BSE
Sensex
NSE
Nifty
BSE
500
BSE
Realty
2013 April 417.00 19,504 5,930 7,385 1,901
2013 May 402.70 19,760 5,986 7,442 1,685
2013 June 421.05 19,396 5,842 7,164 1,511
2013 July 444.45 19,346 5,742 6,986 1,317
2013 August 401.60 18,620 5,472 6,674 1,174
2013 September 405.90 19,380 5,735 7,020 1,170
2013 October 427.35 21,165 6,299 7,657 1,343
2013 November 394.05 20,792 6,176 7,598 1,356
2013 December 396.05 21,171 6,304 7,828 1,433
2014 January 372.05 20,514 6,090 7,499 1,212
2014 February 348.65 21,120 6,277 7,710 1,204
2014 March 366.15 22,386 6,704 8,295 1,468
Chart A: Mahindra Lifespaces Share Performance versus
BSE Sensex

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60
80
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120
140
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Mahindra Lifespace
BSE Sensex
Note: Share price of Mahindra Lifespaces and BSE Sensex
have been indexed to 100 on 1
st
April, 2013
640
Chart B: Mahindra Lifespaces Share Performance versus
NSE NIFTY
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100
120
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Mahindra Lifespace
NSE Nifty
Note: Share price of Mahindra Lifespaces and NSE NIFTY
st
April, 2013
Chart C: Mahindra Lifespaces Share Performance versus
BSE 500
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40
60
80
100
120
140
Mahindra Lifespace
BSE 500
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0
20
40
60
80
100
120
140
Mahindra Lifespace
BSE Realty
Note: Share price of Mahindra Lifespaces and BSE 500 have
been indexed to 100 on 1
st
April, 2013
Chart D: Mahindra Lifespaces Share Performance versus
BSE Realty
Note: Share price of Mahindra Lifespaces and BSE Realty
st
April, 2013
Registrar and Share Transfer Agents
Sharepro Services (India) Pvt. Limited
Registered Ofce
13 AB Samhita Warehousing Complex,
Sakinaka Telephone Exchange Lane,
Off Andheri - Kurla Road, Sakinaka,
Andheri (E), Mumbai-400 072
Tel: 022-67720300, 67720400
Fax: 022-28591568, 28508927
E-mail: sharepro@shareproservices.com
Website: www.shareproservices.com
Investor Relation Centre
Sharepro Services (India) Pvt. Limited
912, Raheja Centre,
Free Press Journal Road,
Nariman Point, Mumbai - 400 021
Tel: 022-66134700
Share Transfer System
Shares sent for transfer in physical form are registered and
returned within a period of fteen days from the date of
receipt of documents, provided that, documents are valid and
complete in all respects. With a view to expedite the process of
share transfers, Ms. Anita Arjundas, Managing Director & Chief
Executive Ofcer, Mr. Suhas Kulkarni, Sr. Vice President-Legal &
Company Secretary and Ms. Arti Shinde, DGM - Secretarial &
Legal have been severally authorised by the Board to approve
the transfer of shares in physical form, not exceeding 5,000
equity shares per transfer, provided that, the transferee does
not hold 100,000 or more equity shares. As of date, there are
no pending share transfers pertaining to the year under review.
Distribution of Shareholding as on 31
st
March, 2014
No. of Equity
shares
No. of
shareholders
% of
Shareholders
No. of shares
held
% of
shareholding
1 100 59,755 90.96 1,308,203 3.20
101 200 2,944 4.48 434,868 1.07
201 300 1,024 1.56 259,285 0.63
301 400 493 0.75 174,942 0.43
401 500 419 0.64 198,254 0.49
501 1,000 548 0.83 404,138 0.99
1,001 2,000 245 0.37 344,974 0.84
2,001 3,000 75 0.11 186,623 0.46
3,001 4,000 48 0.07 171,028 0.42
4,001 5,000 20 0.03 93,833 0.23
5,001 10,000 42 0.06 300,265 0.73
10,001 &
above
83 0.13 36,971,937 90.51
Total 65,696 100 40,848,350 100
Shareholding Pattern
Category As on 31
st
March, 2014 As on 31
st
March, 2013
No. of Equity
shares held
% of
shareholding
No. of Equity
shares held
% of
shareholding
Promoters and
Promoter Group
20,846,126 51.03 20,846,126 51.04
Insurance
Companies &
Banks
65,881 0.16 401,544 0.98
UTI and Mutual
Funds
708,233 1.73 1,011,395 2.48
FIIs 12,299,068 30.11 11,514,513 28.20
641
Category As on 31
st
March, 2014 As on 31
st
March, 2013
No. of Equity
shares held
% of
shareholding
No. of Equity
shares held
% of
shareholding
NRIs/OBC 375,976 0.92 290,448 0.71
Bank of New
York Mellon (for
GDR Holders)
47,310 0.12 86,070 0.21
Domestic
Companies
2,064,212 5.05 2,016,096 4.94
Resident
Individuals
4,441,544 10.88 4,673,458 11.44
Total 40,848,350 100 40,839,650 100
As of 31
st
March, 2014, 40,160,388 shares (98.32%) of total
paid-up equity capital were held in electronic form with National
Securities Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL). The Companys equity shares
are traded in the electronic form. Requests for dematerialisation
of shares are generally processed and conrmed within 7 days.
Outstanding GDRs/ADRs/Warrants or any convertible
instruments, conversion date and likely impact on equity
As of 31
st
March, 2014 outstanding GDRs represent 47,310
equity shares. Since the underlying equity shares represented
by GDRs have been allotted in full, the outstanding GDRs have
no impact on the equity share capital of the Company.
Mahindra Lifespace Developers Limited Unclaimed
Suspense Account
As per the provisions of clause 5A. II of the Listing Agreement (SEBI
circular no. CIR/CFD/DIL/10/2010 dated December 16, 2010) the
unclaimed/undelivered shares lying in the possession of the Company
are required to be dematerialized and transferred into a Unclaimed
Suspense Account held by the Company. In compliance with the
said amendment, the Company has sent three reminder letters to
such shareholders whose share certicates are returned undelivered
and hence remained unclaimed, by requesting them to update
correct details viz. postal addresses, PAN details etc. registered with
the Company in order to avoid transfer of such unclaimed shares to
the Unclaimed Suspense Account. The Company has in March
2014 transferred such 49,854 unclaimed shares to the Mahindra
Lifespace Developers Limited Unclaimed Suspense Account.
These shares are being credited to the aforesaid Suspense Account.
Any corporate benets in terms of securities accruing on such shares
viz. bonus shares, split etc., shall also be credited to such Demat
Suspense Account. The Suspense Account shall be held by the
Company on behalf of the allottees who are entitled for the shares and
the shares held in such Suspense Account shall not be transferred in
any manner whatsoever except for the purpose of allotting the shares
as and when the Shareholders approach the Company. The voting
rights on such shares shall remain frozen till the rightful owner claims
the shares. As and when the allottee approaches the Company,
the Company shall credit the shares lying in the Suspense Account
to the demat account of the allottee to the extent of the allottees
entitlement, after proper verication of the identity of the allottee.
1 Aggregate number of shareholders and
account lying at the beginning of the
year (Shares being credited to the
Suspense Account);
Number of
shareholders :
3170
Outstanding
shares : 49,854
2 Number of shareholders who
approached issuer for transfer of shares
from suspense account during the year;
Nil
3 Number of shareholders to whom
shares were transferred from suspense
account during the year;
Nil
4 aggregate number of shareholders and
account lying at the end of the year
(Shares being credited to the Suspense
Account);
Number of
shareholders :
3170
Outstanding
shares : 49,854
Ofces of the Company
Registered Ofce & Corporate Ofce
5
th
Floor, Mahindra Towers,
Worli, Mumbai - 400 018
Tel: 022-67478600/67478601
Mumbai Ofce
Chemtex House, Ground Floor, Main Street Road,
Hiranandani Gardens, Powai, Mumbai 400 076
Tel: 022-66793191/66793190
301, 3
rd
Floor, Building 1, Nirmal Galaxy Avior,
LBS Marg, Mulund (W), Mumbai - 400080
Tel: 022-65301520
Delhi Ofce
Mahindra Towers, 2A, Bhikaiji Cama Place,
New Delhi-110 066
Tel: 011-26173787/26194977
Chennai Ofce
The Canopy, II Floor, Unit. No-II
Mahindra World City, Special Economic Zone,
Natham Sub P.O., Near Paranur Rly Station,
Chengelpet-603 002, Tamil Nadu
Tel: 044-67454060/47410000
Pune Ofce
CTS 6017, Pimpri-Nehru Nagar Road,
Next to Dr. Beck Company,
Pimpri, Pune 411 018. Maharashtra
Tel: 020-65103374
Hyderabad Ofce
Survey No. 78/2 & 78 /3,
Next to Indu Fortune Fields,
Kukatpally, Hyderabad - 500 072
Tel: 040 - 64600944
Shareholders may correspond with the Company at its
Registered Ofce and/or with the Registrars and Share Transfer
Agents, Sharepro Services (I) Pvt. Limited.
Compliance Ofcer
Mr. Suhas Kulkarni
Company Secretary
5
th
Floor, Mahindra Towers, Worli, Mumbai - 400 018
Tel: 022-67478600/67478601
Fax: 022-24975084
E-mail: kulkarni.suhas@mahindralifespaces.com
Companys investor email ID
investor@mahindralifespaces.com
Companys website
www.mahindralifespaces.com
642
Status of Investors Complaints received during the period 1
st
April, 2013 to 31
st
March, 2014
1. Number of complaints received from the investors
comprising non-receipt of dividend, non-receipt of
shares lodged for transfer, non-receipt of Annual
Report, etc
4
2. Number of complaints resolved 4
3. Complaints pending as at 31
st
March, 2014 Nil
4. Number of share transfers pending for approval as at
31
st
March, 2014
Nil
9. Disclosure of Accounting Treatment
The nancial statements are prepared in accordance with
Generally Accepted Accounting Principles in India, the
Accounting Standards issued by The Institute of Chartered
Accountants of India and the provisions of the Companies
Act, 1956 and the Rules framed thereunder.
10. Materially Signicant Related Party Transactions
signicant Related Party transactions entered into
between the Company and its Promoters, Directors or the
Management, subsidiaries or relatives, etc. that may have
potential conict with the interests of the Company at
large. Details of Related Party transactions are presented
in Note No. 36 to Annual Accounts of the Annual Report.
11. Compliance with Clause 49
Mandatory Requirements
As of 31
st
March, 2014, the Company was fully compliant with all
applicable mandatory requirements of the revised Clause 49.
Non-Mandatory Requirements
The Company has set up the Nomination and
Remuneration Committee of the Board of Directors,
the details of which have been provided under the
section Committees of the Board.
Whisle Blower Policy
On 22
nd
April, 2014, the Board adopted Whistle Blower
Policy. The Company promotes ethical behaviour in all
its business activities and has put in place a mechanism
wherein the Employees are free to report illegal or unethical
behaviour; actual or suspected fraud or violation of the
Companys Codes of Conduct or Corporate Governance
Policies or any improper activity to the Chairman of the
Audit Committee of the Company or Chairman of the
Corporate Governance Cell. The Whistle Blower Policy has
been appropriately communicated within the Company.
Under the Whistle Blower Policy, the condentiality of
those reporting violation(s) is protected and they are not
subject to any discriminatory practices. No personnel
has been denied access to the Audit Committee.
The nancial statements of the Company are unqualied.
The Company has not adopted other non-mandatory
requirements as specied in Annexure 1 D of the
Clause 49.
12. Management Discussion and Analysis Report
Management Discussion and Analysis Report (MDA) has
been attached to the Directors Report and forms part of
this Annual Report.
13. Corporate Governance Voluntary Guidelines 2009
In December, 2009 the Government of India, Ministry of
Corporate Affairs (MCA) had issued Corporate Governance
Voluntary Guidelines 2009. MCA has claried that the
Guidelines were prepared and disseminated for consideration
and adoption by Corporates and may be voluntarily adopted
by public companies with the objective to enhance not only the
economic value of the enterprise but also the value for every
stakeholder who has contributed in the success of the enterprise
and set a global benchmark for good Corporate Governance.
MCA after taking into account the experience of adoption of
these guidelines by Corporates and after consideration of the
feedback received from them would review these guidelines
for further improvements. The Company has been a strong
believer in good corporate governance and has been adopting
the best practices that have evolved over the last decade.
As of 31
st
March, 2014, the Company is compliant with
some of the Voluntary Guidelines to the extent that they are
consistent with provision of Clause 49 of Listing Agreement.
14. Other Disclosures
Details of Non-compliance Relating to Capital Markets
The Company has complied with all requirements of
regulatory authorities. No penalties/strictures were
imposed on the Company by Stock Exchanges or SEBI
or any statutory authority on any matter related to capital
market since the listing of the Companys equity shares.
In compliance with the SEBI Regulations 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 advise them on procedures to
be followed and disclosures to be made while dealing
with shares of the Company and caution them of the
consequences of violations.
Risk Assessment and Minimisation procedures are in
existence and are reviewed periodically.
Material Non-listed Indian Subsidiary Company
As of 31
st
March, 2014, none of the subsidiary companies
was a Material Non-listed Indian Subsidiary Company
under Clause 49 of the Listing Agreements with the Stock
Exchanges. The Audit Committee of the Company periodically
reviews the nancial statements of subsidiary companies.
Means of Communication
The quarterly, half-yearly and yearly results are published in
daily English and daily Marathi newspapers within prescribed
timelines. The Company also informs stock exchanges in a
prompt manner, about all price sensitive information or such
other matters which in its opinion, are material and relevant
to the shareholders and subsequently issues a press release
on the said matters. Further, the Company has also been
complying with the listing requirement for ling of its nancial
results with BSE and NSE. The Companys results, ofcial
presentations, news and releases are displayed on the
Companys website www.mahindralifespaces.com
643
Declaration on Codes of Conduct
As required by Clause 49 of the Listing Agreement the Declaration for Codes of Conduct is given below:
To
The Members of
I, Anita Arjundas, Managing Director & Chief Executive Ofcer of the Company declare that all Board Members and Senior
Management Employees of the Company have afrmed compliance with the Codes of Conduct.
For Mahindra Lifespace Developers Limited
Anita Arjundas
Managing Director & Chief Executive Ofcer
DIN : 00243215
Mumbai, 22
nd
April, 2014
Auditors Certicate on Corporate Governance
To
The Members of
Mahindra Lifespace Developers Limited, Mumbai
We have examined the compliance of the conditions of Corporate Governance by Mahindra Lifespace Developers Limited (the
Company) for the year ended on March 31, 2014 as stipulated in Clause 49 of the Listing Agreements of the said Company with
the National Stock Exchange Limited and BSE Limited.
The compliance of the 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 Corporate
Governance. It is neither an audit nor an expression of opinion on the nancial 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 Agreements.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or
Firm Registration Number 105102W
Partner
Membership Number 44784
644
Mahindra Lifespace Developers Limited(the Company),
st
March, 2014,
and the Statements of Prot and Loss and Cash Flow for the
year then ended, and a summary of signicant accounting
Managements responsibility on the nancial statements
Accounting Standards referred to in sub section (3C) of
section 211 of the Companies Act, 1956 (the Act). This
control relevant to the Companys preparation and
fair presentation of the nancial statements in order
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
accounting estimates made by management, as well
as evaluating the overall presentation of the nancial
statements.
opinion.
AUDITORS REPORT
TO THE MEMBERS OF MAHINDRA LIFESPACE DEVELOPERS LIMITED
Opinion
accepted in India:
st
March, 2014;
Emphasis of Matter
7. We draw attention to:
i. Note No. 19(#) to the nancial statements regarding the
realisability of project advance of ` 10,000 lakhs where
commencement of the project has been delayed and
which is being settled by the parties out of court. We have
relied on managements representation of the realisability
of the advance.
ii. Note No. 11 of the nancial statements for the reasons
detailed therein the management of the Company does
not perceive any permanent diminution in the value of
long term investment of ` 1,800 lakh in its wholly owned
subsidiary company and of its investment of ` 50 lakhs
in New Tirpur Area Development Corporation (NTADCL)
in view of the revival of the operations being taken by the
stakeholders of NTADCL.
Our opinion is not qualied in respect of the matters stated in
7(i) and (ii).
to us, we give in the Annexure a statement on the matters
645
of Prot and Loss and Cash Flow dealt with by
this report comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the
st
March, 2014, and taken
st
March, 2014, from
Act, 1956;
For and on behalf of
B. K. Khare and Co.
Partner
Mumbai
Dated: 22
nd
April, 2014
646
1) (i) The Company has maintained proper records
(ii) All xed assets have not been physical veried by the
management during the year but there is a regular
programme of verication which, in our opinion, is
reasonable having regard to the size of the Company
and the nature of its assets. Discrepancies reported
on such verication have been properly dealt in the
accounts.
(iii) There was no disposal of a substantial part of xed
assets during the year.
2) (i) The management has conducted physical verication
of inventory at reasonable intervals during the year.
(ii) The procedures of physical verication of inventory
followed by the management are reasonable and
(iii) The Company is maintaining proper records of
inventory and no material discrepancies were noticed
on physical verication.
3) (i) According to the information and explanations given
to us the Company has granted unsecured loans,
to one company listed in the register maintained
under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was
` 44,666 lakh and the year end balance of loans
granted to such party was ` Nil.
(ii) In our opinion, the rate of interest and other terms
and conditions of such loans are not, prima facie,
prejudicial to the interest of the Company.
(iii) In respect of loans granted, repayment of the principal
amount is as stipulated and payment of interest has
been regular.
(iv) There is no overdue amount of loans granted to
companies, rms or other parties listed in the register
1956.
(v) According to the information and explanations given
to us the Company has not taken any loans secured
or unsecured from companies, rms or other parties
listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions
of clause 4(iii)(e) - (g) of the Order are not applicable
to the Company.
4) In our opinion and according to the information and
Referred to in Paragraph (8) of our report of even date on the accounts of
Mahindra Lifespace Developers Limited ended 31
st
March, 2014.
Company and the nature of its business, for the purchases
of inventory, xed assets and for the sale of goods and
services. In our opinion and according to the information
and explanations given to us, there is no continuing failure
to correct major weaknesses in internal control.
arrangements that needed to be entered in the Register
maintained in pursuance of section 301 of the Companies
Act, 1956. Accordingly, clause 4(v)(b) of the Order is not
Applicable to the Company.
any deposits from the public within the meaning of section
58A and 58AA of the Companies Act, 1956, and the rules
framed thereunder.
7) The Company has an internal audit system, which in our
opinion is commensurate with the size of the Company
and nature of its business.
8) As informed to us, the maintenance of cost records
has been prescribed by the Central Government under
section 209(1)(d) of the Companies Act, 1956, in respect
of the activities carried on by the Company. We have
broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by
the company pursuant to the Rules made by the Central
Government for the maintenance of cost records under
section 209 (1) (d) of the Companies Act, 1956 and we
are of the opinion that prima facie the prescribed accounts
and records have been made and maintained.
9) (i) According to the records of the Company, the
Company is generally regular in depositing with the
appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and
Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, cess and other statutory dues applicable to it.
The provisions of Excise Duty are not applicable to
the operations of the Company.
(ii) According to the information and explanations given
to us, there are no undisputed amounts payable in
respect of Income tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty that were outstanding, at the year
end for a period of more than six months from the
date they became payable.
(iii) According to the information and explanations given
to us, dues of income-tax outstanding on account of
disputes are as follows:
647
Sr.
No.
Assessment
Year
Nature
of Dues
Amount
` in lakh
Forum where
case is
pending
1 2003-04 Income
Tax
162.96 Commissioner
of Income Tax
(Appeals)
2 2005-06 Income
Tax
Penalty
28.74 Income Tax
Appellate
Tribunal
3 2006-07 Income
Tax
13.67 Income Tax
Appellate
Tribunal
4 2011-12 Income
Tax
62.17 Commissioner
of Income Tax
(Appeals)
10) The Company does not have any accumulated losses at
the end of the nancial year and it has not incurred any
cash losses in the current year and in the immediately
11) According to the information and explanations given to
us and based on the documents and records produced
before us, the Company has not defaulted in repayment of
dues to a nancial institution, banks or debenture holders.
12) According to the information and explanations given to
securities.
explanations given to us, the Company is not a chit
fund or a nidhi/mutual benet fund/society. Therefore the
provisions of clause 4(xiii) of the Order are not applicable
to the Company.
14) In our opinion, the Company is not dealing in shares,
securities, debentures and other investments. Accordingly
the provisions of clause 4(xiv) of the Order are not
explanations given to us, the Company has not given
any guarantee for loans taken by others from banks or
nancial institutions.
16) In our opinion, the term loans have been applied for the
purpose for which they were obtained.
17) According to the information and explanations given to us
and on an overall examination of the Balance Sheet and
Cash Flows of the Company, we report that the Company
has not utilized funds raised on short-term basis for long
term purposes.
18) The Company has not made any preferential allotment of
shares during the year.
19) According to the information and explanations given to us,
during the year covered by our audit report, the Company
had issued 5,000 debentures of ` 10,00,000 each. The
Company has created security in respect of debentures
issued.
20) The Company has not made any public issue of its shares
during the year.
21) Based on the audit procedures performed and as per the
information and explanations given to us by management,
no fraud on or by the Company has been noticed or
B. K. Khare and Co.
Partner
Mumbai
Dated: 22
nd
April, 2014
648
As per our Report attached hereto
B. K. Khare & Co.
Arun Nanda Chairman
Padmini Khare Kaicker Sanjiv Kapoor Director
Partner Shailesh Haribhakti Director
Membership No.: 44784
Suhas Kulkarni
Company Secretary
Anil Harish Director
Prakash Hebalkar Director
Mumbai: 22
nd
April, 2014 Anita Arjundas Managing Director & CEO
st
MARCH, 2014
Notes
Current Year
` in lakh
Previous Year
` in lakh
Shareholders' Funds
Share Capital ................................................................................................ 2 4,084.84 4,083.97
Reserves & Surplus ...................................................................................... 3 109,646.41 114,884.49
113,731.25 118,968.46
Non Current Liabilities
Long Term Borrowings ................................................................................. 4 55,000.00 11,000.00
Long Term Provisions .................................................................................. 5 10,387.36 104.13
65,387.36 11,104.13
Current Liabilities
Short Term Borrowings ................................................................................ 6 4,565.63 19,722.59
Trade Payables ............................................................................................. 7 12,961.19 11,973.86
Other Current Liabilities ............................................................................... 8 16,177.83 17,862.39
Short Term Provisions .................................................................................. 9 4,325.86 4,409.75
38,030.51 53,968.59
TOTAL .......................................................................................................... 217,149.12 184,041.18
ASSETS
Non Current Assets
Fixed Assets 10
Tangible Assets ............................................................................................ 2,856.77 2,474.69
Intangible Assets .......................................................................................... 0.00 0.00
Capital work-in-progress .............................................................................. 81.87
2,856.77 2,556.56
Non Current Investments ............................................................................. 11 65,690.41 32,013.29
Deferred Tax Assets( Net) ............................................................................ 12 259.41 158.12
Long Term Loans & Advances ..................................................................... 13 21,429.56 1,764.56
Other Non Current Assets ............................................................................ 14 93.34 66.26
90,329.49 36,558.79
Current Assets
Current Investments ..................................................................................... 15 9,336.44 11,101.10
Inventories .................................................................................................... 16 65,490.33 58,110.83
Trade Receivables ........................................................................................ 17 2,630.66 2,410.34
Cash & Cash Equivalents ............................................................................ 18 3,462.05 9,068.10
Short-term loans and advances .................................................................... 19 32,092.61 59,902.16
Other Current Assets .................................................................................. 20 13,807.54 6,889.86
126,819.63 147,482.39
TOTAL ......................................................................................................... 217,149.12 184,041.18
Notes on Financial Statements ................................................................ 1 to 39
649
B. K. Khare & Co.
Arun Nanda Chairman
Suhas Kulkarni
Company Secretary
Mumbai: 22
nd
st
MARCH, 2014
Notes
Current Year
` lakh
Previous Year
` in lakh
INCOME
Income from Operations ............................................................................ 21 30,706.52 35,152.05
Other Income ............................................................................................. 22 11,426.25 7,073.47
42,132.77 42,225.52
EXPENDITURE
Operating Expenses .................................................................................. 23 21,878.91 22,577.45
Employee Remuneration & Benets .......................................................... 24 3,038.69 2,597.01
Administration & Other Expenses .............................................................. 25 2,908.92 2,668.13
Interest & Finance charges ........................................................................ 26 3,934.88 617.71
Depreciation & Amortization Expenses ..................................................... 231.95 177.04
31,993.35 28,637.34
Prot before taxation ............................................................................... 10,139.42 13,588.18
Less: Provision for Current Taxation .......................................................... 2,467.70 3,965.03
Less: Provision for Deferred Taxation ........................................................ (101.29) (125.81)
Prot after Tax ........................................................................................... 7,773.01 9,748.96
Basic Earnings Per Share ....................................................................... 19.03 23.87
Diluted Earnings Per Share ..................................................................... 19.03 23.87
Notes on Financial Statements ............................................................... 1 to 39
650
st
MARCH, 2014
Current Year
` in lakh
Previous Year
` in lakh
Net Prot Before Tax ................................................................................................. 10,139.42 13,588.19
Adjustments for:
Depreciation and Amortisation Expenses ........................................................... 231.95 177.04
Provision for Doubtful debts ................................................................................ 55.00 95.00
Prot on sale of current investments ................................................................... 2.20 0.41
Amortisation of expenses .................................................................................... 93.12 70.37
Considered separately:
Interest Income .................................................................................................... (8,393.15) (3,100.03)
Finance Cost ...................................................................................................... 6,576.79 2,785.34
Dividend Income ................................................................................................. (2,331.06) (2,218.56)
(Prot)/Loss on sale of Fixed assets (net) ........................................................... 11.06 (1,194.87)
Operating Prot Before Working Capital Changes ............................................... 6,385.33 10,202.89
Adjustments for:
Trade and Other Receivables ..................................................................................... (5,743.81) 9,554.19
Inventories .................................................................................................................. (7,379.50) (34,753.99)
Trade Payables and Other Liabilities .......................................................................... (3,571.40) 4,372.82
Cash Generated from Operations ........................................................................... (10,309.38) (10,624.09)
Income taxes (paid)/received ..................................................................................... (2,908.27) (4,727.83)
Net Cash (used in)/from operating activities ......................................................... (13,217.65) (15,351.92)
Purchase of Fixed Assets ........................................................................................... (552.46) (279.00)
Proceeds from sale of Fixed Assets ........................................................................... 8.93 1,644.76
Proceeds /(Investments) in others (Net) .................................................................... 1,764.66 1,745.69
Investment in subsidiaries .......................................................................................... (33,672.11)
Interest received ......................................................................................................... 4,855.79 3,306.18
Dividend received ....................................................................................................... 2,331.06 2,218.56
Deposits/Advances with Companies.......................................................................... 10,523.50 (14,355.44)
Net Cash (used in)/from investing activities.......................................................... (14,740.63) (5,719.25)
651
ST
MARCH, 2014 (CONTD.)
Current Year
` in lakh
Previous Year
` in lakh
Increase in borrowings ............................................................................................... 53,843.04 33,722.59
Repayment of Loan ................................................................................................... (25,000.00) (10,000.00)
Finance Cost .............................................................................................................. (3,755.81) (2,636.35)
Dividend Paid .............................................................................................................. (2,866.82) (2,847.58)
Issue of share capital .................................................................................................. 0.87 0.45
Share Premium Proceeds .......................................................................................... 7.87
Net Cash (used in) /from nancing activities ........................................................ 22,229.15 18,239.11
Net Increase/(Decrease) in Cash and Cash Equivalents .................................... (5,729.13) (2,832.06)
Cash and Cash Equivalents (Opening) ................................................................ 8,796.78 11,628.84
Cash and Cash Equivalents (Closing) ................................................................. 3,067.65 8,796.78
B. K. Khare & Co.
Arun Nanda Chairman
Suhas Kulkarni
Company Secretary
Mumbai: 22
nd
652
NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31
st
MARCH
2014.
1) SIGNIFICANT ACCOUNTING POLICIES:
a) Presentation and Disclosure of Financial Statements:
Assets & liabilities have been classied as Current & Non Current as per
the Companys normal operating cycle and other criteria set out in the
Schedule VI of the Companies Act, 1956. Based on the nature of activity
carried out by the company and the period between the procurement and
realisation in cash and cash equivalents, the Company has ascertained
its operating cycle as 5 years for the purpose of Current Non Current
classication of assets & liabilities.
b) Basis of Preparation:
The nancial statements are prepared under the historical cost convention
in accordance with Generally Accepted Accounting Principles in India, the
Accounting Standards notied under The Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act, 1956 which
continue to be applicable in respect of the current nancial year.
c) Use of Estimates:
The preparation of nancial statements in conformity with generally accepted
accounting principles requires the management to make estimates and
assumptions that affect the reported balances of assets and liabilities as of
the date of the nancial statements and reported amounts of income and
expenses during the period. Management believes that the estimates used
in the preparation of nancial statements are prudent and reasonable. Actual
d) Fixed Assets:
Fixed assets are stated at cost of acquisition or construction less
accumulated depreciation. Cost includes all incidental expenses related to
acquisition and installation, other pre operation expenses and interest in
case of construction.
The carrying amount of cash generating units / assets is reviewed at the
balance sheet date to determine whether there is any indication of impairment.
If such indication exists, the recoverable amount is estimated as the net
selling price or value in use, whichever is higher. Impairment loss, if any, is
recognized whenever carrying amount exceeds the recoverable amount.
Depreciation on xed assets is provided, on prorata basis, on straight
line method over their estimated useful lives or lives based on the rates
specied in Schedule XIV to the Companies Act, 1956, whichever is higher
except for:
1. Furniture & Fixtures, Plant & Machinery and Computers, individually
costing more than ` 5,000, which are depreciated over their estimated
useful lives of 5 years, and
2. Vehicles at 15 % per annum of cost.
3. Leasehold improvements are amortised over the period of lease.
e) Intangible Assets:
All Intangible Assets are initially measured at cost and amortised so
consumed.
Software expenses are treated as an intangible asset and amortised
over the useful life of the asset. The maximum period for such
amortization is 36 months.
f) Investments:
Investments are classied into Non Current and Current Investments.
Non current investments are carried at cost less diminution other
then temporary. Provision for diminution, if any, in the value of each
long-term investment is made to recognize a decline, other than of a
temporary nature.
Current Investments are carried individually at lower of cost and fair
value and the resultant decline, if any, is charged to revenue.
g) Inventories:
Inventories are stated at lower of cost and net realisable value. The
cost of construction material is determined on the basis of weighted
average method. Construction Work-in-Progress includes cost
of land, premium for development rights, construction costs and
allocated interest and expenses incidental to the projects undertaken
by the Company.
h) Revenue Recognition:
Income from Projects
Income from real estate sales is recognised on the transfer of all
signicant risks and rewards of ownership to the buyers and it is
not unreasonable to expect ultimate collection and no signicant
uncertainty exists regarding the amount of consideration. However if, at
the time of transfer substantial acts are yet to be performed under the
contract, revenue is recognised on proportionate basis as the acts are
performed, i.e. on the percentage of completion basis. Revenues from
real estate projects are recognised only when the actual project costs
incurred is at least 25 % of the total estimated project costs including
land and when at least 10% of the sales consideration is realised.
In accordance with the Guidance Note on Accounting for Real Estate
Transactions (Revised 2012) issued by the Institute of Chartered
Accountants of India, in case of projects commencing on or after
1
st
April 2012 or in case of projects which have already commenced
but where revenue is being recognised for the rst time on or after
1
st
April 2012, revenues will be recognized from these real estate
projects only when
i. the actual construction and development cost incurred is at
least 25% of the total construction and development cost
(without considering land cost) and
ii. when at least 10% of the sales consideration is realised and
iii. where 25% of the total saleable area of the project is secured
by contracts of agreement with buyers.
Income from long term contracting assignments is also recognised
on the percentage of completion basis. As the long term contracts
necessarily extend beyond one year, revision in costs and revenues
estimated during the course of the contract are reected in the
accounting period in which the facts requiring the revision become
known. Any expected loss on a project is recognised in the year in
which costs incurred together with the balance costs to completion
are likely to be in excess of the estimated revenues from project.
Unbilled costs are carried as construction work-in-progress.
Determination of revenues under the percentage of completion method
necessarily involves making estimates by the Company, some of which
are of a technical nature, concerning, where relevant, the percentages
of completion, costs to completion, the expected revenues from the
project/activity and the foreseeable losses to completion.
Income from sale of land and other rights
Revenue from sale of land and other rights are considered upon transfer
of all signicant risks and rewards of ownership of such real estate/
property as per the terms of the contract entered into with the buyers,
which generally with the rmity of the sale contracts/agreements.
Income from Project Management
Project Management Fees receivable on xed period contracts is
accounted over the tenure of the contract/agreement. Where the fee
is linked to the input costs, revenue is recognised as a proportion of
the work completed based on progress claims submitted. Where the
management fee is linked to the revenue generation from the project,
revenue is recognised on the percentage of completion basis.
Income from operation of commercial complexes is recognised over
the tenure of the lease/service agreement.
Interest and dividend income
Interest income is accounted on an accrual basis at contracted
rates except where there is uncertainty of ultimate collection.
Dividend income is recognised when the right to receive the same is
established.
653
i) Employee benets:
(i) Dened contribution Plans
Provident Fund and Superannuation Fund are recognised in
(ii) Dened Benet Plan
Companys liabilities towards gratuity and leave encashment
are determined on actuarial basis using the projected unit
credit method, which consider each period of service as giving
rise to an additional unit of benet and measures each unit
separately to build up the nal obligation. Past services are
recognised on straight-line basis over the average period until
the amended benets become vested. Actuarial gain and losses
are recognised immediately in the Statement of Prot and Loss
Account as income or expense. Obligation is measured at the
present value of estimated future cash ow using a discount
rate that is determined by reference to market yields at the
Balance Sheet date on government bonds where the currency
and terms of the government bonds are consistent with the
currency and estimated terms of the dened benet obligation.
(iii) In view of the past trends of leave availed, the amount of
employee benet in the form of compensated absences, being
in the nature of short term benet, is accounted for on accrual
basis at an undiscounted value.
j) Borrowing Costs:
Borrowing costs that are directly attributable to long-term project
management and development activities are capitalised as part of
project cost. Other borrowing costs are recognised as expense in
the period in which they are incurred.
Borrowing costs are capitalised as part of project cost when the
activities that are necessary to prepare the asset for its intended
use or sale are in progress. Borrowing costs are suspended from
capitalisation on the project when development work on the project
is interrupted for extended periods.
k) Provision for taxation:
Tax expense comprises both current and deferred tax.
authorities, using the applicable tax rates and tax laws.
Deferred tax assets and liabilities are recognised for future tax
consequences attributable to the timing differences between taxable
income and accounting income that are capable of reversal in one or
more subsequent periods and are measured using tax rates enacted
or substantively enacted as at the Balance Sheet date. Deferred Tax
assets are not recognised unless, in the management judgment,
there is reasonable certainty that sufcient future taxable income will
be available against which such deferred tax assets can be realized
except in case of deferred tax asset arising from brought forward tax
losses wherein deferred tax asset is only recognized when there is
virtual certainty. The carrying amount of deferred tax is reviewed at
each balance sheet date.
l) Segment Information:
The Company operates in three main segments; namely Projects, Project
Management and Development activities, Operating of commercial
complexes and Business Centers. The segments have been identied
and reported taking into account the differing risks and returns and the
internal business reporting systems. Revenues and expenses have been
identied 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 reected as unallocated corporate income/expenses.
m) Provisions and Contingent Liabilities
Provisions are recognised in the nancial statements in respect of a
present obligation arising from a past event, the amount of which can
be reliably estimated.
that arise from past events but their existence is conrmed by the
occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company.
n) Employee stock compensation costs
Measurement and disclosure of the employee share-based payment
plans is done in accordance with SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
and the Guidance Note on Accounting for Employee Share-based
Payments, issued by ICAI. The company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period
of the option on a straight line basis.
2) Share Capital:
Current Year
` in lakh
Previous Year
` in lakh
Authorised
50,000,000 (Previous year 50,000,000)
Equity Shares of ` 10 each 5,000.00 5,000.00
6,500,000 (Previous year 6,500,000)
Preference Shares of ` 100 each 6,500.00 6,500.00
6,000,000 (Previous year 6,000,000)
Unclassied Shares of ` 10 each 600.00 600.00
12,100.00 12,100.00
Issued
40,889,201 (Previous year 40,880,501)
Equity Shares of ` 10 each 4,088.92 4,088.05
4,088.92 4,088.05
Subscribed and Paid-up
40,848,350 (Previous year 40,839,650) Equity
Shares of ` 10 each fully paid up 4,084.84 4,083.97
4,084.84 4,083.97
a) Reconciliation of number of shares
No. of Shares ` in lakh No. of Shares ` in lakh
Equity Shares
Balance as at the beginning of
the year ................................ 40,839,650 4,083.97 40,835,150 4,083.52
Add: Shares Issued (earlier
kept in abeyance) ................. 4,500 0.45
Add: Stock Options exercised
during the year ..................... 8,700 0.87
Balance as at the end of the
year ...................................... 40,848,350 4,084.84 40,839,650 4,083.97
b) Shares held by holding company
Equity Shares No. of Shares % holding No. of Shares % holding
2,08,46,126 shares (Previous
Year- 2,08,46,126 shares held
by Mahindra & Mahindra Limited
20,846,126 51.03% 20,846,126 51.04%
c) Details of shares held by shareholders including Holding Company,
holding more than 5% of the aggregate shares in the Company
Equity Shares No. of Shares % holding No. of Shares % holding
(Holding Company) ...............
20,846,126 51.03% 20,846,126 51.04%
Amansa Investments Limited ..... 2,505,170 6.13% 2,434,599 5.96%
Small Cap World Fund, INC .... 2,157,380 5.28% 2,157,380 5.28%
d) Shares reserved for issue under options
Refer note 24(#) for details of shares to be issued under the
Employee Stock Option Plan
654
e) The allotment of 40,851 (Previous Year 40,851) equity shares of
the Company has been kept in abeyance in accordance with
Section 206A of the Companies Act, 1956, till such time as the title
of the bonade owner of the shares is certied by the concerned
Stock Exchange or the Special Court (Trial of Offences relating to
Transactions in Securities).
3) Reserves & Surplus
Current Year
` in lakh
Previous Year
` in lakh
Capital Redemption Reserve
Balance as at the beginning of the year ....... 7,353.58 7,353.58
Balance as at the end of the year .................. 7,353.58 7,353.58
Debenture Redemption Reserve
Balance as at the beginning of the year .......
Add:- Transfer from Prot & Loss Account ... 3,135.42
Balance as at the end of the year .................. 3,135.42
Share Premium Account
Add : Premium on shares issued during the
year ....................................................................... 7.87
Less: Premium on Redemption of
Debentures .......................................................... (10,244.65)
General Reserve
Add:- Transfer from Prot & Loss Account ..... 777.30 974.90
Employee Stock Option Outstanding
A) Employee Stock Option Outstanding:
Opening Balance ..................................... 424.30 107.11
Add: Fresh grants of options ................ 117.68 317.19
Less: Amount transferred to Securities
premium/Options Lapsed ......................
Closing balance ....................................... 541.98 424.30
Less:
B) Deferred Employee Compensation
Expenses:
Opening Balance ..................................... 274.04 27.22
Add: Fresh grants of options ................ 117.68 317.19
Less: Transfer to Employee
Compensation/Options Lapsed ............ (93.12) (70.37)
Closing balance ....................................... 298.60 274.04
Balance as at the end of the year ........ 243.38 150.26
Surplus in the Statement of Prot & Loss
Prot for the year ............................................... 7,773.01 9,748.96
Less: Appropriations .........................................
Proposed Dividend ............................................
On Equity Shares ............................................... 2,450.90 2,450.38
Tax on distributed prot .................................... 416.53 416.44
Transfer to Debenture Redemption Reserve ... 3,135.42
Transfer to General Reserve ............................ 777.30 974.90
109,646.41 114,884.49
4) Long Term Borrowings
Current Year
` in lakh
Previous Year
` in lakh
Secured Loans
Term Loans
From Bank* ............................................... 5,000.00 11,000.00
Non Convertible Debentures# .............. 50,000.00
55,000.00 11,000.00
* Term Loan from Bank
Nature of Security
The term loan from bank is secured by a pari-passu charge on specied
immovable properties of the company and are also secured by pari-passu
charge on specied movable and current assets of the company, both
present and future.
Terms of Repayment
The said loan amount is repayable quarterly on prorated basis commencing
June 30, 2014. Interest is payable on monthly basis.
# Non Convertible Debentures
The Company has issued 5,000 Redeemable Secured Non Convertible
Debentures of ` 10 lakhs each aggregating to ` 50,000 lakhs redeemable
in the 3
rd
, 4
th
and 5
th
year in the ratio of 25:35:40, along with redemption
premium as summarised below:-
Series I II III
Face Value (`) 1,000,000 1,000,000 1,000,000
No. of Debentures 1250 1750 2,000
Total Value (in lacs) 12,500 17,500 20,000
Redemption Premium per
debenture (`) 3,59,896.61 1,30,874.10 1,72,782.29
Maturity Date 3
rd
April 2016 3
rd
April 2017 3
rd
April 2018
Nature of Security
The above debentures are secured by an exclusive charge over assets,
including land & building as identied by the Issuer from time to time.
At present the identied assets are land owned by Mahindra Integrated
Township Limited and Mahindra Lifespace Developers Limited.
Interest is payable annually
5) Long Term Provisions
Current Year
` in lakh
Previous Year
` in lakh
Provision for Gratuity ........................... 27.16
Provision for compensated
absences ...................................................
115.55 104.13
Provision for Premium on Redemption
of Debentures ........................................... 10,244.65
10,387.36 104.13
6) Short Term Borrowings
Current Year
` in lakh
Previous Year
` in lakh
Secured Loans
From Bank* ............................................... 4,565.63 4,722.59
Unsecured Loans
From Others# ........................................... 15,000.00
4,565.63 19,722.59
* Secured Loans
(a) Nature of Security
The loan is secured by a pari-passu charge on immovable properties
of the Company and are also secured by pari-passu charge on
specied movable and current assets of the Company, both present
and future.
(b) Terms of Repayment
The said loan amount is repayable quarterly. Interest is payable on
monthly basis.
# Unsecured Loans
The said loan amount was repaid on 8
th
April 2013.
655
7) Trade Payables
Current Year
` in lakh
Previous Year
` in lakh
Trade Payables - Micro & Small
Enterprises* ..............................................
Trade Payables - Others ......................... 12,961.19 11,973.86
12,961.19 11,973.86
* Based on the information available with the Company there are no
dues outstanding in respect of Micro, Small and Medium Enterprises
as of Balance Sheet date.
8) Other Current Liabilities
Current Year
` in lakh
Previous Year
` in lakh
Current Maturity of Long Term
Borrowings* .............................................. 10,000.00 10,000.00
Advances and Deposits .......................... 1,084.58 6,168.48
Unclaimed Dividends
#
............................ 75.30 62.52
Interest accrued but not due ................. 3,154.06 333.07
Other Liabilities ......................................... 1,863.89 1,298.32
16,177.83 17,862.39
* The current maturity of long term borrowings is repayable during the
next nancial year.
# There are no amounts due and outstanding to be credited to Investor
Education and Protection Fund.
9) Short Term Provisions
Current Year
` in lakh
Previous Year
` in lakh
Employee benets
Provision for Gratuity ............................ 27.28 10.48
Others ..........................................................
Defect Liabilities / Warranties ................. 339.51 448.90
Proposed Dividend ................................... 2,450.90 2,450.38
Provision for tax on Proposed Dividend ... 416.53 416.44
Provision for Losses to project
Completion* ............................................. 1,023.00 1,023.00
4,325.86 4,409.75
* The Company has, in case of one project, provided for ` 1,023.00
lakh (previous year ` 1,023.00 lakh) as provision for loss to
project completion. The amount has been determined using best
estimates with regard to percentage of completion, foreseeable
costs to completion and revenues from the project activity. However,
considering future business scenario, ination in construction costs
and market movement causing changes in realisations, which
cannot be presently quantied, the nal outcome may differ from that
presently estimated. The probability and the timing of the outow
with regard to this matter depends on the completion of the project
and conclusion of the arbitration proceedings.
10) Fixed Assets
` in lakh
COST DEPRECIATION NET BLOCK
Particulars
As at 31
ST

March, 2013
Additions Deductions As at 31
ST

March, 2014
Up to 31
ST

March, 2013
Deductions For the Year Up to 31
ST

March, 2014
As at 31
ST

March, 2014
As at 31
ST

March, 2013
Tangible Assets:
Land 44.27 44.27 44.27 44.27
Building 3,054.68 64.56 3,119.24 979.76 56.94 1,036.70 2,082.54 2,074.92
Furniture & Fixtures 97.69 28.49 10.04 116.14 54.38 7.48 13.31 60.21 55.93 43.31
Plant & Machinery 162.85 23.18 9.41 176.62 139.39 8.68 11.32 142.03 34.59 23.46
Computers 402.40 64.49 52.63 414.26 275.60 52.33 45.05 268.32 145.94 126.82
Vehicles 228.05 165.57 40.64 352.98 79.02 24.48 41.53 96.07 256.91 149.03
Leasehold improvements 103.54 288.05 2.19 389.40 90.66 1.65 63.80 152.81 236.59 12.88
SUB TOTAL 4,093.48 634.34 114.91 4,612.91 1,618.81 94.62 231.95 1,756.14 2,856.77 2,474.69
Previous Year 4,476.72 197.13 580.35 4,093.50 1,569.67 127.91 177.04 1,618.81 2,474.69 2,907.05
Intangible assets:
Software 289.52 289.52 289.52 289.52 0.00
SUB TOTAL 289.52 289.52 289.52 289.52 0.00
Previous Year 289.52 289.52 289.52 289.52 0.00
Total 4,383.00 634.34 114.91 4,902.43 1,908.33 94.62 231.95 2,045.66 2,856.77 2,474.69
Previous year total 4,766.24 197.13 580.35 4,383.02 1,859.19 127.90 177.04 1,908.33 2,474.69 2,907.05
Capital Work In Progress 81.87
2,856.77 2,556.56
11) Non Current Investments
Face Value
Ruppes Number of shares
Current Year
Ruppes in lakh
Previous Year
Rupees in lakh
Non Current Investments (At Cost) Unquoted,
Trade Equity Shares
In Subsidiary Companies
Mahindra Infrastructure Developers Limited 10 18,000,000 1,800.00 1,800.00
Mahindra World City Developers Limited 10 17,799,999 3,886.54 2,254.51
(1,275,006 Shares acquired during the year)
Mahindra World City (Jaipur) Limited 10 111,000,000 11,100.00 11,100.00
Mahindra World City (Maharashtra) Limited 10 1,170,400 117.04 117.04
Mahindra Integrated Township Limited 10 37,000,000 3,700.00 3,700.00
Knowledge Township Limited 10 21,000,000 2,100.00 2,100.00
Mahindra Bebanco Developers Limited 10 35,000 3.50 3.50
Industrial Township (Maharashtra) Limited 10 5,000,000 500.00 500.00
Mahindra Housing Private Limited 10 50,000 5.00 0.00
(50,000 Shares acquired during the year)
656
Face Value
Current Year
Ruppes in lakh
Previous Year
Rupees in lakh
Riagad Business and Industrial Park limited 10 110,000 11.00 5.00
(60,000 Shares acquired during the year)
Mahindra Homes Private Limited Company (Earlier Known as
Watsonia Developers Private Limited and before that Watsonia
Developers Limited)* 10 50,000 0.00 5.00
Anthurium Developers Limited 10 50,000 5.00 5.00
In Joint Venture
Developers Limited)*
Class A Equity Shares 10 205,628 20.56 0.00
(155,628 Shares acquired during the year and 50,000 shares
converted into Class A shares)
Class C Equity Shares 10 371 0.04 0.00
(371 Shares acquired during the year)
23,248.68 21,590.05
In Associates
Topical Builders Private Limited 10 175 0.02
Kismat Developers Private Limited 10 15 0.00
0.02
In Others
Deepmangal Developers Private Limited 100 177 284.61 284.61
New Tirupur Area Development Corporation Limited 10 500,000 50.63 50.63
Mahindra Knowledge Park (Mohali) Limited 10 6 0.00 0.00
335.23 335.24
Preference Shares
In Subsidiary Company
Mahindra World City Developers Limited 100 6,500,000 6,500.00 6,500.00
(8.5% Cummulative Redeemable Preference Shares)
Mahindra World City Jaipur Limited 10 37,000,000 3,700.00 3,700.00
(8% Redeemable Cumulative Preference Shares)
10,200.00 10,200.00
In Joint Venture
Developers Limited)* 10 1 0.00 0.00
(0.01% Optionally convertible Redeemable Preference Shares)
0.00 0.00
In Associates
Topical Builders Private Limited 10 4,825 0.48 0.00
(8.5% Non-cumulative Redeemable Preference Shares)
(4,825 shares purchased during the year)
Kismat Developers private Limited 10 4,985 0.50 0.00
(8.5% Non-cumulative Redeemable Preference Shares)
0.98 0.00
In Others
Mahindra Knowledge Park (Mohali) Limited 0.00 5.00
(7% Non Cumulative Redeemable Participating Optionally
Convertible Preference Shares)
(50,000 shares sold during the year)
Moonshine Construction Pvt Limited
7% Non-Cumulative Redeemable Participating 10 5,000 0.50 0.00
Optionally Convertible Preference Shares)
0.50 5.00
657
* With effect from 20
th
July 2013 Mahindra Homes Private Limited has been
ceased to be subsidiary and has become joint venture.
In the opinion of the Management, no loss is expected to arise in respect
of other long term investments for which an additional provision is required
to be made in the accounts.
The Company has made investment in equity shares of ` 1,800 lakh
in the wholly owned subsidiary Mahindra Infrastructure Developers
Limited(MIDL). MIDL has further invested ` 1,500 lakh in the equity
shares of New Tirpur Area Development Corporation Limited (NTADCL).
Due to adverse business conditions, NTADCL has been making losses
and there has been an erosion in the net worth of NTADCL. In view of
the management various steps contemplated by the stakeholders such
as infusion of equity capital, debt restructuring, increase in tariff rates of
water etc and various other concessions from Tamil Nadu Government
are expected to lead to a turnaround in the operations of NTADCL and
improve its nancial position. Hence the management does not perceive
any permanent diminution in the value of the investments in NTADCL and
in the value of the investments in MIDL. Considering the long term and
strategic nature of the said investment for reasons stated above no erosion
has been considered necessary on this account.
12) Deferred Tax Asset/(Liability) (Net)
Current Year
` in lakh
Previous Year
` in lakh
Deferred Tax Asset
Relating to:
Provision for impairment in asset value ... 526.90 526.90
Expenses allowable on actual payment ... 371.10 298.54
898.00 825.44
Deferred Tax Liability
Relating to:
Difference between book and tax
depreciation ............................................. 638.59 667.32
Deferred Tax Asset(Net) ............................ 259.41 158.12
13) Long Term Loans & Advances
(Unsecured,Considered Good,Unless
otherwise stated)
Current Year
` in lakh
Previous Year
` in lakh
Considered good 21,429.56 1,764.56
21,429.56 1,764.56
14) Other Non Current Assets
Current Year
` in lakh
Previous Year
` in lakh
Bank Balances
Long Term Deposits with Banks having
maturity more than 12 months (Fixed
deposit of ` 62.33 lakh (Previous year-
` 18.47 lakh) is against Margin Monies
with banks for Bank Guarantee) 93.34 66.26
93.34 66.26
15) Current Investments
Number of
units
Current Year
` in lakh
Previous Year
` in lakh
Current Investments, Unquoted, Non Trade
(At lower of cost and fair value)
In Units of Mutual Fund
Redeemed during the year
JP Morgan India Treasury Fund - Super
Institutional Daily Dividend ...................... 35,775,265 3,580.71
Sundaram Ultra Short Term - Super
Institutional Daily Dividend .................... 49,960,625 5,014.55
BSL Ultra Short Term Fund - Super
Institutional ........................................... 500,448 500.72
Kotak Floater Long Term Fund - Daily
Dividend ............................................... 19,892,491 2,005.12
Acquired during the year
JP Morgan India Treasury Fund -
Growth .................................................. 24,334,955 4,089.20
HSBC Cash Fund - Growth ................... 320,306 4,094.64
ICICI Prudential Liquid - Growth ............ 608,077 1,152.60
9,336.44 11,101.10
16) Inventories
Current Year
` in lakh
Previous Year
` in lakh
Raw material ......................................... 1,362.74 1,018.88
Construction Work in Progress*# ...... 64,127.59 57,091.95
65,490.33 58,110.83
* Construction Work in Progress represents materials at site
and unbilled costs on the projects. Based on projections and
estimates by the Company of the expected revenues and costs
to completion, provision for losses to completion and/ or write
off of costs carried to inventory are made on projects where
the expected revenues are lower than the estimated costs to
completion. In the opinion of the management, the net realisable
value of the construction work in progress will not be lower than
the costs so included therein.
# Construction Work-in-Progress, short term loans and advances
and interest accrued on project advances in other current assets
include ` 765.87 lakh, ` 4,205.26 lakh and ` 2,174.98 lakh,
respectively on account of a project, where commencement
of construction had been delayed on account of a dispute
between the land-owner and the Company which was referred to
arbitration. Post year end, the parties have entered into mutually
agreed consent terms and the arbitration award has been issued
in accordance with the consent terms, as a result of which these
amounts are expected to be recovered either by sale or joint
development of the property.
Face Value
Current Year
Ruppes in lakh
Previous Year
Rupees in lakh
Debentures
In Joint Venture
17.65% Optionally Convertible Debentures
(32,017,000 shares purchased during the year)
Developers Limited)* 100 32,017,000 32,017.00 0.00
32,017.00 0.00
65,802.41 32,130.29
Less : Provision for diminution in value of investments (112.00) (117.00)
65,690.41 32,013.29
658
17) Trade Receivables
Current Year
` in lakh
Previous Year
` in lakh
Outstanding over six months
Considered Good ................................. 250.81 414.44
Considered Doubtful............................. 261.16 206.16
511.97 620.60
Other debts
Considered Good ................................. 2,379.85 1,995.90
Considered Doubtful.............................
2,379.85 1,995.90
Less: Provision for Doubtful Debts ...... (261.16) (206.16)
2,630.66 2,410.34
18) Cash & Cash equivalents
Current Year
` in lakh
Previous Year
` in lakh
Bank Balance
In Current Accounts* ........................ 2,293.90 6,697.78
In Deposit Accounts (less than
3 months maturity) ............................ 772.74 2,096.91
(Fixed deposit of ` 337.50 lakh
(Previous year- ` 310.61 lakh) is
against Margin Monies with banks for
Bank Guarantee)
3,067.65 8,796.78
Other Bank Balances
Long Term Deposits with maturity
more than 3 months but less than 12
months) ................................................. 394.40 271.32
(Fixed deposit of ` Nil lakh (Previous
year- ` 55.34 lakh) is against
Margin Monies with banks for Bank
Guarantee)
3,462.05 9,068.10
* Balance with Banks includes Unclaimed Dividend of ` 75.30 lakh
(Previous year 62.52 lakh)
19) Short Term Loans & Advances
(Unsecured, Considered Good, Unless
otherwise stated)
Current Year
` in lakh
Previous Year
` in lakh
Considered good ............................. 2,000.00 31,629.00
2,000.00 31,629.00
Considered good
*#
.......................... 24,116.26 23,176.59
Considered doubtful ........................ 121.25 121.25
24,237.51 23,297.84
Less : Provision for doubtful loans &
advances .............................................. (121.25) (121.25)
24,116.26 23,176.59
Intercorporate Deposits ....................... 266.30 174.04
Advance payment of Income tax (net
of Provision for tax ` 22,869.66 lakhs
Previous year ` 20,434.72 lakh) .......... 2,604.52 2,164.25
Staff Loans and Advances .................. 14.08 6.81
Deposits ............................................... 3,091.45 2,751.47
32,092.61 59,902.16
* Refer note no.16(#)
# Other Loans and advances include project advances of ` 10,000 lakhs
pending for over 2 years relating to a project whose commencement
has been delayed due to non performance by Vendors. The
Company has during the quarter initiated action against Vendors to
protect the interest of the Company and for resolving the dispute to
enable commencement of the project.
20) Other Current Assets (Unsecured, Considered Good, Unless Otherwise
stated)
(Unsecured, Considered Good, Unless
otherwise stated)
Current Year
` in lakh
Previous Year
` in lakh
Interest accrued on Project
advances
*#
........................................... 4,070.32 4,070.32
Less: Provision for impairment in asset
value ..................................................... (1,550.15) (1,550.15)
2,520.17 2,520.17
Interest accrued - Others 4,702.38 1,165.01
[including ` 1,047.12 lakh, (Previous
year ` 993.49 lakh) due from
subsidiaries and ` 3,202.45 lakh
(previous year ` Nil) due from Joint
Venture] ...............................................
Unbilled Revenue................................. 6,584.99 3,204.68
13,807.54 6,889.86
* Interest accrued thereon represent the amounts recoverable from the
proceeds of projects undertaken/nanced by the Company as per the
contracted terms. The advances as well as the interest thereon are
considered good and fully recoverable based on inter-alia the estimates
and projections by the Company of the project costs and revenues.
# Refer note no. 16 (#).
21) Operating Income
Current Year
` in lakh
Previous Year
` in lakh
Income from Projects ........................... 27,730.30 32,911.95
Project Management Fees ................... 1,345.06 346.65
Income from Operation of Commercial
Complexes ............................................ 1,631.16 1,568.56
Prot on Sale of Properties .................. 324.89
30,706.52 35,152.05
22) Other Income
Current Year
` in lakh
Previous Year
` in lakh
Interest Income
On Inter Corporate Deposits ............ 3,776.67 2,462.71
On Bank Deposits ............................. 1,079.72 608.08
Others ................................................ 3,536.77 29.24
Dividend on Long Term Investments-
Trade (Subsidiary) ................................ 1,471.44 828.88
Dividend on Current Investments-Non
Trade .................................................... 859.62 1,389.68
Prot on sale of Current investments-
Non Trade ............................................. 2.20 0.41
Prot on sale of Fixed assets ............... 0.81 869.98
Miscellaneous Income .......................... 699.02 884.49
11,426.25 7,073.47
23) Operating expenses
Current Year
` in lakh
Previous Year
` in lakh
Cost of Project
Opening Stock
Stock in trade .................................... 76.98
Work-in-progress ............................... 57,091.95 22,835.86
Raw Material ...................................... 1,018.88 444.00
58,110.83 23,356.84
659
Current Year
` in lakh
Previous Year
` in lakh
Add: Expenses incurred during the year :
Premium for Development Rights ........ 3,805.84 29,958.12
Architect Fees ....................................... 399.62 732.21
Preliminaries & Site Expenses ............. 275.51 2,648.77
Civil, Electrical, Contracting etc. .......... 18,427.40 16,338.48
Overheads allocated ............................. 1,243.62 1,114.28
Interest allocated .................................. 2,641.91 2,167.63
Payment to Local Agencies ................. 499.43 2,488.06
Insurance .............................................. 22.29 32.84
Legal & Professional Fees.................... 791.47 366.84
28,107.09 55,847.23
86,217.92 79,204.07
Less :-Closing Stock
Work-in-progress ................................... 64,127.59 57,091.95
Raw Material ......................................... 1,362.74 1,018.88
65,490.33 58,110.83
Rent, Rates & Taxes ............................. 50.66 41.18
Insurance ............................................. 0.37
Repairs & Maintenance - Commercial
Properties .............................................. 192.60 95.55
Professional Fees ................................. 173.17 116.64
Brokerage .............................................. 51.45 170.51
Advertisement, Marketing & Business
Development ......................................... 456.91 243.26
Electricity ............................................... 2.10 10.98
Other Operating Expenses ................... 224.06 806.09
21,878.91 22,577.45
24) Employee Remuneration & Benets
Current Year
` in lakh
Previous Year
` in lakh
Salaries, Allowances & Bonus
#
.......... 3,818.59 3,310.59
Contribution to Provident & Other
Funds*................................................... 200.51 138.56
Staff Welfare Expenses ......................... 263.21 262.14
4,282.31 3,711.29
Less:- Allocated to projects .................. (1,243.62) (1,114.28)
3,038.69 2,597.01
* Gratuity
(1) Description of the Plan:
The Company has covered its gratuity liability by a Group Gratuity
Policy named Employee Group Gratuity Assurance Scheme issued
by LIC of India. Under the plan, employee at retirement is eligible for
benet, which will be equal to 15 days salary for each completed year
of service. Thus, it is a dened benet plan and the aforesaid insurance
policy is the plan asset.
(2) Principal actuarial assumptions:
Discount rate ................................ 9.19% 8.06%
Rate of Return on Plan Assets .... 9.50% 9.50%
(3) Reconciliation of Benet Obligation:
Current Year
` in lakh
Previous Year
` in lakh
Liability at the beginning of the
year............................................... 121.66 119.20
Adjustment to the opening
balance ......................................... (3.85)
Interest Cost ................................. 10.94 10.31
Current Service Cost ................... 42.33 29.79
Benet Paid ..................................
Unrecognised Past Service
Cost ..............................................
Current Year
` in lakh
Previous Year
` in lakh
Actuarial (Gain)/Loss on
Obligations ...................................
32.28 (37.64)
Liability at the end of the year .... 203.36 121.66
Fair Value of Plan Assets at the
end of the year ............................
148.92 111.18
Amount recognised and disclosed
under the head Provisions for
Gratuity .......................................
54.44 10.48
Current Liability ............................ 27.28 10.48
Non Current Liability ................. 27.16 NIL
(4) Reconciliation of Fair value of Plan Assets:
Current Year
` in lakh
Previous Year
` in lakh
beginning of the year .................. 111.18 68.92
Adjustment to the opening
balance ......................................... 6.37
Expected Return on Plan Assets .. 11.70 8.86
Contributions ................................ 27.28 35.89
Benet Paid ..................................
Actuarial Gain/(Loss) on
Obligations ................................... (1.25) (8.86)
end of the year ............................ 148.92 111.18
(5) Expenses recognised in the Statement of Prot and Loss under the
head Employee Remuneration & Benets:
Current Year
` in lakh
Previous Year
` in lakh
Current Service Cost ................... 42.33 29.79
Interest Cost ................................. 10.94 10.31
Unrecognised Past Service Cost ..
Expected Return on Plan Assets .. (8.86)
Net Actuarial (Gain)/Loss
recognised ................................... (11.70) (28.79)
Settlement Cost ........................... 33.52
Expenses recognised in Prot
and Loss Account ........................ 75.09 2.45
(6) Experience Adjustments
2014 2013 2012 2011 2010
Dened benet obligation 207.20 121.66 119.20 109.60 72.73
Fair value of plan assets 148.92 111.18 68.92 68.92 58.55
Surplus/(Decit) ......... (58.28) (10.48) (50.28) (40.68) (14.18)
Experience adjustment on plan
liability
[(Gain)/Loss] ............. 32.27 9.08 (7.88) 25.06
Experience adjustment on plan
assets
[Gain/(Loss)] ............. (1.25) (3.27) 0.04 (5.17)
# Employee Stock Option Scheme
The Company had granted 10,000 Equity shares on 4
th
August, 2012 to the
eligible employee under the Employee Stock Option Scheme 2006 (ESOS
2006) of the company.
The details of the Employee Stock Option Scheme are:
Particulars Grant dated 4
th
August, 2012
Type of
Arrangement
Employee Share-Based Payment by issue of shares.
Number of
Options Granted
10,000
Contractual life Options will lapse if not exercised within 5 years from
the date of individual vesting.
Exercise Price ` 325 /- per share
Method of
Settlement
By Issue of Shares at Exercise Price
Vesting Conditions 25 % On expiry of 12 months from the date of grant;
25 % On expiry of 24 months from the date of grant;
660
The company has adopted intrinsic value method for computing
the compensation cost for the Options granted. The exercise price
of the shares is based on the average of the daily high and low of
the prices for the Companys Equity Shares quoted on the Bombay
Stock Exchange Limited, during the 15 days preceding the grant
of the Options. The Intrinsic value i.e. the difference between the
market price of the share and the exercise price is being amortised as
employee compensation cost over the vesting period. The details of
the same are given here under:
4
th
August, 2012
Intrinsic Value of shares based on latest available
closing market price `(0.86)
Total Amount to be amortized over the vesting period `(0.09) lakh
Charge to Statement of Prot & Loss for the year `(0.02) lakh
Compensation in respect of lapsed cases
Unamortized Amount Carried Forward `(0.05) lakh
The Fair Value has been calculated using the Black Scholes Options
Pricing Model and the signicant assumptions made in this regard are as
follows:
4
th
August, 2012
Risk free interest rate 8.06% -8.20%
Expected life 3.5 -6.5 Years
Expected volatility 44.15%- 59.61%
Expected dividend yield 1.38%
Exercise price ` 325
Stock price ` 324.14
th
August, 2012 to
the eligible employees under the Employee Stock Option Scheme (ESOS
2012) of the company.
th
August, 2012
Type of
Arrangement
Number of
Options Granted 101,000
Method of
Settlement
Vesting
Conditions
The company has adopted intrinsic value method for computing the
compensation cost for the Options granted. The exercise price of the
shares is ` 10/- per stock option. The Intrinsic value i.e. the difference
between the market price of the share and the exercise price is being
amortised as employee compensation cost over the vesting period. The
details of the same are given here under:
4
th
August, 2012
closing market price 314.14
Total Amount to be amortized over the vesting period ` 278.01 lakh
Charge to Statement of Prot & Loss for the year ` 73.53 lakh
Unamortized Amount Carried Forward ` 162.17 lakh
th
July, 2013 to the
eligible employees under the Employee Stock Option Scheme (ESOS 2012)
of the company.
th
July, 2013
Type of
Arrangement
Number of
Options Granted
26,500
Method of
Settlement
Vesting
Conditions
The company has adopted intrinsic value method for computing the
compensation cost for the Options granted. The exercise price of the shares
is ` 10/- per stock option. The Intrinsic value i.e. the difference between
the market price of the share and the exercise price is being amortised as
employee compensation cost over the vesting period. The details of the
same are given here under:
24
th
July, 2013
closing market price ` 444.09
Total Amount to be amortized over the vesting period ` 117.68 lakh
Charge to Statement of Prot & Loss for the year ` 19.61 lakh
Unamortized Amount Carried Forward ` 98.07 lakh
The Fair Value has been calculated using the Black Scholes Options
Pricing Model and the signicant assumptions made in this regard are as
follows:
24
th
July, 2013
Risk free interest rate 8.31% -8.39%
Expected life 6-9 Years
Expected volatility 47.63%
Expected dividend yield 1.31%
Exercise price ` 10.00
Stock price ` 454.09
Earnings Per Share as required by Accounting Standard 20 read with the
Guidance Note on Accounting for Employee share-based Payments is as
follows.
Intrinsic Value Method Fair Value Method
Particulars Current Year Previous Year Current Year Previous Year
A Net Prot After Tax
(` in lakh) 7,773.01 9,748.96 7,787.29 9,415.50
Less Preference dividend
B Weighted Average number
of Equity Shares of ` 10/-
each (Basic) 40,841,051 40,836,260 40,841,051 40,836,260
C Weighted Average number
of Equity Shares of ` 10/-
each (Diluted) 40,841,051 40,836,260 40,841,051 40,836,260
D Basic Earning per Share (`) 19.03 23.87 19.07 23.06
E Diluted Earning per Share (`) 19.03 23.87 19.07 23.06
The compensation costs of stock options granted to employees are
accounted by the Company using the intrinsic value method.
Summary of Stock Options Current Year Previous Year
Options outstanding on 1
st
April 6,98,436 5,88,779
Options granted during the year 26,500 1,11,000
Options lapsed during the year
Options cancelled during the year 1,03,580 1,343
Options exercised during the year 8,700
st
March 6,12,656 6,98,436
Options vested but not exercised on
31
st
March 5,07,856 5,88,779
661
Information in respect of options outstanding as at 31
st
March, 2014:
Exercise price No. of Options Weighted average
remaining life
` 428 4,96,356 30 months
` 325 7,500 48 months
` 10 82,300 48 months
` 10 26,500 60 months
25) Administration & Other Expenses
Current Year
` in lakh
Previous Year
` in lakh
Rent, Rates and Taxes .......................... 538.84 556.73
Insurance .............................................. 8.20 7.35
Buildings ............................................ 6.11 2.94
Others ................................................ 192.50 148.48
Electricity Charges ................................ 46.27 38.67
Travelling & Conveyance ...................... 418.07 383.05
Legal & Professional Fees.................... 442.02 554.72
Printing & Stationery ............................. 63.98 64.59
Communication ..................................... 123.70 97.05
Advertisement, Marketing & Business
Development ......................................... 353.99 263.54
Auditors Remuneration ......................... 43.04 41.36
Loss on Sale of Fixed Assets............... 11.87
Doubtful Debts Provided ...................... 55.00 95.00
Miscellaneous Expenses ...................... 605.33 414.65
2,908.92 2,668.13
Auditors Remuneration (including service tax):
Current Year
` in lakh
Previous Year
` in lakh
Audit Fees ............................................ 25.00 22.42
Tax Audit Fees ..................................... 1.55 1.52
Tax matters .......................................... 5.70 14.38
Certication and Other Services ......... 10.79 3.04
Total ..................................................... 43.04 41.36
26) Finance Cost
Current Year
` in lakh
Previous Year
` in lakh
On Term Loan ....................................... 6,576.79 2,785.34
Less: Allocated to projects ................... (2,641.91) (2,167.63)
3,934.88 617.71
27) Earnings in Foreign Currency:
Current Year
` in lakh
Previous Year
` in lakh
Consideration received on sale of
residential units ..................................... 211.94
Total ...................................................... 211.94
28) Expenditure in Foreign Currency:
Current Year
` in lakh
Previous Year
` in lakh
a) Other expenditure
Travelling ...................................... 17.18 7.76
Marketing expenses .................... 7.57 2.51
Others .......................................... 64.66 68.06
Total ............................................. 89.41 78.33
b) Value of Imported and
Indigenous Consumption
a. Imported .................................. 576.25
b. Indigenously obtained ............ 2,575.01 2,444.13
Total ............................................. 3,151.26 2,444.13
% Imported .................................. 18.29%
% Indigenously obtained ............ 81.71% 100%
100% 100%
29) Commitments
Current Year
` in lakh
Previous Year
` in lakh
Capital Commitment: Estimated value
of contracts remaining to be executed
on capital account and not provided
for (net of advances) 4.49 198.13
The disclosure of commitment is given only to the extent of capital
commitment and other disclosure relating to commitment has not been
given in order to avoid providing excessive details that may not assist
users of Financial Statements.
30) In respect of real estate projects under long term contracts, determination
of prots/ losses and realisability of the construction work in progress &
project advances necessarily involves making estimates by the Company,
some of which are of a technical nature, concerning, where relevant, the
percentage of completion, costs to completion and the projections of
revenues expected from projects / activity and the foreseeable losses to
completion. Prot from these contracts and valuation of construction work
in progress is based on such estimates.
31) Leases:
The Companys signicant leasing arrangements are in respect of
operating leases for Commercial & Residential premises.
a) Lease income from operating leases is recognised on a straight-line
basis over the period of lease. The particulars of the premises given
under operating leases are as under:
Current Year
` in lakh
Previous Year
` in lakh
Gross Carrying Amount of premises ... 2,765.27 2,604.37
Accumulated Depreciation ................... 852.13 807.04
Depreciation for the year ...................... 45.09 42.46
Future minimum lease payments under
non-cancellable operating leases
Not later than 1 year ........................ 1,395.76 679.59
Later than 1 year and not later than
5 years .............................................. 88.29
Later than 5 years ............................
b) Lease expenditure for operating leases is recognised on a straight-
line basis over the period of lease. The particulars of the premises
taken on operating leases are as under:
Current Year
` in lakh
Previous Year
` in lakh
Not later than 1 year ....................... 109.96 185.39
5 years ............................................. 100.74
Later than 5 years ...........................
32) Contingent Liabilities
Matter Current Year
` in lakh
Previous Year
` in lakh
a) Claims against the Company not
acknowledged as debts represent:
i) Claims awarded by
the Arbitrator to a civil
contractor in respect of a
project at Mumbai and the
Companys appeal against
the award has been
admitted by the Mumbai
High Court ............................ 93.89 182.33
ii) Demand from local
authorities for transfer fees
on transfer of property,
disputed by the Company ... 123.99 123.99
662
35) Segmental Reporting
` in lakh
Operating of Commercial
Complexes
Projects, Project
Management & Development
Business Centre Consolidated
REVENUE
External Revenue 1,631.16 29,075.36 30,706.52
Previous Year 1,893.45 33,258.60 35,152.05
Intersegment Revenues
Previous Year
TOTAL REVENUE 1,631.16 29,075.36 30,706.52
Previous Year 1,893.45 33,258.60 35,152.05
SEGMENT RESULT 1,443.53 7,453.02 0.00 8,896.55
Previous Year 1,705.99 11,047.05 12,753.05
Unallocated Corporate
Expenses (net) (2,922.44)
Previous Year (1,463.25)
Operating prot 5,976.11
Previous Year 11,291.78
Interest expense (3,934.89)
Previous Year (617.71)
Interest income 8,098.47
Income taxes (2,366.71)
Previous Year (3,839.22)
Net Prot 7,773.01
OTHER INFORMATION
Segment Assets 2,079.99 164,746.22 0.55 166,826.76
Previous Year 2,222.64 118,567.85 0.56 120,791.04
Unallocated Corporate Assets 50,322.36
TOTAL ASSETS 217,149.12
Matter Current Year
` in lakh
Previous Year
` in lakh
iii) Demand from a local
authority for energy dues
disputed by the Company ... 2,164.04 2,164.04
iv) Claim from welfare
association in connection
with project work, disputed
by the Company. ................... 4,500.00
b) Income tax matters under appeal
In respect of certain business
incomes re-classied by the
Income tax Department as
income from house property
and other disallowances,
the Company has partially
succeeded in appeal and is
pursuing the matter further with
the higher appellate authorities .. 360.43 935.60
The liability net of Deferred
Tax Asset/Deferred Tax Liability
would be ` 360.43 lakh (previous
year ` 524.17 lakh)
33) Managerial Remuneration
Current Year
` in lakh
Previous Year
` in lakh
Salaries and Allowances ...................... 162.02 156.63
Contribution to Provident, Gratuity and
Superannuation Funds ......................... 23.04 20.04
Perquisites (estimated monetary value) .. 17.50 4.14
Total: ..................................................... 202.56 180.81
34) Computation of Net Prot in accordance with Section 349 of the
Companies Act, 1956:
` in lakh
Current Year
` in lakh
Previous Year
` in lakh
Prot before Tax .................. 10,139.42 13,588.19
Add:
Depreciation as per
accounts ................................ 231.95 177.04
Managerial remuneration...... 202.56 180.81
Directors fees ....................... 14.10 10.15
Commission to Directors
(non executive Director) ....... 134.05 130.00
Loss on disposal of xed
assets not allowable as per
proviso to Section 349 11.87 594.53
10,733.95 14,086.19
Less:
Depreciation under
Section 350 ........................... 138.77 116.34
Loss on disposal of xed
assets allowable as per
proviso to Section 349 ......... 11.87
Prot on sale of xed assets
not allowable as per proviso
to Section 349 ....................... 0.81 151.45 869.98
Net Prot as per Section
349 of the Companies Act,
1956 ...................................... 10,582.50 13,099.87
5% of Net Prot as
computed above ................. 529.13 654.99
663
Operating of Commercial
Complexes
Projects, Project
Management & Development
Business Centre Consolidated
Segment Liabilities 603.04 93,791.88 24.18 94,419.09
Previous Year 589.88 56,556.63 24.18 57,170.69
Unallocated Corporate
Liabilities 8,998.78
TOTAL LIABILITIES 103,417.87
Capital Expenditure 82.03 634.32
Previous Year 39.45 197.13
Depreciation 58.10 9.64 231.95
Previous Year 51.12 2.57 177.04
Notes:
1. The segment result for Projects, Project Management and Development activity is arrived at after considering an interest of ` 1,879.23 lakh(Previous year
` 1,578.73 lakh), as it formed part of the cost of projects according to the method of accounting followed by the Company.
36) Related Party Transactions
List of related parties
Enterprises Controlling the Company
Mahindra & Mahindra Limited: Holding Company
Enterprises under the control of the Company
Mahindra Infrastructure Developers Limited Mahindra Integrated Township Limited.
Mahindra World City Developers Limited Mahindra Residential Developers Limited
Mahindra World City (Jaipur) Limited Industrial Township (Maharashtra) Limited
Knowledge Township Limited Mahindra Bebanco Developers Limited
Mahindra World City (Maharashtra) Limited Raigad Industrial & Business Park Limited
Anthurium Developers Limited Mahindra Housing Private Limited
Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia Developers Limited)*
*With effect from 20
th
July 2013 Mahindra Homes Private Limited has been ceased to be subsidiary and has become joint venture.
Fellow Subsidiaries
Mahindra Integrated Business Solutions Private Limited
Associates
Kismat Developers Private Limited
Topical Builders Private Limited
Joint Ventures
Mahindra Inframan Water Utilities Private Limited
Mahindra Water Utilities Private Limited
Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia
Developers Limited)*
*With effect from 20
th
July 2013 Mahindra Homes Private Limited has been ceased to be subsidiary and has become joint venture.
Managing Director & Chief Executive Ofcer of the Company- Ms. Anita Arjundas
Enterprises over which key management personnel are able to exercise signicant inuence: Nil
Transactions with related parties during the year and balance as on 31
st
March 2014:
(` in lakh)
Nature of Transactions Enterprise
controlling the
Company
Enterprises under
the control of the
Company
Companies under
common control
including Fellow
Subsidiaries
Joint Ventures/
Associates
Individual Key
Management
Personnel
Rendering of Services 1,520.89 1,237.67 294.59
Previous Year 1,441.37 1,031.44
Receiving of services 373.11 384.24 72.97
Previous Year 623.10 61.45 46.10
Sales
Remuneration 202.56
Previous Year 180.81
664
Nature of Transactions Enterprise
controlling the
Company
Enterprises under
the control of the
Company
Companies under
common control
including Fellow
Subsidiaries
Joint Ventures/
Associates
Individual Key
Management
Personnel
Reimbursement made to parties 290.83 0.70
Previous Year 20.30
Reimbursement received from parties 32.19 21.74
Previous Year
Finance given during the year 16,070.00 65,875.00
Previous Year 48,383.00 60.00
Purchase of Equity Shares 1,643.03 15.62
Previous Year
Purchase of Preference Shares 0.98
Previous Year
ICD refunded 15,134.00 44,666.00
Interest received 2,406.08 1,366.69
Dividend Paid 1,250.77
Dividend Income 1,471.44
Previous Year 828.88
Advance Received
Previous Year 8.12
Receivables 2,017.68 23,247.82 2.46 35,239.16
Previous Year 2,271.50 33,011.77 2.46
Payables 2,202.19 9.10
The signicant related party transactions are as under:
Nature of Transactions Enterprises
Controlling the
Company
Amount
(` in lakh)
Enterprises under
the Control of the
Company
Amount
(` in lakh)
Enterprises under the
Common control of
the Company/Fellow
Subsidiaries
Amount
(` in lakh)
Joint Ventures/
Associates
Amount
(` in lakh)
Key
Management
Personnel
Amount
(` in lakh)
Rendering of services Mahindra &
Mahindra
Limited
1,520.89 Mahindra Residential
Developers Limited
419.64 Mahindra Homes
Private Limited
(earlier known as
Watsonia Developers
Private Limited)
294.59
Mahindra Bebanco
Developers Limited
354.47
Mahindra Integrated
Township Limited
455.83
Receiving of services Mahindra &
Mahindra
Limited
373.11 Mahindra World City
Developers Limited
48.77 Bristle Cone India
Limited
25.39
Mahindra Integrated
Township Limited
335.47 Mahindra Holidays &
44.54
Remuneration Anita Arjundas 202.56
Expense Reimbursement Mahindra &
Mahindra
Limited
290.83 Mahindra World City
(Jaipur) Limited
0.70
Reimbursement received
from parties
Mahindra Residential
Developers Limited
Private Limited
(earlier known as
Watsonia Developers
Private Limited)
21.74
Mahindra World City
(Jaipur) Limited
21.39
Finance given during
the year
Mahindra World City
Developers Limited
9,150.00 Mahindra Homes
Private Limited
(earlier known as
Watsonia Developers
Private Limited)
65,783.00
Mahindra Integrated
Township Limited
6,683.00
665
Nature of Transactions Enterprises
Controlling the
Company
Amount
(` in lakh)
Enterprises under
the Control of the
Company
Amount
(` in lakh)
Enterprises under the
Common control of
the Company/Fellow
Subsidiaries
Amount
(` in lakh)
Joint Ventures/
Associates
Amount
(` in lakh)
Key
Management
Personnel
Amount
(` in lakh)
Purchase of Equity
Shares
Mahindra World City
Developers Limited
Private Limited
(earlier known as
Watsonia Developers
Private Limited)
15.62
Purchase of Preference
Shares
Kismat Developers
Private Limited
0.50
Topical Builders
Private Limited
0.48
ICD refunded Mahindra Integrated
Township Limited
Private Limited(earlier
known as Watsonia
Developers Private
Limited)
44,666.00
Mahindra World City
Developers Limited
6,450.00
Mahindra Bebanco
Developers Limited
Private Limited(earlier
known as Watsonia
Developers Private
Limited)
1,366.69
Mahindra Integrated
Township Limited
1,129.53
Mahindra World City
Developers Limited
1,051.57
Dividend paid during
the year
Mahindra &
Mahindra
Limited
1,250.77
Dividend received during
the year
Mahindra World City
Developers Limited
953.44
Mahindra World City
(Jaipur) Limited
518.00
Receivables Mahindra &
Mahindra
Limited
2,017.68 Mahindra World City
Developers Limited
9,234.14 Mahindra Consulting
Engineers Limited
2.46 Mahindra Homes
Private Limited
(earlier known as
Watsonia Developers
Private Limited)
35,239.16
Mahindra Bebanco
Developers Limited
2,333.86
Knowledge
Township Limited
2,413.25
Mahindra Integrated
Township Limited
8,861.64
Payables Mahindra &
Mahindra
Limited
2,202.19 Mahindra Holidays &
2.30
Mahindra Consulting
Engineers Limited
1.49
Bristle Cone India
Limited
5.09
37) Information in respect of Jointly Controlled Operations
i) Development of the following residential projects:
G.E. Gardens, Mumbai
Kukattpally, Hyderabad
ii) Project for providing potable drinking water and sewerage facilities at Tirupur, Tamil Nadu.
666
38) Earnings per share
Calculation of Net Prot available for Equity Shareholders:
Current Year
` in lakh
Previous Year
` in lakh
A. Net Prot After Tax .............................................................................................................................. 7,773.01 9,748.96
B. Less: Dividend on Non Cumulative Redeemable Preference Shares (including Tax on
distributed Prots) ...............................................................................................................................
C. Prot available for Equity Shareholders ............................................................................................. 7,773.01 9,748.96
D. Weighted Average number of Equity Shares of ` 10/- each............................................................. 408.41 408.36
E. Basic Earnings per Share (`) ............................................................................................................. 19.03 23.87
F. Diluted Earnings per Share (`) ........................................................................................................... 19.03 23.87
39) The gures for previous year have been regrouped wherever necessary to conform to current years classication
B. K. Khare & Co.
Arun Nanda Chairman
Partner
Shailesh Haribhakti Director
Suhas Kulkarni
Company Secretary
Mumbai: 22
nd
667
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies:
` in lakh
Name of the Subsidiary Company
Particulars Mahindra
Infrastructure
Developers
Limited
Mahindra
World City
Developers
Limited
Mahindra
World City
(Jaipur)
Limited
Mahindra
World City
(Maharashtra)
Limited
Mahindra
Integrated
Township
Limited
Knowledge
Township
Limited
Mahindra
Residential
Developers
Limited
Mahindra
Bebenco
Developers
Limited
Industrial
Township
(Maharashtra)
Limited
Raigad
Industrial
& Business
Park
Limited
Anthurium
Developers
Limited
Mahindra
Housing
Private
Limited
The Financial Year of the
Subsidiary Company ended on
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
31
st
March
2014
Number of Shares in the Subsidiary Company held by Mahindra Lifespace Developers Limited at the above date :
Equity 18,000,000 17,799,992 111,000,000 1,170,400 50,000,000 21,000,000 250,000 35,000 5,000,000 50,000 50,000 50,000
Extent of holding 100% 89.00% 74.00% 100% 96.30% 100% 96.30% 70.00% 100.00% 100.00% 100.00% 100.00%
The net aggregate of prots/(losses) of the Subsidiary Company for its nancial year so far as they concern the members of Mahindra Lifespace Developers Limited:
1. Dealt with in the Accounts
of Mahindra Lifespace
Developers Ltd. for the year
ended 31
st
March, 2014.
Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
2. Not dealt with in the
Accounts of Mahindra
Lifespace Developers
Limited for the year ended
31
st
March, 2014.
(26.05) 797.82 1,809.10 (0.33) (496.90) (0.64) 3,159.93 80.03 (0.43) (0.50) (0.51) (0.63)
The net aggregate of prots/(losses) of the Subsidiary Company for its previous nancial years so far as they concern the members of Mahindra Lifespace Developers
Limited:
1. Dealt with in the Accounts
of Mahindra Lifespace
Developers Ltd. for the year
ended 31
st
March, 2013.
Nil 4,746.07 544.39 Nil Nil Nil Nil Nil Nil Nil Nil NA
2. Not dealt with in the
Accounts of Mahindra
Lifespace Developers
Limited for the year ended
31
st
March, 2013.
(0.32) 10,977.78 2,450.88 (112.82) (184.12) (42.04) 1,234.46 (472.22) (13.35) (8.82) (1.96)
Arun Nanda Chairman
Sanjiv Kapoor Director
Shailesh Haribhakti Director
Suhas Kulkarni
Company Secretary
Mumbai : 22
nd
Summary of nancial performance of the subsidiaries for the year April 2013- March 2014
SUBSIDIARY COMPANY Mahindra
Infrastructure
Developers
Limited
Mahindra
World City
Developers
Limited
Mahindra
World City
(Jaipur)
Limited
Mahindra
World City
(Maharashtra)
Limited
Mahindra
Integrated
Township
Limited
Knowledge
Township
Limited
Mahindra
Residential
Developers
Limited
Mahindra
Bebanco
Developers
Limited

Industrial Township
(Maharashtra)
Limited
Raigad
Industrial
& Business
Park Limited
Anthurium
Developers
Limited
Mahindra
Housing
Private
Limited
MIDL MWCDL MWCJL MWCML MITL KTL MRDL MBDL ITML RIBPL ADL MHPL
Particulars ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh ` lakh
Capital ......................... 1,800.00 8,500.00 20,000.00 117.04 5,043.50 2,100.00 26.00 5.00 500.00 11.00 5.00 5.00
Reserves/(Debit
balance as per Prot &
Loss A/c) .................... (5.96) 9,398.97 3,243.95 (113.53) (710.84) (44.16) 9,267.57 (560.51) (13.79) (9.59) (2.47) (0.63)
Total Assets ................. 2,035.95 51,361.29 66,447.24 4.09 19,180.43 4,475.74 15,729.33 12,151.44 518.63 6.56 203.26 5.00
Total Liabilities ............. 2,035.95 51,361.29 66,447.24 4.09 19,180.43 4,475.74 15,729.33 12,151.44 518.63 6.56 203.26 5.00
Investments (except in
case of investment in
subsidiaries) ................ 1,507.50 2,954.72
Turnover ...................... 17.15 4,787.21 10,216.69 0.29 6,259.26 15,557.08 5,261.49
Prot before Taxation ... (25.07) 1,357.38 3,703.43 (0.33) (515.99) (0.64) 4,151.50 144.32 (0.43) (0.50) (0.51) (0.63)
Provision for Taxation ... 0.98 460.94 1,258.70 870.16 30.00
Prot after Taxation ........ (26.05) 896.43 2,444.73 (0.33) (515.99) (0.64) 3,281.34 114.32 (0.43) (0.50) (0.51) (0.63)
Proposed Dividend ......... 322.31 1,169.95
MAHINDRA INFRASTRUCTURE DEVELOPERS LIMITED
668
Your Directors present their Thirteenth Report together with the audited accounts of your Company for the year ended 31
st
March,
2014.
FINANCIAL RESULTS
(Rupees)
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Income 19,81,328 8,09,685
(Loss) before Depreciation and Taxation (25,05,078) (21,53,650)
Less: Depreciation 2,121 11,698
(Loss) before Taxation (25,07,199) (21,65,348)
Current Tax
(Excess) provision for tax relating to prior years (119,356)
Deferred Tax 97,987 98,461
(Loss) after Taxation (26,05,186) (21,44,453)
Prot brought forward from previous year 20,09,163 41,53,616
Balance carried to Balance Sheet (5,96,023) 20,09,163
OPERATIONS
During the year under review, your Companys income has
increased to Rs. 19.81 lakh as compared to Rs. 8.10 lakhs in
the previous year.
Your Company has had several rounds of discussions with
Tirumala Tirupati Devasthanam (TTD) post termination of
Agreement and a resolution is expected shortly.
DIVIDEND
In view of losses, your Directors do not recommend dividend
for the year.
DIRECTORS
Mr. S. Venkatraman retires by rotation at the forthcoming
Annual General Meeting, and being eligible, offers himself for
re-appointment.
AUDIT COMMITTEE
The Audit Committee presently comprises of Mr. S. Venkatraman
(Chairman of the Committee), Mr. A. K. Nanda and Ms. Anita
Arjundas. In view of the applicability of the provisions of
Section 177 of the Companies Act, 2013, read with Companies
(Meetings of Board and its Powers) Rules, 2014, the terms of
reference of the Audit Committee were revised and aligned in
Act, 2013.
The Audit Committee met four times during the year under
review.
your Directors, based on the representation received
from the Operating Management, and after due enquiry,
conrm that:
as at 31
st
1956, for safeguarding the assets of the Company and for
concern basis.
CODES OF CONDUCT
The Company had adopted Codes of Conduct (Codes) for
declarations under the Codes from the Directors, Members,
669
AUDITORS
Mumbai (Firm Registration No:117365W), retire as Auditors
at the forthcoming Annual General Meeting. The Members
will be required to re-appoint auditors to hold ofce from the
conclusion of the forthcoming Annual General Meeting until
the conclusion of the next Annual General Meeting and x their
remuneration.
As required by the provisions of section 139 of the Companies
Act, 2013, the Company has received a written certicate from
Mumbai, to the effect that their re-appointment, if made, would
be in conformity with the limits and conditions specied in the
said section and also indicating that they satisfy the criteria
provided in Section 141 of the Companies Act, 2013.
COST AUDITOR
M/s. Shilpa & Co., Cost Accountants, Nashik (Firm Registration
No. 100558) were appointed as Cost Auditors of your Company
to audit the cost accounts for the year ending 31
st
March, 2014.
The due date of ling the said report is 27
th
September, 2014.
For the year ended 31
st
March 2013, the due date of ling
the compliance report was 27
th
September, 2013. The cost
compliance report, accordingly, was led on 25
th
September
2013 in XBRL format.
The Board of Directors has, upon a recommendation of the
Audit Committee and subject to the approval of the Central
Government, appointed M/s. Shilpa & Co., Cost Accountants
to audit the cost accounts of the Company for the year ending
31
st
March, 2015. The remuneration of Rs. 25,000/- (excluding
Service-tax and out of pocket expenses) is recommended
for ratication by the shareholders at their ensuing Annual
General Meeting.
As required under Sections 139, 141 and 148 of the Companies
Act, 2013, the Company has obtained a written conrmation
from M/s. Shilpa & Co. to the effect that they are eligible
for appointment as Cost Auditors under section 148 of the
Companies Act, 2013 and that they are an independent rm of
Cost Accountants and have an arms length relationship with
your Company.
The Company has not made any loans/ advances which
executed with the Parent Companies - Mahindra Lifespace
Developers Limited and Mahindra & Mahindra Limited listed
with the Stock Exchanges.
absorption, foreign exchange earnings and outgo, as required
under section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 are given in the Annexure to
this Report.
initiatives on safety awareness, health surveys of employees
etc. The health survey of site personnel is conducted once in
a year. The persons working at site are given adequate training
on safety and health. The requirements relating to various
been duly complied by your Company.
The Company had no employee, who was employed
throughout the nancial year and was in receipt of remuneration,
of not less than Rs. 60,00,000 p.a. during the year ended
March 31, 2014 or who was employed for the part of the
nancial year and was in receipt of remuneration of not less
than Rs. 500,000 p.m.
A.K. Nanda
Chairman
Mumbai, 17
th
April, 2014
670
ST
MARCH, 2014.
CONSERVATION OF ENERGY
During the year, the Company has taken the following initiative:
Used High pressure Sodium vapour lamps and metal halide lamps for getting high efciency. These lamps have power
saving features.
production of goods:
(d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules in
respect of Industries specied in the Schedule: Not applicable
TECHNOLOGY ABSORPTION
3. Future Plan of action : Further quality improvement
2013 - 14
Total Foreign Exchange earned Nil
Total Foreign Exchange used Nil
A. K. Nanda
Chairman
Mumbai, 17
th
April, 2014
671
TO THE MEMBERS OF
MAHINDRA INFRASTRUCTURE DEVELOPERS LIMITED (the
Company) which comprise the Balance Sheet as at 31
st
March,
2014, the Statement of Prot and Loss and the Cash Flow
Statement for the year then ended, and a summary of the
dated 13
th
we comply with the ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the
Opinion
st
March, 2014;
Emphasis of Matter
We draw attention to Note 25 to the nancial statements.
As stated in the Note, the latest available Audited Financial
Statements for the year ended 31
st
March, 2013 of New Tirupur
Area Development Corporation Limited (NTADCL) wherein
the Company is having investment of `150,000,000 in Equity
Shares, reect substantial erosion of its net worth. In the opinion
of the management of the Company, there is no permanent
diminution in value of the investment in NTADCL for the reasons
stated therein.
5 of the Order.
th
st
st
of the Act.
(Firm Registration No. 117365W)
(U. M. Neogi)
Place: Mumbai (Partner)
Date: 17
th
672
activities/results during the year, clauses (vi), (xi), (xii),
(xiii), (xiv), (xv), (xvi), (xviii), (xix) and (xx) of paragraph 4
of the Order are not applicable to the Company.
(b) The Company has a program of verication of xed
assets once in every three years, which, in our
opinion, is reasonable having regard to the size of
the Company and the nature of its assets. The last
physical verication was carried out in March, 2012,
accordingly no physical verication of xed assets
was carried out by the Management during the year.
(c) During the year, the Company has not disposed any
part of its xed assets.
veried during the year by the Management. In our
opinion the frequency of verication is reasonable.
verication.
Company and the nature of its business with regard to the
sale of goods. There are no purchases of inventory and
xed assets and sale of services during the year. During
the course of our audit, we have not observed any major
weakness in such internal control system.
arrangements which need to be entered in the register
required to be maintained under Section 301 of the
Companies Act, 1956. As there are no such contracts
or arrangements, paragraph 4(v)(b) of the Order is not
applicable.
of its business.
Companies Act, 1956 and are of the opinion that, prima
facie, the prescribed cost records have been maintained.
We have, however, not made a detailed examination of the
cost records with a view to determine whether they are
Employees State Insurance, Income-tax, Service Tax,
(b) No undisputed amounts payable in respect of Income-
tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty
and Excise Duty were in arrears as at 31
st
March,
2014 for a period of more than six months from the
(c) According to the records of the Company, there are
no dues of Income-tax, Service Tax, Sales Tax, Wealth
Tax, Custom Duty and Excise Duty which have not
been deposited as on 31
st
March, 2014 on account
of any dispute.
(x) The Company has accumulated losses at the end of the
nancial year. The Company has incurred cash losses
during the nancial year covered by our audit and in the
the Company and no fraud on the Company has been
(U. M. Neogi)
Place: Mumbai (Partner)
Date: 17
th
673
ST
MARCH 2014
`
As at
31
st
March 2014
` `
As at
31
st
March 2013
`
1 Shareholders Funds:
(a) Share capital ............................. 3 180,000,000 180,000,000
(b) Reserves and surplus ............... 4 (596,023) 2,009,163
179,403,977 182,009,163
2 Non-current liabilities:
(a) Deferred tax liabilities (Net) ...... 22 5,438,147 5,340,160
3 Current liabilities:
(a) Trade payables ......................... 5 10,787,408 9,996,486
(b) Other current liabilities .............. 6 869,884 861,888
(c) Short-term provisions ............... 7 7,095,171 4,950,148
18,752,463 15,808,522
TOTAL .......... 203,594,587 203,157,845
B ASSETS
1 Non-current assets:
(a) Fixed assets
Tangible assets ......................... 8 19,793,324 19,795,445
(b) Non-current investments .......... 9 150,749,990 150,749,990
(c) Long-term loans and advances 10 2,370,621 2,323,104
172,913,935 172,868,539
2 Current assets:
(a) Inventories ................................. 11 1,352,517 1,538,717
(b) Trade receivables ...................... 12 22,113,421 22,113,421
(c) Cash and cash equivalents ...... 13 3,190,821 2,325,590
(d) Short-term loans and advances 10 3,936,840 4,198,032
(e) Other current assets ................. 14 87,053 113,546
30,680,652 30,289,307
TOTAL .......... 203,594,587 203,157,845
See accompanying notes forming part of
the nancial statements
A. K. Nanda Chairman
U. M. Neogi
Partner S. Venkatraman Director
Place: Mumbai
Date: 17
th
April 2014
Place: Mumbai
Date: 17
th
April 2014
674
ST
MARCH 2014
Particulars Note No. For the year
ended
31
st
March 2014
`
For the year
ended
31
st
March 2013
`
A CONTINUING OPERATIONS:
1 Revenue from operations (gross) ...................................
Less: Excise duty ............................................................
Revenue from operations (net) .......................................
2 Other income................................................................... 15 1,715,328 557,685
3 Total revenue (1+2) ...................................................... 1,715,328 557,685
4 EXPENSES
(a) Employee benets expense .................................... 16 895,164 804,726
(b) Depreciation expense .............................................. 8 2,121 11,698
(c) Other expenses ........................................................ 17 732,085 592,898
Total expenses ............................................................... 1,629,370 1,409,322
5 Prot/(Loss) before taxation (3-4) ................................... 85,958 (851,637)
6 Tax expense:
(a) Current tax ...............................................................
(b) (Excess) provision for tax relating to prior years ... (119,356)
(C) Deferred tax.............................................................. 22 8,469 (3,509)
8,469 (122,865)
7 Prot/(Loss) from continuing operations (5-6) ............... 77,489 (728,772)
B Discontinuing operations:
8 (i) Loss from discontinuing operations (before tax) ......... 23 (2,593,157) (1,313,711)
(ii) Tax expense of discontinuing operations - deferred tax 22 89,518 101,970
9 Loss from discontinuing operations [8(i)-8(ii)] .............. (2,682,675) (1,415,681)
C Total operations:
10 (Loss) for the year (7+9) ................................................ (2,605,186) (2,144,453)
11 Earnings per share (of ` 10 each) .............................. 21
Basic/diluted:
(i) Continuing operations..................................................... 0.0043 (0.0405)
(ii) Total operations ............................................................... (0.1447) (0.1191)
See accompanying notes forming part of the nancial
statements
U. M. Neogi
Place: Mumbai
Date: 17
th
April 2014
Place: Mumbai
Date: 17
th
April 2014
675
ST
MARCH 2014
ended
31
st
March 2014
`
For the year
ended
31
st
March 2013
`
A Cash ow from operating activities:
Net prot/(loss) before taxation ................................................................. 85,958 (851,637)
Adjustments to reconcile net prot/(loss) to net cash used in operating
activities:
Depreciation expense................................................................................. 2,121 11,698
Provision no longer required written back ................................................ (1,192,500)
Interest income ........................................................................................... (521,696) (557,475)
Operating prot from continuing operations before working capital changes (1,626,117) (1,397,414)
Changes in
Trade and other receivables ......................................................................
Trade and other payables .......................................................................... 926,278 633,656
Cash generated from continuing operations ............................................ (699,839) (763,758)
Income taxes (paid) ................................................................................... (53,304) (55,750)
Net cash ow used in continuing operations ........................................... (753,143) (819,508)
Net cash ow used in discontinued operations ....................................... (383,507) (1,007,375)
Net cash ow used in operating activities ............................................ (1,136,650) (1,826,883)
B Cash ows from investing activities:
Inter corporate deposits ............................................................................. (3,000,000)
Interest received ......................................................................................... 809,381 495,883
Proceeds from sale of long-term investment ............................................ 1,192,500
Bank balance not considered as Cash and cash equivalents (Net) ....... (37,510)
Net cash ow from/(used in) continuing operations ................................ 1,964,371 (2,504,117)
Net cash ow from/(used in) discontinued operations ............................
Net cash ow from/(used in) investing activities ................................ 1,964,371 (2,504,117)
C Cash ows from nancing activities:

Net cash ow from continuing operations ................................................
Net cash ow from discontinued operations ............................................
Net cash ow from nancing activities .................................................
Net increase/(decrease) in cash and cash equivalents (A+B+C) 827,721 (4,331,000)
Cash and cash equivalents at the beginning of the year ........................ 2,014,533 6,345,533
Cash and cash equivalents at the end of the year .................................. 2,842,254 2,014,533
Reconciliation of Cash and cash equivalents with Balance Sheet:
Cash and cash equivalents as per Balance Sheet (Note 13) .................... 3,190,821 2,325,590
Less: Bank balance not considered as Cash and cash equivalents
In earmarked account
balance held as margin money ................................................................. 348,567 311,057
Cash and cash equivalents at the end of the year.............................. 2,842,254 2,014,533
See accompanying notes forming part of the nancial
statements
U. M. Neogi
Place: Mumbai
Date: 17
th
April 2014
Place: Mumbai
Date: 17
th
April 2014
676
ST
MARCH, 2014
Note 1 Corporate Information
Mahindra Infrastructure Developers Limited (the Company) is a public
company incorporated in India on 10 May, 2001 under the provisions of
the Companies Act, 1956. The Company is in the business of development
of infrastructure projects and infrastructure related services.
Note 2 Signicant accounting policies
a) Basis of preparation
relevant provisions of the Companies Act, 1956. The nancial statements
have been prepared on accrual basis under the historical cost convention.
b) Fixed Assets
(i) All Fixed Assets are carried at cost less depreciation. Cost includes
nancing cost relating to borrowed funds attributable to the
construction or acquisition of qualifying assets upto the date the
asset is ready for use.
the statement of Prot and Loss.
(ii) Depreciation on assets is calculated on Straight Line Method (SLM)
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 except depreciation on building which is
provided at 4.75% p. a. on the SLM. (Refer note 23)
c) Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are subject
to insignicant risk of changes in value.
d) Cash ow statement
Cash ows are reported using the indirect method, whereby prot/(loss)
before extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash ows from operating, investing and
nancing activities of the Company are segregated based on the available
information.
e) Investments
Long-term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline other than temporary in
the value of investments.
f) Inventories
Inventories are stated at cost and net realisable value, whichever is lower.
Cost is arrived at on rst-in rst-out basis and includes overheads on
absorption basis, where appropriate.
g) Revenue Recognition
Revenue on account of sale of services is recognised under the Completed
Service Contract Method to the extent it is probable that the economic
benet will ow to the Company and the revenue can be reliably measured.
Sales are recognised, net of returns and trade discounts, on transfer of
signicant risks and rewards of ownership to the buyer, which generally
coincides with the delivery of goods to customers.
Dividend income is recognised in the statement of Prot and Loss when
the right to receive payment is established.
Interest Income is accounted for on time proportion basis.
h) Income Taxes
assets arising on account of unabsorbed depreciation or carry forward of
tax losses are recognised only to the extent that there is virtual certainty
supported by convincing evidence that sufcient future tax income will be
the Company will pay normal income tax against which the MAT paid will
be adjusted.
i) Segment reporting
The Company has a single reportable segment namely development of
infrastructure projects and infrastructure related services for the purpose
of Accounting Standard 17 on Segment Reporting.
Note 3 Share capital
st
March 2014 As at 31
st
March 2013
Number of
shares `
Number of
shares `
(a) Authorised
Equity shares of ` 10 each
with voting rights 20,000,000 200,000,000 20,000,000 200,000,000
20,000,000 200,000,000 20,000,000 200,000,000
(b) Issued, subscribed and
fully paid-up shares
Equity shares of
` 10 each 18,000,000 180,000,000 18,000,000 180,000,000
18,000,000 180,000,000 18,000,000 180,000,000
Notes (i) to (iv) below
(i) Reconciliation of the number of shares and amount outstanding at the
beginning and at the end of the reporting period:
st
March 2014 As at 31
st
March 2013
Number of
shares `
Number of
shares `
Opening balance 18,000,000 180,000,000 18,000,000 180,000,000
year
Closing balance 18,000,000 180,000,000 18,000,000 180,000,000
The company has not allotted any equity shares for consideration other
than cash, bonus shares, nor have any shares been bought back during
the period of ve years immediately preceding the Balance Sheet date.
(ii) Terms/rights attached to equity shares:
The Company is having only one class of equity shares having par value of
` 10 each. Each holder of equity share is entitled to one vote per share.
In the event of liquidation of the Company, the holders of the equity
shares will be entitled to receive remaining assets of the Company. The
distribution will be in proportion to the amount paid up on equity shares
held by the shareholders.
(iii) Details of shares held by the holding company:
Particulars
As at
31
st
March 2014
As at
31
st
March 2013
Mahindra Lifespace Developers Limited, the
holding company, including 6 shares jointly
held with its nominee 18,000,000 18,000,000
(iv) Details of shares held by each shareholder holding more than 5%
shares:
st
March 2014 As at 31
st
March 2013
Number of
shares % holding
Number of
shares % holding
Mahindra Lifespace
Developers Limited 17,999,994 99.99997% 17,999,994 99.99997%
677
Note 4 Reserves and surplus
Particulars
As at
31
st
March 2014
`
As at
31
st
March 2013
`
(Decit)/Surplus in the Statement of Prot
and Loss
Opening balance ............................................... 2,009,163 4,153,616
Add: Loss for the year ...................................... (2,605,186) (2,144,453)
Closing balance ............................................... (596,023) 2,009,163
Note 5 Trade payables
(a) Total outstanding dues of micro and
small enterprises (Note 19) ....................
(b) Total outstanding dues of other than
micro and small enterprises ................... 10,787,408 9,996,486
10,787,408 9,996,486
Particulars
As at
31
st
March 2014
`
As at
31
st
March 2013
`
(a) Other payables
Statutory remittances (Contributions to
PF and ESIC, Withholding Taxes, Service
Tax, etc.) ................................................ 869,884 861,888
869,884 861,888
Note 7 Short term provisions
(a) Provision - Others
Provision for income tax including fringe
benet tax (net of advance tax) .............. 5,787
Provision for diminution in the value of
business unit .......................................... 7,095,171 4,944,361
7,095,171 4,950,148
ST
MARCH, 2014
Note 8 Fixed assets
Tangible assets
Balance as
at 1
st
April 2013
Addition Balance as
at 31
st
March 2014
Balance as
at 1
st
April 2013
For the year
(Note 23)
Balance as at
31
st
March 2014
Balance as at
31
st
March 2014
` ` ` ` ` ` `
(a) Building 3,158,995 3,158,995 314,363 314,363 2,844,632
(3,158,995) () (3,158,995) (314,363) () (314,363) (2,844,632)
(b) Plant and equipment 19,482,323 19,482,323 2,595,038 1,260 2,596,298 16,886,025
(19,482,323) () (19,482,323) (2,593,778) (1,260) (2,595,038) (16,887,285)
(c) Furniture and xtures 28,189 28,189 17,933 17,933 10,256
(28,189) () (28,189) (17,933) () (17,933) (10,256)
(d) Vehicles 96,000 96,000 48,371 48,371 47,629
(96,000) () (96,000) (48,371) () (48,371) (47,629)
(e) Ofce equipment 9,500 9,500 9,500 9,500
(9,500) () (9,500) (9,500) () (9,500) ()
(f) Computer 135,277 135,277 129,634 861 130,495 4,782
(135,277) () (135,277) (119,196) (10,438) (129,634) (5,643)
Total 22,910,284 22,910,284 3,114,839 2,121 3,116,960 19,793,324
Previous year (22,910,284) () (22,910,284) (3,103,141) (11,698) (3,114,839) (19,795,445)
Previous years gures are in brackets and italics.
Note 9 Non-current investments
st
March 2014 As at 31
st
March 2013
Number of shares ` Number of shares `
Long-term Investments (At cost, unless otherwise specied):
Non-trade and fully paid-up unless otherwise specied
(a) Investment in equity instruments - unquoted
of joint ventures
` 10 per share in Mahindra Inframan Water Utilities Private Limited 24,999 249,990 24,999 249,990
` 10 per share in Mahindra Water Utilities Limited 50,000 500,000 50,000 500,000
of associates
` 10 per share in Rathna Bhoomi Enterprises Private Limited 500 5,000 500 5,000
of other entity
` 10 per share in New Tirupur Area Development Corporation Limited (Note 25) 15,000,000 150,000,000 15,000,000 150,000,000
150,754,990 150,754,990
Less: Provision for diminution in value of investment 5,000 5,000
Sub total 150,749,990 150,749,990
(b) Investment in preference shares - unquoted
of associates
` 10 per share in Rathna Bhoomi Enterprises Private Limited 119,250 1,192,500 238,500 2,385,000
Less: Provision for diminution in value of investment 1,192,500 2,385,000
Sub total
Total 150,749,990 150,749,990
Aggregate amount of unquoted investments (net of provisions) 150,749,990 150,749,990
678
Note 10 Loans and advances
Particulars Non-current Current
As at
31
st
March 2014
`
As at
31
st
March 2013
`
As at
31
st
March 2014
`
As at
31
st
March 2013
`
(a) Security deposits 126,200 126,200
(b) Loans and advances to related party
Inter-corporate deposits (including interest receivable) 3,026,370 3,287,562
(c) Advance income tax including fringe benet tax (net of provision) 2,244,421 2,196,904
(d) Prepaid expenses 11,235 11,235
(e) Balance with government authorities (service tax credit receivable) 899,235 899,235
Unsecured, considered doubtful
(f) Inter-corporate deposits (representing interest) 29,392
Less: Provision for doubtful loans and advances 29,392

2,370,621 2,323,104 3,936,840 4,198,032
ST
MARCH, 2014
Note 16 Employee benets expenses
Particulars
For the year ended
31
st
March 2014
`
For the year ended
31
st
March 2013
`
(a) Secondment Charges (including service
tax) ........................................................ 868,318 783,374
(b) Staff welfare .......................................... 26,846 21,352
895,164 804,726
Note 17 Other expenses
(a) Professional charges ............................. 159,019 269,906
(b) Stamp and ling fees ............................. 2,210 1,248
(c) Sundry balances written off ................... 29,392
Less: Provision held .............................. (29,392)
(d) Payment to auditors (Note below) ......... 562,838 309,664
(e) General and miscellaneous expenses..... 8,018 12,080
732,085 592,898
Note
Payment to auditors (including service tax): For the year ended
31
st
March 2014
`
For the year ended
31
st
March 2013
`
For audit 365,170 308,990
For other service 196,630
Reimbursement of expenses 1,038 674
562,838 309,664
Note 18 Contingent liabilities (to the extent not provided for)
Guarantee/Counter Guarantee given by the Company:
Amount in `
Amount of
Guarantee
Amount
outstanding
Maximum liability of the
Company
2014 2013 2014 2013 2014 2013
For Joint Venture
Company 180,000,000 180,000,000 180,000,000 180,000,000 90,000,000 90,000,000
Note 19 Disclosures required under section 22 of the Micro, Small and
No Companies have been identied under the Micro, Small and Medium
Enterprises Development Act, 2006 as on 31 March, 2014 and hence the
disclosure as required by Notication No. G.S.R. 719 (E), dated 16 November,
2007 issued by the Ministry of Corporate Affairs is not applicable.
Note 11 Inventories
Particulars
As at 31
st
March
2014
`
As at 31
st
March
2013
`
At lower of cost and net realisable value
(a) Finished goods ...................................... 1,274,622 1,460,822
(b) Packing materials .................................. 77,895 77,895
1,352,517 1,538,717
(a) Trade receivables outstanding for a
period exceeding six months from the
date they are due for payment ............... 22,113,421 22,113,421
22,113,421 22,113,421
(a) Balances with banks
in current accounts ............................... 399,597 86,617
in term deposit accounts ....................... 2,442,657 1,927,916
in earmarked account
balance held as margin money .............. 348,567 311,057
3,190,821 2,325,590
denition of Cash and cash equivalents as per
AS 3 Cash Flow Statements is 2,842,254 2,014,533
Note 14 Other current assets
(a) Interest accrued but not due on term
deposit accounts ................................... 87,053 113,546
87,053 113,546
For the year ended
31
st
March 2014
`
For the year ended
31
st
March 2013
`
Note 15 Other income
(a) Interest income on
Bank deposits ........................................ 176,699 237,959
Interest on inter-corporate deposits ....... 344,997 319,516
(b) Other non-operating income
Provision for diminution in value of
investment written back ......................... 1,192,500
Miscellaneous income ........................... 1,132 210
1,715,328 557,685
679
Note 20 Related party transactions
The Company has given the following relevant disclosures in pursuance of the
Accounting Standard 18 Related Party Disclosures.
Enterprises Controlling the Company
1 Mahindra & Mahindra Limited Ultimate Holding Company
2 Mahindra Lifespace Developers Limited Holding Company
Fellow Subsidiary
1 Mahindra Consulting Engineers Limited
Joint Ventures
1 Mahindra Water Utilities Limited
2 Mahindra Inframan Water Utilities Private Limited
Details of transactions with related parties during the year and balance as
on 31
st
March 2014
Amount in `
Transactions with related parties during the year
Nature of
transactions
Enterprises controlling the
Company
Fellow Subsidiary
Joint Venture
(Mahindra Water
Utilities Limited)
Ultimate Holding
Company
Holding
Company
Mahindra
Consulting
Engineers
Limited
Interest income 344,997
() () () (319,516)
Sale of goods 266,000
() () (252,000) ()
Expenses 868,318
() (783,374) () ()
Inter-corporate
deposit given

() () () (3,000,000)
Balance as on 31
st
March 2014
Enterprises controlling
the Company
Fellow
Subsidiary
Joint Venture
(Mahindra
Water Utilities
Limited)
Ultimate
Holding
Company
Holding
Company
Mahindra
Consulting
Engineers
Limited
Maximum liability to the Company
in respect of guarantee outstanding 90,000,000
() () () (90,000,000)
Receivables 21,913,260
() () () (21,913,260)
Payables 946,989 7,399,335
(946,989) (6,617,849) () ()
Inter-corporate deposits (including
interest receivable) 3,026,370
() () () (3,287,562)
1. Previous years gures are in brackets and italics.
2. During the year, there were no amounts required to be written off or written
back in respect of debts due from or to related parties.
3. Related parties have been identied by the Management.
Note 21 Computation of Earnings Per Share
The computation of the Earnings per share in line with Accounting Standard
20 is as under:
ended 31
st
March
2014
For the year
ended 31
st
March
2013
(a) Net prot/(loss) after tax from
continuing operations available for equity
shareholders (`)
77,489 (728,772)
(b) Net loss after tax from total operations
available for equity shareholders (`)
(2,605,186) (2,144,453)
(c) Nominal value per share (`) 10 10
(d) Weighted average number of equity shares (No.) 18,000,000 18,000,000
(e) Basic/Diluted earnings per share (Re.)
Continuing operations 0.0043 (0.0405)
Total operations (0.1447) (0.1191)
Note 22 Deferred tax liabilities (Net)
st
March
2014
`
As at 31
st
March
2013
`
Deferred tax liabilities
Difference between book depreciation and tax
depreciation
5,438,147 5,349,242
5,438,147 5,349,242
Deferred tax assets
Provision for doubtful loans and advances 9,082
9,082
Deferred tax liabilities (Net) 5,438,147 5,340,160
Note 23 Discontinuing Operations:
Solid Waste Treatment Agreement (the Agreement) executed on 17 January,
2003 with Tirumala Tirupati Devasthanams (TTD) for operating a solid waste
treatment plant (the project) at Tirumala, has been terminated by the Company
with effect from 19 June, 2009. Discussions are on with TTD for resolving all
the pending issues post termination in accordance with the terms of the
Agreement. The project has not been operating since the termination date. The
Company has a right to claim the written down value of the xed assets as of
the termination date and an appropriate compensation from TTD in terms of the
Agreement. Accordingly, no depreciation on the xed assets of the project has
been provided after the date of termination. The particulars of the project as on
the date of termination to be transferred to TTD on acceptance of the termination
by them are given below:
Amount in `
Description of assets Written down value of the assets
Building 2,844,632
Plant & Machinery and Ofce equipment 16,881,474
Computer 4,782
Furniture and xtures 10,256
Vehicles 47,629
Total 19,788,773
The carrying amount of current assets pertaining to the above discontinuing
operation is ` 16,90,113 (2013: ` 18,76,313) and its current liabilities is
` 90,58,740 (2013: ` 70,35,290).
The following statement shows the revenue and expenses of the continuing and
the above discontinuing operation of the Company.
Amount in `
Continuing operations Discontinuing operations Total
Particulars For the
year ended
31 March
2014
For the
year ended
31 March
2013
For the
year ended
31 March
2014
For the
year ended
31 March
2013
For the
year ended
31 March
2014
For the
year ended
31 March
2013
Total revenue 1,715,328 557,685 266,000 252,000 1,981,328 809,685
Increase/(decrease) in the inventory (186,200) (176,397) (186,200) (176,397)
Personnel expenses (895,164) (804,726) (244,548) (245,155) (1,139,712) (1,049,881)
Other expenses (732,085) (592,898) (277,599) (256,365) (1,009,684) (849,263)
Depreciation expense (2,121) (11,698) (2,121) (11,698)
Diminution in the value of
business unit (2,150,810) (887,794) (2,150,810) (887,794)
Prot/(loss) for the year before
taxation 85,958 (851,637) (2,593,157) (1,313,711) (2,507,199) (2,165,348)
ST
MARCH, 2014
680
ST
MARCH, 2014
Note 24 Information pertaining to Joint Ventures
The Companys share of the assets, liabilities, income and expenses of the
jointly controlled entities for the year ended 31
st
March 2014 are as follows:
Amount in `
2014 2013 2014 2013
Name of Joint Venture Mahindra Water Utilities
Limited
Mahindra Inframan Water
Utilities Private Limited
Audited Audited Audited Audited
% of interest 50% 50% 50% 50%
Country of incorporation India India India India
Non-current liabilities 1,596,099 1,674,237
Current liabilities 37,410,831 43,577,051 10,208 11,056
Non-current assets 165,906,261 162,590,242 38,734 41,282
Current assets 87,547,861 74,674,615 369,398 354,144
Revenue 69,210,982 77,522,971 31,709 31,107
Employee benets expense 20,740,015 20,920,331
Finance costs 654,399 1,312,040
Depreciation and amortisation
expense 550,132 577,698
Other expenses 13,937,068 12,617,644 12,094 78,380
Prot/(Loss) before tax 33,329,368 42,095,258 19,615 (47,273)
Income tax expense 10,895,746 13,883,841 6,061
Prot/(Loss) after tax 22,433,622 28,211,417 13,554 (47,273)
Note 25 The Company has an investment of `150,000,000 in the equity shares
of New Tirupur Area Development Corporation Limited (NTADCL) whose net
worth has substantially eroded as per the latest available audited nancial
statements as at 31 March 2013. Given the difcult situation of NTADCL and to
revive its operations, the Tamil Nadu Government (TN Govt) and the Lenders
have initiated several measures to provide more revenues and cash to NTADCL
and make their operations protable again.
The TN Govt, under its Order dated 16 March 2012 had outlined several nancial
and operational initiatives and restructuring measures to be undertaken by itself
and various lenders to NTADCL. It is observed that most of these initiatives/
measures have been implemented including fresh infusion of equity capital by
the TN Govt, reduction in interest rates by lenders, conversion of part of the debt
from lenders into equity, one time waiver of interest dues, extended moratorium
for repayment of loans, etc. Also there has been substantial improvement in
water offtake partly due to additional quantities of water being lifted by the TN
Govt and partly due to increase in industrial water offtake aided by increase in
production activities in Tirupur region buoyed by higher garment exports. With
higher revenues and reduction in interest rates, there has been steady decrease
in NTADCL losses and improvement in cash ows. It is expected that the
revenues from water offtake will further increase in future leading to a turnaround
in the nancial position of NTADCL. Therefore, in view of the management, there
is no permanent diminution in the value of the investments in NTADCL.
Note 26 Previous years gures have been regrouped/reclassied wherever
Place: Mumbai A. K. Nanda Chairman
Date: 17
th
April 2014 S. Venkatraman Director
MAHINDRA WORLD CITY DEVELOPERS LIMITED
681
Your Directors present the Seventeenth Report together with the audited accounts of the Company for the nancial year ended
31
st
March, 2014.
FINANCIAL HIGHLIGHTS:
(` in Lakhs)
31
st
March, 2014
For the year ended
31
st
March, 2013
Income ........................................................................................................................ 4,787.21 12,381.42
Prot before Depreciation, Interest and Taxation ...................................................... 4,960.92 11,773.84
Depreciation ................................................................................................................ (196.49) (179.26)
Interest ........................................................................................................................ (3,417.05) (3,326.20)
Provision for Tax Current Tax .................................................................................. (1,495.00)
Deferred Tax ................................................................................ (457.55) (1,324.02)
Prot after tax for the year.......................................................................................... 889.83 5,449.36
Add : Balance of Prot/(Loss) for earlier years ......................................................... 8,479.85 4,157.63
Amount available for appropriation ............................................................................ 9,369.68 9,606.99
Less : Dividend Paid (including tax on dividend) ..................................................... 322.31
Less : Proposed Dividend (including tax on distributed prots) .............................. 561.62 854.14
Less : Transfer to General Reserve ........................................................................... 273.00
Balance carried forward ............................................................................................. 8,485.75 8,479.85
Operations
During the year, two new multinational customers were added
to the portfolio of Mahindra World City, Chennai (MWCC)
namely, Heat and Control (USA) ranked amongst the leading
food processing equipment manufacturers in the world; and
Dorma (Germany)-the world leaders in Door controls.
The business zone in the project has 63 industrial clients of
which 27 are in the SEZ and 36 are in the DTA. Currently,
49 companies operate out of Mahindra World City, Chennai of
which 2 customers started operations in the Domestic Tariff
Area during the year.
During the year, direct employment by companies in MWCC
increased from 31,000 to ~ 33,000 people. Exports of units in
MWCC touched ~ ` 5400 crores for the period April 2013 to
Dec 2013, an increase of ~ 1,000 crores in the corresponding
period over the previous year. The exports are expected to
cross ~ ` 7200 crores in the scal year 2014.
There has been considerable progress in strengthening the
social infrastructure of MWCC in FY 14. Holiday Inn Express
started its 140 room Business hotel with Conference and
banquet facilities in Dec 2013 and at present has ~ 40%
occupancy. Construction of a hospital by JSP Hospitals and The
Club with recreational, sports and leisure facilities is underway.
Your company also signed up with SSBM Realty and Hospitality
to set up a Hostel for working professionals. The Hostel is
proposed to have 500 rooms of which 200 rooms would be in
Phase I. A South Indian vegetarian restaurant, a non-vegetarian
restaurant and a nancial services provider were added to the
offerings at the Commercial center The Canopy.
The 3
rd
edition of Mindquest, the Mahindra World City Quiz had
over 200 teams participating, including schools, colleges and
teams from both within MWCC and the Chennai metropolitan.
The 2
nd
Edition of Conuence the MWC Annual Thought
Leadership event was held at MWCC and had eminent
personalities from diverse disciplines congregating to share
their thoughts on the various facets of city creation. The
MWCC run in aid of Nanhi Kali, had over 1000 participants
from within MWCC and Chennai city. Champions Trophy the
Inter-company sports tournament had over 35 teams from
Companies and residents within MWCC.
The pace of residential infrastructure being developed by
co-developers of your company has progressed well during
the year and 277 units have been handed over to homeowners
in 2 projects. Currently ~ 400 families live in MWCC. The year
also saw the launch of the 4
th
residential project, Nova value
homes for young people in the ticket size of ~ ` 20 lakhs to
25 lakhs. The project evinced good response.
The rst batch of Class XII students from Mahindra World
School have appeared for the CBSE Board exams in March
April 2014 . The school has ~ 600 students and ~ 50 teachers.
The school was also ranked amongst top ve schools in Best
Resource Managers category, for Green schools Award,
2013-14 instituted by the Centre for Science and Environment.
Mahindra World City, Chennai won the ABCI and PRCI
awards for the Coffee Table Book Celebrating 10 years of
Excellence and Skyline the Mahindra World City quarterly.
Mahindra World City Chennai is the rst township to receive
Green township certication (Stage I) from IGBC.
682
Dividend
Your Directors have recommended a preference dividend
of ` 8.50 per Preference share on 6,500,000 8.50 percent
Cumulative Redeemable Preference Shares of ` 100 each.
Your Directors have also recommended an equity dividend of
` 1 per share on 20,000,000 equity shares of face value of
` 10 per share of the Company for the year 2013 2014. The
total dividend payment (including tax on distributed prots) for
the year amounts to ` 883.93 lakhs.
Capital
During the year under review, the Company Issued fresh
6,500,000 - 8.50% Cumulative preference shares amounting
to Rs.65 Crores to Mahindra Lifespace Developers Limited
(MLDL) on 28th September, 2013 and out of the proceeds
redeemed existing 6,500,000 - 8.5% Cumulative preference
Shares amounting to Rs.65 Crores issued to MLDL on
29
th
September, 2013;
MLDL, the holding company acquired further 12,75,000
shares of Rs. 10 each from one of the existing shareholder.
Consequently, MLDLs equity shareholding in the Company
increased from 82.62% to 89%. Balance 11% equity
shareholding is held by TIDCO.
Your Company continues to be subsidiary of MLDL and
consequently a subsidiary of the ultimate holding company,
viz. Mahindra & Mahindra Limited.
Directors
Pursuant to Section 152 of the Companies Act, 2013, Mr. Arun
Nanda, Non-executive and Non-independent Director (DIN:
00010029) retires by rotation at the 17
th
Annual General
Meeting of the Company and is eligible for re-appointment.
of Directors) Rules, 2014, Mr. Sanjiv Kapoor (DIN: 00004005)
retires by rotation at the forthcoming Annual General Meeting
of the Company. He is eligible for re-appointment as an
Independent Director not liable to retire by rotation. It is
proposed that he be appointed as an Independent Director at
the 17
th
Annual General Meeting of the Company for a term of
ve consecutive years from the date of the 17
th
AGM.
of Directors) Rules, 2014, it is proposed that Mr. N.Vaghul
(DIN: 00002014) and Mr.V.Balaraman (DIN: 00267829) existing
Directors who meet the criteria of Independence, be appointed
as Independent Directors at the 17
th
of the Company for a term of ve consecutive years from the
date of the 17
th
AGM.
All the above Directors i.e. Mr. Arun Nanda, Mr. Sanjiv Kapoor,
Mr. N.Vaghul and Mr.V.Balaraman are not disqualied from
being re-appointed as Directors by virtue of the provisions of
Section 164 of the Companies Act, 2013 (erstwhile section
274(1)(g) of the Companies Act, 1956). The board therefore
recommends their appointment/re-appointment as directors of
the company.
Appropriate resolutions for their appointment/re-appointment
are being placed for approval of the members at the AGM.
Directors Responsibility Statement:
in the preparation of the annual accounts, the applicable
they have, in the selection of the accounting policies,
as at 31
st
March, 2014 and of the prot of the Company for
proper and sufcient care has been taken for the
the annual accounts have been prepared on a going
concern basis.
Audit Committee
The Audit Committee of the Company comprises
Mr. Sanjiv Kapoor (Chairman), Mr. Hans Raj Verma, IAS,
Mr. Uday Y. Phadke and Mr. V. Balaraman. The committee met
four times during the year.
The terms of reference of the Committee were enhanced in the
Board meeting held on 18
th
April 2014 pursuant to Section 177
of the Companies Act, 2013 and the Audit committee has been
reconstituted by including Mr. Vaghul Independent Director
and chairman of the Board as an additional member.
The Nomination and Remuneration Committee of the Company
comprises Mr. N. Vaghul (Chairman), Mr. A.K. Nanda, Mr. Hans
Raj Verma, IAS and Ms. Anita Arjundas.
th
April, 2014
renamed the Committee as Nomination and Remuneration
Committee, enhanced the terms of reference and reconstituted
the committee with the following members
Mr. V. Balaraman Chairman of the Committee and Independent
Director
Mr. N. VaghulChairman of the Board and Independent Director
Mr. Hans Raj Verma, IAS, - Member and Director representing
TIDCO
Ms. Anita Arjundas - Member and Director
On 24
th
March 2014, the Board constituted CSR Committee
683
comprising Mr. V. Balaraman (Chairperson/Chairman),
Ms. Anita Arjundas and Ms. Sangeeta Prasad. During the
year one meeting of the Committee was held. The Committee
framed and recommended CSR policy to the Board.
Codes of Conduct
The Company had adopted Codes of Conduct (the Codes)
Employees. These Codes enunciate the underlying principles
governing the conduct of the Companys business and seek to
reiterate the fundamental precept that good governance must
and would always be an integral part of the Companys ethos.
declarations under the Code from the Board Members and
MWC conducted a Social Impact Assessment Study through
Tata Institute of Social Sciences (TISS) to understand the
impact of Mahindra World City on the local communities. The
nal report has been received and an action plan and road
map is being drawn up.
The construction of the Mahindra World City CAP Community
College is underway. Mahindra World City reached out to the
surrounding communities, village schools and daily wage
earners as part of its CSR initiatives during the year. Some of
the initiatives included health camps for daily wage earners,
construction of Heath and sanitation facilities and tree planting
camps in the neighbouring village schools and a blood
donation drive for the employees among other activities.
Auditors
M/s. A. F. Ferguson & Co., Chartered Accountants, Chennai,
The members are requested to appoint Auditors from the
conclusion of the forthcoming Annual General Meeting until
the conclusion of next Annual General Meeting and x their
remuneration.
As required by the provisions of section 139 and 141 of
Companies Act, 2013 the Company has received written
consent and certicate from M/s. A. F. Ferguson & Co, Chartered
Accountant, (ICAI Firm Registration Number 112066W),
proposed to be re-appointed as Auditors for one year i.e upto
conclusion of the 18
th
Annual General Meeting of the Company
to the effect that their appointment, if made, would be in
conformity with the limits specied in that Section.
The Company has not made any loans/advances of the
nature, which are required to be disclosed in the annual
accounts pursuant to Clause 32 of the Listing Agreement of
the parent companies Mahindra Lifespace Developers Limited
and Mahindra & Mahindra Limited with the Stock Exchanges.
under Section 217(1)(e) of the Companies Act, 1956 read
Board of Directors) Rules, 1988 are given in the Annexure I to
this Report.
of the Companies Act, 1956 and the Rules made there under
The Company had 2 (Two) employees who were in receipt of
remuneration of not less than ` 60,00,000 per annum. during
the year ended 31
st
March, 2014 or not less than ` 5,00,000
per month during any part of the said year. The particulars of
remuneration are given in Annexure II to this Report.
Acknowledgement
Your Directors wish to place on record their sincere thanks to
the Tamil Nadu Government, Housing Development Finance
Corporation Limited, all consultants, associates and the
Employees for their support and co-operation extended during
For and on Behalf of the Board,
Place : Chennai N. Vaghul
Date : 18
th
DIN : 00002014
684
st
MARCH, 2014.
a. Energy conservation measures taken : The operations of your Company are not energy intensive.
However, adequate measures have been initiated to reduce
energy consumption.
b. Additional investments and proposals, if any, being
: As a part of phased energy consumption reduction plan
replacement 62 MHSV lights with Induction lights in a
phased manner have been taken up.
c. Impact of the measures taken/to be taken at (a) &
consequent impact on the cost of production of goods
: The above measures and the 75 KW solar initiative has
resulted in saving of around 1.16 lakh units of electricity
this year.
d. Total energy consumption and energy consumption per
unit of production as per Form-A of the Annexure to the
Rules in respect of Industries specied in the Schedule
: Not applicable
1. Areas in which R & D is carried out The Company has not carried out any R&D activities during the year
2. Benets derived as a result of the above efforts Not Applicable
3. Future Plan of action Further quality improvement
4. Expenditure on R & D Nil
5. Technology absorption, adaptation and innovation Nil
6. Imported Technology for the last 5 years Nil
The information on foreign exchange earnings and outgo is furnished in the notes to accounts.
Date : 18
th
DIN : 00002014
Annexure II to the Directors Report
Particulars of Employee as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of
st
March, 2014
Name of the
Employee
Designation/
Nature of Duties
Qualication Remuneration
(Subject to tax)
(`)
Age
(yrs)
Experience
(yrs)
Date of Commencement of
employment
Last employment held
(Designation / Organisation)
Ms. Sangeeta
Prasad
Chief Executive
Ofcer & Manager
M.B.A. 382,933 46 21 From 29
th
August, 2008 to
15
th
April, 2013
Chief Sales Manager South
TATA Steels Limited
Mr. S. Chandru Manager & Chief
Operating Ofcer
C.A.
C.S. and I.C.W.A
74,47,550 57 33 1
st
October, 2007 to 15
th
April, 2013
From 16
th
April, 2013 Manager
& Chief Operating Ofcer
India Limited
Notes:
1. Nature of employment is contractual, subject to termination at three months notice from either side.
2. The above employee is/are not related to any other Director of the Company.
3. The employee does not hold by himself or along with his/her spouse and dependent children 2% or more of the equity shares
of the Company.
4. Terms and Conditions of employment are as per Companys rules/contract.
5. Gross remuneration received as shown in the statement includes Salary, Bonus, House Rent Allowance or value of perquisites for
accommodation, employers contribution to Provident fund and Superannuation scheme including group insurance premium,
leave travel facility, Reimbursement of medical expenses and all allowances/perquisites and terminal benets as applicable.
For and on Behalf of the Board,
Date : 18
th
DIN : 00002014
685
TO THE MEMBERS OF
of MAHINDRA WORLD CITY DEVELOPERS LIMITED
at 31
st
and the Cash Flow Statement for the year then ended
and a summary of the signicant accounting policies
and other explanatory information.
preparation of these financial statements that give a
true and fair view of the financial position, financial
performance and cash flows of the Company in
accordance with the Accounting Standards notified
under the Companies Act, 1956 (the Act) (which
continue to be applicable in respect of Section 133
of the Companies Act, 2013 in terms of General
th
Ministry of Corporate Affairs) and in accordance
with the accounting principles generally accepted
in India. This responsibility includes the design,
implementation and maintenance of internal control
relevant to the preparation and presentation of the
financial statements that give a true and fair view and
are free from material misstatement, whether due to
fraud or error.
statements are free from material misstatements
opinion.
Opinion
accepted in India:
st
March, 2014;
(b) in the case of the Statement of Prot and Loss, of
date; and
5 of the Order.
th
st
st
of the Act.
For A. F. Ferguson & Co.
(Firm Registration No.: 112066W)
B. Ramaratnam
Partner
CHENNAI, 18
th
April, 2014
686
AUDITORS REPORT
and Regulatory Requirements section of our report to the
members of Mahindra World City Developers Limited on
the accounts for the year ended 31
st
March, 2014)
(i) Having regard to the nature of Companys business/
activities/results, clauses (vi), (x), (xii), (xiii), (xiv), (xv),
(xviii), (xix) and (xx) of paragraph 4 of the Order are not
applicable to the Company in the current year.
of the Company.
(a) As explained to us, the saleable inventories were
physically veried during the year by the Management
at reasonable intervals.
explanations given to us, the Company has neither granted
nor taken any loans, secured or unsecured, to/from
companies, rms or other parties covered in the Register
purchase of inventory and xed assets and for the sale
of inventory. During the course of our audit, we have not
observed any continuing failure to correct major weakness
in such internal control system.
explanations given to us, the company has not entered
into contracts or arrangements with parties covered in the
Act, 1956.
(vii) In our opinion, the Company has an internal audit system
which is commensurate with its size and nature of business.
Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima
facie the prescribed cost records have been maintained.
undisputed dues, including Provident Fund, Income-
tax, Value Added Tax, Service Tax and other material
authorities.
of Income-tax and other material statutory dues in
arrears as at 31
st
(c) As on March 31, 2014, there were no disputed
dues on account of Income tax, Service tax and
other material statutory dues which have not been
deposited, except as given below:
Statute Nature of
dues
Forum where
dispute is
pending
Period to
which the
amount
relates
Amount
involved
(Rs. in
lakhs)
Income Tax
Act, 1961
Income Tax
including
interest
Commissioner
(Appeals)
2009-10 174.91
(x) In our opinion and according to the information and
in the repayment of dues in respect of term loans from
HDFC Limited.
explanations given to us, the Company has applied the
term loans during the year for the purpose for which they
were obtained.
the Balance Sheet of the Company, we report that, funds
used during the year for long term investments.
For A. F. Ferguson & Co.
(Firm Registration No.: 112066W)
B. Ramaratnam
Partner
CHENNAI, 18
th
April, 2014
687
For A. F. Ferguson & Co
N. Vaghul Chairman
B. Ramaratnam
Partner
Anita Arjundas
V. Balaraman
Sangeeta Prasad
Directors
S. Chandru Manager & Chief Operating Ofcer
Place : Chennai
Date : 18
th
April, 2014
Place : Chennai
Date : 18
th
April, 2014
}
ST
MARCH, 2014
Particulars
Note No. As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Shareholders funds
(a) Share capital ........................................................................................... 3 850,000,000 850,000,000
(b) Reserves and surplus............................................................................. 4 883,074,877 882,484,730
1,733,074,877 1,732,484,730
(a) Long-term borrowings ............................................................................ 5 1,737,500,000 1,042,500,000
(b) Deferred tax liabilities (net) .................................................................... 26.6 321,139,815 275,385,235
(c) Other long-term liabilities ....................................................................... 6 39,665,396 79,240,217
2,098,305,211 1,397,125,452
Current liabilities
(a) Short-term borrowings ........................................................................... 7 1,075,000,000 650,000,000
(b) Trade payables ....................................................................................... 8 28,419,297 15,359,062
(c) Other current liabilities ........................................................................... 9 140,006,966 853,636,425
(d) Short-term provisions ............................................................................. 10 61,322,700 92,098,885
1,304,748,963 1,611,094,372
TOTAL ................................................. 5,136,129,051 4,740,704,554
ASSETS
Non-current assets
(a) Fixed assets ............................................................................................ 11
(i) Tangible assets ................................................................................ 366,047,317 383,723,389
(ii) Intangible assets ............................................................................. 1 1
(iii) Capital work-in-progress ................................................................. 46,905,632
(b) Non-current investments ........................................................................ 12 130,000,000 130,000,000
(c) Long-term loans and advances ............................................................. 13 224,574,152 198,047,172
767,527,102 711,770,562
Current assets ............................................................................................
(a) Inventories ............................................................................................ 14 3,828,377,624 3,499,127,857
(b) Trade receivables ................................................................................... 15 17,627,172 34,116,091
(c) Cash and cash equivalents ................................................................... 16 7,223,815 30,934,307
(d) Short-term loans and advances............................................................. 17 483,926,704 439,622,951
(e) Other current assets ............................................................................... 18 31,446,634 25,132,786
4,368,601,949 4,028,933,992
TOTAL ................................................. 5,136,129,051 4,740,704,554
688
ST
MARCH, 2014
Particulars Note No. For the
year ended
31
st
March,
2014
For the
Year ended
31
st
March,
2013
` `
Revenue from operations ................................................................. 19 465,048,435 1,220,852,885
Other income .................................................................................... 20 13,672,689 17,288,693
Total revenue ................................................................................... 478,721,124 1,238,141,578
Expenses
Cost of land and project development..................................... 86,098,867 294,316,050
Changes in inventories ............................................................. 21 (329,249,767) (447,368,652)
Employee benets expense ...................................................... 22 41,119,166 48,887,431
Finance costs ............................................................................ 23 341,704,874 332,620,029
Depreciation and amortisation expense ................................... 11 19,649,461 17,925,625
Other expenses ......................................................................... 24 184,660,868 164,922,977
Total expenses ................................................................................. 343,983,469 411,303,460
134,737,655 826,838,118
Tax expense:
(a) Current tax expense ........................................................... 28,242,000 165,500,000
(b) (Less): MAT credit ............................................................. (28,242,000) (16,000,000)
Net current tax expenses .......................................................... 149,500,000
(c) Deferred tax ........................................................................ 45,754,580 132,402,002
Net tax expenses .............................................................................. 45,754,580 281,902,002
Prot for the year ............................................................................ 88,983,075 544,936,116
Basic and diluted earnings per share ............................................. 1.20 24.73
N. Vaghul Chairman
B. Ramaratnam
Partner
Anita Arjundas
V. Balaraman
Sangeeta Prasad
Directors
Place : Chennai
Date : 18
th
April, 2014
Place : Chennai
Date : 18
th
April, 2014
}
689
ST
MARCH, 2014
Particulars For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
Net Prot before tax ............................................................................................................. 134,737,655 826,838,118
Adjustments for:
Depreciation and amortisation ..................................................................................... 19,649,461 17,925,625
Loss on sale/write off of assets .................................................................................... 979,184 1,223,873
Finance costs ................................................................................................................ 341,704,874 332,620,029
Interest income .............................................................................................................. (13,566,689) (17,062,963)
Operating prot before working capital changes ............................................................... 483,504,485 1,161,544,682
Inventories ..................................................................................................................... (329,249,767) (447,368,652)
Trade receivables .......................................................................................................... 16,488,919 (15,066,054)
Short-term loans and advances ................................................................................... (117,603,753) (15,742,584)
Long-term loans and advances .................................................................................... 4,500 (108,528)
(430,360,101) (478,285,818)
Trade payables .............................................................................................................. 13,060,235 (1,753,294)
Other current liabilities .................................................................................................. (23,629,459) (58,756,342)
Other long-term liabilities .............................................................................................. (39,574,821) 47,445,895
Short-term provisions .................................................................................................... (1,523,429) 1,724,521
(51,667,474) (11,339,220)
Cash generated from operations ......................................................................................... 1,476,910 671,919,644
Net income tax (paid)/refunded ........................................................................................... (22,763,070) (272,125,121)
Net cash ow from/(used in) operating activities (A) ......................................................... (21,286,160) 399,794,523
Capital expenditure on xed assets, including capital advances ...................................... (53,893,165) (32,579,529)
Proceeds from sale of xed assets ..................................................................................... 266,550
Inter-corporate deposits ....................................................................................................... 73,300,000
Interest received
- Joint ventures ............................................................................................................. 6,499,920 11,493,123
- Others .......................................................................................................................... 752,921 1,015,538
Net cash ow from investing activities (B) ..................................................................... 26,926,226 -20,070,868
Proceeds from the issue of preference share capital......................................................... 650,000,000
Redemption of preference shares ....................................................................................... (650,000,000)
Inter-corporate deposits (net) .............................................................................................. 425,000,000 150,000,000
Proceeds from long-term borrowings ................................................................................. 350,000,000 250,000,000
Repayment of current maturities of long term borrowings ................................................ (345,000,000) (367,500,000)
Finance cost ......................................................................................................................... (341,704,874) (332,620,029)
Dividends paid ...................................................................................................................... (100,556,164) (49,000,000)
Tax on dividend .................................................................................................................... (17,089,520) (7,949,025)
Net cash ow (used in) nancing activities (C) ............................................................. (29,350,558) (357,069,054)
Net increase/(decrease) in Cash and cash equivalents (A+B+C) ............................. (23,710,492) 22,654,601
Cash and cash equivalents at the beginning of the year .................................................. 30,934,307 8,279,706
Cash and cash equivalents at the end of the year........................................................ 7,223,815 30,934,307
N. Vaghul Chairman
B. Ramaratnam
Partner
V. Balaraman
Anita Arjundas
Sangeeta Prasad
}
Directors
Place : Chennai
Date : 18
th
April, 2014
Place : Chennai
Date : 18
th
April, 2014
690
st
MARCH, 2014
The Company is in the business of land development for industrial,
commercial and residential use. The Company acquires land and incurs
expenditure on its development and related infrastructure facilities for
lease/sale. The Company also maintains the Industrial Park for which it
collects operation and maintenance charges from the lessees.
2 Signicant accounting policies
notied under Section 211 (3C) of the Companies Act, 1956
(the 1956 Act) (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 (the 2013 Act) in terms of
General circular 15/2013 dated 13 September 2013 of the Ministry of
corporate Affairs) and the relevant provisions of the 1956 Act/2013
accrual basis under the historical cost convention. The accounting
2.2 Use of estimates
periods in which the results are known / materialise.
2.3 Inventories
Inventories are valued at lower of cost and net realisable value. Cost
represents cost of land and all expenditure incurred in connection
with, or attributable to the project, and, being a long-term project,
includes interest.
2.4 Cash and cash equivalents (for purposes of Cash Flow
Statement)
Cash ows are reported using the indirect method, whereby prot /
2.6 Depreciation and amortisation
Intangible assets are amortised over their estimated useful life as
follows:
Software expenditure incurred is amortised over three years.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each nancial year and the
amortisation method is revised to reect the changed pattern.
2.7 Revenue recognition
a) Land lease premium is recognised as income upon creation of
leasehold rights in favour of the lessee or upon an agreement
to create leasehold rights with handing over of possession.
b) Property lease rentals, income from operation & maintenance
charges and water charges are recognised on an accrual basis
as per terms of the agreement with the lessees.
2.8 Other income
Interest income is accounted on time-proportion basis. Dividend
income is accounted for, when the right to receive it is established.
Fixed assets, are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of xed assets includes interest
on borrowings attributable to acquisition of qualifying xed assets up
to the date the asset is ready for its intended use and other incidental
expenses incurred up to that date.
Fixed assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in the project cost
till commissioning of the project.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
Intangible assets are carried at cost less accumulated amortisation
and impairment losses, if any. The cost of an intangible asset
comprises its purchase price, including any import duties and other
taxes (other than those subsequently recoverable from the taxing
authorities), and any directly attributable expenditure on making
the asset ready for its intended use and net of any trade discounts
and rebates. Subsequent expenditure on an intangible asset after its
purchase / completion is recognised as an expense when incurred
unless it is probable that such expenditure will enable the asset to
generate future economic benets in excess of its originally assessed
standards of performance and such expenditure can be measured
and attributed to the asset reliably, in which case such expenditure
is added to the cost of the asset.
2.11 Foreign currency transactions and translations
prevailing on the date of transaction. Monetary assets/liabilities are
translated at exchange rates prevailing on the date of settlement
or at the year end as applicable, and gain/loss arising out of such
translation is adjusted to the prot and loss account.
2.12 Government grants, subsidies and export incentives
Government grants and subsidies are recognised when there
is reasonable assurance that the Company will comply with the
conditions attached to them and the grants / subsidy will be received.
Government grants whose primary condition is that the Company
should purchase, construct or otherwise acquire capital assets are
adjusted to the carrying value of the assets.
2.13 Investments
Long-term investments (excluding investment properties), are
carried individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments
are carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties.
2.14 Employee benets
Employee benets include provident fund, superannuation fund,
gratuity fund and compensated absences.
The Companys contribution to provident fund and superannuation
fund are considered as dened contribution plans and are charged
as an expense as they fall due based on the amount of contribution
required to be made as and when services are rendered by the
employees.
Dened benet plans
For dened benet plans in the form of gratuity fund, the cost of
providing benets is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognised in the
Statement of Prot and Loss in the period in which they occur.
Past service cost is recognised immediately to the extent that the
691
benets are already vested and otherwise is amortised on a straight-
line basis over the average period until the benets become vested.
The retirement benet obligation recognised in the Balance Sheet
represents the present value of the dened benet obligation as
adjusted for unrecognised past service cost, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation
is limited to past service cost, plus the present value of available
Short-term employee benets
to be paid in exchange for the services rendered by employees are
recognised during the year when the employees render the service.
These benets include performance incentive and compensated
absences which are expected to occur within twelve months after the
end of the period in which the employee renders the related service.
The cost of such compensated absences is accounted as under:
(a) in case of accumulated compensated absences, when
employees render the services that increase their entitlement
of future compensated absences; and
(b) in case of non-accumulating compensated absences, when the
absences occur.
Long-term employee benets
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of the
dened benet obligation as at the Balance Sheet date less the fair
value of the plan assets out of which the obligations are expected to be
settled. Long Service Awards are recognised as a liability at the present
value of the dened benet obligation as at the Balance Sheet date.
Borrowing costs include interest and amortisation of ancillary costs
incurred. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Prot and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating
to construction/development of the qualifying asset upto the date
of capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Prot and Loss during extended periods when active
2.16 Segment reporting
The company has a single reportable segment namely, lease of land
and properties constructed thereon.
2.17 Earnings per share
Basic / Diluted earnings per share is computed by dividing the
prot / (loss) after tax (including the post tax effect of extraordinary
items, if any) by the weighted average number of equity shares
outstanding during the year.
2.18 Taxes on income
Minimum Alternate Tax (MAT) paid in accordance with the tax laws,
which gives future economic benets in the form of adjustment
to future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet
when it is probable that future economic benet associated with it
will ow to the Company.
Deferred tax is recognised on timing differences, being the differences
and the tax laws enacted or substantially enacted as at the reporting
date. Deferred tax liabilities are recognised for all timing differences.
forward of losses are recognised only if there is virtual certainty that
assets. Deferred tax assets are recognised for timing differences of
can be realised. Deferred tax assets and liabilities are offset if such
their realisability.
The carrying values of assets / cash generating units at each
Balance Sheet date are reviewed for impairment. If any indication
of impairment exists, the recoverable amount of such assets is
estimated and impairment is recognised, if the carrying amount of
these assets exceeds their recoverable amount. The recoverable
amount is the greater of the net selling price and their value in use.
Value in use is arrived at by discounting the future cash ows to their
present value based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset in earlier
accounting periods no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Statement of Prot
and Loss, except in case of revalued assets.
2.21 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there
is no uncertainty in availing / utilising the credits.
3 Share capital
st
st
March, 2013
Number
of shares
` Number
of shares
`
(a) Authorised
Equity shares of ` 10
each with voting rights 25,000,000 250,000,000 25,000,000 250,000,000
Unclassied shares of
`10 each 5,000,000 50,000,000 5,000,000 50,000,000
Cumulative Redeemable
preference shares of
`100 each 6,500,000 650,000,000 6,500,000 650,000,000
950,000,000 950,000,000
(b) Issued, Subscribed
and fully paid up
Equity shares of `10
each with voting rights 20,000,000 200,000,000 20,000,000 200,000,000
8.5% (previous year
8.5%) Cumulative
Redeemable
preference shares of
`100 each 6,500,000 650,000,000 6,500,000 650,000,000
Total 850,000,000 850,000,000
Notes:
(i) Terms/rights attached to Equity Shares
The company has only one class of Equity shares having a par value
of Rs 10/- per share. Each holder of Equity Shares is entitled to one
vote per share.
st
March, 2014, Final dividend of `1 Per
share has been proposed by the Board of Directors (Previous year
`1.50 per share).
st
MARCH, 2014
692
The amount of dividend proposed to be distributed to equity
shareholders is `200 lakhs (previous year - `300 lakhs).
The dividends proposed by the Board of Directors is subject to the
approval of the shareholders at the Annual General Meeting.
Repayment of capital will be in proportion to the number of equity
shares held.
(ii) Terms/rights attached to Preference Shares
The Company has redeemed 8.5% Cumulative preference shares on
29
th
September, 2013 and Dividend on such shares have been paid
upto the date of redemption.
The Company has issued and allotted fresh 8.5% Cumulative
Redeemable Preference shares on 28th September, 2013 to the
holding company. The shares shall be redeemed within a period not
exceeding one year from the date of allotment.
The amount of dividend proposed to be distributed to preference
shareholders is `280.03 lakhs (`8.50 per share) for the period 28
th
September 2013 to 31
st
March, 2014 (previous year - `430.07 lakhs
(`6.625 per share)).
(iii) Details of Preference shares held by the holding company, the
ultimate holding company, their subsidiaries and associates:
st
st
March, 2013
Equity shares
with voting
rights
8.5%
Cumulative
Redeemable
preference
shares
Equity shares
with voting
rights
8.5%
Cumulative
Redeemable
preference
shares
Number of shares Number of shares
Mahindra Lifespace
Developers Limited,
the holding
company 17,799,999 6,500,000 16,524,993 6,500,000
(iv) Details of equity shares held by each shareholder holding more
than 5% shares:
Class of shares/Name of
shareholder
As at 31
st
st
March, 2013
Number of
shares held
% holding
in that
class of
shares
Number of
shares held
% holding
in that
class of
shares
Equity shares with voting rights
Mahindra Lifespace
Developers Limited 17,799,999 89.00%

16,524,993 82.60%
Prudential Management &
1,275,000 6.40%
Tamil Nadu Industrial
Development Corporation
Limited 2,200,000 11.00% 2,200,000 11.00%
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
4 Reserves and surplus
(a) General reserve
Opening balance ......................................... 34,500,000 7,200,000
Addition during the year
Transfer from surplus in Statement of Prot
and Loss account ....................................... 27,300,000
Closing balance ...................................... 34,500,000 34,500,000
(b) Surplus in Statement of Prot and Loss
Opening balance ......................................... 847,984,730 415,762,977
Add: Prot for the year ............................... 88,983,075 544,936,116
Less: Dividends proposed to be distributed
to equity shareholders (`1.00 per share
(previous year - `1.50 per share)) ............. 20,000,000 30,000,000
Dividends proposed to be distributed to
preference shareholders -`8.50 per share
from September 28, 2013 upto March 31,
2014 (previous year - `6.00 per share
upto December 31, 2012 and `8.50 per
share from 1
st
January, 2013 to 31
st
March,
2013)) ........................................................ 28,003,425 43,006,849
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Tax on proposed dividend .......................... 8,158,182 12,407,514
Dividend paid on redemption of preference
shares @ 8.5% for the period from April 1,
2013 to September 29, 2013. .................... 27,549,315
Tax on dividend .......................................... 4,682,006
Transferred to General reserve .................... 27,300,000
Closing balance ...................................... 848,574,877 847,984,730
883,074,877 882,484,730
As at
31
st
March, 2014
As at
31
st
March, 2013
5 Long-term borrowings
Term loans (Secured)
From HDFC Limited............................................... 1,737,500,000 1,042,500,000
Total ............................................................. 1,737,500,000 1,042,500,000
(i) Term loan carries interest @ 12.35% - Principal to be repaid in 12
equal quarterly instalments, commencing from March 31, 2016.
(ii) Term loans are secured by equitable Mortgage of specied lands.
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
6 Other long-term liabilities
Security deposit received (From Lessees) ............... 39,665,396 39,240,217
Advance received from Ultimate Holding Company
(towards club membership) .................................... 40,000,000
Total ............................................................. 39,665,396 79,240,217
7 Short-term borrowings
From related parties (Unsecured)
Intercorporate Deposit from Holding Company ....... 920,000,000 650,000,000
Intercorporate Deposit from Mahindra Residential
Developers Limited ................................................ 155,000,000
Total ............................................................. 1,075,000,000 650,000,000
8 Trade payables
Trade payables ................................................... 28,419,297 15,359,062
Total ............................................................. 28,419,297 15,359,062
9 Other current liabilities
Current maturities of long-term loan from HDFC
Limited .................................................................. 690,000,000
Advance received from Ultimate Holding Company
(towards club membership) .................................... 90,000,000
Other payables ....................................................... 28,773,623 62,654,223
Payable for Capital Expenditure ............................... 6,988,325 1,194,467
Earnest money deposit received ............................. 822,600 410,000
Advances from customers ...................................... 1,173,632 89,544,750
Rental / other deposit from customers .................... 9,400,656 9,467,870
Total ............................................................. 140,006,966 853,636,425
10 Short-term provisions
(i) Compensated absences ..................... 4,174,183 5,731,103
(ii) Gratuity ............................................ 986,910 953,419
5,161,093 6,684,522
(i) Proposed equity dividend.................... 20,000,000 30,000,000
(ii) Proposed preference dividend ............. 28,003,425 43,006,849
(iii) Tax on proposed dividends ................. 8,158,182 12,407,514
56,161,607 85,414,363
61,322,700 92,098,885
st
MARCH, 2014
693
11 Fixed Asset
`
Particulars Gross block Depreciation Net block
As at
01.04.2013
Additions Deletions Adjustments As at
31.03.2014
As at
01.04.2013
For the
year
Deletions Adjustments As at
31.03.2014
As at
31.03.2014
As at
31.03.2013
A. Tangible assets
Land ................................................ 10,779,777 10,779,777 10,779,777 10,779,777
(Previous year) ................................ (10,779,777) (10,779,777) (10,779,777) (10,779,777)
Buildings ..........................................
- Own use ...................................... 112,097,794 112,097,794 22,508,304 3,641,956 26,150,260 85,947,534 89,589,490
(Previous year) ................................ (108,570,607) (3,527,187) (112,097,794) (18,923,196) (3,585,108) (22,508,304) (89,589,490) (89,647,411)
- Given under operating lease ......... 116,977,826 116,977,826 20,889,928 3,907,060 24,796,988 92,180,838 96,087,898
(Previous year) ................................ (116,977,826) (116,977,826) (16,982,868) (3,907,060) (20,889,928) (96,087,898) (99,994,958)
Plant and machinery ........................ 221,357,958 221,357,958 42,084,911 10,540,186 52,625,097 168,732,861 179,273,047
(Previous year) ................................ (168,442,643) (35,901,276) (17,014,039) (221,357,958) (29,973,895) (8,916,407) (3,194,609) (42,084,911) (179,273,047) (138,468,748)
Ofce equipment .............................. 2,651,401 35,400 1,035,473 1,651,328 1,084,015 349,519 546,424 887,110 764,218 1,567,386
(Previous year) ................................ (19,245,040) (376,870) 16,970,509 (2,651,401) (4,165,762) (103,125) 3,184,872 (1,084,015) (1,567,386) (15,079,278)
Furniture and xtures ....................... 3,465,561 1,191,554 2,274,007 2,742,528 107,165 1,048,959 1,800,734 473,273 723,033
(Previous year) ................................ (3,520,011) 54,450 (3,465,561) (2,614,859) (141,606) 13,937 (2,742,528) (723,033) (905,152)
Computers ....................................... 6,223,453 176,356 4,673,141 1,726,668 4,774,802 378,943 4,436,507 717,238 1,009,430 1,448,651
(Previous year) ................................ (5,605,949) (606,584) (10,920) (6,223,453) (4,323,114) (447,488) (4,200) (4,774,802) (1,448,651) (1,282,835)
Vehicles ........................................... 6,782,645 3,007,367 1,743,920 8,046,092 2,528,538 724,632 1,366,464 1,886,706 6,159,386 4,254,107
(Previous year) ................................ (8,411,091) (616,249) (2,244,695) (6,782,645) (2,724,529) (824,831) (1,020,822) (2,528,538) (4,254,107) (5,686,562)
Total ................................................ 480,336,415 3,219,123 8,644,088 474,911,450 96,613,026 19,649,461 7,398,354 108,864,133 366,047,317 383,723,389
Total (Previous year) ........................ (441,552,944) (41,028,166) (2,244,695) (480,336,415) (79,708,223) (17,925,625) (1,020,822) (96,613,026) (383,723,389) (361,844,721)
B. Intangible assets
Software .......................................... 5,558,724 5,558,724 5,558,723 5,558,723 1 1
(Previous year) ................................ (5,558,724) (5,558,724) (5,558,723) (5,558,723) (1) (1)
Total ................................................ 5,558,724 5,558,724 5,558,723 5,558,723 1 1
Total (Previous year) ........................ (5,558,724) (5,558,724) (5,558,723) (5,558,723) (1) (1)
Total (A+B)..................................... 485,895,139 3,219,123 8,644,088 480,470,174 102,171,749 19,649,461 7,398,354 114,422,856 366,047,318 383,723,390
Total (A+B) Previous year ............. (447,111,668) (41,028,166) (2,244,695) (485,895,139) (85,266,946) (17,925,625) (1,020,822) (102,171,749) (383,723,390) (383,723,390)
As at
31
st
March, 2014
As at
31
st
March, 2013
Nos: ` Nos: `
12 Non-current investments
Investments (At cost):
Unquoted, Non-trade
Investment in equity instruments
in Joint venture company
- Mahindra Integrated
Township Limited .............. 13,000,000

130,000,000 13,000,000

130,000,000
13,000,000 130,000,000 13,000,000 130,000,000
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
13 Long-term loans and advances
(Unsecured. Considered good)
Capital advances ...................................... 9,060,725 5,292,315
Security deposits ...................................... 3,403,360 3,407,860
Advance income tax (net of provisions) ..... 115,768,067 121,246,997
MAT credit entitlement ............................... 96,342,000 68,100,000
Total ......................................................... 224,574,152 198,047,172
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
14 Inventories
(at lower of cost and net realisable
value)
Work-in-progress
(representing cost of land and related
expenditure) ............................................... 3,828,377,624 3,499,127,857
3,828,377,624 3,499,127,857
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
15 Trade receivables
(Unsecured, Considered good)
were due for payment .............................. 2,075,611 3,690,317
Other Trade receivables .............................. 15,551,561 30,425,774
Total ......................................................... 17,627,172 34,116,091
st
MARCH, 2014
694
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
(a) Cash on hand ....................................... 15,435 59,402
In current accounts .............................. 7,208,380 30,874,905
Total .............................................................. 7,223,815 30,934,307
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
17 Short-term loans and advances
(Unsecured unless specically stated,
Considered good)
(a) Security deposits .................................... 675,000 675,000
(b) Loans and advances to employees ......... 10,760
(c) Prepaid expenses ................................... 2,550,775 1,525,208
(d) Balances with government authorities
Service Tax input credit .......................... 2,813,825 2,785,077
(e) Inter-corporate deposit to related party ..... 73,300,000
(f) Advances for purchase of land
Secured .................................................. 473,263,192 352,170,692
Unsecured .............................................. 3,405,000 7,665,474
(g) Other advances ...................................... 1,208,152 1,501,500
Total ............................................................... 483,926,704 439,622,951
Intercorporate deposits represents receivable from Mahindra Integrated
Township Limited, Joint venture company.
As at
31
st
March, 2014
As at
31
st
March, 2013
` `
18 Other current assets
Interest accrued on Advance for purchase of
land ................................................................ 31,446,634 25,132,786
Total .............................................................. 31,446,634 25,132,786
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
19 Revenue from operations
(a) Land Lease Premium / sale of land (Refer
Note below) .............................................. 250,625,000 1,017,096,000
(b) Rental income ........................................... 12,147,671 29,652,940
(c) Operation and maintenance income ......... 202,275,764 174,103,945
Total .............................................................. 465,048,435 1,220,852,885
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
20 Other income
Interest on
Advance for purchase of land ..................... 7,066,769 7,496,739
Intercorporate Deposit ................................ 6,499,920 9,360,814
Income tax refund ...................................... 32,484
Others ........................................................ 172,926
Miscellaneous income .................................... 106,000 225,730
Total .............................................................. 13,672,689 17,288,693
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
21 Changes in inventories
Work-in-progress ......................................... 3,828,377,624 3,499,127,857
3,828,377,624 3,499,127,857
Work-in-progress ......................................... 3,499,127,857 3,051,759,205
3,499,127,857 3,051,759,205
Net (increase)/decrease ............................... (329,249,767) (447,368,652)
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
22 Employee benets expense
Salaries and wages ....................................... 34,983,910 43,001,790
Contributions to provident and other funds ....... 1,762,585 1,609,550
Commission to non-whole time directors ........ 2,000,000 2,000,000
Staff welfare expenses .................................... 2,372,671 2,276,091
Total .............................................................. 41,119,166 48,887,431
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
23 Finance costs
(a) Interest expense on:
(i) Term loan from HDFC Limited .... 222,080,286 263,865,890
(ii) Intercorporate Deposit ................ 119,624,588 65,495,917
(iii) Service tax ................................. 3,258,222
Total ............................................................... 341,704,874 332,620,029
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
24 Other expenses
Power and fuel............................................. 27,722,764 25,666,995
Rent including lease rentals ......................... 664,606 448,620
- Machinery ....................................... 83,930 65,348
- Others ............................................. 2,881,411 2,533,577
Insurance ..................................................... 2,050,533 1,803,595
Rates and taxes ........................................... 1,919,687 2,950,043
Communication .......................................... 1,611,054 1,579,183
Travelling and conveyance ........................... 7,744,292 7,769,624
Printing and stationery ................................. 1,441,540 1,110,529
Sales commission ...................................... 8,860,800
Business promotion .................................... 8,656,640 9,356,804
Legal and professional ................................ 19,923,735 20,302,550
Directors sitting fees .................................... 105,000 110,000
Payments to auditors .................................. 1,033,054 1,020,000
Loss on Sale of Fixed Assets ....................... 979,184 1,223,873
Operation and Maintenance Expenses .......... 104,359,486 77,859,065
Miscellaneous expenses .............................. 3,483,952 2,262,371
Total ............................................................ 184,660,868 164,922,977
st
MARCH, 2014
695
For the year
ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
(i) Payments to the auditors comprises
(net of service tax input credit)
Statutory audit ................................... 700,000 700,000
Other services ................................... 330,000 320,000
Reimbursement of expenses .............. 3,054 -
Total .................................................. 1,033,054 1,020,000
25 Additional information to the nancial statements
For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
25.1 Contingent liabilities and commitments
(i) Contingent liabilities
Income Tax matters disputed and not
provided for - under appeal
Borrowing costs inventorised in
books but claimed as expenditure
under Income Tax for the year ended
March 31, 2011 and disputed by the
department is Rs. 59,607,406/-.
However even if this liability
crystallizes, there would be future tax
benets available on account of timing
difference except for interest and
income tax rate differences.
Other Matters disputed ......................... 768,833 747,720
Note : The above amount is based on
demand raised, which the Company
is contesting with the concerned
authorities. Outows, if any, arising
out of this claim would depend on
the outcome of the decision of the
appellate authorities and Companys
rights for future appeals. No
reimbursements are expected.
(ii) Commitments
account and not provided for Tangible
assets ................................................. 53,029,878 82,393,285
25.2 There are no dues to Micro and Small Enterprises and these have
been determined to the extent such parties have been identied on
the basis of information collected by the Management. This has been
relied upon by the auditors.
25.3 For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
Expenditure in foreign currency ` `
Travel ................................................... 77,227
Other Expenses ................................... 76,705
Total.................................................... 153,932
26 Disclosures under Accounting Standards
For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
` `
26.1 Details of borrowing costs
inventorised
Borrowing costs inventorised during
the year ............................................ 289,347,683 273,533,905
26.2 Additional information to the nancial statements - Gratuity
a) Dened Contribution plans
The Company makes Provident fund contribution to dened
contribution plans for the employees. Under the scheme, the
company is required to contribute a specied percentage of the
payroll cost to the fund the benets. The Company recognized
Rs. 1,484 (In 000s) (PY Rs. 1,702 (In 000s) for Provident fund
contributions in the statement of prot and Loss. The contributions
payable to these plans by the company are at rates specied in the
rules of the scheme.
b) Dened Benet Plans
The Companys obligation towards gratuity is dened benet plan.
The gratuity expense is included under Contributions to provident
and other funds in Note 22 Employee benets expense. The details
of actuarial valuation are given below:
Gratuity (Funded)
2013-14 2012-13
` `
a. Net Asset/(Liability) recognized in the balance sheet
Present Value of Dened Benet Obligation ............... 3,217,102 3,800,161
Fair Value of Plan assets ........................................... 2,230,192 2,846,742
Liability recognised in the balance sheet ........................ 986,910 953,419
b. Expense recognized in the Statement of Prot &
Loss
Past service cost ......................................................
Current Service cost ................................................. 456,695 728,675
Interest cost .............................................................. 265,784 334,486
Expected return on plan assets ................................. (192,012) (182,060)
Actuarial (gains) / Losses ......................................... (434,430) (1,108,365)
Total expenses .......................................................... 96,037 (227,264)
c. Change in present value of Dened Benet
obligation
Present Value of the obligation at the beginning of
the year .................................................................... 3,800,161 4,024,903
Past service cost ......................................................
Current Service cost ................................................ 456,695 728,675
Interest Cost ............................................................ 265,784 334,486
Actuarial (Gains)/Losses ........................................... (349,807) (1,108,365)
Benets Paid ............................................................. (955,731) (179,538)
Present value of the obligation as at the end of the
year .......................................................................... 3,217,102 3,800,161
st
MARCH, 2014
696
Gratuity (Funded)
2013-14 2012-13
` `
d. Change in fair value of plan assets
Present value of plan assets as the beginning of the
year .......................................................................... 2,846,742 2,844,220
Expected return on plan assets ................................. 192,012 182,060
Contributions made ................................................... 62,546
Benets paid ............................................................. (955,731) (179,538)
Actuarial Gains / (Losses) ........................................ 84,623
Present value of plan assets at the end of the year ... 2,230,192 2,846,742
e. Principal actuarial assumptions
Discount Rate ........................................................... 9.10% 8.00%
Expected return on plan assets ................................. 8.00% 8.00%
Mortality ................................................................... LIC (2006-08) Ultimate
mortality tables
f. Estimate of amount of contribution in the immediate
next year ................................................................... 50,000 62,546
g. Estimates of future salary increases considered in actuarial valuation
take account of ination, seniority, promotions, increments and other
relevant factors such as supply and demand in the employment
market.
h. Basis used to determine expected rate of return - The Gratuity Fund
is managed by the Life Insurance Corporation of India and they
have not made available the information on major categories of plan
assets and the expected rate of return on each class of plan assets.
i. Experience
adjustment as
provided by actuary:
2013-14
2013-14 2012-13 2011-12 2010-11 2009-10
Present value of DBO . 3,800,161 4,024,903 2,636,307 1,417,578 999,425
Fair value of plan
assets ...................... 2,230,192 2,846,742 2,022,143
Experience gain /
(loss) adjustments
on plan liabilities ...... (192,012) (182,060)
Experience gain /
(loss) adjustments
on plan assets ......... 84,623 (127,992) 80,886
st
MARCH, 2014
Particulars For the
year ended
31
st
March,
2014
For the
year ended
31
st
March,
2013
Actuarial assumptions for long-term compensated
absences
Discount rate ............................................................... 9.10% 8.00%
Expected return on plan assets ................................ 0.00% 0.00%
Salary escalation ......................................................... 12.00% 12.00%
Attrition ......................................................................... 2.00% 2.00%
The discount rate is based on the prevailing market yields of
Government of India securities as at the balance sheet date for the
estimated term of the obligations.
The estimate of future salary increases considered, takes into
account the ination, seniority, promotion, increments and other
relevant factors.
26.3 Related party transactions
26.3 a. Details of related parties:
Description of
relationship
Names of related parties
Ultimate Holding Company Mahindra & Mahindra Limited
Holding Company Mahindra Lifespaces Developers Limited
Fellow Subsidiaries Mahindra World City (Jaipur) Limited
Mahindra Residential Developers Limited
(Subsidiary of MITL)
Mahindra Hinoday Industries Limited
Mahindra Integrated Business Solutions
Private Ltd.
Mahindra Holidays & Resorts (India) Ltd.
Joint Venture Mahindra Integrated Township Limited
(MITL)
Key Management
Personnel (KMP)
Ms. Sangeeta Prasad, Manager and
Chief Executive Ofcer (Upto 15/04/2013)
Mr. S Chandru, Manager and Chief
Operating Ofcer (From 16/04/2013)
Note: Related parties have been identied by the Management and relied
upon by the auditors.
697
st
MARCH, 2014
26.3 b. Details of related party transactions during the year ended 31
st
March, 2014 and balances outstanding as at 31
st
March, 2014:
`
Ultimate
Holding
Company
Holding
Company
Fellow
Subsidiaries
Joint
Venture
KMP
Transactions during the year
Operation and maintenance Income 15,430,200 2,539,708 19,689,000
(13,887,180) (3,308,441) (17,720,100)
- Mahindra Residential Developers Limited 6,552,840
(5,895,556)
Water charges 5,201,600 4,097,820
(4,743,480) (686,040) (1,642,850)
(2,413,550)
Rent received 2,337,719
(2,150,700)
Interest received 6,499,920
(9,360,814)
Professional Charges 42,000
(15,000)
- Mahindra Consulting Engineers Limited 8,854,972
(8,375,448)
- Mahindra Integrated Business Solutions Pvt Ltd. 108,000
(103,000)
Travelling Expenses
- Mahindra Holidays and Resorts India Limited 1,956,406

Rent Paid 161,280
(161,280)
(65,495,917)

Purchase of spares
- Mahindra Hinoday Industries Limited
(1,307,000)
Inter Corporate Deposit received 410,000,000
(610,000,000)

Inter Corporate Deposit repaid 140,000,000
(460,000,000)

Inter corporate deposit recovered 73,300,000
Advances received 50,000,000

(40,000,000)
Managerial Remuneration* 7,088,958*
(9,390,044)
Dividend Paid 95,343,654
(47,262,497)
Balance Outstanding as at the year end
Receivables 422,650
(348,440) (73,300,000)
Payables 95,288,966 923,414,098 6,650,775
(45,135,206) (653,414,098) (6,650,775)
(2,306,889)
- Mahindra Holidays and Resorts India Limited 25,173

Note: Figures in bracket relates to the previous year
* Subject to shareholders approval
698
The Companys leasing arrangements are in respect of commercial
premises given under operating lease.
Lease income from operating leases is recognized on a straight-line basis
over the period of lease. The particulars of the premises given under
operating leases are under:
26.4 Leases
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
` `
Gross carrying amount of premises .... 116,977,826 116,977,826
Accumulated depreciation .................... 24,796,988 20,889,928
Depreciation for the year ...................... 3,907,060 3,907,060
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
` `
Basic and diluted
Net prot for the year ........................... 88,983,075 544,936,116
Less: Preference dividend and tax
thereon ........................................ 64,993,928 50,315,863
Net prot for the year attributable to
the equity shareholders ........................ 23,989,147 494,620,253
shares .................................................... 20,000,000 20,000,000
Par value per share .............................. 10 10
Earnings per share - Basic and diluted ... 1.20 24.73
26.6 Deferred tax (liability)/asset
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Tax effect of items constituting
deferred tax liability
On difference between book balance
and tax balance of xed assets ......... (50,352,968) (47,231,446)
Interest inventorised but claimed as
allowable for tax purposes ................. (328,775,135) (230,425,858)
deferred tax liability ............................ (379,128,103) (277,657,304)
deferred tax assets
Provision for compensated absences,
gratuity and other employee benets .... 1,754,256 2,272,069
Brought forward business losses ...... 56,234,032
deferred tax assets ............................. 57,988,288 2,272,069
Net deferred tax (liability)/asset ......... (321,139,815) (275,385,235)
26.7 Joint Venture Disclosures
i. Interest in Joint Ventures
Name of the Company Country of
Incorporation
Proportion of
ownership
interest
Mahindra Integrated Township Limited India 25.78%
ii. Interest in assets, liabilities, income, expenses and capital
commitment with respect to the Joint Ventures
Particulars 201314 201213
Tangible xed assets .............................. 104,134 133,003
Non-current Investments ........................ 170,905,601 170,905,601
Long term loans and advances ............. 9,545,276 5,515,237
Inventories ............................................... 250,807,078 219,784,416
Cash and cash equivalents .................... 12,495,826 7,284,743
Trade receivables .................................... 33,470,328 17,617,210
Short term loans and advances ............. 14,232,596 6,101,636
Other Current Assets .............................. 2,829,146 118,946,273
Trade payables ....................................... 44,526,579 26,342,876
Other Current Liabilities .......................... 97,698,087 92,875,959
Short term borrowings............................ 238,941,211 302,091,801
Short term provisions ............................. 1,546,545
Long term Borrowings ............................
Income .................................................... 161,337,127 176,913,309
Expenses ................................................. 174,637,065 147,494,715
27 Previous years gures
Previous years gures have been regrouped / reclassied wherever
necessary to conform with the current years classication / disclosure.
st
MARCH, 2014
N. Vaghul Chairman
B. Ramaratnam
Partner
Anita Arjundas
V. Balaraman
Sangeeta Prasad
Directors
S. Chandru Manager & Chief
Operating Ofcer
Place : Chennai
Date : 18
th
April, 2014
Place : Chennai
Date : 18
th
April, 2014
}
MAHINDRA WORLD CITY (JAIPUR) LIMITED
699
Your Directors present their Ninth Report together with the audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
Particulars For the
year ended
31
st
March 2014
For the
year ended
31
st
March 2013
Total Income............................................................................................................................. 1,021,668,877 1,066,124,035
Prot before Tax ....................................................................................................................... 370,343,072 252,631,677
Provision for Taxation
Net Current Tax ..................................................................................................................... 99,800,000 61,200,000
Deferred Tax .......................................................................................................................... 26,070,122 25,593,760
Prot after Tax .......................................................................................................................... 244,472,950 165,837,917
Add: Prot brought forward from previous year .................................................................... 37,542,382 112,975,965
Appropriations:
Transferred to Debenture Redemption Reserve ..................................................................... 159,375,000 159,375,000
Proposed Dividend (including tax on distributed prots) ...................................................... 116,995,000 81,896,500
Transfer to General Reserve....................................................................................................
Prot Carried to Balance Sheet .............................................................................................. 5,645,332 37,542,382
Performance & operations
During the year, your Company has received additional
land of 61.47 acres from JDA through RIICO. The Company
surrendered 35.64 Acres to JDA in 2012-13, gross total land
leased to Company is 2,949 acres.
During the year, your Company added six (6) customers (1 in
SEZ and 5 in DTA), taking the total number of customers in
Mahindra World City, Jaipur (MWCJ) to Fifty one (51). Two (2)
existing customers also increased their footprint during the year.
The total land leased out during the year is 52.43 acres (SEZ
1.15 acres and DTA 51.28 acres) and include companies across
diverse industry segments. Some of the companies to whom
land was leased during the year are TTK Healthcare Limited,
Perto India Private limited and Hindustan Media Ventures Limited.
Five (5) customers (Metlife, Nagarro Software, phone Support,
Orvi Design Studio, Premier Bars) became operational during
the year, taking the total number of operational customers to
nineteen (19). During the year, six (6) customers started their
development activities for their respective campus/factories
at MWCJ. The total development at eVolve is currently is
0.43 Million square feet rentable area comprising of 4 buildings.
Of the total area constructed, an area of 0.35 Million square
feet has been leased and 0.041 Million square feet committed
to lease/under MOUs. The customers at eVolve include DBOI
Global Services Pvt Ltd, Genpact, EXL Services SEZ BPO
Solution Pvt Ltd, Systweak, Phone Support Private Ltd and
Appirio India Cloud Solutions Pvt Ltd.
The cumulative direct employment created by the companies
at Mahindra World City, Jaipur was around 5,000 and the total
direct/indirect employment generated was upwards of 8,000
persons. Exports by MWCJ clients grew by 64% to reach
` 1,077 Cr. in 2013-14 compared to ` 656 Cr. during the
previous year. Your Company and the customers have together
invested `1,824 crores in the project.
Your Company currently has 5 sector Specic Special
Economic Zones (SEZs), viz. 2 in IT/ITeS, and 1 each in
Handicrafts, Engineering & Related Industries, and Gems &
Jewellery. The project also comprises a Domestic Tariff Area.
The area currently notied, under the SEZs, is 1514 acres and
the DTA comprises 500 acres.
During the year, 5 editions of the customer engagement platform,
Coalesce have been conducted to discuss operational matters in
MWC-Jaipur and collaborate on new initiatives and infrastructure
needs. This initiative has been received well by the customers.
Your company stays committed to sustainable development.
The 4th building at eVolve (B1) received the IGBC LEED Gold
rating for sustainable development in the commercial building
category, during the year. The IT SEZ at MWCJ also received
pre-certication under the green category of IGBC.
Dividend
Your Directors have recommended a preference dividend of
` 0.80 per Share i.e. 8 per cent of the face value of ` 10 on
50,000,000 Cumulative Redeemable Preference shares of
the Company for the year 2013-14. Your Directors have also
recommended equity dividend of ` 0.40 per share i.e. 4 per
cent of the face value of ` 10 on 150,000,000 equity shares of
the Company for the year 2013-14. The total dividend payment
for the year (including tax on distributed prots) amounts to
` 116,995,000/-.
Share Capital
The Authorized and paid-up Share Capital of the Company
comprises of 150,000,000 equity shares of ` 10/- each aggregating
` 1,500,000,000/- and 50,000,000 8% Redeemable Cumulative
Preference shares of ` 10/- each aggregating ` 500,000,000/- held
by Mahindra Lifespace Developers Limited (MLDL) and Rajasthan
State Industrial Development and Investment Corporation Limited
(RIICO) in the ratio of 74:26
Your Company continues to be a subsidiary Company of MLDL
and consequently, a subsidiary Company of the ultimate holding
company, viz. Mahindra & Mahindra Limited.
700
CSR forms an integral part of your Company and the
Company believes that its initiatives and high ethical standards
will denitely encourage a positive impact on everyone
involved in the project directly or indirectly. During the year
the Company also constituted the CSR Committee consisting
of two Directors. With a view to achieve inclusive social
development, the Company has taken initiatives of organizing
training programs for school dropouts/unemployed youth who
are part of the local community around project area through a
well-recognized NGO - Technology Business Incubator.
Since the inception of this initiative, around 840 candidates
have completed various types of employability training and over
410 have been placed in various jobs. Through Technology
Business Incubator, 75 Women Self Help Groups (SHGs)
have been formed in the neighboring villages. The SHGs have
been trained to start small businesses within the community
and this has helped develop women empowerment during the
year. Your company also launched Gyandeep a school for
children of construction workers at Project Ofce, MWCJ.
By virtue of these initiative and employee participation, in
the same year, Company received the Skotch Order of Merit
for CSR activities and also received Mahindra Group Silver
category award for Star Performance and Esop award for CSR
activities in non- factory locations.
Your Company also conducted Medical camps & plantation
drives in the surrounding villages around the project.
Directors & Manager
Pursuant to the provisions of Articles of Association, two
directors (1) Shri Arun Nanda (DIN 00010029) (2) Shri Uday
Y. Phadke (DIN_00030191)shall retire at the ensuing Annual
General Meeting. Shri Arun Nanda and Shri Uday Y. Phadke
both are eligible for re-appointment. However. Shri Arun Nanda
has offered himself for reappointment. Mr. Phadke does not
wish to seek re-appointment as a Director of the Company.
Shri Kuldeep Ranka (DIN 00279526) ceased to be Director
of the Company effective 18
th
July, 2013 and Shri Sunil Arora
(DIN_00283209), Shri G S Sandhu (DIN 00322840), Shri Naveen
Mahajan (DIN 01890995) ceased to be Director of the Company
effective 20
th
January, 2014 and Shri Abhay Kumar (DIN_02389148)
ceased to be director of the Company effective 16
th
April, 2014. Your
Board placed on record its appreciation of the services rendered
by Shri Sunil Arora, Shri G S Sandhu, Shri Naveen Mahajan and
Shri Abhay Kumar during their tenure as Director of the Company.
During the year, Rajasthan State Industrial Development &
Investment Corporation Limited (RIICO) nominated Shri C.S.
Rajan (DIN 0126063), Shri D.B. Gupta (DIN 00225916), Smt.
Veenu Gupta (DIN 02170999) were appointed as Additional
Director at the meeting of the Board of Directors of the
Company held on 20
th
January, 2014 and Shri Shikhar Agarwal
(DIN 01093773) was appointed as an Additional Director at the
meeting of the Board of Directors of the Company held on 16
th

April, 2014. All of them holds ofce only upto the date of the
9
th
Annual General Meeting of the Company.
The Company has received requisite notice from a member
signifying his/its intention to propose Shri C.S. Rajan, Shri D.B.
Gupta, Smt. Veenu Gupta and Shri Shikhar Agarwal as a candidate
for the ofce of Director at the forthcoming Annual General Meeting.
During the year, Shri Sanjay Srivastava was appointed as the
Manager & COO of the Company for a term of 5 year from 1
st

July, 2013 to 30
th
June, 2018 consequent to retirement of Shri
B K Subbaiah, the earlier Manager & COO of the Company.
your directors, based on the representations received from the
operating management and after due enquiry, conrm that:
ii) the Company, in the selection of the accounting policies,
applied consistently, 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
31
st
March, 2014 and of the prot of the Company for the
year ended on that date;
accordance with the provisions of the Companies Act, for
and detecting fraud and other irregularities; and
concern basis.
Audit Committee
The Audit Committee of your Company presently comprises of ve
Directors, namely, Shri C.S. Rajan (Chairman), Shri D.B. Gupta,
Shri Arun Nanda, Shri Uday Y. Phadke, and Smt. Anita Arjundas.
Presently, Shri C.S. Rajan is the Chairman of the Audit Committee.
The Company Secretary is the Secretary to the Committee.
The terms of reference of the Committee were enhanced in
the Board meeting held on 16
th
April, 2014 pursuant to Section
177 of the Companies Act, 2013 and Rules made thereunder..
During the year under review, 4 meetings of the Audit Committee
were held on 18
th
April, 2013, 18
th
July, 2013, 15
th
October, 2013
and 20
th
January, 2014.
The Nomination and Remuneration Committee of your
Company presently comprises of three Directors, namely
Smt Veenu Gupta, Shri Arun Nanda and Ms. Anita Arjundas.
Smt. Veenu Gupta is the Chairman of the Nomination and
Remuneration Committee. During the year under review, one
meeting of the Committee was held on 15
th
October, 2013.
Pursuant to Section 178 of the Companies Act, 2013, the Board
of Directors in its meeting held on 16
th
April, 2014 renamed
the Committee as Nomination and Remuneration Committee
and enhanced the terms of reference. The Committee is also
authorized to formulate a policy, inter alia, with regard to
the criteria for determining qualications, positive attributes
and independence of a Director, and shall ensure that the
remuneration to directors, key managerial personnel and senior
701
management involves a balance between xed and incentive
pay reecting short and long-term performance objectives
appropriate to the working of the Company and its goal.
The Corporate Social Responsibility (CSR) Committee of your
Company presently comprises of two Directors, namely Smt
Veenu Gupta and Smt. Sangeeta Prasad. Smt. Veenu Gupta is
the Chairperson of the CSR Committee. A meeting of CSR was
held on 16th April, 2014 wherein the Committee recommended
the roadmap for the year in terms of focus areas and activities
proposed to be undertaken during FY -15 and the CSR policy
to the Board for its approval. The Committee, based on the 3
years average prot considered and approved CSR budget
of the Company for 2014-15 Rs 50.19 lacs and directed to
Company to present the detailed activity plan separately
Codes of Conduct
for its Directors and Senior Management personnel and
senior management employees afrming compliance with the
respective Codes.
Auditors
Messers Deloitte Haskins & Sells, Chartered Accountants,
Chennai were appointed as Auditors of the Company in the
8
th
Annual General Meeting held on 16
th
September, 2013
in terms of Section 224A of the Companies Act, 1956. The
Auditors shall hold ofce till the conclusion of the ensuing
Annual General Meeting. The members will be required
to appoint Auditors in terms of relevant provisions of the
Companies Act, 2013 and x their remuneration.
As required by the provisions of section 139 and 141 of
Companies Act,2013 the Company has received written
consent and certicate from Messers Deloitte Haskins &
Sells, Chartered Accountant, (ICAI Firm Registration Number
008072S), proposing to be re-appointed as Auditors for one
year i.e upto conclusion of the 10th Annual General Meeting
of the Company to the effect that their appointment, if made,
would be in conformity with the limits specied in that section.
Since more than 25% of the subscribed capital of the
Company is held by Rajasthan State Industrial Development
& Investment Corporation Limited (RIICO), the appointment
or re-appointment of Auditors is required to be made by a
Special Resolution.
The report of the auditors along with Notes on Accounts are
self explanatory and do not require any explanation.
Deposits, Loans and Advances
The Company has not made any loans/advances, which
the parent companies viz. Mahindra Lifespace Developers
Limited and Mahindra & Mahindra Limited with the Stock
Exchange.
Board of Directors) Rules, 1988 are given in the Annexure I to
this Report.
Your Companys aspirations of sustaining and enhancing its
long term growth plans are well balanced by its conscious
commitments to society and in its principles of conducting
business in a fully compliant manner. Your Company partakes
in letter and spirit its intention of being a responsible corporate
citizen and is committed to contribute positively in all activities
pertaining to environmental protection, health, safety, energy
conservation and societal commitments while at the same time
continuing to protect and enhance all stakeholders interests.
of Companies Act, 1956 and rules made there under
During the year under review, the Company had two (2)
employees who were in receipt of remuneration in excess of the
limit specied in section 217(2A) of Companies Act, 1956. The
particulars as required under section 217(2A) of Companies
Act, 1956 are given in the Annexure II to this report.
Acknowledgements
The Board of Directors thank and wish to place on record
its appreciation to the Ministry of Commerce & Industry,
Board of Approvals (SEZ), Development Commissioner,
Noida Special Economic Zone, Development Commissioner
SEZs, Government of Rajasthan, and all the agencies and
Departments of the State Government, Bankers State Bank
of India, Kotak Mahindra Bank, Axis Trustee our valuable
customers and the employees of the Company at all levels,
for their continued co-operation and unstinted support.
The Directors also express their sincere thanks to the
shareholders for the continued support and trust they have
shown in the Management.
Ms.Anita Arjundas Ms. Sangeeta Prasad
Director (DIN 00243215) Director (DIN 02791944)
Jaipur, 16
th
April, 2014
702
ST
MARCH, 2014.
a) Energy conservation measures taken : The Company is regularly pursuing the initiatives taken for
energy conservation which include introduction of LED
lighting, use of re-cycled water, plantation etc.
b) Additional investments and proposals, if any, being
: The Company has been working with Mahindra EPC for use
of solar power.
c) Impact of the measures taken/to be taken at (a) &
: Energy saving of 30% due to use of LED street lights.
d) Total energy consumption and energy consumption per
: Not applicable
1. Areas in which R & D is carried out : The Company has not carried out any specic R&D activities
during the year.
2. Benets derived as a result of the above efforts : Not Applicable.
Your Company has incurred expenditure in foreign exchange to the extent of ` 7,22,220/- during the year under review.
Foreign exchange earnings during the year was Nil.
Ms.Anita Arjundas Ms. Sangeeta Prasad
Director (DIN 0243215) Director (DIN_02791944)
Jaipur, 16
th
April, 2014
ANNEXURE - II
Particulars of Employees as required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 and forming part of the Directors Report for the year ended 31st March, 2014 is given below.
Name Designation Gross
Remuneration
(`)
Qualication Age Experience
Years months
Date of
Commencement
Last Employment Held
Designation/Org.
Date of Birth
Mr. B K Subbaiah* Manager & Chief
Operating Ofcer
2,269,711 MBA 62 Yrs 37 11 6-Sep-06 Vice President (Mktg. &
Sales) - Escorts Limited
12-Mar-52
Mr. Sanjay
Srivastava*
Manager & Chief
Operating Ofcer
7,734,944 B.Tech. Computer
Science/Technology,
PGDM Marketing &
Finance
43 Yrs 18 3 7-Jun-13 Principal Accenture
Management Consultant
17-Oct-70
* Employed for part of the year.
Notes :
1. Nature of employment is contractual, and either of the party can terminate the same by giving three months notice.
2. None of the above employee is related to any Director of the Company.
3. None of the above employee holds by himself or alongwith his spouse and dependent children, 2% or more of the equity
4. Employment terms and conditions are as per Company rules.
5. Remuneration received as shown in the statement above includes basic salary, house rent allowance, reimbursement of
medical expenses, employers contribution to provident fund, and gratuity fund, all other allowances/perquisites as applicable.
Anita Arjundas Sangeeta Prasad
Director Director
DIN 0243215 DIN 02791944
Jaipur, 16
th
April, 2014
703
TO THE MEMBERS OF
of MAHINDRA WORLD CITY (JAIPUR) LIMITED (the
31
st
the Cash Flow Statement for the year then ended and a
th
September 2013 of
the accounting principles generally accepted in India.
This responsibility includes the design, implementation
and maintenance of internal controls relevant to the
preparation and presentation of the nancial statements
that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
those risk assessments, the auditor considers the internal
controls relevant to the Companys preparation and fair
but not for the purpose of expressing an opinion on
the effectiveness of the Companys internal control. An
audit also includes evaluating the appropriateness of
the accounting policies used and the reasonableness of
the accounting estimates made by the Management, as
well as evaluating the overall presentation of the nancial
statements.
opinion.
Opinion
accepted in India:
st
March, 2014;
prot of the Company for the year ended on that date and
2003 (the Order) issued by the Central Government
in terms of Section 227 (4A) of the Act, we give in
the Annexure a statement on the matters specied in
(d) In our opinion, the Balance Sheet, the Statement of Prot
and Loss, and the Cash Flow Statement comply with the
Accounting Standards notied under the Act (which
continue to be applicable in respect of Section 133 of
15/2013 dated 13
th
September 2013 of the Ministry of
Corporate Affairs).
(e) On the basis of the written representations received from
the directors as on 31
st
March, 2014 taken on record by
the Board of Directors, none of the directors is disqualied
as on 31
st
March, 2014 from being appointed as
a director in terms of Section 274(1)(g) of the Act.
B. Ramaratnam
Date: 16
th
704
members of Mahindra World City (Jaipur) Limited on the
accounts for the year ended 31
st
March 2014)
(i) Having regard to the nature of Companys business/activities/
result, clauses (vi), (x), (xii), (xiii), (xiv), (xv), (xviii) and (xx) of
paragraph 4 of the Order are not applicable to the Company
in the current year.
(a) The Company has maintained proper records showing
full particulars, including quantitative details and situation
of the xed assets.
provides for physical verication of all the xed assets at
reasonable intervals. According to the information and
explanation given to us, no material discrepancies were
noticed on such verication.
opinion, do not constitute a substantial part of the xed
assets of the Company and such disposal has, in our
Company.
veried during the year by the Management at reasonable
intervals.
were reasonable and adequate in relation to the size of
(iv) In our opinion and according to the information and explanations
given to us, the Company has neither granted nor taken any
loans, secured or unsecured, to/from companies, rms or other
parties covered in the Register maintained under Section 301 of
explanations given to us, there is an adequate internal control
system commensurate with the size of the Company and the
nature of its business for the purchase of inventory and xed
assets and for the sale of goods and services and during
the course of our audit we have not observed any continuing
failure to correct major weakness in such internal control
system.
explanations given to us, the company has not entered into
contracts or arrangements with parties covered in the Register
(vii) In our opinion, the internal audit functions carried out during
the year by rm of Chartered Accountants appointed by the
Management have been commensurate with the size of the
company and the nature of its business.
under Section 209(1) (d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed cost
records have been maintained. We have, however, not made
a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
undisputed dues, including Provident Fund, Income-tax,
Value Added Tax, Service Tax and other material statutory
dues applicable to it with the appropriate authorities
arrears as at 31
st
March, 2014 for a period of more than
six months from the date they became payable.
(c) Details of dues of Income Tax which have not been
deposited as on 31
st
March, 2014, on account of disputes
are given below:
Statute Nature of
dues
Forum
where
dispute is
pending
Financial
Year
Amount
involved
(`
in lakhs)
Income
Tax Act,
1961
Income
Tax
including
interest
Commis-
sioner
(Appeals)
2010-11 30.73
in the repayment of dues to nancial institutions, banks and
debenture holders.
explanations given to us, the term loans have been applied
by the Company during the year for the purposes for which
they were obtained.
raised on short term basis have, prima facie, not been used
during the year for long term investment.
(xiii) According to the information and explanation given to us, the
Company has created adequate security in respect of the
debentures issued.
(xiv) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and
no material fraud on the Company has been noticed or
B. Ramaratnam
Date: 16
th
705
31
st
March, 2014
As at
31
st
March, 2013
` `
(a) Share capital ............................................................................................... 3 2,000,000,000 2,000,000,000
(b) Reserves & Surplus ..................................................................................... 4 324,395,332 196,917,382
2,324,395,332 2,196,917,382
2 Non-Current liabilities
(a) Long term Borrowings ................................................................................ 5 3,058,100,000 3,101,000,000
(b) Deferred tax liabilities (Net) ......................................................................... 6 134,346,578 108,276,456
(c) Other long term liabilities ............................................................................ 7 34,958,373 3,139,295
(d) Long term provisions .................................................................................. 8 122,416,085 53,018,081
3,349,821,036 3,265,433,832
(a) Short term Borrowings ................................................................................ 9 21,850,598
(b) Trade payables ............................................................................................ 10 63,089,893 47,158,025
(c) Other current liabilities ................................................................................ 11 789,916,045 735,543,920
(d) Short term provisions .................................................................................. 12 117,501,578 83,383,957
970,507,516 887,936,500
TOTAL............................................................. 6,644,723,884 6,350,287,714
B ASSETS
1 Non-Current assets
(a) Fixed Assets
(i) Tangible assets ..................................................................................... 13 1,510,127,131 1,434,269,150
(ii) Intangible assets .................................................................................. 14 1 1
(iii) Capital work in progress...................................................................... 103,146,856 63,324,878
1,613,273,988 1,497,594,029
(b) Long term loans and advances ................................................................... 15 155,714,667 117,086,285
1,768,988,655 1,614,680,314
2 Current assets
(a) Current Investments .................................................................................... 16 295,472,347 10,721,526
(b) Inventories ................................................................................................... 17 4,369,974,693 4,195,593,331
(c) Trade receivables ........................................................................................ 18 100,594,995 95,529,074
(d) Cash and cash equivalents ........................................................................ 19 67,763,259 382,434,467
(e) Short term loans and advances ................................................................. 20 25,058,952 32,944,143
(f) Other current assets .................................................................................... 21 16,870,983 18,384,859
4,875,735,229 4,735,607,400
TOTAL............................................................. 6,644,723,884 6,350,287,714
ST
MARCH, 2014
For Deloitte Haskins & Sells Sanjay Srivastava C S Rajan
}
Directors
Chartered Accountants Manager & COO Sangeeta Prasad
B. Ramaratnam Sanjay Jain
Partner Company Secretary cum GM
(Accounts)
Place : Chennai
Date : 16
th
April, 2014
Place : Jaipur
Date : 16
th
April, 2014
706
}
Directors
(Accounts)
Place : Chennai
Date : 16
th
April, 2014
Place : Jaipur
Date : 16
th
April, 2014
Note No. For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
` `
INCOME
1 Revenue from operations ............................. 22 983,579,758 1,041,865,568
2 Other income ................................................ 23 38,089,119 24,258,467
3 Total Revenue .............................................. 1,021,668,877 1,066,124,035
4 EXPENDITURE
Cost of land and Project development ........ 176,051,475 552,449,372
Changes in Inventories of
Work in Progress .......................................... 24 (174,381,362) (427,713,066)
Employee benets expense ......................... 25 51,129,283 53,609,060
Finance costs ................................................ 26 402,712,255 494,874,693
Depreciation and amortization expense ...... 13 55,585,511 50,223,392
Other expenses ............................................. 27 144,428,165 101,078,008
655,525,327 824,521,459
Less : Capitalized ......................................... (4,199,522) (11,029,101)
651,325,805 813,492,358
5 Prot before tax 370,343,072 252,631,677
6 Tax expense:
(a) Current tax ...................................... 99,800,000 61,200,000
(b) Deferred tax .................................... 26,070,122 25,593,760
7 Prot for the year ........................................ 244,472,950 165,837,917
Basic and diluted earnings per share ......... 1.32 0.79
ST
MARCH, 2014
707
31
st
March, 2014
For the year ended
31
st
March, 2013
` `
Net Prot before tax ................................................................................................ 370,343,072 252,631,677
Adjustments for:
Depreciation and Amortization ............................................................................... 55,585,511 50,223,392
Finance costs .......................................................................................................... 402,712,255 494,874,693
Loss on sale of xed assets (net) .......................................................................... 559,867 483,481
Gain on redemption of Mutual Fund Investments ................................................. (27,431,814) (10,903,853)
Interest income ........................................................................................................ (9,739,952) (12,756,165)
Operating prot before working capital changes .................................................. 792,028,939 774,553,225
Adjustments for (Increase)/decrease in operating assets
Inventories ............................................................................................................... (174,381,362) (427,713,066)
Trade receivables .................................................................................................... (5,065,921) 538,368,323
Short Term Loans and advances ............................................................................ 7,885,191 (4,810,967)
Long term Loans and advances ............................................................................. (14,899,960) (8,315,683)
Other Current Assets ............................................................................................... 1,639,393 (8,708,955)
Adjustments for Increase/(Decrease) in operating liabilities
Trade Payables ........................................................................................................ 15,931,868 2,532,056
Other Current Liabilities .......................................................................................... (19,718,075) 46,980,691
Other Long term Liabilities ...................................................................................... 31,819,078 (6,485,360)
Short Term Provisions ............................................................................................. (980,879) (2,556,977)
Long Term Provision ............................................................................................... (288,526) 1,339,995
Cash generated from Operations ........................................................................... 633,969,746 905,183,282
Income Tax paid ...................................................................................................... (108,641,363) (135,377,850)
Net cash ow from operating activities (A) ....................................................... 525,328,383 769,805,432
Capital expenditure on xed assets, including capital advances ......................... (157,566,586) (179,930,750)
Proceeds from sale of xed assets ........................................................................ 40,693 39,281
Bank balances not considered as Cash and cash equivalents
Placed .............................................................................................................. (126,250,000)
Matured ........................................................................................................... 137,196,583
Interest received ...................................................................................................... 9,614,435 11,706,451
Gain on redemption of Mutual Fund Investments ................................................. 27,431,814 10,903,853
Net cash ow used in investing activities (B) ................................................... 16,716,939 (283,531,165)
Proceeds from long-term borrowings .................................................................... 60,000,000 2,600,000,000
Repayment of long-term borrowings ...................................................................... (57,900,000) (2,334,200,000)
Proceeds/(Repayment) of working capital borrowings ......................................... (21,850,598) (584,754,855)
Dividend including dividend distribution tax paid .................................................. (81,896,500) (55,951,925)
Finance costs .......................................................................................................... (333,122,028) (264,667,898)
Net cash ow from/(used in) nancing activities (C) ....................................... (434,769,126) (639,574,678)
Net increase/(decrease) in Cash and cash equivalents (A+B+C) ................ 107,276,196 (153,300,411)
Cash and cash equivalents at the beginning of the year ..................................... 206,905,993 360,206,404
Cash and cash equivalents at the end of the year........................................... 314,182,189 206,905,993
ST
MARCH, 2014
708
ST
MARCH, 2014
31
st
March, 2014
For the year ended
31
st
March, 2013
` `
Cash and cash equivalents as per Balance Sheet (Refer Note 19) ............................ 67,763,259 382,434,467
Less: Bank balances not considered as Cash and cash equivalents
(i) in deposit accounts maturing after 3 months ................................................. 143,600,000
(ii) in earmarked accounts (Refer Note 19) ......................................................... 49,053,417 42,650,000
Net Cash and cash equivalents ..................................................................................... 18,709,842 196,184,467
Investment in units of Mutual Funds (Refer Note 16) ................................................... 295,472,347 10,721,526
314,182,189 206,905,993
Cash and cash equivalents at the end of the year*
* Comprises:
(a) Cash on hand .......................................................................................................... 43,055 59,780
(i) In current accounts .......................................................................................... 18,666,787 55,622,728
(ii) In deposit accounts with original maturity of less than 3 months ................. 140,501,959
(c) Current investments considered as part of Cash and cash equivalents
(Refer Note 16) ........................................................................................................ 295,472,347 10,721,526
314,182,189 206,905,993
}
Directors
(Accounts)
Place : Chennai
Date : 16
th
April, 2014
Place : Jaipur
Date : 16
th
April, 2014
709
NOTES FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
ST
MARCH, 2014
Note 1. Corporate information
The Company is in the business of land development for industrial,
commercial and residential use. The Company acquires land and incurs
expenditure on its development and related infrastructure facilities for
lease. The Company also maintains the Industrial Park for which it collects
operation and maintenance charges from the lessees.
Note 2. Signicant accounting policies
notied under section 211(3C) of the Companies (Accounting
Standards) Rules, 2006 (as amended) (the 1956 Act) (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 (the 2013 Act) in terms of General Circular 15/2013
dated 13 September, 2013 of the Ministry of Corporate Affairs) and
the relevant provisions of the 1956 Act/2013 Companies Act, as
applicable 1956. The nancial statements have been prepared on
2.3 Inventories
Inventories are valued at lower of cost and net realizable value. Cost
represents cost of land and all expenditure incurred in connection
with, or attributable to the project, and, being a long-term project,
includes interest.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Leasehold land is amortized over the period of lease i.e. 99 years
Cost of Interiors of building given on lease is amortized over the
period of lease.
Intangible assets are amortized over their estimated useful life as follows:
Software expenditure incurred is amortized over three years.
The estimated useful life of the intangible assets and the amortization
period are reviewed at the end of each nancial year and the
amortization method is revised to reect the changed pattern.
2.7 Revenue recognition
a) Land lease premium is recognized as income upon creation of
leasehold rights in favor of the lessee or upon an agreement to
create leasehold rights with handing over of possession.
b) Income from properties and other assets given under operating
lease is recognised based on the terms of lease agreement on
a straight line basis over the non cancellable lease period.
c) Income from operation & maintenance charges and water
charges are recognized on an accrual basis as per terms of
the agreement with the lessees.
2.8 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for, when the right to receive it is established.
impairment losses, if any. The cost of xed assets includes interest
on borrowings attributable to acquisition of qualifying xed assets up
to the date the asset is ready for its intended use and other incidental
expenses incurred up to that date. Subsequent expenditure relating
to xed assets is capitalized only if such expenditure results in an
increase in the future benets from such asset beyond its previously
assessed standard of performance.
Capital work-in-progress
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
Intangible assets are carried at cost less accumulated amortization and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates.
2.11 Foreign currency transactions and translations
prevailing on the date of transaction. Monetary assets/liabilities are
translated at exchange rates prevailing on the date of settlement
or at the year end as applicable, and gain/loss arising out of such
translation is adjusted to the prot and loss account.
2.12 Investments
Long-term investments, are carried individually at cost less provision
for diminution, which is other than temporary in nature, in the value of
such investments. Current investments are carried individually, at the
lower of cost and fair value. Cost of investments include acquisition
2.13 Employee benets
Employee benets include provident fund, gratuity and compensated
absences
The Companys contribution to provident fund are considered as
dened contribution plans and are charged as an expense as they
fall due based on the amount of contribution required to be made
and when services are rendered by the employees.
Dened benet plans
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognized in the
710
Statement of Prot and Loss in the period in which they occur.
Past service cost is recognized immediately to the extent that the
benets are already vested and otherwise is amortized on a straight-
The retirement benet obligation recognized in the Balance Sheet
adjusted for unrecognized past service cost, as reduced by the fair
Short-term employee benets
to be paid in exchange for the services rendered by employees are
recognized during the year when the employees render the service.
These benets include performance incentive and compensated
absences which are expected to occur within twelve months after the
end of the period in which the employee renders the related service.
The cost of such compensated absences is accounted as under:
absences occur.
Long-term employee benets
Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee
renders the related service are recognized as a liability at the present
value of the dened benet obligation as at the Balance Sheet date
less the fair value of the plan assets out of which the obligations are
expected to be settled.
Borrowing costs include interest and amortization of ancillary costs
incurred. Costs in connection with the borrowing of funds to the
loan. Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating
to construction/development of the qualifying asset up to the date
of capitalization of such assets are added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
2.15 Segment reporting
The Company has a single reportable segment namely, lease of land
and properties constructed thereon.
Basic/Diluted earnings per share is computed by dividing the
prot/(loss) after tax (including the post tax effect of extraordinary
items, if any) and after reducing the dividend obligation (including
Dividend Distribution Tax) on Preference Shares by the weighted
average number of equity shares outstanding during the year.
Accordingly, MAT is recognized as an asset in the Balance Sheet
Deferred tax is recognized on timing differences, being the differences
liabilities are recognized for all timing differences. Deferred tax assets
recognized only if there is virtual certainty that there will be sufcient
future taxable income available to realize such assets. Deferred tax
assets are recognized for timing differences of other items only to
income will be available against which these can be realized. Deferred
tax assets and liabilities are offset if such items relate to taxes on
income levied by the same governing tax laws and the Company has
a legally enforceable right for such set off. Deferred tax assets are
reviewed at each Balance Sheet date for their realisability.
estimated and impairment is recognized, if the carrying amount of
indication that an impairment loss recognized for an asset in earlier
reversal of impairment loss is recognized in the Statement of Prot
Note 3. Share Capital
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Authorized
150,000,000 equity shares of
` 10 each .............................................. 1,500,000,000 1,500,000,000
50,000,000 Preference shares of
` 10 each .............................................. 500,000,000 500,000,000
2,000,000,000 2,000,000,000
150,000,000 Equity shares of
` 10/- each fully paid up ...................... 1,500,000,000 1,500,000,000
50,000,000 Preference Share of
` 10/- each fully paid up ...................... 500,000,000 500,000,000
Total ....................................................... 2,000,000,000 2,000,000,000
3.a Reconciliation of the shares outstanding at the beginning and at the
end of the reporting year
`
As at 31
st
st
March, 2013
No of Shares Value of Shares No of Shares Value of Shares
Equity Shares
At the beginning of
the year 150,000,000 1,500,000,000 150,000,000 1,500,000,000
Outstanding at the
end of the year 150,000,000 1,500,000,000 150,000,000 1,500,000,000
Preference Shares
At the beginning of
the year 50,000,000 500,000,000 50,000,000 500,000,000
Outstanding at the
end of the year 50,000,000 500,000,000 50,000,000 500,000,000
ST
MARCH, 2014
711
3.b Terms/ Rights attached to Equity Shares
The Company has only one class of Equity shares having a par value
of ` 10/- per share. Each holder of Equity Shares is entitled to one
vote per share.
The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the
approval of the shareholders at the Annual General Meeting.
Repayment of capital will be in proportion to the number of equity
shares held.
The amount of dividend proposed to be distributed to equity
share holders is ` 60,000,000/- (Re. 0.40 per share) (Previous year
` 30,000,000/- (Re. 0.20 per share))
3.c Terms of Conversion/redemption of 8% Redeemable Cumulative
Preference Shares (RCPS)
a) The Company issued 25 Million 8% Redeemable Cumulative
Preference Shares of ` 10/- each on 23
rd
December 2008.
These Preference Shares are due for redemption on
23
rd
December, 2016, subject to availability of prots and
fulllment of covenants as per term loan agreement.
b) The Company issued 25 Million 8% Redeemable Cumulative
Preference Shares of ` 10/- each on 4
th
November, 2011. The
Company is entitled to redeem these shares at the end of
5 years i.e., on 4
th
November, 2016, subject to availability of
prots and fulllment of covenants as per term loan agreement;
otherwise redemption can be extended up to the end of 8
th
year
i.e., up to 4
th
November, 2019,with preference shareholders
approval.
c) Each holder of RCPS is entitled to one vote per share only on
resolutions placed before the Company which directly affect
the rights attached to RCPS.
3.d The amount of dividend proposed to be distributed to preference
share holders is ` 40,000,000/- (previous year ` 40,000,000/-).
3.e Details of shares held by each shareholder holding more than 5%
shares:
`
As at 31
st
st
March, 2013
No of Shares Value of Shares No of Shares Value of Shares
Holding Company
(74%)
Mahindra Lifespace
Developers Limited
Equity 111,000,000 1,110,000,000 111,000,000 1,110,000,000
Preference Shares 37,000,000 370,000,000 37,000,000 370,000,000
Rajasthan
State Industrial
Development
and Investment
Corporation Limited
(26%)
Equity 39,000,000 390,000,000 39,000,000 390,000,000
Preference Shares 13,000,000 130,000,000 13,000,000 130,000,000
Note 4. Reserves & Surplus
`
As at
31
st
March, 2014
As at
31
st
March, 2013
(a) Debenture Redemption Reserve
Opening Balance ................................... 159,375,000
Add: Additions during the year
Transferred from surplus in
Statement of Prot & Loss ........... 159,375,000 159,375,000
Closing balance ................................... 318,750,000 159,375,000
(b) Surplus in Statement of Prot
and loss
Opening Balance ................................... 37,542,382 112,975,965
Add: Prot for the year .......................... 244,472,950 165,837,917
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Transferred to Debenture
Redemption Reserve .................... 159,375,000 159,375,000
Dividends proposed to be
distributed to equity shareholders .. 60,000,000 30,000,000
Dividends proposed to be
distributed to preference
shareholders ................................. 40,000,000 40,000,000
Tax on dividend ............................ 16,995,000 11,896,500
5,645,332 37,542,382
Closing balance Total 324,395,332 196,917,382
Note 5. Long Term Borrowings (Secured)
Term loans from bank ........................... 558,100,000 601,000,000
10% Secured Redeemable
Non Convertible Debentures ................. 2,500,000,000 2,500,000,000
Total 3,058,100,000 3,101,000,000
The above Long term borrowings include:
Term Loans form Bank
5.a ` 37.31 Crores carries interest rate linked with SBI Base Rate. The
loan is repayable in 100 monthly installments from July 2011 and
ending in Oct19.
5.b ` 18.50 Crores carries interest rate linked with SBI Base Rate. The
loan is repayable in 69 monthly installments starting from Jan14 and
ending in Sep19.
5.c The above Term loans from bank are secured by way of rst charge
on the specied xed assets and hypothecation of specied movable
and current assets of the company, both present and future.
5.d The company has not defaulted in repayment of interest and principal
Non Convertible Debentures
5.e Company has issued 2,500 Redeemable Secured Non Convertible
Debentures of ` 10 Lakhs each aggregating to ` 250 Crores
repayable in 3, 4 and 5 years in the ratio of 30:30:40 respectively
along with redemption premium as below:-
Series A B C
Face Value (`) 1,000,000 1,000,000 1,000,000
No. of Debentures 750 750 1,000
Total Value (`) 750,000,000 750,000,000 1,000,000,000
Redemption Premium
per debenture (`) 77,835 110,794 147,421
Maturity Date 13-Jul-15 13-Jul-16 13-Jul-17
5.f The above Non Convertible Debentures are secured by way of rst
and exclusive charge by way of equitable mortgage/hypothecation of
assets of the Company (excluding specied assets) covering not less
than 1.25 times of value of debentures outstanding at any point of time.
5.g Interest on Non Convertible Debentures is payable annually.
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Note 6. Deferred Tax Liabilities
Fixed Assets .................................... 132,202,388 109,051,674
Income accrued based on lease
equalization ..................................... 3,429,202 748,885
135,631,590 109,800,559
Accrued expenses allowable on
payment .......................................... 1,285,012 1,524,103
Net Deferred tax liability Total ..... 134,346,578 108,276,456
ST
MARCH, 2014
712
Note 7. Other Long Term Liabilities
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Deposits from lessees .................... 34,958,373 3,139,295
Total ................................................ 34,958,373 3,139,295
Note 8. Long term Provisions
Compensated Absences ................ 1,309,149 1,454,598
Gratuity ............................................ 1,398,842 1,541,919
Provision for premium on
redemption of debentures
(Refer Note 5) ................................. 119,708,094 50,021,564
Total ................................................ 122,416,085 53,018,081
Note 9. Short Term borrowings
Overdraft from banks (secured) ..... 21,850,598
Total ................................................ 21,850,598
Overdraft from banks is secured against Fixed deposits. The overdraft is
repayable on demand.
Note 10. Trade payables
Trade payables ............................... 63,089,893 47,158,025
Total ................................................ 63,089,893 47,158,025
Note 11. Other current Liabilities
`
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
Current maturities of Term Loan
from Banks* .................................... 102,900,000 57,900,000
Interest accrued and not due on
term loan/Debentures ..................... 186,543,997 186,640,300
Other Payables
Statutory Remittances ............ 3,534,569 4,330,302
Earnest money deposit
received .................................. 497,000 397,000
Advances from customers ..... 176,434,310 176,485,917
Deposit from lessees.............. 103,354,687 80,712,895
Payable on purchase of Fixed
Assets ..................................... 82,767,411 53,580,908
Other liabilities ........................ 133,884,071 175,496,598
Total ............................................... 789,916,045 735,543,920
* Refer Note 5 - Long Term Borrowings for details of security and terms
of repayment
Note 12. Short term provisions
Compensated absences ................. 426,433 759,045
Gratuity ............................................. 80,145 728,412
Proposed Equity Dividend............... 60,000,000 30,000,000
Proposed Preference Dividend ....... 40,000,000 40,000,000
Tax on Proposed Dividend .............. 16,995,000 11,896,500
Total ................................................. 117,501,578 83,383,957
Note 13. Fixed Assets
`
Particulars
Gross Block Depreciation Net Block
As at
01.04.2013
31.03.2014
As at
01.04.2013
For the year Deductions As at
31.03.2014
As at
31.03.2014
As at
31.03.2013
Tangible Assets
Leasehold land 42,253,019 42,253,019 2,755,472 420,560 3,176,032 39,076,987 39,497,547
Buildings
Owned 251,413,132 95,099,505 346,512,637 14,076,437 6,536,700 20,613,137 325,899,500 237,336,695
Given under operating
lease 969,472,638 18,813,245 988,285,883 52,754,828 19,936,365 72,691,193 915,594,690 916,717,810
Plant and machinery
Owned 69,861,058 3,975,550 73,836,608 8,191,997 10,583,370 18,775,367 55,061,241 61,669,061
lease 110,808,530 7,784,174 118,592,704 20,632,894 2,053,131 22,686,025 95,906,679 90,175,636
Ofce equipment 1,992,588 386,896 188,208 2,191,276 381,897 112,606 59,992 434,511 1,756,765 1,610,691
Furniture and xtures
Owned 5,294,281 3,167,279 8,461,560 1,702,700 412,127 2,114,827 6,346,733 3,591,581
lease 139,059,988 139,059,988 58,665,684 14,652,675 73,318,359 65,741,629 80,394,304
Computers 4,574,229 720,916 320,800 4,974,345 3,254,170 459,000 299,956 3,413,214 1,561,131 1,320,059
Vehicles 3,688,528 2,096,487 1,239,276 4,545,739 1,732,762 418,977 787,776 1,363,963 3,181,776 1,955,766
Total Tangible Assets 1,598,417,991 132,044,052 1,748,284 1,728,713,759 164,148,841 55,585,511 1,147,724 218,586,628 1,510,127,131 1,434,269,150
Note 14. Intangible Assets
Software 5,203,368 5,203,368 5,203,367 5,203,367 1 1
Total Intangible
Assets 5,203,368 5,203,368 5,203,367 5,203,367 1 1
Total 1,603,621,359 132,044,052 1,748,284 1,733,917,127 169,352,208 55,585,511 1,147,724 223,789,995 1,510,127,132 1,434,269,151
ST
MARCH, 2014
713
Note 13. Fixed Assets (Previous Year)
`
Particulars Gross Block Depreciation Net Block
As at
01.04.2012
Additions Adjustments Deductions As at
31.03.2013
As at
01.04.2012
For the
year
Adjustments Deductions As at
31.03.2013
As at
31.03.2013
As at
31.03.2012
Tangible Assets
Leasehold land 42,253,019 42,253,019 2,334,913 420,559 2,755,472 39,497,547 39,918,106
Buildings
Owned 208,201,721 43,368,408 (156,997) 251,413,132 9,823,457 4,263,167 (10,187) 14,076,437 237,336,695 198,378,264
Given under
operating lease
808,827,494 160,488,147 156,997 969,472,638 35,430,775 17,313,866 10,187 52,754,828 916,717,810 773,396,719
Plant and
machinery
Owned 64,093,462 5,767,596 69,861,058 3,806,525 3,359,951 1,025,521 8,191,997 61,669,061 60,286,937
Given under
operating lease
108,082,208 8,287,451 (5,561,129) 110,808,530 12,788,439 8,791,667 (947,212) 20,632,894 90,175,636 95,293,769
Ofce equipment 2,043,135 283,303 (206,467) 127,383 1,992,588 413,178 107,908 (78,309) 60,880 381,897 1,610,691 1,629,957
Furniture and
xtures
Owned 5,294,281 5,294,281 1,385,981 316,719 1,702,700 3,591,581 3,908,300
Given under
operating lease
139,059,988 139,059,988 44,013,010 14,652,674 58,665,684 80,394,304 95,046,978
Computers 4,346,723 227,506 4,574,229 2,677,850 576,320 3,254,170 1,320,059 1,668,873
Vehicles 4,796,372 1,107,844 3,688,528 1,963,786 420,561 651,585 1,732,762 1,955,766 2,832,586
Total Tangible
Assets

1,386,998,403

212,654,815 1,235,227 1,598,417,991

114,637,914 50,223,392 712,465 164,148,841 1,434,269,150

1,272,360,489
Note 14. Intangible Assets (Previous Year)
Software 5,203,368 5,203,368 5,203,367 5,203,367 1 1
Total Intangible
Assets 5,203,368 5,203,368 5,203,367 5,203,367 1 1
Total 1,392,201,771 212,654,815 1,235,227 1,603,621,359 119,841,281 50,223,392 712,465 169,352,208 1,434,269,151 1,272,360,490
Note 15. Long term Loans and advances (Unsecured considered good.)
`
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
Capital Advance 14,887,059
Security Deposits ............................ 6,817,608 3,317,648
Deposits in respect of premises
taken on lease ................................ 126,000 126,000
Export Duty Refund Receivable ..... 8,290,887 8,290,887
Advance income tax
(net of provisions) ........................... 114,193,113 94,056,321
MAT credit entitlement .................... 11,295,429
Prepaid Expenses ........................... 11,400,000
Total 155,714,667 117,086,285
Note 16. Current Investments (At lower of cost and fair value)
Units `
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
As at
31
st
March, 2014
As at
31
st
March, 2013
Investment in Mutual funds
(unquoted & non trade)
ICICI Prudential Interval Fund II
Quarterly Plan F- Growth ...... 7,349,409 99,999,989
ICICI Prudential Interval Fund III
Quarterly Plan F- Growth ...... 738,748 9,999,988
JM Money Manager Fund
Super Plus Plan - Growth ...... 108,988 2,000,000
Units `
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
As at
31
st
March, 2014
As at
31
st
March, 2013
JM High Liquidity Fund -
Growth Option (452) ................ 201,554 7,000,000
JM - Money Manager fund -
Super Plan Growth Option ........ 152,579 2,800,000
JM Floater Short Term Fund -
Growth Option (448) ................ 445,647 8,827,379
Kotak Liquid scheme plan-A -
Growth ................................... 2,537 6,442,237
Reliance Interval Fund Quarterly
Plan Series- I ........................... 4,989,422 50,000,000
Reliance Interval Fund Quarterly
Plan Series- II .......................... 2,894,591 50,000,000
Reliance Money Manager Fund
- Growth Option ....................... 1,185 2,000,000
SBI - Magnum Insta Cash Fund
Cash Option - Growth ................ 5,907 10,721,526
SBI Ultra Short Term Debt Fund
- Growth .................................. 2,134 3,500,000
TATA Floater Fund - Growth ..... 428 769,841
Tata Floater Fund - Growth ....... 1,663 2,953,898
Templeton India Ultra Short Bond
Fund Super Inst. Plan - Growth .. 1,544,522 25,358,474
UTI Banking & PSU Debt Fund
- Growth .................................. 2,186,728 21,867,283
UTI Money Market Fund-
Institutional Plan - Growth ........ 1,382 1,953,258
Total ........................................ 20,621,517 5,907 295,472,347 10,721,526
ST
MARCH, 2014
714
`
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
Note 17. Inventories (at lower of cost and net realisable value)
Work In Progress ................................... 4,369,974,693 4,195,593,331
(representing cost of land and related
expenditure)
Total ....................................................... 4,369,974,693 4,195,593,331
Note 18. Trade Receivable. (Unsecured considered good)
Trade receivables outstanding for
a period exceeding six months from
the date they were due for payment ... 49,625,318 21,385,128
Other Trade receivables .......................
50,969,677 74,143,946
Total ...................................................... 100,594,995 95,529,074
Note 19. Cash and cash equivalents
Cash on hand ........................................ 43,055 59,780
Balances with Banks
in Current account ................................. 18,666,787 55,622,728
in Deposits maturing in 3 months ........ 140,501,959
In Deposits maturing after 3 months .... 143,600,000
in earmarked deposits (with restriction
on usage)* ............................................. 49,053,417 42,650,000
Total ....................................................... 67,763,259 382,434,467
* The earmarked deposits are given as security against term loan, Bank
over draft and other non-fund based facilities.
Note 20. Short term Loans and advances
(Unsecured, considered good unless otherwise stated)
Prepaid expenses .................................. 7,086,553 6,284,366
Mobilization and other advances given
to vendors (secured against bank
guarantee) .............................................. 16,439,861 19,517,024
Balances with Government authorities
(Service tax) ........................................... 1,532,538 7,142,753
Total ....................................................... 25,058,952 32,944,143
Note 21. Other current assets
Deferred lease rent ................................ 10,088,857 2,203,251
Interest accrued on Fixed Deposits ...... 5,482,126 5,356,609
Contractually recoverable expenses ..... 1,300,000 10,824,999
Total ....................................................... 16,870,983 18,384,859
`
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Note 22. Revenue from operations
Land Lease Premium ............. 761,999,822 849,762,611
Property Rentals ..................... 158,430,063 128,479,944
Income from Operation and
Maintenance ............................ 63,149,873 63,623,013
Total ........................................ 983,579,758 1,041,865,568
22.a During the year, the company has leased 52.43 (previous year 74.13)
acres of land on long term basis. Of this 1.15 (previous year NIL)
acres in Special Economic Zone (SEZ) and 51.28 (previous year
74.13) acres is in the Non Special economic Zone (Non SEZ).
`
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Note 23. Other Income
Interest on
Deposits from Banks ............ 9,438,387 11,859,049
Income Tax Refund & Others 301,565 897,116
Gain on Redemption of Mutual
funds ........................................ 27,431,814 10,903,853
Miscellaneous Income ............. 886,781 506,608
Liabilities no longer required
written back.............................. 30,572 91,841
Total ......................................... 38,089,119 24,258,467
Note 24. Changes in Inventory of Work in Progress
Opening work in progress ...... 4,195,593,331 3,767,880,265
Less: Closing work in
progress ......................... 4,369,974,693 4,195,593,331
Total ......................................... (174,381,362) (427,713,066)
Note 25. Employee Benet Expenses
Salaries, Wages and Bonus ... 47,646,468 49,874,565
Contribution to Provident and
other funds .............................. 1,431,555 1,438,840
Gratuity .................................... (4,145) 645,475
Staff welfare ............................ 2,055,405 1,650,180
Total ........................................ 51,129,283 53,609,060
Note 26. Finance Costs
Interest on Term Loans ............ 82,462,331 176,786,841
Interest on Inter Corporate
Deposits ................................... 56,074,159
Interest on Debentures ............ 250,000,000 179,452,056
Premium on Redemption of
Debentures ............................... 69,686,530 50,021,564
Interest - Others ...................... 47,298 2,471,276
Other Borrowing Costs ............ 516,096 30,068,797
Total ......................................... 402,712,255 494,874,693
Note 27. Other Expenses
Legal and Professional ............ 8,067,861 8,374,750
Electricity .................................. 13,289,724 7,343,782
Rent .......................................... 850,390 767,132
Rates and Taxes ...................... 160,634 219,125
Insurance ................................. 2,223,285 2,541,294
Repairs and Maintenance ....... 4,372,516 2,096,717
Commission ............................. 6,434,142
Marketing & Advertisement ..... 24,605,527 23,176,336
Operation & Maintenance
Expenses .................................. 66,728,816 42,517,168
Travelling and Conveyance ..... 9,778,236 8,973,443
Communication ........................ 1,120,085 1,002,343
Payments to auditors (Refer
Note (i) below) ......................... 811,694 796,790
Loss on sale of xed assets .... 559,867 483,481
Miscellaneous Expenses ......... 5,425,388 2,785,647
Total ......................................... 144,428,165 101,078,008
ST
MARCH, 2014
715
`
Particulars
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
(i) Payments to the
auditors comprises (net
of service tax refund) .....
Statutory Audit ............... 550,000 550,000
Other services ................ 240,000 220,000
Reimbursement of
expenses ........................ 21,694 26,790
Total ............................... 811,694 796,790
Additional information to the nancial statements
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Note 28. Contingent liabilities and commitments (to the extent not
provided for)
(i) Contingent liabilities
Income Tax matters under appeal
By Company ............................... 9,088,735 16,177,776
By Tax authorities ....................... 7,633,579
Note:-
The above amount is based
on demands raised, which the
company is contesting with the
concerned authorities. Outows,
if any, arising out of these claims
would depend on the outcome
of the decision of the appellate
authorities and the companys
rights for future appeals.
(ii) Commitments
account and not provided for
Tangible Assets 189,203,067 76,493,748
Note 29. There are no amounts due to micro enterprises and small enterprises.
This is based on the information received from such parties as
identied by the company. This has been relied upon by the auditors.
`
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Note 30. Value of imports calculated on CIF basis
Capital Goods .......................... 610,847
`
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Note 31. Expenditure in foreign currency
Travel ....................................... 151,018
Subscription ............................ 511,850
Advertisement ......................... 571,202
722,220 511,850
Disclosures under Accounting Standards
Additional information to the nancial statements - Employee benets
`
Gratuity (Unfunded)
2013-14 2012-13
Note 32. Employee Benets
a. Net Asset/(Liability) recognized in the
balance sheet as at 31
st
March, 2013
Liability recognised in the balance sheet 1,478,987 2,270,331
Non current .............................................. 1,398,842 1,541,919
Current ..................................................... 80,145 728,412
`
Gratuity (Unfunded)
2013-14 2012-13
b. Expense recognized in the Prot &
Loss account
Past service cost ......................................
Current Service cost ................................ 403,521 548,519
Interest cost ............................................. 150,139 176,486
Actuarial (gains)/Losses .......................... (557,805) (79,530)
Total expenses (4,145) 645,475
c. Change in present value of Dened
Benet obligation
Present Value of the obligation at the
beginning of the year ..............................
2,270,331 2,527,755
Past service cost ......................................
Current Service cost ................................ 403,521 548,519
Interest Cost ........................................... 150,139 176,486
Actuarial (Gains)/Losses ........................ (557,805) (79,530)
Benets Paid ............................................ (787,199) (902,899)
Present value of the obligation as at the
end of the year ........................................
1,478,987 2,270,331
d. Principal actuarial assumptions ...........
Discount Rate .......................................... 9.20% 8.50%
Mortality Rate ........................................... IALM
(2006-08)
Ultimate
LIC
(1994-96)
Ultimate
mortality
tables
e. Estimates of future salary increases considered in actuarial
valuation take account of ination, seniority, promotions,
increments and other relevant factors such as supply and demand
in the employment market.
f. Experience
adjustment
as provided
by actuary:
2013-14
2013-14 2012-13 2011-12 2010-11 2009-10
Present
value of
obligation
1,478,987 2,270,331 2,527,755 1,809,056 1,473,221
Experience
adjustment
on plan
liabilities
(162,668) (169,416) (126,336) (761,237) (255,527)
Note 33. Details of borrowing costs capitalised
`
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Borrowing costs capitalised
during the year as
Inventory ............................. 180,585,043 257,867,712
Fixed Assets ....................... 9,101,306
Capital Work in Progress ...
Note 34. Related party transactions
Details of related parties:
Description of
relationship
Names of related parties
Ultimate Holding
Company
Fellow Subsidiaries Mahindra Integrated Business Solutions Private Limited
Mahindra EPC Services Private Limited
Key Management
Personnel (KMP)
Mr. B.K. Subbaiah - Chief Operating Ofcer (Upto June 30, 2013)
Mr. Sanjay Srivastava - Chief Operating Ofcer (From July 01, 2013)
Note: Related parties have been identied by the Management
ST
MARCH, 2014
716
Details of related party transactions during the year ended 31
st
March, 2014 and balances outstanding as at 31
st
March, 2013:
Particulars Mahindra &
Mahindra Limited
Mahindra
Lifespace
Developers
Limited
Mahindra Integrated
Business Solutions
Private Limited
Mahindra EPC
Services Private
Limited
Mahindra
Holidays &
Resorts India
Limited
Mahindra
Consulting
Engineers Limited
Mr. B.K. Subbaiah Mr. Sanjay
Srivastava
Rendering of services 1,006,732 12,000
() (12,000)
Land Lease Premium Received 88,450,646
(122,367,600)
Receiving of services 480,072 108,300 1,806,199 543,175
(460,464) (108,400) () (1,305,000)
Security Deposit Received 319,140
(380,378)
Finance (including loans and equity
contributions in cash or in kind)
ICD Taken

(1,420,000,000)
ICD Repaid

(2,000,000,000)
Interest on ICD
(56,074,159)
Preference Shares Dividend Paid 29,600,000
(35,625,137)
Equity Shares Dividend Paid 22,200,000
()
Remuneration 2,269,711 7,734,944
(7,577,655) ()
Balances outstanding at the end
of the year
Trade payables 791,687 177,393
(436,947) (9,101) ()
Deposits Payable 699,518
(380,378)
Note 35. Leases
The Companys leasing arrangements are in respect of commercial
premises given under operating lease.
`
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
Gross carrying amount of premises
and other assets 1,245,938,575 1,219,341,156
Accumulated depreciation 168,695,577 132,053,406
Depreciation for the year 36,642,171 40,758,207
Future minimum lease payments under non-cancellable operating leases
(lock in period of 2 to 3 years for the building and 9 years 5 months for
interiors)
`
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
Not later than 1 year 66,228,804 35,986,998
5 years 172,235,624 130,609,375
Later than 5 years 37,346,934 65,105,600
Signicant Leasing Arrangements
Lease is non-cancellable during the lock in period.
In respect of building primary lease period is for 5 years, renewable for
further 2 terms of 5 years each.
Note 36. Earnings per share
`
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
Basic & Diluted
Net prot for the year from continuing
operations 244,472,950 165,837,917
thereon 46,798,000 46,798,000
Net prot for the year from continuing
operations attributable to the equity
shareholders 197,674,950 119,039,917
shares 150,000,000 150,000,000
Earnings per share from continuing
operations - Basic & Diluted 1.32 0.79
Note 37. Previous years gures have been regrouped/reclassied wherever
necessary to correspond with the current years classication/
disclosure.
Sanjay Srivastava C S Rajan
}
Directors
Manager & COO Sangeeta Prasad
Sanjay Jain
Company Secretary cum GM
(Accounts)
Place : Jaipur
Date : 16
th
April, 2014
ST
MARCH, 2014
MAHINDRA INTEGRATED TOWNSHIP LIMITED
717
Your Directors present the Eighteenth Report together with the audited accounts of the Company for the year ended 31
st
March,
2014.
FINANCIAL HIGHLIGHTS:
(Rs. in lakhs)
31
st
March 2014
For the year ended
31
st
March, 2013
Income ...................................................................................................................... 5869.46 5,842.71
Other Income ............................................................................................................ 389.80 1020.85
Prot/(Loss) before Depreciation, Interest and Taxation ......................................... 702.80 1559.01
Less: Depreciation .................................................................................................... 1.19 0.34
Prot before Interest and Taxation ........................................................................... 701.61 1558.67
Less: Interest ............................................................................................................. 1217.60 417.34
Prot/(Loss) Before Taxation .................................................................................... (515.99) 1141.33
Provision for Tax:
Current Tax ........................................................................................................ 28.28
Deferred Tax ...................................................................................................... (28.28)
Prot/(Loss) after tax for the year ............................................................................ (515.99) 1141.33
Add: Balance of Prot/(Loss) for earlier years ........................................................ (194.85) (1336.18)
Amount available for appropriation .......................................................................... (710.84) (194.85)
Balance carried forward ........................................................................................... (710.84) (194.85)
DIRECTORS REPORT TO THE MEMERS
OPERATIONS
The company is currently developing 2 residential projects.
Iris Court, located in Mahindra World City, Chennai, is spread
over 18 acres with a total saleable area of 0.86 million square
feet. During 2013-14, the rst phase of the project covering
0.27 million square feet was completed. The handover of units
in this phase is also nearing completion and over 100 families
have already moved in. Construction in the remaining two
phases is underway and progressing as per schedule. 84%
of the total units launched in this project have been sold upto
March, 2014.
Nova in Mahindra World City, Chennai is spread over 7 acres
with a saleable area of 0.54 million square feet. During the
year, the Company launched the rst phase of the project
which has 360 units. The construction work also started along
with the launch and is progressing as per schedule. 51% of
total units launched have been sold as of March, 2014.
DIVIDEND
In view of loss during the year, your Directors have not
recommended any dividend for the year under review.
CAPITAL
The Authorised equity share capital of the company is Rs. 60
crores. The paid up equity share capital of Rs.50.44 crores
of your Company is held by Mahindra Lifespace Developers
Limited (MLDL) and Mahindra World City Developers Limited
in the ratio of 73.36 : 25.78 respectively and therefore your
company continues to be a subsidiary company of MLDL and
consequently a subsidiary company of the ultimate Holding
Company, viz. Mahindra & Mahindra Limited.
EMPLOYEE STOCK OPTION SHCEME (ESOS)
Out of 4,55,000 Options granted and vested, 20,000 Options
were lapsed and balance 4,35,000 Options were exercised
earlier. During the year no Options were granted / exercised.
SUBSIDIARY OF THE COMPANY
During FY 2012-13, the Company acquired 49% of paid
up equity capital held by Velands Investments Limited, an
Ayala Group Company in Mahindra Residential Developers
Limited (MRDL). MRDL is now wholly owned subsidiary of
your Company and consequently a subsidiary company of,
Mahindra Lifespace Developers Limited and the ultimate
holding company Mahindra & Mahindra Limited.
The audited accounts of your subsidiary Company for the year
ended 31
st
March, 2014 together with Directors and Auditors
Report, and a statement pursuant to Section 212 of the
Companies Act, 1956 are attached.
DIRECTORS
Mr. S. Chandru (DIN 243025) retires by rotation and being
eligible, offers himself for re-appointment at the forthcoming
718
st
March,
2014 and of the loss of the Company for the year ended
on that date.
concern basis.
AUDIT COMMITTEE
The Audit Committee of your Company comprises of Ms. Anita
Arjundas (Chairperson), Mr. S. Chandru and Ms. Sangeeta
Prasad.
The terms of reference of the Committee were enhanced in
the Board meeting held on 18
th
April, 2014 pursuant to Section
Audit Committee met four times during the year under review.
NOMINATION AND REMUNERATION COMMITTEE (earlier
known as Compensation Committee)
th
April 2014
changed the nomenclature of the Compensation Committee
as Nomination and Remuneration Committee and enhanced
the terms of reference.
The Nomination and Remuneration Committee of your
Company comprises of Ms. Anita Arjundas (Chairperson), Mr.
S. Chandru and Ms. Sangeeta Prasad. During the year under
review, no meeting of the Committee was held.
AUDITORS
M/s. A.F. Ferguson & Co., Chartered Accountants, Chennai,
retire as Auditors at the 18
th
Annual General Meeting. Pursuant
to Section 139 of the Companies Act, 2013, the members
are requested to appoint Auditors from the conclusion of the
forthcoming Annual General Meeting until the conclusion of
the next Annual General Meeting and x their remuneration.
As required by the provisions of Section 139 and 141 of the
Companies Act, 2013 read with the Companies (Audit and
Auditors) Rules, 2014, the Company has received a written
consent and certicate from the above auditors proposed to
be re-appointed as Auditors for one year i.e upto conclusion of
the 19
th
Annual General Meeting of the Company to the effect
that their re-appointment, if made, would be in conformity with
the limits specied in the said section.
CODE OF CONDUCT
PUBLIC DEPOSITS, LOANS/ADVANCES
The Company has not made any loans/advances of the nature
Agreement of the parent companies Mahindra Lifespace
Developers Limited and Mahindra & Mahindra Limited with the
stock exchanges.
this Report.
there under
31
st
March, 2014, or was employed for a part of the Financial
Rs. 500,000 per month during any part of the year.
ACKNOWLEDGEMENT
The Directors thank State Bank of India and all consultants
and associates of the Company for the support received from
them during the year under review.
For and On Behalf of the Board,
Anita Arjundas
Chairperson
Chennai , 18
th
April, 2014 DIN : 00243215
719
ST
MARCH, 2014.
a. Energy conservation measures taken : The operations of your Company are not energy intensive.
However, adequate measures have been taken to reduce
energy consumption.
b. Additional investments and proposals, if any, being
: Nil
c. Impact of the measures taken at (a) & (b) above for
impact on the cost of production of goods
: The above measures have resulted in reduction of energy
consumption
d. Total energy consumption and energy consumption
Schedule
: Not applicable
1. Areas in which R & D is carried out : The Company has not carried out any R&D activities
during the year
The information on foreign exchange earnings and outgo is furnished in the notes to accounts.
Anita Arjundas
Place: Chennai Chairperson
Date : 18
th
April, 2014 (DIN-00243215)
720
TO THE MEMBERS OF
of MAHINDRA INTEGRATED TOWNSHIP LIMITED
at 31
st
the Cash Flow Statement for the year then ended and
a summary of the signicant accounting policies and
1956 (the Act) (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General
th
September, 2013 of the Ministry
of Corporate Affairs) and in accordance with the accounting
principles generally accepted in India. This responsibility
internal control relevant to the preparation and presentation of
the nancial statements that give a true and fair view and are
issued by the Institute of Chartered Accountants of India.
Those Standards require that we comply with the ethical
made by the Management, as well as evaluating the overall
presentation of the nancial statements.
opinion.
Opinion
view in conformity with the accounting principles
(a) in the case of the Balance Sheet, of the state of
st
March, 2014;
loss of the Company for the year ended on that date
and
terms of Section 227(4A) of the Act, we give in the
Annexure a statement on the matters specied in
Prot and Loss, and the Cash Flow Statement
the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of
th
September, 2013
of the Ministry of Corporate Affairs).
st
record by the Board of Directors, none of the
st
March, 2014 from
being appointed as a director in terms of Section
274(1) (g) of the Act.
B. Ramaratnam
Partner
Chennai, 18
th
April, 2014
721
members of Mahindra Integrated Township Limited on the
st
March 2014)
activities/result, clauses (vi), (x), (xii) to (xv), (xviii), (xix),
and (xx) of paragraph 4 of the Order are not applicable to
the Company in the current year.
and situation of the same.
provides for physical verication of all the xed
assets at reasonable intervals. According to the
(c) No xed assets have been disposed off during the year.
explanations given to us, the Company has
maintained proper records of its inventories and no
material discrepancies were noticed on physical
verication.
explanations given to us , the Company has neither granted
companies, rms or other parties covered in the Register
purchase of inventory and xed assets. During the course
of our audit, we have not observed any continuing failure
to correct major weakness in such internal control
system.
Act, 1956.
(vii) In our opinion, the internal audit function carried out during
the year by rm of Chartered Accountants appointed by
the Management have been commensurate with the size
of the company and the nature of its business.
under Section 209(1)(d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed cost
records have been maintained. We have, however, not
made a detailed examination of the cost records with
a view to determine whether they are accurate or complete.
(a) The Company has been generally regular in depositing
undisputed dues, including Income tax, Service tax
and other material statutory dues applicable to it with
respect of Income tax, Service tax and other material
st
March, 2014 for
became payable.
(c) As on 31
st
March, 2014, there were no disputed dues
on account of Income tax, Service tax and other
material statutory dues which have not been deposited.
in the repayment of dues in respect of term loans.
information and explanations given to us, no fraud by the
Company and no material fraud on the Company has
B. Ramaratnam
Partner
Chennai, 18
th
April, 2014
722
` in lacs
Note
As at
31
st
March, 2014
As at
31
st
March, 2013
Shareholders Funds:
Share capital ............................................................................................ 3 5,043.50 5,043.50
Reserves and surplus .............................................................................. 4 (710.84) (194.85)
Trade Payables ......................................................................................... 5 1,727.46 1,097.30
Other Current Liabilities ........................................................................... 6 3,790.31 3,527.93
Short term borrowings ............................................................................. 7 9,270.00 11,720.00
Short term provisions ............................................................................... 8 60.00
Total ................................................................................................................. 19,180.43 21,193.88
B. ASSETS
Non Current Assets
Tangible Fixed Assets .............................................................................. 9 4.04 5.16
Non current Investments ......................................................................... 10 6,630.48 6,630.48
Long term loans and advances............................................................... 11 370.32 213.97
Current Assets
Inventories ................................................................................................ 12 9,730.35 8,526.79
Trade receivables ..................................................................................... 13 1,298.52 683.48
Cash and cash equivalents ..................................................................... 14 484.79 282.62
Short- term loans and advances ............................................................. 15 552.17 236.72
Other current assets ................................................................................ 16 109.76 4,614.66
Total ................................................................................................................. 19,180.43 21,193.88
st
MARCH, 2014
For A. F. Ferguson & Co. Anita Arjundas Chairperson
B. Ramaratnam Arti Shinde Sangeeta Prasad Director
Partner Company Secretary
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
723
` in lacs
Note
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
INCOME
Revenue from operations ................................................................................ 17 5,869.46 5,842.71
Other Income ................................................................................................... 18 389.80 1,020.85
6,259.26 6,863.56
EXPENDITURE
Project Costs ................................................................................................... 19 6,041.65 5,197.51
Changes in Inventories ................................................................................... 20 (1,203.56) (370.19)
Finance Costs .................................................................................................. 21 1,217.60 417.34
Depreciation ..................................................................................................... 9 1.19 0.34
Other expenses ............................................................................................... 22 718.37 477.23
6,775.25 5,722.23
Prot/(Loss) before tax ........................................................................................ (515.99) 1,141.33
Current tax ...................................................................................................... 28.28
Less : MAT Credit entitlement ..................................................................... (28.28)
Prot/(Loss) for the year ................................................................................. (515.99) 1,141.33
Earnings per share: (`)
Basic/(Diluted) ................................................................................................. (1.02) 2.26
STATEMENT OF PROFIT AND LOSS FOR YEAR ENDED 31
st
MARCH, 2014
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
724
` in lacs
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Prot (Loss) before tax ........................................................................................................................ (515.99) 1,141.33
Adjustments for:
Dividend income ......................................................................................................................... (1,000.00)
Depreciation ................................................................................................................................ 1.19 0.34
Finance Costs.............................................................................................................................. 1,217.60 417.34
Interest income ............................................................................................................................ (8.49) (10.61)
Operating prot/(loss) before working capital changes .............................................................. 694.31 548.40
Inventories ................................................................................................................................... (1,039.99) 85.26
Trade Receivables ....................................................................................................................... (615.04) (563.96)
Long term loans and advances .................................................................................................. (12.01) (115.63)
Short-term loans and advances ................................................................................................. (315.45) (27.86)
Other Current assets ................................................................................................................... 4,504.90 (2,047.75)
Trade payables ............................................................................................................................ 630.16 759.46
Short term provisions .................................................................................................................. 60.00
Other current liabilities ................................................................................................................ 1,453.37 865.84
4,665.94 (1,044.64)
Cash generated from/(used) in operations ........................................................................................ 5,360.25 (496.24)
Income taxes paid (net of refunds) .................................................................................................... (144.34) (57.93)
Net cash ow from/(used in) operating activities ......................................................................... 5,215.91 (554.17)
B. Cash ow from investing activities:
Purchase of xed assets ..................................................................................................................... (0.07) (4.43)
Interest received .................................................................................................................................. 8.49 10.61
Dividend received ................................................................................................................................ 1,000.00
Net cash from investing activities ................................................................................................... 8.42 1,006.18
C. Cash ow from nancing activities:
Inter Corporate Deposits received ...................................................................................................... 83.00 6,600.00
Inter Corporate Deposits repaid ......................................................................................................... (2,533.00) 693.00
Bank balances not considered as Cash and Cash Equivalents ....................................................... (141.26)
Repayment of term loan ..................................................................................................................... (1,268.00)
Finance costs ...................................................................................................................................... (1,304.16) (855.59)
Purchase of Investments ..................................................................................................................... (6,616.73)
Net cash used in nancing activities .............................................................................................. (5,163.42) (179.32)
Net increase in cash and cash equivalents (A+B+C) ................................................................. 60.91 272.69
Cash and Cash Equivalents at the Beginning of the Year ................................................................ 282.62 9.93
Cash and Cash Equivalents at the End of the Year ..................................................................... 343.53 282.62
Reconciliation of Cash and Cash Equivalents with the Balance Sheet
Cash and Cash Equivalents as per Balance Sheet ........................................................................... 484.79 282.62
Less: Bank balances not considered as Cash and Cash Equivalents ............................................. 141.26
343.53
282.62
st
MARCH, 2014
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
725
The Company is a special purpose vehicle formed for developing
residential complexes at Mahindra World City, Chengalpet, Tamilnadu.
a) Basis of accounting:
India (Indian GAAP) to comply with the Accounting Standards
notied under Section 211 (3C) of the Companies Act, 1956
(the 1956 Act) (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 (the 2013 Act) in terms of
General circular 15/2013 dated 13th September 2013 of the Ministry
of corporate Affairs) and the relevant provisions of the 1956 Act/2013
b) Use of Estimates:
c) Inventories:
The cost of construction materials is determined on the basis of the
Construction work in progress includes cost of land, construction
costs and allocated interest and expenses attributable to the
projects undertaken by the company.
d) Cash and cash equivalents (for purposes of Cash Flow Statement)
e) Cash ow statement
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash ows from
operating, investing and nancing activities of the Company are
segregated based on the available information.
f) Revenue Recognition:
Income from property development activity is accounted on the
percentage of completion method which necessarily involves
technical estimates of the percentage of completion of each
contract, and costs to completion of the contract, on the basis of
which prots/losses are accounted. Such estimates, made by the
management and certied to the auditors, have been relied upon by
them, as these are of a technical nature.
The Company has adopted The Guidance note for Accounting of
Real Estate Transactions(Revised 2012) applicable to all projects in
real estate which have commenced on or after April 1 2012 and
relating to projects where revenue is being recognized for the rst
time on or after April 1 2012.
Accordingly revenues are now recognized only when all the
following conditions are met:
All critical approvals necessary for commencement of the
project have been obtained
NOTES FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31
st
MARCH, 2014
Expenditure incurred on construction & development cost is not
less than 25 % of the estimated construction and development
costs excluding land cost
Atleast 25% of the saleable project area is secured by
contracts or agreements with buyers.
Atleast 10 % of the total revenue as per the agreements of sale are
realised at the reporting date in respect of each of the contracts
and it is reasonable to expect that the parties to such contracts
will comply with the payment terms as dened in the contracts.
In respect of projects where revenue recognition commenced prior
to April 1, 2012, the following policy is adopted.
Revenues are recognized only when all the following conditions are met.
The project costs incurred exceed 25% of the total estimated
project costs including land
At least 10% of the sales consideration is realized.
At least plinth level is achieved for a particular phase as
certied by the architect.
g) Other income
Interest income is accounted on accrual basis
h) Fixed assets
Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition is inclusive of purchase price, levies and any directly
attributable cost of bringing the assets to its working condition for
the intended use
Depreciation
Depreciation is provided on straight line method from the date the
assets are put to use in accordance with Schedule XIV to the
i) Investments
Long term investments are carried at cost. Diminution in the value
of investments, other than temporary, is provided for. Current
investments are valued at lower of cost and fair value.
j) Foreign currency transactions and translations
Foreign exchange transactions are recorded at exchange rates
prevailing on the date of the transactions. The exchange gain/loss
arising on settlement of such transactions is adjusted to the prot
and loss account.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date
and gain or loss arising out of such translation is adjusted to the
prot and loss account
k) Borrowing costs
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction/development of the qualifying asset upto the date of
capitalisation of such assets are added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
l) Earnings per share
after tax (including the post -tax effect of extraordinary items, if any)
by the weighted average number of equity shares outstanding
during the year. Diluted earnings per share is computed by dividing
the prot/(loss) after tax (including the post-tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
726
other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on
the conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net prot per share from continuing
ordinary operations. Potential dilutive equity shares are deemed to
be converted as at the beginning of the period, unless they have
been issued at a later date. The dilutive potential equity shares are
adjusted for the proceeds receivable had the shares been actually
issued at fair value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are determined independently
for each period presented. The number of equity shares and
potentially dilutive equity shares are adjusted for share splits/reverse
share splits and bonus shares, as appropriate.
m) Taxes on income
which gives future economic benets in the form of adjustment to
future income tax liability, is considered as an asset if there is
Deferred tax is recognized on timing differences, being the
differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or
more subsequent periods. Deferred tax is measured using the tax
rates and the tax laws enacted or substantively enacted as at the
reporting date. Deferred tax liabilities are recognized for all timing
differences. Deferred tax assets in respect of unabsorbed
depreciation and carry forward of losses are recognized only if there
is virtual certainty that there will be sufcient future taxable income
available to realize such assets. Deferred tax assets are recognized
for timing differences of other items only to the extent that
reasonable certainty exists that sufcient future taxable income will
be available against which these can be realized. Deferred tax
assets and liabilities are offset if such items relate to taxes on
income levied by the same governing tax laws and the Company
has a legally enforceable right for such set off. Deferred tax assets
are reviewed at each Balance Sheet date for their reliability.
3. SHARE CAPITAL
st
st
March, 2013
Number of
shares
Value of
Shares
` in lacs
Number of
shares
Value of
Shares
` in lacs
Authorised
Equity shares of ` 10 each ...... 60,000,000 6,000.00 60,000,000 6,000.00
Issued, Subscribed and Paid up
Equity Shares of ` 10 each ...... 50,435,000 5,043.50 50,435,000 5,043.50
50,435,000 5,043.50 50,435,000 5,043.50
a. Reconciliation of shares outstanding at the beginning and at the end
of the reporting year
st
st
March, 2013
No of
Shares
Value of
Shares
` in lacs
No of
Shares
Value of
Shares
` in lacs
Balance as at the beginning of
the year .................................... 50,435,000 5,043.50 50,365,000 5,036.50
Add: Shares allotted during the
year under ESOS scheme ......... 70,000 7.00
Balance as at the end of the
year .......................................... 50,435,000 5,043.50 50,435,000 5,043.50
b. Equity Shares: The company has one class of equity shares having a par
value of ` 10 per share. Each shareholder is eligible for one vote per
share. Dividends are paid in Indian Rupees. The dividends proposed by
the Board of Directors are subject to the approval of the shareholders at
the Annual General Meeting. Repayment of capital will be in proportion to
the number of equity shares held.
c. Details of Share held by shareholders holding more than 5% of the
aggregate shares in the company
st
st
March, 2013
No of
Shares held
Percentage
of Holding
No of
Shares held
Percentage
of Holding
Equity Shares
Limited, Holding Company ......... 37,000,000 73.36% 37,000,000 73.36%
Mahindra World city Developers
Limited, Fellow subsidiary ......... 13,000,000 25.78% 13,000,000 25.78%
` in Lacs
Particulars As at
31
st
March, 2014
As at
31
st
March, 2013
4. RESERVES & SURPLUS
Surplus in statement of Prot & Loss
Balance at the beginning of the year .. (194.85) (1,336.18)
Add: Prot/(Loss) for the year ............. (515.99) 1,141.33
Balance at the end of the year .......... (710.84) (194.85)
5. TRADE PAYABLES
Trade Payables
Related Parties ............................ 252.43 75.30
Others .......................................... 1,137.72 885.19
Retention Money ................................... 337.31 136.81
1,727.46 1,097.30
6. OTHER CURRENT LIABILITIES
(secured) * ............................................ 1,268.00
borrowings
Related Parties ............................ 239.25 162.24
Statutory remittances - withholding
taxes ...................................................... 72.23 57.11
Other liabilities....................................... 331.43 14.00
Advance received from
Related parties ...................................... 11.84 538.70
Income received in advance ................ 2,815.78 1,224.12
Deposits from customers ....................... 190.74
Advance received from customers ...... 129.04 263.76
3,790.31 3,527.93
* The term loan from SBI was availed in tranches since March 2012.
The loan was secured by simple mortgage over the leasehold rights on
land measuring 18 acres and the residential complex thereon.
The loan was fully repaid during the year
There has been no default in payment of interest.
7. SHORT TERM BORROWINGS (Unsecured)
Inter Corporate Deposits received from Related parties
Mahindra World City Developers Ltd .. 733.00
Limited .................................................. 8,370.00 9,487.00
Mahindra Residential Developers
Limited .................................................. 900.00 1,500.00
9,270.00 11,720.00
8. SHORT TERM PROVISIONS
Defect Liabilities ................................... 60.00
60.00
st
MARCH, 2014
727
9. TANGIBLE ASSETS ` lacs
Particulars Gross block Depreciation Net block
As at
Additions
As at As at For the As at As at As at
1
st
April, 2013 31
st
March, 2014 1
st
April, 2013 period 31
st
March, 2014 31
st
March, 2014 31
st
March, 2013
Computer .................................... 2.16 2.16 0.78 0.38 1.16 1.00 1.38
(Previous year) ............................ (1.49) (0.68) (2.17) (0.49) (0.30) (0.79) (1.38) (1.00)
Ofce Equipment ........................ 3.84 0.07 3.91 0.06 0.81 0.87 3.04 3.78
(Previous Year) ............................ (0.08) (3.75) (3.83) (0.01) (0.04) (0.05) (3.78) (0.07)
Total ............................................. 6.00 0.07 6.07 0.84 1.19 2.03 4.04
Previous Year .............................. 1.57 4.43 6.00 0.50 0.34 0.84 5.16
st
MARCH, 2014
` in Lacs
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
10. NON CURRENT INVESTMENTS
Long term, Trade (at cost)
Mahindra Residential Developers
Limited, Subsidiary Company
250,000 equity shares of ` 10 each
fully paid up .......................................... 6,629.48 6,629.48
10,000 Preference shares of ` 10
each fully paid up ................................. 1.00 1.00
One share warrant of Re. 1 each
(Refer note 10 a) ..................................
6,630.48 6,630.48
10 a. The Company held 1 Share warrant of Re. 1 in Mahindra Residential
Developers Limited (MRDL), which became a wholly owned subsidiary of
the Company, since February 23, 2013.
On July 12, 2013, MRDL cancelled the above Share warrant and returned
the subscription money of Re. 1.
11. LONG TERM LOANS & ADVANCES
Deposits made to Related Party
Mahindra World City Developers
Limited .............................................. 66.51 66.51
Advance Income tax (net of
provisions) ............................................ 243.91 99.57
MAT credit entitlement ........................ 28.28 28.28
Security Deposit .................................. 31.62 19.61
370.32 213.97
12. INVENTORIES
Construction work in progress
(including leasehold land) .................. 9,218.14 8,344.29
Construction materials ........................ 512.21 182.50
9,730.35 8,526.79
13. TRADE RECEIVABLES (Unsecured, considered good)
Trade receivables- outstanding for
they were due for payment ................ 14.44 13.82
Other Trade Receivables .................... 1,284.08 669.66
1,298.52 683.48
14. CASH AND CASH EQUIVALENTS
Balances with banks
Cash on hand .................................... 0.68
On current accounts ......................... 342.85 282.62
on Earmarked Account* ................... 141.26
484.79 282.62
* Collected from Customers and to be transferred to Home Owners
Association upon formation.
15. SHORT TERM LOANS & ADVANCES (Unsecured, considered good
Mobilisation advances - Secured by
Bank guarantees .................................. 447.42 205.72
Supplier advances ................................ 59.15 31.00
Rental deposits ..................................... 0.45
Balance with Govt authorities
(Service tax) .......................................... 45.15
552.17 236.72
16. OTHER CURRENT ASSETS
Unbilled revenue .................................. 109.76 4,614.66
109.76 4,614.66
` in Lacs
Particulars
For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
17. REVENUE FROM OPERATIONS
Income from Projects ........................... 5,869.46 5,842.71
5,869.46 5,842.71
18. OTHER INCOME
Interest on deposit with bank .............. 8.49 10.61
Dividend Income - Subsidiary ............. 1,000.00
Guarantee Commission - Holding
Company .............................................. 335.47
Other income ........................................ 17.24
Cancellation income/Transfer charges 28.60 10.24
389.80 1,020.85
19. PROJECT COSTS
Land and construction costs ............... 5,368.64 3,622.39
Architect Fees ....................................... 25.50 108.49
Site Expenses ....................................... 64.54 49.12
Project management fees .................... 255.17 155.15
Interest .................................................. 163.57 455.44
Approval and consultancy charges .... 164.23 806.92
6,041.65 5,197.51
20. Changes in inventories
Construction materials ......................... 512.21 182.50
Work-in-progress .................................. 9,218.14 8,344.29
Inventories at the beginning of the
year:
Construction materials ......................... 182.50 148.75
Work-in-progress .................................. 8,344.29 8,007.85
Net (increase)/decrease ....................... (1,203.56) (370.19)
21. FINANCE COSTS
Interest on term loan ............................ 40.90 141.20
Interest paid to Related Parties on
Inter corporate deposits ....................... 1,340.27 731.58
Less : Allocated to projects ................. (163.57) (455.44)
1,217.60 417.34
22. OTHER EXPENSES
Operation and maintenance expenses 172.59 157.78
Legal & professional fees .................... 9.52 22.88
Advertisement, marketing and
business development ......................... 192.81 110.19
Brokerage ............................................. 46.60 35.09
Repairs and Maintenance .................... 0.85 0.11
Deputation Charges ............................. 142.30 85.46
Auditors remuneration
Audit fees .................................... 3.00 3.00
Other services ............................. 1.20 1.20
Reimbursement of expenses/
levies ............................................ 0.46 0.52
Ofce Establishment ............................ 71.84 56.58
Provision for Defect liability.................. 60.00
Miscellaneous expenses ...................... 17.20 4.42
718.37 477.23
728
23. Expenditure incurred in foreign currency ` in lacs
2013-14 2012-13
Import of lifts 33.90
Travel Expenses 0.31 2.81
Exhibition Participation Charges 6.61
6.92 36.71
24. Details of borrowing costs inventoried 163.57 455.44
25. Earnings per share:
Prot/(Loss) after tax for the year (` in lacs) (515.99) 1,141.33
Weighted average number of equity shares (Nos. lacs) Basic and diluted 504.35 504.32
Basic and diluted Earnings Per Share (`) (1.02) 2.26
26. Related party transactions:
a) Names of related parties and nature of relationship where control exists:
Holding Company Mahindra Lifespace Developers Limited
Fellow Subsidiary with whom transactions have been entered during the year
Mahindra World City Developers Limited
Subsidiary with whom transactions have been entered during the year
Mahindra Residential Developers Limited
Note: Related Parties are as identied by the Management.
b) The related party transactions are as under: ` in lacs
Nature of the Transaction Ultimate Holding Company Holding Company Fellow Subsidiary Subsidiary
Inter Corporate Deposit received 83.00
(6200)
(400)
Inter Corporate Deposit repaid 1200.00
()
733.00
()
600
()
Deposits given
(9.85)
Investments made
(6616.73)
Interest Expense 1129.53
(493.41)
65.00
(93.61)
145.74
(144.55)
Guarantee Commission income 335.47
()
Deputation charges 338.99
(221.27)
Administration expenses 0.24
()
71.84
(56.57)
0.29
()
Maintenance Charges 196.89
(177.20)
Water Charges 40.98
(16.43)
Purchase of asset
(2.80)
Project expenses
(27.00)
Balances at year end
Deposits 66.51
(66.51)
Inter-corporate deposits 8370.00
(9,487.00)
(733.00)
900.00
(1,100.00)
Payables 11.84
(538.70)
491.64
(237.54)

Nil
()
Figures in brackets are in respect of the previous year.
st
MARCH, 2014
729
27. There are no dues to Micro and Small Enterprises which have been determined to the extent such parties have been
identied on the basis of information collected by the Management. This has been relied upon by the auditors.
28. The Company has obtained Co-developer status under Special Economic Zone Act 2005 which entitles the Company to
a 100% deduction of its income under the Income Tax Act, 1961 upto Assessment year 2019-20.
29. The Company operates in a single segment, namely Property Development.
30. Previous years gures have been regrouped/reclassied wherever necessary to conform to the current years classication /
disclosure.
Anita Arjundas Chairperson
Sangeeta Prasad Director
Arti Shinde Company Secretary
Place: Chennai
Date: 18
th
April, 2014
st
MARCH, 2014
730
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary Companies
Name of the
Subsidiary
Companies
Number of Shares in
the Subsidiary Company
held by Mahindra
Integrated Township
Limited at the nancial
year ending date
The net aggregate of prots/(losses) of the Subsidiary Companies
so far as they concern the members of Mahindra Integrated Township Limited
Equity
Extent of
holding
Dealt within
the accounts
of Mahindra
Integrated
Township Limited
for the year ended
31
st
March, 2014
Not Dealt within
the accounts
of Mahindra
Integrated
Township Limited
for the year ended
31
st
March, 2014
Dealt within
the accounts
of Mahindra
Integrated
Township Limited
for the year ended
31
st
March, 2013
Not Dealt within
the accounts
of Mahindra
Integrated
Township Limited
for the year ended
31
st
March, 2013
Nos. % ` in Lacs ` in Lacs ` in Lacs ` in Lacs
Mahindra
Residential
Developers
Limited
2,50,000 100% Nil 3281.34 1000.00 550.90
Notes:
The nancial year of the Subsidiary Company ended on 31
st
March, 2014
Place : Chennai
Date : 18
th
April, 2014 Arti Shinde Company Secretary
MAHINDRA RESIDENTIAL DEVELOPERS LIMITED
731
DIRECTORS REPORT TO THE SHARE HOLDERS
Your Directors present the Seventh Report together with the audited accounts for the nancial year ended 31
st
March, 2014
FINANCIALS HIGHLIGHTS:
(Rs.in lakhs)
Operating Income ............................................................................................................... 15132.96 7642.13
Other income ...................................................................................................................... 424.12 237.98
Prot /(Loss) before Depreciation, Interest and Taxation.................................................. 4194.25 1129.27
Less : Depreciation .............................................................................................................
Prot before Interest and Taxation ..................................................................................... 4194.25 1129.27
Less : Interest ..................................................................................................................... 42.75 32.51
Prot /(Loss) Before Taxation ............................................................................................. 4151.50 1096.76
Provision for tax ..................................................................................................................
Current tax ......................................................................................................................... 870.16 219.46
Prot/(Loss) after tax for the year ...................................................................................... 3281.34 877.30
Add : Balance of Prot/(Loss) for earlier years ................................................................. 550.90 487.16
Amount available for appropriation .................................................................................... 3832.24 1364.46
Dividend on preference shares (including tax on distributed prots) .............................. 813.56
Less : Transfer to General Reserve ...................................................................................
Balance carried forward ..................................................................................................... 3832.24 550.90
Operations
Aqualily is a premium project within Mahindra World City,
Chennai. Spread across 55 acres of land, the project offers
villas and apartments covering 1.57 million square feet. During
the year 2013-14, the Company completed the construction of
the last three phases of the villas (1B, 1C, 1D) and the rst phase
of apartments (2A), taking the total completed area under the
project to 0.61 million square feet. Handover of units to the
customers is in progress. Construction for the next two phases
of apartments (2B, 2C) covering 0.78 million square feet is
progressing as per schedule. 48% of the total units launched
in this project have been sold upto March, 14.
Dividend
No dividend has been recommended for the year under review
so as to conserve the resources of the Company.
Capital
The Authorised share capital of the company is Rs. 50 lakhs
consisting of equity share capital of Rs. 45 lakh and preference
share capital of Rs.5 lakh. The paid up equity capital is Rs.25
lakh and paid up preference share capital is Rs. 1 lakh, which
is held by Mahindra Integrated Township Limited (MITL).
Your Company is a wholly owned subsidiary company of MITL
and consequently a subsidiary company of the Mahindra
Lifespace Developers Limited and the ultimate holding
company Mahindra & Mahindra Limited.
Directors
Ms. Sangeeta Prasad (DIN 2791944), Director, retires by
rotation and being eligible, offers herself for re-appointment at
the forthcoming Annual General Meeting.
as at 31
st
concern basis.
On 26
th
March, 2014, the Board constituted CSR Committee
comprising Ms. Anita Arjundas (Chairperson), Mr. S. Chandru
and Ms. Sangeeta Prasad. During the year one meeting
of the Committee was held. The Committee framed and
recommended CSR policy to the Board.
Audit Committee
On 18
th
April, 2014, the Audit Committee of the Company was
constituted pursuant to Section 177 of the Companies Act,
732
2013 and Rules made thereunder. The Committee comprises
of Ms, Anita Arjundas (Chairperson), Ms Sangeeta Prasad and
Mr. S. Chandru
On 18
th
April 2014, the Nomination and Remuneration
Committee of the Company was constituted pursuant to
Section 178 of the Companies Act, 2013 and Rules made
thereunder. The Committee comprises of Ms, Anita Arjundas
(Chairperson), Ms Sangeeta Prasad and Mr. S. Chandru
Auditors
M/s. Deloitte Haskins & Sells., Chartered Accountants,
Chennai, retire as Auditors at the 7th Annual General Meeting.
Pursuant to Section 139(1) of the Companies Act, 2013, the
members are requested to appoint Auditors for a term of 5
consecutive years (subject to ratication of their appointment
at every AGM) and x their remuneration.
As required under the provisions of Section 139 and 141(3) of
the Companies Act, 2013 read with the Companies (Audit and
consent and certicate from the above auditors proposed to be
re-appointed, to the effect that their re-appointment, if made,
would be in accordance with the conditions as specied in the
said section.
Code of Conduct
and Mahindra and Mahindra Limited.
Board of Directors) Rules, 1988 are given in the Annexure I
to this Report.
there under
The Company has no employee who was employed throughout
the nancial year and was in receipt of remuneration of not less
than Rs.6,000,000 p.a. during the year ended 31
st
March 2014
and was in receipt of remuneration of not less than Rs.500,000
p.m. during any part of the year.
Certicate under Section 383A of the Companies Act, 1956
from a Company Secretary in Whole-time Practice
Companies Act, 1956, a certicate issued by M/s. M. K.
SURANA & Co, Company Secretary in Whole-time Practice,
certifying that the Company has complied with all the provisions
of the Companies Act, 1956 is given in the Annexure II and
forms a part of this Report.
Acknowledgement
The Directors thank Housing Development and Finance
Corporation Limited (HDFC) and all consultants and associates
of the Company for the support received from them during the
year.
For and On Behalf of the Board
Anita Arjundas
Date: 18
th
April, 2014 (DIN 00243215)
733
ST
MARCH, 2014.
a. Energy conservation measures taken : The operations of your Company are not energy
intensive. However, adequate measures have
been taken to reduce energy consumption.
b. Additional investments and proposals, if any, being implemented
for reduction of consumption of energy
: Nil
c. Impact of the measures taken at (a) & (b) above for reduction
of energy consumption and consequent impact on the cost of
production of goods
: The above measures have resulted in reduction
of energy consumption
d. Total energy consumption and energy consumption per unit
of production as per Form-A of the Annexure to the Rules in
respect of Industries specied in the Schedule
: Not applicable
1. Areas in which R & D is carried out : The Company has not carried out any R&D
activities during the year
The information on foreign exchange earnings and outgo is furnished in the notes to accounts annexed to the nancial
statements.
For and On Behalf of the Board
Anita Arjundas
Date: 18
th
April 2014 (DIN 00243215)
734
ANNEXURE II
SECRETARIAL COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
Name of the Company : M/s. MAHINDRA
RESIDENTIAL DEVELOPERS
LIMITED
Company Identication No. : U45200TN2008PLC066292
Registration Number : 18 - 066292
Authorized Share Capital : ` 50,00,000/-
Issued & Paidup Share Capital : ` 26,00,000/-
To,
The Members
M/S. MAHINDRA RESIDENTIAL DEVELOPERS LIMITED
Mahindra World City, Administrative Block,
Chengalpattu 603 002.
We have examined the registers, records, books and papers of M/s.
Mahindra Residential Developers Limited (the Company) having
their registered ofce at Mahindra World City, Administrative Block,
Chengalpattu 603 002 as required to be maintained under the
Companies Act, 1956, (the Act) and the rules made thereunder and
also the provisions contained in the Memorandum and Articles of
Association of the Company for the nancial year ended on 31
st

March 2014. In our opinion and to the best of our information and
according to the examinations carried out by us and explanations
furnished to us by the Company, its ofcers and agents, we certify
that in respect of the aforesaid period:
1. The Company has kept and maintained all registers as stated in
Annexure A to this certicate, as per the provisions and the rules
made thereunder and all entries therein have been duly recorded.
2. The Company has duly led the forms and returns as stated in
Annexure B to this certicate, with the Registrar of Companies,
Tamil Nadu, except in some of the cases, within the time prescribed
under the Act and the rules made thereunder.
3. The Company being a Public Limited Company has the minimum
prescribed paid-up capital.
4. The Board of Directors duly met Six times on 12.04.2013,
12.07.2013, 18.10.2013, 10.01.2014, 26.03.2014 and 28.03.2014
all of which meetings proper notices were given and the
proceedings were properly recorded and signed in the Minutes
5. The Company has also formed a CSR Committee as per
requirements of The Companies Act 2013 on 26.03.2014 with
Mr. S. Chandru, Ms. Sangeeta Prasad and Ms. Anita Arjundas
as committee members and a CSR Committee meeting was also
held on 28.03.2014.
6. The Company has closed its Register of Members during the
nancial year under review. The Company does not have any
Debenture holders.
7. The Annual General Meeting for the nancial year ended on 31
st
March 2013 was held on 12
th
July 2013 after giving due notice to
the members of the company and the resolutions passed thereat
were duly recorded in the Minutes Book maintained for the purpose.
8. NO Extra Ordinary General Meeting were held during the
9. According to the information and explanations furnished by the
Management, the Company has not advanced any loans to its
directors or persons or rms or companies referred to under
Section 295 of the Act during the nancial year under review.
10. As informed by the management, the Company has complied
with the provisions of Section 297 of the Companies Act, 1956 in
respect of contracts specied in that Section.
11. The Company has made necessary entries in the register
maintained under Section 301 of the Act.
Management, there were no instances falling within the purview of
Section 314 of the Act and hence the Company has not obtained
any approvals from Board of Directors, members or the Central
Government.
13. The Company has not issued any duplicate share certicates
during the nancial year under review.
14. (i) There was no allotment/transfer/transmission of securities
(ii) The Company has not deposited any amount in a separate
Bank Account as no dividend was declared during the
(iii) The Company was not required to post warrants to any
member of the Company as no dividend was declared
(iv) The Company has no amounts in unpaid dividend account,
application money due for refund, matured deposits, matured
debentures and the interest accrued thereon which have
remained unclaimed or unpaid for a period of seven years
and therefore, the question of transferring such amounts to
Investor Education and Protection Fund does not arise.
(v) The Company has generally complied with the requirements
of Section 217 of the Act.
15. The Board of Directors of the Company is duly constituted. There
was no appointment of additional directors, alternate directors and
director to ll casual vacancy during the nancial year under review.
16. The Company has not appointed any Managing/whole-time
Director/Manager during the nancial year under review.
Management, the Company has not appointed any sole selling
agents during the nancial year under review.
Management, the Company was not required to obtain any approvals
of the Central Government, Company Law Board, Regional
Director, Registrar and/or such authorities prescribed under any
of the provisions of the Act during the nancial year under review.
19. The directors have disclosed their interest in other rms/companies
to the Board of directors pursuant to the provisions of the Act and
the rules made thereunder.
20. The Company has not issued any shares, debentures or other
securities during the nancial year. As on date, the paid-up Equity
Share Capital is `.25,00,000/- and Paid-Up Preference Share
Capital is `.1,00,000/-. Share Warrant issued by the Company has
been cancelled on 21.07.2013 and money has been refunded to
Mahindra Integrated Township Limited.
21. The Company has not bought back any shares during the nancial
year under review.
22. There was no redemption of preference shares or debentures
23. There were no transactions necessitating the Company to keep in
abeyance the rights to dividend, rights shares and bonus shares
pending registration of transfer of shares.
24. The Company has not invited/accepted any deposits including
any unsecured loans falling within the purview of Section 58A and
58AA read with Companies (Acceptance of Deposit) Rules, 1975
25. The amounts borrowed by the Company from directors, members,
public, nancial institutions, banks and others during the nancial
year ending 31
st
March 2014 are within the borrowing limits of the
Company.
26. The Company has made loans and investments or advances or
given guarantees or provided securities to other bodies corporate
to any other bodies corporate in compliance with provisions of the
Act and has made necessary entries in the register kept for the
735
purpose. The Company has given Inter-Corporate Deposits (ICD)
to other companies during the period under review.
27. The Company has not altered the provisions of the Memorandum
with respect to situation of the Companys registered ofce from
one State to another during the year under scrutiny.
with respect to the objects of the Company during the year under
scrutiny.
with respect to name of the Company during the year under scrutiny.
with respect to share capital of the Company during the year
under scrutiny.
31. The Company has altered its Articles of Association during the
period under review.
32. As informed by the management, there was no prosecution
initiated against or show cause notice received by the Company and
no nes or penalties or any other punishment was imposed on the
Company during the nancial year, for the offences under the Act.
management, the Company has reportedly not received any
money as security from its employees during the nancial year
under review and hence, the question of depositing the same as
per provisions of Section 417(1) of the Act does not arise.
management, the Company has not constituted any Provident
Fund Account inviting application of the provisions of Section 418
of the Act during the nancial year.
for M. K. SURANA & Co.,
Company Secretaries,
(M. Kavitha Surana)
Place: Chennai Proprietor
Date: 18.04.2014 FCS 5926, C.P. No. 5269
Annexure A
(Forming part of Compliance Certicate dated 18
th
April 2014)
Statutory Registers as maintained by M/s. Mahindra Residential
Developers Limited
Sl.
No.
Section
Number
Name of the Register
1 143 Register of Charges
2 150 Register of Members
3 193 Minutes of Meeting of Board of Directors
4 193 Minutes of Meeting of Members
5 205 Books of Accounts
6 301 Register of Contracts in which directors are
interested
7 303 Register of Directors
8 307 Register of Directors Shareholding
9 Register of Share Transfers
(M. Kavitha Surana)
Date: 18.04.2014 FCS 5926, C.P. No. 5269
Annexure B
(Forming part of Compliance Certicate dated 18
th
April 2014)
Forms and Returns as led by M/s. Mahindra Residential Developers Limited with the Registrar of Companies, Tamil Nadu, during the nancial
year ending 31
st
March 2014
Sl.
No
Form No. Relevant
Section
in the Act
Description SRN No. and
Date of ling
Date of
payment in the
Bank/by credit
card
Whether
led within
prescribed
time Yes/No
If delay in
ling whether
requisite
additional fee
paid Yes/No
1. Form 66 383A Secretarial Compliance Certicate
for the nancial year ended
31
st
March 2013.
Q09773615
30.07.2013
30.07.2013 Yes
2. Form 20B 159 Annual Return led for the Annual
th
July
2013.
Q11083151
12.09.2013
12.09.2013 No Yes
3. Form 23 192 Alteration of Articles of Association
in the AGM held on 12
th
July 2013.
B84182435
12.09.2013
12.09.2013 No Yes
4. Form 23AC &
23ACA - XBRL
220 Certied True Copy of Balance
Sheet, P&L a/c etc. for the nancial
year ended 31
st
March 2013.
Q09984063
09.08.2013
09.08.2013 Yes
5. Form 23B 224 Information by Auditor to the ROC
regarding their appointment for the
period 01.04.2013 to 31.03.2014
S22104210
04.09.2013
04.09.2013 No Yes
(M. Kavitha Surana)
Date: 18.04.2014 FCS 5926, C.P. No. 5269
736
TO THE MEMBERS OF
of Mahindra Residential Developers Limited (the
31
st
the Cash Flow Statement for the year then ended and a
th
September, 2013 of
opinion.
Opinion
accepted in India:
st
March, 2014;
date; and
5 of the Order.
th
st
st
of the Act.
B. Ramaratnam
Date: 18
th
737
members of Mahindra Residential Developers Limited on the
st
March, 2014).
activities/result, clauses (i), (vi), (x), (xii) to (xv), (xviii), (xix),
and (xx) of paragraph 4 of the Order are not applicable to the
Company.
(ii) In respect of its inventory:
verication.
(iii) In our opinion and according to the information and
from companies, rms or other parties covered in the
Act, 1956.
inventory and the sale of inventory. During the course of
our audit, we have not observed any continuing failure to
correct major weakness in such internal control system.
Act, 1956.
(vi) In our opinion, the internal audit functions carried out during
the year by rm of Chartered Accountants appointed by
the Management have been commensurate with the size
of the company and the nature of its business.
(vii) We have broadly reviewed the cost records maintained
Companies Act, 1956 and are of the opinion that prima
facie the prescribed cost records have been maintained.
(viii) According to the information and explanations given to us
undisputed dues, including Income tax, Service tax
and other material statutory dues applicable to it with
respect of Income tax, Service tax and other material
st
March, 2014 for a
became payable.
(c) As on 31
st
March, 2014, there were no disputed dues on
account of Income tax, Service tax and other material
statutory dues which have not been deposited.
in the repayment of dues in respect of term loans.
B. Ramaratnam
Date: 18
th
738
st
MARCH, 2014
` in Lacs
Note
As at
31
st
March, 2014
As at
31
st
March, 2013
Shareholders Funds
Share Capital ............................................................................. 3 26.00 26.00
Reserves and Surplus ............................................................... 4 9,267.57 5,986.23
Long Term Borrowings .............................................................. 5 300.00
Current Liabilities
Trade Payables .......................................................................... 6 2,206.55 1,527.21
Other Current Liabilities ............................................................ 7 4,116.19 2,162.37
Short-Term Provisions ............................................................... 8 113.02 19.05
Total .................................................................................................. 15,729.33 10,020.86
ASSETS
Non-Current Assets
Long Term Loans and Advances .............................................. 9 380.90 149.53
Current Assets
Inventories ................................................................................. 10 6,819.48 4,473.47
Trade Receivables ..................................................................... 11 2,527.63 1,496.08
Cash and Cash Equivalents ..................................................... 12 1,363.72 633.90
Short-Term Loans and Advances .............................................. 13 3,381.33 2,741.21
Other Current Assets ................................................................. 14 1,256.27 526.67
Total .................................................................................................. 15,729.33 10,020.86
Chartered Accountants Anita Arjundas Chairperson
B. Ramaratnam
Partner
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
739
st
MARCH, 2014
` in Lacs
Note
Year Ended
31
st
March, 2014
Year Ended
31
st
March, 2013
INCOME
Revenue from Operations .......................................................... 15 15,132.96 7,642.13
Other Income .............................................................................. 16 424.12 237.98
15,557.08 7,880.11
EXPENDITURE
Projects Costs ............................................................................ 17 13,041.45 5,610.82
Changes in Inventories .............................................................. 18 (2,346.01) 331.14
Finance Cost .............................................................................. 19 42.75 32.51
Other Expenses .......................................................................... 20 667.39 808.88
11,405.58 6,783.35
Prot Before Tax .............................................................................. 4,151.50 1,096.76
Tax Expense
Current tax .................................................................................. 870.16 219.46
Prot for the year ............................................................................. 3,281.34 877.30
Earnings per Share (Basic/Diluted)* ............................................. 1,014.27
* EPS has been calculated based on earnings for the year attributable to equity shareholders as ascertained below: As per the terms of the Shareholders Agreement,
equity shareholders are entitled to share of prots only after payment of dividends to preference shareholders amounting to `. 2,324.50 lacs. `. 1,000 lacs was paid
as dividends to preference shareholders upto 31
st
March, 2014. Accordingly, the prots attributable to equity shareholders for the year has been ascertained after
adjusting the balance preference dividends and tax thereon. Refer Note 23.
B. Ramaratnam
Partner
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
740
st
MARCH, 2014
` in Lacs
Year Ended
31
st
March, 2014
Year Ended
31
st
March, 2013
Prot Before Tax ..................................................................................................... 4,151.50 1,096.76
Adjustments for:
Finance Costs ................................................................................................. 42.41 32.07
Interest Income ............................................................................................... (343.73) (190.94)
Operating Prot before Working Capital Changes ................................................. 3,850.18 937.89
Changes in Working Capital
Adjustments for (Increase)/Decrease in Operating Assets:
Inventories ...................................................................................................... (2,346.01) 331.11
Trade Receivables ........................................................................................... (1,031.55) (871.08)
Long-Term Loans and Advances ....................................................................... (52.00) (3.53)
Short-Term Loans and Advances and Other Current Assets ................................ (415.21) 545.57
Adjustments for Increase/(Decrease) in Operating Liabilities:
Trade Payables................................................................................................ 679.34 370.19
Other Current Liabilities ................................................................................... 1,653.82 456.13
Short Term Provisions ...................................................................................... 93.97 (10.95)
(1,417.64) 817.44
Cash Generated from Operations ............................................................................ 2,432.54 1,755.33
Net Income Tax Paid ............................................................................................... (1,049.53) (343.97)
Net Cash from Operating Activities ....................................................................... 1,383.01 1,411.36
B. Cash Flow from Investing Activities:
Intercorporate Deposit Given ................................................................................... (2,400.00) (400.00)
Proceeds from repayment of Intercorporate Deposit given Bank balances not
considered as Cash and Cash Equivalents ....................................................................... 1,450.00
Placed (817.25) (27.00)
Interest Received .................................................................................................... 339.22 217.99
Net Cash (Used in) Investing Activities ................................................................. (1,428.03) (209.01)
C. Cash Flow from Financing Activities:
Proceeds from Long Term Borrowings ..................................................................... 300.00
Repayment of Borrowings ....................................................................................... (300.00)
Finance Costs ........................................................................................................ (42.41) (32.07)
Dividend and Dividend tax Paid ............................................................................... (1,162.22)
Net Cash (Used in) Financing Activities ................................................................ (42.41) (1,194.29)
Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) ........................... (87.43) 8.06
Cash and Cash Equivalents at the Beginning of the Year .......................................... 606.90 598.84
Cash and Cash Equivalents at the End of the Year ............................................... 519.47 606.90
Reconciliation of Cash and Cash Equivalents with the Balance Sheet
Cash and Cash Equivalents as per Balance Sheet .................................................... 1,363.72 633.90
Less: Bank balances not considered as Cash and Cash Equivalents ......................... 844.25 27.00
519.47 606.90
B. Ramaratnam
Partner
Place: Chennai
Date: 18
th
April, 2014
Place: Chennai
Date: 18
th
April, 2014
741
The Company was incorporated on 1
st
February, 2008. It is engaged in the
business of Development of residential complexes at Mahindra World City,
Chennai.
a) Basis of accounting
India (Indian GAAP) to comply with the Accounting Standards notied
under Section 211 (3C) of the Companies Act, 1956 (the 1956 Act)
(which continue to be applicable in respect of Section 133 of the
Companies Act, 2013 (the 2013 Act) in terms of General circular
15/2013 dated 13
th
Affairs) and the relevant provisions of the 1956 Act/2013 Act, as
applicable. The nancial statements have been prepared on accrual
b) Use of Estimates
c) Inventories
The cost of construction materials is determined on the basis of the
Construction work in progress includes cost of land, construction
costs and allocated interest and expenses attributable to the projects
undertaken by the Company.
d) Cash and cash equivalents (for purposes of Cash Flow
Statement)
e) Cash ow statement
f) Revenue Recognition
Income from property development activity is accounted on the
percentage of completion method which necessarily involves
technical estimates of the percentage of completion of each contract,
and costs to completion of the contract, on the basis of which prots/
losses are accounted. Such estimates, made by the management
and certied to the auditors, have been relied upon by them, as
these are of a technical nature.
The Company has adopted The Guidance note for Accounting of
Real Estate Transactions (Revised 2012) applicable to all projects
in real estate which have commenced on or after April 1 2012 and
relating to projects where revenue is being recognized for the rst
time on or after April 1, 2012.
Accordingly revenues are now recognized only when all the following
conditions are met:
All critical approvals necessary for commencement of the
project have been obtained
Expenditure incurred on construction & development cost is not
less than 25% of the estimated construction and development
costs excluding land cost
At least 25% of the saleable project area is secured by contracts
or agreements with buyers.
At least 10% of the total revenue as per the agreements of
sale are realised at the reporting date in respect of each of the
contracts and it is reasonable to expect that the parties to such
contracts will comply with the payment terms as dened in the
contracts.
In respect of projects where revenue recognition commenced prior
to April 1, 2012, the following policy is adopted.
Revenues are recognized only when all the following conditions are met:
The project costs incurred exceed 25% of the total estimated
project costs including land
At least 10% of the sales consideration is realized.
At least plinth level is achieved for a particular phase as
certied by the architect.
g) Other income
Interest income is accounted on accrual basis.
h) Foreign currency transactions and translations
Foreign exchange transactions are recorded at exchange rates
prevailing on the date of the transactions. The exchange gain/loss
arising on settlement of such transactions is adjusted to the prot
and loss account.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date and
gain or loss arising out of such translation is adjusted to the prot
and loss account.
i) Earnings per share
after tax (including the post-tax effect of extraordinary items, if any)
by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
prot/(loss) after tax (including the post-tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges
to expense or income relating to the dilutive potential equity shares,
by the weighted average number of equity shares considered for
deriving basic earnings per share and the weighted average number
of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Potential equity shares are
deemed to be dilutive only if their conversion to equity shares would
decrease the net prot per share from continuing ordinary operations.
Potential dilutive equity shares are deemed to be converted as at
the beginning of the period, unless they have been issued at a
later date. The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair
value (i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented. The number of equity shares and potentially dilutive
equity shares are adjusted for share splits/reverse share splits and
bonus shares, as appropriate.
j) Taxes on income
st
MARCH, 2014
742
ST
MARCH, 2014
Deferred tax is recognized on timing differences, being the differences
and the tax laws enacted or substantively enacted as at the reporting
date. Deferred tax liabilities are recognized for all timing differences.
forward of losses are recognized only if there is virtual certainty that
there will be sufcient future taxable income available to realize such
assets. Deferred tax assets are recognized for timing differences of
can be realized. Deferred tax assets and liabilities are offset if such
their reliability.
k) Provisions and contingencies
` in Lacs
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
3. Share Capital
Authorized
450,000 Equity Shares of ` 10 each ........ 45.00 45.00
50,000 Preference Shares of ` 10 each .. 5.00 5.00
50.00 50.00
250,000 Equity Shares of ` 10 each .... 25.00 25.00
10,000 Tranche I Preference shares of
` 10 each ........................................................ 1.00 1.00
Share Warrant
1 Share Warrant of ` 1 each ................
26.00 26.00
3a. Rights, preferences and restrictions attached to shares/warrants
Equity Shares: The Company has only one class of Equity Shares
having a par value of ` 10/- per share. Every shareholder is entitled to
one vote per share. Dividends are paid in Indian Rupees. The dividends
proposed by the Board of Directos are subject to the approval of the
shareholdes at the Annual General Meeting. Repayment of capital will
be in proportion to the numbers of equity shares held. As per terms of
the Shareholders Agreement, equity shareholders are entitled to share
of prots only after payment of dividends to preference shareholde`
amounting to ` 2,324.50 lacs. ` 1,000 lacs have so far been paid as
dividends to preference share holders.
Preference Shares: The company has one class of preference
shares having a par value of ` 10 per share. The Preference Shares
are redeemable upon payment of dividend of ` 2,324.50 Lacs to the
preference shareholder. Preference Shareholder carries all rights
including rights to distributions of the Company, other than voting
rights.
Money received against Share warrant: The Company cancelled
the share warrant on 12
th
July, 2013 and refunded the money to
Mahindra Integrated Township Limited, the holder of the warrant.
3b. Details of shares held by Shareholders holding more than 5% of
the aggregate shares in the Company
` in Lacs
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
No. of
Shares/
Warrant
Percentage
of Holding
No. of
Shares/
Warrant
Percentage
of Holding
Equity Shares
Mahindra Integrated Township
Limited, Holding Company 2,50,000 100% 2,50,000 100%
Preference Shares
Limited, Holding Company 10,000 100% 10,000 100%
Share Warrants
Limited, Holding Company 0% 1 100%
` in Lacs
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
4. Reserves and Surplus
Securities Premium Account ...... 5,435.33 5,435.33
Surplus in Statement of Prot
& Loss
Balance at the Beginning of the
Year ......................................... 550.90 487.16
Add: Prot for the Year ........... 3,281.34 877.30
Less: Appropriations:
Interim Dividend on Preference
Shares ..................................... 700.00
Tax on Interim Dividend............ 113.56
Balance at the End of the Year 3,832.24 550.90
9,267.57 5,986.23
5. Long Term Borrowings
Term Loan from HDFC Limited
(Secured) ........................................... 300.00
300.00
Refer 7.1 under Note 7 - Other Current liabilities for terms of loan and the
security details
6. Trade Payables
Trade Payables ................................. 1,280.48 1,082.48
Retention Money ............................... 926.07 444.73
2,206.55 1,527.21
7. Other Current Liabilities
from HDFC Limited (secured) * ........ 300.00
Payable to Related Party ................... 126.34 93.97
With-holding taxes payable ............... 52.51 49.60
Income Received in Advance ........... 1,418.55 1,622.96
Advance from Customers .................. 57.44 129.57
Other Liabilities .................................. 2,103.95 239.27
Deposits from Customers.................. 57.40 27.00
4,116.19 2,162.37
* Note 7.1 - The term loan from HDFC Limited was availed during October
2012. It carries an interest of 14.35% p.a and is repayable in April 2014.
This loan is secured by deposit of title deeds of leasehold rights of land.
There has been no default in payment of interest.
743
` in Lacs
As at
31
st
March, 2014
As at
31
st
March, 2013
8. Short Term Provisions
Provisions
Defect Liabilities ................................. 113.02 19.05
113.02 19.05
9. Long Term Loans and Advances
Deposits with Related Party .............. 23.07 23.07
Security Deposits ............................... 72.80 20.80
Advance Payment of Tax (Net).......... 285.03 105.66
380.90 149.53
10. Inventories
Construction Work in Progress
(Including Leasehold Land) .............. 3,744.86 3,876.85
Construction Materials ....................... 1,193.80 596.62
Finished Goods in Trade ................... 1,880.82
6,819.48 4,473.47
11. Trade Receivables
Trade Receivables outstanding for
they were due for payment ............... 80.35 25.34
Other Trade Receivables ................... 2,447.28 1,470.74
2,527.63 1,496.08
12. Cash and Cash Equivalents
Cash on Hand.................................... 0.24 0.02
Balances with Banks
on Current Accounts ...................... 519.23 406.88
on Deposit Accounts
(Maturing Within 3 Months) ........... 200.00
on Deposit Accounts (Maturing
beyond 3 Months) .......................... 800.00
on Earmarked Deposit Accounts/
Current Account* ........................... 44.25 27.00
1,363.72 633.90
* Collected from customers and to be transferred to Home owners
Association upon formation.
13. Short Term Loans and Advances
Mobilisation Advances -
Secured By Bank Guarantee ............ 706.78 1,058.94
Supplier Advances ............................. 224.51 182.27
Service tax Input Credit ..................... 0.04
Inter Corporate Deposits To Related
Party .................................................. 2,450.00 1,500.00
3,381.33 2,741.21
Interest Accrued on Deposits with
Banks ................................................. 6.34 1.83
Unbilled Revenue............................... 1,249.93 524.84
1,256.27 526.67
` in Lacs
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
15. Revenue from Operations
Income from Projects ........................ 15,132.96 7,642.13
15,132.96 7,642.13
16. Other Income
Interest on:
Deposits with Banks ...................... 53.31 46.38
Inter corporate Deposits with
Related Party .................................. 290.42 144.56
Income Tax Refund ........................ 0.22
Interest from Customers .................... 0.20 2.44
Rental Income .................................... 1.75
Scrap Sale.......................................... 36.58
Cancellation Income .......................... 41.86 44.38
424.12 237.98
17. Project Costs
Land and Construction Costs ........... 12,539.97 4,535.70
Architect Fees .................................... 126.45 102.82
Project Management Fees ................ 124.60 279.69
Other Expenses ................................. 250.43 692.61
13,041.45 5,610.82
18. Changes in Inventories
Inventories at the End of the Year:
Construction Materials ....................... 1,193.80 596.62
Work-in-Progress ............................... 3,744.86 3,876.85
Finished goods .................................. 1,880.82
6,819.48 4,473.47
Inventories at the Beginning
of the Year:
Construction Materials ....................... 596.62 402.38
Work-in-Progress ............................... 3,876.85 4,326.16
Stock-in-Trade .................................... 76.07
4,473.47 4,804.61
Net (increase)/decrease .................. (2,346.01) 331.14
19. Finance Cost
Interest on Term Loan ..................... 42.41 32.07
Interest on delayed payments of
Service Tax ....................................... 0.34 0.44
42.75 32.51
20. Other Expenses
Legal & Professional Fees............... 20.62 1.10
Deputation Charges ......................... 141.37 168.96
Audit Fees ................................. 4.00 4.00
Other Services........................... 1.60 1.60
Reimbursement of Expenses/
Levies ........................................ 0.03 0.69
Rates and Taxes .............................. 6.14 0.33
Repairs and Maintenance ............... 0.40 0.35
Advertisement, Marketing and
Business Development .................... 187.13 415.47
Brokerage ......................................... 50.73 39.43
Travelling & Conveyance ................. 3.54 25.34
Ofce Establishment ........................ 128.37 110.26
Provision for Defect Liability ............ 102.66
Miscellaneous Expenses ................. 20.80 41.35
667.39 808.88
ST
MARCH, 2014
744
ST
MARCH, 2014
` in Lacs
2013-2014 2012-2013
21. Expenditure in Foreign Currency:
Travel ................................................ 7.58
Exhibition and Participation Charges 7.69 28.45
7.69 32.25
22. Earnings in foreign exchange
Consideration received on sale of
residential units ................................ 40.45
Prot after Tax .................................. 3,281.34 877.30
payable thereon ............................... 745.68 1,324.50
Prot available to equity
shareholders .................................... 2,535.67 (447.20)
Earnings Per Share.......................... 1,014.27
24. Related party transactions:
a) Names of related parties and nature of relationship where control exists:
Ultimate Parent Company Mahindra & Mahindra Limited
Parent of the Holding Company Mahindra Lifespace Developers Limited
Holding Company Mahindra Integrated Township Limited
Joint Venture Partner Velands Investments Limited
(upto 22 Feb 2013)
Fellow Subsidiary with whom transactions have been entered during
the year
Mahindra World City Developers Limited (MWCDL)
Mahindra Holidays & Resorts India Limited (MHRIL)
b) The related party transactions are as under:
` in Lacs
Nature of transaction Ultimate
Holding
Company
Parent
of the
Holding
Company
Holding
Company
Fellow
Subsidiary
Interest Income 221.40 130.21
MWCDL (144.56) ()
Purchase of Materials 15.25 10.81 0.82
MHRIL () () ()
Deposits given
(3.28)
Service/Consultancy 291.27
(289.72)
` in Lacs
Nature of transaction Ultimate
Holding
Company
Parent
of the
Holding
Company
Holding
Company
Fellow
Subsidiary
Ofce establishment 115.53
(110.27)
Maintenance Charges 133.15
MWCDL (83.09)
Inter corporate Deposit
given 2,400.00
MWCDL (400.00) ()
Inter corporate Deposit
recovered
600.00 850.00
MWCDL () ()
Balances at year end:
Deposits 23.07
MWCDL () (23.07)
Inter-corporate Deposit 900.00 1,550.00
MWCDL (1,500.00) ()
Payables 126.34
(93.97)
Figures in brackets are in respect of the previous year.
25. Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identied on the basis of information collected by
the Management. This has been relied upon by the auditors.
26. The Company has obtained Co-developer status under Special Economic
Zone Act 2005 which entitles the Company to 100% deduction of its
income under the Income Tax Act, 1961 relating to Minimum Alternate Tax
up to Assessment year 2019-20. However provision of Minimum Alternate
Tax is applicable and current tax expense has been computed under these
provisions.
27. The Company operates in a single segment, namely Property Development.
necessary to conform to the current years classication/disclosure.
Place: Chennai
Date: 18
th
April, 2014
MAHINDRA WORLD CITY (MAHARASHTRA) LIMITED
745
Your Directors present their Ninth Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
Particulars For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
Total Income............................................................................................................................... 28,851 27,329
Prot/(Loss) Before Depreciation, Interest and Taxation.......................................................... (32,784) (12,726)
Less: Depreciation .....................................................................................................................
Prot/(Loss) Before Interest and Taxation ................................................................................ (32,784) (12,726)
Less: Interest ..............................................................................................................................
Prot/(Loss) Before Taxation ..................................................................................................... (32,784) (12,726)
Less: Provision for Taxation ......................................................................................................
Prot/(Loss) for the year after Taxation ..................................................................................... (32,784) (12,726)
Add: Balance of Prot/(Loss) for earlier years ......................................................................... (11,319,851) (11,307,125)
Balance carried forward ............................................................................................................ (11,352,635) (11,319,851)
Operations
Your Company is looking out for suitable business opportunities
to undertake large format development, including residential
development.
Dividend
In view of losses, your Directors have not recommended any
Capital
The Authorised Equity capital of your Company is ` 1.50 crore
and the paid-up equity capital of your Company is ` 1.1704
Crore.
Your Company continues to be a 100% subsidiary company
of Mahindra Lifespace Developers Limited and consequently a
subsidiary company of the ultimate holding company Mahindra
& Mahindra Limited.
Directors
Mr. Vijay Paradkar (DIN: 00149410) retires by rotation and
being eligible offer himself for re-appointment.
Ms. Sangeeta Prasad (DIN: 02791944) was appointed as an
Additional Director at the meeting of the Board of Directors of
the Company held on 31
st
July, 2013. Ms. Sangeeta Prasad
hold ofce only upto the date of the 9
th
of the Company.
The Company has received a notice from a member signifying
its intention to propose Ms. Sangeeta Prasad as candidate for
the ofce of Director.
During the year, Mr. Rajan Narayan (DIN: 00213953) resigned
as a Director of the Company w.e.f. 31
st
July, 2013. Your Board
placed on record its appreciation of the services rendered by
Mr. Rajan Narayan during his tenure as Director.
your Directors, based on the representations received
from the Operating Management and after due enquiry,
conrm that:
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
31
st
March, 2014 and of the loss of the Company for the
concern basis.
Code of Conduct
The Company had adopted Code of Conduct (the Code/s)
for its Directors and Senior Management and Employees.
These Codes enunciate the underlying principles governing
the conduct of the Companys business and seek to reiterate
the fundamental precept that good governance must and
would always be an integral part of the Companys ethos.
declarations under the Codes from the Board Members of the
Company afrming compliance with the Code.
746
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, retire
as auditors at the 9
th
Annual General Meeting. Pursuant to
Section 139(1) of the Companies Act, 2013, the members are
requested to appoint Auditors for a term of ve consecutive
years to hold ofce from the conclusion of the ensuing 9
th
th
Annual
General Meeting and thereafter till the conclusion of every sixth
Annual General Meeting of the Company, provided that the
Company shall place the matter relating to such appointment
for ratication by members at every Annual General Meeting.
The members are requested to x the remuneration of the
Auditors.
As required under the provisions of Section 139 and 141 of the
Companies Act, 2013 read with the Companies (Accounts and
said section.
Certicate under Section 383A of the Companies Act, 1956
Companies Act, 1956, a certicate issued by M/s. Martinho
Ferrao & Associates, Company Secretary in Whole-time
Practice, certifying that the Company has complied with all
the provisions of the Companies Act, 1956 is given in the
Annexure 1 and forms a part of this Report.
which otherwise are required to be disclosed in the annual
accounts pursuant to Clause 32 of the Listing Agreements of
Board of Directors) Rules, 1988 are given in the Annexure 2
to this Report.
Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 and Rules made there
under
the Financial Year and was in receipt of remuneration, of
not less than ` 6,000,000 per annum during the year ended
31
st
` 500,000 per month during any part of the year.
Acknowledgment
The Directors are thankful to all consultants and associates
of your Company for the support received from them during
the year.
Anita Arjundas
Chairperson
DIN: 00243215
Mumbai, 17
th
April, 2014
747
ANNEXURE 1 TO THE DIRECTORS REPORT
The Members of
5
th
Floor, Mahindra Towers,
Worli, Mumbai-400 018
I have examined the registers, records, books and papers of
MAHINDRA WORLD CITY (MAHARASHTRA) LIMITED (the
Company) as required to be maintained under the Companies
Act, 1956, (the Act) and the rules made there under and also
the provisions contained in the Memorandum of Association
and Articles of Association of the Company for the nancial
year ended on 31
st
March, 2014.
In my opinion and to the best of my information and according
to the examinations carried out by me and explanations
furnished to me by the company, its ofcers and agents,
I certify that in respect of the aforesaid nancial year:
1. The Company has kept and maintained all registers
as stated in Annexure `A to this certicate, as per the
provisions of the Act and the rules made there under and
all entries therein have been duly recorded.
2. The Company has duly led the forms and returns as
stated in Annexure `B to this certicate, with the Registrar
of Companies, Regional Director, Central Government,
Company Law Board or other authorities within the time
prescribed under the Act and the rules made there under.
3. The Company being a Public Limited Company has the
minimum prescribed paid up capital.
4. The Board of Directors duly met on 16
th
April, 2013, 15
th
July, 2013, 31
st
July, 2013, 17
th
nd
January, 2014 in respect of which meetings proper notices
were given and the proceedings were properly recorded
and signed.
5. The Company has not closed the Register of Members
under Section 154 of the Act during the nancial year
since the same was not mandatory.
6. The Annual General Meeting for the nancial year ended
on 31
st
March, 2013 was held on 8
th
July, 2013 after
giving due notice to the members of the Company. The
resolutions passed there at were duly recorded in Minutes
7. No Extra Ordinary General Meeting was held, during the
year under scrutiny.
8. The Company has not advanced any loan to its directors,
or persons, or rms and Companies referred to under
section 295 of the Act.
9. The Company has not entered into any contract falling
within the purview of Section 297 of the Act.
explanation given to us, there were no transactions with any
party that needed to be entered in the register maintained in
pursuance of the section 301 of the Companies Act, 1956.
11. As there were no instances falling within the purview of
Section 314 of the Act the Company was not required to
obtain any approval from the Board of Directors, members
and Central Government.
12. The Board of Directors has not issued duplicate share
certicates during the nancial year under review.
13. The Company has:
i) not issued/allotted any shares and has not received any
request for transmission or transfer.
ii) not declared any dividend during the year and hence
the Company was not required to deposit any amount
as unpaid in a separate bank account.
iii) not paid/posted warrants for dividends to any members,
since no dividend was declared during the year under
review.
iv) not transferred any amounts to the Investors Education
and Protection Fund since there were no unpaid
dividends, application money due for refund, matured
deposits, matured debentures and the interest accrued
thereon, outstanding for a period of seven years.
v) has duly complied with the requirements of Section 217
of the Act.
14. The Board of Directors of the Company is duly constituted
and the appointments/re-appointment of directors have
been duly made.
15. The Company has not appointed a Managing Director/
Whole time Director/Manager during the nancial year
under review.
16. The Company has not appointed any sole-selling agents
17. As explained to me, the Company was not required to
obtain any approvals from the Central Government,
Company Law Board, Regional Director and/or such
other authorities as may be prescribed under the various
provisions of the Act.
18. The directors have disclosed their interest in other rms/
companies to the Board of Directors pursuant to the
provisions of the Act and the rules made there under.
19. The company has not issued any shares, debentures and/
or other securities during the nancial year under scrutiny.
20. The Company has not bought back any shares during the
21. Since the Company has no preference shares/debentures,
the Company was not required to redeem any preference
share/debentures during the year under review.
22. There were no transactions necessitating the Company to
bonus shares pending registration of transfer of shares.
748
23. The Company has not invited/accepted any deposits
including any unsecured loans falling within the purview
of the provisions of Section 58A and 58AA read with
Companies (Acceptance of Deposit) Rules, 1975 during
24. The Company has not borrowed any amount from
Directors, members, public, nancial institutions, banks
and others, during the nancial year under review.
25. The company has not made any loans or investments, or
given guarantees or provided securities to other bodies
corporate and consequently no entries has been made in
the register kept for the purpose.
Memorandum of Association with respect to situation of
the Companys registered ofce from one state to another
Memorandum of Association with respect to the objects
of the company during the year under scrutiny.
Memorandum of Association with respect to name of the
company during the year under scrutiny.
Memorandum of Association with respect to share capital
of the company during the year under scrutiny.
30. The Company has not altered its Articles of Association
31. There were no prosecution initiated against or show cause
notices received by the Company for alleged offences
under the Act and also no nes and penalties or any other
punishment imposed on the company during the nancial
year under review.
32. The Company has not received any money as security
from its employees during the year under review.
33. According to the explanation given to us the Provident
Fund Scheme is not applicable to the Company. Hence
the Company has not deducted both employees and
employers contribution to Provident Fund, with prescribed
authorities, pursuant to Section 418 of the Act.
For Martinho Ferrao & Associates
Company secretaries
Martinho Ferrao
Proprietor
Place: Mumbai C P. No. 5676
Date: 17
th
April, 2014 FCS : 6221
ANNEXURE A
(Refer Para 1 of report dated 17
th
April, 2014)
No. Registers as maintained by the
Company
Under
Section
1 Register of Members 150
2 Minutes Books of proceedings of
a) General Meeting 193
b) Board of Directors 193
3 Register of Contracts, Companies &
Firms in which Directors are interested 301
4 Register of Directors 303
5 Register of Director Shareholding 307
6 Register of charges 143
7 Register of Transfer of shares 108
ANNEXURE B
(Refer Para 2 of report)
Returns led by the Company with the Registrar of Companies,
Maharashtra, Mumbai, during the Financial Year on 31
st
March, 2014
No Form No. Under Section Purpose Filing date with ROC
1 Form 23AC & 23ACA - XBRL - Balance
Sheet and Prot & Loss A/c (as on
31
st
March, 2013)
220 As prescribed in the section 6
th
August 2013
2 Form 20B - Annual Return (as on
8
th
July, 2013)
159 As prescribed in the section 29
th
August, 2013
3 Form 66 (Compliance Certicate) 383A As required under the Issuance of
Compliance Certicate Rules, 2001
17
th
July, 2013
4 Form 32 (Appointment of Director) 260 As prescribed in the section 14
th
August, 2013
749
ANNEXURE 2 TO THE DIRECTORS REPORT
ST
MARCH, 2014.
(a) Energy conservation measures taken : The Company is looking out for suitable opportunity
in large format development and residential
development and adequate energy conservation
measures will be taken at an appropriate time
: Nil
(c) Impact of the measures taken/to be taken at (a) & (b) above
for reduction of energy consumption and consequent
: The above measures, when implemented at an
appropriate time are expected to result in reduction
of energy consumption.
(d) Total energy consumption and energy consumption per
: Not Applicable
during the year.
3. Future Plan of action : The Company intends to initiate quality improvement
measures at an appropriate time.
There was no inow or outow of foreign exchange involved during the year under review.
Anita Arjundas
Chairperson
Mumbai, 17
th
April, 2014 DIN: 00243215
750
TO THE MEMBERS OF
of Mahindra World City (Maharashtra) Limited (the
31
st
March, 2014, and the Statements of Prot and Loss
information.
section 211 of the Companies Act 1956. (the Act). This
purpose of expressing an opinion on the effectiveness
of the entitys internal control. An audit also includes
evaluating the appropriateness of accounting policies
made by management, as well as evaluating the overall
opinion.
Opinion
accepted in India:
st
March, 2014.
(b) in the case of Statement of Prot and Loss, of the loss
of the Order.
d. In our opinion, the Balance Sheet, the Statements of
Prot and Loss and Cash Flow dealt with by this report
comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies
Act, 1956;
st
March, 2014, and taken on
st
March, 2014, from being
Date: 17
th
751
Referred to in Paragraph (7) of our report of even date on the
accounts of Mahindra World City (Maharashtra) Limited for
the year ended 31
st
March, 2014.
1. (i) The Company is maintaining proper records showing
full particulars, including quantitative details and
situation of xed assets.
(ii) The Company has a program for physical verication
of xed assets at periodic intervals. In our opinion,
the period of verication is reasonable having regard
to the size of the Company and the nature of its
assets. Discrepancies reported on such verication
have been properly dealt in the accounts.
(iii) The company has not disposed off any of its xed
asset during the year under consideration.
2. Since the company does not hold any nished goods,
stores, spares and raw materials. Therefore, provisions of
sub-clause (a), (b) and (c) of sub-para (ii) of para 4 of the
Order are not applicable.
4. Since the company has not dealt in purchase and sale
of any nished goods, stores, spares and raw materials.
Also neither it owned any xed assets at the beginning or
at the end of the year nor has purchased or sold any xed
assets during the year. Therefore provisions of sub-para
(iv) of para 4 of the Order are not applicable.
5. In respect of transactions entered in the register maintained
under section 301 of the Companies Act, 1956:
a) In our opinion and according to the information and
explanation given to us, there were no transactions
exceeding the value of ` ve lakhs in case of any
party that need to be entered in the Register
maintained in pursuance of section 301 of the
b) As there are no transactions exceeding the value of
` ve lakhs in case of any party that need to be entered
in the Register maintained pursuant to section 301 of
the Companies Act, 1956, sub-clause (b) of sub-para
(v) of Para 4 of the Order regarding reasonability of
price at which such transactions have been entered
is not applicable.
explanations given to us, the company has not accepted
any loans or deposits within the meaning of Rule 2(b) of
the Companies (Acceptance of Deposits Rule), 1975.
7. The provisions relating to internal audit are not applicable
to the Company.
8. We have been informed that the Central Government has
not prescribed maintenance of Cost records u/s 209(1)(d)
9. (i) According to the records of the Company, the
with appropriate authorities undisputed statutory
dues including Provident Fund, Employees State
Insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess and other statutory
dues applicable to it. According to the information
and explanations given to us, no undisputed amounts
payable in respects of income-tax wealth tax, sales
tax, custom duty and excise duty were outstanding,
as on 31
st
March, 2013, for a period more than six
(ii) There are no disputed dues outstanding as on 31
st

March 2013 on account of sales tax, customs duty,
income tax, excise duty, service tax, income tax,
wealth tax and cess
10. The accumulated losses of the Company exceeds fty
percent of its net worth as at 31
st
March 2014. The
Company has incurred cash losses in the nancial year
ended on that date and in the immediately preceding
nancial year.
11. Based on our audit procedures and on the basis of
we are of the opinion that the company has not defaulted
in repayment of dues to Financial Institutions and Banks.
us, the company has not granted any loans or advances
13. The provisions of any special statute applicable to chit
fund/nidhi/mutual benet fund/society are not applicable
to the company.
14. In our opinion, the company is not dealing in or trading in
us, the company has not given any guarantee for loans
the year.
752
the information and explanations given to us, the company
has not obtained any term loans during the year ended
31
st
March 2013.
the balance sheet of the company, no funds raised on short
term basis have been used for long term investments.
shares to parties and companies covered in the register
maintained under Section 301 of the Companies Act,
1956 during the year.
19. The company has not issued any debentures during the year.
20. During the year the company has not raised any money
by way of public issue.
the generally accepted auditing practices in India, and
we have neither come across any instance of fraud on or
by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
Date: 17
th
753
ST
MARCH, 2014
Note Ref As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Shareholders funds
Share capital ...................................................................................................... 3 11,704,000 11,704,000
Reserves and surplus ........................................................................................ 4 (11,352,635) (11,319,851)
351,365 384,149
Current liabilities
Other current liabilities....................................................................................... 5 57,680 29,590
Total .................................................................................................................... 409,045 413,739
ASSETS
Non-current assets
Fixed Assets
Tangible assets .................................................................................................. 6 1 1
1 1
Current assets
Cash and cash equivalents ............................................................................... 7 352,634 397,857
Short term loans and advances ........................................................................ 8 56,410 15,881
409,044 413,738
Total .................................................................................................................... 409,045 413,739
For B. K. Khare & Co. For and on behalf of the Board of Directors
}
Padmini Khare Kaicker Vijay Paradkar
Directors
Partner Suhas Kulkarni
Membership No. : 44784 Sangeeta Prasad
Date : 17
th
th
April, 2014
754
Particulars Note Ref Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
` `
INCOME
Other Income ..................................................................................................... 9 28,581 27,329
28,581 27,329
EXPENDITURE
Other expenses .................................................................................................. 10 61,365 40,055
61,365 40,055
Loss before tax ................................................................................................ (32,784) (12,726)
Less : Tax expense ............................................................................................
Loss for the period .......................................................................................... (32,784) (12,726)
Earnings per equity share:
Basic & diluted ................................................................................................... (0.03) (0.01)
ST
MARCH, 2014
}
Directors
Date : 17
th
th
April, 2014
755
ST
MARCH, 2014
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
` `
A. Cash ow from operating activities:
Net Loss before tax .................................................................................... (32,784) (12,726)
Finance costs ............................................................................................. (28,581) (27,119)
Operating (loss) before working capital changes ..................................... (61,365) (39,845)
Adjustments for increase/(decrease) in operating assets
Other current assets ................................................................................... (40,529) (76)
Increase/(decrease) in current liabilities .................................................... 28,090 (80,710)
(12,439) (80,786)
Cash used in Operations ........................................................................... (73,804) (120,631)
Net cash (used in) operating activities ...................................................... (73,804) (120,631)
Interest received ......................................................................................... 28,581 27,119
Net cash from investing activities .............................................................. 28,581 27,119
Net increase/(decrease) in cash and cash equivalents (A+B) .......... (45,223) (93,512)
Cash & cash equivalents
Opening balance ........................................................................................ 397,857 491,369
Closing balance .......................................................................................... 352,634 397,857
Net increase/(decrease) in cash and cash equivalents ...................... (45,223) (93,512)
}
Directors
Date : 17
th
th
April, 2014
756
ST
MARCH, 2014
The Company was incorporated in 2005 for development of Multi Product
SEZ at Karla, Maharashtra as a Joint Venture with Maharashtra Industrial
Development Corporation (MIDC). Owing to the issues faced in land
acquisition in that region, MIDC has stated in their letter of January 7, 2011
that the project would not be pursued at Karla but it would work with the
Company to examine the possibility of a Joint Venture project elsewhere.
Accordingly, the project inventory representing cost on preliminary studies,
surveys and interest have been charged off resulting in the accumulated
losses eroding its networth in the previous year. The company is exploring
alternate locations for the project. Since the Holding Company is committed
to extending nancial support to the Company for its future projects the
accounts have been prepared on a Going Concern basis.
a. The nancial statements of the Company have been prepared in
1956. The nancial statements have been prepared on accrual
b. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation. Cost
of acquisition is inclusive of purchase price, levies and any directly
attributable costs of bringing the assets to its working condition for
the intended use.
c. Depreciation
Fixed assets are depreciated on the Straight Line method in
accordance with the provisions of Section 205(2) (b) of the Companies
Act, 1956 based on the useful life estimated by the Management.
Accordingly, computers are depreciated at 20% which is higher than
the rate specied in Schedule XIV to the Companies Act, 1956.
d. Inventories
Inventories are valued at cost which represents expenses attributable
to lands to be acquired.
e. Taxes on Income
of taxable income for the year. Deferred tax is recognized, subject
to consideration of prudence, on timing differences, being the
difference between taxable income and accounting income that
subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and
carried forward losses are recognized if there is virtual certainty
that there will be sufcient future taxable income available to realize
such losses. Other deferred tax assets are recognized if there is
reasonable certainty that there will be sufcient future taxable income
available to realize such assets.
f. Provisions and contingencies
A provision is recognized when the Company has a present obligation
as a result of past events and it is probable that an outow of
resources will be required to settle the obligation, in respect of which
a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required
to settle the obligation at the Balance Sheet date. These are reviewed
estimates. Contingent Liabilities are not recognized but are disclosed
in the notes. Contingent Assets are neither recognized nor disclosed
in the nancial statements.
`
As at
31
st
March, 2014
As at
31
st
March, 2013
3. Share Capital
Authorised
1,500,000 Equity shares of ` 10 each 15,000,000 15,000,000
Issued, subscribed and paid up.
1,170,400 equity shares of ` 10 each
fully paid up 11,704,000 11,704,000
11,704,000 11,704,000
a. The above shares are held by Mahindra Lifespace Developers
Limited, the holding company and its nominees.
b. Terms/Rights attached to Equity Shares
vote per share.
Repayment of capital on liquidation will be in proportion to the
Reconciliation of the shares outstanding at the beginning and at the
end of the reporting period.
As at 31
st
st
March, 2013
Equity Shares
No of
Shares
Value of
Shares (`)
No of
Shares
Value of
Shares (`)
At the beginning of
the period 11,70,400 1,17,04,000 11,70,400 1,17,04,000
Issued during the
period
Outstanding at the
end of the period 11,70,400 1,17,04,000 11,70,400 1,17,04,000
`
As at
31
st
March, 2014
As at
31
st
March, 2013
4. Reserves & Surplus
(Decit) in the statement of Prot
and Loss
Opening Balance (11,319,851) (11,307,125)
Add: Loss for the Year (32,784) (12,726)
Closing Balance (11,352,635) (11,319,851)
57,680 29,590
757
`
As at
31
st
March, 2014
As at
31
st
March, 2013
7. Cash & Cash Equivalents
Cash on hand 1,549 1,549
Balances with Bank
in current account 3,51,085 3,96,308
3,52,634 3,97,857
8. Short Term Loans & Advances
Advance Tax 56,410 15,881
56,410 15,881
`
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
9. Other Income
Interest income
Interest on deposits 28,581 27,119
Other Income 210
28,581 27,329
10. Other Expenses
Audit Fees 28,090 30,150
Miscellaneous expenses 2,040
61,365 40,055
6. FIXED ASSET
TANGIBLE ASSETS `
Gross block Depreciation Net block
As at
1
st
April, 2013
As at
31
st
March, 2014
As at
1
st
April, 2013
For the year
April - March
2014
As at
31
st
March, 2014
As at
31
st
March, 2014
As at
31
st
March, 2013
Computers 61,882 61,882 61,881 61,881 1 1
TOTAL 61,882 61,882 61,881 61,881 1
Previous year 61,882 61,882 61,881 61,881 1
11. The particulars regarding dues to micro enterprises and small enterprises
12. Related Parties
a) Details of related parties:
Holding Company Mahindra Lifespace Developers
Limited
13. Earnings per Share
Particulars For the Year ended
31
st
March, 2014
For the Year ended
31
st
March, 2013
Basic & Diluted
Net prot/(loss) for the year (`) (32,784) (12,726)
shares (Nos.)
11,70,400 11,70,400
Par value per share (`) 10 10
Earnings per share - Basic & Diluted (`) (0.03) (0.01)
14. In line with AS 22, Accounting for Taxes on Income, on principles of
prudence, the company has not recognized the net deferred tax asset
arising due to unabsorbed losses.
15. Previous years gures have been regrouped/reclassied wherever necessary
to correspond with the current years classication/disclosure.
}
Directors
Date : 17
th
th
April, 2014
ST
MARCH, 2014
KNOWLEDGE TOWNSHIP LIMITED
758
Your Directors present their Seventh Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
31
st
March, 2014
For the year ended
31
st
March, 2013
Total Income......................................................................................
Prot/(Loss) Before Depreciation, Interest and Taxation................. (46,064) (134,269)
Less: Depreciation ............................................................................ 17,803 17,330
Prot/(Loss) Before Interest and Taxation ....................................... (63,867) (151,599)
Less: Interest .....................................................................................
Prot/(Loss) Before Taxation ............................................................ (63,867) (151,599)
Less: Provision for Taxation .............................................................
Prot/(Loss) for the year after Taxation ............................................ (63,867) (151,599)
Add: Balance of Prot/(Loss) for earlier years ................................ (4,352,031) (4,200,432)
Balance carried forward to the Balance Sheet ............................... (4,415,898) (4,352,031)
Operations
Your Company has started acquisition of land to set up an
Integrated Township in Maharashtra. During the year, your
Company continued its land acquisition process in the
targeted area.
Dividend
Capital
The Authorised Equity Share Capital of your Company is
` 50 crore and the paid-up equity capital of your Company is
` 21 crore.
Your Company is a wholly owned subsidiary company of
Mahindra Lifespace Developers Limited and consequently
a subsidiary company of the ultimate holding company,
Directors
Mr. Arun Nanda (DIN: 00010029) retire by rotation and being
eligible offers himself for re-appointment.
Ms. Sangeeta Prasad (DIN: 02791944) was appointed as an
st
July, 2013. Ms. Sangeeta Prasad
holds ofce only upto the date of the 7
th
Annual General
Meeting of the Company.
its intention to propose Ms. Sangeeta Prasad as candidate for
the ofce of Director.
During the year, Ms. Beroz Gazdar (DIN: 00390861) resigned
st
placed on record its appreciation of the services rendered
by Ms. Beroz Gazdar during her tenure as a Director of the
Company.
Operating Management and after due enquiry, conrm that:
31
st
concern basis.
Audit Committee
On 17
th
April, 2014, the terms of the Audit Committee were
enhanced in accordance with the provisions of Section 177 of
the Companies Act, 2013 and Rules made thereunder.
The Audit Committee of the Company comprises of three
members viz; Ms. Anita Arjundas, Ms. Beroz Gazdar and
Mr. Brij Mohan Kataria. Subsequent to the resignation of
Ms. Beroz Gazdar as a Director of the Company, the Committee
was re-constituted on 31
st
July, 2013. The present members
of the Committee are Ms. Anita Arjundas, Ms. Sangeeta
Prasad and Mr. Brij Mohan Kataria. Ms. Anita Arjundas is the
Chairperson of the Audit Committee.
Code of Conduct
the conduct of the Companys business and seeks to
reiterate the fundamental precept that good governance
must and would always be an integral part of the Companys
ethos.
declarations under the Code from the Board Members and
759
Employees of the Company afrming compliance with the
respective Codes.
Auditors
The members will be required to appoint Auditors in terms of
relevant provisions of the Companies Act, 2013 and x their
remuneration.
As required under the provisions of Section 139 and 141
of the Companies Act, 2013, the Company has received a
written consent and certicate from M/s. B. K. Khare & Co.,
Chartered Accountants, Mumbai, proposed to be re-appointed
as Auditors for one year i.e. upto conclusion of the 8
th
Annual
General Meeting of the Company, to the effect that their
specied in the said Section.
Public Deposits and Loans / Advances
accounts pursuant to Clause 32 of the Listing Agreement of
under Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 are given in the Annexure to this Report.
31
st
Acknowledgment
The Directors are thankful to all consultants, associates and
employees of your Company for the support received from
them during the year.
Arun Nanda
Chairman
Mumbai, 17
th
April, 2014 DIN: 00010029
ST
MARCH, 2014.
(a) Energy conservation measures taken : The operations of your Company are not energy-intensive.
However, adequate measures will be initiated to reduce
energy consumption at an appropriate time.
: Nil
(c) Impact of the measures taken/to be taken at (a)
& (b) above for reduction of energy consumption
and consequent impact on the cost of production
of goods
: The above measures, when implemented at an appropriate
time are expected to result in reduction of energy consumption.
Schedule
: Not Applicable
1. Areas in which R & D is carried out : The Company has not carried out any R&D activities during
the year
Arun Nanda
Chairman
Mumbai, 17
th
April, 2014 DIN: 00010029
760
TO THE MEMBERS OF
of Knowledge Township Limited (the Company), which
comprise the Balance Sheet as at 31
st
March, 2014, and
the Statements of Prot and Loss and Cash Flow for the
5. We believe that the audit evidence we have obtained is sufcient
Opinion
accepted in India:
st
March, 2014;
of the Order.
(d) In our opinion, the Balance Sheet, the Statements of
Act, 1956;
st
st
For B. K. Khare and Co.
Dated: 17
th
April, 2014 Membership Number 44784
761
accounts of Knowledge Township Limited for the year ended
31
st
March, 2014.
1. (i) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of
xed assets.
(ii) The Company has a program for physical verication of
xed assets at periodic intervals. In our opinion, the period
of verication is reasonable having regard to the size of the
Company and the nature of its assets. Discrepancies reported
on such verication have been properly dealt in the accounts.
(iii) The Company has not disposed off any of its xed asset
during the year under consideration.
2. Since the company does not hold any nished goods, stores,
spares and raw materials. Therefore, provisions of sub-clause (a),
(b) and (c) of sub-para (ii) of para 4 of the Order are not applicable.
3. The Company has not granted or taken any loans, secured or
unsecured, to or from companies, rms or other parties listed in
the register maintained under section 301 of the Companies Act,
1956. Therefore, provisions of sub-clause (b), (c), (d), (e), (f) and
(g) of sub-para (iii) of para 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchases of inventory, xed assets and for the
sale of goods and services. In our opinion and according to the
information and explanations given to us, there is no continuing
failure to correct major weaknesses in internal control.
explanation given to us, there were no transactions exceeding
the value of ` ve lakhs in case of any party that need to be
entered in the Register maintained in pursuance of section
in the Register maintained pursuant to section 301 of the
Companies Act, 1956, sub-clause (b) of sub-para (v) of
Para 4 of the Order regarding reasonability of price at which
such transactions have been entered is not applicable.
6. In our opinion and according to the information and explanations
given to us, the company has not accepted any loans or deposits
within the meaning of Rule 2(b) of the Companies (Acceptance
of Deposits Rule), 1975.
7. The provisions relating to internal audit are not applicable to the
Company.
8. We have been informed that the Central Government has not
prescribed maintenance of Cost records u/s 209(1)(d) of the
9. (i) According to the records of the Company, the Company
has been generally regular in depositing with appropriate
authorities undisputed statutory dues including Provident
Fund, Employees State Insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess
and other statutory dues applicable to it. According to the
information and explanations given to us, no undisputed
amounts payable in respects of income-tax wealth tax,
sales tax, custom duty and excise duty were outstanding,
as on 31
st
March, 2014, for a period more than six months
st
March
2014 on account of sales tax, customs duty, income tax,
excise duty, service tax, income tax, wealth tax and cess.
10. The accumulated losses of the Company did not exceed fty
st
March 2014. The Company has
incurred cash losses in the nancial year ended on that date and
in the immediately preceding nancial year.
11. Based on our audit procedures and on the basis of information
and explanations given by the management, we are of the
opinion that the company has not defaulted in repayment of
dues to Financial Institutions and Banks.
12. According to the information and explanations given to us, the
company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/nidhi/
mutual benet fund/society are not applicable to the company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others
from banks or nancial institutions during the year.
16. To the best of our knowledge and belief and according to the
information and explanations given to us, the company has not
obtained any term loans during the year ended 31
st
March, 2014.
17. In our opinion and according to information and explanations
given to us and on an overall examination of the balance sheet
of the company, no funds raised on short term basis have been
used for long term investments.
18. The company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
20. During the year the company has not raised any money by way
of public issue.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance
of fraud on or by the company, noticed or reported during the year,
nor have we been informed of such case by the management.
B. K. Khare and Co.
Dated: 17
th
April, 2014 M. No. 44784
762
st
MARCH, 2014
Note
Ref
Current Year
`
Previous Year
`
Shareholders Funds
Share capital ............................................................................... 3 210,000,000 210,000,000
Reserves & Surplus .................................................................... 4 (4,415,899) (4,352,032)
205,584,101 205,647,968
Current Liabilities
Short term Borrowings ............................................................... 5 189,500,000 186,000,000
Other current liabilities................................................................ 6 51,974,196 51,942,818
Short term provisions ................................................................. 7 515,470 523,582
241,989,666 238,466,400
TOTAL ................. 447,573,767 444,114,368
ASSETS
Non Current Assets
Fixed Assets
Tangible assets ........................................................................... 8 43,362 61,165
43,362 61,165
Long Term Loans and advances ............................................... 9 1,298 1,298
Current Assets
Inventories ................................................................................... 10 222,686,966 219,810,376
Cash and cash equivalents ........................................................ 11 175,737 145,831
Short term loans and advances ................................................. 12 224,666,404 224,095,698
447,529,107 444,051,905
TOTAL ................. 447,573,767 444,114,368
For B.K.Khare & Co.
Chartered Accountants Arun Nanda Chairman
Partner
Sejal Shah
Company Secretary
Anita Arjundas
Brij Mohan Kataria
Sangeeta Prasad
}
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
763
st
MARCH, 2014
Note
Ref
Current Year
`
Previous Year
`
EXPENDITURE
Operating Expenses ......................................................................... 13
Employee benet expense ............................................................... 14
Finance Cost ..................................................................................... 15
Depreciation and amortization expense .......................................... 17,803 17,330
Other expenses ................................................................................. 16 46,064 134,269
TOTAL EXPENDITURE 63,867 151,599
Prot/(Loss) before tax ..................................................................... (63,867) (151,599)
Less: Tax expense ............................................................................
Prot/(Loss) after tax ........................................................................ (63,867) (151,599)
Earning per equity share:
Basic and Diluted ............................................................................. (0.00) (0.01)
For B.K.Khare & Co.
Partner
Sejal Shah
Company Secretary
Anita Arjundas
Brij Mohan Kataria
Sangeeta Prasad
}
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
764
st
MARCH, 2014
Current Year
`
Previous Year
`
Prot/(Loss) before tax .................................................................. (63,867) (151,599)
Adjustments for:
Depreciation ................................................................................... 17,803 17,330
Operating loss before working capital changes .......................... (46,064) (134,269)
Adjustment for (increase)/decrease in operating assets
(Increase)/decrease in short term loans and advances (570,706) (22,472)
(Increase)/decrease in inventories ................................................ (2,876,590) (26,280,682)
Adjustment for increase/(decrease) in operating liabilities
Increase/(decrease) in other current liabilities ............................. 23,266 21,124,397
(3,424,030) (5,178,757)
Cash (used in) operations ............................................................ (3,470,094) (5,313,026)
Taxes paid ......................................................................................
Net cash (used in) operating activities ......................................... (3,470,094) (5,313,026)
Purchase of Fixed Assets ............................................................. (62,703)
Net cash from investing activities ................................................. (62,703)
Proceeds from borrowings ........................................................... 3,500,000 5,400,000
Net cash from nancing activities ................................................. 3,500,000 5,400,000
Net increase/(decrease) in cash and cash equivalents ......... 29,906 24,271
Opening balance ........................................................................... 145,831 121,560
Closing balance ............................................................................. 175,737 145,831
Net increase/(decrease) in cash and cash equivalents ......... 29,906 24,271
For B.K.Khare & Co.
Partner
Sejal Shah
Company Secretary
Anita Arjundas
Brij Mohan Kataria
Sangeeta Prasad
}
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
765
st
MARCH, 2014
The company was incorporated on August 16, 2007 and is engaged in the
business of development of Knowledge City in Pune, Maharashtra.
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the nancial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual results
and the estimates are recognized in the periods in which the results are
known / materialize.
2.3 Inventories
Cost of inventory represents expenses attributable to lands acquired,related
expenses for a long term project including interest.
Cash ows are reported using the indirect method, whereby prot / (loss)
before extraordinary items and tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past or future cash receipts
or payments. The cash ows from operating, investing and nancing activities
of the Company are segregated based on the available information.
Depreciation is provided on straight line method from the date the assets are
put to use in accordance with Schedule XIV to the Companies Act, 1956.
Accordingly Computers are depreciated at 20% which is higher than the
rates specied in schedule XIV to the Companies Act, 1956.
2.7 Other income
accounted for, when the right to receive it is established.
impairment losses, if any. The cost of xed assets includes interest on
borrowings attributable to acquisition of qualifying xed assets up to the date
the asset is ready for its intended use and other incidental expenses incurred
up to that date. Subsequent expenditure relating to xed assets is capitalized
only if such expenditure results in an increase in the future benets from such
asset beyond its previously assessed standard of performance.
2.9 Employee benets
Employee benets include gratuity and compensated absences
Basic/Diluted earnings per share is computed by dividing the prot/(loss)
after tax (including the post tax effect of extraordinary items, if any) and
after reducing the dividend obligation (including Dividend Distribution Tax)
on Preference Shares by the weighted average number of equity shares
capable of reversal in one or more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carried
forward losses are recognised if there is virtual certainty that there will
be sufcient future taxable income available to realize such losses. Other
deferred tax assets are recognised if there is reasonable certainty that
assets.
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
impairment is recognized, if the carrying amount of these assets exceeds
their recoverable amount. The recoverable amount is the greater of the
loss recognized for an asset in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment loss is recognized in
the Statement of Prot and Loss, except in case of revalued assets.
A provision is recognized when the Company has a present obligation as a
be made. Provisions (excluding retirement benets) are not discounted
to their present value and are determined based on the best estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reect the current
best estimates. Contingent liabilities are disclosed in the Notes.
Current Year
`
Previous Year
`
3 Share Capital
Authorised
50,000,000 equity shares of ` 10 each ..... 500,000,000 500,000,000
Issued, subscribed and fully paid up.
21,000,000 equity shares fully paid up
of `10 each .................................................. 210,000,000 210,000,000
210,000,000 210,000,000
3a. The above shares are held by Mahindra Lifespace Developers
There has been no movement in the equity share capital during the year.
3b. Terms/ Rights attached to Equity Shares
The company has only one class of Equity Shares having a par value
vote per share.
Repayment of the capital on liquidation will be in proportion to the
3c. Details of shares held by each shareholder including Holding Company,
holding more than 5% of the aggregate shares in the Company:
No. of
Shares
Value of
Shares (`)
No. of
Shares
Value of
Shares (`)
Holding Company (100%)
Mahindra Lifespace
Developers Limited
Equity 21,000,000 210,000,000 21,000,000 210,000,000
766
Current Year
`
Previous Year
`
Decit in the Statement of Prot
and Loss.......................................................
Opening balance ........................................ (4,352,031) (4,200,432)
Add: Loss for the Current Year ............... (63,867) (151,599)
Closing Balance ......................................... (4,415,898) (4,352,031)
5 Short Term Borrowings
Intercorporate deposits from Holding
company repayable on demand ............... 189,500,000 186,000,000
189,500,000 186,000,000
Current Year
`
Previous Year
`
Interest Accrued but not due on
Intercorporate Deposits (from Holding
Company repayable on demand) ............ 51,825,298 51,825,298
Other liabilities ............................................. 148,898 117,520
Statutory remittances
Withholding Taxes ............................ 6,297
Profession Taxes 600 800
Other 142,001 116,720
51,974,196 51,942,818
7 Short Term Provisions
Compensated absences...................... 211,432 203,214
Provision for bonus............................... 304,038 320,368
515,470 523,582
8 Fixed Assets Amount in `
Description of Assets As at
April 1, 2013
Addition Deduction
during the
year
As at
March 31,
2014
As at
April 1, 2013
For the year As at
March 31,
2014
As at
March 31,
2014
As at
March 31,
2013
Tangible Assets
Computers 51,683 51,683 46,418 5,262 51,680 3 5,265
Furniture & Fixture 62,703 62,703 6,803 12,541 19,344 43,359 55,900
TOTAL 114,386 114,386 53,221 17,803 71,024 43,362
Previous Year 114,386 114,386 25,367 17,330 53,221 61,165
Current Year
`
Previous Year
`
9 Long Term Loans And Advances
Income Tax Payment ............................... 1,298 1,298
1,298 1,298
10 Inventories
(at lower of cost and Net realisable value)
Work in progress ........................................
(represents land and other related
expenses)
222,686,966 219,810,376
222,686,966 219,810,376
11 Cash and Cash Equivalents
Cash on hand ............................................. 18,089 12,432
Balances with Banks
in current accounts ................................ 157,648 133,399
175,737 145,831
12 Short Term Loans and Advances
Advance for purchase of land ................. 222,813,226 222,813,226
Advance given to employees .................. 10,000
TDS Receivable ............................................ 580,706
Claims recoverable .................................... 1,272,472 1,272,472
224,666,404 224,095,698
Current Year
`
Previous Year
`
13 Operating Expenses
Opening Work In Progress 01.04.2013............. 219,810,376 193,529,694
Add : CONSUMPTION DURING 2013-14 ........
Employee Remuneration ...................................... 2,691,075 2,729,228
Staff Welfare ............................................................ 2,285 14,148
Interest On Intercompany Loan .......................... 23,317,362
Repairs & Maintenance Others ........................... 14,000
Telephone Expenses - Mobile ............................. 28,245 26,093
Telephone Expenses-Leased Lines/Internet/
VSAT .......................................................................... 4,382
Travelling Expenses Domestic - Fare ................ 53,882 55,840
Travelling Expenses Domestic - Lodging/
Boarding ...................................................................
12,573 29,288
Conveyance ............................................................. 16,809 31,079
Printing & Stationery ............................................. 5,688 43,547
Professional Fees ................................................... 56,180
Liaisoning /Statutory Fees .................................... 1,750
Bank Charges - Others ......................................... 353 2,808
News papers, Books & Periodicals ................... 6,916
Gen & Misc Exp - Sundries/Others ................... 9,500 4,241
TOTAL CONSUMPTION IN FY 2013-14 ............ 2,876,590 26,280,682
LESS : CLOSING WIP 28.02.2014 ..................... 222,686,966 219,810,376

st
MARCH, 2014
767
Current Year
`
Previous Year
`
14 Employee Benet Expense
Salaries, wages and bonus ..................... 2,691,075 2,729,228
Staff welfare ................................................. 2,285 14,148
2,693,360 2,743,376
Less: Allocated to Projects ...................... (2,693,360) (2,743,376)

15 Finance Costs
Interest on Inter Corporate deposits ..... 23,317,362
Less: Allocated to Projects ...................... (23,317,362)

16 Other Expenses
Legal and Professional Charges ............ 14,606 19,849
Audit Fee .................................................. 28,090 114,420
Other Expenses .......................................... 3,368
Insurance Expenses- Other ........................ 674
Miscellaneous ............................................... 2,694
46,064 134,269
17 The particulars regarding dues to micro enterprises and small enterprises
upon by the auditors. There are no dues to such parties.
18 Related Party Transactions
a List of Related Parties
b Related Party Transactions
Details of related party transactions during the year ended 31
st
March, 2014
and balances outstanding as at 31
st
March, 2014:
Particulars
Current Year
`
Previous Year
`
Mahindra Lifespace Developers Ltd.
Inter Corporate Deposit taken 3,500,000 5,400,000
Interest on Inter Corporate
Deposit......................................... 23,317,362
Outstanding Payables as at the
year end ...................................... 241,325,298 237,825,298
19 Earnings per share
Particulars Current Year Previous Year
Basic and Diluted:
Net loss for the year (`) ......................... (63,867) (151,599)
equity shares (Nos.) ............................... 21,000,000 21,000,000
Par value per share (`) .......................... 10 10
Earnings per share (`) ........................... (0.00) (0.01)
20 In line with AS 22, Accounting for Taxes on Income, on principles of
21 Previous years gures have been regrouped / reclassied wherever
necessary to correspond with the current years classication / disclosure.
As per our report attached hereto For and on behalf of the
Board of Directors
For B.K.Khare & Co. Arun Nanda Chairman
Partner
Sejal Shah
Company Secretary
Anita Arjundas
Brij Mohan Kataria
Sangeeta Prasad
}
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
st
MARCH, 2014
MAHINDRA BEBANCO DEVELOPERS LIMITED
768
Your Directors present their Sixth Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
31
st
March, 2014
For the year ended
31
st
March, 2013
Total Income............................................................................................................... 526,149,250 248,251,194
Prot/(Loss) Before Depreciation, Interest and Taxation.......................................... 15,850,789 (33,934,755)
Less: Depreciation ..................................................................................................... 1,418,640 550,455
Prot/(Loss) Before Interest and Taxation ................................................................ 14,432,149 (34,485,210)
Less: Interest ..............................................................................................................
Prot/(Loss) Before Taxation ..................................................................................... 14,432,149 (34,485,210)
Less: Provision for Taxation 3,000,000
Deferred Tax ..................................................................................................... 10,706,080
Prot/(Loss) for the year after Taxation ..................................................................... 11,432,149 (45,191,291)
Add: Balance of Prot/(Loss) for earlier years ......................................................... (67,482,837) (22,291,546)
Balance carried forward ............................................................................................ (56,050,688)* (67,482,837)
* This is the balance of total Reserves and Surplus. For only P&L Account the balance carried forward is same as that of earlier year ie :
(` 67,482,837) because the entire PAT of F-14 has been transferred to the Debenture Redemption Reserve (DRR)
The Company has received a notice from a member signifying its
intention to propose Mr. Jeet Kapadia as candidate for the ofce
of Director.
During the year, Mr. Monesh Bhansali (DIN: 01091458) resigned
th
May, 2013. Your Board
placed on record its appreciation of the services rendered by
Mr. Monesh Bhansali during his tenure as a Director of the Company.
ii) they have, in the selection of the accounting policies, consulted
the 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
st
March, 2014 and of the prot of the
Company for the year ended on that date;
iii) proper and sufcient care has been taken for the maintenance
iv) the annual accounts have been prepared on a going concern
basis.
Audit Committee
On 17
th
April, 2014, the Audit Committee of the Company was
constituted pursuant to Section 177 of the Companies Act, 2013
and Rules made thereunder. The Committee comprisses of
Mr. Jayantt Manmadkar, Mr. Digant Kapadia and Mr. Rajendra
Joshi. Mr. Jayantt Manmadkar is the Chairman of the Committee.
Operations
Bloomdale, is the Companys rst venture, located in Nagpur,
Maharashtra. This project is conceived as a gated community
spanning around 25 acres and offering a choice of midrise
apartments, row houses and duplex homes. During the year,
phase two of the project was launched with 97 units having a
total saleable area of 0.14 million square feet. This was in addition
to the 330 units of Phase one with a total saleable area of 0.41
million square feet. The Construction of both Phase one and two
is progressing as per schedule.
Dividend
In view of carried forward losses, your Directors have not
recommended any dividend for the year under review.
Capital
The Authorised and paid-up Equity Share Capital of the Company is
` 5 Lac which is presently held by Mahindra Lifespace Developers
Limited (MLDL) and B.E. Billimoria & Co. Limited (BEBL) in the
ratio of 70:30 respectively. Your Company is a subsidiary of MLDL
and consequently a subsidiary of its ultimate holding company,
Non-convertible Debentures
On 11
th
March, 2013, the Company had issued and allotted
40 Secured Redeemable 11.60% Coupon, Non-Convertible
Debentures with a face value of ` 1 crore, aggregating ` 40 Crore
on a Private Placement Basis.
Directors
Mr. Rajendra Joshi (DIN: 01336172) retires by rotation and being
eligible, has offered himself for re-appointment.
Mr. Jeet Kapadia (DIN: 02633453) was appointed as an Additional
Director at the meeting of the Board of Directors of the Company
held on 18
th
July, 2013. Mr. Jeet Kapadia holds ofce only upto the
date of the 6
th
769
On 17
th
April, 2014, the Nomination and Remuneration Committee
of the Company was constituted pursuant to Section 178 of the
Companies Act, 2013 and Rules made thereunder. The Committee
comprises of Mr. Rajendra Joshi, Ms. Anita Arjundas and Mr. Digant
Kapadia. Mr. Rajendra Joshi is the Chairman of the Committee.
Code of Conduct
The Company had adopted Code of Conduct (the Code/s) for
Codes enunciate the underlying principles governing the conduct
of the Companys business and seeks to reiterate the fundamental
The Company has for the year under review, received declarations
under the Codes from the Board Members and Senior Management
Personnel and Employees of the Company afrming compliance
with the respective Codes.
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, retire as
auditors at this 6
th
Annual General Meeting. Pursuant to Section
139(1) of the Companies Act, 2013, the members are requested to
appoint Auditors for a term of ve consecutive years to hold ofce
from the conclusion of the ensuing 6
th
Annual General Meeting till
the conclusion of the 11
th
Annual General Meeting and thereafter
till the conclusion of every sixth Annual General Meeting of the
Company, provided that the Company shall place the matter
relating to such appointment for ratication by members at every
Annual General Meeting. The members are requested to x the
remuneration of the Auditors.
said section.
which are required to be disclosed in the annual accounts
pursuant to Clause 32 of the Listing Agreements of the parent
companies Mahindra Lifespace Developers Limited and Mahindra
& Mahindra Limited with the Stock Exchanges.
Sustainability
Bloomdale is designed as a Green Building addressing certain
priorities, which includes water conservation, reduction & reutilization
of waste, energy conservation, reduction in CO2 emissions,
conservation of resources like wood and lesser dependence on
usage of virgin materials. In August, 2012, Bloomdale has received
GOLD rating in Precertication from IGBC under IGBC Green
Homes Rating System. Bloomdale has also been included under
the scope of GRI Sustainability reporting of Mahindra Lifespace
Developers Limited.
Particulars of Employees as required under Section 217(2A) of
the Companies Act, 1956 and Rules made there under
the Financial Year and was in receipt of remuneration, of not less
than ` 6,000,000 per annum during the year ended 31
st
March,
2014 or was employed for a part of the Financial Year and was
in receipt of remuneration of not less than ` 500,000 per month
during any part of the year.
Acknowledgments
The Directors are thankful to all consultants, associates and
employees of your Company for the support received from them
Anita Arjundas
Chairperson
Mumbai, 17
th
April, 2014 DIN: 00243215
770
ST
MARCH, 2014.
(a) Energy Conservation measures taken : As a part of sustainable development adequate measures have
been initiated to reduce energy consumption. With respect to
providing an Energy Efcient nal product to its customers, the
Company is developing Green Buildings.
Green Building increases the resource efciency (energy, water,
and materials), while reducing impacts on human health and
the environment, through better selection of sites, design,
construction, operation, maintenance, and removal i.e. the
complete building life cycle.
(b) Additional investments and proposals, if any, are being
: Nil
Energy consumption is being minimized through the following
in green buildings:
Energy effcient building envelopes for walls and roofs
assembly
Energy effcient electronic ballast & all lighting system
Adoption of high effciency light fttings
Adoption of high effciency pumps, motors
Group control mechanism for lifts
for reduction of energy consumption and consequent impact
on the cost of production of goods
: Not Applicable
(d) Total energy consumption and energy consumption per unit
of production as per FormA of the Annexure to the Rules in
respect of industries specied in the schedule
: Not Applicable
1. Areas in which Research & Development is carried out : The Company has carried out one site laboratory based R&D
activity during the year on a nano-technology based 360
degree curing and waterproong system. The Company has
also carried out eld research and testing for innovative building
materials and methods like pervious concrete, perlite concrete,
High volume yash concrete at Bloomdale.
2. Benets derived as a result of the above efforts : Used 40% of yash in the High volume Flyash concrete
mix designs trials which has resulted in improved workable
concrete, good surface nishes and strength.
3. Future plan of action : More experiments and testing on alternative sustainable building
materials to improve quality and reduce time of construction are
planned.
5. Technology absorption, adaptation and innovation : Since last year, Company is using Aluminium formwork system
for construction in Bloomdale Project, Nagpur.
6. Imported technology : In case of imported technology (imported during the last 5 years
reckoned from the beginning of the nancial year), following
information may be furnished:
Technology imported Aluminium formwork system
Year of import FY-13
Has technology been fully absorbed? - Yes
If not fully absorbed, areas where this has not taken place,
reasons there for and future plans of action. - N. A.
Details of foreign exchange earnings and outgo during the year under review are furnished in the Notes to Accounts.
Anita Arjundas
Chairperson
Mumbai, 17
th
April, 2014 DIN: 00243215
771
of MAHINDRA BEBANCO DEVELOPERS LIMITED (the
st

March, 2014, and the Statements of Prot and Loss and Cash
Flow for the year then ended, and a summary of signicant
preparation of these nancial statements that give a true and
fair view of the nancial position, nancial performance and
cash ows of the Company in accordance with the Accounting
Standards notied under the Companies Act, 1956 (the Act).
maintenance of internal control relevant to the preparation and
presentation of the nancial statements that give a true and fair
view and are free from material misstatement, whether due to
fraud or error.
3. Our responsibility is to express an opinion on these nancial
misstatement.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of
the accounting estimates made by management, as well
as evaluating the overall presentation of the nancial
statements.
opinion.
Opinion
6. In our opinion and to the best of our information and according
TO THE MEMBERS OF
Company as at 31
st
March 2014;
(c) in the case of the Cash Flow Statement, of the cash ows for
the year ended on that date.
to us, we give in the Annexure a statement on the matters
b. in our opinion proper books of account as required by
from our examination of those books;
c. the Balance Sheet, the Statement of Prot and Loss and
Cash Flow dealt with by this Report are in agreement
with the books of account
comply with the Accounting Standards referred to in sub
section (3C) of section 211 of the Companies Act, 1956.
e. on the basis of written representations received from the
directors as on 31
st
March, 2014, and taken on record
by the Board of Directors, none of the directors is
disqualied as on 31
st
March, 2014, from being appointed
as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956;
Partner
Mumbai, Dated: 17
th
April 2014 Membership Number 44784
772
Referred to in Paragraph (7) our report of even date on the
nancial statements of Mahindra Bebanco Developers Limited
ended 31
st
March, 2014.
1) (i) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of
xed assets.
(ii) The Company has a program for physical verication of
xed assets at periodic intervals. In our opinion, the period
of verication is reasonable having regard to the size of the
Company and the nature of its assets. Discrepancies reported
on such verication have been properly dealt in the accounts.
(iii) In our opinion, the disposal of xed assets during the year
does not affect the going concern assumption.
2) The Management has conducted physical verication of inventory
at reasonable intervals. The procedures of physical verication
of inventory followed by the management are reasonable and
adequate in relation to the size of the Company and the nature
of its business. The Company is maintaining proper records of
inventory and no material discrepancies were noticed on physical
verication.
3) The Company has not granted or taken any loans, secured or
unsecured, to or from companies, rms or other parties listed in
the register maintained under section 301 of the Companies Act,
1956. Therefore, the provisions of sub-clause (b), (c), (d), (e), (f)
and (g) of sub-para (iii) of para 4 of the Order is not applicable.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchases of inventory, xed assets and for the
sale of goods and services. In our opinion and according to the
information and explanations given to us, there is no continuing
failure to correct major weaknesses in internal control.
5) (i) In our opinion and according to the information and
explanations given to us, there were no transactions with any
party that needed to be entered in the Register maintained
in pursuance of section 301 of the Companies Act, 1956.
(ii) As there are no transactions exceeding the value of
` Five lakhs in case of any party that need to be entered
in the Register maintained pursuant to section 301 of the
Companies Act, 1956, sub-clause (b) of sub-para (v) of Para
4 of the Order regarding reasonability of price of which such
transactions have been entered is not applicable.
6) On our verication and according to the information and
explanations given to us, the Company has not accepted any
deposits from the public within the meaning of section 58A and
58AA of the Companies Act, 1956, and the rules framed thereunder.
7) The Company has an internal audit system, which in our opinion
is commensurate with the size of the Company and nature of its
business.
8. As informed to us, the maintenance of cost records has been
prescribed by the Central Government under section 209(1)(d) of
the Companies Act, 1956, in respect of the activities carried on
by the Company. On our verication and as per information and
explanation given to us such accounts and records have been
made and maintained.
9. (i) According to the records of the Company, the Company is
generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection
Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess
and other statutory dues applicable to it with the appropriate
authorities. According to the information and explanations
given to us, no undisputed amounts payable in respect of
Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty
and Excise Duty were outstanding, at the year end for a period
of more than six months from the date they became payable.
st
March,
2014 on account of sales tax, customs duty, income tax,
excise duty, service tax, income tax, wealth tax and cess.
10) The accumulated losses at the end of the nancial year is more
than fty percent of its net worth. The Company has not incurred
cash losses in the nancial year under consideration but has
incurred cash losses in immediately preceding nancial year.
11) According to the information and explanations given to us and
based on the documents and records produced before us, the
Company has not defaulted in repayment of dues to banks or
debenture holders.
12) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of
security by way of pledge of shares and other securities.
13) In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not
attract any special statute applicable to chit fund and nidhi/
mutual benet fund/ societies.
14) In our opinion, the Company has maintained proper records of
the transactions and contracts of the investments dealt in by
the Company and timely entries have been made therein. The
investments made by the Company are held in its own name
except to the extent of the exemption under section 49 of the Act.
15) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others
from banks or nancial institutions, the terms and conditions
whereof are prejudicial to the interest of the Company.
16) The company has applied term loans for the purpose for which
the loans were obtained.
17) According to the information and explanations given to us on
an overall examination of the Balance Sheet and Cash Flows of
the Company, we report that the Company has not utilized funds
raised on short-term basis for long term purposes.
18) There is no preferential allotment of shares during the year.
19) The Company has not issued any debentures during the year.
20) The Company has not made any public issue of its shares during
the year.
information and explanations given by the management, we
report that no fraud on or by the Company has been noticed or
B. K. Khare and Co.
Partner
M. No. 44784
Mumbai, Dated: 17
th
April 2014 Firm Registration No. 105102W
773
st
MARCH, 2014
Note As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
Shareholders funds
Share capital ....................................................................................................... 3 500,000 500,000
Reserves and surplus......................................................................................... 4 (56,050,688) (67,482,837)
(55,550,688) (66,982,837)
Long term borrowings ........................................................................................ 5 252,141,835 652,141,835
252,141,835 652,141,835
Current Liabilities
Short term Borrowings ....................................................................................... 6 46,388,395 35,988,777
Trade Payables ................................................................................................... 7 396,129,151 470,100,945
Other current liabilities ....................................................................................... 8 573,819,910 92,475,047
Short term provisions ......................................................................................... 9 2,215,755 1,631,466
1,018,553,211 600,196,235
Total ........................................................................................................................... 1,215,144,358 1,185,355,232
ASSETS
Non-current assets
Fixed Assets
Tangible assets ................................................................................................... 10 19,380,734 1,079,930
19,380,734 1,079,930
Other Non Current Assets .................................................................................. 11 24,492,800 23,200,000
43,873,534 24,279,930
Current assets
Current Investments ........................................................................................... 12 27,566,809
Inventories .......................................................................................................... 13 880,015,069 883,718,259
Trade receivables ............................................................................................... 14 153,539,757 44,609,209
Cash and Cash Equivalents .............................................................................. 15 15,427,734 10,914,997
Short term loans and advances ........................................................................ 16 104,956,636 102,161,436
Other current assets ........................................................................................... 17 17,331,629 92,104,595
1,171,270,824 1,161,075,304
Total ........................................................................................................................... 1,215,144,358 1,185,355,232
For B.K.Khare & Co
Rajan Narayan
}
Directors
Padmini Khare Kaicker Digant Kapadia
Partner Jeet Kapadia
Rajendra Joshi
Jayantt Manmadkar
Date : 17
th
April 2014 Date : 17
th
April 2014
774
st
MARCH, 2014
Note Year Ended
31
st
March, 2014
`
Year Ended
31
st
March, 2013
`
REVENUE
Income from Operations .................................................................................... 525,698,191 248,117,589
Other Income ...................................................................................................... 18 451,059 133,605
EXPENDITURE
Operating Expenses ........................................................................................... 19 440,049,642 218,898,087
Employee benets .............................................................................................. 20 4,554,054 3,665,061
Finance costs ...................................................................................................... 21
Depreciation ........................................................................................................ 10 1,418,640 550,455
Administrative & Other expenses ....................................................................... 22 62,694,765 59,622,801
Other Operating Expenses ................................................................................. 23 3,000,000
511,717,101 282,736,404
Prot/(Loss) before tax .................................................................................... 14,432,149 (34,485,210)
Less: Tax expense ............................................................................................
Current tax ............................................................................................ 3,000,000
Deferred tax .......................................................................................... 10,706,080
Prot/(Loss) for the year ................................................................................. 11,432,149 (45,191,291)
Basic and diluted ................................................................................................ 228.64 (903.83)
For B.K.Khare & Co
Rajan Narayan
}
Directors
Rajendra Joshi
Jayantt Manmadkar
Date : 17
th
th
April 2014
775
st
MARCH, 2014
Year Ended
31
st
March, 2014
`
Year Ended
31
st
March, 2013
`
Prot/(Loss) before tax ....................................................................................................... 14,432,149 (34,485,210)
Adjustments for:
Depreciation ................................................................................................................ 1,418,640 550,455
Finance Costs ............................................................................................................. 32,148,094 52,581,308
Income from Mutual Fund .......................................................................................... (499,283) (322,143)
Interest from Fixed Deposits ...................................................................................... (209,752) (225,821)
Operating loss before working capital changes ............................................................... 47,289,848 18,098,589
Adjustments in operating assets
(Increase)/decrease in short term loans and advances ................................... (2,299,958) (47,186,002)
(Increase)/decrease in inventories .................................................................... 3,703,191 (449,575,199)
(Increase)/decrease in trade receivable ............................................................ (108,930,548) (44,609,209)
(Increase)/decrease in long term loans and advances .................................... (1,292,800) (15,000)
(Increase)/decrease in other current assets ..................................................... 74,772,966 (92,104,595)
Adjustments in operating liabilities
Increase/(decrease) in Long Term Borrowings ................................................. (400,000,000) (16,785)
Increase/(decrease) in other current liabilities .................................................. 446,781,058 (92,416,124)
Increase/(decrease) in trade payables .............................................................. (73,971,794) 416,263,449
(61,237,886) (309,659,465)
Cash (used in) operations .................................................................................................. (13,948,038) (291,560,876)
Taxes paid ........................................................................................................................... 213,793 (5,244)
Net cash (used in) operating activities .............................................................................. (13,734,245) (291,566,120)
(Purchase)/Sale of xed assets ......................................................................................... (19,719,444) (434,067)
(Purchase)/Sale of investments ......................................................................................... 27,566,809 (24,759,218)
Net cash from investing activities ...................................................................................... 7,847,365 (25,193,284)
Proceeds from borrowings ................................................................................................. 10,399,619 400,000,000
Repayment of borrowings .................................................................................................. (75,511,223)
Net cash from nancing activities ...................................................................................... 10,399,619 324,488,777
Net increase/(decrease) in cash and cash equivalents .............................................. 4,512,737 7,729,373
Opening balance ................................................................................................................ 10,914,997 3,185,624
Closing balance .................................................................................................................. 15,427,734 10,914,997
Net increase/(decrease) in cash and cash equivalents .............................................. 4,512,737 7,729,373
Cash & Cash equivalents comprise of:
Cash on Hand..................................................................................................................... 30,165 19,299
Balance with Banks ............................................................................................................ 15,397,569 10,895,698
TOTAL ................................................................................................................................. 15,427,734 10,914,997
For B.K.Khare & Co For and on behalf of the Board of Directors
Rajan Narayan
}
Directors
Rajendra Joshi
Jayantt Manmadkar
Date : 17
th
th
April 2014
776
1 CORPORATE INFORMATION
The company is engaged in the business of development of residential
complexes in MIHAN at Nagpur. Based on the nature of activity carried out
by the Company and the period between the procurement and realisation
in cash and cash equivalents, the Company has ascertained its operating
cycle sas 5 years for the purpose of Current - Non Current classication of
assets & liabilities.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
The nancial statements are prepared under the historical cost
convention in accordance with Generally Accepted Accounting
Principles in India, the Accounting Standards notied under The
Companies (Accounting Standard) Rules, 2006 and the relevant
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported balances of
assets and liabilities as of the date of the nancial statements and
reported amounts of income and expenses during the period.
Management believes that the estimates used in the preparation of
nancial statements are prudent and reasonable.
2.3 Inventories
Inventories are stated at lower of cost and net realisable value. The
cost of construction material is determined on the basis of weighted
average method. Construction Work-in-Progress includes cost
of land, premium for development rights, construction costs and
allocated interest and expenses incidental to the projects undertaken
by the Company.
2.4 Fixed Assets
Fixed assets are stated at cost of acquisition or construction less
accumulated depreciation. Cost includes all incidental expenses
related to acquisition and installation, other pre operation expenses
and interest in case of construction.
The carrying amount of cash generating units / assets is reviewed at
the balance sheet date to determine whether there is any indication
of impairment. If such indication exists, the recoverable amount is
estimated as the net selling price or value in use, whichever is higher.
Impairment loss, if any, is recognized whenever carrying amount
exceeds the recoverable amount.
Depreciation on xed assets is provided, on prorata basis, on the
straight line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956, except for:
1. Furniture & Fixtures, Plant & Machinery and Computers,
individually costing more than ` 5,000, which are depreciated
over their estimated useful lives of 5 years, and
2. Leasehold improvements are amortised over the period of lease.
2.5 Revenue
Income from real estate sales is recognised on the transfer of all
signicant risks and rewards of ownership to the buyers and it is
not unreasonable to expect ultimate collection and no signicant
uncertainty exists regarding the amount of consideration. However
if, at the time of transfer substantial acts are yet to be performed
under the contract, revenue is recognised on proportionate basis as
the acts are performed, i.e. on the percentage of completion basis.
Revenues from real estate projects are recognised only when the
actual construction and development costs incurred is at least 25 %
of the total estimated construction and development costs excluding
land and when at least 10% of the sales consideration is realised and
atleast 25% of total area is sold.
Determination of revenues under the percentage of completion method
necessarily involves making estimates by the Company, some of which
are of a technical nature, concerning, where relevant, the percentages
of completion, costs to completion, the expected revenues from the
project/activity and the foreseeable losses to completion.
Interest income is accounted on accrual basis of contracted rates
except where there is uncertainty of ultimate collection.
Dividend income is recognised when the right to receive the same is
established.
2.6 Investments
Investments are classied into long term and current investments.
Long-term investments are carried at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize
a decline, other than of a temporary nature.
2.7 Employee benets
In view of the past trends of leave availed, the amount of employee
benet in the form of compensated absences, being in the nature
of short term benet, is accounted for on accrual basis at an
undiscounted value.
2.8 Provision for Taxation
Tax expense comprises both current and deferred tax.
authorities, using the applicable tax rates and tax laws.
Deferred tax assets and liabilities are recognised for future tax
consequences attributable to the timing differences between taxable
income and accounting income that are capable of reversal in one or
more subsequent periods and are measured using tax rates enacted
or substantively enacted as at the Balance Sheet date. Deferred Tax
assets are not recognised unless, in the management judgment, there
is virtual certainty that sufcient future taxable income will be available
against which such deferred tax assets can be realised. The carrying
amount of deferred tax is reviewed at each balance sheet date.
The carrying values of assets / cash generating units at each
estimated and impairment is recognized, if the carrying amount of
indication that an impairment loss recognized for an asset in earlier
reversal of impairment loss is recognized in the Statement of Prot
2.10 Provisions and Contingent Liabilities
Provisions are recognised in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
that arise from past events but their existence is conrmed by the
occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company.
2.11 Borrowing Costs
Borrowing costs that are directly attributable to long-term project
management and development activities are capitalised as part of
project cost. Other borrowing costs are recognised as expense in
Borrowing costs are capitalised as part of project cost when the
activities that are necessary to prepare the asset for its intended
use or sale are in progress. Borrowing costs are suspended from
capitalisation on the project when development work on the project
is interrupted for extended periods.
st
MARCH, 2014
777
3 SHARE CAPITAL
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
Authorised
50,000 (Previous Year 50,000) equity
shares of ` 10 each fully paid up 500,000 500,000
50,000 (Previous Year 50,000) equity
shares of ` 10 each fully paid up 500,000 500,000
500,000 500,000
a. 35,000 equity shares are held by Mahindra Lifespace Developers
There has been no movement in the equity share capital during the
year.
b. Terms/Rights attached to Equity Shares
vote per share.
c. Details of shares held by each shareholder including Holding Company,
holding more than 5% of the aggregate shares in the Company:
31
st
March, 2014 31
st
March, 2013
No of
Shares
Value of
Shares `
No of
Shares
Value of
Shares `
Mahindra Lifespace
Developers Limited
Equity 35,000 350,000 35,000 350,000
B. E. Billimoria & Co
Limited (30%)
Equity 15,000 150,000 15,000 150,000
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
4 RESERVES & SURPLUS
A. Surplus/(Decit) in the
Statement of Prot & Loss:
Opening balance (67,482,837) (22,291,546)
Add: (Loss) for the Current Year 11,432,149 (45,191,291)
(56,050,688) (67,482,837)
Less: Transfer to Debenture
Redemption Reserve (Refer Note
4a) (11,432,149)
Net Statement of Prot & Loss
Surplus/(Decit) (67,482,837)
B. Debenture Redemption
Reserve:
Opening balance
Add: Transfer from Statement of
Prot and Loss 11,432,149
Net Balance in Debenture
Redemption Reserve 11,432,149
Closing Balance (A+B) (56,050,688) (67,482,837)
a Debenture Redemption Reserve has been created to the extent of
prots available for appropriation for the current Financial Year only.
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
5 Long Term Borrowings
Secured
40 Secured Non Convertible
Debentures of face Value of
` 1,00,00,000/- each 400,000,000
Unsecured
Inter Corporate Deposit 252,141,835 252,141,835
252,141,835 652,141,835
Secured
Loans repayable on demand from
bank
Cash Credit Facility 46,388,395 35,988,777
(The above facility is secured by
First pari passu charge by way of
mortgage on the Property/Project
and second charge over escrow of
receivables from Project)
Rate of interest is 13.25% p.a
46,388,395 35,988,777
7 Trade Payables
Trade Payables Others 396,129,151 470,100,945
396,129,151 470,100,945
Based on the information available with the Company there are no
outstandings in respect of Micro, Small and Medium Enterprises as of
Balance Sheet date
8 Other current Liabilities
Advances from customers 120,525,803 71,649,501
Interest accrued but not due 44,045,530 15,112,245
Long Term Borrowing (Debenture)
due within 12 months 400,000,000
Provision for Current Tax 2,474,753
Other liabilities 6,773,823 5,713,301
573,819,910 92,475,047
(a) The debentures are repayable in 24 months in three equal installment
starting from the last day of the 15th month, last day of the 18th
month and on the date of redemption.
(b) RATE OF INTEREST : Coupon Rate is 11.60% per annum,
compounded semi-annually. Interest payment is semi-annually.
(c) SECURITY : The above Non Convertible Debentures are secured by
First pari passu charge by way of mortgage on the Property/Project
and second charge over escrow of receivables from the project.
(d) The company has not defaulted in repayment of interest and principal.
9 Short Term Provisions
Provision for Employee Benets
Others 1,585,742 1,227,715
2,215,755 1,631,466
st
MARCH, 2014
778
10 Fixed Assets `
Gross Block Depreciation Net Block
Description of Assets As at
April 1, 2013
Additions As at
Mar 31, 2014
As at
April 1, 2013
For the year As at
Mar 31, 2014
As at
Mar 31, 2014
As at
March 31, 2013
Tangible Assets
Lease Hold Improvement 543,540 543,540 407,903 135,636 543,539 1 135,637
Computers 927,983 122,942 1,050,925 277,736 185,988 463,724 587,201 650,247
Plant & Equipments 206,994 748,255 955,249 87,896 84,891 172,787 782,462 119,098
Furniture & Fixture 150,450 18,751,501 18,901,951 100,296 973,535 1,073,831 17,828,120 50,154
Ofce Equipment 172,752 96,746 269,498 47,958 38,590 86,548 182,950 124,794
Total 2,001,718 19,719,444 21,721,162 921,789 1,418,640 2,340,429 19,380,734 1,079,930
Previous year 1,569,252 432,467 2,001,718 372,934 550,455 921,789 1,079,930 1,196,318
11 Other Non Current Assets
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
Security Deposits 21,537,800 20,245,000
Bank Balances
Long term deposits with banks having
maturity more than
12 months 2,955,000 2,955,000
24,492,800 23,200,000
12 Current
Investments
31
st
March, 2014
Units
31
st
March, 2013
Units
Unquoted, Non
Trade (At lower
of cost and face
value):
JP Morgan
India Treasury
Fund 2,754,230 27,566,809
27,566,809
13 Inventories (valued at lower of cost and
net realisable value)
Construction Work in progress 880,015,069 883,718,259
880,015,069 883,718,259
Construction Work in Progress represents materials at site and unbilled
costs on the projects. Based on projections and estimates by the Company
of the expected revenues and costs to completion, provision for losses
to completion and/or write off of costs carried to inventory are made on
projects where the expected revenues are lower than the estimated costs
to completion. In the opinion of the management, the net realisable value
of the construction work in progress will not be lower than the costs so
included therein.
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
14 Trade Receivable
Trade Receivables outstanding for less
than six months
Secured, considered good 122,686,803 44,609,209
122,686,803 44,609,209
Less: Provision for doubtful debts
(A) 122,686,803 44,609,209
As on
31
st
March, 2014
`
As on
31
st
March, 2013
`
Trade Receivables outstanding for more
than six months
Secured, considered good 30,852,954
(B) 30,852,954
(A+B) 153,539,757 44,609,209
Cash on Hand 30,165 19,299
Balances with banks
On Current Accounts 15,397,569 10,895,698
15,427,734 10,914,997
16 Short Term Loans and advances
Loans & Advances
Considered good 104,956,636 101,947,643
Considered doubtful
104,956,636 101,947,643
Less : Provision for doubtful loans
& advances
104,956,636 101,947,643
Advance Payment of Income Tax 213,793
104,956,636 102,161,436
17 Other Current Assets
Unbilled Revenue 17,331,629 92,104,595
17,331,629 92,104,595
Year Ended
31
st
March, 2014
`
Year Ended
31
st
March, 2013
`
18 Other Income
Transfer Fees received from Customers 451,059 133,605
451,059 133,605
st
MARCH, 2014
779
Year Ended
31
st
March, 2014
`
Year Ended
31
st
March, 2013
`
Opening Work In Progress 01.04.2013 883,718,259 434,143,060
Add: CONSUMPTION DURING 01.04.2013 -
31.03.2014
Architect Fees 2,242,972 7,024,915
Consultant Fees 757,306
Interest on ICD 32,148,094 52,581,308
Interest on Debentures 46,400,000 2,669,590
Interest on Cash Credit 12,016,868 91,228
Employee, Remuneration & Staff Welfare Expenses 7,106,028 6,021,012
Civil Work 365,664,214 222,342,275
Service Tax Cenvat Credit (29,105,449) (8,974,183)
Royalty Expenses 385,580,000
Professional Charges 104,495
Miscellaneous Expenses 582,759 823,303
Interest on FD (209,752) (225,821)
Dividend Income - Mutual Fund (499,283) (322,143)
TOTAL CONSUMPTION 01.04.2013 -
31.03.2014 436,346,451 668,473,286
LESS : CLOSING WIP 31.03.2014 880,015,069 883,718,259
440,049,642 218,898,087
20 Employee Benets Expenses
Salaries, allowances & Bonus 10,979,003 9,073,267
Staff welfare expenses 627,938 612,806
11,606,941 9,686,073
Less: Allocated to Projects (7,052,887) (6,021,012)
4,554,054 3,665,061
21 Finance Cost
Interest on Intercorporate deposits 32,148,094 52,581,308
Interest on Debentures 46,400,000 2,669,590
Interest on Cash Credit 12,016,868 91,228
Less: Allocated to Projects (90,564,962) (55,342,126)

22 Administration & Other Expenses
Rent, Rates and taxes 395,300 608,740
- Others 1,264,134 523,190
Legal and Professional Fee 41,990,874 41,988,124
Advertisement and Marketing Expenses 9,516,038 11,025,780
Brokerage 4,291,415 2,094,053
Remuneration to auditors
Audit Fees 561,800 337,080
Tax Audit Fees 112,360
Other Services 449,440
62,694,765 59,622,801
23 Other Operating Expenses
Defect Liability Expenses 3,000,000
3,000,000
24 In respect of real estate projects under long term contracts, determination
of prots/losses and realisability of the construction work in progress &
project advances necessarily involves making estimates by the Company,
some of which are of a technical nature, concerning, where relevant, the
percentage of completion, costs to completion and the projections of
revenues expected from projects/activity and the foreseeable losses to
completion. Prot from these contracts and valuation of construction work
in progress is based on such estimates.
25 Related party transactions
25a Description of relationship Names of related parties
Associate Company B.E. Billimoria & Co. Ltd
Details of related party transactions and balances outstanding as at
31
st
March, 2014:
25b Nature of transactions:
`
Holding company Associate Company
2013-14 2012-13 2013-14 2012-13
Purchase of services 39,828,475 38,949,145 377,403,642 207,633,498
Inter corporate
deposit taken 93,450,000 40,050,000
Interest on inter
corporate deposit 22,498,176 36,806,264 9,649,918 15,775,045
Inter corporate
deposit repaid (171,500,000) (73,500,000)
Net Payable 233,271,143 211,510,465 8,199,466 75,685,600
26 Earnings Per share
2013-14 2012-13
Net (loss) after tax (`) 11,432,149 (45,191,291)
Weighted average number of Equity
shares (Nos.) 50,000 50,000
Nominal value of shares (`) 10 10
Basic and Diluted Earnings/(loss) per
share (`) 228.64 (903.83)
27 The Company operates in one segment namely Project and development
activity.
28 Leases:
a) There is no lease income
b) Lease expenditure for operating leases is recognised on a straight
line basis over the period of lease. The particulars of the premises
taken on operating leases are as under:
`
2013-14 2012-13
Not later than 1 year 16,500
Later than 1 year and not later than 5 years
Later than 5 years
29 Previous years gures have been regrouped/reclassied wherever
As per our report attached hereto For and on behalf of the Board of Directors
B.K.Khare & Co
Padmini Khare Kaicker Rajan Narayan
}
Partner Digant Kapadia
Directors Jeet Kapadia
Rajendra Joshi
Jayantt Manmadkar
Date : 17
th
th
April 2014
st
MARCH, 2014
RAIGAD INDUSTRIAL & BUSINESS PARK LIMITED
780
Your Directors present their Fifth Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
31
st
March, 2014
For the year ended
31
st
March, 2013
Total Income................................................................................................................
Prot/(Loss) Before Depreciation, Interest and Taxation........................................... (49,850) (49,969)
Less : Depreciation .....................................................................................................
Prot/(Loss) Before Interest and Taxation ................................................................. (49,850) (49,969)
Less : Interest .............................................................................................................
Prot/(Loss) Before Taxation ...................................................................................... (49,850) (49,969)
Prot/(Loss) for the year after Taxation ...................................................................... (49,850) (49,969)
Add : Balance of Prot/(Loss) for earlier years ......................................................... (909,587) (859,618)
Balance carried forward to the Balance Sheet ......................................................... (959,437) (909,587)
Operations
During the year, your Company reviewed various proposals
to undertake large format developments and residential
developments. Your Company is looking out for suitable
business opportunities in this area.
Dividend
In view of the losses, your Directors have not recommended
any dividend for the year under review.
Capital
The Authorised Equity Share Capital of your Company is
` 5 crore. During the year, the paid-up equity capital of your
Company was increased from ` 5 lakh to ` 11 lakhs. The
increase in Equity Share Capital is due to allotment of 60,000
equity shares of ` 10 each in rights issue.
Directors
Mr. Rajan Narayan (DIN: 00213953) retires by rotation and
being eligible offers himself for re-appointment.
Mr. Jayantt Manmadkar (DIN: 03044559) was appointed as an
st
July, 2013. Mr. Jayantt Manmadkar
th
Annual General
its intention to propose Mr. Jayantt Manmadkar as candidate
for the ofce of Director.
During the year, Ms. Anita Arjundas (DIN: 00243215) resigned
st
by Ms. Anita Arjundas during her tenure as a Director of the
Company.
31
st
concern basis.
Code of Conduct
the conduct of the Companys business and seeks to
declarations under the Code from the Board Members of the
Auditors
as auditors at the 5
th
Annual General Meeting. Pursuant to
781
requested to appoint Auditors for a term of ve consecutive
years to hold ofce from the conclusion of the ensuing
5
th
th
Annual
Company shall place the matter relating to such appointment
for ratication by members at every Annual General Meeting.
The members are requested to x the remuneration of the
Auditors.
said section.
of the Companies Act, 1956 and Rules made there under
31
st
Acknowledgment
The Directors are thankful to all the consultants and associates
of your Company for the support received from them during
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
ST
MARCH, 2014.
(a) Energy conservation measures taken : The Company is looking out for suitable opportunity in large
format development and residential development and adequate
energy conservation measures will be taken at an appropriate time
: Nil
for reduction of energy consumption and consequent impact
on the cost of production of goods
: The above measures, when implemented at an appropriate time
are expected to result in reduction of energy consumption.
(d) Total energy consumption and energy consumption per unit
of production as per Form-A of the Annexure to the Rules in
respect of Industries specied in the Schedule
: Not Applicable
1. Areas in which R & D is carried out : The Company has not carried out any R&D activities during the year.
3. Future Plan of action : The Company intends to initiate quality improvement measures at
an appropriate time.
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
782
TO THE MEMBERS OF
of Raigad Industrial and Business Park Limited (the
31
st
March, 2014, and the Statements of Prot and Loss
information.
opinion.
Opinion
accepted in India:
st
March, 2014;
of the Order.
Act, 1956;
st
st
Date: 17
th
783
accounts of Raigad Industrial and Business Park Limited for
the year ended 31
st
March, 2014.
1. The company did not own any xed assets at the beginning
or at the end of the year. Also it has not purchased or sold
any xed assets during the year. Therefore, provisions of
sub-clause (a), (b) and (c) of sub-para (i) of para 4 of the
3. The Company has not granted or taken any loans, secured
or unsecured, to or from companies, rms or other parties
listed in the register maintained under section 301 of the
Companies Act, 1956. Therefore, provisions of sub-clause
(b), (c), (d), (e), (f) and (g) of sub-para (iii) of para 4 of the
is not applicable
to the Company.
as on March 31, 2014, for a period more than six
(ii) There are no disputed dues outstanding as on
31
st
March 2014 on account of sales tax, customs
duty, income tax, excise duty, service tax, income tax,
wealth tax and cess.
10. The accumulated losses of the Company exceeds fty
st
March 2014. The
ended on that date and in the immediately preceding
nancial year.
to the company.
by others from banks or nancial institutions during the year.
16. To the best of our knowledge and belief and according
company has not obtained any term loans during the
year ended 31
st
March 2014.
784
of the balance sheet of the company, no funds raised on
short term basis have been used for long term investments.
19. The company has not issued any debentures during the
year.
Date: 17
th
April 2014 Membership No. 44784
785
Note Ref As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Shareholders funds
Share capital ...................................................................................................... 3 1,100,000 500,000
Reserves and surplus ........................................................................................ 4 (959,437) (909,587)
140,563 (409,587)
Current liabilities
Other current liabilities....................................................................................... 5 515,323 487,233
Total .................................................................................................................... 655,886 77,646
ASSETS
Current assets
Cash and Cash equivalents .............................................................................. 6 655,886 77,646
Total .................................................................................................................... 655,886 77,646
ST
MARCH, 2014
Firm Registration No. 105102W Jayantt Manmadkar Chairman
}
Directors
Partner
Suhas Kulkarni
Membership No. : 44784
Date : 17
th
th
April, 2014
786
Note Ref Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
` `
EXPENDITURE
Other expenses ................................................................................................. 7 49,850 49,969
49,850 49,969
Loss before tax ................................................................................................. (49,850) (49,969)
Less : Tax expense ...........................................................................................
Loss for the year ............................................................................................... (49,850) (49,969)
Basic & diluted .................................................................................................. (0.90) (1.00)
ST
MARCH, 2014
}
Directors
Partner
Suhas Kulkarni
Date : 17
th
th
April, 2014
787
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
A. Cash ow from operating activities ` `
(Loss) before tax ....................................................................................... (49,850) (49,969)
Adjustments for:
Operating (loss) before working capital changes .................................... (49,850) (49,969)
Increase/(decrease) in current liabilities ................................................... 28,090 (82,210)
Cash (used in) operations ..................................................................... (21,760) (132,179)
B. Cash ow from nancing activities:
Proceeds from issue of shares 600,000
Net cash from nancing activities 600,000
Net increase/(decrease) in cash and cash equivalents (A+B) ............. 578,240 (132,179)
Opening balance ....................................................................................... 77,646 209,825
Closing balance ......................................................................................... 655,886 77,646
Net increase/(decrease) in cash and cash equivalents .................... 578,240 (132,179)
ST
MARCH, 2014
}
Directors
Partner
Suhas Kulkarni
Date : 17
th
th
April, 2014
788
1. Corporate Information:
th
June, 2009 and is engaged in the
business of development of Industrial Parks in Maharashtra and is in the
process of identifying the lands for acquisition. Since the Holding Company
is committed to extending nancial support to the Company for its future
projects the accounts have been prepared on a Going Concern basis.
a. Basis of Accounting
b. Taxes on Income
which gives future economic benets in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly,
MAT is recognised as an asset in the Balance Sheet when it is probable
that future economic benet associated with it will ow to the Company.
enacted or substantially enacted as at the reporting date. Deferred tax
future taxable income available to realise such assets. Deferred tax
assets are recognised for timing differences of other items only to
income will be available against which these can be realised. Deferred
tax assets and liabilities are offset if such items relate to taxes on
income levied by the same governing tax laws and the Company has
a legally enforceable right for such set off. Deferred tax assets are
reviewed at each Balance Sheet date for their realisability.
c. Provisions and contingencies
estimate can be made. Provisions (excluding retirement benets) are
not discounted to their present value and are determined based on
the best estimate required to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted
to reect the current best estimates. Contingent liabilities are not
recognised but are disclosed in notes contingent Assets are neither
recognised nor disclosed in the nancial statements.
3. Share Capital:
As at
31
st
March, 2014
As at
31
st
March, 2013
Authorised ` `
5,000,000 Equity shares of ` 10 each .... 50,000,000 50,000,000
1,10,000 equity shares of ` 10 each
fully paid up
(50,000 equity shares of ` 10 each fully
paid up as on March13 ........................ 1,100,000 500,000
1,100,000 500,000
3a. The above shares are held by Mahindra Lifespace Developers
end of the reporting period:
As at 31
st
st
March, 2013
Equity Shares
No. of
Shares
Value of
Shares (`)
No. of
Shares
Value of
Shares (`)
At the beginning of the period 50,000 500,000 50,000 500,000
Issued during the period 60,000 600,000
the period ......................... 110,000 1,100,000 50,000 500,000
ST
MARCH, 2014
3b. Terms/Rights attached to Equity Shares
of `. 10/- per share. Each holder of Equity Shares is entitled to one
vote per share.
`
4. Reserves & Surplus:
As at
31
st
March, 2014
As at
31
st
March, 2013
Surplus in Statement of Prot and Loss
Opening balance of Prot & Loss Account ... (909,587) (859,618)
Add: (Loss) for the Current Year ..................... (49,850) (49,969)
Closing Balance ............................................... (959,437) (909,587)
5. Other Current Liabilites:
Expenses reimbursible to Holding Company ... 459,143 459,143
Other payables ................................................ 56,180 28,090
515,323 487,233
6. Cash & cash equivalents:
Bank Balances
On current account.......................................... 655,886 77,646
655,886 77,646
`
7. Other Expenses:
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
Rates and taxes .............................................. 9,401 8,119
Legal and Professional Charges ..................... 12,359 11,236
Miscellaneous expenses ................................. 464
Audit Fee ......................................................... 28,090 28,090
Reimbursement of expenses/levies ............... 2,060
49,850 49,969
8. List of related parties:
Ultimate Holding Company
Holding Company
Related parties are as identied by the management
Mahindra Lifespace Developers Limited As at
31
st
March, 2014
As at
31
st
March, 2013
Payable as at the year end (`) .................. 459,143 459,143
Shares issued (`) ....................................... 600,000
9. Earnings per Share:
2013-14 2012-13
Net (loss) after tax (`) ............................... (49,850) (49,969)
shares (Nos.) .............................................. 55,425 50,000
Basic and Diluted Earnings per share (not
annualised) (`) ........................................... (0.90) (1.00)
Nominal value of shares (`) ..................... 10 10
Jayantt Manmadkar Chairman
}
Director
Partner
Suhas Kulkarni
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
INDUSTRIAL TOWNSHIP (MAHARASHTRA) LIMITED
789
Your Directors present their Sixth Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
Particulars For the
year ended
31
st
March, 2014
For the
year ended
31
st
March, 2013
Total Income..........................................................................................................................
Prot/(Loss) Before Depreciation, Interest and Taxation..................................................... (43,158) (133,769)
Less: Depreciation ................................................................................................................
Prot/(Loss) Before Interest and Taxation ........................................................................... (43,158) (133,769)
Less: Interest .........................................................................................................................
Prot/(Loss) Before Taxation ................................................................................................ (43,158) (133,769)
Less: Provision for Taxation .................................................................................................
Prot/(Loss) for the year after Taxation ................................................................................ (43,158) (133,769)
Add: Balance of Prot/(Loss) for earlier years .................................................................... (1,335,493) (1,201,724)
Balance carried forward to the Balance Sheet ................................................................... (1,378,651) (1,335,493)
Operations
As no further progress on land acquisition in the target area was
happening for more than 2 years, the Company cancelled its
proposed project at Roha, Maharashtra. Out of total 91.56 acres
acquired by the Company, the Company in compliance with the
conditions of the approval obtained by it, re-conveyed 64.74
acres to the land owners from whom the Company had acquired
land. The Company is in process of completing the process of
re-conveyance of balance 26.82 acres during the current year.
Company will keep on looking out for suitable Business
opportunities for large format development and residential
developments.
Dividend
any dividend for the year under review.
Capital
The Authorised Equity Share Capital of your Company is ` 10
crore and the paid-up equity capital of your Company is ` 5 crore.
Directors
Ms. Anita Arjundas (DIN: 00243215) retires by rotation and
being eligible offers herself for re-appointment.
Audit Committee
On 17
th
April, 2014, the terms of the Audit Committee were
enhanced in accordance with the provisions of Section 177 of
the Companies Act, 2013 and Rules made thereunder.
The Audit Committee of the Company comprises of Ms. Anita
Arjundas, Mr. Rajan Narayan and Mr. Suhas Kulkarni. Ms. Anita
Arjundas is the Chairperson of the Audit Committee.
your Directors, based on the representations received from
the Operating Management and after due enquiry, conrm
that:
31
st
concern basis.
Code of Conduct
the conduct of the Companys business and seeks to reiterate
declarations under the Codes from the Board Members of the
Auditors
as auditors at the 6th Annual General Meeting. Pursuant to
requested to appoint auditors for a term of ve consecutive
years to hold ofce from the conclusion of the ensuing 6
th

th
Annual
Company shall place the matter relating to such appointment for
790
ratication by members at every Annual General Meeting. The
members are requested to x the remuneration of the Auditors.
As required under the provisions of Section 139 and 141 of
the Companies Act, 2013 read with Companies (Accounts and
said section.
this Report.
31
st
Acknowledgment
The Directors are thankful to all consultants and associates of
your Company for the support received from them during the
year under review.
Anita Arjundas
Chairperson
Mumbai, 17
th
April, 2014 DIN: 00243215
ST
MARCH, 2014.
(a) Energy conservation measures taken : The operations of your Company are not energy-
intensive. However, adequate measures will be initiated
to reduce energy consumption at an appropriate time.
: Nil
(c) Impact of the measures taken/to be taken at (a) &
appropriate time are expected to result in reduction of
energy consumption.
: Not Applicable
during the year
Anita Arjundas
Chairperson
Mumbai, 17
th
April, 2014 DIN: 00243215
791
of Industrial Township (Maharashtra) Limited (the
31
st
March, 2014, and the Statement of Prot and Loss
information.
opinion.
Opinion
TO THE MEMBERS OF
st
March, 2014;
of the Order.
b. in our opinion proper books of account as required by
from our examination of those books;
Act, 1956;
st
st
Dated: 17
th
April 2014 Membership Number 44784
792
Annexure to the auditors report referred to in
paragraph (7) of our report of even date on the
accounts of Industrial Township (Maharashtra)
Limited year ended 31
st
March, 2014.
Companies Act, 1956. Therefore, provisions of sub-clause (b),
(c), (d), (e), (f) and (g) of sub-para (iii) of para 4 of the Order
are not applicable.
is not applicable.
to the Company.
payable in respects of income-tax wealth tax, sales tax,
custom duty and excise duty were outstanding, as on
31
st
March, 2014, for a period more than six months
31
st
March, 2014 on account of sales tax, customs
10. The accumulated losses of the Company did not exceed
fty percent of its net worth as at 31
st
March, 2014. The
ended 31
st
March, 2014 and in the immediately preceding
nancial year.
to the company.
the company has not given any guarantee for loans taken by
others from banks or nancial institutions during the year.
31
st
March, 2014.
the balance sheet of the company, no funds raised on short
term basis have been used for long term investments.
B. K. Khare and Co.
Dated: 17
th
April 2014 M. No. 44784
793
Note Ref Current Year
`
Previous Year
`
Shareholders funds
Share capital .............................................................................................................. 3 50,000,000 50,000,000
Reserves and Surplus ............................................................................................... 4 (1,378,651) (1,335,493)
48,621,349 48,664,507
Current Liabilities
Short term Borrowings .............................................................................................. 5 88,200,000
Other Current liabilities .............................................................................................. 6 3,241,312 19,339,144
3,241,312 107,539,144
TOTAL .................................................................................................. 51,862,662 156,203,651
ASSETS
Current assets
Inventories .................................................................................................................. 7 48,988,635 90,597,219
Cash and cash equivalents ....................................................................................... 8 2,599,130 379,452
Short term loans and advances ................................................................................ 9 274,897 65,226,980
51,862,662 156,203,651
TOTAL .................................................................................................. 51,862,662 156,203,651
ST
MARCH, 2014
See accompanying notes forming part of Financial Statements
Padmini Khare Kaicker Suhas Kulkarni
Directors
Partner Rajan Narayan
Date: 17
th
April 2014 Date: 17
th
April 2014
}
794
Note Ref Current Year
`
Previous Year
`
EXPENDITURE
Operating Expenses ................................................................................................. 10
Finance Cost ........................................................................................................... 11
Other expenses ......................................................................................................... 12 43,158 133,769
43,158 133,769
Prot before exceptional and extraordinary items and tax ..................................... (43,158) (133,769)
Exceptional Items
Prot before extraordinary items and tax ................................................................ (43,158) (133,769)
Extraordinary Items ...................................................................................................
Loss before tax (43,158) (133,769)
Less: Tax expense ...................................................................................................
Loss after tax ............................................................................................................ (43,158) (133,769)
Earning per equity share:
Basic and Diluted ..................................................................................................... 15 (0.01) (0.03)
ST
MARCH, 2014
Directors
Date: 17
th
April 2014 Date: 17
th
April 2014
}
795
ST
MARCH, 2014
Current Year
`
Previous Year
`
Loss before tax ...................................................................................................................... (43,158) (133,769)
Adjustments for:
Dividend and Gain on Redemption ...............................................................................
Finance Charges ............................................................................................................
Operating loss before working capital changes ........................................................... (43,158) (133,769)
Changes in Working capital:
Adjustments for (increase)/ decrease in operating assets
(Increase)/decrease in short term loans and advances ............................................... 64,952,083 500,000
(Increase)/decrease in inventories ................................................................................ 41,608,584 (12,414,280)
Adjustments for (increase)/ decrease in operating liabilities
Increase/(decrease) other in current liabilities .............................................................. (16,097,832) 10,011,406
90,462,835 (1,902,874)
Cash used in operations ....................................................................................................... 90,419,678 (2,036,643)
Taxes paid ..............................................................................................................................
Net cash used in operating activities ................................................................................... 90,419,678 (2,036,643)
Proceeds from sale of investments ......................................................................................
Dividend Received .................................................................................................................
Net cash ow from investing activities ................................................................................
Proceeds from short term borrowings ................................................................................. (88,200,000) 1,700,000
Interest on Inter corporate Deposit payable ........................................................................
Net cash from nancing activities ......................................................................................... (88,200,000) 1,700,000
Net increase/(decrease) in cash and cash equivalents (A+B+C) 2,219,678 (336,643)
Opening balance .................................................................................................................. 379,452 716,095
Closing balance ..................................................................................................................... 2,599,130 379,452
Net increase/(decrease) in cash and cash equivalents ................................................ 2,219,678 (336,643)
Directors
Date: 17
th
April 2014 Date: 17
th
April 2014
}
796
nd
July, 2008 and is engaged in
the business of development of Industrial Park in Roha, Raigad District,
Maharashtra. The Company is currently acquiring lands and carrying out
preliminary surveys.
2.1 The nancial statements of the Company have been prepared in accordance
to comply with the Accounting Standards notied under the Companies
(Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The nancial statements have
The preparation of the nancial statements in conformity with Indian GAAP
requires the Management to make estimates and assumptions considered
in the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
Management believes that the estimates used in preparation of the nancial
statements are prudent and reasonable. Future results could differ due to
these estimates and the differences between the actual results and the
estimates are recognized in the periods in which the results are known/
materialize.
2.3 Inventories
Inventories are valued at lower of cost and net realizable value. Cost
represents cost of land and all expenditure incurred in connection with, or
attributable to the project, and, being a long-term project, includes interest.
Basic/Diluted earnings per share is computed by dividing the prot/(loss)
after tax (including the post tax effect of extraordinary items, if any) and
after reducing the dividend obligation (including Dividend Distribution Tax)
on Preference Shares by the weighted average number of equity shares
2.7 Taxes on Income
income for the year. Deferred tax is recognized, subject to consideration
capable of reversal in one or more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carried
forward losses are recognized if there is virtual certainty that there will
be sufcient future taxable income available to realize such losses. Other
deferred tax assets are recognized if there is reasonable certainty that there
will be sufcient future taxable income available to realize such assets.
The carrying values of assets/cash generating units at each Balance Sheet
recognized, if the carrying amount of these assets exceeds their recoverable
there is indication that an impairment loss recognized for an asset in earlier
accounting periods no longer exists or may have decreased, such reversal
of impairment loss is recognized in the Statement of Prot and Loss, except
in case of revalued assets.
A provision is recognized when the Company has a present obligation as a
their present value and are determined based on the best estimate required
to settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reect the current best estimates.
Contingent liabilities are disclosed in the Notes.
Current Year
`
Previous Year
`
3 Share Capital
Authorised
10,000,000 equity shares of ` 10 each .......... 100,000,000

100,000,000
Issued, subscribed and fully paid up.
5,000,000 equity shares of ` 10 each .......... 50,000,000 50,000,000
50,000,000 50,000,000
3a The above shares are held by Mahindra Lifespace Developers Limited,
the holding company and its nominees
3b Terms/ Rights attached to Equity Shares
vote per share.
3c Details of shares held by each shareholder including Holding
Company, holding more than 5% of the aggregate shares in the
Company :
No of
Shares
Value of
Shares
(`)
No of
Shares
Value of
Shares
(`)
Mahindra Lifespace
Developers Limited Equity 5,000,000 50,000,000 5,000,000 50,000,000
Current Year
`
Previous Year
`
Decit from the statement of Prot and loss
Opening balance (1,335,493) (1,201,724)
Add: Loss for the Current Year (43,158) (133,769)
Closing Balance of Prot and Loss Account (1,378,651) (1,335,493)
Intercorporate deposits from Holding
Company repayable on demand
88,200,000
88,200,000
ST
MARCH, 2014
797
Current Year
`
Previous Year
`
Interest Accrued But not Due on
Intercorporate deposits
19,226,731
Others 140,503 112,413
Received from Land Aggregator 3,100,809
3,241,312 19,339,144
7 Inventories
(at lower of Cost and Net Realisable Value)
Work In Progress
(represents Land and related expenses) 48,988,635 90,597,219
48,988,635 90,597,219
Cash on hand 20,000 20,000
Balances with Bank
In current accounts 2,579,130 359,452
2,599,130 379,452
9 Short Term Loans and Advances
Advance towards purchase of land 65,226,980
TDS Receivable 274,897
274,897 65,226,980
Opening Work In Progress 01.04.2013 90,597,219 78,182,939
Add : Consumption during 2013-14
Land (41,672,211)
Interest On Intercompany Loan 11,121,510
Travelling Expenses Domestic Fare 6,952 850
Travelling Expenses Domestic
Lodging/Boarding
2,767
Printing & Stationery 2,265
Professional Fees 56,180 1,280,748
Bank Charges 494 6,140
Total Consumption in FY 2013-14 (41,608,585) 12,414,280
Less : Closing WIP 31.03.2014 48,988,635 90,597,219

Current Year
`
Previous Year
`
11 Finance Costs
Interest on Inter Corporate Deposit 11,121,510
Less: Allocated to Projects (11,121,510)

12 Other Expenses
Audit fees 28,090 114,420
Other Expenses 1,023
43,158 133,769
13 The particulars regarding dues to micro enterprises and small enterprises
14 Related Party Transaction
(a) List of Related Parties
(b) Related Party Transactions
Particulars Current Year
`
Previous Year
`
Inter-Corporate Deposit taken/(repaid) Net (88,200,000) 1,700,000
Interest on Inter Corporate Deposit taken 11,121,510
Outstanding balance 107,426,731
15 Earnings Per Share
Particulars Current Year Previous Year
Net Prot/(Loss) after tax (`) (43,158) (133,769)
shares (Nos.) 5,000,000 5,000,000
Par value per share (`) 10 10
Earnings per share Basic and
diluted (`) (0.01) (0.03)
17 Previous years gures have been regrouped/reclassied wherever
ST
MARCH, 2014
For B. K. Khare & Co the Board of Directors
Directors
Date: 17
th
th
April, 2014
}
ANTHURIUM DEVELOPERS LIMITED
798
Your Directors present their Fourth Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
(Amount in `)
31
st
March, 2014
For the year ended
31
st
March, 2013
Total Income
Prot/(Loss) Before Depreciation, Interest and Taxation (51,029) (47,031)
Less: Depreciation
Prot/(Loss) Before Interest and Taxation (51,029) (47,031)
Less: Interest
Prot/(Loss) Before Taxation (51,029) (47,031)
Prot/(Loss) for the year after Taxation (51,029) (47,031)
Add: Balance of Prot/(Loss) for earlier years (195,655) (148,624)
Balance carried forward to the Balance Sheet (246,684) (195,655)
Operations
During the year, your Company reviewed various proposals to
undertake residential developments. Your Company is looking
out for suitable business opportunities in this area.
Dividend
Capital
lakh and the paid-up equity share capital of your Company is
` 5 lakh.
Your Company is a wholly-owned subsidiary company of
Directors
Mr. Rajan Narayan (DIN: 00213953) retires by rotation and
being eligible offers himself for re-appointment.
Mr. Jayantt Manmadkar (DIN: 03044559) was appointed as an
st
July, 2013. Mr. Jayantt Manmadkar
th
Annual General
its intention to propose Mr. Jayantt Manmadkar as candidate
for the ofce of Director.
During the year, Ms. Anita Arjundas (DIN: 00243215) resigned
st
by Ms. Anita Arjundas during her tenure as Director of the
Company.
your Directors, based on the representations received from
the Operating Management and after due enquiry, conrm
that:
31
st
concern basis.
Code of Conduct
Auditors
as auditors at 4
th
Annual General Meeting. Pursuant to Section
139(1) of the Companies Act, 2013, the members are requested
to appoint Auditors for a term of ve consecutive years to hold
ofce from the conclusion of the ensuing 4
th
Annual General
Meeting till the conclusion of the 9
th
and thereafter till the conclusion of every sixth Annual General
Meeting of the Company, provided that the Company shall
799
RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014.
(a) Energy conservation measures taken : The Company is looking out for suitable opportunity in
residential development and adequate energy conservation
measures will be taken at an appropriate time
: Nil
: The above measures, when implemented at an appropriate
time are expected to result in reduction of energy
consumption.
: Not Applicable
1. Areas in which R & D is carried out : The Company has not carried out any R&D activities during
the year
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
place the matter relating to such appointment for ratication
by members at every Annual General Meeting. The members
are requested to x the remuneration of the Auditors.
As required under the provisions of Section 139 and 141 of
the Companies Act, 2013 read with the Companies (Accounts
and Auditors) Rules, 2014, the Company has received a written
would be in conformity with the limits specied in the said section.
this Report.
31
st
Acknowledgment
year under review.
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
800
TO THE MEMBERS OF
Anthurium Developers Limited (the Company), which
st
March, 2014, and
the Statements of Prot and Loss and Cash Flow for the
opinion.
Opinion
accepted in India:
st
March, 2014;
of the Order.
Act, 1956;
st
st
Partner
Place: Mumbai
Dated: 17
th
April, 2014
801
Referred to in Paragraph (7) of our report of even date on
the accounts of Anthurium Developers Limited for the year
ended 31
st
March, 2014.
is not applicable
to the Company.
as on 31
st
31
st
March, 2014 on account of sales tax, customs
10. The company has been registered for a period of less than
year is fty percent or more of its net worth and whether it
has incurred cash losses in such nancial year and in the
we are of the opinion that the company has not
defaulted in repayment of dues to Financial Institutions
and Banks.
to the company.
us, the company has not given any guarantee for loans
the year.
31
st
March, 2014.
of the balance sheet of the company, no funds raised
on short term basis have been used for long term
investments.
802
year.
Firms Registration No. 105102W
Partner
Place: Mumbai
Dated: 17
th
April, 2014
803
ST
MARCH, 2014
Note Ref As at
31
st
March, 2014
As at
31
st
March, 2013
` `
Shareholders funds
Share capital .......................................................................................... 3 500,000 500,000
Reserves and surplus ............................................................................. 4 (246,684) (195,655)
253,316 304,345
Current liabilities
Short term Borrowings ........................................................................... 5 20,000,000
Other current liabilities............................................................................ 6 72,725 44,635
Total ........................................................................................................ 20,326,041 348,980
ASSETS
Non-current Investments ..................................................................... 7 196,150
196,150
Current assets
Cash and Cash equivalents ................................................................... 8 290,424 152,830
Short term loans and advances ............................................................. 20,035,617
20,326,041 152,830
Total ......................................................................................................... 20,326,041 348,980
For B K Khare & Co. For and on behalf of the Board of Directors
Directors
Partner Ramesh Ranganathan
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
}
804
Note Ref Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
` `
EXPENDITURE
Other expenses ..................................................................................... 9 51,029 47,031
51,029 47,031
Loss before tax ....................................................................................... (51,029) (47,031)
Less : Tax expense .................................................................................
Loss for the year ..................................................................................... (51,029) (47,031)
Basic & Diluted ....................................................................................... (1.02) (0.94)
ST
MARCH, 2014
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
}
805
ST
MARCH, 2014
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
` `
(Loss) before tax ................................................................................................. (51,029) (47,031)
Operating (loss) before working capital changes .............................................. (51,029) (47,031)
(Increase) / decrease in current assets ............................................................... (20,035,617)
Increase / (decrease) in current liabilities ............................................................ 28,090 11,545
(20,007,527) 11,545
Cash (used in) operations .................................................................................. (20,058,556) (35,486)
Net cash (used in) operating activities ............................................................... (20,058,556) (35,486)
Purchase of investments ..................................................................................... (196,150)
Proceeds from sale of investments .................................................................... 196,150
Net cash from investing activities ....................................................................... 196,150 (196,150)
Proceeds from borrowings ................................................................................. 20,000,000
Net cash from nancing activities ....................................................................... 20,000,000
Net increase/(decrease) in cash and cash equivalents (A+B+C) ............ 137,594 (231,636)
Opening balance ................................................................................................. 152,830 384,466
Closing balance ................................................................................................... 290,424 152,830
Net increase / (decrease) in cash and cash equivalents ............................. 137,594 (231,636)
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
}
806
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED
31
ST
MARCH, 2014
1 Corporate Information
The Company was incorporated on 2nd June, 2010 and is engaged in the
business of development of Residential complexes and is in the process
of identifying lands for acquisition for its projects.
a Basis of Accounting
The nancial statements have been prepared under the historical
cost convention in accordance with the accounting principles
generally accepted in India and comply with the mandatory
Accounting Standards notied by the Central Government of India
under The Companies (Accounting Standards) Rules, 2006 and
with the relevant provisions of the Companies Act, 1956. Assets &
liabilities have been classied as current & non current as per the
Companys normal operating cycle and other criteria set out in the
Schedule VI of the Companies Act, 1956.
b Taxes on Income
of taxable income for the year. Deferred tax is recognized, subject to
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and
carried forward losses are recognized if there is virtual certainty
that there will be sufcient future taxable income available to realise
such losses. Other deferred tax assets are recognised if there is
reasonable certainty that there will be sufcient future taxable income
available to realise such assets.
c Provisions and contingencies
outow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are
not discounted to present value and are determined based on
best estimate required to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted
to reect the current best estimates. Contingent Liabilities are not
recognised but are disclosed in the notes. Contingent Assets are
neither recognised nor disclosed in the nancial statements.
3. Share Capital
`
As at
31
st
March, 2014
As at
31
st
March, 2013
Authorised
100,000 Equity shares of ` 10 each ............ 1,000,000 1,000,000
50,000 equity shares of ` 10 each fully
paid up. ......................................................... 500,000 500,000
500,000 500,000
(a) The above shares are held by Mahindra Lifespace Developers
end of the reporting period
As at 31
st
st
March, 2013
No of
Shares
Value of
Shares `
No of
Shares
Value of
Shares `
Equity Shares
At the beginning of the
period .............................. 50,000 500,000 50,000 500,000
Issued during the period ...
the period
........................
50,000 500,000 50,000 500,000
(b) Terms/Rights attached to Equity Shares
vote per share.
`
As at
31
st
March, 2014
As at
31
st
March, 2013
4. Reserves & Surplus
Opening balance of Prot & Loss Account ... (195,655) (148,624)
Add: (Loss) for the Current Year .................. (51,029) (47,031)
Closing Balance .......................................... (246,684) (195,655)
from other parties .................................. 20,000,000
20,000,000
Other payables ............................................. 72,725 44,635
72,725 44,635
7. Investment
Non Current Non Current
Shares (Non-trade and fully paid-up unless
otherwise specied) :
Preference Shares ..................................................
(7% Non-Cumulative Preference Share)
196,150
196,150
8. Cash & cash equivalents
Bank Balances
In current accounts ........................................ 290,424 152,830
290,424 152,830
`
Year ended
31
st
March, 2014
Year ended
31
st
March, 2013
9. Other Expenses:
Legal and Professional Charges ................... 22,883 18,539
Miscellaneous expenses ............................... 56 402
Audit Fee ........................................................ 28,090 28,090
51,029 47,031
807
10. List of related parties:
Mahindra & Mahindra Limited Ultimate Holding Company
Mahindra Lifespace Developers Limited Holding Company
Limited:
As at
31
st
March, 2014
As at
31
st
March, 2013
Payable as at the period end ....... NIL NIL
11. Earnings per Share
2013-14 2012-13
Net (loss) after tax (`) .................................. (51,029) (47,031)
(Nos.)............................................................ 50,000 50,000
Basic and Diluted Earnings per share (not
annualised) (`) ............................................. (1.02) (0.94)
Nominal value of shares (`) ........................ 10 10
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED
31
ST
MARCH, 2014
13. Previous year's gures have been regrouped/reclassied wherever
necessary to correspond with the current year's classication/disclosure.
Directors
Place : Mumbai
Date : 17
th
April, 2014
Place : Mumbai
Date : 17
th
April, 2014
}
MAHINDRA HOUSING PRIVATE LIMITED
808
Your Directors present their First Report together with the Audited Accounts of the Company for the year ended 31
st
March, 2014.
Incorporation
Your Company was incorporated on 29
th
March, 2013
(Amount in `)
Particulars For the period ended
29
th
March, 2013 to
31
st
March, 2014
Total Income..............................................................................................................................................
Prot/(Loss) Before Depreciation, Interest and Taxation......................................................................... (62,699)
Less: Depreciation ....................................................................................................................................
Prot/(Loss) Before Interest and Taxation ............................................................................................... (62,699)
Less: Interest .............................................................................................................................................
Prot/(Loss) Before Taxation .................................................................................................................... (62,699)
Less: Provision for Taxation .....................................................................................................................
Current Tax ........................................................................................................................................
Deferred Tax ......................................................................................................................................
Prot/(Loss) for the period after Taxation ................................................................................................ (62,699)
Balance carried forward to the Balance Sheet ....................................................................................... (62,699)
Operations
During the year, your Company reviewed various proposals
to undertake large format developments including residential
developments. Your Company is looking out for suitable
business opportunities in this area.
Dividend
any dividend for the period under review.
Capital
lakh and the paid-up equity share capital of your Company is
` 5 lakh.
Your Company is a wholly-owned subsidiary company of
Directors
Mr. Jayantt Manmadkar (DIN: 03044559) being the rst
Director of the Company holds ofce upto the date of 1
st

Mr. Suhas Kulkarni (DIN: 00003936) was appointed as an
additional Director at the meeting of the Board of Directors of
st
July, 2013. Mr. Suhas Kulkarni hold
ofce only upto the date of the 1
st
Annual General Meeting of
the Company.
The Company has received notices from a member signifying
its intention to propose Mr. Jayantt Manmadkar and Mr. Suhas
Kulkarni as candidates for the ofce of Director.
During the year, Ms. Anita Arjundas (DIN: 00243215), rst
director of the Company resigned as a Director of the
Company w.e.f. 31
st
July, 2013. Your Board placed on record
its appreciation of the services rendered by Ms. Anita Arjundas
during her tenure as a Director of the Company.
st
March,
2014 and of the loss of the Company for the period ended
on that date;
concern basis.
Code of Conduct
The Company has for the period under review, received
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the
rst Auditors of the Company, who were appointed by the
Board of Directors, retires as Auditors of the Company at the
1
st
Annual General Meeting. Pursuant to section 139(1) of the
809
Companies Act, 2013, the members are requested to appoint
Auditors for a term of ve consecutive years to hold ofce from
the conclusion of the ensuing 1
st
Annual General Meeting till
th
Annual General Meeting and thereafter
till the conclusion of every sixth Annual General Meeting of the
Company, provided that the Company shall place the matter
relating to such appointment for ratication by members at
every Annual General Meeting. The members are requested to
x the remuneration of the Auditors.
consent and certicate from the above Auditors proposed to be
said section.
employees during the period under review.
31
st
Acknowledgment
period under review.
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
ST
MARCH, 2014.
(a) Energy conservation measures taken : The Company is looking out for suitable opportunity
in residential development and adequate energy
conservation measures will be taken at an appropriate
time
: Nil
appropriate time are expected to result in reduction
of energy consumption.
: Not Applicable
during the period
There was no inow or outow of foreign exchange involved during the period under review.
Jayantt Manmadkar
Chairman
Mumbai, 17
th
April, 2014 DIN: 03044559
810
To the Members of
Mahindra Housing Private Limited
of Mahindra Housing Private Limited (the Company),
st
March, 2014,
and the Statements of Prot and Loss and Cash Flow
opinion.
Opinion
accepted in India:
st
March, 2014;
loss for the period ended on that date; and
of the Order.
of Prot and Loss and Cash Flow dealt with by
this report comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
st
st
(Partner)
MUMBAI, 17
th
April, 2014
811
accounts of Mahindra Housing Private Limited for the year
ended 31
st
March, 2014.
4. Since the company has not dealt in purchase and sale of
any nished goods, stores, spares and raw materials. Also
neither it owned any xed assets at the beginning or at the
end of the year nor has purchased or sold any xed assets
during the year. Therefore provisions of sub-para (iv) of
para 4 of the Order are not applicable.
exceeding the value of ` ve lakhs in case of any party
that need to be entered in the Register maintained in
pursuance of section 301 of the Companies Act, 1956.
is not applicable
to the Company.
as on 31
st
31
st
March 2014 on account of sales tax, customs
10. The company has been registered for a period of less than
year is fty percent or more of its net worth and whether it
has incurred cash losses in such nancial year and in the
the company has not granted any loans or advances on the
and other securities.
to the company.
by others from banks or nancial institutions during the year.
31
st
March 2014.
of the balance sheet of the company, no funds raised on
short term basis have been used for long term investments.
maintained under Section 301 of the Companies Act, 1956
during the year.
year.
20. During the year the company has not raised any money by
way of public issue.
For and on behalf of B. K. Khare and Co.
Partner
M. No. 44784
MUMBAI, 17
th
April, 2014
812
st
MARCH, 2014
Note Ref
As at
31
st
March, 2014
`
Shareholders funds
Share capital ................................................................................................................ 3 500,000
Reserves and surplus.................................................................................................. 4 (62,699)
437,301
Current liabilities
Other current liabilities ................................................................................................ 5 62,699
62,699
TOTAL ................................................................................................................................. 500,000
ASSETS
Current assets
Cash and Cash equivalents ........................................................................................ 6 500,000
TOTAL ................................................................................................................................. 500,000
Suhas Kulkarni Director
Partner
Date: 17
th
th
April, 2014
813
STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDED FROM 29
th
MARCH, 2013 TO
31
st
MARCH, 2014
Note Ref
29
th
March, 2013 To
31
st
March, 2014
`
EXPENDITURE
Other expenses ................................................................................................................... 7 62,699
62,699
Loss before tax ................................................................................................................. (62,699)
Less: Tax expense ............................................................................................................
Loss for the year ............................................................................................................... (62,699)
Basic & diluted .................................................................................................................... (1.25)
Partner
Date: 17
th
th
April, 2014
814
CASH FLOW STATEMENT FOR THE PERIOD ENDED FROM 29
th
MARCH, 2013 TO
31
st
MARCH, 2014
29
th
March, 2013 To
31
st
March, 2014
`
(Loss) before tax ................................................................................................................. (62,699)
Adjustments for:
Operating (loss) before working capital changes ............................................................. (62,699)
Increase / (decrease) in current liabilities ......................................................................... 62,699
Cash (used in) operations ..................................................................................................
B. Cash ow from nancing activities:
Proceeds from issue of shares ......................................................................................... 500,000
Net cash from nancing activities .................................................................................. 500,000
Net increase/(decrease) in cash and cash equivalents (A+B) .................................. 500,000
Opening balance ...............................................................................................................
Closing balance ................................................................................................................. 500,000
Net increase/(decrease) in cash and cash equivalents ............................................. 500,000
Partner
Date: 17
th
th
April, 2014
815
1 CORPORATE INFORMATION
th
March, 2013 and is engaged
in the business of establishing, acquiring, developing and maintaining
Industrial Parks, Technology Parks, Bio-tech Parks, Software Parks, Special
Economic zones, Export Processing Zones, Industrial Areas, Industrial
estates, Integrated Townships, Residential and/or Commercial Complexes,
Housing Facility in India and outside India. Since the Holding Company
is committed to extending nancial support to the Company for its future
projects the accounts have been prepared on a Going Concern basis.
2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Accounting
b Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year
as determined in accordance with the provisions of the Income Tax Act,
1961.
the Company will pay normal income tax. Accordingly, MAT is recognised
as an asset in the Balance Sheet when it is probable that future economic
benet associated with it will ow to the Company.
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent periods.
Deferred tax is measured using the tax rates and the tax laws enacted or
substantially enacted as at the reporting date. Deferred tax liabilities are
recognised for all timing differences. Deferred tax assets in respect of
unabsorbed depreciation and carry forward of losses are recognised only
if there is virtual certainty that there will be sufcient future taxable income
available to realise such assets. Deferred tax assets are recognised for
timing differences of other items only to the extent that reasonable certainty
exists that sufcient future taxable income will be available against which
these can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws and
the Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each Balance Sheet date for their realisability.
c Provisions and contingencies
their present value and are determined based on the best estimate required
each Balance Sheet date and adjusted to reect the current best estimates.
Contingent liabilities are not recognised but are disclosed in notes contingent
Assets are neither recognised nor disclosed in the nancial statements.
3. Share Capital
As at 31
st
March,
2014
Authorised
1,00,000 Equity shares of `. 10 each 1,000,000
50,000 equity shares of `.10 each fully paid up 500,000
500,000
3a The above shares are held by Mahindra Lifespace Developers Limited, the
holding company and its nominees
Reconciliation of the shares outstanding at the beginning and at the end
of the reporting period
As at 31
st
March, 2014
No of Shares Value of Shares
Equity Shares
At the beginning of the period
Issued during the period 50,000 500,000
Outstanding at the end of the period 50,000 500,000
3b Terms/ Rights attached to Equity Shares
The company has only one class of Equity shares having a par value of
` 10/- per share. Each holder of Equity Shares is entitled to one vote per
share.
3c Shares held by holding Company
Particulars No.of Share/S %
Mahindra Lifespace Developers Ltd 50,000 100.00%
Total 50,000 100.00%

`
As at 31
st
March,
2014
Opening balance of Prot & Loss Account
Add: (Loss) for the Current Year (62,699)
Closing Balance of Prot and Loss Account (62,699)
5 Other Current Liabilites
Other payables 62,699
62,699
The particulars regarding dues to micro enterprises and small enterprises
the basis of information available with the Company.
6 Cash & cash equivalents
Bank Balances
On current account 500,000
500,000
7 Other Expenses
`
29
th
March, 2013 To
31
st
March, 2014
Rates and taxes 32,923
Legal and Professional Charges 1,686
Audit Fee 28,090
62,699
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED
31
st
MARCH, 2014
816
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED
31
st
MARCH, 2014
8 List of related parties:
Mahindra & Mahindra Limited Ultimate Holding Company
Mahindra Lifespace Developers Limited Holding Company
As at
31
st
March, 2014
Mahindra Lifespace Developers Limited:
Issue of Shares (`) 500,000
9 Earnings per Share
2013-14
Net (loss) after tax (`) (62,699)
Weighted average number of equity shares (Nos.) 50,000
Basic and Diluted Earnings per share (not annualised) (`) (1.25)
Nominal value of shares (`) 10
11 The Company was incorporated on 29
th
March 2013 and this is the rst
year of operation hence previous year gures are not applicable.
Partner
Date: 17
th
th
April, 2014
MAHINDRA CONSULTING ENGINEERS LIMITED
817
Operations
During the year under review, your Company consolidated its
presence in Engineering, Project Advisory and Infrastructure
Consulting and spread its operations in countries like
Africa, GCC countries and other neighboring countries. Your
Companys income for the year was Rs. 1,157.68 Lakhs as
compared to Rs. 1,484.16 Lakhs in the previous year. Your
Company has registered prot before taxation of Rs. 29.68
Lakhs as compared to Rs. 313.90 Lakhs for the previous year.
During the year, your Company has bagged several
prestigious and rst of its kind assignments in Engineering,
Project Advisory and Infrastructure Consulting sectors. Your
Company has further strengthened its position in the areas
of area development, water supply & sewerage, solid waste
management, urban infrastructure, agribusiness, agri and
rural infrastructure, social infrastructure, marine infrastructure,
urban transport, industrial infrastructure, cluster initiatives,
renewable energy, tourism infrastructure, sustainability studies,
institutional strategies / planning studies, industrial plants and
systems, etc. Your Company has received several repeat
orders from its existing clientele which afrm the goodwill of the
Company and its customer centric approach. Your Company
has bagged several projects in Africa in agribusiness, social
infrastructure sectors and these projects along with strong
domestic presence, would serve as a base for the Companys
sustained growth in the future.
Your Company has also evolved on several innovative
and sustainability ideas in its projects and is augmenting
its efforts to consolidate its position as a front-runner in
Your Directors present the Twenty rst Annual Report along with the audited accounts of your Company for the year ended
31
st
March, 2014.
Financial Results
(Rs. in Lakhs)
2014 2013
Income (Gross) 1,157.68 1,484.16
Less: Service Tax 57.47 67.53
Income (Net) 1,100.21 1,416.63
Total Expenditure 1,070.53 1,095.35
Prot before Depreciation and Taxation 37.36 321.28
Less: Depreciation 7.68 7.38
Prot before Taxation 29.68 313.90
Deferred Tax asset/(liability) (net) (1.34) (1.84)
Prior years
Prot after Taxation 18.52 210.23
Balance of prot brought forward 477.24 412.35
Prot available for appropriation 495.76 622.58
Proposed dividend on equity shares 21.25 106.26
Dividend distribution Tax 3.61 18.06
Transfer to general reserve 21.02
Balance carried to Balance Sheet 470.90 477.24
innovative projects. Your Company continues to receive
orders from prestigious clients in different sectors indicating
its versatile capability of providing consultancy services for
multi-disciplinary projects.
During the year, your Company has got empanelled with
various Central / State Government nodal agencies entrusted
with responsibility of developing infrastructure in the Country.
Dividend
Keeping in mind the overall performance during the year
under review, your Directors are pleased to recommend a
dividend of Re. 1 per Equity Share on 21,25,250 fully paid-up
equity shares of Rs. 10 each (i.e. @ 10% on equity shares)
aggregating to Rs. 21.25 Lakhs (excluding Tax) (Previous
year: Rs. 106.26 Lakhs).
The above dividend, if approved, will be paid to those
shareholders whose names appear in the Register of members
as on the Record Date xed for this purpose. The equity
dividend for the nancial year 2013-14, inclusive of dividend
distribution tax, will absorb a sum of Rs. 24.86 Lakhs.
Your Company has actively promoted academia industry
partnership with various reputed universities and educational
institutions like conceiving appropriate course curriculum,
providing internship to students, guest lectures, guidance
and supervisory support for undergraduate and post graduate
project work and thesis, assistance in developing ecofriendly
campus etc.
818
Directors
Mr. Patrick Vaughan and Mr. Yann Fajolles resigned from the
directorship of your Company with effect from 10
th
September,
2013 and Mr. Benoit Clocheret resigned from the directorship
of your Company with effect from 2
nd
December, 2013.
Mr. B. Suresh retires by rotation at the forthcoming Annual
General Meeting and, being eligible, offers himself for re-
appointment.
Remuneration/Compensation Committee
Your Company has constituted the Remuneration/
Compensation Committee and it comprises of Mr. A. K. Nanda
and Mr. S. Venkatraman.
(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
st
March, 2014 and of the prot
of the Company for the year ended on that date;
concern basis.
Code of Conduct
Your Company had adopted Codes of Conduct for Corporate
Governance for its Directors and Senior Management &
Employees (Codes). These Codes enunciate the underlying
principles governing the conduct of the Companys business
and seek to reiterate the fundamental precept that good
governance must and would always be an integral part of the
Companys ethos.
Your Company has for the year under review, received
Policy on Sexual Harassment
Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai
retire as Auditors of the Company at the conclusion of the
forthcoming Annual General Meeting and have given their
consent for re-appointment. The Members are requested to
re-appoint Auditors to hold such ofce from the conclusion
of the 21
st
Annual General Meeting till the conclusion of 26
th

Annual General Meeting and x their remuneration.
As required under the provisions of Sections 139 and 141 of
the Companies Act, 2013, the Company has obtained a written
certicate from Messrs. Deloitte Haskins & Sells, Chartered
Accountants, to the effect that their re-appointment, if made,
would be in conformity with the conditions and criteria as
specied in the said Sections.
Deposits and Loans/Advances
Your Company has not accepted deposits from the public or
its employees during the year.
Your Company has not made any loans and advances which
between the Parent Company, Mahindra & Mahindra Limited
Stock Options and Exercise
During the year under review, 21 eligible employees exercised
2,05,458 Options under the Mahindra Consulting Engineers
Employees Stock Options Scheme. Accordingly, Mahindra
Consulting Engineers Employees Stock Options Trust
transferred 2,05,458 Equity Shares of your Company to these
eligible employees. 22,312 options granted to 14 eligible
employees were cancelled during the year under review.
under section 217(1)(e) of the Companies Act, 1956 read with
of Directors) Rules, 1988 are given in Annexure I to this Report.
of the Companies Act, 1956 and Rules thereunder
and Rules thereunder, a statement containing particulars of the
Companys employee who was in receipt of remuneration of
not less than Rs. 60,00,000 per annum during the year ended
31
st
March, 2014 or of not less than Rs. 5,00,000 per month
during any part thereof is given in Annexure II to this report.
Certicate under section 383A of the Companies Act, 1956
In accordance with the provisions of section 383A of the
Companies Act, 1956, a certicate issued by Mr. Vijay Sonone,
proprietor of M/s Vijay Sonone & Co., Company Secretaries in
Whole-time Practice, certifying that the Company has complied
with all the provisions of the Companies Act, 1956 is given in
Annexure III and forms a part of this Report.
A. K. Nanda
Chairman
Mumbai, 28
th
May, 2014.
819
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 31
ST
MARCH, 2014.
(a) Energy conservation measures taken :
The Company has adopted sustainability concepts in its operations and being in Engineering, Project Advisory and
Infrastructure Consulting sector, the Company has taken steps to implement sustainability initiatives in its assignment like
water conservation, rainwater harvesting, zero discharge, water recycling, 3-R concepts, scientic management of waste
disposal, renewable energy technologies, waste minimization and management concepts. The Company has also taken
active measures in promoting sustainability concepts, through conducting awareness campaign program, academia
industry initiatives, guest lectures etc. The Company is actively involved in National/International seminars/committees
on water, environment, green marketing, sustainable infrastructure development, etc.
(c) Impact of the measures taken/to be taken at (a) & (b) above for reduction of energy consumption and consequent
The above measures have resulted in relatively reduced Energy consumption.
in respect of Industries specied in the Schedule: Not applicable
1 Areas in which R & D is carried out : None
2 Benets derived as a result of the above efforts : Not applicable
3 Future plan of action : Further quality improvement
4 Expenditure on R & D : Nil
5 Technology absorption, adaptation and innovation : None
6 Imported technology for the last 5 years : None
The total foreign exchange earned and used:
(Rs. in Lakhs)
Financial year
2013-2014
Financial year
2012- 2013
Total foreign exchange earned 686.15 508.07
Total foreign exchange used 72.13 371.35
A. K. Nanda
Chairman
Mumbai, 28
th
May, 2014.
820
ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES
ACT, 1956, READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND
FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED MARCH 31, 2014.
Name of
employee
Designation/
Nature of
duties
Gross
remuneration
received
(subject to
income tax)
(Rs)
Qualication(s)
Experience
(Yrs)
Age
(Yrs)
Date of
commencement
of employment
Last
employment
held,
organization
and
designation
C S
Narayanan
Vice
President
6,171,400 B.E. (Civil)
MBA,
Master of
infrastructure
management
23 44 02/12/1999 Esquire
Engineers and
Consultants
Limited
Principal
Engineer
Notes :
1. The nature of employment is permanent, subject to termination, on three months notice, on either side.
2. The above employee is not related to any other Director of the Company.
3. The above employee do not hold by himself or along with his spouse and dependent children, 2% or more of the equity
4. Terms and conditions of employment are as per Companys Rules/Contract.
5. Gross remuneration received as shown in the statement includes salary, performance pay, house rent allowance or value
of perquisite for accommodation, car perquisite value/allowances as applicable, employers contribution to provident fund
and superannuation fund, leave travel facility, reimbursement of medical expenses and all allowances/perquisite and terminal
benets as applicable.
A. K. Nanda
Chairman
Mumbai, 28
th
May, 2014
821
ANNEXURE III TO THE DIRECTORS REPORT
VIJAY SONONE & CO
Company Secretaries
E-507, Lokdhara Phase III, E 3, Lokdhara,
Kalyan East, Thane 421306
Mobile: +91 99300 21463;
E-mail: vijaysonone@gmail.com
Registration No. of the Company: 11 - 074723
Authorised Share Capital: Rs. 40,000,000/-
To,
The Members
Gateway Building,
Apollo Bunder,
Mumbai-400001
We have examined the registers, books and papers of
M/s Mahindra Consulting Engineers Limited (the Company) as
required to be maintained under the Companies Act, 1956, (the
Act)/ the Companies Act, 2013 and the rules made thereunder
and also the provisions contained in the Memorandum & Articles
of Association of the Company for the nancial year ended 31
st

March, 2014. In our opinion and to the best of our information
and according to the examinations carried out by us and
explanations furnished to us by the Company, its ofcers and
agents, we certify that in respect of the aforesaid nancial year: -
1. the Company has kept and maintained all registers
as stated in Annexure A to this certicate, as per the
provisions and rules made there under and all entries
therein have been duly recorded.
2. the Company has duly led the forms and returns as
stated in Annexure B to this certicate, with the Registrar
of Companies, Regional Director, Central Government,
Company Law Board or other authorities within the time
prescribed under the Act and the rules made there under.
3. the Company being a public limited Company, has a paid-
up Capital of Rs. 21,252,500.
4. the Board of Directors duly met 4 times on 06.05.2013,
23.09.2013, 12.12.2013 and 18.03.2014, in respect of
which meetings proper notices were given and signed in
the minutes book maintained for the purpose.
5. the Company has not closed its Register of Members,
and/or Debenture holders during the nancial year.
6. the Annual General Meeting for the nancial year ended
31.03.2013 was held on 23
rd
September, 2013 after
giving due notice to the members of the Company and
the resolutions passed thereat were duly recorded in the
minutes book maintained for the purpose.
7. One extra-ordinary general meeting was held during the
Financial Year on 5
th
June, 2013.
8. the Company has not advanced any loans or given any
guarantees or provided any securities to its directors or
persons or rms or Companies referred to under Section
295 of the Act/Section 185 of the Companies Act, 2013.
9. the Company has duly complied with the provisions of
Section 297 of the Act in respect of Contracts specied in
that Section.
10. the Company was not required to make entries in the
register maintained under Section 301 of the Act.
11. as there were no instances during the year falling within
the purview of Section 314 of the Act, the Company has
not obtained any approvals from the Board of Directors,
Members or Central Government.
12. the Company has not issued any duplicate share
certicates during the nancial year.
13. the Company: -
i) Has delivered all the certicates on lodgment thereof
for transfer in accordance with the provisions of the
Act.
ii) Has declared dividend during the year and paid the
same within the specied time.
iii) Has not declared Interim Dividend during the year.
iv) Was not required to transfer any amount of unclaimed
or unpaid dividend.
v) Duly complied with the requirements of Section 217
of the Act.
14. the Board of Directors of the Company is duly constituted.
Appointment of Mr. Parag Shah as Director was conrmed
by the shareholders of the Company at their Annual
rd
September, 2013. Mr. Patrick
Vaughan and Mr. Yann Fajolles ceased to be Directors
of the Company w.e.f. 10
th
September, 2013. Mr. Benoit
Clocheret ceased to be a Director of the Company w.e.f.
2
nd
December, 2013.
15. The Company has re-designated and appointed
Mr. B. Suresh as CEO & Managing Director of the
th
May, 2013. Mr. Suresh held
the ofce of Whole-time Director of the Company prior to
the aforesaid appointment. Other than the above, no other
appointment of Managing Director / Whole Time Director /
Manager took place during the nancial year.
16. the Company has not appointed any sole-selling agents
17. the Company was not required to obtain any approvals of
the Central Government, Company Law Board, Regional
Director, Registrar of Companies and/or such authorities
prescribed under the various provisions of the Act during
the nancial year unless stated otherwise.
18. the Directors have disclosed their interest in other rms,
Companies to the Board of Directors pursuant to the
provisions of the Act and rules made there under.
822
19. the Company has not issued any shares/debentures/other
securities during the nancial year.
20. the Company has not bought back any Shares during the
nancial year.
21. the Company has not redeemed any preference shares
22. there were no transactions necessitating the Company to
bonus shares pending registration of transfer of shares.
23. the Company has not invited/accepted any deposits
from the public under the provisions of Section 58A and
58AA read with Companies (Acceptance of deposits)
Rules, 1975.
24. the borrowings made by the Company during the nancial
year ended 31
st
March, 2013 are within the prescribed
limits.
25. the Company has not made any loans or advances or
given guarantees or provided securities to other bodies
corporate during the year and consequently no entries
have been made in the register kept for the purpose.
26. the Company has not altered the provisions of the
Memorandum with respect to the situation of the
Companys registered ofce from one state to another
Memorandum with respect to the objects of the Company
Memorandum with respect to name of the Company
Memorandum with respect to share capital of the
Company for the year under scrutiny.
30. the Company has not altered its Articles of Association
31. as informed to us, there was no prosecution initiated
against the Company and no nes or penalties or any
other punishment was imposed on the Company during
the nancial year for offence under the Act.
32. the Company has not received any money as security
from its employees during the nancial year.
33. the Company is regular in depositing both the employees
and employers contribution to Provident Fund with the
prescribed authorities pursuant to Section 418 of the Act.
Vijay Sonone & Co.,
Company Secretaries
(Vijay B Sonone FCS.7301)
(Proprietor)
Certicate of Practice No.7991
Place: Mumbai
Date: 9
th
May, 2014
823
ANNEXURE A SECRETARIAL COMPLIANCE CERTIFICATE
Name of the Company : Mahindra Consulting Engineers Limited
Registration Number : 11-074723
Registers as maintained by the Company
Statutory and Other Registers
Sr. No. Under Section Name of Register
1 143 Register of Charges
2 150 Register of Members
3 193 Minutes of all meetings of Board of Directors
4 193(1) Minutes of General Body Meetings
5 209 Books of Accounts
6 301 Register of Particulars of Contracts in which Directors are interested
7 303 Register of Directors
8 307 Register of Directors Shareholding
9 Board Meeting Attendance Register
10 General Meeting Attendance Register
11 Share Transfer Register
ANNEXURE B SECRETARIAL COMPLIANCE CERTIFICATE
Returns / Documents / Forms led with the Registrar of Companies, Regional Director, Central Government or other authorities
during the nancial year ended March 31
st
, 2013
REGISTRAR OF COMPANIES/CENTRAL GOVERNMENT
Sl.
No.
Form
No.
Relevant
Section
Description Date of
Filing
Whether led
Within prescribed
time
Yes/No
If delay in ling,
whether requisite
additional fee paid
Yes/No
1. 32 303 Change in designation of Mr. Parag
Shah as Director w.e.f. 23.09.2013
10/10/2013
SRN:B86501400
Yes NA
2. 66 383A Compliance Certicate for the year
ended 31.03.2013
24/09/2013
SRN: Q11598596
Yes NA
3. 32 303 Cessation of Directorships of Mr.
Patrick Vaughan and Mr. Yann Fajolles
w.e.f 10.09.2013
16/09/2013
SRN:B84534064
Yes NA
4. 20B 159(1) Annual Return (Schedule V) made up
to 28/09/2013
10/10/2013
SRN: Q12993077
Yes NA
5. 23AC &
ACA
220(1) Balance Sheet & Prot & Loss Account
as on 31/03/2013
08/10/2013
SRN:Q12637435
Yes NA
6. 23 192 Re-designation of Mr. B. Suresh to
CEO and Managing Director w.e.f.
06.05.2013
09/05/2013
SRN:Q12637435
Yes NA
7. 32 303 Appointment of Mr. Parag Shah as an
Additional Director Re-designation of
Mr. B. Suresh to CEO and Managing
Director w.e.f. 06.05.2013
09/05/2013
SRN:B74613431
Yes NA
8 25A 198(4),
269
Application to Central Government for
approval of revision in remuneration of
Mr. B. Suresh
13/06/2013
SRN:B74613100
Yes NA
9. 32 303 Cessation of Directorship of Mr. Benoit
Clocheret
31/12/2013
SRN:B92702976
Yes NA
824
of Mahindra Consulting Engineers Limited (the
31
st
the Cash Flow Statement for the year then ended, and a
Accounting Standards notied under the Companies
Act, 1956 (the Act) (which continue to be applicable
in respect of Section 133 of the Companies Act, 2013
in terms of General Circular 15/2013 dated 13
th

September 2013 of the Ministry of Corporate Affairs) and
in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control
our audit in accordance with the standards on Auditing
issued by the Institute of Chartered Accountants of India.
Those Standards require that we comply with ethical
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Companys
internal control. An audit also includes evaluating the
appropriateness of the accounting policies used and
the reasonableness of the accounting estimates made
by the Management, as well as evaluating the overall
opinion.
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF
Opinion
Act in the manner so required and give a true and
fair view in conformity with the accounting principles
(a) in the case of the Balance Sheet, of the state of
st
March, 2014;
date; and
2003 (the Order) issued by the Central Government
in terms of Section 227(4A) of the Act, we give in the
Annexure a statement on the matters specied in
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
with the Accounting Standards notied under the
Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms
of General Circular 15/2013 dated 13th September,
2013 of the Ministry of Corporate Affairs).
st
March, 2014 taken
st
March, 2014 from
being appointed as a director in terms of Section
274(1)(g) of the Act.
B. Ramaratnam
Partner
Place : CHENNAI
Date : May 28, 2014
825
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements
section of our report of even date)
Having regard to the nature of the Units business/activities/
result, clauses (ii), (vi), (viii), (xi), (xii), (xiii), (xiv), (xvi), (xviii),
(xix), (xx) of CARO are not applicable.
of the Company.
(ii) The Company has neither granted nor taken any loans,
purchase of xed assets and the sale of services. During
the course of our audit, we have not observed any major
weakness in such internal control system. The Company
does not purchase inventory nor does it sell any goods in
the ordinary course of its business.
(iv) In our opinion, the company has an adequate internal
its business.
(v) To the best of our knowledge and belief and according
to the information and explanations given to us, there are
no contracts or arrangements that needed to be entered
in the Register maintained in pursuance of Section 301 of
(vi) According to the information and explanations given to us
Fund, Employees State Insurance, Income-tax,
Service Tax, Cess and other material statutory dues
applicable to it with the appropriate authorities.
Income-tax, Service Tax, Cess and other material
st
March 2014 for a
became payable.
(c) Details of dues of Income tax which have not been
deposited as on 31
st
March, 2014, on account of
disputes are given below:
Statute Nature of
dues
Forum where
dispute is pending
Period to which
the amount relates
Amount
involved (Rs.)
Income
Tax Act
Income tax Income Tax
Appellate Tribunal
AY 1997-98 26,28,231
(vii) The Company does not have accumulated losses at
(viii) According to the information and explanations given to us,
the Company has not given guarantees for loans taken by
others from banks and nancial institutions.
(x) To the best of our knowledge and according to the
(Firm Registration No. 008072S)
B. Ramaratnam
Partner
Place : CHENNAI
Date : May 28, 2014
826
BALANCE SHEET AS AT 31st MARCH, 2014
Particulars Note No As at 31-Mar-14
(in Rupees)
As at 31-Mar-13
(in Rupees)
(a) Share capital ................................................................................ 3 21,252,500 21,252,500
(b) Reserves and surplus .................................................................. 4 83,602,487 77,519,864

2 Non-current liabilities
(a) Long-term provisions ................................................................... 5 2,836,753 2,902,428

(a) Trade payables ............................................................................ 6 14,992,556 9,836,339
(b) Other current liabilities ................................................................. 7 2,745,267 2,654,182
(c) Short-term provisions .................................................................. 8 2,581,727 12,521,947
TOTAL ................................................................................................ 128,011,290 126,687,260
II. ASSETS
(a) Fixed assets ................................................................................. 9
Tangible assets ............................................................................ 3,184,772 3,490,168
(b) Deferred tax assets (net) ............................................................. 10 904,286 770,181
(c) Long-term loans and advances .................................................. 11 10,785,647 2,673,860

2 Current assets
(a) Trade receivables ......................................................................... 12 41,772,447 21,650,552
(b) Cash and cash equivalents ......................................................... 13 9,014,129 21,302,944
(c) Short-term loans and advances .................................................. 14 2,172,964 2,970,592
(d) Other current assets .................................................................... 15 60,177,045 73,828,963
TOTAL ................................................................................................. 128,011,290 126,687,260
Arun Kumar Nanda Chairman
B.Ramaratnam B.Suresh CEO
Partner and Managing Director
S Venkatraman Director
Place: Chennai Place : Mumbai
Date : 28.05.2014 Date : 28.05.2014
827
Particulars Note No For the year
ended
31-Mar-14
(in Rupees)
For the year
ended
31-Mar-13
(in Rupees)
Revenue from operations:
Revenue from consultancy services (Gross) 114,585,723 146,152,027
Less: Service Tax 5,747,318 6,753,416
108,838,405 139,398,611
Other income 16 1,182,083 2,263,770
Total Revenue 110,020,488 141,662,381
Expenses:
Employee benets expenses 17 64,796,995 87,056,840
Other expenses 18 41,487,408 22,478,165
Total expenses 107,052,790 110,272,947

Prot before Tax 2,967,698 31,389,434

Tax expense:
Current tax 1,250,000 10,550,000
Deferred tax (134,105) (183,346)
Prot for the year 1,851,803 21,022,780
Earnings per equity share: (of Rs.10/- each)
Basic & Diluted 20 0.87 9.89
Date : 28.05.2014 Date : 28.05.2014
828
March 31, 2014
(in Rupees)
For the year ended
March 31, 2013
(in Rupees)
A. Cash ow from operating activities:
Prot before taxation 2,967,698 31,389,434
Adjustments for:
Unrealised exchange differences (21,160) 6,833
(Prot)/Loss on sale of xed assets (Net) (2,500) (97,544)
Interest income (882,594) (2,166,226)
Employee Compensation expenses on account of ESOS 6,717,256 1,107,059
Bad debts 12,638,727 329,767
Provisions for Compensated Absences (60,150) 402,783
Provisions for Gratuity 338,355 78,484
Operating prot before working capital changes 22,464,019 31,788,532

Adjustment for (increase)/decrease in operating assets:
Trade Receivables (32,739,462) (5,716,646)
Other Current Assets 13,111,503 (33,419,604)
Short Term Loans & Advances 797,628 (88,112)
Long Term Loans & Advances (1,350,580) 453,279

Adjustment for increase/(decrease) in operating liabilities:
Trade payables 5,156,217 (7,534,905)
Other Current Liabilities (247,720) (753,062)
Cash generated from/(used in operations) (7,192,055) (15,270,518)

Income-tax paid (8,011,207) (7,765,832)
Net Cash used in operating activities (819,153) (23,036,350)

Purchase of Fixed Assets (463,712) (254,544)
Proceeds from sale of Fixed Assets 3,222 97,544
Bank balances not considered as cash and cash equivalents 9,017,019 19,769,964
Net cash generated from investing activities 9,979,538 21,916,727
829
March 31, 2014
(in Rupees)
For the year ended
March 31, 2013
(in Rupees)
Dividend paid (10,626,250) (10,626,250)
Dividend distribution tax paid (1,805,931) (1,723,843)
Net cash used in nancing activities (12,432,181) (12,350,093)
Net decrease in cash and cash equivalents (A+B+C) (3,271,796) (13,469,716)

Cash and Cash Equivalent at the beginning of the year 3,522,467 16,992,183
Cash and Cash Equivalent at the end of the year 250,671 3,522,467
Reconciliation of Cash and Cash equivalents with the Balance Sheet
Cash and Cash equivalents as per Balance Sheet 9,014,129 21,302,944
Less: Bank Balances not considered as Cash and Cash equivalents (8,763,458) (17,780,477)
250,671 3,522,467
Date : 28.05.2014 Date : 28.05.2014
830
Notes forming part of the nancial statements
for the year ended 31st March 2014
1. Mahindra Consulting Engineers Limited (MACE) is a multidisciplinary
engineering consultancy organization providing Engineering, Project
Advisory Services and Infrastructure Consulting. The sectors of operation
covers urban infrastructure, industrial infrastructure, water and wastewater,
environment, transportation sector, tourism infrastructure, renewable
energy, sustainable development studies, buildings and structures,
industrial plants and systems, agribusiness and food infrastructure,
social infrastructure, institutional studies. The company offers wide range
of services in both domestic and international market right from project
conceptualization, market demand, feasibility studies, planning, design,
engineering, project management, Public Private Partnership (PPP)
transaction advisory etc across several sectors. The clientele base includes
Central Government, State Government, Public Sector Undertakings,
Infrastructure Development Agencies, Private Sector, Financial Institutions,
International Consulting rms, etc.
2.1 Basis of accounting and preparation of Financial Statements
The nancial statements of the Company have been prepared in accordance
to comply with the Accounting Standards notied under Section 211(3C) of
the Companies Act, 1956 (the 1956 Act) (which continue to be applicable
in respect of Section 133 of the Companies Act, 2013 (the 2013 Act)
in terms of General Circular 15/2013 dated 13th September, 2013 of the
Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/
2013 Companies Act, as applicable 1956. The nancial statements have
2.2 Use of Estimates
and the estimates are recognised in the periods in which the results are
known/materialise.
2.5 Depreciation
Depreciation is provided on the straight line method at the rates and in
the manner specied in Schedule XIV to the Companies Act, 1956, except
for certain items of computers, ofce equipment and furniture & xtures,
costing more than Rs.5,000, which are depreciated at the rate of 19.8% per
annum based on the expected useful life of such assets.
a. The Company recognizes revenue on the percentage of completion
method, which involves technical estimates with respect to costs to
completion, of each contract/activity. Such estimates, made by the
Company and certied to the auditors, have been relied upon by
them, as these are of a technical nature.
b. Revenue from project supervision services is recognized based on
monthly billings and covers personnel costs of employees deputed
for the project and includes appropriate overheads and margins.
c. Interest income on xed deposits is accrued proportionately based
on period for which the same is placed
2.7 Tangible Fixed assets
Fixed assets are stated at cost less depreciation. Cost comprises of purchase
price and any attributable costs (including nancing cost) of bringing the
assets to its working condition for its intended use. When an asset is
scrapped, or otherwise disposed off, the cost and related depreciation are
removed from the books of account and resultant prot (including capital
prot) or loss, if any, is reected in the Statement of Prot & Loss.
Technical know-how has been amortised over a period of ve years on
straight line basis.
2.9 Foreign currency transactions:
Foreign currency transactions are recorded at the exchange rate prevailing
on the date of transaction. Monetary assets and liabilities are translated
at the closing exchange rate prevailing on the last day of the accounting
year. Exchange differences arising on settlement/restatement of foreign
currency monetary assets and liabilities of the Company are recognised
as income or expense in the Statement of Prot and Loss.
2.10 Employee Benets
Employee benets include provident fund, superannuation fund, gratuity
fund and compensated absences.
a. Dened contribution plans
The Companys contribution to provident fund and superannuation
fund are considered as dened contribution plans and are charged
as an expense based on the amount of contribution required to be
b. Dened benet plans
method, with actuarial valuations being carried out at each
balance sheet date. Actuarial gains and losses are recognised in
the Statement of Prot and Loss in the period in which they occur.
Past service cost is recognised immediately to the extent that the
benets are already vested and otherwise is amortised on a straight-
The retirement benet obligation recognised in the Balance Sheet
adjusted for unrecognised past service cost, as reduced by the fair
c. Short term employee benet plans
All short term employee benet plans such as salaries, wages,
bonus, special awards and medical benets which fall due within
12 months of the period in which the employee renders the related
services which entitles him to avail such benets are recognised
on an undiscounted basis and charged to the prot and loss
account. This includes compensated absences which are expected
to occur within twelve months after the end of the period in which
the employee renders the related service. The cost of short-term
compensated absences is accounted as under:
absences occur.
d. Long term employee benet plans
Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee
renders the related service are recognised as a liability at the present
value of the dened benet obligation as at the Balance Sheet date.
831
2.11 Earnings Per Share
Basic earnings per share is computed by dividing the prot/(loss) after
tax (including the post tax effect of extraordinary items, if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the prot/(loss) after
tax (including the post tax effect of extraordinary items, if any) as adjusted
for dividend, interest and other charges to expense or income (net of any
attributable taxes) relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive potential
equity shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net prot per share from
continuing ordinary operations. Potential dilutive equity shares are deemed
to be converted as at the beginning of the period, unless they have been
issued at a later date. The dilutive potential equity shares are adjusted for
the proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented. The
number of equity shares and potentially dilutive equity shares are adjusted
for share splits/reverse share splits and bonus shares, as appropriate.
2.12 Taxation
Current tax is the amount of tax payable on the taxable income for the year as
determined in accordance with the provisions of the Income Tax Act, 1961.
liabilities are recognised for all timing differences.
Deferred tax assets are recognised for timing differences of items other
than unabosrbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufcient future taxable income will
be available against which these can be realised. However, if there are
unabsorbed depreciation and carry forward of losses, deferred tax assets
are recognised only if there is virtual certainty that there will be sufcient
future taxable income available to realise the assets. Deferred tax assets
and liabilities are offset if such items relate to taxes on income levied by
the same governing tax laws and the Company has a legally enforceable
right for such set off. Deferred tax assets are reviewed at each balance
sheet date for their realisability.
2.13 Impairment of Assets
The carrying values of assets/cash generating units at each balance sheet
amount. The recoverable amount is the greater of the net selling price
and their value in use. Value in use is arrived at by discounting the future
cash ows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognised for an asset in
earlier accounting periods no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Statement of Prot and
Loss, except in case of revalued assets.
2.14 Provisions and Contingencies:
estimate can be made. Provisions (excluding retirement benets) are not
discounted to their present value and are determined based on the best
estimate required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reect the current
best estimates. Contingent liabilities are disclosed in the Notes. Contingent
assets are not recognised in the nancial statements.
Notes to Accounts
Note 3: Share Capital
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Authorized
(Previous Year: 4,000,000 Equity Shares of
Rupees 10 each)
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Issued, Subscribed & Paid-up
(i) There is no movement in the number
of equity shares during the year
(ii) The Company has only one class of
equity shares having a par value of
Rs. 10/- Each holder is entitled to one
vote per equity share.
(iii) The Company declares and pays
dividends in Indian rupees. The
dividend proposed by the Board of
Directors is subject to the approval
of the shareholders at the Annual
General Meeting.
(iv) Repayment of capital will be in
proportion to the number of equity
shares held.
21,252,500 21,252,500
Details of shares held by each shareholder holding more than 5% shares:
Class of shares/Name
of Shareholder
Number of
shares held
% holding
Number of
shares held
% holding
Mahindra & Mahindra
Ltd and its nominees
(Holding Company)
1,151,000 54.16% 1,151,000 54.16%
Mahindra Consulting
Engineers Employees
Stock Option Trust
(MCET)
113,542 5.34% 319,000 15.01%
SAFEGE, France 655,250 30.83% 655,250 30.83%
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
(a) Capital reserve 1,627,959 1,627,959
(b) Securities premium account 17,351,250 17,351,250
(c) Share options outstanding account
(ESOS)
Opening balance 2,962,355 1,855,296
Add: Additions during the year 6,717,256 1,107,059
Less: Transferred to general reserve on
allotment of shares 6,882,843
Closing balance 2,796,768 2,962,355
(d) General Reserve
Opening balance 7,855,095 5,752,817
Add: Transferred from surplus in
statement of prot and Loss 2,102,278
Add: Transferred from share option
outstanding account 6,882,843
Closing balance 14,737,938 7,855,095
(e) Surplus in Statement of Prot and Loss
Opening balance 47,723,205 41,234,884
Add: Prot for the year 1,851,803 21,022,780
Less: Proposed Dividend Re. 1 per
equity share (previous year Rs 5.00 per
share) 2,125,250 10,626,250
Tax on dividend 361,186 1,805,931
Amount transferred to general reserve 2,102,278
Closing Balance 47,088,572 47,723,205
Total 83,602,487 77,519,864
832
Note 5: Long Term Provisions
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
2,836,753 2,902,428
Note 6: Trade payables
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Trade Payables
Amounts payable to related party 9,830,270 4,870,724
Other payables 5,162,286 4,965,615
14,992,556 9,836,339
Note 7: Other Current Liabilities
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Gratuity Payable 619,787 281,432
Statutory remittances (Contribution to PF and
ESIC, TDS, service tax etc)
1,163,558 1,759,515
2,745,267 2,654,182
Note 8: Short Term Provisions
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
95,291 89,766
(b) Provision - Others:
(i) proposed equity dividend 2,125,250 10,626,250
(ii) tax on proposed dividends 361,186 1,805,931
2,486,436 12,432,181
2,581,727 12,521,947
Note 9: Fixed Assets
Details Gross Block Accumulated Depreciation Net Block
Balance
as at
Additions Disposals Balance
as at
Balance
as at
Depreciation
for the year
On
disposals
Balance
as at
Balance
as at
Balance
as at
1-Apr-13 31-Mar-14 1-Apr-13 31-Mar-14 31-Mar-14 31-Mar-13
(in Rupees) (in Rupees) (in Rupees)
(i) Tangible Assets
Furniture and Fixtures 285,375 10,200 48,863 246,712 257,666 6,428 48,863 215,231 31,481 27,709
(285,375) () () (285,375) (250,930) (6,736) () (257,666) (27,709) (34,445)
Vehicles 2,045,186 129,426 2,174,612 949,612 206,150 1,155,762 1,018,150 1,095,574
(3,657,252) () (1,612,066) (2,045,186) (2,367,386) (194,292) (1,612,066) (949,612) (1,095,574) (1,289,866)
Ofce equipments 3,059,314 81,547 71,999 3,068,862 1,587,571 177,327 71,278 1,693,620 1,375,242 1,471,743
(2,960,795) (98,519) () (3,059,314) (1,413,738) (173,833) () (1,587,571) (1,471,743) (1,547,057)
Computers 3,351,590 242,539 3,594,129 2,456,448 378,482 2,834,930 759,199 895,142
(3,195,565) (156,025) () (3,351,590) (2,093,367) (363,081) () (2,456,448) (895,142) (1,102,198)
Total 87,41,465 463,712 120,862 90,84,315 5,251,297 768,387 120,141 5,899,543 3,184,772 3,490,168
Previous Year 10,098,987 254,544 1,612,066 87,41,465 6,125,421 737,942 1,612,066 5,251,297 3,490,168 3,973,566
(ii) Intangible Assets
Technical Knowhow 4,069,438 4,069,438 4,069,438 4,069,438
(4,069,438) (4,069,438) (4,069,438) (4,069,438)
Total 4,069,438 4,069,438 4,069,438 4,069,438
Previous Year 4,069,438 4,069,438 4,069,438 4,069,438
Grand Total 12,810,903 463,712 120,862 13,153,753 9,320,735 768,387 120,141 9,968,981 3,184,772 3,490,168
Previous Year 14,168,425 254,544 1,612,066 12,810,903 10,194,859 737,942 1,612,066 9,320,735 3,490,168 3,973,566
Previous years gures are in brackets
Note 10: Deferred tax assets
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
liability
On difference between book balance and tax
balance of xed assets (248,106) (291,947)
asset
Provision for compensated absences and
gratuity 1,152,392 1,062,128
904,286 770,181
Note 11: Long-term loans and advances (Unsecured and Considered Good)
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Advance Income tax (net of provisions) 8,396,301 1,635,094
10,785,647 2,673,860
833
Note 12: Trade receivables (Unsecured, considered good unless otherwise
stated)
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
(i) Trade receivables outstanding for a period
were due for payment 12,236,481 9,797,399
(ii) Other Trade receivables 29,535,966 11,853,153
41,772,447 21,650,552
Note 13: Cash and cash equivalents
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Cheques on hand 135,593 2,278,037
Balances with banks
In current accounts 115,078 1,244,430
250,671 3,522,467
Other bank balances
In deposit accounts more than 3 months
and less than 12 months maturity 1,950,000 10,900,000
margin money 890,998 828,266
deposit accounts * 5,922,460 6,052,211
8,763,458 17,780,477
9,014,129 21,302,944
Notes:
* includes deposit amounting to Rs. 35,03,978/- (As at 31
st
March 2013
Rs. 19,82,320/-) which have an original maturity of more than 12 months
Note 14: Short-term loans and advances (Unsecured and considered good)
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
(a) Security deposits 1,911,905 2,659,561
(b) Prepaid expenses 200,159 205,292
(c) Advances to employees 60,900 25,739
(d) Other Recoverables 80,000
2,172,964 2,970,592
Note 15: Other Current Assets
Particulars As at
31-Mar-14
(in Rupees)
As at
31-Mar-13
(in Rupees)
Unbilled revenue 59,804,347 72,915,850
Interest accrued but not due on xed deposits 372,698 913,113
60,177,045 73,828,963
Note 16: Other Income
ended
31-Mar-14
in Rupees
For the year
ended
31-Mar-13
in Rupees
Interest Income
From Bank Deposits 882,594 2,166,226
On income tax refund 63,266
Prot on Sale of Fixed Asset (Net) 2,500 97,544
Net gain on foreign currency transactions 233,723
1,182,083 2,263,770
Note 17: Employee benets expense
ended
31-Mar-14
in Rupees
For the year
ended
31-Mar-13
in Rupees
Salaries & wages 52,790,262 77,514,552
Contribution to Provident & other funds 2,056,907 2,399,457
Sub consultancy Costs 1,670,823 4,247,246
Employee Compensation expenses on
account of ESOS (Refer (iii) of Note 30) 6,717,256 1,107,059
64,796,995 87,056,840
Note 18: Other Expenses
ended
31-Mar-14
in Rupees
For the year
ended
31-Mar-13
in Rupees
Rent 2,311,524 2,717,239
Rates and taxes 49,907 9,494
Repairs and maintenance-others 245,752 324,555
Power and fuel 839,559 1,242,426
Professional charges 2,471,328 2,152,448
Postage, telephone and fax 1,695,808 1,607,667
Insurance 433,632 378,469
Printing and stationery 1,659,591 1,768,644
Traveling & conveyance expenses 14,904,970 8,619,185
Vehicle expenses 674,513 370,322
Interest paid on Income Tax 658,256 240,754
Unbilled revenue accrued in earlier years
written off 12,638,727 329,767
Net loss on foreign currency transactions 289,864
41,487,408 22,478,165
Note 19:
(a) In respect of contracts entered into by the Company, the Company has
recognised revenue on the percentage of completion method, which
is measured with reference to the proportion of personnel and sub-
consultancy costs incurred to the total estimated personnel and sub-
consultancy costs for each contract.
(b) Disclosures pursuant to Accounting Standards (AS) 7 (revised):
Particulars 2013 - 2014
Rs.
2012 - 2013
Rs.
i) Contract revenue recognised for the year
ended 108,838,405 139,398,611
ii) In respect of contracts in progress as
at 31
st
March 2014, the aggregate costs
incurred and recognised prots (net) upto
the year end 200,836,890 188,772,355
iii) Retention money for contracts in progress 990,051 701,198
Note 20: Earnings per share Basic & Diluted
31-Mar-2014
Year Ended
31-Mar-13
Net prot after Tax (Rs) 1,851,803 21,022,780
Number of equity shares (Nos.) 2,125,250 2,125,250
Basic & Diluted Earnings per share (Rs) 0.87 9.89
Nominal value per share (Rs) 10.00 10.00
834
Note 21: Amount paid/payable to the statutory auditors (included under
professional charges in Note 18):
(Amount in Rupees)
31-Mar-14
Year Ended
31-Mar-13
Statutory Audit fees 550,000 550,000
For other services 210,000
Note 22: Earnings in foreign exchange
31-Mar-14
Year Ended
31-Mar-13
Consultancy fees 68,615,034 50,806,653
Note 23: Expenditure in foreign currency
31-Mar-14
Year Ended
31-Mar-13
Salary 3,308,038 33,462,668
Travel 568,362 396,461
Total 3,937,300 33,859,129
Note 24: Amounts remitted in foreign currency during the year on account
of dividend
31-Mar-14
Year Ended
31-Mar-13
Amount of dividend remitted in foreign
currency 3,276,250 3,276,250
Total number of non-resident shareholders (to
whom the dividends were remitted in foreign
currency) 1 1
Total number of shares held by them on
which dividend was due 655,250 655,250
Year to which the dividend relates 2012-13 2011-12
Note 25: Disclosure as required under Accounting Standard 15 on
Employee Benets is as under:
a) The Company has recognized Rs. 822,353/- (Previous Year Rs. 829,600/-)
in Statement of Prot and Loss under Companys Contribution to Provident
Fund.
b) The Company operates funded post retirement dened benet plans for
gratuity, details of which are as follows
(Amount in Rupees)
Employee Dened Benet Plans
Year Ended
31-Mar-14
Year Ended
31-Mar-13
I. Assumptions:
Discount Rate 9.10% 8.00%
Rate of Return on Plan Assets 9.15% 9.15%
Salary Escalation 5.00% 5.00%
Mortality Table - LIC (94-96) Ultimate
Mortality
A Net Asset/(Liability) recognized in
the Balance Sheet
Present value of obligation 3,229,676 2,076,747
Fair value of plan assets 2,609,889 1,795,315
Net Asset/(Liability) (619,787) (281,432)
B Expense recognized in the Prot &
Loss account
Expected return on plan assets (185,777) (161,641)
Actuarial (gains)/Losses (759,795) 81,891
Past service cost 1,254,098
Total expense included under Note 17 808,434 480,295
(Amount in Rupees)
Employee Dened Benet Plans
Year Ended
31-Mar-14
Year Ended
31-Mar-13
C Change in present value of Obligation
obligation as at the beginning of the
year 2,076,747 1,940,770
Benets paid 0 (344,318)
Actuarial (gains)/losses (601,077) (79,750)
obligation as at the end of the period 3,229,676 2,076,747
D Change in fair value of plan assets
Plan assets at the beginning of the year 1,795,315 1,737,822
Expected return on plan assets 1,85,777 1,61,641
Actuarial gains/(losses) 158,719 (161,641)
Contributions by employer 470,078 401,811
Benets paid and adj. to opening
balance 0 (344,318)
Estimates of future salary increases considered in actuarial valuation take
account of ination, seniority, promotion, increments and other relevant factors
In the absence of the relevant information from the actuary, the above details
do not include the composition of plan assets/experience adjustment in
respect of actuarial losses/gains.
Note 26: Related Party Transactions
a) Details of Related Parties :-
Particulars
Nature of
relationship
March 31,
2014
March 31,
2013
1 Mahindra & Mahindra
Limited
Holding Company

2 Mahindra Consulting
Engineers Employees
Stock Option Trust
Employee Welfare
Trust

3 SAFEGE Entity having
signicant inuence
4 Mahindra World City
Developers Limited
Fellow Subsidiary

5 Mahindra Infrastructure
Developers Limited
Fellow Subsidiary

6 Mahindra Lifespace
Developers Limited
Fellow Subsidiary

7 Mahindra Holidays &
Fellow Subsidiary

8 Mahindra EPC Service
Pvt. Ltd
Fellow Subsidiary

9 Mahindra Logisoft
Business Solutions
Limited.
Fellow Subsidiary
10 Mahindra World City

(Jaipur) Limited
Fellow Subsidiary

11 Mahindra Logistics Ltd. Fellow Subsidiary
12 Mahindra First Choice
Wheels Ltd
Fellow Subsidiary
Mr.B.Suresh, CEO &

Managing Director
Key Managerial
Personnel (KMP)
Note: Related parties have been identied by the Management
835
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837
Note 27: Details of foreign currency exposures that are not hedged by
derivative instruments or otherwise
Particulars Client Currency Amount
in foreign
currency
Equivalent
amount
in Rs
Exports
SAFEGE SAR
23600 377,938
( 23,600) ( 341,615)
Exert Engineering Group Ltd. USD 25000 1,501,484
(25,000) (1,357,125)
SGIRE Investments Ltd. USD 5,000 300,297
(50,000) (2,714,250)
UNIDO USD 75,100 4,510,457
() ()
HMR Consultants OMR 22,500 3,510,874
() ()
Fundo para o Fomento de
Habitacao
USD 89,644 5,383,960
() ()
Signature I3S Infra Services
Limited
USD 200,000 12,011,870
() ()
Figures in brackets are in respect of the previous year
Note 28: a. Segment Reporting
The Company has a single reportable business segment viz. income from
consultancy services for the purpose of Accounting Standard 17 on Segment
Reporting.
b. Segment Information
Information about Geographical segment is as follows:
2013-14 2012-13
Particulars Within
India
Outside
India
Total Within
India
Outside
India
Total
Segment Revenue 40,223,371 68,615,034 108,838,405 88,591,958 50,806,653 139,398,611
Segment Assets 78,451,255 40,259,448 118,710,703 114,007,524 10,274,461 124,281,985
Additions to xed
assets 463,712 463,712 254,544 254,544
Note 29: There are no dues to enterprises as dened under Micro, Small and
Medium Enterprises Development Act, 2006, as at 31st March, 2014 which is on
the basis of such parties having been identied by the management and relied
Note 30: Employees Stock Option Scheme (ESOS)
Mahindra Consulting Engineers Employees Stock Option Trust (the Trust)
had purchased 490,000 shares of the Company from the market during 2006.
During the year ended 31st March, 2010, the Employee Stock Option Scheme
(Scheme) was formulated by the Remuneration/Compensation Committee
of the Directors of the Company. Under the said Scheme, the Trust will grant
options to eligible employees and directors of the Company and its Holding
Company (Beneciaries), whereby the Beneciaries will be entitled to acquire
the equity shares lying with the Trust pursuant to the Options granted and vested
in them in accordance with the Scheme and accordingly the said shares lying
with the Trust will get transferred to the Beneciaries upon due exercise of the
options granted. In accordance with the said Scheme, shares held by the Trust
have been granted to the Beneciaries on 31st March 2010.
(i) The details of the Employees Stock Option Scheme are as under:
Date of grant March 31, 2010
Type of Arrangement Equity settled option plan administered through
Employee Stock Option Trust
Number of Options Granted 319,000
Number of Options lapsed
during the year
18,070
Number of option lapsed as
at March 31, 2014
30,057
Vesting period 4 years
Vesting Conditions 25% each on expiry of 12, 24, 36 and 48
months from the date of grant
Exercise Period Within a period of ve (5) years from the date
of vesting
Exercise Price Rs.10/-
Method of Settlement By issue of one equity share each for every
option exercised.
No. of options exercisable in
each tranche.
Minimum of 100 and a maximum of all options
vested till that date.
Number of options vested as
at March 31, 2014
288,943
Number of options exercised
and allotted as at March 31,
2014
205,458
Number of options vested
but not exercised
83,485
(ii) The company has adopted the intrinsic value method in accounting for
employee cost on account of ESOS. The intrinsic value of the shares
based on the valuation obtained from an independent Valuer is Rs. 43.50
per equity share as at March 31, 2010 based on the Discounted Cash Flow
Method.
(iii) In accordance with the Guidance Note issued by the Institute of Chartered
Accountants of India, the difference between the intrinsic value of Rs.
43.50 and the exercise price per share of Rs.10 on options granted
amounting to Rs. 9,679,591/- is being charged to statement of Prot and
Loss over the vesting period of the options as employee compensation
cost and is carried forward as Employees Options Outstanding account
and disclosed separately in the Balance Sheet. Accordingly an amount
of Rs.6,717,256/- has been debited to employee compensation cost for
the year and credited to share option outstanding account. As and when
the options are exercised and the shares are transferred to the eligible
employees by the Trust, the corresponding amount would be transferred
from Share Options Outstanding Account to the General Reserve.
(iv) The fair value of options, based on the valuation of the independent Valuer
as on the date of Grant i.e. March 31, 2010 is Rs. 35.24 per share.
Had the company adopted the fair value method in respect of options
granted, the impact on the nancial statements for the current year would
be Rs. 502,761/- and basic and diluted earnings per share would have
been lower by Rs. 0.24.
The fair value as at March 31, 2010 has been calculated using the Black
Scholes Options Pricing Model and the signicant assumptions made in
this regard are as follows:
Risk free interest rate 6.25%
Expected life 2.50%
Expected volatility 0%
Expected dividend yield 0%
Note 31: Previous years gures have been regrouped / reclassied wherever
necessary to correspond with current years classication/disclosure.
B. Suresh CEO
and Managing Director
Place: Mumbai
Date: 28/05/2014
BRISTLECONE LIMITED
838
DIRECTORS REPORT FOR THE YEAR ENDED MARCH 31, 2014
Your Directors are pleased to present their report together with the Audited Accounts of your Company for the year ended
31
st
March, 2014.
Financial Highlights Year ended
March 31, 2014
USD
Year ended
March 31, 2014
INR
Year ended
March 31, 2013
USD
Year ended
March 31, 2013
INR
Total income .............................................................. 910,308 54,673,098 6,946 417,177
Loss before taxes ...................................................... (889,418) (53,418,445) (1,644,429) (98,764,405)
Loss after taxes ......................................................... (889,418) (53,418,445) (1,644,429) (98,764,405)
(1) Review for the year ended March 31, 2014:
Despite the difcult business environment in North America, your Company and its subsidiaries worldwide reported a net
prot. The Company and its subsidiaries continued to focus on cost control measures to maintain protability.
(2) Outlook for the current year ending March 31, 2015:
Your Company expects a recovery in the general business climate, which is expected to have a positive impact on the
Companys nancial performance during the current year.
(3) Acknowledgement:
The Board acknowledges the continued support the Company received from its employees worldwide and its parent holding
company, Mahindra & Mahindra Ltd.
Ulhas N. Yargop
Chairman
Mountain View, CA, USA
1
st
May, 2014
BRISTLECONE LIMITED
839
Board of Directors and Shareholders
Bristlecone Limited
We have audited the accompanying special purpose parent-
only nancial statements of Bristlecone Limited (the
Company, a Cayman Island corporation and subsidiary of
Mahindra & Mahindra Limited), which comprise the
statements of assets and liabilities as of March 31, 2014 and
2013, and the related special purpose parent-only statements
of revenues and expenses, cash ows and statements of
changes in equity for each of the two years in the period
ended March 31, 2014, and the related notes to the nancial
statements.
presentation of these special purpose parent-only nancial
statements in accordance with note A (3.1); this includes the
design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of nancial
statements that are free from material misstatement, whether
due to fraud or error.
Our responsibility is to express an opinion on these special
purpose parent-only nancial statements based on our audit.
We conducted our audit in accordance with auditing
standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to
considers internal control relevant to the entitys preparation
and fair presentation of the nancial statements in order to
design audit procedures that are appropriate in the
Accordingly, we express no such opinion. An audit also
used and the reasonableness of signicant accounting
opinion.
Opinion
In our opinion, the special purpose parent-only nancial
statements referred to above present fairly, in all material
respects, the assets and liabilities of the Company as of
March 31, 2014 and 2013, and the revenues, expenses and
cash ows for each of the two years in the period ended
March 31, 2014, on the basis of accounting described in
Note A (3).
Basis of accounting
As discussed in Note A (3.1), the accompanying special
purpose nancial statements have been prepared for the
purpose of consolidation with the nancial statements of
Mahindra & Mahindra Limited, the Holding Company on the
basis of accounting described in Note A (3), and are not
intended to be a presentation in conformity with accounting
principles generally accepted in the United States of America.
Our opinion is not modied with respect to this matter.
Restriction on use
This report is intended solely for the information and use of
the Board of Directors and management of Bristlecone
Limited and Mahindra & Mahindra Limited for the purpose of
meeting the requirements of consolidation of the attached
special purpose parent-only nancial statements with the
nancial statements of Mahindra & Mahindra Limited, the
Holding Company and is not intended to be and should not
be used by anyone other than these specied parties or for
any other purpose.
Yours faithfully,
Grant Thornton India LLP
(Formerly Grant Thornton India)
16
th
Floor, Tower II
Indiabulls Finance Centre
S B Marg, Elphinstone (W)
Mumbai 400013 India
T +91 22 6626 2600
F +91 22 6626 2601
www.grantthornton.in
BRISTLECONE LIMITED
840
STATEMENTS OF ASSETS AND LIABILITIES
As at
March 31, 2014
USD
As at
March 31, 2014
INR
(Refer note K)
As at
March 31, 2013
USD
As at
March 31, 2013
INR
(Refer note K)
ASSETS
Current assets
Cash and cash equivalents................................................ 410,010 24,625,201 135,102 8,114,226
Other receivable related party ........................................ 43,494 2,612,250 36,639 2,200,538
Total current assets .......................................................... 453,504 27,237,451 171,741 10,314,764
Non-current assets
Investments in subsidiaries ................................................ 32,579,732 1,956,738,704 32,579,732 1,956,738,704
Total non-current assets .................................................. 32,579,732 1,956,738,704 32,579,732 1,956,738,704
Total assets ....................................................................... 33,033,236 1,983,976,155 32,751,473 1,967,053,468
Current liabilities
Amounts payable to subsidiary ......................................... 3,217,583 193,248,035 2,582,383 155,097,923
Other liabilities, related party ............................................. 5,378,727 323,046,344 4,868,310 292,390,699
Other liabilities, others ....................................................... 68,822 4,133,449 66,720 4,007,203
Loan from Holding Company ............................................ 18,140,000 1,089,488,400 18,140,000 1,089,488,400
Total current liabilities ..................................................... 26,805,132 1,609,916,228 25,657,413 1,540,984,225
Stockholders equity
Common stock par value ................................................ 8,925 536,036 8,716 523,483
Series A preferred stock par value.................................. 7,300 438,438 7,300 438,438
Series B preferred stock par value ................................. 6,920 415,615 6,920 415,615
Additional paid-in-capital ................................................... 16,621,111 998,263,927 16,597,858 996,867,351
Stockholders notes receivable ......................................... (137,091) (8,233,685) (137,091) (8,233,685)
Accumulated decit ........................................................... (10,279,061) (617,360,404) (9,389,643) (563,941,959)
Total stockholders equity ............................................... 6,228,104 374,059,927 7,094,060 426,069,243
Total liabilities and stockholders equity ....................... 33,033,236 1,983,976,155 32,751,473 1,967,053,468
BRISTLECONE LIMITED
841
STATEMENTS OF REVENUES AND EXPENSES
Year ended
March 31, 2014
USD
Year ended
March 31, 2014
INR
(Refer note K)
Year ended
March 31, 2013
USD
Year ended
March 31, 2013
INR
(Refer note K)
Other income .................................................................... 910,308 54,673,098 6,946 417,177
Total Income .................................................................... 910,308 54,673,098 6,946 417,177
Cost and expenses
Salaries, bonus and other remuneration .......................... 631,830 37,947,710 459,300 27,585,558
General and administrative expenses .............................. 64,379 3,866,602 88,558 5,318,793
Interest .............................................................................. 1,103,517 66,277,231 1,103,517 66,277,231
Total cost and expenses ................................................. 1,799,726 108,091,543 1,651,375 99,181,582
Net loss before tax .......................................................... (889,418) (53,418,445) (1,644,429) (98,764,405)
Income tax ........................................................................
Net loss ............................................................................ (889,418) (53,418,445) (1,644,429) (98,764,405)
(The accompanying notes are an integral part of these nancial statement
BRISTLECONE LIMITED
842
Year ended
March 31, 2014
USD
Year ended
March 31, 2014
INR
(Refer note K)
Year ended
March 31, 2013
USD
Year ended
March 31, 2013
INR
(Refer note K)
Net loss ............................................................................. (889,418) (53,418,445) (1,644,429) (98,764,405)
Adjustments to reconcile net loss to net cash
used in operating activities
Stock compensation expense ........................................... 2,530 151,952 7,857 471,891
(Increase)/decrease in current assets, related party ........ (6,855) (411,711) 82,934 4,981,016
Increase in current liabilities, related party ....................... 1,145,617 68,805,757 1,295,523 77,809,111
Increase in current liabilities, others .................................. 2,102 126,246 4,674 280,720
Net cash generated from/(used in) operating activities ..... 253,976 15,253,799 (253,441) (15,221,667)
Proceeds from issue of common stock ............................ 20,932 1,257,176 20,025 1,202,702
Net cash generated from nancing activities ............... 20,932 1,257,176 20,025 1,202,702
Net increase/(decrease) in cash and cash equivalents .... 274,908 16,510,975 (233,416) (14,018,965)
Cash and cash equivalents at the beginning of the year .... 135,102 8,114,226 368,518 22,133,191
Cash and cash equivalents at the end of the year ...... 410,010 24,625,201 135,102 8,114,226
Other disclosures
Interest paid 591,220 35,508,673

275,494

16,546,170
BRISTLECONE LIMITED
843
STATEMENTS OF CHANGES IN EQUITY
Amounts in USD
Preferred stock Common stock

Authorized Issued and
outstanding
outstanding
Additional
paid in
capital
Accumulated
decit
Stockholders
notes
receivable
Total
stockholders
equity
Shares Amount Shares Amount Shares Amount Shares Amount Amount Amount Amount Amount
Balance as at
April 1, 2012 20,200,000 20,200 14,219,977 14,220 25,000,000 25,000 8,570,955 8,571 16,570,121 (7,745,214) (137,091) 8,710,607
Stock issued
during the year 145,164 145 19,880 20,025
Stock compensation
expense 7,857 7,857
Net loss for the year (1,644,429) (1,644,429)
Balance as at
March 31, 2013 20,200,000 20,200 14,219,977 14,220 25,000,000 25,000 8,716,119 8,716 16,597,858 (9,389,643) (137,091) 7,094,060
Stock issued
during the year 209,327 209 20,723 20,932
Stock compensation
expense 2,530 2,530
Net loss for the year (889,418) (889,418)
Balance as at
March 31, 2014 20,200,000 20,200 14,219,977 14,220 25,000,000 25,000 8,925,446 8,925 16,621,111 (10,279,061) (137,091) 6,228,104
Amount in INR (Refer note K)
Preferred stock Common stock
outstanding
outstanding
Additional
paid in
capital
Accumulated
decit
Stockholders
notes
receivable
Total
stockholders
equity
Shares Amount Shares Amount Shares Amount Shares Amount Amount Amount Amount Amount
Balance as at
April 1, 2012 20,200,000 1,213,212 14,219,977 854,053 25,000,000 1,501,500 8,570,955 514,774 995,201,467 (465,177,553) (8,233,685) 523,159,056
Stock issued
during the year 145,164 8,709 1,193,993 1,202,702
Stock compensation
expense 471,891 471,891
Balance as at
March 31, 2013 20,200,000 1,213,212 14,219,977 854,053 25,000,000 1,501,500 8,716,119 523,483 996,867,351 (563,941,959) (8,233,685) 426,069,243
Stock issued
during the year 209,327 12,553 1,244,624 1,257,177
Stock compensation
expense 151,952 151,952
Balance as at
March 31, 2014 20,200,000 1,213,212 14,219,977 854,053 25,000,000 1,501,500 8,925,446 536,036 998,263,927 (617,360,404) (8,233,685) 374,059,927
BRISTLECONE LIMITED
844
Notes to Special Purpose Parent-only Financial Statements
NOTE A BACKGROUND INFORMATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
1. NATURE OF OPERATIONS
Bristlecone Limited (the Company) is the Holding Company for the
Bristlecone Group, which comprises of the Company and its wholly
owned subsidiaries, Bristlecone India Limited, Bristlecone Inc., Bristlecone
UK Ltd, Bristlecone GmbH, Bristlecone (Singapore) Pte. Limited,
Bristlecone (Malaysia) SDN BHD, Bristlecone Consulting Ltd (Canada)
and Bristlecone International AG (Switzerland). The Group is engaged in
providing technology solutions and consulting services with principal
operations in the United States of America, India, Singapore, Malaysia,
UK, Germany and Switzerland. The Groups primary focus is on providing
supply chain services ranging from supply chain strategy and network
design to supply chain system implementations. The Group also provides
application outsourcing services, data management services and
development and integration services to independent software vendors.
The Company was incorporated under the laws of The Cayman Islands
on February 3, 2004. The Company commenced commercial operations
on May 17, 2004 and is a subsidiary of Mahindra & Mahindra Limited
(Holding Company), an Indian Company, which is also the Groups
ultimate Holding Company.
In 2004, pursuant to a Contribution Agreement, the Company acquired
the business of Mahindra Consulting Limited, Mahindra Consulting Inc.,
Mahindra Intertrade (UK) Limited, (all subsidiaries of Mahindra & Mahindra
Limited), and Bristlecone Inc. The consideration was settled through the
issue of Common Stock and Preferred Stock to Mahindra & Mahindra
Limited and the issue of Common Stock, Preferred Stock and cash
payments to the erstwhile shareholders of Bristlecone Inc.
The Company does not have active commercial operations. It engages in
nancing and treasury functions for the Group as a whole.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the signicant accounting policies applied in the
preparation of the accompanying special purpose nancial statements
is as follows:
3.1. OVERALL CONSIDERATIONS
The accompanying nancial statements have been prepared under the
historical cost convention on the accrual basis of accounting in
accordance with the accounting policies described in these notes to
reect the nancial position, revenues and expenses and cash ows of the
Company.
These special purpose nancial statements have been prepared for the
purpose of consolidation with the nancial statements of Mahindra &
Mahindra Limited, the Holding Company and are not intended to be a
presentation in conformity with accounting principles generally accepted
These special purpose nancial statements have been prepared on a going
concern basis, which assumes the realization of assets and satisfaction of
liabilities in the normal course of business. These nancial statements
have been presented in the United States Dollars ($), which is the
functional and reporting currency of the Company.
3.2. USE OF ESTIMATES
In preparing the Companys nancial statements in conformity with the
accounting policies stated herein, the Companys management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the nancial statements as
well as the reported amounts of other income and expenses during the
reporting period. Although these estimates are based on managements
best knowledge of current events and actions, actual results may
ultimately differ from those estimates. The managements estimates for
expected forfeitures of employee stock options and realization of carrying
value of investments represent certain of these particularly sensitive
estimates.
3.3. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments and deposits with an
original maturity of three months or less to be cash equivalents. Cash
equivalents are readily convertible into known amounts of cash and are
subject to an insignicant risk of changes in value. Cash comprises cash
on hand and balance with banks.
3.4. OTHER RECEIVABLES
Receivables that management has the intent and ability to hold for the
foreseeable future, or until maturity or payoff, are reported in the balance
sheets at outstanding amount less any charge-offs and allowance for
doubtful accounts. These amounts primarily consist of receivables from
related parties and are deemed collectible, in full.
3.5. INVESTMENTS
Investments in subsidiaries are carried at cost. Cost is determined based
on the cash paid and other liabilities assumed by the Company.
Consideration that has been settled by issue of the Companys shares is
also considered in arriving at the cost of investments.
3.6. INTEREST EXPENSE
Interest expense on inter corporate deposits availed from the Holding
Company is recorded on accrual basis.
3.7. STOCK COMPENSATION
The Company accounts for equity-settled options granted to employees in
accordance with ASC 718, Stock Compensation. ASC 718 addresses
the accounting for stock payment transactions in which an enterprise
receives employee services in exchange for equity instruments of the
enterprise or liabilities that are based on the fair value of the enterprises
equity instruments or that may be settled by the issuance of such equity
instruments.
In accordance with the provisions of ASC 718, stock compensation for the
awards is recognized on a straight line basis over the requisite service
period, which is generally the vesting period of the award.
ASC 718 requires the use of a valuation model to calculate the fair value of
stock awards. The Company elected to use the Black-Scholes-Merton pricing
model to determine the fair value of stock awards on the date of grant.
NOTE B CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of:
As at
March 31,
2014
USD
As at
March 31,
2014 INR
(Refer note K)
As at
March 31,
2013
USD
As at
March 31,
2013 INR
(Refer note K)
Balance in checking and
money market accounts 410,010 24,625,201 135,102 8,114,226
The balances of the Company are held in checking accounts and money
market accounts, which are non-interest bearing, with the banks
participating in the Transaction Account Guarantee Program of Federal
Deposit Insurance Corporation (FDIC). Under that program, through
March 2014, all non-interest-bearing transaction accounts are fully
guaranteed by the FDIC for the entire amount in the account.
As at the year ended March 31, 2014, the Company does not have cash
balances in excess of the federally insured amounts.
NOTE C INVESTMENTS
Investments as at year end comprise of investment in subsidiary companies:
As at
March 31,
2014
USD
As at
March 31,
2014 INR
(Refer note K)
As at
March 31,
2013
USD
As at
March 31,
2013 INR
(Refer note K)
Bristlecone India Limited 5,141,789 308,815,848 5,141,789 308,815,848
Bristlecone Inc. 23,214,889 1,394,286,233 23,214,889 1,394,286,233
Bristlecone UK Limited 4,134,053 248,291,223 4,134,053 248,291,223
BRISTLECONE LIMITED
845
outstanding options of Bristlecone Inc., aggregating to a total of 2,058,493
options were cancelled and fresh options were issued by Bristlecone
Limited under 2004 stock option plan based on the exchange criteria set
out in the transaction documents.
Options granted under these plans include incentive stock options and
non-statutory stock options. As per these plans, 25 per cent of the Shares
subject to the Option, vest on the one (1) year anniversary of the vesting
commencement date, and 1/48 of the options vest each month thereafter
on the same day of the month as the vesting commencement date,
subject to the grantee continuing to be an employee through each such
date. The term of each Option is stated in the Option Agreement;
provided, however, that the term shall be no more than 10 years from the
date of grant thereof. The exercise price of each option, (a) granted to an
employee who at the time of grant of such option, owns stock
representing more than 10 per cent of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, shall be no less than
110 per cent of the Fair Market Value per Share as determined by the
Board on the date of grant (b) granted to any other employee, the
exercise price shall be no less than 100 per cent of the Fair Market Value
per Share determined by the Board on the date of grant.
2. Bristlecone Limited Amended and Restated 2004 Stock Option Plan and
Bristlecone Limited 2005 Stock Option Plan for Bristlecone India
employees:
non-statutory stock options. As per these plans, 25 cent of the Shares
subject to the Option, vest on the completion of 12 calendar months
from the vesting commencement date, and no vesting shall occur prior
to the completion of such period of 12 months. Subsequently, 6.25 per
cent of the options vest on the completion of each 3 month period
thereafter until full vesting is completed, subject to the grantee
continuing to be an employee through each such date. The term of
each Option is stated in the Option Agreement; provided, however, that
the term shall be no more than 10 years from the date of grant thereof.
The exercise price of each option, (a) granted to an employee who at
the time of grant of such option, owns stock representing more than 10
per cent of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, shall be no less than 110 per cent of the Fair
Market Value per Share as determined by the Board on the date of
grant (b) granted to any other employee, the exercise price shall be no
less than 100 per cent of the Fair Market Value per Share determined
by the Board on the date of grant.
The following table summarizes information about the options issued under
different Plans:
Options
outstanding
Year ended
March 31,
2014
Weighted
average
exercise price
March 31,
2014
Options
outstanding
Year ended
March 31,
2013
Weighted
average
exercise price
March 31,
2013
Stock Option 2004 Plan
Outstanding at April 1 14,805 US$ 0.86
Granted
Exercised 7,248 US$ 0.86
Expired / Forfeited 7,557 US$ 0.86
Outstanding at March 31
Outstanding at April 1 1,367,188 US$ 0.10 1,070,001 US$ 0.10
Granted 460,500 US$ 0.10 655,000 US$ 0.10
Exercised 119,477 US$ 0.10 137,916 US$ 0.10
Expired / forfeited 129,774 US$ 0.10 219,897 US$ 0.10
Outstanding at March 31 1,578,437 1,367,188
Stock Option 2004
Amended Plan
Outstanding at April 1 350,750 US$ 0.10 360,750 US$ 0.10
As at
March 31,
2014
USD
As at
March 31,
2014 INR
(Refer note K)
As at
March 31,
2013
USD
As at
March 31,
2013 INR
(Refer note K)
Bristlecone (Malaysia)
SDN. BHD. 30,239 1,816,154 30,239 1,816,154
Bristlecone Consulting Ltd. 1 60 1 60
Bristlecone
International AG. 58,761 3,529,186 58,761 3,529,186
32,579,732 1,956,738,704 32,579,732 1,956,738,704
NOTE D DIVIDEND INCOME
During the current year, Bristlecone (Malaysia) SDN BHD paid a maiden
dividend of US$ 901,481 (INR 54,142,949). Dividend income is recognised by
the Company when received
NOTE E LOAN FROM THE HOLDING COMPANY
Loan comprises unsecured loan of US$ 18,140,000 (INR 1,089,488,400) [2013:
US$ 18,140,000 (INR 1,089,488,400)] being inter corporate deposits availed
from the Holding Company, received on various dates during the earlier years.
The loan bears an interest rate of 6% [2013: 6%] as at March 31, 2014 and is
repayable on demand. No demand has been raised by the Holding Company
till the date of the nancial statements.
NOTE F STOCKHOLDERS EQUITY
The Companys authorized share capital comprised of 8,200,000 Series A
Preferred Stock at par of US$ 0.001 each, 12,000,000 Series B Preferred Stock
at par of US$ 0.001 each and 25,000,000 Common Stock at par of US$ 0.001
each as at March 31, 2014 of which 7,299,977 Series A Preferred Stock,
6,920,000 Series B Preferred Stock and 8,925,446 Common Stock were issued
and outstanding as at March 31, 2014.
Conversion of Preferred Stock
Each Series A Preferred Stock and Series B Preferred Stock are entitled to be
converted, without payment of any additional consideration, into one fully paid
Common Stock.
Voting
Every member, present in person or by proxy, is entitled to one vote for each
Common Stock held. Each Series A Preferred Stockholder and Series B
Preferred Stockholder is entitled to votes derived based on ratio of conversion
between Preferred Stock and Common Stock on the record date of the Meeting
or if no record date is established, the date the poll is taken.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company,
holders of Series A & B Preferred Stock are entitled to an amount of one
hundred and fty percent (150%) of the original purchase price of such Stock
(as adjusted for any recapitalization, stock combinations, dividends, stock splits
and the like) in preference to any distribution to holders of Common Stock.
Additional Paid in Capital
Additional Paid in Capital comprises the capital contributions relating to the
issue of the Companys Common Stock and Preferred Stock and amounts adjusted
on accounting for the Group reorganization involving acquisition of stake in
various subsidiary companies and on accounting for stock compensation.
Stockholders notes receivable
Stockholders notes receivable comprises of non-recourse notes granted to a
director and accounted for in accordance with ASC 718-10-25.
NOTE G STOCK COMPENSATION
Bristlecone Limited has four Stock Option Plans:
1. Bristlecone Limited 2004 Stock Option Plan (arising out of conversion of
the earlier Bristlecone Inc. Existing Stock Option Plan) and Bristlecone
Limited 2008 Stock Option Plan:
Pursuant to the terms of the acquisition of Bristlecone Inc. on May 17,
2004 by Bristlecone Limited (the transaction), the then existing
BRISTLECONE LIMITED
846
Options
outstanding
Year ended
March 31,
2014
Weighted
average
exercise price
March 31,
2014
Options
outstanding
Year ended
March 31,
2013
Weighted
average
exercise price
March 31,
2013
Granted
Outstanding at March 31 265,750 350,750
Outstanding at April 1 67,400 US$ 0.10 69,550 US$ 0.10
Granted
Outstanding at March 31 45,400 67,400
The Company has a total option pool of 2,656,457 options as at March 31, 2014
towards all the above options and the unallocated options against this pool as
at March 31, 2014 is 766,870 options.
Additional information on outstanding options
Exercise price range for the options outstanding is given below:
Grant Price No of options outstanding
March 31, 2014 March 31, 2013
US$ 0.10 1,889,587 1,785,338
Options outstanding that have vested and are expected to vest as of March 31,
Outstanding
Options
Weighted
Average
Exercise
Price in
US$
Weighted
Average
Remaining
Contract Term
(in years)
Vested 1,030,031 0.10 6.67
Expected to vest 548,406 0.10 8.72
Outstanding
Options
Weighted
Average
Exercise
Price in
US$
Weighted
Average
Remaining
Contract Term
(in years)
Stock Option 2004
Amended Plan
Vested 265,750 0.10 1.68
Outstanding
Options
Weighted
Average
Exercise
Price in
US$
Weighted
Average
Remaining
Contract Term
(in years)
Vested 45,400 0.10 1.38
The aggregate intrinsic value is calculated based on the difference between the
fair value of the Companys shares on March 31, 2014 of US$ 0.07 and the
exercise price for all in-the-money options outstanding. Considering that the
exercise price of all options are higher than the fair value of the shares, there
are no in-the-money options at year end.
Stock compensation expense has been determined based on the fair values of
the options estimated on the date of grant using the Black-Scholes model with
the following assumptions:
Year ended
March 31,
2014
Dividend yield 0 percent
Expected life 7.31 years
Risk free interest rate 2.41 percent
Volatility 47.04 percent
The Black-Scholes option-pricing model was developed for estimating fair value
of traded options that have no vesting restrictions and are fully transferable.
Since options pricing models require use of subjective assumptions, changes
therein can materially affect fair value of the options. The options pricing models
do not necessarily provide a reliable measure of fair value of the options.
Additional disclosures pertaining to compensation expenses, net of costs
allocated to Group entities in accordance with FASB Interpretation No. 44
Accounting for Certain Transactions Involving Stock Compensation:
The Company has recognized stock compensation expense of US$ 2,530 (INR
151,952) [2013: US$ 7,857 (INR 471,891)] for the year ended March 31, 2014.
The Company received an amount of US$ 20,932 (INR 1,257,176) [2013: US$
20,025 (INR 1,202,702)] for exercise of stock options in the current year.
Unrecognized compensation expense associated under the fair value method
for shares expected to vest (unvested options net of expected forfeitures) as of
March 31, 2014 was approximately US$ 10,414 (INR 625,465) [2013: US$
11,820 (INR 709,909)] and is expected to be recognized over a weighted
average period of 2.59 years.
The aggregate fair value of all options granted during the year is US$ 6,920
(INR 415,615) and weighted average grant date fair value of options vested
during the year is US$ 2,530 (INR 151,952).
NOTE H CONTINGENCIES
The Company may be subject to legal claims in the normal course of business.
Management believes that there are no such claims that would be material to
the nancial condition or results of operations.
NOTE I RELATED PARTY TRANSACTIONS
The Company had the following transactions with its parent, subsidiaries and
key management personnel:
Holding Company
March 31,
2014
USD
March 31,
2014 INR
(Refer note K)
March 31,
2013
USD
March 31,
2013 INR
(Refer note K)
Accrued Interest
during the year 1,103,517 66,277,231 1,103,517 66,277,231
Interest payable as at
year end 5,378,727 323,046,344 4,868,310 292,390,699
Interest paid during
the year 591,220 35,508,673 275,494 16,546,170
Principal amount
repayable as at year
end 18,140,000 1,089,488,400 18,140,000 1,089,488,400
Subsidiaries
Bristlecone Inc.
March 31,
2014
USD
March 31,
2014 INR
(Refer note K)
March 31,
2013
USD
March 31,
2013 INR
(Refer note K)
Reimbursement of
expenses 635,200 38,150,112 467,500 28,078,050
Amount repayable as
at year end
3,217,583 193,248,035 2,582,383 155,097,923
BRISTLECONE LIMITED
847
Bristlecone (Malaysia) Sdn Bhd
March 31,
2014
USD
March 31,
2014 INR
(Refer note K)
March 31,
2013
USD
March 31,
2013 INR
(Refer note K)
Dividend received
during the year 901,481 54,142,949
Director
March 31,
2014
USD
March 31,
2014 INR
(Refer note K)
March 31,
2013
USD
March 31,
2013 INR
(Refer note K)
Interest income during
the year 6,855 411,711 6,855 411,711
Amount receivable as
at year end 43,494 2,612,250 36,639 2,200,538
Stockholders notes
receivable 137,091 8,233,685 137,091 8,233,685
NOTE J FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the Companys cash equivalents, current assets and
current liabilities approximated their fair values due to their short maturities.
NOTE K CONVENIENCE TRANSLATION
For the convenience of the readers, including the investors of the Holding
Company, the nancial statements for the year ended March 31, 2014 along
with comparatives for the year ended March 31, 2013 have been translated into
Indian Rupees (INR) at the average of the telegraphic transfer buying and
selling rates quoted by the Mumbai Branch of State Bank of India on March 28,
2014 of 1 US$ = INR 60.06. The convenience translation should not be
construed as a representation that the Indian Rupee amounts or the
US$ amounts referred to in these nancial statements have been, could have
been, or could in the future be, converted into US$ or INR, as the case may be,
at this or at any other rate of exchange, or at all.
NOTE L SUBSEQUENT EVENTS
The Company has evaluated subsequent events through April 29, 2014, the
date these nancial statements were available to be issued. The Company is
not aware of any additional subsequent events that would require recognition or
disclosure in the nancial statements.
BRISTLECONE INC.
848
Your Directors are pleased to present their report together with the Audited Accounts of your Company for the period ended
31
st
March, 2014.
March 31, 2014
USD
Year ended
March 31, 2014
INR
Year ended
March 31, 2013
USD
Year ended
March 31, 2013
INR
Revenues ........................................................ 27,560,791 1,655,301,107 31,307,771 1,880,344,726
Prot before tax .............................................. 908,991 54,593,999 2,361,764 141,847,545
Prot after tax .................................................. 893,991 53,693,099 2,304,770 138,424,485
Review of Operations:
Revenues from Operations for the year ended 31
st
March, 2014 was $27.56m (INR 1,655.30m) as compared to $31.31m
(INR 1,880.34m) for the same period in the previous year. The reduction in revenues had an adverse impact on the Prot after tax.
Prots after tax for the year ended 31
st
March, 2014 which was at $0.89m (INR 53.69m) as compared to $2.30m (INR 138.42m)
in the previous year.
Outlook for the current year:
The Company expects an improvement in the economic climate in North Americas and introduction of new service offerings to
have a positive impact on its performance and improved results during the current year.
Acknowledgement:
The Board acknowledges the continued support the Company received from its employees and its holding company, Bristlecone
Limited.
Ulhas N. Yargop
Chairman
Mountain View, CA, USA
1
st
May, 2014
BRISTLECONE INC.
849
Board of Directors and Shareholders
Bristlecone, Inc.
Bristlecone, Inc. (a California Corporation and wholly owned
subsidiary of Bristlecone Limited), which comprise the balance
sheets as of March 31, 2014 and 2013, and the related
statements of comprehensive income, cash ows and changes
in equity for each of the two years in the period ended March
31, 2014, and the related notes to the nancial statements.
maintenance of internal control relevant to the preparation and
fair presentation of nancial statements that are free from
statements based on our audits. We conducted our audits in
misstatement.
considers internal control relevant to the entitys preparation
and fair presentation of the nancial statements in order to
design audit procedures that are appropriate in the
Accordingly, we express no such opinion. An audit also
used and the reasonableness of signicant accounting
opinion.
Opinion
Bristlecone, Inc. as of March 31, 2014 and 2013, and the
results of their operations and their cash ows for each of the
two years in the period ended March 31, 2014, in accordance
with accounting principles generally accepted in the United
States of America.
Yours faithfully,
(Formerly Grant Thornton India)
16
th
Floor, Tower II
Indiabulls Finance Centre
S B Marg, Elphinstone (W)
Mumbai 400013, India
T +91 22 6626 2600
F +91 22 6626 2601
www.grantthornton.in
BRISTLECONE INC.
850
BALANCE SHEETS
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31, 2013
US$
As at
March 31, 2013
INR
(refer Note Q)
ASSETS
Current assets
Cash and cash equivalents ............................................... 4,246,643 255,053,379 6,203,310 372,570,799
Accounts receivable:
Due from related parties ................................................ 769,575 46,220,674 686,104 41,207,406
Others ............................................................................. 5,874,242 352,806,975 4,605,091 276,581,765
Unbilled revenue ................................................................ 385,079 23,127,845 228,180 13,704,491
Other current assets:
Due from related parties ................................................ 3,387,310 203,441,838 3,313,220 198,991,993
Others ............................................................................. 802,205 48,180,432 973,476 58,466,969
Total current assets ......................................................... 15,465,054 928,831,143 16,009,381 961,523,423
Non-current assets
Property, equipment and software, net ............................ 319,821 19,208,449 434,123 26,073,427
Other assets ....................................................................... 123,588 7,422,695 123,588 7,422,695
Total non-current assets 443,409 26,631,144 557,711 33,496,122
Total assets ....................................................................... 15,908,463 955,462,287 16,567,092 995,019,545
Current liabilities
Accounts payable:
Due to related parties .................................................... 2,913,757 175,000,245 5,063,800 304,131,828
Others ............................................................................. 1,076,090 64,629,965 353,393 21,224,784
Employee related liabilities ................................................ 2,257,027 135,557,042 2,510,531 150,782,492
Accrued expenses and other current liabilities ................ 1,268,015 76,156,981 996,053 59,822,943
Obligations under capital leases....................................... 155,448 9,336,207 204,221 12,265,513
Deferred rent ...................................................................... 19,319 1,160,299 11,165 670,570
Short term borrowing ........................................................ 1,000,000 60,060,000 1,000,000 60,060,000
Total current liabilities ..................................................... 8,689,656 521,900,739 10,139,163 608,958,130
Obligations under capital leases....................................... 97,808 5,874,349 196,518 11,802,871
Deferred rent ...................................................................... 7,357 441,861 26,676 1,602,160
Total non-current liabilities 105,165 6,316,210 223,194 13,405,031
Total liabilities ................................................................... 8,794,821 528,216,949 10,362,357 622,363,161
Stockholders equity
Series A Preferred stock, no par value............................. 774,518 46,517,551 774,518 46,517,551
Series B Preferred stock, no par value ............................ 5,939,606 356,732,736 5,939,606 356,732,736
Common stock, no par value ........................................... 136,664 8,208,040 136,664 8,208,040
Additional paid-in capital ................................................... 17,601,250 1,057,131,075 17,586,334 1,056,235,220
Accumulated decit ........................................................... (17,338,396) (1,041,344,064) (18,232,387) (1,095,037,163)
Total stockholders equity ............................................... 7,113,642 427,245,338 6,204,735 372,656,384
Total liabilities and stockholders equity ...................... 15,908,463 955,462,287 16,567,092 995,019,545
BRISTLECONE INC.
851
STATEMENTS OF COMPREHENSIVE INCOME
Year ended
March 31, 2014
US$
Year ended
March 31, 2014
INR
(refer Note Q)
Year ended
March 31, 2013
US$
Year ended
March 31, 2013
INR
(refer Note Q)
Revenues ........................................................................... 27,560,791 1,655,301,107 31,307,771 1,880,344,726
Operating expenses
Cost of revenues ................................................................ 18,794,217 1,128,780,673 21,413,493 1,286,094,390
Selling, general and administrative expenses ................... 7,590,260 455,871,016 7,274,261 436,892,116
Depreciation and amortization ........................................... 207,518 12,463,531 191,735 11,515,604
Total operating expenses ................................................. 26,591,995 1,597,115,220 28,879,489 1,734,502,110
Operating Prot ................................................................. 968,796 58,185,887 2,428,282 145,842,616
Interest expense ................................................................. 59,805 3,591,888 66,518 3,995,071
Net prot before tax ......................................................... 908,991 54,593,999 2,361,764 141,847,545
Income tax
Current tax expense ........................................................... 15,000 900,900 56,994 3,423,060
Profit for the year and total comprehensive income ... 893,991 53,693,099 2,304,770 138,424,485
BRISTLECONE INC.
852
Year ended
March 31, 2014
US$
Year ended
March 31, 2014
INR
(refer Note Q)
Year ended
March 31, 2013
US$
Year ended
March 31, 2013
INR
(refer Note Q)
Net prot ............................................................................ 893,991 53,693,099 2,304,770 138,424,485
Adjustments to reconcile net prot to net cash from
operating activities
Depreciation and amortization ........................................... 207,518 12,463,531 191,735 11,515,604
Loss on disposal of property and equipment ................... 18 1,081 167 10,030
Provision for doubtful debts ............................................... 8,781 527,387 47,492 2,852,370
Stock compensation expense ............................................
14,916 895,855 25,549 1,534,473
(Increase) in accounts receivable from related parties ..... (83,471) (5,013,268) (185,865) (11,163,051)
(Increase)/Decrease in accounts receivable and
unbilled revenue ................................................................. (1,434,831) (86,175,950) 2,750,420 165,190,225
(Increase) in other current assets, related parties ............ (74,090) (4,449,845) (481,564) (28,922,734)
(Increase)/Decrease in other current assets, others ......... 171,271 10,286,537 (227,403) (13,657,824)
(Decrease) in accounts payable, related parties ................... (2,150,043) (129,131,583) (220,094) (13,218,846)
Increase/(Decrease) in accounts payable, others ............. 722,697 43,405,181 (464,023) (27,869,221)
Increase in other current liabilities ..................................... 7,293 438,018 51,849 3,114,052
Net cash (used in)/from operating activities ................ (1,715,950) (103,059,957) 3,793,033 227,809,563
Purchase of property, equipment and software ................ (30,222) (1,815,133) (85,875) (5,157,653)
Net cash used in investing activities ............................. (30,222) (1,815,133) (85,875) (5,157,653)
Repayment of term loan ..................................................... (497,309) (29,868,379)
Finance lease payments .................................................... (210,495) (12,642,330) (127,728) (7,671,343)
Net cash used in nancing activities ............................. (210,495) (12,642,330) (625,037) (37,539,722)
Net (decrease)/increase in cash and cash equivalents .... (1,956,667) (117,517,420) 3,082,121 185,112,188
Cash and cash equivalents at the beginning of the year 6,203,310 372,570,799 3,121,189 187,458,611
Cash and cash equivalents at the end of the year ...... 4,246,643 255,053,379 6,203,310 372,570,799
Interest paid ........................................................................ 59,805 3,591,888 66,518 3,995,071
Income taxes paid .............................................................. 13,112 787,507 53,508 3,213,690
Assets acquired under capital lease .................................. 63,012 3,784,501 339,582 20,395,295
BRISTLECONE INC.
853
Amounts in US$
Preferred stock Common stock Additional
paid-in
capital
Accumu-
lated
decit
Total
stock-
holders
equity
Authorized Issued and outstanding Authorized Issued and outstanding
Shares Amount Shares Amount Shares Amount Shares Amount Amount Amount Amount
Balance as at
April 1, 2012 4,494,500 3,615,535 6,714,124 30,000,000 8,492,157 136,664 17,560,785 (20,537,157) 3,874,416
Stock compensation
expense 25,549 25,549
Prot for the year 2,304,770 2,304,770
Balance as at
March 31, 2013 4,494,500 3,615,535 6,714,124 30,000,000 8,492,157 136,664 17,586,334 (18,232,387) 6,204,735
Stock compensation
expense 14,916 14,916
Prot for the year 893,991 893,991
Balance as at
March 31, 2014 4,494,500 3,615,535 6,714,124 30,000,000 8,492,157 136,664 17,601,250 (17,338,396) 7,113,642
Amounts in INR (Refer Note Q)
Preferred stock Common stock Additional
paid-in
capital
Accumu-
lated
decit
Total
stock-
holders
equity
Authorized Issued and outstanding Authorized Issued and outstanding
Shares Amount Shares Amount Shares Amount Shares Amount Amount Amount Amount
Balance as at
April 1, 2012 4,494,500 3,615,535 403,250,287 30,000,000 8,492,157 8,208,040 1,054,700,747 (1,233,461,649) 232,697,425
Stock compensation
expense 1,534,473 1,534,473
Prot for the year 138,424,486 138,424,486
Balance as at
March 31, 2013 4,494,500 3,615,535 403,250,287 30,000,000 8,492,157 8,208,040 1,056,235,220 (1,095,037,163) 372,656,384
Stock compensation
expense 895,855 895,855
Prot for the year 53,693,099 53,693,099
Balance as at
March 31, 2014 4,494,500 3,615,535 403,250,287 30,000,000 8,492,157 8,208,040 1,057,131,075 (1,041,344,064) 427,245,338
BRISTLECONE INC.
854
NOTE A - BACKGROUND INFORMATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
1. NATURE OF OPERATIONS
Bristlecone, Inc. (the Company) is engaged in providing technology
solutions and consulting services, with operations primarily in the United
States of America (the US or USA). The Companys primary focus is on
providing supply chain services ranging from supply chain strategy and
network design to supply chain system implementations. The Company
also provides application outsourcing services, data management
services and development and integration services to independent
software vendors.
The Company was incorporated under the laws of the State of California
in 1998. In May 2004, the Company became a wholly-owned subsidiary of
Bristlecone Limited, a Cayman Island Company. The Companys then
stockholders and stock option holders, in exchange for their stock interest
in Bristlecone, Inc., received cash, common stock, preferred stock,
warrants and common stock options of Bristlecone Limited. Mahindra &
Mahindra Limited, an Indian Company is the Companys ultimate parent.
A summary of the signicant accounting policies applied in the
preparation of the accompanying nancial statements is as follows:
3.1. OVERALL CONSIDERATIONS
The accompanying nancial statements have been prepared on a going
concern basis under the historical cost convention and on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America.
These nancial statements have been presented in United States Dollars
(US$), which is the functional and reporting currency of the Company.
3.2. USE OF ESTIMATES
In preparing the Companys nancial statements in conformity with
accounting principles generally accepted in the United States of America,
the Companys management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
nancial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on
managements best knowledge of current events and actions, actual
results may ultimately differ from those estimates. The managements
estimates for allowance for uncollectible amounts, useful lives of assets,
efforts to completion for xed price projects and realization of deferred tax
assets represent certain of these particularly sensitive estimates.
3.3. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION
Transactions in foreign currencies are translated at the rate of exchange
prevailing on the date of the transaction. Monetary assets and liabilities in
foreign currencies are translated at the rate of exchange prevailing at the
balance sheet date. All foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary
assets and liabilities at year-end are recorded in the statement of
3.4. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Cash equivalents
are readily convertible into known amounts of cash and are subject to an
insignicant risk of changes in value. Cash comprises balance held with
banks.
3.5. ACCOUNTS RECEIVABLE
Accounts receivable that management has the intent and ability to hold
for the foreseeable future, or until maturity or payoff, are reported in the
balance sheets at outstanding amount less any charge-offs and the
allowance for doubtful accounts. Accounts receivable primarily consists of
receivables from customers in United States of America. The Company
performs ongoing credit evaluations of its customers, and generally
extends credit without requiring collateral. The Company maintains an
allowance for doubtful accounts based on managements expectations of
future losses, which is determined based on historical experience and
current economic environment.
Accounts are charged to bad debt expense when they are deemed
uncollectible based upon managements periodic review of the accounts.
3.6. PROPERTY, EQUIPMENT AND SOFTWARE
Property, equipment and software are stated at historical cost less
accumulated depreciation and amortization.
Assets under capital lease obligations are recorded at lower of the present
value of the minimum lease payments or the fair market value of the
leased asset, at the inception of the lease.
Depreciation/amortization is calculated on the straight-line method over
the estimated useful life of the respective assets. Assets under capital
leases and leasehold improvements are amortized over lower of their
estimated useful lives or the term of the lease.
The Company has determined the estimated useful lives of assets for
depreciation/amortization purposes as follows:
Computer 3 5 years
Furniture and xtures 5 7 years
Ofce equipments 5 years
Software 3 years
Leased furniture and xtures 6 years
Leased Computers 3 years
Leasehold improvements Over the shorter of primary lease period or
the useful life of the asset
Expenditure for maintenance and repairs are expensed as incurred. When
assets are retired or otherwise disposed of, the cost of the asset and
related accumulated depreciation are eliminated from the nancial
records. Any gain or loss on disposition is credited or charged to the
statement of comprehensive income.
3.7. IMPAIRMENT OF LONG LIVED ASSETS
Long-lived assets to be held and used are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of such assets may not be recoverable. Such assets are
considered to be impaired if the carrying amount of the assets is higher
than the future undiscounted net cash ows expected to be generated
from the assets. The impairment amount to be recognized is measured by
the amount by which the carrying value of the assets exceeds its fair
value. Management believes that there is no impairment loss on any of
the long lived assets as of March 31, 2014.
3.8. REVENUE RECOGNITION
Revenue is recognized when the provision of services is complete and
there are either no unfullled obligations on the Company or any
obligations are inconsequential or perfunctory and will not affect the
customers nal acceptance of the services including the satisfaction of
the following criteria: (i) persuasive evidence of an arrangement exists; (ii)
delivery has occurred; (iii) the fee is xed and determinable; and (iv)
collectability is reasonably assured.
Revenue from Services
Revenues with respect to time and material contracts are recognized as
related costs are incurred and services are performed in accordance with
the terms of the specic contracts.
Revenues from xed-price contracts are recognized in accordance with
percentage of completion method measured by the percentage of man-
hours incurred to date in relation to the estimated total man-hours for
each of such contracts. This method is used because the management
considers man-hours to be the best available measure of progress on
these contracts. Provisions for estimated losses on uncompleted contracts
are recorded in the period in which such losses become probable based
on current contract estimates.
BRISTLECONE INC.
855
Amounts included in the nancial statements, which relate to recoverable
costs and accrued margins, if any, not yet billed on contracts are
classied as Unbilled revenue. Billings on uncompleted contracts in
excess of accrued cost and accrued margins, if any, are classied in
current liabilities under the heading Unearned revenue.
Revenue from Multiple element arrangements
The Company also derives revenues from projects involving multiple-
element revenue arrangements, which may include any combination of
services, software, hardware and/or nancing. The revenue from such
projects is accounted for in accordance with the Financial Accounting
Standards Boards (FASB) Accounting Standard Codication (ASC)
605-25, Multiple-Element Arrangements. To the extent that a deliverable
in a multiple-element arrangement is subject to specic guidance, such as
software which is subject to ASC 985-605, Software: Revenue
recognition on whether and/or how to separate multiple deliverable
arrangements into separate units of accounting (separability) and how to
allocate the arrangement consideration among those separate units of
accounting (allocation), that deliverable is accounted for in accordance
with such specic guidance. For all other deliverables in multiple-element
arrangements, the separability and allocation is assessed on the basis of
principles enumerated in ASC 605-25.
Revenue from Hosting arrangements
Hosting arrangements entered into by the Company typically do not have
a software element. After the arrangement consideration has been
allocated to each unit of accounting, the Company applies the appropriate
revenue recognition method for each unit based on the nature of the
arrangement and the services included in each unit of accounting.
All deliverables that do not meet the separation criteria of ASC 605-25 are
combined into one unit of accounting and the most appropriate revenue
recognition method is applied. The Company has adopted a policy of
combining the setup fee and related services together and recognizing
them over the contractual life or the expected customer life, whichever is
longer.
Revenue from Gross versus Net
The Company evaluates the criteria outlined in ASC 605-45, Principal
Agent Considerations, in determining whether it is appropriate to record
the gross amount of software consulting revenues and related costs or the
net amount of consultancy charges earned as a sub-contractor. In
contracts with customers, the Company is not the primary obligor and
hence does not take contractual risk and the amounts earned as
consultancy charges are based on a xed rate. Accordingly, the Company
does not reect the revenues or the cost of sales for acting as the ow-
through entity for providing these services, and instead presents these
amounts on a net basis. During the years ended March 31, 2014 and
March 31, 2013, the Company has not entered into any such transactions
that will require recognition of revenue on net basis in accordance with
ASC 605-45 Principal Agent Considerations.
Reimbursements
In accordance with ASC 605-45, Principal Agent Considerations, the
Company has accounted for reimbursements received for out-of pocket
expenses incurred on a gross basis in the statements of comprehensive
income. The Company typically incurs travel related costs that are billed
to and reimbursed by customers. Accordingly, revenues include
reimbursements of out-of-pocket expenses amounting to US$ 1,571,140
(INR 94,362,653) [2013: US$ 2,147,012 (INR 128,949,548)].
3.9. COST OF REVENUES
Cost of revenues comprises salaries and employee benets, stock
compensation expense, sub-contractor fees, off-shore consultancy
charges, project related travel and other costs, including those
reimbursed by customers.
3.10. EMPLOYEE BENEFITS
Contributions to dened contribution plans are charged to statements of
comprehensive income in the year in which they accrue.
The Companys liability towards compensated absences is determined on
an arithmetical basis for the entire unavailed vacation balance standing to
the credit of each employee as at year-end.
The Company has a 401(k) plan that provides dened contribution
retirement benets for all the employees. Participants may contribute
a portion of their compensation to the plan, subject to the limitations
under the Internal Revenue Code. The Companys contributions to the
plan are at the discretion of the Board and expense is recorded in the
year to which such contributions pertain.
3.11. STOCK COMPENSATION
The employees of the Company participate in various stock compensation
plans which are operated by the Holding Company, based on which the
employees of the Company have been granted stock options of the
Holding Company. The Company accounts for stock compensation in
accordance with FASB Interpretation No. 44 Accounting for Certain
Transactions Involving Stock Compensation.
The Company applies the same accounting principles as the Holding
Company for recording stock compensation in respect of stock of the
Holding Company granted to employees of the Company for the
purposes of reporting in the separate nancial statements of the
Company. An amount equal to such compensation expense for the year is
recorded as a capital contribution in stockholders equity in the separate
nancial statements of the Company.
The Company accounts for the equity-settled options granted to its
employees in accordance with ASC 718, Stock Compensation. ASC 718
addresses the accounting for stock based compensation transactions in
which an enterprise receives employee services in exchange for equity
instruments of the enterprise or liabilities that are based on the fair value
of the enterprises equity instruments or that may be settled by the
issuance of such equity instruments.
In accordance with the provisions of ASC 718, stock compensation for all
awards granted, modied or settled on or after April 1, 2006, that the
Company expects to vest is recognized on a straight line basis over the
requisite service period, which is generally the vesting period of the
award.
ASC 718 requires the use of a valuation model to calculate the fair value
of stock-based awards. The Company elected to use the Black- Scholes-
Merton pricing model to determine the fair value of stock-based awards
on the date of grant.
3.12. INCOME TAXES
The Company applies the asset and liability method of accounting for
income taxes as described in ASC 740, Income Taxes. Under this
method, deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the nancial statements
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using tax rates expected
to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. Valuation allowances are
recognized to reduce the deferred tax assets to an amount that is more
likely than not to be realized. In assessing the likelihood of realization,
management considers estimates of future taxable income and the effect
of temporary differences.
Further ASC 740-10 requires the Company to recognize a provision for
uncertainty in income taxes based on minimum recognition threshold.
The Company applies a two-step approach for recognizing and
measuring uncertain tax positions. The rst step is to evaluate the tax
position for recognition by determining, based on the technical merits,
that the position will be more likely than not sustained upon examination.
The second step is to measure the tax benet as the largest amount of the
tax benet that is greater than 50% likely of being realized upon
settlement.
3.13. LEASES
The Company classies all leases at the inception date as either a capital
lease or an operating lease. Lease of assets under which there is transfer
of substantially the entire risk and rewards incident to ownership as per
ASC 840 Leases are classied as capital leases otherwise all leases are
classied as operating lease.
BRISTLECONE INC.
856
Assets under capital leases are capitalized and lease payments are
appropriated towards the lease obligation and interest on the obligation
amount.
Lease rental expenses on operating leases are charged to expense over
the lease term as they become payable. Certain operating lease
agreements provide for scheduled rent increases over the lease term.
Rental expense for these leases is recognized on a straight-line basis over
the primary lease term.
3.14. CONTINGENCIES
The Company evaluates contingencies as per its assessments of
probable, reasonably possible and remote, as per ASC 450
Contingencies.
NOTE B - CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31, 2013
US$
As at
March 31, 2013
INR
(refer Note Q)
Balance in checking
and money market
accounts 4,246,643 255,053,379 6,203,310 372,570,799
Cash balances of the Company are held in checking accounts, which are non-
interest bearing, with the banks participating in the Transaction Account
Guarantee Program of Federal Deposit Insurance Corporation (FDIC). Under
that program, through March 2014, all non-interest-bearing transaction accounts
are guaranteed by the FDIC for US$ 250,000 per tax ID for State Bank of India,
California and for full amount for Silicon Valley Bank.
As at March 31, 2014 the Company has US$ 2,959,011 (INR 177,718,201)
[2013: US$ 5,001,487 (INR 300,389,309)] in balances in excess of the federally
insured amounts.
NOTE C - ACCOUNTS RECEIVABLE
The allowance for uncollectible amounts reected the following activity during
the year:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31,2013
US$
As at
March 31,2013
INR
(refer Note Q)
Balance at the
beginning 278,021 16,697,942 230,529 13,845,571
Less: Adjusted with
doubtful receivables (280,009) (16,817,341)
Add: Allowance
created during the
year 8,781 527,387 47,492 2,852,370
6,793 407,988 278,021 16,697,941
NOTE D - OTHER CURRENT ASSETS
Other current assets comprise of the following:
As at
March 31,2014
US$
As at
March 31,2014
INR
(refer Note Q)
As at
March 31,2013
US$
As at
March 31,2013
INR
(refer Note Q)
Prepaid expenses 401,093 24,089,646 553,730 33,257,024
Taxes paid/withheld
at source, net 130,790 7,855,247 173,777 10,437,047
Others 270,322 16,235,539 245,969 14,772,898
802,205 48,180,432 973,476 58,466,969
NOTE E - PROPERTY, EQUIPMENT AND SOFTWARE, NET
Property, equipment and software consisted of the following:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31, 2013
US$
As at
March 31, 2013
INR
(refer Note Q)
Computers 403,519 24,235,351 397,427 23,869,466
Furniture and xtures 47,371 2,845,103 45,779 2,749,487
Ofce equipments 6,809 408,949 6,809 408,949
Software 55,819 3,352,489 55,819 3,352,489
Lease hold
improvements 42,651 2,561,619 22,349 1,342,281
Capital Lease -
Computers 437,722 26,289,583 439,545 26,399,072
Capital Lease -
Furniture and xtures 34,439 2,068,406 34,439 2,068,406
Capital Lease -
Ofce Equipments 278,803 16,744,908 278,803 16,744,908
1,307,133 78,506,408 1,280,970 76,935,058
Less: Accumulated
depreciation and
amortization (987,312) (59,297,959) (846,847) (50,861,631)
319,821 19,208,449 434,123 26,073,427
Depreciation and amortization expense for the year ended March 31, 2014
was US$ 207,518 (INR 12,463,531) and March 31, 2013 was US$ 191,735
(INR 11,515,604).
NOTE F - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities comprised of the following:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31,2013
US$
As at
March 31,2013
INR
(refer Note Q)
Unearned revenue 780,664 46,886,680 415,531 24,956,792
Provision for tax 96,674 5,806,240 137,773 8,274,646
Other accruals 390,677 23,464,061 442,749 26,591,505
1,268,015 76,156,981 996,053 59,822,943
NOTE G - SHORT TERM BORROWING
Short term borrowing comprised of the following:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31, 2013
US$
As at
March 31, 2013
INR
(refer Note Q)
Line of credit 1,000,000 60,060,000 1,000,000 60,060,000
1,000,000 60,060,000 1,000,000 60,060,000
The Company has a revolving line of credit amounting to US$ 1,500,000 (INR
90,090,000) from State Bank of India (California) which is due for renewal in one
year from the last renewal date i.e. February 28, 2015. The terms of the Line of
Credit provide a ceiling for the total limit to the lower of US$ 1,500,000 or
aggregate of eligible receivables. It bears an interest rate of 5.25% which is
200 basis points above WSJ Prime with a oor rate of 3.25% p.a. [WSJ Prime
as at March 31, 2014] and also carries a commitment charge of 0.25% on the
unutilized portion of the facility, if the unutilized portion exceeds 60% during any
month.
As of March 31, 2014, the Company has drawn US$ 1,000,000
(INR 60,060,000) [2013: US$ 1,000,000 (INR 60,060,000)] against the said line
of credit.
BRISTLECONE INC.
857
The line of credit is secured by a charge on the current assets of the Company
and requires the banks approval, prior to distribution of dividends during any
year, in excess of 50 per cent of the net income for the year. The agreement
does not contain any nancial covenants.
The remaining availability on the line of credit was US$ 500,000
(INR 30,030,000) as at March 31, 2014 and US$ 500,000 (INR 30,030,000) as at
March 31, 2013.
Interest expense for the year ended March 31, 2014 towards the line of credit
was US$ 52,938 (INR 3,179,456) [2013: US$ 66,518 INR (3,995,071)].
NOTE H - INCOME TAXES
Income tax expense for the year comprises of the following:
Year ended
March 31, 2014
US$
Year ended
March 31, 2014
INR
(refer Note Q)
Year ended
March 31, 2013
US$
Year ended
March 31, 2013
INR
(refer Note Q)
Current tax 15,000 900,900 56,994 3,423,060
15,000 900,900 56,994 3,423,060
The difference between the amounts of income tax benet that would result
from applying domestic federal statutory income tax rates to the net prot
and the net deferred tax assets is related to certain nondeductible expenses,
state income taxes and the change in the valuation allowance. Permanent
differences are primarily on account of non-deductible meals and entertainment
expenses.
Following is the summary of deferred tax assets and liabilities:
As at
March 31, 2014
US$
As at
March 31, 2014
INR
(refer Note Q)
As at
March 31, 2013
US$
As at
March 31, 2013
INR
(refer Note Q)
Deferred tax assets
non current
Net operating
loss carry
forwards and tax
credits 7,242,984 435,013,619 7,414,269 445,300,996
Sub-total 7,242,984 435,013,619 7,414,269 445,300,996
Deferred tax assets
current
Allowance for
bad debts 2,717 163,183 111,208 6,679,152
Accrued Payroll
(bonus and
vacation) 894,657 53,733,099 1,020,628 612,989,118
Sub-total 897,374 53,896,282 1,131,836 619,668,270
Valuation allowance (8,134,876) (488,580,653) (8,483,386) (509,512,163)
Total deferred tax asset 5,482 329,249 62,719 3,766,903
non current
Property,
equipment and
software (5,482) (329,249) (62,719) (3,766,903)
Net deferred tax asset
As at March 31, 2014, the Company had US$ 18,107,460 (INR 1,087,534,047)
[2013: US$ 18,612,765 (INR 1,117,882,665)] in US Federal Net Operating Loss
(NOL) carryovers, including US$ 119,702 (INR 7,189,302) [2013:
US$ 2,770,425 (INR 166,391,725) of Mahindra Consulting Inc. (subject to
certain limitations under US tax laws), which can be carried forward for future
utilization within 20 years subject to certain limitations under US tax laws.
As at March 31, 2014, the Company also had US$ 16,560,306 (INR 994,611,978)
[2013: US$ 17,247,337 (INR 1,035,875,060)] in State Operating Losses carried
forward, which can be carried forward for future utilization within 5-17 years.
Additionally, the Company has federal and state tax credit carry forwards
of approximately US$ 254,583 (INR 15,427,730) and US$ 267,784
(INR 16,227,710) [2013: US$ 254,583 (INR 15,427,730) and US$ 267,784
(INR 16,227,710)]. The federal tax credit carry forward expire beginning in 2023
and state tax credit carry forward have no expiration.
The Company earned prots for the scal year ended March 31, 2014 and
March 31, 2013 after incurring losses over several years. At the current date,
although the Company remains optimistic, until the nancial performance of the
Company stabilizes, it is likely that the deferred tax asset arising from the
carry forward of federal and state net operating losses and tax credits will not
be realized and therefore a valuation allowance of US$ 8,134,876
(INR 488,580,653) [2013: US$ 8,483,386 (INR 509,512,163 )], representing a net
change of US$ (505,305) [INR (30,348,618)], was recorded against the net
deferred tax assets on Net Operating loss (NOL) carry forwards, accrued
expenses and bad debts allowance.
The carry forward of the NOLs prior to the date of change of ownership will
be impacted by Sec 382 limitation under the Internal Revenue Code. In terms
of this limitation, while the carry forward of all NOLs will not be restricted,
there will be a limitation on the annual amounts available for set-off under the
Code, (currently computed as the value of Bristlecone Inc. prior to the
Transaction *4.45%).
No statutes have been extended on any of the Companys federal income tax
lings. The statute of limitations on the Companys March 2011, March 2012
and March 2013 Federal income tax returns will expire on December 15, 2014,
December 15, 2015 and December 15, 2016, respectively.
The Company is currently not under examination by any state authority for
income tax purposes and no statutes of limitations for state income tax lings
have been extended.
As of March 31, 2014 the Company does not have any uncertain tax position in
respect of unrecognized tax positions as per ASC 740-10.
NOTE I - STOCKHOLDERS EQUITY
The Companys authorized stock comprised of 4,494,500 preferred stock at no
par value and 30,000,000 common stock at no par value as at March 31, 2014
of which 865,540 preferred stock Series A, 2,749,995 preferred stock series B and
8,492,157 common stock were issued and outstanding as at March 31, 2014.
Conversion of preferred stock
Each preferred stock series A and preferred stock series B are entitled to be
converted, without payment of any additional consideration, into one fully paid
common stock.
Voting
Every holder of preferred stock series A and preferred stock series B are
entitled to one vote for each common stock held into which such Series A or
Series B preferred stock could be converted.
Liquidation
In the event of a liquidation, dissolution or winding up of the Company:
(a) holders of Preferred Stock series A and Preferred Stock series B, shall on
a pari passu basis, in preference to any distribution to holders of Common
Stock receive an amount per stock equal to (i) US$ 0.94 for each
outstanding stock of preferred stock Series A and (ii) US$ 2.21 for each
outstanding stock of preferred stock Series B subject to appropriate
adjustments for stock splits, stock dividends, combinations or
recapitalization etc. If upon the occurrence of such event the assets
available for distribution shall be insufcient to permit the payment of the
full aforesaid preferential amounts, then the available funds shall be
distributed rateably in proportion to the preferential amount each such
holder is otherwise entitled to receive pursuant to this clause.
(b) Upon the completion of distribution required by clause (a) above, the
remaining assets available for distribution shall be distributed among the
holders of Series A Preferred Stock, Series B Preferred Stock and
Common Stock pro rata based on the number of stocks of Common
Stock held by each, provided that the Common Stock holders shall not
receive any distribution unless the Series A Preferred Stock holders have
received an aggregate of US$ 0.47 per stock and the Series B Preferred
Stock holders have received an aggregate of US$ 1.11 per stock (not
including amounts paid pursuant to clause (a) above).
BRISTLECONE INC.
858
NOTE J - EMPLOYEE BENEFIT PLANS
Accrual for compensated absences at current employee compensation rates
during the year ended March 31, 2014 is US$ 649,925 (INR 39,034,496) [2013:
US$ 698,765 (INR 41,967,826)].
The Company did not make any contributions to the 401(k) plan during the
current or preceding year.
NOTE K - STOCK COMPENSATION
Bristlecone Limited, the Holding Company has three Stock Option Plans under
which the options are granted to the employees of the Company
1. Bristlecone Limited 2004 Stock Option Plan (arising out of conversion of
the earlier Bristlecone Inc. Existing Stock Option Plan) and Bristlecone
Limited 2008 Stock Option Plan:
Pursuant to the terms of the acquisition of Bristlecone Inc. on May 17,
2004 by Bristlecone Limited (the transaction), the then existing
outstanding options of Bristlecone Inc., aggregating to a total of 2,058,493
options were cancelled and fresh options were issued by Bristlecone
Limited under 2004 stock option plan based on the exchange criteria set
out in the transaction documents.
Features of these plans are as under:
non-statutory stock options. As per these plans, 25 per cent of the Shares
subject to the Option, vest on the one (1) year anniversary of the vesting
commencement date, and 1/48 of the options vest each month thereafter
on the same day of the month as the vesting commencement date,
subject to the grantee continuing to be an employee through each such
date. The term of each Option is stated in the Option Agreement;
provided, however, that the term shall be no more than 10 years from the
date of grant thereof. The exercise price of each option, (a) granted to an
employee who at the time of grant of such option, owns stock
representing more than 10 per cent of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, shall be no less than
110 per cent of the Fair Market Value per Share as determined by the
Board on the date of grant (b) granted to any other employee, the
per Share determined by the Board on the date of grant.
2. Bristlecone Limited Amended and Restated 2004 Stock Option Plan:
Options granted under this plan include incentive stock options and non-
statutory stock options. As per this plan, 25 cent of the Stocks subject to
the Option vest on the completion of 12 calendar months from the vesting
commencement date, and no vesting shall occur prior to the completion
of such period of 12 months. Subsequently, 6.25 per cent of the options
vest on the completion of each 3 month period thereafter until full vesting
is completed, subject to the grantee continuing to be an employee
through each such date. The term of each Option is stated in the Option
Agreement; provided, however, that the term shall be no more than 10
years from the date of grant thereof. The exercise price of each option,
(a) granted to an employee who at the time of grant of such option, owns
stock representing more than 10 per cent of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, shall be no
less than 110 per cent of the Fair Market Value per Stock as determined
by the Board on the date of grant (b) granted to any other employee, the
per Stock determined by the Board on the date of grant.
The following table summarizes information about the options issued
under different Plans:
Options
outstanding
Year ended
March 31, 2014
Weighted
average
exercise price
March 31, 2014
Options
outstanding
Year ended
March 31, 2013
Weighted
average
exercise price
March 31, 2013
Stock Option
2004 Plan
Outstanding at
April 1 14,805 US$ 0.86
Granted
Expired/Forfeited 7,557 US$ 0.86
Outstanding at
March 31
Options
outstanding
Year ended
March 31, 2014
Weighted
average
exercise price
March 31, 2014
Options
outstanding
Year ended
March 31, 2013
Weighted
average
exercise price
March 31, 2013
Stock Option
2008 Plan
Outstanding at
April 1 992,854 US$ 0.10 890,167 US$ 0.10
Granted 374,000 US$ 0.10 440,500 US$ 0.10
Exercised 42,187 US$ 0.10 137,916 US$ 0.10
Expired/Forfeited 82,292 US$ 0.10 199,897 US$ 0.10
Outstanding at
March 31 1,242,375 992,854
Stock Option
2004 Amended
Plan
Outstanding at
April 1 318,200 US$ 0.10 328,200 US$ 0.10
Granted
Expired/Forfeited 10,000 US$ 0.10 10,000 US$ 0.10
Outstanding at
March 31 233,200 318,200
Additional information on outstanding options
Exercise price range for the options outstanding is given below:
Exercise Price (US$) No of options outstanding
March 31, 2014 March 31, 2013
US$ 0.10 1,475,575 1,311,054
Options outstanding that have vested and are expected to vest as of March 31,
Outstanding
Options
Weighted
Average
Exercise Price
in US$
Weighted
Average
Remaining
Contract Term
(in years)
Vested 824,146 0.10 6.58
Expected to vest 418,229 0.10 8.74
Stock Option 2004 Amended Plan
Vested 233,200 0.10 1.52
The aggregate intrinsic value is calculated based on the difference between the
fair value of the Companys stocks on March 31, 2014 of US$ 0.07 and the
exercise prices for all in-the-money options outstanding. Considering that the
exercise price of all options are higher than the fair value of the stocks, there
are no in-the-money options at year end.
Stock based compensation expense has been determined based on the fair
values of the options estimated on the date of grant using the Black-Scholes
model with the following assumptions:
Year ended March 31, 2014
Dividend yield 0 percent
Expected life 7.31 years
Risk free interest rate 2.41 percent
Volatility 47.04 percent
The Black-Scholes option-pricing model was developed for estimating fair
value of traded options that have no vesting restrictions and are fully
transferable. Since options pricing models require use of subjective
assumptions, changes therein can materially affect fair value of the options. The
options pricing models do not necessarily provide a reliable measure of fair
value of the options.
The Company has recognized stock compensation expense of US$ 14,916
(INR 895,855) [2013: US$ 25,549 (INR 1,534,473)] for the year ended
March 31, 2014.
BRISTLECONE INC.
859
Unrecognized compensation expense associated under the fair value method
for shares expected to vest (unvested options net of expected forfeitures) as of
March 31, 2014 was approximately US$ 33,436 (INR 2,008,166) [2013: US$
26,723 (INR 1,604,983)] and is expected to be recognized over a weighted
average period of 2.61 years.
The aggregate fair value of all options granted during the year is US$ 27,040
(INR 1,624,022) and weighted average grant date fair value of options vested
during the year is US$ 14,916 (INR 895,855).
There have been no modications or cancellations of these plans during the
current or preceding year.
NOTE L - CONTINGENCIES
The Company is subject to legal claims in the normal course of business.
However, based on its evaluation, management believes that there are no
claims or contingencies, potential outcomes of which could be material to the
nancial condition or results of operations of the Company.
NOTE M - OPERATING LEASES
The Company leases ofce space under operating leases expiring through the
nancial year 2015-16 some of which contain annual rent escalation clauses.
The rental expense on these leases is recognized on a straight line basis.
Total rent expense was US$ 275,562 (INR 16,550,254) [2013: US$ 309,005
(INR 18,558,840) for the year ended March 31, 2014.
Future minimum lease payments under capital leases and operating leases
consisted of the following as of March 31, 2014:
In US$ In INR
Year ending March 31 Capital
lease
Operating
lease
Capital
lease
Operating
lease
2015 157,058 246,837 9,432,903 14,825,030
2016 85,676 84,648 5,145,701 5,083,959
2017 12,392 744,264
Total minimum payments 255,126 331,485 15,322,868 19,908,989
Amount representing interest 1,870 112,312
Present value of minimum
lease payment
253,256 15,210,556
Obligation under capital leases
Long term 155,448 9,336,207
Current 97,808 5,874,349
253,256 15,210,556
NOTE N - RELATED PARTY TRANSACTIONS
Ultimate Holding Company
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Reimbursement of
expenses 7,366 442,402 517,128 31,058,708
at year end 7,366 442,402 70,905 4,258,554
Holding Company
Bristlecone Limited
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Reimbursement of
expenses 635,200 38,150,112 467,500 28,078,050
at year end 3,217,583 193,248,035 2,582,383 155,097,923
Fellow subsidiaries
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Sub - contracting
service received 5,785,096 347,452,866 6,564,978 394,292,579
Reimbursement of
expenses 384,804 23,111,328 496,646 29,828,559
Reimbursement of
expenses received 48,286 2,900,057 113,464 6,814,648
Expense paid 33,138 1,990,268 24,120 1,448,647
at year end 54,215 3,256,153 394,834 23,713,730
Amount payable as
at year end 2,771,075 166,430,765 4,642,742 278,843,085
Bristlecone GmbH
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Sub - contracting
service received 160,386 9,632,783 190,207 11,423,832
Reimbursement of
expenses received 16,012 961,681 5,248 315,195
at year end 5,248 315,195
Amount payable as
at year end 190,207 11,423,832
Bristlecone UK Limited
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Reimbursement of
expenses made 4,058 243,723
Amount payable as
at year end 2,465 148,048
Bristlecone (Singapore) Pte. Ltd.
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Amount payable as
at year end 9,029 542,282
Bristlecone Consulting Ltd Canada
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Sub - contracting
service provided 81,760 4,910,506 280,000 16,816,800
Sub - contracting
service received 32,590 1,957,355
Reimbursement of
expenses made 4,729 284,024
Reimbursement of
expenses received 54,099 3,249,186 187,671 11,271,520
at year end 519,147 31,179,969 543,213 32,625,373
Amount payable as
at year end 37,319 2,241,379 9,573 574,954
BRISTLECONE INC.
860
Bristlecone International AG (Switzerland)
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Sub - contracting
service provided 349,057 20,964,363 373,624 22,439,857
Reimbursement of
expenses made 1,612 96,817 29,117 1,748,767
Reimbursement of
expenses received 9,517 571,591 2,005 120,420
at year end 358,574 21,535,954 402,741 24,188,624
Amount payable as
at year end 105,362 6,328,042 209,785 12,599,687
Mahindra Tractor Assembly Inc.
March 31, 2014
US$
March 31, 2014
INR
(refer Note Q)
March 31, 2013
US$
March 31, 2013
INR
(refer Note Q)
Reimbursement of
expenses 120,739 7,251,584
NOTE O - CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash equivalents, trade receivables and bank
deposits. By their nature, all such nancial instruments involve risk including the
credit risk of non-performance by counter parties.
The Companys cash equivalents and bank deposits are invested with banks
with high investment grade credit ratings.
Trade receivables (primarily denominated in US$) are typically unsecured
and are derived from revenues earned from large multinational customers.
The Company monitors the credit worthiness of its customers to which it grants
credit terms in the normal course of the business. The Company had 5 major
customers in 2014. Revenues from these customers amounted to
US$ 19,778,590 (INR 1,187,902,115) [2013: US$ 19,355,545 (INR 1,162,494,032)]
or 72.76% [2013: 61.82%] of total revenue. Total accounts receivable from these
customers are US$ 3,891,716 (INR 233,736,463) [2013: US$ 2,274,815
(INR 136,625,389)] at March 31, 2014 or 66.25% [2013: 49.40%] of total
receivables.
During the current year ended March 31, 2014, the sales in North America
including Canada accounted for 97.87% of the total sales and were 97.90% for
the year ended March 31, 2013.
NOTE P - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the Companys cash equivalents, accounts payable and
accrued expenses approximated their fair values due to their short maturities.
The carrying value of short term borrowings and lease obligations approximates
fair value based upon the market interest rate available to the Company for debt
with similar risk and maturities.
NOTE Q - CONVENIENCE TRANSLATION
For the convenience of the readers, including the investors of the ultimate
parent Company, Mahindra and Mahindra Limited, the nancial statements for
the year ended March 31, 2014 along with comparatives for the year ended
March 31, 2013 have been translated into Indian Rupees (INR) at the average
Branch of State Bank of India on March 28, 2014 of 1 US$ = INR 60.06.
The convenience translation should not be construed as a representation that
the US$ amounts or the Indian Rupee amounts referred to in these nancial
statements have been, could have been, or could in the future be, converted
into INR or US$, as the case may be, at this or at any other rate of exchange,
or at all.
NOTE R RECLASSIFICATIONS
Certain reclassications have been made to the prior years nancial statements
to conform to the current year presentation.
NOTE S - SUBSEQUENT EVENTS
Subsequent to the year end, on April 02, 2014, Bristlecone Inc. repaid short
term borrowings of State Bank of India, California, amounting to $500,000
(INR 30,030,000).
In accordance with ASC 855-10 Subsequent events, the Company has
evaluated subsequent events through April 29, 2014, the date these nancial
statements were available to be issued. The Company is not aware of any
additional subsequent events that would require recognition or disclosure in the
nancial statements.
BRISTLECONE INDIA LIMITED
861
Your Directors present their Twenty Third Report together with the audited accounts of your Company for the nancial year ended 31
st
March, 2014.
FINANCIAL RESULTS
(Rupees in lakhs)
31
st
March, 2014
For the year ended
31
st
March, 2013
Revenue 13,989.37 12,485.63
Prot before Depreciation, Interest, Taxation and prior period items 1,982.33 1,084.79
Prot before Interest, Taxation and prior period items 1,663.97 797.38
Interest (125.16) (220.30)
Prot before Taxation and prior period items 1,538.81 577.08
Current Tax (485.00) (280.01)
Deferred Tax (52.33) 85.76
MAT Credit Entitlement
Prot for the year after Taxation 1,001.48 382.83
Excess/(Short) provision for Taxation in respect of earlier years (107.03)
Prot after Tax 1,001.48 275.80
Balance of Prot for earlier years 2,823.37 2547.57
Balance of Prot carried forward 3,824.85 2823.37
OPERATIONS
During the year under review, revenue increased from Rs. 12,486 lakhs to
Rs. 13,989 lakhs, registering an increase of 12% over the previous year.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
amounted to Rs.1,982 lakhs (14.2% of revenue) as against Rs. 1,085
lakhs (8.7% of revenue) in the previous year. The net prot after tax was
Rs. 1,001 lakhs (7.2% of revenue) as compared to Rs. 276 lakhs (2.2% of
revenue) in the previous year. The increase in Prot before Taxation and
prior period items during the year is largely attributable to higher revenue
and cost control measures.
DIVIDEND
With a view to conserve cash resources for the future growth of your
Company, the Directors deem it prudent not to recommend a dividend for
the year.
OUTLOOK FOR THE CURRENT YEAR
In line with the current year performance, your Company will continue
to focus on increasing its market share in the markets your Company
operates in, through increased business with its existing clients and
identifying new customers for its offerings. Your Company will also
continue to drive operational efciencies and cost reduction during
the year ahead. The Company expects these measures to yield further
increase in revenues and cost savings which would reect in improved
performance.
RISK MANAGEMENT
Your Company, being in the business of rendering software services, is
exposed to a variety of risks. Your Company has proper and adequate
systems of internal controls to ensure smooth operations, safeguarding of
assets and ensuring compliance with applicable regulations.
As on 31
st
March, 2014 your Company had the following two subsidiaries:
1. Bristlecone GmbH was incorporated in 2004, in Frankfurt am
Main, to cater to the requirements of customers based in Germany.
Your Company holds 100% of the share capital and voting power of
Bristlecone GmbH. During the year, the company earned revenue
of Rs. 3,271 lakhs (previous year Rs. 2,775 lakhs) and recorded a
prot of Rs. 254 lakhs (previous year Rs. 112 lakhs).
2. Bristlecone (Singapore) Pte. Ltd. was incorporated in 2003, in the
Republic of Singapore, to pursue business in the Asia Pacic region.
Your Company holds 100% of the share capital and voting power
of Bristlecone Singapore Pte Ltd. During the year, the company has
earned revenue of Rs. 118 lakhs (previous year Rs. 124 lakhs) and
registered a prot of Rs. 18 lakhs (previous year Rs. 15 lakhs).
The audited statements of accounts for the year ended 31
st
March,
2014 of the Companys subsidiaries, together with the reports of their
Directors and Auditors and Statement pursuant to section 212 of the
Companies Act, 1956 are attached.
Pursuant to section 217(2AA) of the Companies Act, 1956, your
Directors, based on the representation received from the Operating
Management, and after due enquiry, conrm that:
(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 31
st
(iii) proper and sufcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions
of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) the annual accounts have been prepared on a going concern
basis.
862
DIRECTORS
Mr. K. Chandrasekar retires by rotation and being eligible, offers
himself for re-appointment at the forthcoming Annual General Meeting.
AUDIT COMMITTEE
The Audit Committee presently comprises of Mr. S. Venkatraman
(Chairman), Mr. Ulhas N. Yargop and Mr. K. Chandrasekar. In view of
the applicability of the provisions of Section 177 of the Companies Act,
2013, read with Companies (Meetings of Board and its Powers) Rules,
2014, the terms of reference of the Audit Committee were revised
and aligned with effect from 1
st
April, 2014, in accordance with the
aforesaid provisions of the Companies Act, 2013.
The Audit Committee met twice during the year under review.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara,
retire as Auditors of the Company at the forthcoming Annual General
Meeting and have not offered themselves for re-appointment.
The Members are requested to appoint Messrs. Deloitte Haskins
& Sells, LLP, Chartered Accountants, Mumbai (Firm Registration
No: 117366W/W-100018), as Auditors from the conclusion of the
forthcoming Annual General Meeting until the conclusion of the next
Annual General Meeting and x their remuneration.
As required by the provisions of section 139 read with Section 141
of the Companies Act, 2013, your Company has received a written
consent and certicate from Messrs. Deloitte Haskins & Sells, LLP,
Chartered Accountants, to the effect that their appointment, if made,
would be in conformity with the conditions and criteria specied in the
said sections.
DIRECTORS EXPLANATION TO AUDITORS REPORT
As regards the Auditors remark in their Report, your Company has
mentioned in Note 2.11 (1) to the nancial statements that Bristlecone
Singapore Pte Ltd, is expected to recoup its acumulated losses in view
of the expected increase in business volume coupled with appropriate
cost reduction measures. Hence, there is no permanent diminution in
the value of its investment in the subsidiary company and no provision
for the same is required.
CODES OF CONDUCT
The Board of Directors of your Company has adopted separate Codes
of Conduct for Corporate Governance (the Codes) for its Directors
and Senior Management Personnel and Employees enunciating
the underlying principles governing the conduct of its business and
seeking to reiterate the fundamental precept that good governance
must and would always be an integral part of its ethos.
Pursuant to the above Codes of Conduct, all the Board Members,
Senior Management Personnel and Employees of your Company have
afrmed compliance with the respective Codes, on an annual basis.
PUBLIC DEPOSITS AND LOANS / ADVANCES
The Company has not made any loans and advances of the nature
which are required to be disclosed in the annual accounts of the
Company pursuant to Clause 32 of the Listing Agreement of the
ultimate parent company, Mahindra and Mahindra Limited with the
Stock Exchanges.
Your Companys commitment towards safety, health and environment
is being continuously enhanced and persons working at all locations
are given adequate training on safety and health. The requirements
relating to various environmental legislations and environment
protection have been duly complied with by your Company.
SUSTAINABILITY
Your Company continues with its journey on sustainable development
with conscious efforts to minimize the environmental impact caused
by its operations and simultaneously taking responsibility to enable
communities to Rise without losing focus on economic performance.
During the year under review your Company has constituted a
Corporate Social Responsibility Committee comprising of Mr. S.
Venkatraman, Mr. K. Chandrasekar and Mr. C. Krishnadas in
accordance with Section 135 of the Companies Act, 2013, read
with Schedule VII of the Companies Act, 2013 and the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The Committee
had formulated and recommended to the Board, a Corporate Social
Responsibility Policy which indicates the activities to be undertaken
by the Company as specied in Schedule VII to the Companies Act,
2013. The same has been made effective from 1
st
April, 2014.
During the year under review a contribution of Rs 16.93 lakhs was
made toward Corporate Social Responsibility initiatives.
harassment as per Vishaka guidelines stipulated by the Supreme
Court of India, in which it has formalised a free and fair enquiry
process with clear timelines. The Company has also constituted an
Internal Complaints Committee to which employees can write their
complaints. During the year under review one complaint was received
by the said Committee and the same was disposed of appropriately.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
absorption and foreign exchange earnings and outgo, as required
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are given in Annexure I to this Report.
PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION
217(2A) OF THE COMPANIES ACT, 1956 AND THE RULES
THEREUNDER
As required under section 217(2A) of the Companies Act, 1956 and
Rules thereunder, particulars of the Companys employees, who
were employed throughout the Financial Year and were in receipt of
remuneration, of not less than Rs. 60,00,000 per annum during the
year ended 31
st
March, 2014 or who were employed for a part of the
Financial Year and were in receipt of remuneration of not less than
Rs.5,00,000 per month are given in Annuexure II to this report.
ACKNOWLEDGEMENT
The Board acknowledges the continued support received from its
holding company, Bristlecone Limited and its ultimate parent company,
Mahindra and Mahindra Limited and all employees of the Company.
Ulhas N. Yargop
Chairman
Mumbai, 23
rd
April, 2014
863
ST
MARCH, 2014.
energy consumption.
b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy :
Nil
c. Impact of the measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of
As energy costs comprise a very small part of your companys total expenses, the nancial impact of these measures is
not material.
d. Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules
in respect of Industries specied in the Schedule:
Not applicable
1. Areas in which Research & Development is carried out : None
Foreign exchange earnings and outgo during the year under review are as follows:
(Rupees in lakhs)
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Foreign Currency Earnings 8,292.52 6,987.61
Foreign Exchange Outgo 318.89 467.96
Ulhas N. Yargop
Chairman
Mumbai, 23
rd
April, 2014
864
ST
MARCH,
2014
Additional information as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of
st
March, 2014
A) Employed for Full Financial Year 2013-14
Name of the
Employee
Designation/
Nature of
Duties
Gross
Remuneration
(subject to tax)
(Rs.)
(years)
Age
(years)
Date of
Commencement
of Employment
Last Employment
held: Organisation
and Designation.
Mr. Satish
Moorjani
V P - Sales 63,64,223 B. Tech, MBA 37 60 03-Sep-07 Mahindra & Mahindra
Ltd - Vice President
B) Employed for Part of the Financial Year 2013-14
Name of the
Employee
Designation/
Nature of
Duties
Gross
Remuneration
(subject to tax)
(Rs.)
(years)
Age
(years)
Date of
Commencement
of Employment
Last Employment
held: Organisation
and Designation.
Mr. Prashant
Karkhanis
V P -
Consulting
Services
70,89,339 Diploma in
Mechanical
Engineering
37 58 01-Sep-98 Mahindra & Mahindra
Ltd - Senior Executive
NOTES:
1 Nature of employment is permanent, subject to termination with two months notice on either side.
2 The above employee is not a relative of any Director of the Company.
3 The employee does not hold by himself or along with his spouse and dependent children 2% or more of equity shares of
the Company.
4 Terms and conditions of employment are as per Companys rules.
5 Gross remuneration received, shown in the statement, includes Salary, Bonus, House Rent Allowance or value of perquisites for
accommodation, car perquisites value/allowances applicable, employers contribution to Provident Fund and Superannuation
scheme including group insurance premium, leave travel facility, reimbursement of medical expenses, and all allowances/
perquisites and terminal benets as applicable.
Ulhas N. Yargop
Chairman
Place: Mumbai
Date: 23
rd
April, 2014
865
To the members of Bristlecone India Limited
BRISTLECONE INDIA LIMITED (the Company) which
comprise the Balance Sheet as at March 31, 2014, the Statement
of Prot and Loss and the Cash Flow Statement for the year then
ended and a summary of the signicant accounting policies and
dated 13th September, 2013 of the Ministry of Corporate
Opinion
to the explanations given to us the aforesaid nancial
of the Company as at March 31, 2014;
date; and
Emphasis of Matter
We draw attention to Note 2.11 (1). The Company has
investments aggregating to SGD 1,670,000 (` 50,147,260) in
Ordinary shares of Bristlecone (Singapore) Pte. Ltd., a wholly
owned subsidiary. The accumulated losses as at March 31,
2014 of the subsidiary, on the basis of the audited nancial
statements for the year ended March 31, 2014 provided by the
Management, are SGD 1,548,029 (as at March 31, 2013 SGD
1,585,223), resulting in substantial erosion of the subsidiarys
net worth. For the reason stated in the said Note 2.11 (1), the
Management is of the view that there is no diminution, other
than temporary, in the value of these investments. Accordingly,
no provision is required to be made in the accounts. Our
opinion is not qualied in respect of this matter.
5 of the Order.
Circular 15/2013 dated 13th September 2013 of the
from the directors as on March 31, 2014 taken on
record by the Board of Directors, none of the directors is
disqualied as on March 31, 2014 from being appointed
as a director in terms of Section 274(1)(g) of the Act.
Ketan Vora
Partner
Mumbai, April 23, 2014 (Membership No. 100459)
866
AUDITORS REPORT
and Regulatory Requirements of our report of even date)
activities/result, clauses (ii), (vi), (viii), (xii), (xiii), (xiv), (xix)
and (xx) of the Order are not applicable.
(b) The Company has a programme for physical
verication of xed assets in accordance with which
the xed assets are physically veried once every
two years. In accordance with the said programme,
no physical verication was planned/ conducted in
the current year and accordingly, the question of
discrepancies on physical verication does not arise.
In our opinion, the frequency of physical verication
of xed assets is reasonable having regard to the size
of the Company and the nature of its assets.
of the Company.
(iii) According to the information and explanations given to us,
the Company has neither granted nor taken any loans,
parties listed in the Register maintained under Section 301
of the Companies Act, 1956. Accordingly sub-clauses (b) to
(d), (f) and (g) of clause (iii) of the Order are not applicable.
xed assets and sale of services. There is no sale of goods
as the Company is in service industry. During the course of
our audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
During the year, the operations of the Company do not
entail purchase of inventory and sale of goods.
explanations given to us, there are no transactions
that need to be entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956.
Accordingly clause (v)(b) of the Order is not applicable.
(vi) In our opinion, the Company has an adequate internal
of its business.
(vii) According to the information and explanations given to us
(a) The Company has been generally regular in
Wealth Tax, Service Tax, Custom Duty, Excise Duty,
of Provident fund, Investor Education and Protection
Fund, Employees State Insurance, Income-tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other material statutory dues applicable to the Company
(c) Details of dues of Income Tax which have not been
deposited as on 31
st
March, 2014 on account of
disputes are given below:
Statute Nature of
Dues
Forum where
Dispute is
pending
Period to
which the
amount
relates
Amount
involved
(` in lakhs)
Income Tax
Act, 1961
Income Tax Dispute
Resolution Panel
A.Y. 2010-11 216.88
(viii) The Company has no accumulated losses as at the year
end and, has not incurred cash losses in the nancial year
and in the immediately preceding nancial year.
in repayment of dues to banks and nancial institutions.
The Company has not issued any debentures till date.
(x) The company has not given any guarantee for loans taken
by others from banks or nancial institutions.
applied for the purposes for which they were obtained.
term basis have not been used during the year for long-
term investment.
(xiii) The Company has not made any preferential allotment of
maintained under Section 301 of the Act.
(xiv) To the best of our knowledge and according to the
Ketan Vora
Partner
Mumbai, April 23, 2014 (Membership No. 100459)
867
ST
MARCH, 2014
(` In Lakhs)
Particulars Notes
As at
March 31, 2014
As at
March 31, 2013
SHAREHOLDERS FUNDS
Share capital ................................................................................................... 2.1 1,904.94 1,904.94
Reserves and surplus ..................................................................................... 2.2 3,913.19 2,911.71
5,818.13 4,816.65
Long term borrowings .................................................................................... 2.3 50.13 582.02
Other long term liabilities ............................................................................... 2.4 7.13 11.21
Long term provisions ...................................................................................... 2.5 505.82 522.82
563.08 1,116.05
CURRENT LIABILITIES
Short term borrowings.................................................................................... 2.6 373.92 833.66
Trade payables ............................................................................................... 2.7 1,867.80 2,125.19
Other current liabilities.................................................................................... 2.8 528.73 207.54
Short term provisions ..................................................................................... 2.9 250.86 314.00
3,021.31 3,480.39
TOTAL 9,402.52 9,413.09
ASSETS
NON-CURRENT ASSETS
Fixed assets - Tangible ................................................................................... 2.10 1,343.83 1,447.18
Non-current investments ................................................................................ 2.11 779.51 779.51
Deferred tax assets ......................................................................................... 2.12 267.40 319.73
Long term loans and advances ..................................................................... 2.13 538.50 1,105.14
2,929.24 3,651.56
CURRENT ASSETS
Trade receivables 2.14 4,617.43 4,897.62
Cash and cash equivalents ............................................................................ 2.15 899.49 233.91
Short term loans and advances ..................................................................... 2.16 385.61 306.36
Other current assets ....................................................................................... 2.17 570.75 323.64
6,473.28 5,761.53
TOTAL 9,402.52 9,413.09
SIGNIFICANT ACCOUNTING POLICIES .................................................... 1
NOTES TO THE FINANCIAL STATEMENTS ............................................... 2
The accompanying notes are an integral part of the nancial statements
For Deloitte Haskins & Sells Ulhas N. Yargop
Chartered Accountants Director
K. Chandrasekar
Director
Ketan Vora C. Krishnadas
Partner Director
S. Venkatraman
Director
868
ST
MARCH, 2014
(` In Lakhs)
Particulars Notes
Year ended
March 31, 2014
Year ended
March 31, 2013
Revenue from operations .......................................................................... 2.18 13,568.60 12,180.90
Other income ............................................................................................. 2.19 420.77 304.73
Total Revenue ........................................................................................... 13,989.37 12,485.63
Expenditure
Employee benets expense ...................................................................... 2.20 8,950.61 8,201.33
Finance costs ............................................................................................. 2.21 125.16 220.30
Depreciation ............................................................................................... 2.10 318.36 287.41
Other expenses .......................................................................................... 2.22 3,056.43 3,199.51
Total Expenditure ..................................................................................... 12,450.56 11,908.55
Prot before tax 1,538.81 577.08
Tax expense ...............................................................................................
Current tax .......................................................................................... 485.00 280.01
Deferred tax ........................................................................................ 2.12 52.33 (85.76)
Tax expense in respect of earlier years ............................................. 107.03
537.33 301.28
Prot for the year 1,001.48 275.80
Earnings per equity share (Nominal Value of equity
share `100/- per Share) ............................................................................
Basic and Diluted ............................................................................... 2.32 52.57 14.48
SIGNIFICANT ACCOUNTING POLICIES ............................................... 1
NOTES TO THE FINANCIAL STATEMENTS .......................................... 2
The accompanying notes are an integral part of the nancial statements
K. Chandrasekar
Director
Partner Director
S. Venkatraman
Director
869
ST
MARCH, 2014
(` In Lakhs)
Particulars
Year ended
March 31,
2014
Year ended
March 31,
2013
A Cash ow from operating activities
Prot before tax .................................................................................................................. 1,538.81 577.08
Adjustments for:
Depreciation ........................................................................................................................ 318.36 287.41
Unrealised exchange (gain)/loss ....................................................................................... 163.25 (43.60)
Finance costs ...................................................................................................................... 125.16 220.30
Interest income ................................................................................................................... (94.42) (4.33)
Dividend from non-current investments ............................................................................. (0.15) (0.15)
Provision for expenses written back .................................................................................. (50.32) (69.08)
(Prot)/loss on scrap/sale of xed assets (net) ................................................................. (2.42) 18.03
Provision for gratuity ........................................................................................................... (1.92) 69.45
Provision for compensated absences ............................................................................... (26.14) 26.28
Provision for doubtful Trade receivables ........................................................................... (220.38) 9.07
Trade receivables written off .............................................................................................. 296.00 67.80
507.02 581.18
Operating prot before working capital changes ........................................................ 2,045.83 1,158.26
Trade receivables ................................................................................................. 41.32 (80.09)
Short-term loans and advances .......................................................................... (79.25) (28.87)
Other current assets ............................................................................................ (247.11) 274.94
Long-term loans and advances ........................................................................... (4.76) (117.49)
(289.80) 48.49
Trade payables ............................................................................................................ (207.07) 548.24
Other current liabilities ................................................................................................ 219.86 (59.51)
12.79 488.73
Cash ow from operations
Direct tax (paid)/refunded (net) .......................................................................................... 34.32 (376.23)
Net cash ow from operating activities ......................................................................... 1,803.14 1,319.25
B Cash ow from investing activities:
Purchase of xed assets .................................................................................................... (301.28) (975.05)
Proceeds from sale of xed assets.................................................................................... 51.80 15.92
Dividend from current investments .................................................................................... 0.15 0.15
Interest received ................................................................................................................. 94.42 4.33
Net cash used in investing activities ............................................................................. (154.91) (954.65)
870
(` In Lakhs)
Particulars
Year ended
March 31,
2014
Year ended
March 31,
2013
C Cash ow from nancing activities:
Finance costs paid ............................................................................................................. (122.95) (290.07)
Proceeds from nance lease .............................................................................................
Repayment of nance lease ............................................................................................... (27.49) (26.26)
Decrease in cash credit from banks .................................................................................. (459.74) (86.85)
Repayment of loan from holding company ....................................................................... (802.76)
Proceeds from term loans .................................................................................................. 557.50
Repayment of loan ............................................................................................................. (372.47) (4.28)
Net cash used in nancing activities ............................................................................. (982.65) (652.72)
Net increase/(decrease) in cash and cash equivalents (A+B+C) ............................ 665.58 (288.12)
Cash and cash equivalents at the commencement of the year, comprising:
Balances with banks ........................................................................................................... 233.91 522.03
233.91 522.03
Cash and cash equivalents at the end of the year, comprising:
Cheques on hand ............................................................................................................... 16.84 1.69
Balances with banks ........................................................................................................... 882.65 70.91
Funds in transit ................................................................................................................... 161.31
899.49 233.91
Net increase/(decrease) in cash and cash equivalents (A+B+C) ............................ 665.58 (288.12)
ST
MARCH, 2014 (Contd.)
K. Chandrasekar
Director
Partner Director
S. Venkatraman
Director
871
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS AS AT
MARCH 31, 2014 AND FOR THE YEAR ENDED ON THAT DATE
1. Signicant accounting policies:
Basis for preparation of accounts:
The nancial statements have been prepared under the historical
cost convention on an accrual basis and are in accordance with the
requirements of the Companies Act, 1956, and comply with the Accounting
Standards notied under Section 211 (3C) of the Companies Act, 1956
(the 1956 Act) (which continue to be applicable in respect of Section 133
of the Companies Act, 2013 (the 2013 Act) in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs)
and relevant provisions of the 1956 Act/2013 Act, as appilicable.
Use of estimates:
The preparation of nancial statements in conformity with the generally
accepted accounting principles require the management to make estimates
and assumptions to be considered in the reported amounts of assets
and liabilities (including contingent liabilities) on the date of the nancial
the year. The management believes that the estimates used in preparation
of the nancial statements are prudent and reasonable. Further results
could differ due to these estimates and differences between the actual
results and the estimates are recognised in the period in which the results
are known / materialise.
Revenue recognition:
Revenue from software services performed on time and material basis is
recognised as and when services are performed.
Revenues from xed price contracts are recognized over the life of the
contract using the proportionate completion method, with man hours
input determining the degree of completion. The estimation of man hours
required to complete the project requires signicant judgment. When
adjustments in estimated project man hours are identied, anticipated
losses, if any, are recognized in the period in which they are determined.
Fixed assets - Tangible:
All xed assets are stated at cost less depreciation. Costs comprise
purchase price and any attributable costs of bringing the asset to its
working condition for its intended use.
Depreciation on xed assets:
Depreciation is provided on the straight-line method at the rates and in the
manner prescribed in Schedule XIV to the Companies Act, 1956.
Leasehold improvement is depreciated on the straight line method over
the primary period of lease.
Investments:
Investments are valued at cost. Provision for diminution in the value is
made to recognise a decline, other than temporary, in the value of the
investments.
Borrowing costs:
Borrowing costs that are attributable to acquisition or construction of
the qualifying assets are capitalised as part of the cost of such assets.
A qualifying asset is one that necessarily takes substantial period of time
to get ready for its intended use or sale. All other borrowing costs are
charged to revenue.
Employee benets:
1. Short term employee benets are recognised as an expense at the
undiscounted amount in the statement of Prot and Loss for of the
year in which the related service is rendered.
2. Long term benets:
a. Dened contribution plan
i. Provident and family pension fund
The eligible employees of the Company are entitled to
receive post employment benets in respect of provident
and family pension fund, in which both employees and
the Company make monthly contribution at a specied
percentage of the employees eligible salary (currently
12% of employees eligible salary). The contributions
are made to Regional Provident Fund Commissioner.
Provident fund and family pension fund are classied
as dened contribution plans as the Company has no
further obligations beyond making the contribution.
ii. Superannuation
The eligible employees of the Company are entitled
to receive post employment benets in respect of
superannuation fund in which the Company makes yearly
contribution at a specied percentage of the employees
eligible salary (currently 13% of employees eligible
salary). The contributions are made to the Life Insurance
Corporation of India. Superannuation is classied as
dened contribution plan as the Company has no further
obligations beyond making the contribution.
The Companys contributions to dened contribution plans are
charged to the Statement of Prot and Loss as incurred.
b. Dened benet plan Gratuity
The Company has obligation towards gratuity, a dened
benet retirement plan, covering eligible employees. The
plan provides a lump sum payment to vested employees at
retirement, death while in employment or on termination of
employment of an amount equivalent to 15 days salary payable
for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of ve years of
service. The Company accounts for gratuity benets payable
in future based on an independent actuarial valuation carried
out as at the year end. Actuarial gain or loss is recognised in
the statement of Prot and Loss.
c. Other long term benets Compensated absences
The Company provides for the encashment of leave or
number of days of unutilised leave at each Balance Sheet date
on the basis of an independent actuarial valuation carried out
as at the year end. Actuarial gain or loss is recognised in the
statement of Prot and Loss.
Foreign currency transactions:
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in foreign
currencies are revalued at the exchange rate prevailing as at the year end.
The exchange differences arising out of settlement or on conversion at the
closing rate are recognised in the Statement of Prot and Loss.
Income taxes:
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities using
the applicable tax rate. Deferred tax is recognised for timing differences
between taxable income and accounting income that are capable of
reversal in one or more subsequent years and are measured using enacted
/ substantially enacted tax rate. Deferred tax liabilities are recognised
for all timing differences. Deferred tax assets are recongised for timing
differences only to the extent that reasonable certainty exists that sufcient
future taxable income will be available against which these can be realised.
In situations where the Company has unabsorbed depreciation or carry
forward tax losses, deferred tax assets are recognised only if there is
virtual certainty supported by convincing evidence that they can be
realised against future taxable prots.
Minimum alternative tax credit:
Minimum alternative tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will pay
normal tax during the specied period as per the Income-tax Act, 1961. In
the year, in which MAT credit becomes eligible to be recognized as an asset
in accordance with the recommendations contained in the guidance note
issued by the Institute of Chartered Accountants of India, the said asset is
created by way of a credit to the Statement of Prot and Loss and shown
as MAT credit entitlement. MAT credit is reviewed at each balance sheet
date and the carrying amount of MAT credit is written down to the extent
there is no longer convincing evidence to the effect that the Company
will pay normal income tax during such specied period i.e. presently ten
succeeding years from the year in which MAT credit becomes allowable.
Impairment of assets:
At each Balance Sheet date, the Company assesses whether there is any
indication of impairment based on internal/external factors. If any of such
872
indication exists impairment loss is provided to the extent the carrying
amount of assets exceed their recoverable amount. Recoverable amount
is the higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash ows expected to arise
from the continuing use of an asset and from its disposal at the end of
its useful life. Net selling price is the amount obtainable from the sale of
an asset in an arms length transaction between knowledgeable, willing
parties, less the cost of disposal.
Provision and contingencies:
A provision is recognised when an enterprise has a present obligation as
a result of past event and it is probable that an outow of resources will
be required to settle the obligation in respect of which reliable estimates
can be made. Provisions are not discounted to their present values and
are determined based on the management estimates of amount required
each Balance Sheet date and adjusted to reect the current management
estimates. Contingent liabilities are disclosed in the notes.
Leases:
a. Operating lease:
Leases where the lessor effectively retains substantially all the risks
and benets of ownership of the leased assets are classied as
operating leases. Operating lease payments are recognised as an
expense in the Statement of Prot and Loss on a straight-line basis
over the lease term.
b. Finance lease:
Lease arrangements whereby the company essentially assumes the
same rights as ownership of the assets are classied as nance lease.
Assets taken under nance lease are capitalized at fair value or
present value of the minimum lease payments, whichever is lower.
Depreciation on the assets taken under nance lease is charged
at the rate applicable to similar type of the xed assets as per the
Companys accounting policy for depreciation as stated above.
Lease liability is recognized at present value of the minimum lease
payment considering interest rate implicit in the lease.
Lease payments made are apportioned between the nance charges
and reduction of the outstanding lease liabilities in respect of the
assets taken under lease.
Cash ow statement:
Cash ows are reported using the indirect method, whereby prot for the
year is adjusted for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments. The cash
ows from operating, investing and nancing activities of the Company are
segregated based on the available information.
Earnings per share:
Basic earnings per share is computed by dividing the prot for the year by
the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the prot for the year
as adjusted for dividend, interest and other charges to expense or income
relating to the dilutive potential equity shares, by the weighted average
number of equity shares considered for deriving basic earnings per share
and the weighted average number of equity shares which could have been
issued on the conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net prot per share from continuing ordinary
operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a later
date. The dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e. average
market value of the outstanding shares). Dilutive potential equity shares
are determined independently for each period presented. The number of
equity shares and potentially dilutive equity shares are adjusted for share
splits / reverse share splits and bonus shares, as appropriate.
Segment reporting:
The Company identies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and management
structure. The operating segments are the segments for which separate
nancial information is available and for which operating prot/loss
amounts are evaluated regularly by the executive management in deciding
how to allocate resources and in assessing performance.
2. Notes to the nancial statements
2.1 Share Capital
(` In Lakhs)
Particulars As at
March 31,2014
As at
March 31,2013
Authorised:
2,500,000 (previous year 2,500,000) Equity
shares of `100/- each 2,500.00 2,500.00
Issued:
shares of `100/- each 1,924.13 1,924.13
Subscribed and Paid-up (See footnotes):
shares of `100/- each fully paid-up 1,904.94 1,904.94
1,904.94 1,904.94
(1) All the above shares are held by Bristlecone Limited, Cayman Island,
the holding company, including 36 equity shares held jointly with its
nominees. The ultimate holding company is Mahindra & Mahindra
Limited.
(2) The Company has only one class of shares i.e. equity shares having
a par value of `100. Each holder of equity share is entitled to one
vote per share held. In the event of liquidation of the Company, the
holders of the equity shares will be entitled to receive remaining
assets after deducting all its liabilities, in proportion to the number of
equity shares held.
(3) Details of shareholder holding more than 5% of paid-up capital:
Name of shareholder As at March 31, 2014 As at March 31, 2013
No. of
shares
%
holding
No. of
shares
%
holding
Bristlecone Limited
(including 36 Equity
shares held jointly with its
nominees) 1,904,944 100 1,904,944 100
2.2 Reserves and surplus
(` In Lakhs)
Particulars As at
March 31,2014
As at
March 31,2013
Capital Reserve
As per last Balance Sheet 88.34 88.34
Surplus in the statement of
Prot and Loss
Opening Balance 2,823.37 2,547.57
Add: Prot for the year transferred from
statement of prot and loss 1,001.48 275.80
3,913.19 2,911.71
2.3 Long-term borrowings
(` In Lakhs)
Particulars As at
March 31,2014
As at
March 31,2013
Long term maturities of nance lease
obligations (Secured) [see footnotes 1 and 2] 50.13 78.93
Term loans: (see footnote 3)
MARCH 31, 2014 AND FOR THE YEAR ENDED ON THAT DATE (contd.)
873
(` In Lakhs)
Particulars As at
March 31,2014
As at
March 31,2013
from bank 487.67
from nancial institution 15.42
50.13 582.02
(1) The Company has taken certain assets on nance lease. The lease
obligation is secured by the assets acquired under the nance lease
(see note 2.8).
(2) The future minimum lease payments and present value (PV) of future
minimum lease payments at the interest rate implicit in the lease are
as follow;
(` In Lakhs)
Particulars Future minimum
lease payments
PV of future minimum
lease payments
As at
March 31,
2014
As at
March 31,
2013
As at
March 31,
2014
As at
March 31,
2013
Not later than one year 37.33 39.37 28.79 27.48
Later than one year but not
later than ve years 56.40 93.72 50.13 78.93
Later than ve years
93.73 133.09 78.92 106.41
3 (a) Term loan from bank is secured by exclusive charge by way of
hypothecation of movable assets funded by the term loan and
pari-passu charge with the other banks [see note 2.6 (2)], by
way of rst hypothecation, on entire movable xed assets of the
company except vehicles funded by term loan from nancial
institution and leased assets. Term loan from bank carries
interest at 12% per annum and is repayable in 9 monthly
installments (Originally repayable in 48 monthly installments
starting from December 2013).
(b) Term loan from nancial institution is secured by hypothecation
of vehicle nanced by the loan. Term loan from nancial
institution carries interest at 13% per annum. This Loan has
been fully repaid during the year.
2.4 Other long term liabilities
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Payable for xed assets 7.13 11.21
7.13 11.21
2.5 Other long-term provisions
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Gratuity [see note 2.25(2)(b)] 254.61 256.30
505.82 522.82
2.6 Short-term borrowings
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Cash credit from banks (See footnotes) 373.92 833.66
373.92 833.66
(1) Cash credit from banks is repayable on demand.
(2) Cash credit from banks are secured by charge pari-passu amongst
banks by way of hypothecation of present and future book debts and
movable xed assets excluding assets referred in note 2.3 (3) and
ranking.
2.7 Trade payables
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Trade payables 1,867.80 2,125.19
1,867.80 2,125.19
There are no amounts due to suppliers covered under the Micro, Small
and Medium Enterprises Development Act, 2006; this information takes
into account only those suppliers who have responded to the enquiries
made by the Company for this purpose.
2.8 Other current liabilities
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Current maturities of nance lease obligations
[See note 2.3 (2)] 28.79 27.48
Current maturities of term loans from banks
[See note 2.3 (3)] 180.75 50.13
Interest accrued but not due on borrowings 2.21
Income received in advance [see notes 2.26
(2) (b)] 38.06
Statutory dues 174.65 62.74
Payables for purchase of xed assets 5.98 38.79
Security deposit received 24.00
Other payable 74.29 28.40
528.73 207.54
2.9 Short term provisions
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Gratuity [see note 2.25(2)(b)] 74.17 74.40
Provision for fringe benet tax net of advance tax
` 35.93 Lakhs (Previous year `35.61 Lakhs) 6.89 6.89
Provision for income-tax net of advance tax
` 197.61 Lakhs (previous year `378.30 Lakhs) 66.52 118.60
250.86 314.00
874
2.10 Fixed Assets - Tangible
(` In Lakhs)
Description of assets Original Cost Depreciation Net book value
Opening as
at April 01,
2013
Additions
during the
year
Deductions/
Retirement
during the
year
Closing
as at
March 31,
2014
Opening
as at
April 01,
2013
For the
year
Deductions
during the
year
As at
March 31,
2014
As at
March 31,
2014
Closing
as at
March 31,
2013
A Owned assets
Leasehold improvement 599.04 14.69 108.90 504.83 269.23 91.51 108.90 251.84 252.99
(265.79) (333.25) (-) (599.04) (197.69) (71.54) (-) (269.23) (329.81)
Furniture and ttings 303.03 7.81 7.94 302.90 53.33 17.61 3.61 67.33 235.57
(100.42) (205.52) (2.91) (303.03) (44.63) (9.61) (0.91) (53.33) (249.70)
Ofce equipment 291.43 15.74 33.45 273.72 52.12 22.93 16.02 59.03 214.69
(138.87) (157.00) (4.44) (291.43) (34.01) (19.50) (1.39) (52.12) (239.31)
Computer and equipment 1,082.08 226.15 98.49 1,209.74 642.58 146.75 75.77 713.56 496.18
(1,035.90) (254.60) (208.42) (1,082.08) (677.15) (146.77) (181.34) (642.58) (439.50)
Vehicles 91.73 - 14.47 77.26 17.98 7.92 9.57 16.33 60.93
(30.45) (68.49) (7.21) (91.73) (15.02) (8.35) (5.39) (17.98) (73.75)
B Assets under nance lease
[See note 2.3 (1)]
Computer equipment 29.46 - - 29.46 11.63 4.77 - 16.40 13.06
(29.46) (-) (-) (29.46) (6.86) (4.77) (-) (11.63) (17.83)
Furniture and ttings 90.97 - - 90.97 25.10 18.19 - 43.29 47.68
(90.97) (-) (-) (90.97) (6.91) (18.19) (-) (25.10) (65.87)
Ofce equipment 43.39 - - 43.39 11.98 8.68 - 20.66 22.73
(43.39) (-) (-) (43.39) (3.30) (8.68) (-) (11.98) (31.41)
TOTAL 2,531.13 264.39 263.25 2,532.27 1,083.95 318.36 213.87 1,188.44 1,343.83
Previous year (1,735.25) (1,018.86) (222.98) (2,531.13) (985.57) (287.41) (189.03) (1,083.95) (1,447.18)
Figures in bracket pertain to previous year
2.11 Non-current investments
(` In Lakhs)
Particulars As at March
31, 2014
As at March
31, 2013
Other than trade at cost (Unquoted)
Investments in equity instruments (fully paid up)
(a) 1,670,000 (previous year 1,670,000) shares
of face value of SGD 1/- each of Bristlecone
(Singapore) Pte. Ltd. (wholly owned
subsidiary)[see footnote 1] 501.47 501.47
(b) 1 (previous year 1) Share of face value of
Euro 50,000/- of Bristlecone GmbH (wholly
owned subsidiary)[see footnote 2] 277.04 277.04
778.51 778.51
(c) 4,000 (previous year 4,000) Equity shares
of ` 25/- each of The Zoroastrian Co-
operative Bank Ltd. 1.00 1.00
779.51 779.51
(1) The Company has investment of SGD 1,670,000 (` 501.47 Lakhs) in
Bristlecone (Singapore) Pte. Ltd, a wholly owned subsidiary company.
The accumulated losses, as at March 31, 2014, of the subsidiary on
the basis of audited nancial statements for the year ended March
31, 2014 is SGD 1,548,029 (previous year SGD 1,585,223).
In view of the expected increase in business volume indicated by the
subsidiarys improved sales pipeline, coupled with appropriate cost
reduction measures initiated by the management which will result
into improved protability, the subsidiary is expected to recoup its
accumulated losses in the near future. Hence, in the opinion of the
management there is no permanent diminution in the value of its
investment in the subsidiary company and no provision for the same
is required.
(2) Includes ` 248.54 Lakhs (previous year ` 248.54 Lakhs) invested
towards capital reserve of the company in accordance with German
Commercial Code.
2.12 Deferred tax asset
The components of deferred tax liabilities and assets are as follow:
(` In Lakhs)
Particulars Deferred tax
asset/(liability)
as at
March 31, 2013
(Charge)/credit
for the year
Deferred tax
asset/(liability)
as at
March 31, 2014
Deferred tax liabilities:
Depreciation (56.62) 4.47 (52.15)
Deferred tax assets:
Trade receivables 81.96 (80.66) 1.30
Expenses covered
under section 43B 219.82 (9.54) 210.28
Expenses disallowed
under section 40 (a) (ia) 74.57 33.40 107.97
376.35 (56.80) 319.55
319.73 (52.33) 267.40
2.13 Long-term loans and advances
(unsecured considered good, unless stated otherwise)
(` In Lakhs)
Particulars As at
March 31,
2014
As at
March 31,
2013
Security deposits
for rented premises 179.64 173.88
for others 4.28 5.28
Advance tax net of provision ` 988.60 Lakhs
(previous year ` 528.60 Lakhs) 343.16 914.56
Fringe benet tax paid 11.42 11.42
538.50 1105.14
875
2.14 Trade Receivables (unsecured, unless stated otherwise)
(`In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Outstanding for a period
exceeding six months from
the date they became due
Considered good 15.84 193.16
Considered doubtful 3.81 224.19
19.65 417.35
Less: Provision for doubtful Trade
receivables (3.81) (224.19)
15.84 193.16
Others (considered good) 4,601.59 4,704.46
4,617.43 4,897.62
See note 2.26(2)(b) for Trade receivables from related parties.
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Cash and bank balances
Cheques on hand 16.84 1.69
Balances with banks
In current accounts 75.65 70.86
Term Deposit
Short term xed deposit 806.95
882.60 70.86
Other bank balances
Deposit with original maturity for
more than 12 months 0.05 0.05
Remittance in transit 161.31
899.49 233.91
2.16 Short-term loans and advances
(unsecured considered good, unwless stated otherwise)
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Security deposits for rented premises 18.70 59.11
Prepaid expenses 124.98 40.77
Balance with Central Excise (Service tax credit) 77.81 40.95
Travel advances to employees 46.12 61.34
Claims receivable 56.64 91.25
Other advances 61.36 12.94
385.61 306.36
2.17 Other current assets
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Unbilled revenue [see note 2.26(2)(b)] 570.75 323.64
570.75 323.64
2.18 Revenue from operations
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Sale of services 13,549.61 12,153.79
Other operating income 18.99 27.11
13,568.60 12,180.90
2.19 Other income
(` In Lakhs)
Particulars As at
March 31, 2014
As at
March 31, 2013
Dividend income from long-term
investment 0.15 0.15
Interest income
Deposits with a bank 16.34 0.01
Income tax refund 78.08 4.32
Foreign exchange gain (net) 273.46 231.17
Prot on write off/sale of xed assets (net) 2.42
Provision for expenses written back 50.32 69.08
420.77 304.73
2.20 Employee benets expense
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Salaries, bonus, etc. 8,515.44 7,753.75
funds 268.28 247.84
Gratuity [see note 2.25(2)(c)] 70.40 98.35
Staff welfare 96.49 101.39
8,950.61 8,201.33
2.21 Finance costs
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Interest on
Cash credit from banks 43.60 98.94
Term loans 59.70 14.54
Short term loan from ultimate
holding company 89.89
Finance leases 12.23 15.81
Others
Interest on delayed payment of taxes 9.63 1.12
125.16 220.30
2.22 Other expenses
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Power 97.58 108.98
Rent [net of recovery ` 23.94 lakhs
(Previous year: ` 30.49 lakh)] 408.66 439.28
Communication expenses 242.04 247.96
Travelling and conveyance 675.07 859.68
31
ST
MARCH, 2014 AND FOR THE YEAR ENDED ON THAT DATE (contd.)
876
31
ST
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Recruitment expenses 110.92 79.29
Repairs and maintenance - computer
and ofce equipment 49.78 46.04
Repairs and maintenance - Others 21.96 26.94
Insurance 4.79 5.19
Legal and professional fees (Including
audit fees; see note 2.31) 732.73 642.72
Business promotion expenses 23.88 126.19
Software expenses 151.20 135.62
Training expenses 59.93 34.44
Bad debts written off (See note below) 75.62 76.87
Commision on sales 53.49 29.02
Loss on write off/sale of xed assets (net) 18.03
Donations 16.93 16.00
3,056.43 3,199.51
2.22 (a) Bad debts written off
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Bad debts written off 296.00 67.80
Add/(Less):-
Provision for the doubtful debts (220.38) 9.07
75.62 76.87
2.23 Operating Lease
(1) The Company has taken ofce premises / guest houses on operating
lease. The lease term is on the basis of individual agreements entered
into with the landlord. Certain agreements provide for increase in
rent. There are no restrictions imposed by lease arrangements. The
lease rental expense recognised in the statement of prot and loss
for the year ` 408.66 Lakhs (previous year ` 439.28 Lakhs).
The future minimum lease payments under non-cancellable operating
leases for each of the following periods:
(` Lakhs)
March 31, 2014
Year ended
March 31, 2013
Not later than one year 266.39 278.11
Later than one year but not later than
ve years 169.95 381.65
Later than ve years
Total 436.34 659.76
(2) During the year the Company has given a part of its leased premises
on sub-lease. The rent received on account of sub-lease is ` 23.94
Lakhs (previous year ` 30.49 Lakhs).
2.24 Contingent liabilities to the extent not provided for
(` Lakhs)
March 31, 2014
Year ended
March 31, 2013
Income tax matter 216.88
2.25 The disclosures as required under Accounting Standard 15 on
Employee Benets
(1) Dened Contribution Plan
Contribution for the year to Dened Contribution Plan is recognised
in the Statement of Prot and Loss included under employee benets
expense note 2.20. Contribution to provident and other funds as
disclosed in note 2.20 are as under:
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Employers Contribution to
Provident Fund 177.27 161.46
Family Pension Fund 58.06 54.85
Superannuation Fund 7.58 7.35
(2) Dened benet plan Gratuity (Unfunded)
(a) Reconciliation of opening and closing balances of Dened benet
obligation
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Present value of Dened Benet
Obligation (DBO) as at the
beginning of the year 330.70 261.25
Actuarial loss/(gain) (37.31) 6.87
Benets paid (72.32) (28.90)
Present value of Dened benet
obligation as at the end of the year 328.78 330.70
(b) Break up of closing dened benet obligation into current and non-current.
(` In Lakhs)
March 31,2014
Year ended
March 31,2013
Current 74.17 74.40
Non-current 254.61 256.30
(c) Expenses recognised during the year in the Statement of Prot and Loss.
(` In Lakhs)
March 31,2014
Year ended
March 31,2013
Actuarial loss/(gain) (37.31) 6.87
Gratuity expense recognised in the
statement of prot and loss [see
note (2.20)] 70.40 98.35
(d) Assumptions:
March 31, 2014
Year ended
March 31, 2013
Salary escalation rate 8.00% 8.00%
The discount rate is based on the prevailing market yields of the Indian
Government securities as at the balance sheet date for the estimated term
of the obligations.
The estimates of future increase in salary considered in actuarial valuation
takes into account ination, seniority, promotion and other relevant factors.
(e) Net liability recognised in the Balance Sheet and experience adjustments
as at/for the year end and as at/for the previous four years end.
877
(` In Lakhs)
Gratuity (Unfunded)
Particulars As at
March 31,
2010
As at
March 31,
2011
As at
March 31,
2012
As at
March 31,
2013
As at
March 31,
2014
Present value of
dened benet
obligation 247.92 282.83 261.25 330.70 328.78
Experience
adjustment
arising on:
Plan liabilities
[loss/(gain)] (8.43) (7.03) (49.93) 0.07 (24.28)
(f) The above information has been certied by the actuary.
2.26 Related party disclosures
(1) List of Related parties and relationships
Name of the Related Party
(a) Holding company and ultimate holding company
Bristlecone Limited (Holding company)
Mahindra and Mahindra Limited (Ultimate Holding company)
(b) Subsidiary companies
Bristlecone (Singapore) Pte. Limited
Bristlecone GmbH
(c) Fellow subsidiaries (where there are transactions)
Bristlecone Inc.
Bristlecone UK Limited
Bristlecone (Malaysia) Sdn.Bhd.
Bristlecone International AG
Bristlecone Consulting Limited
Mahindra First Choice Services Limited
Mahindra Life Space Developers Limited
Mahindra Trucks and Buses Limited (Formerly known as Mahindra
Navistar Automotives Limited)
Mahindra Retail Private Limited
Mahindra Shubhlabh Services Limited
Mahindra USA Inc.
Mahindra Two Wheelers Limited
Mahindra Integrated Business Solutions Limited
Mahindra and Mahindra Financial Services Limited
Mahindra Holidays and Resorts India Limited
Mahindra Vehicles Manufacturers Ltd.
(2) Related Party Transactons and Balances
(` in Lakhs)
Particulars Ultimate
Holding
Company
Subsidiary
Companies
Fellow
Subsidiary
Companies
Holding
Company
(a) Transactions with related parties
Reimbursement of expenses paid 11.85 28.99
(41.38) () (66.85) ()
Reimbursement of expenses received 6.63 29.69 500.89
(30.98) (4.59) (557.23) ()
Income from services rendered 2,903.92 2,409.61 5,854.42
(2,730.62) (1,936.00) (5,109.03) ()
Business promotion expenses 23.88
() (126.19) () ()
Interest on loans 1.79
31
ST
(` in Lakhs)
Particulars Ultimate
Holding
Company
Subsidiary
Companies
Fellow
Subsidiary
Companies
Holding
Company
(89.89) () (2.56) ()
Rent received
() () (30.49) ()
Purchase of software
(13.29) () () ()
Loan taken
() () (25.49) ()
Loan repaid 21.21
(802.76) () (4.28) ()
Professional fees 10.43
() () (9.90) ()
Other expenses 1.25 45.89 0.20
() (28.40) (1.09) ()
(b) Related party balances as at the year end
Loan outstanding as at the year end.
() () (21.21) ()
Debit / (Credit) balances (net)
outstanding as at the year end.
172.71 1,077.23 2,858.45
(439.93) (314.63) (3,118.13) ()
Provision for doubtful trade
receivables as at the year end.
3.81
(3.81) () (0.16) ()
Unbilled Revenues as at the year end. 234.97
(5.50) (117.27) () ()
Income received in advance 31.54 2.22
() () () ()
[Figures in brackets ( ) pertain to the previous year]
(3) Out of the above items, transactions with subsidiary companies and fellow
subsidiary companies in excess of 10% of total related party transactions
are as under:
(` in Lakhs)
Transactions For the
year ended
March 31, 2014
For the
year ended
March 31, 2013
Reimbursement of expenses paid:-
Fellow Subsidiary Companies
Bristlecone Inc. 28.99 66.85
Reimbursement of expenses received:-
Fellow Subsidiary Companies
Bristlecone Inc. 233.43 321.14
Bristlecone UK Limited 32.26
Bristlecone International AG 213.96 141.31
Income from services rendered:-
Subsidiary companies
Bristlecone GmbH 2,325.86 1,844.68
Fellow Subsidiary companies
Bristlecone Inc. 3,515.69 3,639.20
Bristlecone (Malaysia) Sdn.Bhd. 1,125.31 344.11
Rent received
Fellow Subsidiary company
Mahindra First Choice Services Limited 30.49
Professional fees
Mahindra Integrated Business Solutions Limited 10.43 9.90
878
31
ST
(` in Lakhs)
Transactions For the
year ended
March 31, 2014
For the
year ended
March 31, 2013
Other expenses
Mahindra Holidays and Resorts India Limited 0.20 1.09
Business promotion expenses:-
Bristlecone (Singapore) Pte. Limited 23.88 21.88
Bristlecone GmbH 104.31
Loan taken
Fellow subsidiary
Mahindra and Mahindra Financial Services Limited 25.49
Loan repaid
Fellow subsidiary
Mahindra and Mahindra Financial Services Limited 21.21 4.28
Interest on loans
Fellow Subsidiary
Mahindra and Mahindra Financial Services Limited 1.79 2.56
2.27 Segment Reporting:
(1) Primary Segment: Business Segment
The Companys business activity falls within a single business
segment viz. Information Technology Services. All other activities
of the company revolve around its main business. Hence, there are
no separate reportable primary segments as dened by Accounting
Standard 17 on Segment Reporting.
(2) Secondary Segment: Geographical Segment
The Company has identied two segments under this category
based on geographical locations of customers.
(` in Lakhs)
Particulars Domestic Overseas Total
Revenue attributable to location of
customers
5,276.08 8,292.52 13,568.60
(i.e. income from services and sale of
computer hardware/software) (5,193.29) (6,987.61) (12,180.90)
Assets - Trade receivables 548.51 4,068.92 4,617.43
(991.08) (3,878.14) (4,869.22)
Assets - Unbilled revenues 317.64 253.11 570.75
(199.23) (124.41) (323.64)
Capital Expenditure 264.39 264.39
(1,018.86) () (1,018.86)
Notes:
(a) The Companys operating facilities are located in India. Most of the assets
are not identiable separately to any reportable segment as these are used
interchangeably between the segments.
(b) Figures for the previous year are given in bracket.
2.28(a) Details of Derivative Instruments (for hedging): None
2.28(b) The year end foreign currency exposures that have not been
specically hedged by a derivative instrument or otherwise are given
below:
Sr.
No.
Particulars As at March
31, 2014
` In Lakhs
As at March
31, 2014
In Foreign
Currency
As at March
31, 2013
` In Lakhs
As at March
31, 2013
In Foreign
Currency
(a) Amounts receivable in foreign currency on account of the following:
Unbilled Revenues 228.13 EUR 276,592 117.27 EUR 168,757
24.98 USD 41,634 7.14 USD 13,125
Debtors
2,237.07 USD 3,735,910 3,391.53 USD 6,232,147
GBP Nil 7.40 GBP 8,981
761.91 MYR 4,147,981 281.69 MYR 1,605,977
20.69 SGD 43,501 75.85 SGD 173,331
1,049.25 EUR 1,272,123 121.67 EUR 215,654
(b) Amounts payable in foreign currency on account of the following:
Creditors 37.36 USD 62,397 214.88 USD 394,848
23.79 SGD 50,000 25.56 SGD 58,570
104.31 EUR 150,000
2.29 Expenditure in foreign currency (on accrual basis):
(` In Lakhs)
Sr.
No.
March 31, 2014
Year ended
March 31, 2013
(i) Travelling 183.70 281.20
(ii) Business promotion expenses 23.88 126.19
(iii) Software purchase expenses 90.30 59.65
(iv) Subcontracting expenses 21.01
(v) Others (Includes training, books
and periodicals, membership and
subscription, etc.) 0.92
2.30 Earning in foreign currency:
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
Professional and consultancy fees in respect of
services rendered (including unbilled revenue) 8,292.52 6,987.61
2.31 Remuneration to auditors as (excluding service tax):
(` In Lakhs)
March 31, 2014
Year ended
March 31, 2013
As statutory auditors 9.00 8.10
For taxation matter 7.75 6.25
For other services 1.00 0.90
For reimbursement of expenses 0.10 0.06
17.85 15.31
2.32 Earnings per share:
(` In Lakhs)
Sr.
No.
March 31, 2014
Year ended
March 31, 2013
(i) Prot for the year (` In Lakhs) 1,001.48 275.80
(ii) Weighted average number of Equity
Shares (for Basic and Diluted) 1,904,944 1,904,944
(iii) Nominal value per equity share (`) 100 100
(iv) Earnings Per Share in (`)
[Basic and Diluted] 52.57 14.48
2.33 Capital Commitments as at 31st March,2014 Rs. Nil (Previous Year Rs. Nil).
2.34 Previous Years gures have been regrouped/rearranged wherever necessary
in order to conform to current years groupings and classications.
Ulhas N. Yargop
Director
C. Krishnadas
Director
K. Chandrasekar
Director
S. Venkatraman
Director
879
Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary
Companies
Particulars Names of the Subsidiary Companies
Bristlecone
(Singapore)
Pte. Ltd.
Bristlecone
GmbH
The nancial year of the Subsidiary Company ended on .................................................. March 31, 2014
Rupees
March 31, 2014
Rupees
Number of Shares of the Subsidiary Company held by
Bristlecone India Limited at the above date
Equity .................................................................................................................................... 1,670,000 1
Extent of holding................................................................................................................... 100% 100%
The Net aggregate of prots/(losses) of the Subsidiary Company for
its Financial year so far as they concern the members of Bristlecone
India Limited:
(a) Dealt with in the accounts of Bristlecone India
Limited for the Year ended 31
st
March, 2014 .............................................................

(b) Not dealt with in the accounts of Bristlecone India
st
March, 2014 .............................................................
1,771,550 25,406,488
The Net aggregate of prots/(losses) of the Subsidiary Company for
its previous nancial years, so far as they concern the members of
Bristlecone India Limited :
(a) Dealt with in the accounts of Bristlecone India
st
March, 2014 .............................................................

(b) Not dealt with in the accounts of Bristlecone India
st
March, 2014 .............................................................
(75,504,171) 23,800,317
Ulhas N. Yargop
Director
C. Krishnadas
Director
K. Chandrasekar
Director
S. Venkatraman
Director
BRISTLECONE (SINGAPORE) PTE. LTD.
880
REPORT OF THE DIRECTORS
The Directors present their report together with the audited nancial statements of the Company for the nancial year ended
31
st
March, 2014.
1 DIRECTORS
The Directors of the Company in ofce at the date of this
report are:
Mr. Krishnadas Chillara
Mr. Lim Tiong Beng
Mr. Satish Moorjani
2 ARRANGEMENTS TO ENABLE DIRECTORS TO
ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION
OF SHARES AND DEBENTURES
Neither at the end of the nancial year nor at any
time during the nancial year did there subsist any
arrangement whose object was to enable the directors to
acquire benets by means of the acquisition of shares or
debentures in the company or any other body corporate
except for the options mentioned below.
3 DIRECTORS INTERESTS IN SHARES AND DEBENTURES
The Directors of the Company holding ofce at the end of the nancial year had no interests in the share capital and
debentures of the Company and related corporations as recorded in the Register of Directors Shareholdings kept by the
Company under Section 164 of the Singapore Companies Act except as follows:
Name of Directors and Companies At beginning At end
in which interests are held of year of year
Stock Options Stock Options
Mahindra & Mahindra Ltd Units of Indian rupee 5 each Units of Indian rupee 5 each
Krishnadas Chillara 8,067 12,146 11,159 6,054
Satish Moorjani
Bristlecone Ltd., Cayman Units of US$0.001 each
Satish Moorjani 80,000 80,000
4 DIRECTORS RECEIPT AND ENTITLEMENT TO
CONTRACTUAL BENEFITS
Since the beginning of the nancial year, no Director has
received or become entitled to receive a benet which
is required to be disclosed under Section 201(8) of
the Singapore Companies Act, by reason of a contract
made by the Company or a related corporation with
the Director or with a rm of which he is a member, or
with a Company in which he has a substantial nancial
interest except for salaries, bonuses and other benets
as disclosed in the nancial statements. Certain directors
have received remuneration from related corporations in
their capacities as Directors and/or executives of those
related corporations.
5 SHARE OPTIONS
(a) Options to take up unissued shares
During the nancial year, no options to take up
unissued shares of the Company were granted.
(b) Options exercised
During the nancial year, there were no shares of the
company issued by virtue of the exercise of an option
to take up unissued shares.
(c) Unissued shares under option
At the end of the nancial year, there were no
unissued shares of the Company under options.
6 AUDITORS
The auditors, Deloitte & Touche LLP, have expressed their
willingness to accept re-appointment.
On behalf of the Directors
Krishnadas Chillara Satish Moorjani
Director Director
Place: Mumbai
Date: 17
th
April, 2014
881
STATEMENT OF DIRECTORS
In the opinion of the directors, the accompanying nancial statements as set out herein are drawn up so as to give a true and
fair view of the state of affairs of the company as at March 31, 2014 and of the results, changes in equity and cash ows of the
company for the nancial year then ended and at the date of this statement there are reasonable grounds to believe that the
company will be able to pay its debts as and when they fall due.
On Behalf of the Directors
Krishnadas Chillara Satish Moorjani
Director Director
Place : Mumbai
Date : 17
th
April, 2014
882
INDEPENDENT AUDITORS REPORT TO THE MEMBER OF BRISTLECONE (SINGAPORE) PTE. LTD.
of Bristlecone (Singapore) Pte. Ltd. (the company) which
comprise statement of nancial position of the company as
at March 31, 2014, and the statement of prot or loss and
other comprehensive income, statement of changes in equity
and statement of cash ows of the company for the year then
ended, and a summary of signicant accounting policies and
other explanatory information, as set out herein.
Management is responsible for the preparation of nancial
statements that give a true and fair view in accordance
with the provisions of the Singapore Companies Act (the
Act) and Singapore Financial Reporting Standards and for
devising and maintaining a system of internal accounting
controls sufcient to provide a reasonable assurance that
assets are safeguarded against loss from unauthorised use or
disposition; and transactions are properly authorised and that
they are recorded as necessary to permit the preparation of
true and fair prot and loss account and balance sheet and to
maintain accountability of assets.
accordance with Singapore Standards on Auditing. Those
misstatement.
internal control relevant to the entitys preparation of nancial
statements that give a true and fair view in order to design
opinion.
Opinion
In our opinion, the accompanying nancial statements of
the company are properly drawn up in accordance with the
provisions of the Act and Singapore Financial Reporting
Standards so as to give a true and fair view of the state of
affairs of the company as at March 31, 2014 and of the results,
changes in equity and cash ows of the company for the year
ended on that date.
In our opinion, the accounting and other records required by
the Act to be kept by the company have been properly kept in
accordance with the provisions of the Act.

Public Accountants and
Singapore
17 April, 2014
883
STATEMENT OF FINANCIAL POSITION 31
ST
MARCH, 2014
Note 2014 2014 2013 2013
$ INR $ INR
ASSETS
Current assets
Cash and cash equivalents ............................ 6 1,32,696 63,20,310 1,41,661 67,47,313
Trade receivables ........................................... 7 63,500 30,24,505 3,85,452 1,83,59,079
Other receivables and prepayments ............. 8 5,546 2,64,156 6,011 2,86,304
Total current assets ......................................... 2,01,742 96,08,971 5,33,124 2,53,92,696
Total assets ..................................................... 2,01,742 96,08,971 5,33,124 2,53,92,696
LIABILITIES AND EQUITY
Current liabilities
Trade payables ............................................... 9 45,463 21,65,402 4,06,391 1,93,56,403
Other payables ................................................ 10 34,308 16,34,090 41,956 19,98,364
Total current liabilities ..................................... 79,771 37,99,492 4,48,347 2,13,54,767
Capital and reserves
Share capital .................................................... 11 16,70,000 7,95,42,100 16,70,000 7,95,42,100
Accumulated losses ........................................ (15,48,029) (7,37,32,621) (15,85,223) (7,55,04,171)
Total equity ....................................................... 1,21,971 58,09,479 84,777 40,37,929
Total liabilities and equity ......................... 2,01,742 96,08,971 5,33,124 2,53,92,696
See accompanying notes to nancial statements.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
YEAR ENDED 31
ST
MARCH, 2014
Note 2014 2014 2013 2013
$ INR $ INR
Revenue .......................................................... 12 2,47,950 1,18,09,859 2,60,000 1,23,83,800
Cost of sales .................................................... (2,23,336) (1,06,37,494) (2,11,449) (1,00,71,316)
Gross prot ..................................................... 24,614 11,72,365 48,551 23,12,484
Selling expenses .............................................. (7,093) (3,37,840) (4,503) (2,14,477)
Administrative expenses .................................. (51,452) (24,50,659) (80,878) (38,52,219)
Other income ................................................... 13 71,125 33,87,684 67,588 32,19,216
Prot before income tax ............................... 14 37,194 17,71,550 30,758 14,65,004
Income tax ....................................................... 15
Prot for the year, representing total
comprehensive income for the year .............. 37,194 17,71,550 30,758 14,65,004
884
STATEMENT OF CASH FLOWS YEAR ENDED 31
ST
MARCH, 2014
2014 2014 2013 2013
$ INR $ INR
Prot before income tax ..................................................... 37,194 17,71,550 30,758 14,65,004
Adjustments for:
Loss on disposal of equipment ......................................... 3,114 1,48,320
Depreciation expense ......................................................... 4,518 2,15,192
Operating cash ows before movements in working
capital .................................................................................. 37,194 17,71,550 38,390 18,28,516
Trade receivables ................................................................ 3,21,952 1,53,34,574 1,17,854 56,13,386
Other receivables ................................................................ 465 22,148 20,348 9,69,175
Trade payables ................................................................... (3,60,928) (1,71,91,001) (97,499) (46,43,877)
Other payables ................................................................... (7,648) (3,64,274) (26,323) (12,53,764)
Cash (used in) generated from operations, representing
cash (used in) from operating activities ............................ (8,965) (4,27,003) 52,770 25,13,436
Investing activity
Sales proceeds from disposal of equipment, representing
net cash from investing activity.......................................... 8,571 4,08,237
Net (decrease) increase in cash and bank balances ....... (8,965) (4,27,003) 61,341 29,21,673
Cash and cash equivalents at beginning of year ............. 1,41,661 67,47,313 80,320 38,25,640
Cash and cash equivalents at end of year ................... 1,32,696 63,20,310 1,41,661 67,47,313
STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31
ST
MARCH, 2014
Share capital Accumulated losses Total
$ INR $ INR $ INR
Balance at April 1, 2012 ............................ 16,70,000 7,95,42,100 (16,15,981) (7,69,69,175) 54,019 25,72,925
comprehensive income for the year ........... 30,758 14,65,004 30,758 14,65,004
Balance at March 31, 2013 ........................ 16,70,000 7,95,42,100 (15,85,223) (7,55,04,171) 84,777 40,37,929
comprehensive income for the year ............. 37,194 17,71,550 37,194 17,71,550
Balance at March 31, 2014 ........................... 16,70,000 7,95,42,100 (15,48,029) (7,37,32,621) 1,21,971 58,09,479
885
NOTES TO FINANCIAL STATEMENTS 31
ST
MARCH, 2014
expected life of the nancial instrument, or where appropriate, a shorter
period. Income and expense are recognised on an effective interest basis.
Financial assets
Cash and cash equivalents comprise cash at bank that are readily
convertible to a known amount of cash and are subject to an insignicant
risk of changes in value.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the effective
interest method less impairment. Interest is recognised by applying the
effective interest method, except for short-term receivables when the
recognition of interest would be immaterial.
Impairment of nancial assets
Financial assets are assessed for indicators of impairment at the end
of each reporting period. Financial assets are impaired where there is
objective evidence that, as a result of one or more events that occurred
after the initial recognition of the nancial asset, the estimated future cash
ows of the investment have been impacted.
For nancial assets carried at amortised cost, the amount of the impairment
is the difference between the assets carrying amount and the present
value of estimated future cash ows, discounted at the original effective
interest rate.
The carrying amount of the nancial asset is reduced by the impairment
loss directly for all nancial assets with the exception of receivables where
the carrying amount is reduced through the use of an allowance account.
When a receivable is uncollectible, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are
credited against the allowance account. Changes in the carrying amount
of the allowance account are recognised in prot or loss.
If, in a subsequent period, the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring after the
impairment loss was recognised, the previously recognised impairment
loss is reversed through prot or loss to the extent the carrying amount
of the investment at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been
recognised.
Derecognition of nancial assets
The company derecognises a nancial asset only when the contractual
rights to the cash ows from the asset expire, or it transfers the nancial
asset and substantially all the risks and rewards of ownership of the asset
to another entity. If the company neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the
transferred asset, the company recognises its retained interest in the asset
and an associated liability for amounts it may have to pay. If the company
retains substantially all the risks and rewards of ownership of a transferred
nancial asset, the company continues to recognise the nancial asset and
also recognises a collateralised borrowing for the proceeds received.
Financial liabilities and equity instruments
Classication as debt or equity
Financial liabilities and equity instruments issued by the company are
classied according to the substance of the contractual arrangements
entered into and the denitions of a nancial liability and an equity
instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the company after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
Trade and other payables are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost,
using the effective interest method, with interest expense recognised on an
effective yield basis, except for short-term payables where the recognition
of interest would be immaterial.
1. GENERAL
The company (Registration No. 200300626G) is incorporated in the
Republic of Singapore with its principal place of business at 3 Temasek
Avenue, #21-00 Centennial Tower, Singapore 039190 and registered
ofce at 3, Anson Road, #27-01, Springleaf Tower, Singapore 079909.
The nancial statements are expressed in Singapore dollars, which is the
functional currency of the company.
The company is principally engaged in providing various types of computer
software services.
The nancial statements of the company for the year ended March 31,
2014 were authorised for issue by the Board of Directors on April 17, 2014.
BASIS OF ACCOUNTING - The nancial statements have been prepared
in accordance with the historical cost basis, except as disclosed in the
accounting policies below, and are drawn up in accordance with the
provisions of the Singapore Companies Act and Singapore Financial
Reporting Standards (FRS).
Historical cost is generally based on the fair value of the consideration
given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants
at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the company takes into account
the characteristics of the asset or liability which market participants would
take into account when pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure purposes in these
consolidated nancial statements is determined on such a basis, except
for share-based payment transactions that are within the scope of FRS
102, leasing transactions that are within the scope of FRS 17, and
measurements that have some similarities to fair value but are not fair
value, such as net realisable value in FRS 2 or value in use in FRS 36.
In addition, for nancial reporting purposes, fair value measurements are
catergorised into Level 1, 2 or 3 based on the degree to which the inputs to
the fair value measurements are observable and the signicance of the inputs
to the fair value measurement in its entity, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date;
Level 2 inputs are inputs, other than quoted prices included within
Level 1, that are observable for the asset or liability, either directly or
indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
ADOPTION OF NEW AND REVISED STANDARDS - In the current nancial
year, the company has adopted all the new and revised FRSs and
Interpretations of FRS (INT FRS) issued that are relevant to its operations
and effective for annual years beginning on or after April 1, 2013. The
adoption of these new/revised FRSs and INT FRSs does not result in
changes to the companys accounting policies and has no material effect
on the amounts reported for the current or prior years nancial statements.
At the date of authorisation of these nancial statements, management
anticipates that the adoption of the FRSs, INT FRSs and amendments
to FRSs that were issued at the date of authorisation of these nancial
statements but effective only in future periods will not have a material
impact on the nancial statements of the company in the period of their
initial adoption.
FINANCIAL INSTRUMENTS - Financial assets and nancial liabilities are
recognised on the companys statement of nancial position when the
company becomes a party to the contractual provisions of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised
cost of a nancial instrument and of allocating interest income or expense
over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts or payments (including all fees on
points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the
886
Derecognition of nancial liabilities
The company derecognises nancial liabilities when, and only when, the
companys obligations are discharged, cancelled or they expire.
PROVISIONS - Provisions are recognised when the company has a
present obligation (legal or constructive) as a result of a past event, it is
probable that the company will be required to settle that obligation and a
reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end of
the reporting period, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cash
ows estimated to settle the present obligation, its carrying amount is the
present value of those cash ows.
When some or all of the economic benets required to settle a provision are
expected to be recovered from a third party, the receivable is recognised
as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
LEASES - Leases are classied as nance leases whenever the terms of
the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classied as operating leases.
Rental payable under operating leases are charged to prot or loss on
a straight-line basis over the term of the relevant lease unless another
systematic basis is more representative of the time pattern in which
economic benets from the leased asset are consumed. Contingent
rentals arising under operating leases are recognised as an expense in
In the event that lease incentives are received to enter into operating
leases, such incentives are recognised as a liability. The aggregate benets
of incentives is recognised as a reduction of rental expense on a straight-
line basis, except where another systematic basis is more representative
of the time pattern in which economic benets from the leased asset are
consumed.
REVENUE RECOGNITION - Revenue is measured at the fair value of the
consideration received or receivable and represents amounts receivable
for services provided in the normal course of business, net of discounts
and sales related taxes.
Rendering of services
Revenue from a contract to provide services is recognised by reference
to the stage of completion of the contract. The stage of completion of the
contract is determined as follows:
installation fees are recognised by reference to the stage of
completion of the installation, determined as the proportion of the
total time expected to install that has elapsed at the end of the
reporting period;
servicing fees are recognised by reference to the proportion of the
total cost of providing the servicing;
revenue from time and material contracts is recognised at the
contractual rates as labour hours are delivered and direct expenses
are incurred; and
where the outcome of a contract cannot be estimated reliably,
contract revenue is recognised to the extent of contract costs
incurred that it is probable will be recoverable. Contract costs are
recognised as expenses in the period in which they are incurred.
RETIREMENT BENEFIT COSTS - Payments to dened contribution
retirement benet plans are charged as an expense as they fall due.
Payments made to state-managed retirement benet schemes, such as the
Singapore Central Provident Fund, are dealt with as payments to dened
contribution plans where the companys obligations under the plans are
equivalent to those arising in a dened contribution retirement benet plan.
EMPLOYEE LEAVE ENTITLEMENT - Employee entitlements to annual
leave are recognised when they accrue to employees. A provision is made
for the estimated liability for annual leave as a result of services rendered
by employees up to the end of the reporting period.
INCOME TAX - Income tax expense represents the sum of the tax currently
payable and deferred tax.
The tax currently payable is based on taxable prot for the year. Taxable
prot differs from prot as reported in the statement of comprehensive
income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are not taxable
or tax deductible. The companys liability for current tax is calculated using
tax rates (and tax laws) that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax is recognised on the differences between the carrying
amounts of assets and liabilities in the nancial statements and the
corresponding tax bases used in the computation of taxable prot, and
is accounted for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable
that taxable prots will be available against which deductible temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable
that sufcient taxable prots will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised based on the tax
rates (and tax laws) that have been enacted or substantively enacted by
the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority
and the company intends to settle its current tax assets and liabilities on a
net basis.
Current and deferred tax are recognised as an expense or income in prot
or loss.
FOREIGN CURRENCY TRANSACTIONS - The nancial statements of the
company are measured and presented in Singapore dollars, which is the
currency of the primary economic environment in which the company
operates (its functional currency).
Amounts are translated for convenience into Indian Rupees at the
exchange rate of INR47.63 = SGD1 which is the average of the telegraphic
transfer buying and selling rates quoted by Mumbai Branch of State Bank
of India on 28
th
March 2014. Comparative gures are also translated at this
rate.
Transactions in currencies other than the companys functional
currency are recorded at the rates of exchange prevailing on the date
of the transaction. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing
on the end of the reporting period. Non-monetary items carried at fair
value that are denominated in foreign currencies are retranslated at the
rates prevailing on the date when the fair value was determined. Non-
monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on
retranslation of monetary items are included in prot or loss for the period.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the companys accounting policies, which are
described in Note 2, management is required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both
Critical judgements in applying the companys accounting policies
Management is of the opinion that any instances of application of
judgement are not expected to have a signicant effect on the amounts
recognised in the nancial statements, except for judgements relating to
accounting estimates as discussed below.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of
estimation uncertainty at the end of the reporting period, that have a
signicant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next nancial year are discussed below.
887
Allowance for bad and doubtful debts
The company makes allowance for bad and doubtful debts based on
an assessment of the recoverability of trade and other receivables.
Allowances are applied to these receivables where events or changes in
circumstances indicate that the balances may not be recoverable. The
identication of bad and doubtful debts requires the use of judgments and
estimates. Where the expectation is different from the original estimate,
such difference will impact carrying value of receivables and doubtful
debts expenses in the year in which such estimate has been changed.
The carrying value of trade receivables as stated in Note 7 to nancial
statements.
4. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS
MANAGEMENT
The following table sets out the nancial instruments as at the end of the
reporting period:
2014 2014 2013 2013
$ INR $ INR
Financial assets
Receivable (including cash
and cash equivalents) 2,01,424 95,93,825 5,32,341 2,53,55,402
Financial liabilities
Payables at amortised cost 79,771 37,99,493 2,17,250 1,03,47,618
a) Foreign exchange risk management
The companys foreign currency exposures arise mainly from the
exchange rate movements of the United States dollar against the
Singapore dollar.
At the reporting date, the carrying amounts of monetary assets
and monetary liabilities denominated in currency other than the
companys functional currency are as follows:
Assets Liabilities
2014 2014 2013 2013 2014 2014 2013 2013
$ INR $ INR $ INR $ INR
United States
dollar 1,68,334 80,17,748 2,22,028 1,05,75,194
The sensitivity rate used when reporting foreign currency risk to
key management personnel is 10%, which is the change in foreign
exchange rate that management deems reasonably possible which
will affect outstanding foreign currency denominated monetary items
at period end.
If the Singapore dollar was to appreciate/depreciate by 10% against
the United States dollar, prot before tax will decrease/increase by
$Nil (2013 : $5,369, INR 2,55,725).
b) Interest rate risk management
The companys exposure to interest rate and liquidity risks is
insignicant as it does not have signicant interest bearing nancial
assets and liabilities.
c) Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in nancial loss to the company.
The companys objective is to seek continual revenue growth while
minimising losses incurred due to increased credit risk exposure.
The company trades only with recognised and creditworthy parties.
It is the companys policy that all customers who wish to trade on
credit terms are subject to credit verication procedures. In addition,
receivables balances are monitored on an ongoing basis with result
that the companys exposure to bad debts is not signicant.
The company has a signicant concentration of credit risk with
1 customer (2013 : 2 customers representing 100% (2013 : 80%) of
the companys trade receivables.
Cash and bank balances are held with reputable nancial institutions.
Further details of credit risks on trade and other receivables are
disclosed in Notes 7 and 8.
d) Liquidity risk management
The company monitors and maintains a level of cash and bank
balances deemed adequate by management to nance the companys
operations and to mitigate effects of uctuations in cash ows.
All nancial liabilities in 2014 and 2013 are repayable on demand or
due within 1 year from the end of the reporting period.
e) Fair value of nancial asset and nancial liabilities
The carrying amounts of cash and cash equivalents, trade and
other receivables and payables approximate their respective fair
values due to the relatively short-term maturity of these nancial
instruments.
f) Capital risk management policies and objectives
The company reviews its capital structure at least annually to ensure
that the company will be able to continue as a going concern. The
capital structure of the company comprises only of issued capital.
The companys overall strategy remains unchanged from 2013.
5. HOLDING COMPANY, RELATED COMPANIES AND RELATED PARTY
TRANSACTIONS
The company is a subsidiary of Bristlecone India Limited., incorporated in
India. The companys ultimate holding company is Mahindra & Mahindra
Limited, also incorporated in India. Related companies in these nancial
statements refer to members of the ultimate holding companys group of
companies.
Some of the companys transactions and arrangements are between members
of the group and the effect of these on the basis determined between the
parties are reected in these nancial statements. The intercompany balances
are unsecured, interest-free and repayable on demand.
Signicant intercompany transactions are as follows:
2014 2014 2013 2013
$ INR $ INR
Immediate holding
company
Marketing support fees (50,000) (23,81,500) (50,000) (23,81,500)
Subcontracting fees 1,74,069 82,90,906 2,07,999 99,06,992
Compensation of directors and key management personnel
Except for the directors of the company, there are no other key management
personnel. Among the three directors, other than Mr Lim Tiong Beng (Note
14), remuneration for the two of them is paid by its holding company.
6. CASH AND CASH EQUIVALENTS
2014 2014 2013 2013
$ INR $ INR
Bank Balances 132,696 63,20,310 1,41,661 67,47,313
7. TRADE RECEIVABLES
2014 2014 2013 2013
$ INR $ INR
Outside Parties 13,500 6,43,005 3,25,366 1,54,97,183
Immediate holding
company (Note 5) 50,000 23,81,500 58,570 27,89,689
Related company
(Note 5) 11,265 5,36,552
Allowances for doubtful
debts-outside party (9,749) (4,64,345)
Total 63,500 30,24,505 3,85,452 1,83,59,079
The average credit period on sale is 30 days (2013 : 30 days).
In determining the recoverability of a trade receivables, the company
considers any change in the credit quality of the trade receivable from
the date credit was initially granted up to the reporting date. The trade
receivables that are neither past due nor impaired relates to customers
888
that the company has assessed to be creditworthy based on the
credit evaluation process performed by management. Accordingly, the
management believes that there is no further credit provision required in
excess of the allowance for doubtful debts.
Included in the companys trade receivables balance are debtors with a
carrying amount of $Nil (2013 : $316,726, INR 15,085,659) which are past
due at the reporting date for which the company has not provided as there
has not been a signicant change in credit quality and the amounts are still
considered recoverable.
(i) The aging of receivables that past due but not impaired are as follows:
2014 2014 2013 2013
$ INR $ INR
< 3 months 46,020 21,91,933
3 months to 6 months 18,725 8,91,872
> 6 months 2,51,981 1,20,01,855
3,16,726 1,50,85,660
(ii) These amounts are stated before any deduction of impairment
losses. These receivables are not secured by any collateral or credit
enhancement.
Movement in the allowance for doubtful debts:
2014 2014 2013 2013
$ INR $ INR
Balance at the beginning
of the year 9,749 4,64,345 9,749 4,64,345
Amount written off during
the year (9,749) (4,64,345)
Balance at the end of
the year 9,749 4,64,345
8. OTHER RECEIVABLES AND PREPAYMENTS
2014 2014 2013 2013
$ INR $ INR
Deposits 3,728 1,77,565 3,728 1,77,565
Prepayments 318 15,146 783 37,294
Others 1,500 71,445 1,500 71,445
Total 5,546 2,64,156 6,011 2,86,304
9. TRADE PAYABLES
2014 2014 2013 2013
$ INR $ INR
Immediate holding
company (Note 5) 43,500 20,71,904 1,73,331 82,55,756
Related company
(Note 5) 1,963 93,498 1,963 93,498
Advance from customers 2,31,097 1,10,07,149
45,463 21,65,402 4,06,391 1,93,56,403
The average credit period on purchases of goods is 90 days (2013 :
1 month).
10. OTHER PAYABLES
2014 2014 2013 2013
$ INR $ INR
Other payables 280 13,336 648 30,864
34,308 16,34,090 41,956 19,98,364
11. SHARE CAPITAL
2014 2013 2014 2014 2013 2013
Number of ordinary shares $ INR $ INR
Issued and paid:
At beginning and end
of year 16,70,000 16,70,000 16,70,000 7,95,42,100 16,70,000 7,95,42,100
Fully paid ordinary shares, which have no par value, carry one vote per share and
carry a right to dividends as and when declared by the company.
12. REVENUE
2014 2014 2013 2013
$ INR $ INR
Rendering Services 2,47,950 1,18,09,859 2,60,000 1,23,83,800
13. OTHER INCOME
2014 2014 2013 2013
$ INR $ INR
Marketing support fees
(Note 5) 50,000 23,81,500 50,000 23,81,500
Others 21,125 10,06,184 17,588 8,37,716
Total 71,125 33,87,684 67,588 32,19,216
Marketing support fees is an incentive given by its immediate holding
company, Bristlecone India Limited for the companys business
development costs incurred in Singapore.
14. PROFIT BEFORE INCOME TAX
This is arrived at after charging (crediting):
2014 2014 2013 2013
$ INR $ INR
Staff costs (excluding
directors' fees) 2,22,832 1,06,13,488 2,10,489 1,00,25,591
Directors' fees 2,000 95,260 2,000 95,260
Foreign exchange loss
(gain) 699 33,293 (461) (21,957)
Loss on disposal of
equipment 3,114 1,48,320
889
16. OPERATING LEASE ARRANGEMENTS
2014 2014 2013 2013
$ INR $ INR
Minimise lease payments
paid under operating
leases recognised as an
expense during the year 3,680 1,75,278 3,576 1,70,325
At the end of the reporting period, the company has outstanding
commitments under non-cancellable operating leases, which fall due as
follows:
2014 2014 2013 2013
$ INR $ INR
Within one year 2,682 1,27,744 2,682 1,27,744
Operating lease payments represent rentals payable by the company for
its ofce premises. Leases are negotiated for an average term of 1 year
and rentals are xed for an average of 1 year.
15. INCOME TAX
Domestic income tax is calculated at 17% (2013 : 17%) of the estimated
assessable prot for the year. The total income tax for the year can be
reconciled to the accounting prot as follows:
2014 2014 2013 2013
$ INR $ INR
Prot before income
tax 37,194 17,71,550 30,758 14,65,004
Tax at the domestic
income tax rate of 17%
(2013 : 17%) 6,323 3,01,164 5,229 2,49,057
Utilisation of deferred
benet previously not
recognised (6,323) (3,01,164) (5,229) (2,49,057)
Total income tax
expense
Subject to agreement with the Comptroller of Income Tax and compliance
with certain conditions of the relevant tax legislation, the company
has temporary differences from unabsorbed tax losses amounting to
$1,382,197(INR 65,834,043) (2013 : $1,419,391) (INR 67,605,593) available
for offsetting against future taxable income.
The above deferred tax benets have not been recognised in the nancial
statements due to the unpredictability of future prot streams.
BRISTLECONE GmbH
890
MANAGING DIRECTORS REPORT TO THE SHAREHOLDERS
Your Managing Directors present their Eleventh Report together with the audited accounts for the nancial year ended 31
st
March, 2014.
Financial Results
Particulars Financial year
ended
31
st
March, 2014
Financial year
ended
31
st
March, 2014
Financial year
ended
31
st
March, 2013
Financial year
ended
31
st
March, 2013
(EURO) (INR) (EURO) (INR)
Sales and Income from Operations ................ 4,122,595 340,485,156 3,435,207 283,713,770
Other Income ................................................... 28 2,293 34 2,782
Total ................................................................. 4,122,623 340,487,449 3,435,241 283,716,552
(Loss)/Prot before Interest, Depreciation,
Taxation and Extraordinary Items .................... 399,008 32,954,051 214,251 17,694,911
Less: Depreciation ........................................... 3,869 319,510 4,591 379,133
(Loss)/Prot before Tax .................................... 395,139 32,634,541 209,660 17,315,778
Tax on Income ................................................. 87,517 7,228,054 73,256 6,050,202
Other Taxes ......................................................
Net Prot/(Loss) after Tax ................................ 307,622 25,406,487 136,404 11,265,576
Balance of Prot/(Loss) brought forward from
last year ............................................................ 288,175 23,800,316 151,771 12,534,740
Prot & Loss Account Balance carried
forward .............................................................. 595,797 49,206,803 288,175 23,800,316
Share Capital
The Companys share capital is
475,000 (INR 39,230,250)

including Capital Reserve of
425,000 (INR 35,100,750).

The share capital is fully paid up by the sole shareholder
Bristlecone India Limited, Mumbai/India.
The Directors state as an averment of the responsibility that :
ii. they have, in the selection of the accounting policies,
as at 31
st
March, 2014 and of the Prot of the Company
iii. proper and sufcient care has been taken for the
maintenance of adequate accounting records for
safeguarding the assets of the Company and for
iv. the annual accounts have been prepared on a going
concern basis.
Management and Representative Authority
Mr. Kulashekar Raghavan, Mr. Satish Moorjani and Mr.
Krishnadas Chillara are Managing Directors of the Company.
Each Managing Director of the Company represents the
Company jointly with another Managing Director.
Auditors
The auditors WWS Wirtz, Walter, Schmitz GmbH, have
expressed their willingness to accept re-appointment.
Satish Moorjani C. Krishnadas
Managing Directors
Mumbai
17
th
April, 2014
BRISTLECONE GmbH
891
A. Audit engagement
After appointment as auditor at the shareholder
meeting of
Bristlecone GmbH, Frankfurt am Main,
(hereinafter also referred to the Company) the
management of the Company has assigned us to audit
the annual nancial statements for the year ended
March 31, 2014, including the accounting records.
The terms governing this assignment are set out in the
General Terms of Engagement for public accountants and
rms of public accountants in the version of January 1,
2002, which are attached as Appendix 6 to this report.
The performance and results of our audit are included
in this report to which the audited nancial statements
(consisting of balance sheet, income statement and Notes)
are enclosed as annexures 1 - 3. This report includes
remarks in connection with HGB 321 (1) sentence 3
(German Commercial Code) as well as a summary of
the other results of the audit and the audit opinion. The
performance and the results of the audit are specied in
chapter C. and D. of this report in detail.
According to 321 (4a) HGB we conrm that we have
followed the independence rules for the audit.
Prepared this report in accordance with the German
standard of auditing No. 450, which is published by the
IDW (Institut der Wirtschaftsprfer; German Institute of
Public Accountants).
B. Basic conclusions
Though the year end audit isnt aimed to detect criminal
liabilities and breach of by law outside the accounting, we
are bound by law to indicate such facts, which represent
serious violations of the legal representatives or of
employees against the law or the bylaw of the company.
Our audit has not revealed any such facts.
C. Objects, nature and scope of the audit
We have audited the annual nancial statements, including
the accounting records, of Bristlecone GmbH for the
nancial year ended March 31, 2014. The bookkeeping
and the preparation of the annual nancial statements is
the responsibility of the Companys management. Our
responsibility is to express an opinion on the annual
nancial statements based on our audit.
The audit of the compliance of other legal regulations is
only part of the annual year end audit, if the regulations
have usually an impact on the nancial statements.
We have conducted the audit of the annual nancial
statements in accordance with 316 HGB considering
the German generally accepted standard on auditing
No 200: Objectives and general principles of orderly
performance of nancial statements audits. The standard
requires to plan and perform the audit, that reasonable
assurance can be obtained, that the accounting
records and the nancial statements are free of material
misstatements. The audit includes the assessment of the
accounting-, valuation- and classication-principles as well
as the evaluation of the overall presentation of the annual
nancial statements. We believe that our audit provides a
Within the audit the following main audit procedures were
carried out:
Reconciliation statements for trade debtors
Reconciliation of liabilities due to Shareholder
Reconciliation statements of the banks
Completeness and valuation of accruals
Check of the signifcant expenses and income
positions with regard to completeness as well
as consistency in classication and presentation
compared to last year
We have carried out the audit within April 2014.
All requested information and verications were given
to us. The management supplied us with a letter of
representation conrming the completeness of the
accounting records and the nancial statements.
D. Observations and explanations of the nancial
accounting
I. Accuracy of the accounting
1. Accounting records and further documents
The Companys accounting records are properly
maintained. The function of the accounting documents
comply with requirement. The accounting records
and further documents audited, comply with German
legal regulations and the supplementary articles of
the association.
2. Financial statements
The nancial statements as of March 31, 2014 are
orderly developed from the accounting records and
other necessary records of the Company.
The balance sheet and the income statement are
prepared in accordance with the regulations in
German Commercial Code for the accounting of
private limited companies [GmbH]. The notes to
the nancial statements include all legally required
information.
We have no knowledge of signicant matters that
happened after the end of the nancial year 2013 /
2014, which should be reported.
II. Overall statement of nancial statements
1. Observation to overall statement of the nancial
statements
In our opinion, the nancial statements show a true
and fair view of the Company in accordance with the
German principles of proper accounting.
BRISTLECONE GmbH
892
2. Essential valuation methods
The essential valuation methods are specied
correctly by the company in the Notes. Essential
changes of the valuation methods in comparison with
the year before cannot be recorded.
III. Analysis of the nancial statements of the company
The economic situation in the nancial year ended
March 31, 2014, compared with the previous nancial year
ended March 31, 2013, can be summarised as follows:
1. Composition of assets, shareholder equity and
liabilities
March 31,
2014
March 31,
2013
+/
K
% K
% K
Intangible assets and

Property, plant and
equipment 4 0,1 7 0,5 - 3
Non-current assets 4 0,1 7 0,5 - 3
Receivables and other
assets 1.021 34,1 842 55,2 + 179
Cash 1.957 65,3 677 44,3 + 1.280
Prepaid expenses 13 0,5 0 0,0 + 13
Current assets 2.991 99,9 1.519 99,5 + 1.472
Total assets 2.995 100,0 1.526 100,0 + 1.469
March 31,
2014
March 31,
2013
+/
K
% K
% K
Subscribed capital 50 1,7 50 3,3 0

Capital reserves 425 14,2 425 27,8 0
Prot carried forward 288 9,6 152 10,0 + 136
Net prot for the
nancial year 308 10,3 136 8,9 + 172
Total equity 1.071 35,8 763 50,0 + 308
Accrued liabilities 527 17,6 378 24,8 + 149
Short-term liabilities 81 2,7 7 0,4 + 74
Liabilities due to
shareholder 1.316 43,9 378 24,8 + 938
Total Liabilities 1.924 64,2 763 50,0 + 1.161
Total shareholder
equity and liabilities 2.995 100,0 1.526 100,0 + 1.469
2. Cash ow statement
2013/2014
K
2012/2013
K
Net prot for the year + 308 + 136

Depreciation on xed assets + 3 + 4
Cash Earnings according to DVFA/SG + 311 + 140
2013/2014
K
2012/2013
K
In-/decrease of accounts trade

receivables as well as other assets,
which have not to be allocated to cash
ow from investment and nancing
operation - 192 + 2
In-/decrease of accounts payable trade
as well as other liabilities which have
not to be allocated to cash ow from
investment and nancing operation + 1.161 - 133
= Cash ow from operations + 1.280 + 9
Payments for investments in xed
assets 0 0
= Cash ow from investments 0 0
Effective cash variations of liquid funds + 1.280 + 9
Liquid funds at the beginning of the
scal year + 677 + 668
= Liquid funds at the end of the
scal year + 1.957 + 677
Composition of the liquid funds at the
end of scal year:
Cash at banks + 1.957 + 677
3. Results of operation
2013/2014 2012/2013 +/
K
% K
% K
Sales 3.960 100,0 3.360 100,0 + 600

Operating income 3.960 100,0 3.360 100,0 + 600
Cost of purchased
services 2.809 70,9 2.646 78,7 + 163
Personnel expenses 483 12,2 328 9,8 + 155
Depreciation on xed
assets 3 0,1 4 0,1 - 1
Other operating expenses 432 10,9 248 7,4 + 184
Operating expenses 3.727 94,1 3.226 96,0 + 501
Other operating income 163 4,1 75 2,0 + 88
Taxes on income 88 2,2 73 2,0 + 15
Net result 308 7,8 136 4,0 + 172
BRISTLECONE GmbH
893
E. Replication of the Audit Opinion
We have granted the following audit opinion as stated
below to the nancial statements as of March 31, 2014 of
Bristlecone GmbH, Frankfurt am Main:
Audit Opinion
To Bristlecone GmbH:
We have audited the annual nancial statements,
comprising the balance sheet, the income statement
and the notes to the nancial statements, together with
the bookkeeping system of Bristlecone GmbH, Frankfurt
am Main, for the business year from April 1, 2013 until
March 31, 2014. The maintenance of the books and records
and the preparation of the annual nancial statements
in accordance with German Commercial Code and
supplementary provisions in the articles of incorporation
are the responsibility of the Companys management.
Our responsibility is to express an opinion on the annual
nancial statements including the bookkeeping system
based on our audit.
We conducted our audit of the annual nancial statements
in accordance with 317 HGB [Handelsgesetzbuch:
German Commercial Code] and the German generally
accepted standards for the audit of nancial statements
promulgated by the Institut der Wirtschaftsprfer in
Deutschland (IDW). Those standards require that we plan
and perform the audit, such that misstatements materially
affecting the presentation of the net assets, nancial
position and results of operations in the annual nancial
statements are detected with reasonable assurance.
Knowledge of the business activities and the economic
and legal environment of the company and expectations
as to possible misstatements are taken into account in
the determination of audit procedures. The evidence
supporting the disclosures in the books and records and
the annual nancial statements are examined primarily
on a test basis within the framework of the audit. The
audit includes assessing the accounting principles used
and signicant estimates made by management as well
as evaluating the overall presentation of the annual
nancial statements. We believe that our audit provides a
Our audit has not led to any reservations.
In our opinion, based on the ndings of our audit,
the annual nancial statements comply with the legal
requirements and supplementary provisions of the articles
of incorporation and give a true and fair view of the net
assets, nancial position and results of operations of the
company in accordance with German principles of proper
accounting.
Nettetal, April 17, 2014 WWS Wirtz, Walter, Schmitz GmbH
Wirtschaftsprfungsgesellschaft
Steuerberatungsgesellschaft
Schmedt
Wirtschaftsprfer
Post
Wirtschaftsprfer
BRISTLECONE GmbH
894
Annexure 1
Balance Sheet as of March 31, 2014
2014/3/31
2014/3/31
Rs.
2013/3/31
2013/3/31
Rs.
Assets
A. Fixed assets
I. Intangible assets
1. Software 2,00 165 2,00 165
II. Property, plant and equipment
1. Other equipment, operational and ofce equipment 4.194,00 3,46,382 7.037,00 5,81,185
B. Current assets
I. Accounts receivable and other assets
1. Trade receivables 825.273,56 6,81,59,343 623.939,33 5,15,31,149
2. Receivables due from afliated companies 185.113,00 1,52,88,482 214.296,91 1,76,98,782
3. Other assets 10.534,42 8,70,037 4.046,20 3,34,175
thereof with remaining term of more than one
year:

2.021,08 (Rs. 1,66,921) {(prior year:

2.021,08 (Rs. 1,66,921)}
1.020.920,98 8,43,17,862 842.282,44 6,95,64,106
II. Cash in banks 1.957.160,28 16,16,41,867 677.229,93 5,59,32,418
C. Prepaid expenses 12.842,65 10,60,674 0,00 0.00
2.995.119,91 24,73,66,950 1.526.551,37 12,60,77,874
2014/3/31
2014/3/31
Rs.
2013/3/31
2013/3/31
Rs.
Equity and liabilities
A. Equity
I. Subscribed capital 50.000,00 41,29,500 50.000,00 41,29,500
II. Capital reserves 425.000,00 3,51,00,750 425.000,00 3,51,00,750
III. Prot carried forward 288.174,32 2,38,00,317 151.770,68 1,25,34,740
IV. Net prot 307.621,84 2,54,06,487 136.403,64 1,12,65,576
1.070.796,16 8,84,37,054 763.174,32 6,30,30,566
B. Provisions
1. Tax provisions 77.226,01 63,78,096 99.817,63 82,43,938
2. Other provisions 450.246,97 3,71,85,897 277.882,50 2,29,50,315
527.472,97 4,35,63,993 377.700,13 3,11,94,253
C. Liabilities
1. Accounts payable, trade 5.747,93 4,74,721 1.095,98 90,516
thereof with a remaining term of less than one year:

5.747,93 (Rs. 4,74,721) {(prior year:

1.095,98
(Rs. 90,516)}
2. Liabilities due to shareholder 1.316.097,32 10,86,96,477 378.439,57 3,12,55,324

1.316.097,32 (Rs. 10,86,96,477) {(prior year:
378.439,57 (Rs. 3,12,55,324)}

3. Other liabilities 75.005,52 61,94,705 6.141,37 5,07,215

75.005,52 (Rs. 61,94,705) {(prior year:
6.141,37
(Rs. 5,07,215)}
thereof for taxes:

75.005,52 (Rs. 61,94,705)
{(prior year:
0,00 (Rs. 0.00)}

1.396.850,77 11,53,65,903 385.676,92 3,18,53,055
2.995.119,91 24,73,66,950 1.526.551,37 12,60,77,874
BRISTLECONE GmbH
895
2013/4/1 - 2014/3/31 2013/4/1 - 2014/3/31 2012/4/1 - 2013/3/31 2012/4/1 - 2013/3/31
Rs. Rs. Rs. Rs.
1. Sales 3.959.630,91 32,70,25,917 3.360.161,94 27,75,15,775
2. Other operating income 162.964,52 1,34,59,239 75.045,35 61,97,995
thereof from foreign currency
translation:

58.869,75 (Rs. 48,62,053)
(prior year:

25.244,07)
(Rs. 20,84,908)
3. Costs of purchased services 2.808.560,39 23,19,59,003 2.646.146,27 21,85,45,220
thereof to afliated companies:

2.808.560,39
(Rs. 23,19,59,003)
(prior year:

2.646.146,27)
(Rs. 21,85,45,220)
4. Personnel expenses
a) Wages and Salaries 457.606,11 3,77,93,689 304.198,99 2,51,23,795
b) Social security, pension and
other benet costs 25.564,29 21,11,355 23.152,34 19,12,152
of which relating to pensions
0,00 (Rs. 0.00)

(prior year:
0,00)
(Rs. 0.00)
483.170,40 3,99,05,044 327.351,33 2,70,35,947
5. Depreciation on intangible xed
assets, plant and equipment 3.868,63 3,19,510 4.590,55 3,79,133
6. Other operating expenses 431.884,62 3,56,69,351 247.243,96 2,04,19,880
thereof from foreign currency
translation:

75.898,32 (Rs. 62,68,442)

(prior year:

28.681,21)
(Rs. 23,68,781)
7. Other interest and similar income 27,76 2,293 33,68 2,782
8. Other interest and similar expenses 0,00 0.00 249,35 20,594
9. Results from ordinary activities 395.139,15 3,26,34,541 209.659,51 1,73,15,778
10. Taxes on income 87.517,31 72,28,054 73.255,87 60,50,202
11. Net prot of the nancial year 307.621,84 2,54,06,487 136.403,64 1,12,65,576
Annexure 2
Income Statement for the period April 1, 2013 through March 31, 2014
BRISTLECONE GmbH
896
I. GENERAL EXPLANATIONS TO THE BALANCE SHEET AND INCOME
STATEMENT
The nancial statements of Bristlecone GmbH, Frankfurt am Main (referred
to below as the Company) for the scal year as of March 31, 2014, have
been prepared according to the regulations of the German Commercial
Code (HGB) and the Law on Limited Liabilities Companies (GmbH).
The cost-summary method has been applied in accordance with Sect. 275
Para. 2 German Commercial Code (HGB).
The Company is a small corporation according to Sect. 267 Para. 1
German Commercial Code (HGB).
II. ACCOUNTING POLlCIES
1. Fixed assets
Purchase intangible assets are stated at acquisition cost less regular
depreciation according to the rates permitted by tax law.
Tangible assets are stated at acquisition cost less regular depreciation
according to the rates permitted by tax law.
Depreciation on additions to tangible assets is calculated pro rata
temporis.
Low value items are fully depreciated in the year of acquisition.
The following depreciation methods have been used for the
depreciation of xed assets:
Item Depreciation method Useful lifetime
Software straight line 1 - 3 years
Other equipment, operational
and ofce equipment straight line 3 - 13 years
Compound item straight line 5 years
Low value items straight line 1 year
2. Accounts receivables and other assets
Accounts receivables and other assets are stated at nominal value or
their net realizable value.
3. Accrued Liabilities
Provisions for uncertain liabilities are stated at the settlement amount
based on reasonable business judgement.
4. Liabilities
Liabilities disclosed in the balance sheet are stated at the settlement
amount.
5. Foreign currency translation
The nancial statements contain currency transactions, which are
translated into Euro.
Receivables and payables in foreign currencies are stated with the
rate of the day of the business transaction.
Receivables and payables in foreign currencies with a remaining
term of less than one year are stated with the average spot exchange
rate of the balance sheet date.
Receivables and payables in foreign currencies with a remaining term
of more than one year are stated with the average spot exchange
rate of the balance sheet date or the lower or higher market value.
6. Deferred taxes
Deferred taxes were set up accounting to 249 German Commercial
Law (HGB) and are stated within the tax provisions.
7. Afliated companies
Companies, which are directly or indirectly controlled by Mahindra &
Mahindra Ltd., Mumbai, India, are considered as afliated companies.
III. INDIVIDUAL COMMENTS TO THE BALANCE SHEET
1. Fixed assets
Reference is made to the separate analysis of xed assets (see
page 862 of this exhibit).
Annexure 3
Notes to the nancial statements as of March 31, 2014
2. Other provisions
Other provisions in the amount of K

450 (Rs. 3,71,65,500)
mainly represent provisions for outstanding invoices (K

285)
(Rs. 2,35,38,150), for personnel expenses (K

125) (Rs. 1,03,23,750),
for travel expenses (K

20) (Rs. 16,51,800) as well as provisions for
the audit of the nancial statements (K

9) (Rs. 7,43,310) and for
legal and advisory fees (K

8) (Rs. 6,60,720).
3. Liabilities
All liabilities stated in the balance sheet are with a remaining term of
less than one year.
4. Liabilities due to shareholder and afliated companies
Liabilities due to the shareholder and afliated companies result from
current business operations.
5. Deferred taxes
The deferred tax liabilities are calculated with the tax rate of 30%.
Term Valuation
Commercial
Balance Sheet
Valuation Tax
Balance Sheet
Temporary
Difference

Accounts
receivable in
foreign currency 15.921,42 15.451,90 469,52
Accounts payable
in foreign currency 195.056,07 197.038,12 1.982,05
2.451,57
Deferred tax
liabilities 735,47
Term Valuation
Commercial
Balance Sheet
Valuation Tax
Balance Sheet
Temporary
Difference
Rs. Rs. Rs.
Accounts
receivable in
foreign currency 13,14,950 12,76,172 38,778
Accounts payable
in foreign currency 1,61,09,680 1,62,73,378 1,63,698
2,02,476
Deferred tax
liabilities 60,742
IV. OTHER INDIVIDUAL COMMENTS
1. Financial commitments
As of March 31, 2014 the Company had concluded the following
rental commitments:
Total amount
K
Total amount
K Rs.
Ofces 34 2,808
The future rental payments refer to the following years:
Total amount
K
Total amount
K Rs.
2014/2015 12 991
2015/2016 and later 22 1,817
34 2,808
As of balance sheet date no lease contracts have been signed.
2. Contingent liabilities
As of balance sheet date there are no contingent liabilities according
to Sect. 251 German Commercial Code (HGB), which have to be
reported on.
BRISTLECONE GmbH
897
3. Management and representative authority
The managing directors of the Company during the scal year were
the following:
Kulashekar Raghavan, Cupertino, California, USA;
Satish Moorjani, Mumbai, India;
Krishnadas Chillara, Mumbai, India.
Each managing director of the Company represents the company
jointly with another managing director. If only one managing director
is appointed, he has single power of representation. The managing
directors are released from the regulations of Sect. 181 of the
German Civil Code (BGB).
4. Headcount at yearly average
During the scal year the Company employed an average of
2 employees (prior year: 2 employees).
5. Consolidated nancial statements
Mahindra & Mahindra Ltd., Mumbai, India, is the ultimate parent
company responsible for preparing the consolidated nancial
statements for the largest and smallest group of companies.
The consolidated nancial statements are available in the ofce of
Mahindra & Mahindra Ltd., Mumbai, India.
6. Disposition of earnings
The net prot for the scal year as of March 31, 2014, in the amount
of
307.621,84 (Rs. 2,54,06,487) and the prot carried forward as

of April 1, 2013, in the amount of

288.174,32 (Rs. 2,38,00,317) will
be carried forward to new account.
7. Translation into Indian Rupees
The amounts in Euros are translated for convenience into Indian
Rupees at the exchange rate of Euro 1 = Rs. 82,59 (prior year:
Euro 1 = Rs. 82,59), which is the average of the telegraphic transfer
buying and selling rates quoted by the Mumbai Branch of State Bank
of India on March 28, 2014.
Frankfurt am Main, April 14, 2014
Kulashekar Raghavan Krishnadas Chillara
Satish Moorjani
BRISTLECONE GmbH
898
Development of xed assets for the year ended March 31, 2014
At costs Accumulated depreciation Net book value
April 1,
2013
Additions Disposals March 31,
2014
April 1,
2013
Additions Disposals March 31,
2014
March 31,
2014
March 31,
2013

1. Software 1.074,60 0,00 0,00 1.074,60 1.072,60 0,00 0,00 1.072,60 2,00 2,00
Rs. 88,750 0.00 0.00 88,750 88,586 0.00 0.00 88,586 165 165
II. Property, plant
and equipment
1. Other
equipment,
operational
and ofce
equipment 39.286,94 1.025,63 0,00 40.312,57 32.249,94 3.868,63 0,00 36.118,57 4.194,00 7.037,00
Rs. 32,44,708 84,706 0.00 33,29,415 26,63,522 3,19,510 0.00 29,83,032 3,463,82 5,81,185
40.361,54 1.025,63 0,00 41.387,17 33.322,54 3.868,63 0,00 37.191,17 4.196,00 7.039,00
Rs. 33,33,459 84,706 0.00 34,18,165 27,52,108 3,19,510 0.00 30,71,618 3,46,547 5,81,350
BRISTLECONE GmbH
899
To Bristlecone GmbH:
We have audited the annual nancial statements, comprising the balance sheet,
the income statement and the notes to the nancial statements, together with
the bookkeeping system of Bristlecone GmbH, Frankfurt am Main, for the
business year from April 1, 2013 until March 31, 2014. The maintenance of the
books and records and the preparation of the annual nancial statements in
accordance with German Commercial Code and supplementary provisions in the
articles of incorporation are the responsibility of the Companys management.
Our responsibility is to express an opinion on the annual nancial statements
including the bookkeeping system based on our audit.
We conducted our audit of the annual nancial statements in accordance with
317 HGB [Handelsgesetzbuch: German Commercial Code] and the German
generally accepted standards for the audit of nancial statements promulgated by
the Institut der Wirtschaftsprfer in Deutschland (IDW). Those standards require
that we plan and perform the audit, such that misstatements materially affecting
the presentation of the net assets, nancial position and results of operations
in the annual nancial statements are detected with reasonable assurance.
Knowledge of the business activities and the economic and legal environment
of the company and expectations as to possible misstatements are taken into
account in the determination of audit procedures. The evidence supporting the
disclosures in the books and records and the annual nancial statements are
examined primarily on a test basis within the framework of the audit. The audit
includes assessing the accounting principles used and signicant estimates
made by management as well as evaluating the overall presentation of the
annual nancial statements. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the ndings of our audit, the annual nancial statements
comply with the legal requirements and supplementary provisions of the articles
of incorporation and give a true and fair view of the net assets, nancial position
and results of operations of the company in accordance with German principles
of proper accounting.
Nettetal, April 17, 2014 WWS Wirtz, Walter, Schmitz GmbH
Wirtschaftsprfungsgesellschaft
Steuerberatungsgesellschaft
Schmedt
Wirtschaftsprfer
Post
Wirtschaftsprfer
Annexure 4
Audit Opinion
BRISTLECONE GmbH
900
Annexure 5
Explanations to the nancial statements
Balance sheet as of March 31, 2014
ASSETS
A. Fixed assets
1. Software 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
2,00 165 2,00 165
II. Property, plant and equipment
1. Other equipment, operational and ofce
equipment 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
4.194,00 3,46,382 7.037,00 5,81,185
B. Current assets
I. Accounts receivable and other assets
1. Trade receivables 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
825.273,56 6,81,59,343 623.939,33 5,15,31,149
2. Receivables due from afliated companies 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
185.113,00 1,52,88,482 214.296,91 1,76,98,782
3. Other assets 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
10.534,42 8,70,037 4.046,20 3,34,175
Content:
Rent deposit 2.021,08 1,66,921 2.021,08 1,66,921
Creditors with debit balance 0,00 0.00 46,40 3,832
Receivables due from employees 8.513,34 7,03,116 0,00 0.00
Input VAT deductible in following year 0,00 0.00 30,00 2,478
Value-added tax 0,00 0.00 1.948,72 1,60,944
10.534,42 8,70,037 4.046,20 3,34,175
II. Cash in banks 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
1.957.160,28 16,16,41,867 677.229,93 5,59,32,418
Content:
Commerzbank AG,
Frankfurt am Main, current account 1.613.426,35 13,32,52,882 279.988,98 2,31,24,289
Commerzbank AG,
Frankfurt am Main, currency account USD 310.511,83 2,56,45,172 364.018,85 3,00,64,316
Commerzbank AG,
Frankfurt am Main, time deposit account 33.222,10 27,43,813 33.222,10 27,43,813
1.957.160,28 16,16,41,867 677.229,93 5,59,32,418
The cash in bank accounts with Commerzbank AG, Frankfurt am Main, agrees to the bank statements as of March 31, 2014.
C. Prepaid expenses 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
12.842,65 10,60,674 0,00 0.00
BRISTLECONE GmbH
901
A. Equity
I. Subscribed capital 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
50.000,00 41,29,500 50.000,00 41,29,500
II. Capital reserves 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
425.000,00 3,51,00,750 425.000,00 3,51,00,750
III. Prot carried forward 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
288.174,32 2,38,00,317 151.770,68 1,25,34,740
IV. Net prot 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
307.621,84 2,54,06,487 136.403,64 1,12,65,576
B. Provisions
1. Tax provisions 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
77.226,01 63,78,096 99.817,63 82,43,938
Content:
Corporate income tax 11/12 0,00 0.00 27.744,25 22,91,397
Corporate income tax 12/13 - 6.883,19 - 5,68,482 15.230,81 12,57,912
Corporate income tax 13/14 24.316,17 20,08,272 0,00 0.00
17.432,98 14,39,790 42.975,06 35,49,309
Solidarity surcharge 11/12 0,00 0.00 1.525,68 1,26,006
Solidarity surcharge 12/13 - 378,47 - 31,257 837,80 69,194
Solidarity surcharge 13/14 1.337,43 1,10,459 0,00 0.00
958,96 79,202 2.363,48 1,95,200
Trade tax 11/12 0,00 0.00 17.140,43 14,15,628
Trade tax 12/13 19.403,30 16,02,518 19.403,30 16,02,519
Trade tax 13/14 38.695,30 31,95,844 0,00 0.00
58.098,60 47,98,362 36.543,73 30,18,147
Deferred taxes 12/13 0,00 0.00 17.935,36 14,81,282
Deferred taxes 13/14 735,47 60,742 0,00 0.00
735,47 60,742 17.935,36 14,81,282
77.226,01 63,78,096 99.817,63 82,43,938
BRISTLECONE GmbH
902
2. Other provisions 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
450.246,97 3,71,85,897 277.882,50 2,29,50,315
Content:
Outstanding invoices 284.874,07 2,35,27,749 172.972,50 1,42,85,798
Bonuses to employees 96.481,00 79,68,365 41.678,00 34,42,186
Travel expenses 20.343,00 16,80,128 10.217,00 8,43,822
Vacation not yet taken 29.000,00 23,95,110 25.270,00 20,87,049
Audit expenses 9.000,00 7,43,310 9.000,00 7,43,310
Legal and consultancy fees 7.450,00 6,15,296 13.300,00 10,98,447
Miscellaneous 3.098,90 2,55,939 5.445,00 4,49,703
450.246,97 3,71,85,897 277.882,50 2,29,50,315
C. Liabilities
1. Accounts payable, trade 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
5.747,93 4,74,721 1.095,98 90,516
2. Liabilities due to shareholder 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
1.316.097,32 10,86,96,477 378.439,57 3,12,55,324
Bristlecone India Ltd., Mumbai, India, liabilities resulting from current operations.
3. Other liabilities 2014/3/31 2014/3/31 2013/3/31 2013/3/31
Rs.
Rs.
75.005,52 61,94,705 6.141,37 5,07,215
Content:
Debtors with credit balance 0,00 0.00 2.752,58 2,27,335
Value-added tax 75.005,52 61,94,705 0,00 0.00
Travel expenses 0,00 0.00 3.388,79 2,79,880
75.005,52 61,94,705 6.141,37 5,07,215
BRISTLECONE GmbH
903
2013/4/1-
2014/3/31
2013/4/1-
2014/3/31
2012/4/1-
2013/3/31
2012/4/1-
2013/3/31
Rs.

Rs.
1. Sales
Sales from offshore projects, subject to value-
added tax 3.350.140,84 27,66,88,132 3.034.893,65 25,06,51,867
Sales from offshore projects, non value-added
taxable - 5.270,00 - 4,35,249 59.318,75 48,99,136
Revenues from other projects, subject to value-
added tax 283.613,39 2,34,23,630 - 10.467,62 - 8,64,521
Revenues from recharge of market penetration
expenses, non value-added taxable 0,00 0.00 150.000,00 1,23,88,500
Revenues from other projects, non value-added
taxable 331.146,68 2,73,49,404 126.417,16 1,04,40,793
3.959.630,91 32,70,25,917 3.360.161,94 27,75,15,775
2. Other operating income
Income from exchange gains 58.869,75 48,62,053 25.244,07 20,84,908
Income from recharge of expenses 47.626,14 39,33,443 34.876,86 28,80,480
Income from reversal of accruals 50.042,83 41,33,037 7.119,85 5,88,028
Miscellaneous 6.425,80 5,30,706 7.804,57 6,44,579
162.964,52 1,34,59,239 75.045,35 61,97,995
3. Costs of purchased services
Services for offshore projects 2.692.047,57 22,23,36,209 2.707.437,08 22,36,07,228
Services for other projects 116.512,82 96,22,794 - 78.555,37 - 64,87,888
Services for offshore projects (not yet billed) 0,00 0.00 17.264,56 14,25,880
2.808.560,39 23,19,59,003 2.646.146,27 21,85,45,220
4. Personnel expenses
a) Wages and salaries 457.606,11 3,77,93,689 304.198,99 2,51,23,795
b) Social security, pension and other benet
costs 25.564,29 21,11,355 23.152,34 19,12,152
483.170,40 3,99,05,044 327.351,33 2,70,35,947
5. Depreciation on intangible xed assets, plant
and equipment 3.868,63 3,19,510 4.590,55 3,79,133
INCOME STATEMENT
BRISTLECONE GmbH
904
2013/4/1-
2014/3/31
2013/4/1-
2014/3/31
2012/4/1-
2013/3/31
2012/4/1-
2013/3/31
Rs.

Rs.
6. Other operating expenses
Exchange losses 75.898,32 62,68,442 28.681,21 23,68,781
Travel expenses 58.673,87 48,45,875 24.984,21 20,63,446
Bad debt allowance 80.584,54 66,55,477 63,86 5,274
Communication expenses 32.255,00 26,63,941 41.652,26 34,40,060
247.411,73 2,04,33,735 95.381,54 78,77,561
Fees for the preparation and audit of the nancial
statements 19.100,00 15,77,469 18.860,00 15,57,647
Accounting fees 32.775,00 27,06,887 19.126,00 15,79,616
Bank charges 8.799,51 7,26,751 13.359,75 11,03,382
Rent 12.126,48 10,01,526 12.126,48 10,01,526
Legal and consultancy fees 42.120,25 34,78,711 43.757,17 36,13,905
Representation and entertainment expenses 4.202,93 3,47,120 3.135,96 2,58,999
Advertising expenses 0,00 0.00 674,37 55,696
External services 53.186,61 43,92,682 30.028,94 24,80,090
Miscellaneous 10.219,86 8,44,060 9.160,69 7,56,583
Contributions and levies 967,26 79,886 671,35 55,447
Ofce supplies 974,99 80,524 961,71 79,428
431.884,62 3,56,69,351 247.243,96 2,04,19,880
7. Other interest and similar income 27,76 2,293 33,68 2,782
8. Other interest and similar expenses 0,00 0.00 249,35 20,594
9. Results from ordinary activities 395.139,15 3,26,34,541 209.659,51 1,73,15,778
10. Taxes on income 87.517,31 72,28,054 73.255,87 60,50,202
11. Net prot of the nancial year 307.621,84 2,54,06,487 136.403,64 1,12,65,576
BRISTLECONE UK LIMITED
905
The directors present their report with the nancial statements
of the company for the year ended 31
st
March 2014.
PRINCIPAL ACTIVITY
The principal activity of the Company in the year under review
was that of providing IT consulting services.
REVIEW OF BUSINESS
The results for the year and nancial position of the Company
are as shown in the annexed nancial statements.
DIVIDENDS
No dividend will be distributed for the year ended 31
st
March,
2014.
DIRECTORS
The directors shown below have held ofce during the whole
of the period from 1
st
April 2013 to the date of this report.
Krishnadas Chillara
Kulashekar Raghavan
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Report of the
Directors and the nancial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare nancial
statements for each nancial year. Under that law the directors
have elected to prepare the nancial statements in accordance
with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law).
Under company law the directors must not approve the
nancial statements unless they are satised that they give a
true and fair view of the state of affairs of the company and of
the prot or loss of the company for that period. In preparing
these nancial statements, the directors are required to:
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 MARCH 2014
prepare the nancial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufcient to show and explain the companys
transactions and disclose with reasonable accuracy at any time
the nancial position of the company and enable them to ensure
that the nancial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets
of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO
AUDITORS
So far as the directors are aware, there is no relevant audit
information (as dened by Section 418 of the Companies Act
2006) of which the companys auditors are unaware, and each
director has taken all the steps that he ought to have taken as
a director in order to make himself aware of any relevant audit
information and to establish that the companys auditors are
aware of that information.
AUDITORS
The auditors, Butler & Co LLP, will be proposed for re-
appointment at the forthcoming Annual General Meeting.
This report has been prepared in accordance with the special
provisions of Part 15 of the Companies Act 2006 relating to
small companies.
ON BEHALF OF THE BOARD:
Kulashekar Raghavan
Director
Place : Mountain View, California
Date : 17
th
April, 2014
906
We have audited the nancial statements of Bristlecone UK
Limited for the year ended 31 March 2014. The nancial
reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the companys members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the companys members those matters
we are required to state to them in a Report of the Auditors
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the companys members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors
Responsibilities set out on page herein, the directors are
responsible for the preparation of the nancial statements
and for being satised that they give a true and fair view.
Our responsibility is to audit and express an opinion on the
nancial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices
Boards Ethical Standards for Auditors.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts
and disclosures in the nancial statements sufcient to give
reasonable assurance that the nancial statements are free
from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting
policies are appropriate to the companys circumstances and
have been consistently applied and adequately disclosed;
the reasonableness of signicant accounting estimates
made by the directors; and the overall presentation of the
nancial statements. In addition, we read all the nancial
and non-nancial information in the Report of the Directors
to identify material inconsistencies with the audited nancial
statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with,
the knowledge acquired by us in the course of performing
the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications
for our report.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF BRISTLECONE UK LIMITED
Opinion on nancial statements
In our opinion the nancial statements:
- give a true and fair view of the state of the companys
affairs as at 31 March 2014 and of its prot for the year
then ended;
- have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements
of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act
2006
In our opinion the information given in the Report of the
Directors for the nancial year for which the nancial statements
are prepared is consistent with the nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
- adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
- the nancial statements are not in agreement with the
accounting records and returns; or
- certain disclosures of directors remuneration specied by
law are not made; or
- we have not received all the information and explanations
we require for our audit; or
- the directors were not entitled to take advantage of the
small companies exemption from the requirement to
prepare a Strategic Report or in preparing the Report of
the Directors.
Mukesh Desai (Senior Statutory Auditor)
for and on behalf of Butler & Co LLP
& Statutory Auditor
Third Floor
126 - 134 Baker Street
Date: April 17, 2014 London W1U 6UE
907
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2014
Notes
2014
2014
INR
2013
2013
INR
TURNOVER ........................................................ 163,039 16,279,444 78,852 7,873,372
Cost of Sales ...................................................... 90,611 9,047,508 61,446 6,135,383
GROSS PROFIT ................................................. 72,428 7,231,936 17,406 1,737,989
Administrative Expenses .................................... 28,319 2,827,652 80,595 8,047,411
44,109 4,404,284 (63,189) (6,309,422)
Other operating income ..................................... 14,676 1,465,399 121 12,082
OPERATING PROFIT/(LOSS) ........................... 3 58,785 5,869,683 (63,068) (6,297,340)
Interest receivable and similar income .............. 303 30,255
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION ........................................... 59,088 5,899,938 (63,068) (6,297,340)
Tax on prot/(loss) on ordinary activities ........... 4 61 6,091
PROFIT/(LOSS) FOR THE FINANCIAL YEAR ... 59,027 5,893,847 (63,068) (6,297,340)
CONTINUING OPERATIONS
None of the companys activities were acquired or discontinued during the current year or previous year.
TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains or losses other than the prot for the current year and the loss for the previous year.
The notes form part of these nancial statements
908
BRISTLECONE UK LIMITED (REGISTERED NUMBER : 03169221)
BALANCE SHEET AS ON 31 MARCH 2014
Notes
2014
2014
INR
2013
2013
INR
CURRENT ASSETS
Debtors ................................................................ 6 51,838 5,176,024 1,38,677 13,846,898
Cash at bank ...................................................... 408,641 40,802,804 3,27,058 32,656,741
460,479 45,978,828 4,65,735 46,503,639
CREDITORS
Amounts falling due within one year ................. 7 16,261 1,623,660 80,544 8,042,318
NET CURRENT ASSETS .................................. 444,218 44,355,168 3,85,191 38,461,321
TOTAL ASSETS LESS CURRENT LIABILITIES 444,218 44,355,168 3,85,191 38,461,321
CAPITAL AND RESERVES
Called up share capital ...................................... 9 2,350,000 234,647,500 23,50,000 234,647,500
Prot and loss account ...................................... 10 (1,905,782) (190,292,332) (19,64,809) (196,186,179)
SHAREHOLDERS FUNDS ............................... 13 444,218 44,355,168 3,85,191 38,461,321
The nancial statements were authorised for issue by the Board of Directors on April 17, 2014 and were signed on its behalf by:
K Raghavan
Director
Place: Mountain View, California
The notes form part of these nancial statements
909
Accounting convention
The nancial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention
Financial Reporting Standard Number 1
Exemption has been taken from preparing a cash ow statement on the
grounds that the company qualies as a small company.
Turnover
Turnover represents the invoiced amounts of services provided and it is
stated net of Value Added Tax.
Revenue for software services is recognised on the basis of services
rendered. For time and material contracts, invoices are raised on the basis
of customer approved timesheets. For xed price projects, invoices are
raised for prescribed milestones achieved on the basis of acceptance/
sign-off received from the customer. Revenue on xed price contracts is
recognised based on the percentage completion method.
Tangible xed assets
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
Plant and machinery - 50% on cost
Computer equipment - 50% on cost
Deferred tax
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of transaction. Exchange differences are taken into account in arriving
at the operating result.
2. STAFF COSTS
2014
2014
INR
2013
2013
INR
Wages and salaries 43,525 4,345,971 13,317 1,329,702
Social security costs 5,060 505,241 1,909 190,614
48,585 4,851,212 15,226 1,520,316
The average monthly number of employees during the year was as follows:
2014 2013
Management 2 2
Administrative 1 1
Consultants 1 2
4 5
3. OPERATING PROFIT/(LOSS)
The operating prot (2013 - operating loss) is stated after charging:
2014
2014
INR
2013
2013
INR
Auditors
remuneration 3,100 309,535 3,115 311,033
Foreign exchange
differences 8,844 883,073 20,042 2,001,194
Directors
remuneration
4. TAXATION
Analysis of the tax charge
The tax charge on the prot on ordinary activities for the year was as
follows:
2014
2014
INR
2013
2013
INR
Current tax:
UK corporation tax 61 6,091
Tax on prot/(loss)
on ordinary activities 61 6,091
Factors affecting the tax charge
The tax assessed for the year is higher than the standard rate of corporation
tax in the UK. The difference is explained below:
2014
2014
INR
2013
2013
INR
Prot/(Loss) on
ordinary activities
before tax 59,088 5,899,938 (63,068) (6,297,340)
Prot/(Loss) on
ordinary activities
multiplied by the
standard rate of
corporation tax
in the UK of 23%
(2013 - 24%) 13,590 1,356,962 (15,136) (1,511,330)
Effects of:
Income not taxable
for tax purposes 29 2,896
Capital allowances
in excess of
depreciation (262) (26,161)
Depreciation in
excess of capital
allowances 333 33,250
Utilisation of tax
losses (13,259) (1,323,911) 14,774 1,475,184
Adjustment for
small prots rate (8) (799)
Current Tax
Charge 61 6,091
5. TANGIBLE FIXED ASSETS
Plant and
machinery
Plant and
machinery
Computer
equipment
Computer
equipment Totals Totals
INR INR INR
COST
At 1 April 2013 and
31 March 2014 104 10,384 26,195 2,615,571 26,299 2,625,955
DEPRECIATION
At 1 April 2013 and
31 March 2014 104 10,384 26,195 2,615,571 26,299 2,625,955
NET BOOK VALUE
At 31 March 2014
At 31 March 2013
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014
910
6. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2014
2014
INR
2013
2013
INR
Trade debtors 47,838 4,776,624 98,133 9,798,580
Amounts owed
by group
undertakings 1,508 150,574 28,620 2,857,707
Other debtors 2,492 248,826 11,924 1,190,611
51,838 5,176,024 1,38,677 13,846,898
7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2014
2014
INR
2013
2013
INR
Amounts
owed to group
undertakings 1,661 165,851 65,098 6,500,035
Tax 61 6,091
Social security
and other taxes 2,400 239,640
VAT 65 6,490 473 47,229
Other creditors 7,129 711,830 5,388 537,992
Accrued
expenses 7,345 733,398 7,185 717,422
16,261 1,623,660 80,544 8,042,318
8. OPERATING LEASE COMMITMENTS
The following operating lease payments are committed to be paid within
one year:
Other operating leases Other operating leases
2014
2014
INR
2013
2013
INR
Expiring:
Within one year 5,400 539,190 13,450 1,342,983
9. CALLED UP SHARE CAPITAL
Allotted, issued and fully paid:
Number: Class: Nominal
value
2014
2014
INR
2013
2013
INR
2350000 ordinary 1 23,50,000 234,647,500 23,50,000 234,647,500
10. RESERVES
Prot and loss
account
Prot and loss

account
INR
At 1 April 2013 (1,964,809) (196,186,179)
Prot for the year 59,027 5,893,847
At 31 March 2014 (1,905,782) (190,292,332)

11. ULTIMATE PARENT COMPANY
In the opinion of the directors, the immediate parent company is Bristlecone
Limited, a company incorporated in the Cayman Islands.
The directors consider the companys ultimate holding company and
controlling party to be Mahindra & Mahindra Limited which is incorporated
in India
12. RELATED PARTY DISCLOSURES
The company has taken advantage of exemption, under the terms of
Financial Reporting Standard 8 Related Party Disclosures, not to disclose
related party transactions with wholly owned subsidiaries within the group.
13. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
2014
2014
INR
2013
2013
INR
Prot/(Loss) for
the nancial year 59,027 5,893,847 (63,068) (6,297,340)
Shares issued
Net addition/
(reduction) to
shareholders
funds 59,027 5,893,847 (63,068) (6,297,340)
Opening
shareholders
funds 385,191 38,461,320 4,48,259 44,758,661
Closing
shareholders
funds 444,218 44,355,167 3,85,191 38,461,321
14. FOREIGN CURRENCY TRANSLATION
The foreign currency amounts are translated for convenience into Indian
Rupees at the exchange rate of Rs. 99.85 = 1.00 GBP which is the average
of the State Bank of India on 28th March 2014.
911
TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2014
2014
2014
INR
2013
2013
INR
Consulting Income 163,039 16,279,444 78,852 7,873,372
Cost of sales
Consultants Wages 39,025 3,896,646 11,817 1,179,927
Social Security 4,865 485,770
Sub contractors 46,721 4,665,092 35,564 3,551,065
Other direct costs 14,065 1,404,391
90,611 9,047,508 61,446 6,135,383
GROSS PROFIT 72,428 7,231,936 17,406 1,737,989
Other income
Sundry receipts 14,676 1,465,399 121 12,082
Deposit account interest 303 30,255
14,979 1,495,654 121 12,082
87,407 8,727,590 17,527 1,750,072
Expenditure
Wages 4,500 449,325 1,500 149,775
Social security 195 19,471 1,909 190,614
Telephone & Fax Services 1,929 192,611 4,028 402,196
Advertising 7,500 748,875
Travelling 1,779 177,633 33,735 3,368,440
Sundry expenses 93 9,286 211 21,068
Bonus 4,288 428,157
Sales commission (2,000) (199,700) 4,031 402,495
Professional Expenses 4,655 464,801 3,698 369,245
Legal fees 201 20,070 500 49,925
Auditors remuneration 3,100 309,535 3,115 311,033
Foreign exchange losses 8,844 883,073 20,042 2,001,194
27,584 2,754,262 80,269 8,014,860
59,823 5,973,328 (62,742) (6,264,789)
Finance costs
Bank charges 735 73,390 326 32,551
NET PROFIT/(LOSS) 59,088 5,899,938 (63,068) (6,297,340)
This page does not form part of the statutory nancial statements
BRISTLECONE (MALAYSIA) Sdn. Bhd.
912
DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH, 2014
The Directors hereby submit their report together with the
audited nancial statements of the Company for the nancial
year ended 31
st
March 2014.
Principal activities
The principal activities of the Company are to act as
information technology service advisors, business consultants
and implementers of computerised systems and to render
a full range of information technology services including
application and programming services, computer networks
and other forms of computer and electronic technology
services, administration and management control, technical,
scientic and operational assistance, systems design, project
management and technical training of personnel, management
of a computer and electronic service facility and generally,
any type of business or activity relating to the information
technology and electronic industry and to provide support and
training in connection therein.
There have been no signicant changes in the nature of these
activities during the nancial year.
Financial results
RM INR
Prot for the year 1,914,623 35,075,893
Dividends
The Company declared and paid the following dividends since
the end of the previous nancial year:
RM INR
Final single tier dividends of RM20 per share
on 100,000 ordinary shares declared on
28 August 2013 in respect of nancial year
ended 31 March 2013, paid on 4 September
2013. 2,000,000 36,640,000
First interim single tier dividends of RM4
per share on 100,000 ordinary shares
declared on 6 December 2013 in respect of
nancial year ended 31 March 2014, paid on
16 December 2013. 400,000 7,328,000
Second interim single tier dividends of
RM6 per share on 100,000 ordinary shares
declared on 12 February 2014 in respect of
nancial year ended 31 March 2014, paid on
24 February 2014. 600,000 10,992,000
3,000,000 54,960,000
Reserves and provisions
All material transfers to or from reserves or provisions during the
nancial year have been disclosed in the nancial statements.
Issue of shares and debentures
There were no new issue of shares or debentures during the
nancial year.
Directors
The Directors of the Company who held ofce since the date
of the last report are as follows:
Krishnadas Chillara
Oh Swee Chin
Yeap Kok Leong
Satish Moorjani
Retirement and re-election of the Directors at the Annual
General Meeting will be in accordance with the Companys
Articles of Association.
Directors interests
According to the Register of Directors shareholdings,
particulars of interests in the shares of the Companys related
corporations during the nancial year of those Directors who
held ofce at the end of the nancial year were as follows:
Units of Indian Rupee 5 each
At
1.4.2013
Bought/
alloted
Sold At
31.3.2014
The ultimate
holding corporation
Mahindra & Mahindra Ltd (Equity shares)
Krishnadas Chillara 8,067 6,092 (3,000) 11,159
Mahindra & Mahindra Ltd (Options)
Krishnadas Chillara 12,146 (6,092) 6,054
Units of US $0.001 each
At
1.4.2013
Bought/
alloted
Sold At
31.3.2014
The ultimate
holding corporation
Bristlecone Limited (Options)
Satish Moorjani 80,000 80,000
None of the other Directors in ofce at the end of the nancial
year held any interest in the shares of the Company or related
corporations during the nancial year.
Directors benets
Since the end of the previous nancial year, no Director has
received or become entitled to receive a benet by reason of
a contract made by the Company or a related corporation with
any Director or with a rm of which the Director is a member,
or with a company in which the Director has a substantial
nancial interest.
Neither during nor at the end of the nancial year was the
Company a party to any arrangement whose object was to
enable the Directors to acquire benets by means of the
acquisition of shares in, or debentures of, the Company or
any other body corporate.
913
Other statutory information
Before the nancial statements of the Company were made
out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation
to the writing off of bad debts and the making of allowance
for doubtful debts and had satised themselves that all
known bad debts had been written off and that adequate
allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to
realise their values as shown in the accounting records in
the ordinary course of business had been written down to
an amount to which they might be expected so to realise.
circumstances:
(a) which would render the amounts written off for bad debts
or the amount of the allowance for doubtful debts in the
nancial statements of the Company inadequate to any
substantial extent; or
(b) which would render the values attributed to current assets
in the nancial statements of the Company misleading; or
(c) which have arisen which render adherence to the existing
method of valuation of assets or liabilities of the Company
misleading or inappropriate; or
(d) not otherwise dealt with in this report or the nancial
statements which would render any amount stated in the
nancial statements misleading.
In the opinion of the Directors:
(a) the results of the Companys operations during the
nancial year were not substantially affected by any item,
transaction or event of a material and unusual nature; and
(b) no contingent or other liability of the Company has
become enforceable or is likely to become enforceable
within the period of twelve months after the end of the
nancial year which will or may affect the ability of the
Company to meet its obligations when they fall due.
In the interval between the end of the nancial year and the
date of this report:
(a) no item, transaction or event of a material and unusual
nature has arisen which, in the opinion of the Directors,
would affect substantially the results of the operations of
the Company for the nancial year in which this report is
made; and
(b) no charge has arisen on the assets of the Company
which secures the liability of any other person nor has
any contingent liability arisen in the Company.
Holding corporations
The Directors regard Bristlecone Limited, a corporation
incorporated in Cayman Island, as the immediate holding
corporation, and Mahindra & Mahindra Ltd, a corporation
incorporated in India, as the ultimate holding corporation.
Auditors
The auditors, Messrs SSY Partners, have indicated their
willingness to continue in ofce.
Signed on behalf of the Board in accordance with a resolution
of the Directors dated 25
th
April 2014.
Satish Moorjani Krishnadas Chillara
Director Director
Place : Mumbai
Date : 25
th
April, 2014
STATEMENT BY DIRECTORS
Pursuant to Section 169(15) of the Companies Act 1965
We, Satish Moorjani and Krishnadas Chillara, being two of the Directors of Bristlecone (Malaysia) Sdn. Bhd., do hereby state
that, in the opinion of the Directors, the accompanying nancial statements set out herein are drawn up in accordance with
the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Company
Act 1965 in Malaysia so as to give a true and fair view of the nancial position of the Company as at 31 March 2014 and of its
nancial performance and cash ows for the nancial year then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 25 April 2014.
Satish Moorjani Krishnadas Chillara
Director Director
Place : Mumbai
Date : 25
th
April, 2014
914
We have audited the nancial statements of Bristlecone
(Malaysia) Sdn. Bhd., which comprise the statement of
nancial position as at 31 March 2014, and the statement
of comprehensive income, statement of changes in equity
and statement of cash ows, and a summary of signicant
accounting policies and other explanatory information, as set
out herein.
The Directors of the Company are responsible for the
preparation of nancial statements that give a true and
fair view in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and
the requirements of the Companies Act 1965 in Malaysia. The
Directors are also responsible for such internal control as the
Directors determine are necessary to enable the preparation of
nancial statements that are free from material misstatement,
statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in
Malaysia. Those standards require that we comply with
ethical requirements and plan and perform our audit to obtain
reasonable assurance about whether the nancial statements
Our audit involves performing procedures to obtain audit
statements. The procedures selected depend on our
judgement, including the assessment of risks of material
or error. In making those risk assessments, we consider internal
control relevant to the Companys preparation of nancial
statements that give a true and fair view in order to design
effectiveness of the Companys internal control. Our audit also
by the Directors, as well as evaluating the overall presentation
opinion.
Opinion
In our opinion, the nancial statements have been properly
drawn up in accordance with the Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the
requirements of Companies Act 1965 in Malaysia as to give a
true and fair view of the nancial position of the Company as
of 31 March 2014 and of its nancial performance and cash
ows for the year then ended.
In accordance with the requirements of the Companies Act
1965 in Malaysia, we also report that in our opinion the
accounting and other records and the registers required by
the Act to be kept by the Company have been properly kept
in accordance with the provisions of the Act.
Other Matters
This report is made solely to the Members of the Company, as
a body, in accordance with Section 174 of the Companies Act
1965 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
SSY Partners Jason Sia Sze Wan
AF: 0040 No. 2376/05/14 (J)
Chartered Accountants Partner
Subang Jaya
25 April, 2014
Independent Auditors Report to the Members of Bristlecone (Malaysia) Sdn. Bhd.
(Company No: 772033-T)
915
Statement of Financial Position as at 31 March 2014
Note
2014
RM
2014
INR
2013
RM
2013
INR
ASSETS
Non-current assets
Plant and equipment .............................................................................. 6 3,000 54,960
Current assets .......................................................................................
Trade receivables .................................................................................... 7 2,060,173 37,742,369 3,149,215 57,693,619
Other receivables .................................................................................... 8 38,209 699,989 61,461 1,125,966
Cash and bank balances ....................................................................... 5,178,985 94,879,005 1,629,338 29,849,472
7,277,367 133,321,363 4,840,014 88,669,057
TOTAL ASSETS ..................................................................................... 7,277,367 133,321,363 4,843,014 88,724,017
Equity attributable to equity
holders of the Company
Share capital ......................................................................................... 9 100,000 1,832,000 100,000 1,832,000
Retained earnings ................................................................................... 1,473,584 26,996,058 2,558,961 46,880,165
TOTAL EQUITY ...................................................................................... 1,573,584 28,828,058 2,658,961 48,712,165
Current liabilities
Trade payables ....................................................................................... 10 4,147,981 75,991,012 1,369,305 25,085,668
Other payables and accruals ................................................................. 11 1,348,509 24,704,685 774,966 14,197,377
Taxation ................................................................................................... 207,293 3,797,608 39,782 728,807
TOTAL LIABILITIES ............................................................................... 5,703,783 104,493,305 2,184,053 40,011,852
TOTAL EQUITY AND LIABILITIES ....................................................... 7,277,367 133,321,363 4,843,014 88,724,017
The accompanying notes form an integral part of these nancial statements.
916
Statement of Comprehensive Income for the year ended 31 March 2014
Note
2014
RM
2014
INR
2013
RM
2013
INR
Revenue .......................................................... 9,632,117 176,460,383 8,391,721 153,736,329
Cost of services ............................................... (6,475,903) (118,638,543) (5,334,311) (97,724,578)
Gross prot ...................................................... 3,156,214 57,821,840 3,057,410 56,011,751
Other income ................................................... 4,799 87,918
Administrative expenses .................................. (556,993) (10,204,112) (691,931) (12,676,176)
Prot before taxation ....................................... 12 2,599,221 47,617,728 2,370,278 43,423,493
Taxation ............................................................ 13 (684,598) (12,541,835) (620,615) (11,369,667)
Prot for the year ............................................. 1,914,623 35,075,893 1,749,663 32,053,826
917
Statement of Changes in Equity for the year ended 31 March 2014
In Ringgit Malaysia
Note
Share
capital
RM
Retained
earnings
RM
Total
RM
At 1 April 2013 .............................................................................. 100,000 2,558,961 2,658,961
Dividend paid ................................................................................ 14 (3,000,000) (3,000,000)
Prot for the year .......................................................................... 1,914,623 1,914,623
At 31 March 2014 ......................................................................... 100,000 1,473,584 1,573,584
At 1 April 2012 .............................................................................. 100,000 809,298 909,298
Prot for the year .......................................................................... 1,749,663 1,749,663
At 31 March 2013 ......................................................................... 100,000 2,558,961 2,658,961
In Indian Rupee Share
capital
INR
Retained
earnings
INR
Total
INR
At 1 April 2013 .............................................................................. 1,832,000 46,880,165 48,712,165
Dividend paid ................................................................................ (54,960,000) (54,960,000)
Prot for the year .......................................................................... 35,075,893 35,075,893
At 31 March 2014 ......................................................................... 1,832,000 26,996,058 28,828,058
At 1 April 2012 .............................................................................. 1,832,000 14,826,339 16,658,339
Prot for the year .......................................................................... 32,053,826 32,053,826
At 31 March 2013 ......................................................................... 1,832,000 46,880,165 48,712,165
918
Statement of Cash Flows for the year ended 31 March 2014
2014
RM
2014
INR
2013
RM
2013
INR
Prot before taxation ....................................................... 2,599,221 47,617,728 2,370,278 43,423,493
Adjustments for:
Bad debts written off ....................................................... 78,001 1,428,979
Depreciation of plant and equipment ............................. 833 15,261 999 18,302
Net gain on foreign exchange unrealised ................... (19) (348) (4,755) (87,112)
Operating prot before working capital changes ........... 2,678,036 49,061,620 2,366,522 43,354,683
Decrease/(increase) in trade and other receivables ...... 1,034,311 18,948,578 (2,344,412) (42,949,628)
Increase in trade and other payables ............................. 3,352,219 61,412,652 1,491,463 27,323,602
Cash generated from operations .................................... 7,064,566 129,422,850 1,513,573 27,728,657
Tax paid ............................................................................ (517,086) (9,473,016) (544,504) (9,975,313)
Net cash generated from operating activities ................ 6,547,480 119,949,834 969,069 17,753,344
Proceeds from disposal of plant and equipment ........... 2,167 39,699
Net cash from investing activities ................................... 2,167 39,699
Dividends paid ................................................................. (3,000,000) (54,960,000)
Net cash used in nancing activities ............................... (3,000,000) (54,960,000)
Net increase in cash and cash equivalents ............... 3,549,647 65,029,533 969,069 17,753,344
Cash and cash equivalents at beginning of the year ...... 1,629,338 29,849,472 660,269 12,096,128
Cash and cash equivalents at end of the year .......... 5,178,985 94,879,005 1,629,338 29,849,472
Cash and cash equivalents comprise:
Cash in hand ................................................................... 2 37
Cash at bank ................................................................... 5,178,985 94,879,005 1,629,336 29,849,435
5,178,985 94,879,005 1,629,338 29,849,472
919
Notes to the Financial Statements for the year ended 31 March 2014
Gains and losses on disposal are determined by comparing proceeds
with carrying amount and are included in the income statement.
(b) Receivables
Receivables are carried at anticipated realisable value. Bad debts are
written off in the period in which they are identied. An estimate is
made for doubtful debts on a review of all outstanding amounts at
the year end.
(c) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank
balances.
(d) Payables
Payables are stated at the fair value of the consideration to be paid
in the future for goods and services costs.
(e) Revenue recognition
Revenue from service income are recognised upon delivery of
services and customers acceptances, if any, or performance of
services.
Revenue recognised on work completed but not invoiced is classied
as accrued billings under trade receivables.
(f) Impairment of assets
The carrying amounts of assets, other than investment property,
construction contract assets, property development costs, inventories,
deferred tax assets and non-current assets (or disposal groups) held
for sale, are reviewed at each statement of nancial position date
to determine whether there is any indication of impairment. If any
such indication exists, the assets recoverable amount is estimated
to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable
amount is determined on an individual asset basis unless the
asset does not generate cash ows that are largely independent of
those from other assets. If this is the case, recoverable amount is
determined for the cash-generating unit (CGU) to which the asset
belongs to.
An assets recoverable amount is the higher of an assets or CGUs
fair value less costs to sell and its value in use. In assessing value in
use, the estimated future cash ows are discounted to their present
value using a pre-tax discount rate that reects current market
assessments of the time value of money and the risks specic
to the asset. Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. Impairment losses recognised in
respect of a CGU or groups of CGUs are allocated rst to reduce the
carrying amount of any goodwill allocated to those units or groups
of units and then, to reduce the carrying amount of the other assets
in the unit or groups of units on a pro-rata basis.
An impairment loss is recognised in the statement of comprehensive
income in the period in which it arises, unless the asset is carried at
a revalued amount, in which case the impairment loss is accounted
for as a revaluation decrease to the extent that the impairment loss
does not exceed the amount held in the asset revaluation reserve for
the same asset.
(g) Financial instruments
Financial assets
Financial assets are recognised in the statements of nancial position
when the Company becomes a party to the contractual provisions of
the instrument. Regular way purchases and sales of nancial assets
are recognised and derecognised using trade date accounting.
On initial recognition, nancial assets are measured at fair value,
plus transaction costs for nancial assets not at fair value through
The Company is a private limited liability company, incorporated and
domiciled in Malaysia. The registered ofce of the Company is located at
Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur. The principal place of business of the Company is
located at 41/F Vista Tower, The Intermark, 182 Jalan Tun Razak, 50400
Kuala Lumpur, Malaysia.
The principal activities of the Company are to act as information technology
service advisors, business consultants and implementers of computerised
systems and to render a full range of information technology services
including application and programming services, computer networks and
other forms of computer and electronic technology services, administration
and management control, technical, scientic and operational assistance,
systems design, project management and technical training of personnel,
management of a computer and electronic service facility and generally,
any type of business or activity relating to the information technology
and electronic industry and to provide support and training in connection
therein. There have been no signicant changes in the nature of these
activities during the nancial year.
The nancial statements were authorised for issue by the Board of
Directors in accordance with a resolution of the Directors dated 25 April
2014
2. Basis of preparation of the nancial statements
Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act 1965 in Malaysia.
The nancial statements of the Company have been prepared under the
historical cost convention, unless otherwise indicated in the summary of
signicant accounting policies (Note 3).
The preparation of nancial statements in conformity with the Malaysian
Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act 1965 in Malaysia requires the
Directors to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the nancial statements and the reported amounts
of revenue and expenses during the reported period. Actual results could
differ from those estimates.
The nancial statements are presented in Ringgit Malaysia (RM).
All signicant accounting policies set out below are consistent with those
applied in the previous nancial year.
(a) Plant and equipment and depreciation
Plant and equipment is initially recorded at cost. Subsequent
costs are included in the assets carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that
future economic benets associated with the item will ow to the
Company and the cost of the item can be measured reliably. Repairs
and maintenance are charged to the income statement during the
nancial period in which they are incurred.
Subsequent to recognition, plant and equipment is stated at cost
less accumulated depreciation and impairment losses.
All assets are depreciated on a straight line basis to write off the cost
of each asset to its residual value over their estimated useful lives at
the following annual rates:
%
Computer 25
Where an indication of impairment exists, the carrying amount of the
assets is assessed and written down immediately to its recoverable
amount.
920
prot or loss. Effective interest method is a method of calculating
the amortised cost of nancial assets and of allocating the interest
income over the relevant period. The effective interest rate is the
rate that exactly discounts estimate future cash receipts through the
expected life of the nancial assets or a shorter period to the net
carrying amount of the nancial assets.
After initial recognition, nancial assets are classied into one of
four categories: nancial assets at fair value through prot or loss,
held-to-maturity investments, loans and receivables and available-
for-sale nancial assets.
i Financial assets at fair value through prot or loss
Financial assets are classied as at fair value through prot or
loss when the nancial assets are either held for trading, or
upon initial recognition, nancial assets are designated as at
fair value through prot or loss.
A nancial asset is classied as held for trading if:
it is acquired principally for the purpose of selling it in the
near term; or
on initial recognition, it is part of a portfolio of identied
nancial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term prot-taking; or
it is a derivative that is not designated and effective
hedging instrument.
Financial assets (other than held for trading) are designated
as at fair value through prot or loss upon initial recognition if:
it eliminates or signicant reduces a measurement or
recognition inconsistency that would otherwise arise from
measuring assets or recognising the gains and losses on
them on different bases; or
a group of nancial assets is managed and its performance
is evaluated on a fair value basis, in accordance with a
documented risk management or investment strategy,
and information about the grouping is provided internally
on that basis; or
a contract contains one or more embedded derivatives,
the entire hybrid contracts are designated as at fair value
through prot or loss.
After initial recognition, nancial assets at fair value through
prot or loss are measured at fair value. Gains or losses on
the nancial assets at fair value through prot or loss are
recognised in prot or loss.
ii Held-to-maturity investments
Held-to-maturity investments are non-derivative nancial
assets with xed or determinable payments and xed maturity
that and the Company have the positive intention and ability to
hold to maturity.
After initial recognition, held-to-maturity investments are
measured at amortised cost using the effective interest method
less any accumulated impairment losses. Gains or losses are
recognised in prot or loss when held-to-maturity investments
are derecognised or impaired.
iii Loans and receivables
Loans and receivables are non-derivative nancial assets (such
as trade receivables, loans assets, unquoted debt instruments
and deposits held in banks) with xed or determinable
payments that are not quoted in an active market.
After initial recognition, loans and receivables are measured
at amortised cost using the effective interest method less
any accumulated impairment losses. Gains or losses are
recognised in prot or loss when loans and receivables are
derecognised or impaired.
iv Available-for-sale nancial assets
Investment in quoted equity and debt instruments that are
traded in active market and certain unquoted equity instruments
(when the fair value can be determined using a valuation
technique) are classied as available-for-sale nancial assets.
Available-for-sale nancial assets are measured at fair value.
Gains or losses on available-for-sale nancial assets are
recognised in other comprehensive income, except for
impairment losses and foreign exchange gains or losses, until
the available-for-sale nancial assets are derecognised. At
that time, the cumulative gains or losses previously recognised
in other comprehensive income are reclassied from equity to
prot or loss as a reclassication adjustment.
Interest calculated using the effective interest method is
recognised in prot or loss. Dividends on available-for-sale
equity instruments are recognised in prot or loss when the
Companys right to receive payment is established.
v Investment in unquoted equity instruments carried at cost
Investment in equity instruments which do not have a quoted
market price in an active market and whose fair value cannot be
reliably measured and derivatives that are linked to and must
be settled by delivery of such an unquoted equity instruments,
are measured at cost less any accumulated impairment losses.
vi Impairment of nancial assets
At the end of each reporting period, the Company assess
whether there is any objective evidence that nancial assets
held, other than nancial assets at fair value through prot or
loss, are impaired. Financial assets are impaired if there is
objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the nancial
assets which have an impact on the estimated future cash
ows of the nancial assets that can be reliably measured.
For investment in equity instruments classied as available-for-
sale, objective evidence that the nancial assets are impaired
include the disappearance of an active market for the nancial
assets because of nancial difculties, or the decline of the
market price below the cost.
For other nancial assets, objective evidence could include:
signicant nancial difculty of the issuer; or
a breach of contract; or
the lender granting to the borrower a concession that the
lender would not otherwise consider; or
it becoming probable that the borrower will enter
bankruptcy or other nancial re-organisation; or
observable data indicating that there is a measurable
decrease in the estimated future cash ows from the
nancial assets since the initial recognition of those
assets.
Impairment losses, in respect of held-to-maturity investments
carried at amortised cost are measured as the differences
between the assets carrying amounts and the present values
of their estimated future cash ows discounted at the held-to-
maturity investments original effective interest rate.
For certain category of nancial assets, such as trade
receivables, if it is determined that no objective evidence of
impairment exists for an individually assessed nancial asset,
whether signicant or not, the assets are included in a group
with similar credit risk characteristics and collectively assessed
for impairment.
The carrying amounts of the nancial assets are reduced
directly, except for the carrying amounts of trade receivables
which are reduced through the use of an allowance
account. Any impairment loss is recognised in prot or loss
immediately. If, in later periods, the amount of any impairment
loss decreases, the previously recognised impairment losses
are reversed directly, except for the amounts related to trade
receivables which are reversed to write back the amount
921
previously provided in the allowance account. The reversal is
recognised in prot or loss immediately.
If there is objective evidence that impairment losses have been
incurred on nancial assets carried at cost, the amount of
any impairment loss is measured as the differences between
the carrying amounts of the nancial assets and the present
value of their estimated future cash ows discounted at the
current market rate of return for a similar nancial assets. Such
impairment losses are not reversed.
For available-for-sale nancial assets, if a decline in fair value
has been recognised in other comprehensive income and
there is objective evidence that the assets are impaired, the
cumulative losses that have been recognised are reclassied
to prot or loss.
Impairment losses recognised in prot or loss for an investment
in an equity instrument classied as available-for-sale nancial
assets are not reversed through prot or loss. If the fair value
of a debt instrument classied as an available-for-sale nancial
asset subsequently increases, and the increase can be
objectively related to an event occurring after the impairment
losses were recognised in prot or loss, the impairment losses
are reversed and recognised in prot or loss.
vii Derecognition of nancial assets
Financial assets are derecognised when the contractual
rights to the cash ows from the nancial assets expire or the
Company transfer the nancial assets and the transfers qualify
for derecognition.
On derecognition of nancial assets in their entirety, the
differences between the carrying amounts and the sum of the
consideration received and any cumulative gains or losses that
have been recognised in other comprehensive income are
Financial liabilities are recognised on the statements of nancial
position when the Company becomes a party to the contractual
provisions of the instrument. On initial recognition, nancial liabilities
are measured at fair value, plus transaction costs for nancial liabilities
not at fair value through prot or loss. After initial recognition,
nancial liabilities are either classied as at fair value through prot
or loss or amortised cost using the effective interest method.
i Financial liabilities at fair value through prot or loss
Financial liabilities are classied as at fair value through prot
or loss when the nancial liabilities are either held for trading
or upon initial recognition, the nancial liabilities are designated
as at fair value through prot or loss.
A nancial liability is classied as held for trading if:
it is incurred principally for the purpose of repurchasing it
in the near term; or
on initial recognition, it is part of a portfolio of identied
nancial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term prot-taking; or
it is a derivative that is not designated and effective
hedging instrument.
Financial liabilities (other than held for trading) are designated
as at fair value through prot or loss upon initial recognition if:
it eliminates or signicantly reduces a measurement or
recognition inconsistency that would otherwise arise from
measuring liabilities or recognising the gains and losses
on them on different bases; or
a group of nancial liabilities is managed and its
performance is evaluated on a fair value basis, in
accordance with a documented risk management or
investment strategy, and information about the grouping
is provided internally on that basis; or
a contract contains one or more embedded derivatives,
the entire hybrid contracts are designated as at fair value
through prot or loss.
After initial recognition, nancial liabilities at fair value through
prot or loss are measured at fair value. Gains or losses on
the nancial liabilities at fair value through prot or loss are
ii Financial liabilities at amortised cost using the effective
interest method
Effective interest method is a method of calculating the
amortised cost of nancial liabilities and allocating the interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts.
Estimate future cash payments through the expected life of
the nancial liabilities or a shorter period to the net carrying
amount of the nancial liabilities. After initial recognition, nancial
liabilities other than nancial liabilities at fair value through prot
or loss are measured at amortised cost using the effective
interest method. Gains or losses are recognised in prot or loss
when the nancial liabilities are derecognised or impaired.
iii Derecognition of nancial liabilities
Financial liabilities are derecognised when the obligation
specied in the contract is discharged, cancelled or expires.
Any difference between the carrying amounts of nancial
liabilities derecognised and the consideration paid is
(h) Equity instruments
Ordinary shares are classied as equity.
(i) Income tax
Income tax on the prot or loss for the year comprises current and
deferred tax. Current tax is the expected amount of income taxes
payable in respect of the taxable prot for the year and is measured
using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method, on temporary
differences at the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts in the nancial statements.
In principle, deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for
all deductible temporary differences, unused tax losses and unused
tax credits to the extent that it is probable that taxable prot will be
available against which the deductible temporary differences, unused
tax losses and unused tax credits can be recognize. Deferred tax is
not recognised if the temporary difference arises from goodwill or
negative goodwill or from the initial recognition of an asset or liability
in a transaction which is not a business combination and at the time
of the transaction, affects neither accounting prot nor taxable prot.
Deferred tax is measured at the tax rates that are expected to
apply in the period when the asset is realised or the liability is
settled, based on tax rates that have been enacted or substantively
enacted at the balance sheet date. Deferred tax is recognised in the
income statement, except when it arises from a transaction which is
recognised directly in equity, in which case the deferred tax is also
charged or credited directly in equity.
(j) Foreign currency
i Reporting currency
The nancial statements of the Company are measured using
the currency of the primary economic environment in which the
entity operates (the functional currency).
ii Foreign currency transactions and balances
Foreign currency transactions in the Company are accounted
for at exchange rates prevailing at the transactions dates,
unless hedged by forward foreign exchange contracts, in
which case the rates specied in such forward contracts are
used. Foreign currency monetary assets and liabilities are
translated at exchange rates prevailing at the balance sheet
date, unless hedged by forward foreign exchange contracts,
in which case the rates specied in such forward contracts
are used. Exchange differences arising from the settlement
922
of foreign currency transactions and from the translation of
foreign currency monetary assets and liabilities are included in
the income statement.
The principal closing rates used in translation of foreign
currency amounts are as follows:
2014
RM
2013
RM
1 Singapore Dollar (SGD) 2.59 2.49
1 Euro (EUR) Not applicable 3.96
4. Adoption of new and revised Malaysian Financial Reporting Standards
and interpretations
During the nancial year, the Company has adopted the following new
and revised Malaysian Financial Reporting Standards and amendments
to certain standards (collectively referred to as MFRSs), issued by the
Malaysian Accounting Standards Board (MASB) which are effective for
the nancial year of the Company beginning 1 April 2013:
MFRSs that have been issued and effective which do not have any
signicant impact on these nancial statements
The following new and revised MFRSs issued by the MASB, effective for
nancial year beginning on or after 1 April 2013, have been adopted, but the
adoptions do not have any or signicant impact on the nancial statements:
MFRS 10: Consolidated Financial Statements
MFRS 11: Joint Arrangements
MFRS 12: Disclosure of Interest in Other Entities
MFRS 13: Fair Value Measurement
Amendment to MFRS 7: Disclosures Offsetting Financial Assets
and Financial Liabilities
Amendment to MFRS 101: Presentation of Items of Other
Amendment to MFRS 116: Property, Plant and Equipment
Amendment to MFRS 119: Employee Benets
Amendment to MFRS 127: Separate Financial Statements
Amendment to MFRS 128: Investment in Associates and Joint Ventures
Amendment to MFRS 132: Financial Instruments: Presentation
Amendment to MFRS 134: Interim Financial Reporting
Amendment to MFRS 10: Consolidated Financial Statements
Amendment to MFRS 12: Disclosure of Interests in Other Entities
Amendment to MFRS 127: Separate nancial statements
Amendment to MFRS 132: Financial Instruments: Presentation
Amendment to MFRS 136: Impairment of Assets
Amendment to MFRS 139: Financial Instruments: Recognition and
Measurements
IC Interpretations 21: Levies
The Company has not adopted the following MFRSs that have been
issued by the MASB but are not yet effective:
Effective for the nancial period
beginning on or after
MFRS 9: Financial Instruments 1.1.2015
MFRS 10 replaces the parts of MFRS 127 Consolidated and Separate
Financial Statements that deal with consolidated nancial statements.
IC Interpretation 112 Consolidation Special Purpose Entities has been
withdrawn upon the issuance of MFRS 10. Under MFRS 10, there is only
one basis for consolidation, that is control. In addition, MFRS 10 includes
a new denition of control that contains three elements: (a) power over an
investee, (b) exposure, or rights, to variable returns from its involvement
with the investee, and (c) the ability to use its power over the investee to
affect the amount of the investors returns. Extensive guidance has been
added in MFRS 10 to deal with complex scenarios.
MFRS 11 replaces MFRS 131 Interests in Joint Ventures. MFRS 11
deals with how a joint arrangement of which two or more parties have
joint control shall be classied. IC Interpretation 113 Jointly Controlled
Entities Non-monetary Contributions by Venturers has been withdrawn
upon the issuance of MFRS 11. Under MFRS 11, joint arrangements are
classied as joint operations or joint ventures, depending on the rights
and obligations of the parties to the arrangements. In contrast, under
MFRS 131, there are three types of joint arrangements: jointly controlled
entities, jointly controlled assets and jointly controlled operations. In
addition, joint ventures under MFRS 11 are required to be accounted
for using the equity method of accounting, whereas jointly controlled
entities under MFRS 131 can be accounted for using the equity method or
proportionate consolidation accounting.
MFRS 12 is a disclosure standard and is applicable to entities that
have interests in subsidiary, joint arrangements, associates and/or
unconsolidated structured entities. In general, the disclosure requirements
in MFRS 12 are more extensive than those in the current standards.
MFRS 13 establishes a single source of guidance for fair value
measurements and disclosures about fair value measurements. MFRS
13 denes fair value, establishes a framework for measuring fair value,
and requires disclosures about fair value measurements. The scope of
MFRS 13 is broad; it applies to both nancial instrument items and non-
nancial instrument items for which other MFRSs require or permit fair value
measurements and disclosures about fair value measurements, except
in specied circumstances. In general, the disclosure requirements in
MFRS 13 are more extensive than those required in the current standards.
The amendments to MFRS 119 change the accounting for dened
benet plans and termination benets. The most signicant changes
relate to the accounting for dened benet obligations and plan assets.
The amendments require the recognition of changes in dened benet
obligations and in fair value of plan assets when they occur, and hence
eliminate the corridor approach permitted under the previous version
of MFRS 119 and accelerate the recognition of past service costs. The
amendments require all actuarial gains and losses to be recognised
immediately through other comprehensive income in order for the net
pension asset or liability recognised in the consolidated statement of
nancial position to reect the full value of the plan decit or surplus.
5. Signicant accounting estimates
Key Sources of Estimation Uncertainty
Estimates, assumptions concerning the future and judgements are made
in the preparation of the nancial statements. They affect the application of
the Companys accounting policies, reported amounts of assets, liabilities,
income and expenses, and disclosures made. They are assessed on an
on-going basis and are based on historical experience and other relevant
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The key assumptions concerning the future and other key sources of
estimation uncertainty at the nancial year end, that have a signicant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next nancial year are discussed below.
(a) Depreciation of plant and equipment
The cost of plant and equipment are depreciated on straight-line
basis over their useful lives. Management estimates the useful
lives of the plant and equipment as stated in Note 3(a). These are
common life expectancies applied in the industries. Change in the
expected level of usage and technological advancements could
impact the economic useful lives and the residual values of these
assets, therefore future depreciation charge could be revised.
(b) Income taxes
Signicant judgement is involved in determining the provision for
income taxes. There are certain transactions and computations for
which the ultimate tax determination is uncertain during the ordinary
course of business. Where the nal tax outcome of these matters
is different from the amounts that were initially recognised, such
differences will impact the income tax and deferred tax provisions in
the period in which such determination is made.
923
6. Plant and equipment
Computer
RM INR
Carrying amount
At 1 April 2013 3,000 54,960
Depreciation charge (833) (15,261)
Disposal (2,167) (39,699)
At 31 March 2014
At 31 March 2014
Cost
Carrying amount
At 31 March 2013
At 1 April 2012
Additional 3,999 73,262
Depreciation charge (999) (18,302)
At 31 March 2013 3,000 54,960
Depreciation 2013 999 18,302
2014
RM
2014
INR
2013
RM
2013
INR
Trade receivables 1,743,378 31,938,685 2,015,900 36,931,288
Amount due from related
corporations - trade 5,082 93,102 4,896 89,695
Accrued billings 311,713 5,710,582 1,128,419 20,672,636
2,060,173 37,742,369 3,149,215 57,693,619
The currency exposure prole of trade receivables of the Company is as
follows:
2014
RM
2014
INR
2013
RM
2013
INR
Ringgit Malaysia 2,055,091 37,649,267 3,144,319 57,603,924
Singapore Dollar 5,082 93,102 4,896 89,695
2,060,173 37,742,369 3,149,215 57,693,619
8. Other receivables
2014
RM
2014
INR
2013
RM
2013
INR
Loan and advances 13,778 252,413 38,030 696,710
Prepayments 12,163 222,826 12,163 222,826
Rental deposits 12,268 224,750 11,268 206,430
38,209 699,989 61,461 1,125,966
9. Share capital
2014
RM
2014
INR
2013
RM
2013
INR
Authorised
500,000 ordinary shares
of RM1 each 500,000 9,160,000 500,000 9,160,000
Issued and fully paid:
100,000 ordinary shares
of RM1 each 100,000 1,832,000 100,000 1,832,000
10. Trade payables
2014
RM
2014
INR
2013
RM
2013
INR
Amount due to related
corporations:
Bristlecone Singapore (Pte) Ltd 3,950 72,364
Bristlecone GMBH 83,682 1,533,055
4,147,981 75,991,012 1,369,305 25,085,668
Amount due to related corporation is unsecured, interest free and repayable
upon demand.
The currency exposure prole of trade payables of the Company is as follows:
2014
RM
2014
INR
2013
RM
2013
INR
Ringgit Malaysia 4,147,981 75,991,012 1,281,673 23,480,249
Singapore Dollar 3,950 72,364
Euro 83,682 1,533,055
4,147,981 75,991,012 1,369,305 25,085,668
11. Other payables and accruals
2014
RM
2014
INR
2013
RM
2013
INR
Advance billings 789,270 14,459,426
Other payables 330,731 6,058,992 473,375 8,672,230
Provision for expenses 228,508 4,186,267 301,591 5,525,147
1,348,509 24,704,685 774,966 14,197,377
Advance billing represents invoices issued to customers of which goods
or services sold have not been completed and have been included under
trade payables.
12. Prot before taxation
2014
RM
2014
INR
2013
RM
2013
INR
Prot before taxation is
arrived at after charging:
Auditors remuneration 16,000 293,120 11,000 201,520
Depreciation of plant
and equipment 833 15,261 999 18,302
Loss on foreign exchange
- realised 11,062 202,656
- unrealised 70 1,282 89 1,630
Staff costs 5,922,361 108,497,654 1,947,994 35,687,250
Rental of guest house
(under Cost of Services) 20,750 380,140 21,000 384,720
Rental of premises (under
Administrative Expenses) 7,068 129,486 7,657 140,276
Bad debts written off 78,001 1,428,979 17,926 328,404
and crediting:
Gain on foreign exchange
unrealised 89 1,630 4,844 88,742
Gain on foreign exchange
realised 44 806
13. Taxation
2014
RM
2014
INR
2013
RM
2013
INR
Malaysian income tax
Current year 692,000 12,677,440 610,000 11,175,200
(Over)/Under provision in
prior years (7,402) (135,605) 10,615 194,467
684,598 12,541,835 620,615 11,369,667
924
The reconciliation of income tax expense applicable to the results of the
Company at the statutory income tax rate to income tax expense at the
effective income tax rate of the Companyis as follows:
2014
RM
2014
INR
2013
RM
2013
INR
Prot before taxation 2,599,221 47,617,728 2,370,278 43,423,493
Tax at Malaysian statutory
tax rate of 25% 649,805 11,904,428 592,569 10,855,864
Tax effects of expenses not
deductible for tax purposes 42,195 773,012 17,431 319,336
(Over)/Under provision of
income tax in prior years (7,402) (135,605) 10,615 194,467
684,598 12,541,835 620,615 11,369,667
14. Dividends
2014
RM
2014
INR
Final single tier dividends of RM20 per share on
100,000 ordinary shares declared on 28 August 2013
in respect of nancial year ended 31 March 2013, paid
on 4 September 2013 2,000,000 36,640,000
First interim single tier dividends of RM4 per share
on 100,000 ordinary shares declared on 6 December
2013 in respect of nancial year ended 31 March
2014, paid on 16 December 2013 400,000 7,328,000
Second interim single tier dividends of RM6 per share
on 100,000 ordinary shares declared on 12 February
2014 in respect of nancial year ended 31 March
2014, paid on 24 February 2014 600,000 10,992,000
3,000,000 54,960,000
15. Signicant related party transactions
The Company has transactions with its related corporations and the nancial
statements reect the effects of these transactions on the basis agreed upon
between the Company and its related corporations which basis might be
different from the transactions with unrelated parties.
Signicant transactions with related corporations during the year consists of:
2014
RM
2014
INR
2013
RM
2013
INR
Expenses
Service charges by
related corporations:
Bristlecone GMBH 26,435 484,289 85,894 1,573,578
5,948,796 108,981,943 2,033,838 37,259,912
16. Non-cancellable operating lease commitment
The future aggregate minimum lease payments under non-cancellable
operating leases contracted for as at balance sheet date but not recognised
as liabilities are as follows:
2014
RM
2014
INR
2013
RM
2013
INR
Rental of guest house
Future minimum rentals
payments:
Not later than 1 year 21,000 384,720
17. Fair values of the nancial instruments
The fair values of the nancial instruments of the Company as at 31 March
2014 are not materially different from their carrying values.
18. Financial risk management policies
The Companys nancial risk management policy seeks to ensure that
adequate nancial resources are available for the development of the
Companys businesses whilst managing its risks. The Board reviews
and agrees policies for managing each of these risks and they are
summarised below. It is, and has been throughout the year under review,
the Companys policy that no trading in derivative nancial instruments
shall be undertaken.
The main areas of nancial risks faced by the Company and the policy in
respect of the major areas of treasury activity are set out as follows:
(a) Credit risk
The credit risk is controlled by the application of credit approvals,
limits and monitoring procedures. An internal credit review is
conducted if the credit risk is material.
(b) Foreign currency risk
The Company is exposed to transactional currency risk primarily
through sales and purchases that are denominated in a currency
other than the functional currency of the operations to which they
relate. The currency giving rise to this risk is mainly Euro (EUR)
and Singapore Dollars (SGD). Foreign exchange exposures in
transactional currencies other than functional currencies of the
operating entities are kept to an acceptable level.
Foreign currency risk sensitivity analysis
Amounts are translated for convenience into Indian Rupees at the
exchange rate of INR18.32 = RM1 which approximates the market rate as
at 31 March 2014. Comparative gures are also translated at this rate.
The sensitivity analysis to a reasonably possible change in the foreign
currencies as at the end of the reporting period with all other variables
held constant is as follows:
Increase/(decrease) in
the Companys results
Increase/(decrease) in
the Companys results
2014
RM
2014
RM
2013
RM
2013
RM
Effects on prot
before taxation:
SGD
strengthened by 5%
(2013: 5%)
250 4580 50 916
weakened by 5%
(2013: 5%)
(250) (4,580) (50) (916)
EUR
strengthened by 5%
(2013: 5%)
(4,180) (76,578)
weakened by 5%
(2013: 5%)
4,180 76,578
(c) Liquidity and cash ow risks
The Company relies on its management of working capital to ensure that
the cash ow within the operating cycle are sustainable. In the event of
additional funds required to operate the Company, the nancial support
from its holding company and related companies is necessary to meet its
short term funding needs.
BRISTLECONE CONSULTING LTD.
925
The Directors are pleased to present their report together with the Audited Accounts of your Company for the year ended
31
st
March, 2014.
March 31, 2014
Year ended
March 31, 2014
Year ended
March 31, 2013
Year ended
March 31, 2013
CAD INR CAD INR
Total Income...................................................... 1,070,040 57,942,666 1,610,121 87,188,052
Prot/(Loss) before tax ..................................... 349,146 18,906,255 504,017 27,292,521
Prot/(Loss) after tax ........................................ 255,418 13,830,885 371,448 20,113,909
Review of Operations:
Bristlecone Consulting Ltd., Canada was incorporated on
June 1, 2010 under the laws of British Columbia, Canada.
During the scal year under review, revenue declined to $1.07m
(INR 57.94m) from $1.61m (INR 87.19m) and the Prot after tax
for the year was at $0.26m (INR 13.83m) as compared to a
Prot after tax of $0.37m (INR 20.11m) in the previous year.
Outlook for the current year:
The Company will pursue opportunities during the year which
are expected to have a positive impact on the business.
Acknowledgement:
The Board acknowledges the continued support the Company
received from its employees and its holding company,
Bristlecone Limited.
Ashok Santhanam
Director
Place : Mountain View, California
Date : 17
th
April, 2014
926
To The Shareholder of
Bristlecone Consulting Ltd.
Bristlecone Consulting Ltd., which comprise the balance sheet
as at March 31, 2014 and the statements of earnings and
retained earnings and the cash ow statement for the year then
ended, and a summary of signicant accounting policies and
Canadian accounting standards for private enterprises, and for
such internal control as management determines is necessary
to enable the preparation of nancial statements that are free
statements based on our audit. We conducted our audit
in accordance with Canadian generally accepted auditing
standards. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the nancial statements
internal control relevant to the companys preparation and fair
of the companys internal control. An audit also includes
and the reasonableness of accounting estimates made by
Opinion
material respects, the nancial position of Bristlecone Consulting
Ltd. as at March 31, 2014, and the results of its operations
and its cash ows for the year then ended in accordance with
Canadian accounting standards for private enterprises.
Other Matter
Our audit was conducted for the purposes of forming an
opinion on the nancial statements taken as a whole. The
Supplementary Information on pages herein is presented for
purposes of additional information and is not a required part
of the nancial statements. Such information has not been
subjected to the auditing procedures applied in the audit of the
nancial statements and, accordingly, we express no opinion
on it.
Grant Thornton LLP
Toronto, Canada Chartered Accountants
April 17, 2014 Licensed Public Accountants
Grant Thornton LLP
Royal Bank Plaza
19th Floor, South Tower
200 Bay Street, Box 55
Toronto, ON
M5J 2P9
T (416) 366-0100
F (416) 360-4949
www.GrantThornton.ca
927
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
Year ended
March 31, 2014
Year ended
March 31, 2013
Revenue ................................................................................................................. $ 1,070,040 $ 1,610,121
Expenses
Salaries ............................................................................................................ 223,227 147,489
Subcontracting (Note 8) .................................................................................. 386,326 730,292
Rent .................................................................................................................. 22,078 17,415
Ofce ................................................................................................................ 1,239 4,263
Foreign exchange gain ................................................................................... (55,863) (7,831)
Travel ................................................................................................................ 79,001 107,555
Professional fees ............................................................................................. 39,380 53,422
Telephone ........................................................................................................ 5,474 4,703
Commissions ................................................................................................... 14,647 41,286
Meals and entertainment ................................................................................ 2,518 4,913
Bank charges .................................................................................................. 1,954 1,896
Amortization ..................................................................................................... 913 701
720,894 1,106,104
Income before income taxes .................................................................................. 349,146 504,017
Current income taxes (Note 6) .............................................................................. 93,728 132,569
Net income .............................................................................................................. $ 255,418 $ 371,448
Retained earnings, beginning of year ................................................................... $ 418,796 $ 47,348
Net income ............................................................................................................ 255,418 371,448
Retained earnings, end of year .............................................................................. $ 674,214 $ 418,796
928
BALANCE SHEET
March 31,
2014
March 31,
2013
Assets
Current
Cash ................................................................................................................. $ 1,158,232 $ 780,068
Accounts receivable ........................................................................................ 128,925 574,725
Amounts due from related companies (Note 4) ............................................ 41,255
Prepaids ........................................................................................................... 2,515 3,710
1,330,927 1,358,503
Capital assets (net of accumulated amortization of $680) ................................... 1,545 759
$ 1,332,472 $ 1,359,262
Liabilities
Current
Payables and accruals (Note 3) ..................................................................... $ 27,816 $ 81,367
Income taxes payable ..................................................................................... 4,715 116,845
Amounts due to related companies (Note 4) ................................................ 625,726 742,253
658,257 940,465
Shareholders equity
Share capital (Note 5) ............................................................................................ 1 1
Retained earnings ................................................................................................. 674,214 418,796
674,215 418,797
$ 1,332,472 $ 1,359,262
On behalf of the Board
Kulashekar Raghavan
Director
929
STATEMENT OF CASH FLOWS
Year ended
March 31, 2014
Year ended
March 31, 2013
Increase (decrease) in cash
Net income .............................................................................................. $ 255,418 $ 371,448
Amortization ............................................................................................. 913 701
256,331 372,149
Change in non-cash working capital
Accounts receivable ................................................................................ 445,800 (236,307)
Amounts due from related companies .................................................. (41,255)
Work-in-process ...................................................................................... 90,290
Prepaids .................................................................................................. 1,195 (3,710)
Payables and accruals ............................................................................ (53,551) 17,566
Income taxes payable ............................................................................. (112,130) 101,445
Amounts due to related companies ....................................................... (116,527) 516,200
379,863 857,633
Financing activities
Increase in amount due to parent company ......................................... (90,508)
Investing activities
Disposal of capital assets ....................................................................... 526
Purchase of capital assets ...................................................................... (2,225)
(1,699)
Net increase in cash .............................................................................................. 378,164 767,125
Cash, beginning of year ........................................................................................ 780,068 12,943
Cash, end of year .................................................................................................. $ 1,158,232 $ 780,068
930
Notes to the Financial Statements March 31, 2014
1. Nature of operations
Bristlecone Consulting Ltd. (the Company) is engaged in providing
technology solutions and consulting services primarily with operations in
North America. The Companys primary focus is on providing supply chain
services ranging from supply chain strategy and network design to supply
chain system implementations. The Company also provides application
outsourcing services, data management services and development and
integration services to independent software vendors. The Company was
incorporated under the laws of Canada on June 1, 2010.
2. Summary of signicant accounting policies
These nancial statements have been prepared in accordance with
Canadian accounting standards for private enterprises (ASPE).
Use of estimates
In preparing the Companys nancial statements, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the nancial statements and reported amounts of revenue and
expenses during the period. Actual results could differ from these estimates.
Financial instruments
Financial assets and nancial liabilities are initially recognized at fair
value when the Company becomes a party to the contractual provisions
of the nancial instrument. Subsequently, all of the Companys nancial
instruments are measured at amortized cost.
With respect to nancial assets, the Company recognizes in net earnings
an impairment loss, if any, when it determines that a signicant adverse
change has occurred during the period in the expected timing or amount
of future cash ows. When the extent of impairment of a previously
written-down asset decreases and the decrease can be related to an
event occurring after the impairment was recognized, the previously
recognized impairment loss shall be reversed in net earnings in the period
the reversal occurs.
Cash
Cash includes cash on hand and balances with banks.
Capital assets
Rates and bases of amortization applied to write-off the cost less estimated
salvage value of capital assets over their estimated lives are as follows:
Computer equipment 33%, straight-line
Revenue recognition
Revenue is recognized under the percentage of completion method,
whereby work-in-process represents the net realizable value of unbilled
professional time and related charges. Unbilled disbursements are recorded
at cost and included in work-in-process. Revenue is recognized as services
are provided.
Foreign currency translation
The functional currency of the Company is the Canadian dollar. When
using the Canadian dollar as the reporting currency, monetary assets and
liabilities denominated in foreign currencies are translated at the year end
rate of exchange. Revenue and expenses denominated in foreign currencies
are translated at the rate of exchange in effect on the dates on which such
items are recognized in earnings during the year. The translation adjustment
is included in the determination of earnings for the current year.
Income taxes
The Company has elected to apply the taxes payable method of
accounting. The taxes payable and provision for income taxes are based
on the corporate income tax return led. There is no adjustment for income
taxes related to temporary differences and no recognition of the benet of
income tax losses carried forward.
3. Payables and accruals
Included in payables and accruals are government remittances (other than
income taxes) of $6,064 (INR 328,366) (2013 - $30,787 (INR 1,667,116)).
4. Amounts due to/from related companies
Amounts due from
related companies 2014 2014 2013 2013
Bristlecone
Incorporated $ 41,255 2,233,958 $

Amounts due to
related companies 2014 2014 2013 2013
Bristlecone India
Limited $ 49,228 2,665,696 $ 203,277 11,007,450
Bristlecone UK 2,629 142,361
Bristlecone
Incorporated 573,869 31,075,006 538,976 29,185,550
$ 625,726 33,883,063 $ 742,253 40,193,000
The amounts due to/from related companies are non-interest bearing, unsecured
and payable/receivable on demand. The companies are related to due to
common ownership.
5. Share capital
Authorized:
Unlimited number of common shares without nominal or par value
Issued and outstanding:
2014 2014 2013 2013
1 common share $ 1 54 $ 1 54
6. Income taxes
The provision for income taxes in the statement of operations varies from
the amount that would be computed by applying the combined federal and
provincial statutory income tax rates as a result of the following:
2014 2014 2013 2013
Income tax
expense on
earnings at
statutory rates $ 92,523 5,010,120 $ 133,565 7,232,545
Increase (decrease)
resulting from:
Non-
deductible
expenses 495 26,804 663 35,901
Temporary
differences 710 38,446 (1,659) (89,835)
$ 93,728 5,075,370 $ 132,569 7,178,611
7. Financial instruments
Credit risk
The Company is subject to credit risk through trade receivables. The
Company performs ongoing credit evaluations of its customers nancial
condition and limits the amount of credit extended when deemed necessary.
The Company maintains provisions for potential credit losses and any such
losses to date have been within managements expectations. At March 31,
2014 the Company has not recorded any provision for doubtful accounts.
Interest rate risk
The Company is not subject to interest rate risk.
Currency risk
The Company operates internationally giving rise to risks associated with
uctuations in foreign currency exchange rates. The Companys foreign
currency policy is described in Note 2. At the balance sheet date receivables
include $116,631 U.S. (2013 $541,331 U.S.) and due to related companies
include $503,395 U.S. (2013 $667,276 U.S.).
8. Related party transactions
During the year, the Company had entered related party transactions with
Bristlecone India Limited and Bristlecone Incorporated for subcontracting
services provided to the Company.
Services provided amounted to $386,326 (INR 20,919,553) (2013
$730,292 (INR 39,545,312). These transactions were in the normal course
of operations and measured at the exchange amount..
931
Supplementary Information (Unaudited)
For the convenience of readers of the nancial statements, all items in the
statement of earnings and retained earnings for the year ended March 31,
2014 and the balance sheet as at March 31, 2014 have been translated
from the Companys reporting currency (Canadian dollars) into Indian
Rupees (INR) using the exchange rate on March 28, 2014 of Canadian
$1 = INR 54.15. This convenience translation should not be construed as
a representation that the Canadian dollar amounts or the Indian Rupee
amounts referred to have been, could have been, or could in the future
be, converted into INR or Canadian dollar, as the case may be, at this or at
any other rate of exchange, or at all. The information presented below does
not form part of the audited nancial statements and does not conform to
Canadian accounting standards for private enterprises (ASPE).
Statement of Earnings and Retained Earnings
Year
March 31,
2014
Year
March 31,
2013
Revenue INR 57,942,666 87,188,052
Expenses
Salaries 12,087,742 7,986,529
Subcontracting 20,919,553 39,545,312
Rent 1,195,524 943,022
Ofce 67,092 230,841
Foreign exchange gain (3,024,981) -424,049
Travel 4,277,904 5,824,103
Professional fees 2,132,427 2,892,801
Telephone 296,417 254,667
Commissions 793,135 2,235,637
Meals and entertainment 136,350 266,039
Bank charges 105,809 102,668
Amortization 49,439 37,959
39,036,411 59,895,529
Income before income taxes 18,906,255 27,292,523
Current income taxes 5,075,370 7,178,611
Net income INR 13,830,885 20,113,912
Retained earnings, beginning of year INR 22,677,803 2,563,891
Net income 13,830,885 20,113,912
Retained earnings, end of year INR 36,508,688 22,677,803
Balance Sheet
March 31,
2014
March 31,
2013
Assets
Current
Cash INR 62,718,262 42,240,682
Accounts receivable 6,981,289 31,121,360
Amounts due from related companies 2,233,958
Prepaids 136,188 200,897
72,069,697 73,562,939
Capital assets (net accumulated
amortization of INR 36,822) 83,662 41,100
INR 72,153,359 73,604,039
Liabilities
Current
Payables and accruals INR 1,506,237 4,406,025
Income tax payables 255,317 6,327,157
Amounts due to related companies 33,883,063 40,193,000
35,644,617 50,926,182
Shareholders equity
Share capital 54 54
Retained earnings 36,508,688 22,677,803
36,508,742 22,677,857
INR 72,153,359 73,604,039
Statement of Cash Flows
Year Ended
March 31,
2014
Year Ended
March 31,
2013
Increase (decrease) in cash
Net income INR 13,830,885 20,113,912
Amortization 49,439 37,959
13,880,324 20,151,871
Change in non-cash working capital
Accounts receivable 24,140,071 (12,796,024)
Amounts due from related companies (2,233,958)
Work-in-process 4,889,204
Prepaids 64,709 (200,897)
Payables and accruals (2,899,788) 951,199
Income taxes payable (6,071,840) 5,493,247
Amounts due to related companies (6,309,937) 27,952,230
20,569,581 46,440,830
Increase in amount due to parent
company (4,901,008)
Investing activities
Disposal of capital assets 28,483
Purchase or capital assets (120,484)
(92,001)
Net increase in cash 20,477,580 41,539,819
Cash, beginning of year 42,240,682 700,863
Cash, end of year 62,718,262 42,240,682
BRISTLECONE INTERNATIONAL AG
932
Bristlecone International AG was incorporated on 21
st
June, 2011 under the laws of Switzerland. Your Directors present their
Report together with the audited accounts for the year ended 31
st
March, 2014.
Financial Results
Year ended
31
s
t March,
2014
Year ended
31
st
March,
2014
Year ended
31
st
March,
2013
Year ended
31
st
March,
2013
Particulars (CHF) (INR) (CHF) (INR)
Gross Sales ............................................................................ 3,514,189 238,156,579 3,036,234 205,765,563
Other Income ......................................................................... 76,679 5,196,546 76,177 5,162,547
Total ........................................................................................ 3,590,868 243,353,125 3,112,411 210,928,110
(Loss)/Prot before Interest, Depreciation, Taxation ............ 513,924 34,828,669 712,334 48,274,886
Less: Depreciation ................................................................. 2,482 168,209 3,311 224,379
(Loss)/Prot before Tax .......................................................... 511,442 34,660,460 709,023 48,050,507
Tax on Income ....................................................................... (48,200) (3,266,528) (65,418) (4,433,378)
Net Prot/(Loss) after Tax ...................................................... 463,242 31,393,932 643,605 43,617,129
Balance of Prot for earlier years ......................................... 683,727 46,336,194 42,622 2,888,493
Less: Transfer to Legal Reserve ............................................ 32,500 2,202,525 2,500 169,428
Prot & Loss Account Balance carried forward ................... 1,114,469 75,527,601 683,727 46,336,194
Share Capital
The Companys share capital is CHF 100,000 (INR 6,777,000)
[Previous year CHF 100,000 (INR 6,777,000)] of which
CHF 50,000 (INR 3,388,500) [Previous year CHF 50,000
(INR 3,388,500)] is non paid-up.
The Directors state as an averment of the responsibility that :
as at 31
st
for the period ended on that date;
maintenance of adequate accounting records for
safeguarding the assets of the Company and for
concern basis.
Management and Representative Authority
Mr. Kulashekar Raghavan, Mr. Irfan Khan and Mr. Rajesh
Kalra are Directors of the Company. During the year under
review Dr. Stephan Pfenninger had resigned from the Board
and Mr Rajesh Kalra was appointed as the Director of the
Company. The Directors place on record their appreciation of
the contributions made by Dr. Stephan Pfenninger.
Auditors
The auditors BDO Ltd., Hodlerstrasse 5, CH-3001 Berne, have
expressed their willingness to accept re-appointment.
Kulashekar Raghavan
Director
Place : Schaffhausen
Date : 28
th
April, 2014
933
REPORT OF THE STATUTORY AUDITOR ON THE LIMITED STATUTORY EXAMINATION OF THE
FINANCIAL STATEMENTS FOR THE YEAR 2013/14
(for the period of 1 April 2013 until 31 March 2014)
Report of the statutory auditor on the limited statutory
examination to the general shareholders meeting of
Bristlecone International AG, Schaffhausen
As statutory auditor, we have examined the nancial statements
(balance sheet, income statement and notes) of Bristlecone
International AG for the year ended 31 March 2014.
These nancial statements are the responsibility of the board
of directors. Our responsibility is to perform a limited statutory
examination on these nancial statements. We conrm that
we meet the licensing and independence requirements as
stipulated by Swiss law.
We conducted our examination in accordance with the
Swiss Standard on the Limited Statutory Examination. This
standard requires that we plan and perform a limited statutory
examination to identify material misstatements in the nancial
statements. A limited statutory examination consists primarily
of inquiries of company personnel and analytical procedures
as well as detailed tests of company documents as considered
necessary in the circumstances. However, the testing of
operational processes and the internal control system, as
well as inquiries and further testing procedures to detect
fraud or other legal violations, are not within the scope of this
examination.
Based on our limited statutory examination, nothing has
come to our attention that causes us to believe that the
accompanying nancial statements and the proposed
appropriation of available earnings do not comply with Swiss
law and the companys articles of incorporation.
Berne, 28 April, 2014
BDO Ltd
Karel Hojac pp Simon Kehrli
Licensed Audit Expert Licensed Audit Expert
Auditor in Charge
934
BALANCE SHEET AS OF MARCH 31, 2014
ASSETS 31.03.2014
CHF
31.03.2014
INR
31.03.2013
CHF
31.03.2013
INR
Cash .......................................................................... 3,000.00 203,310.00 3,000.00 203,310.00
Bank accounts .......................................................... 1,296,306.28 87,850,676.60 905,150.25 61,342,032.44
Accounts receivables ................................................ 564,473.43 38,254,364.35 1,110,030.04 75,226,735.80
Accounts receivables related parties ....................... 108,055.91 7,322,949.02 0.00 0.00
Provision for doubtful debts ..................................... -36,029.38 -2,441,711.08 -35,000.00 -2,371,950.00
Other current receivables ......................................... 122,388.96 8,294,299.82 60,695.80 4,113,354.37
Services in progress ................................................. 582,907.53 39,503,643.31 240,202.54 16,278,526.14
Prepaid expenses ..................................................... 13,567.57 919,474.22 29,191.96 1,978,339.13
Current Assets ........................................................ 2,654,670.30 179,907,006.24 2,313,270.59 156,770,347.88
Non paid up share capital ..................................... 50,000.00 3,388,500.00 50,000.00 3,388,500.00
Computer hardware and ofce machines ............... 3,368.02 228,250.72 3,947.73 267,537.66
Ofce furniture and appliance .................................. 1,786.85 121,094.82 2,250.00 152,482.50
Rent deposit .............................................................. 6,000.00 406,620.00 6,000.00 406,620.00
Fixed Assets ............................................................ 11,154.87 755,965.54 12,197.73 826,640.16
TOTAL ASSETS ....................................................... 2,715,825.17 184,051,471.78 2,375,468.32 160,985,488.04
LIABILITIES AND EQUITY
Accounts payable ..................................................... 0.00 0.00 30,712.09 2,081,358.34
Accounts payable related parties ............................ 1,173,349.81 79,517,916.62 1,211,486.71 82,102,454.34
Other current payables ............................................. 24,050.90 1,629,929.49 12,071.95 818,116.05
Accrued expenses 268,954.91 18,227,074.26 334,970.34 22,700,939.94
LIABILITIES .............................................................. 1,466,355.62 99,374,920.37 1,589,241.09 107,702,868.67
Share capital ............................................................. 100,000.00 6,777,000.00 100,000.00 6,777,000.00
Legal reserves ........................................................... 35,000.00 2,371,950.00 2,500.00 169,425.00
Prot carried forward ................................................ 651,227.23 44,133,669.38 40,121.96 2,719,065.23
Prot for the year ...................................................... 463,242.32 31,393,932.03 643,605.27 43,617,129.14
Available earnings .................................................. 1,114,469.55 75,527,601.41 683,727.23 46,336,194.37
Equity ........................................................................ 1,249,469.55 84,676,551.41 786,227.23 53,282,619.37
TOTAL LIABILITIES AND EQUITY ......................... 2,715,825.17 184,051,471.78 2,375,468.32 160,985,488.04
Schaffhausen,
Date: 28 April, 2014
R. Kulashekar
Director
935
INCOME STATEMENT FOR THE PERIOD OF 01.04.2013 - 31.03.2014
01.04.2013
- 31.03.2014
CHF
01.04.2013
- 31.03.2014
INR
01.04.2012
- 31.03.2013
CHF
01.04.2012
- 31.03.2013
INR
Services income ...................................................... 3,514,188.86 238,156,579.04 3,036,233.78 205,765,563.27
Provision for doubtful debts ..................................... -1,029.38 -69,761.08 -35,000.00 -2,371,950.00
Net income ............................................................... 3,513,159.48 238,086,817.96 3,001,233.78 203,393,613.27
Services expenses .................................................... -2,318,496.07 -157,124,478.66 -1,643,567.14 -111,384,545.08
Gross prot I ........................................................... 1,194,663.41 80,962,339.30 1,357,666.64 92,009,068.19
Personnel expenses ................................................. -408,341.68 -27,673,315.65 -388,060.44 -26,298,856.02
Gross prot II .......................................................... 786,321.73 53,289,023.65 969,606.20 65,710,212.17
Ofce expenses ........................................................ -39,912.00 -2,704,836.24 -40,074.95 -2,715,879.36
Administration expenses .......................................... -45,657.56 -3,094,212.84 -67,767.03 -4,592,571.62
Consulting, accounting and audit fees .................... -132,270.22 -8,963,952.81 -72,826.44 -4,935,447.84
Advertising expenses................................................ 0.00 0.00 -210.00 -14,231.70
Operating prot before depreciation ................... 568,481.95 38,526,021.76 788,727.78 53,452,081.65
Depreciation .............................................................. -2,482.05 -168,208.53 -3,310.89 -224,379.02
Operating prot (level EBIT) ................................. 565,999.90 38,357,813.23 785,416.89 53,227,702.63
Financial income ....................................................... 75,494.20 5,116,241.93 75,278.47 5,101,621.91
Financial expenses ................................................... -131,236.53 -8,893,899.64 -152,571.09 -10,339,742.77
Other income ............................................................ 1,184.95 80,304.06 899.00 60,925.23
Prot before taxes .................................................. 511,442.52 34,660,459.58 709,023.27 48,050,507.00
Taxes ......................................................................... -48,200.20 -3,266,527.55 -65,418.00 -4,433,377.86
Prot for the year .................................................... 463,242.32 31,393,932.03 643,605.27 43,617,129.14
Schaffhausen,
R. Kulashekar
Director
936
NOTES FOR THE PERIOD OF 1.4.2013 - 31.3.2014
31.03.2014
CHF
31.03.2014
INR
31.03.2013
CHF
31.03.2013
INR
1. Fire insurance coverage
Equipment ........................................................... N/A N/A N/A N/A
2. Risk assessment
Due to the size and complexity of the company, the management did not yet make a written risk assessment. The management
will monitor the risks continuously.
3. Translation into Indian Rupees
The amounts in CHF are translated for convenience into India Rupees at the exchange rate of CHF 1 = INR 67.77, which is the
average of the telegraphic transfer buying and selling rates quoted by the Mumbai Branch of State Bank of India on March 28,
2014.
Other facts to disclose in the annual accounts according to Art. 663 b OR do not exist.
PROPOSED APPROPRIATION OF AVAILABLE EARNINGS
31.03.2014
CHF
31.03.2014
INR
31.03.2013
CHF
31.03.2013
INR
Balance carried forward from last year ............ 651,227.23 44,133,669.38 40,121.96 2,719,065.23
Prot of the year ................................................ 463,242.32 31,393,932.03 643,605.27 43,617,129.15
Available earnings ........................................... 1,114,469.55 75,527,601.41 683,727.23 46,336,194.38
Legal reserves ................................................... 15,000.00 1,016,550.00 32,500.00 2,202,525.00
Balance to be carried forward .......................... 1,099,469.55 74,511,051.41 651,227.23 44,133,669.38
Available earnings ........................................... 1,114,469.55 75,527,601.41 683,727.23 46,336,194.38
Schaffhausen,
R. Kulashekar
Director
MAHINDRA INTERTRADE LIMITED
937
Your directors are pleased to present their Thirty-Sixth Report, together with the audited accounts of your Company for the year
ended 31
st
March 2014.
FINANCIAL RESULTS
(Rs in Crores)
Year ended 31
st
March
2014 2013
Income .................................................................................................................................. 1,168.87 1,304.52
Prot before depreciation, interest and taxation ................................................................. 100.02 92.16
Less: Depreciation ............................................................................................................... 5.99 6.09
Prot before interest and taxation ...................................................................................... 94.03 86.07
Less: Interest ....................................................................................................................... 1.46 3.07
Prot before tax ................................................................................................................... 92.57 83.00
Less: Provision for taxation:
Current tax .................................................................................................................... 29.23 25.80
Deferred tax ................................................................................................................... (1.03) 0.50
Prot for the year after tax.................................................................................................... 64.37 56.70
Balance of prot of earlier years .......................................................................................... 225.50 191.95
Prot available for appropriation ......................................................................................... 289.87 248.65
Proposed dividend on equity shares ........................................................................... 16.60 14.94
Income-tax on proposed dividend................................................................................ 2.82 2.54
Transfer to General Reserve ......................................................................................... 6.44 5.67
Balance carried to Balance Sheet ....................................................................................... 264.01 225.50
Your Companys income for the year decreased to Rs 1,168.87
Crores from Rs 1,304.52 Crores in the previous year primarily
on account of de-growth in the auto industry. Prot before tax
for the year was Rs 92.57 Crores as compared to Rs 83.00
Crores in the previous year on account of better product mix,
and cost control measures.
OPERATIONS
Domestic auto industry remained sluggish throughout the year
resulting in subdued demand for processed steel.
Transformer industry suffered from muted demand during the
year resulting in margins being under pressure.
DIVIDEND
Your directors recommend a dividend at the rate of 100% on
its equity shares, i.e. Rs 10 per equity share on 1,21,00,007
fully paid-up equity shares of Rs 10 each, and a pro rata
dividend of Rs 3 per equity share on 1,50,00,000 partly
paid-up equity shares of Rs 10 each, Rs 3 per equity share
paid-up, aggregating Rs 16.60 Crores.
If approved by the shareholders at the ensuing Annual General
Meeting, the above equity dividend will be paid to those
equity shareholders whose names appear on the Register of
Members as on the record date xed for this purpose.
The equity dividend for the year, together with income tax
thereon, will absorb a sum of Rs 19.42 Crores against
Rs 17.48 Crores paid for the previous year.
SUBSIDIARIES
Mahindra Steel Service Centre Limited:
The nancial performance of Mahindra Steel Service Centre
Limited improved signicantly during the year on account of
better order load in its electrical steel vertical, and cost control
measures. The auto steel vertical, however, faced subdued
demand due to de-growth in the auto industry.
Mahindra MiddleEast Electrical Steel Service Centre (FZC):
The nancial performance of Mahindra MiddleEast Electrical
Steel Service Centre (FZC) improved during the year primarily
on account of stable margins, and cost control measures.
Mahindra Electrical Steel Private Limited:
Mahindra Electrical Steel Private Limited is in the process
of evaluating options for its proposed steel service centre
projects in the context of the continuing economic slowdown
and weak domestic demand trends.
Mahindra Auto Steel Private Limited:
Mahindra Auto Steel Private Limited was incorporated during
the year for setting up an auto steel processing facility at
Chakan pursuant to a joint venture agreement between
your Company, China Steel Global Trading Corporation, CSGT
International Corporation and Mitsui & Co. (Asia Pacic) Pte Ltd.
The audited Statement of Accounts of your Companys
subsidiaries, together with Reports of Directors and Auditors
thereon for the year ended 31
st
March 2014, and a statement
pursuant to Section 212 of the Companies, Act, 1956, are
attached.
INTERNAL CONTROLS
Your Company has implemented a system of internal control
and monitoring procedures. Corporate Management Services
department of the holding Company, Mahindra and Mahindra
Limited, regularly conducts reviews to assess the adequacy
of nancial and operating controls for various businesses
of the Company. Signicant issues, if any, are brought to
938
the attention of the Audit Committee. Statutory Auditors and
representative(s) from Corporate Management Services of
Mahindra and Mahindra Limited are invited to attend Audit
Committee meetings.
RISK MANAGEMENT
Your Company is exposed to a variety of risks which may
impact its operations. These risks are mitigated by using an
integrated risk management approach which covers the full
range of risks across verticals.
HUMAN RESOURCES
Keeping employees happy and enthused is one of the strategic
goals of your Company as reected in its employee engagement
interventions. Your Company continues to invest in capability
building of its people and creating a future-ready talent pool.
CURRENT YEAR
Your Company expects to sustain its performance in both its
verticals, automotive and electrical, during the current year.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year, your Company implemented a number of CSR
initiatives in the areas of education, health and environment.
A junior college at the village Wadhiware, Nashik (Maharashtra
State), constructed by your Company as part of CSR
initiatives, was inaugurated during the year. In an endeavor
to improve the school infrastructure, the playground of the
Z. P. School at Kanhe, Pune (Maharashtra State), was paved
by your Company during the year. At the request of the Gram
Panchayat, a stretch of the Takwe Road adjoining our facility
at Kanhe was widened.
In addition, eye check-up for school children and health check-up
for villagers were organized at Nashik and Vadodara respectively.
Personal computers, benches, water purier, and cooler were
provided to the local schools at Kanhe, Nashik and Vadodara.
Your Company views sustainability not only as a responsibility
but also as an opportunity to create lasting value across
economic, environment and social bottom lines. Sustainability
has been integrated in all our business operations and decision
making processes. Your Companys sustainability performance
was covered in the consolidated group sustainability report
of Mahindra and Mahindra Limited. This report was externally
assured by KPMG with a GRI A+ rating.
Your Company has mapped out a Sustainability Roadmap
under which a series of commitments have been made to
improve the Companys environmental footprint and the social
impact of its business.
AWARDS
Your Company has been the recipient of the following awards
during the year:
(a) Best employee referral program at the 9
th
Global
Talent Acquisition & RASBIC (Recruitment & Stafng
Best-in-Class) Awards
(b) Bronze award from the Public Relations Council of
India (PRCI) for our Corporate Audio Visual
(c) Greentech CSR Award from Greentech Foundation
for constructing a junior college at Village Wadhiware
CONSTITUTION OF THE BOARD
Presently, the Board comprises of eight directors. The directors
have wide experience in business related to trading, nance
and general corporate management.
Ms. Tarjani Vakil ceased to be a director of your Company
as she did not offer herself for re-election at the Thirty-Fifth
Annual General Meeting held on 26
th
July 2013.
Mr. Zhooben Bhiwandiwala, Vice-Chairman of the Board, was
appointed as Executive Director of your Company with effect
from 17
th
January 2014.
BOARD MEETINGS
Board Meetings are conducted at least once every quarter
to review the nancial performance of your Company and
matters relating to its operations and statutory compliance. Six
Board Meetings were held during the year all of which were
well attended. The gap between two Board Meetings did not
exceed one hundred and twenty days.
DIRECTORS
Mr. Raghunath Murti has expressed his intention not to get
re-elected at the forthcoming Annual General Meeting. The
Board places on record its sincere appreciation for the valuable
contribution and guidance provided by Mr. Raghunath Murti
during his tenure as director of your Company.
Mr. Bharat Doshi, Mr. Rajeev Dubey and Mr. P. N. Shah retire
by rotation at the forthcoming Annual General Meeting, and
being eligible, have offered themselves for re-appointment.
Pursuant to Section 149 of the Companies Act, 2013 read with
the Companies (Appointment and Qualication of Directors)
Rules, 2014, appointment of Mr. Sudhir Mankad as an
Independent Director of your Company is proposed for a period
of ve years from the date of ensuing Annual General Meeting.
Pursuant to Section 160 and all other applicable provisions
of the Companies Act, 2013, your Company has, along with
the requisite deposit, received notice proposing candidature of
Mr. Mankad for being appointed as an Independent Director at
the ensuing Annual General Meeting.
AUDIT COMMITTEE
Upon cessation of directorship of Ms. Tarjani Vakil who held
the position of Chairperson of the Audit Committee, Mr. Sudhir
Mankad was appointed as the Chairman of the Audit Committee
with Mr. Raghunath Murti, Mr. Zhooben Bhiwandiwala and
Mr. P. N. Shah as its members. The Audit Committee met four
times during the year.
Rules, 2014, the terms of reference of the Audit Committee were
revised and aligned in accordance with the aforesaid provisions
NOMINATION AND REMUNERATION COMMITTEE (FORMERLY
KNOWN AS REMUNERATION/COMPENSATION COMMITTEE)
Powers) Rules, 2014, the nomenclature of the Remuneration/
Compensation Committee was changed to Nomination and
Remuneration Committee and the terms of reference of the
939
Nomination and Remuneration Committee were revised and
aligned in accordance with the aforesaid provisions of the
Mr. Bharat Doshi, Mr. Raghunath Murti, Mr. Rajeev Dubey,
Mr. Zhooben Bhiwandiwala, and Mr. Sudhir Mankad. The Nomination
and Remuneration Committee met three times during the year.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
Responsibility (CSR) Committee was constituted on 20
th
March
2014. The CSR Committee comprises of Mr. Zhooben
Bhiwandiwala as its Chairman and Mr. Harsh Kumar and
Mr. Sudhir Mankad as its members.
your directors, based on representation from the operating
management, and after due enquiry, conrm that:
(i) in the preparation of annual accounts, the applicable
(ii) they have, in the selection of accounting policies, consulted
Statutory Auditors and these policies have been applied
consistently, and reasonable and prudent judgments and
st
March
2014, and of the prot of the Company for the year ended
on that date;
accordance with the provisions of Companies Act, 1956
for safeguarding the assets of the Company and for
concern basis.
CODES OF CONDUCT
Your Company has adopted Codes of Conduct for its directors,
and senior management and employees (the Codes). These
The Company has, for the year under review, received declarations
from members of the board, and senior management and
employees, afrming compliance with the respective Codes.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai
(Registration No. 117365W) retire as auditors of the Company
at the conclusion of the forthcoming Annual General Meeting
and have given their consent for re-appointment.
Members are requested to appoint auditors from the conclusion
of the forthcoming Annual General Meeting to the conclusion
As required under Sections 139 and 141 of Companies Act,
2013, the Company has obtained a written certicate from the
above auditors to the effect that their re-appointment, if made,
would be in conformity with the limits specied in Section 139
and that they satisfy the criteria mentioned in Section 141 of
COST AUDITOR
M/s. Shilpa & Co., Cost Accountants, Nashik (Registration
No:100558) were appointed as Cost Auditors of your Company
to audit the cost accounts for the year ending 31
st
March 2014.
The due date of ling their report is 27
th
September 2014.
st
March 2013, the due date of ling the
said report was 27
th
September 2013. The cost audit report,
accordingly, was led on 24
th
September 2013 in XBRL format.
The Board of Directors has, upon a recommendation of the Audit
Committee and subject to the approval of the Central Government,
appointed M/s. Shilpa & Co., Cost Accountants to audit the cost
accounts of the Company for the year ending 31
st
March 2015.
The remuneration of Rs 1,49,000 (excluding Service-tax and
out of pocket expenses) is recommended for ratication by the
shareholders at their ensuing Annual General Meeting.
As required under Sections 139, 141 and 148 of the Companies
Act, 2013, the Company has obtained a written conrmation from
M/s. Shilpa & Co. to the effect that they are eligible for appointment
as Cost Auditors under Section 148 of the Companies Act, 2013
and that they are an independent rm of Cost Accountants and
have an arms length relationship with your Company.
Your Company has not accepted any deposits from the public,
or its employees, during the year.
between the parent Company, Mahindra & Mahindra Limited
and stock exchanges.
The particulars relating to conservation of energy, technology
Report of Board of Directors) Rules, 1988 are provided in
Your Company subscribes to guidelines on safety, health
and environment and encourages involvement of all its
employees in activities related to safety, including promotion
of safety standards. Employees across facilities were trained in
behavioural safety at work.
Statutory requirements relating to various environmental
legislations, and environment protection, have been duly
complied with by your Company.
As required under Section 217(2A) of the Companies Act, 1956,
and Rules thereunder, particulars of Companys employees who
were in receipt of remuneration of not less than Rs 60,00,000
per annum during the year ended 31
st
March 2014, or not less
than Rs 5,00,000 per month during any part of the said year, are
given in Annexure II to this Report.
Bharat Doshi
Mumbai, 29
th
April 2014 Chairman
940
ST
MARCH 2014
In processing of steel, the primary plant operation is not power intensive. However, normal precautions are taken by the
Company to minimize power consumption.
impact on the cost of production of goods: Nil
in respect of industries specied in the Schedule: Not applicable
6. Imported technology for the last 5 years : Nil
The total foreign exchange earnings used and earned:
(Rs cr)
Financial Year Financial Year
2013 2014 2012 - 2013
Bharat Doshi
Mumbai, 29
th
April 2014 Chairman
941
ANNEXURE II TO THE DIRECTORS' REPORT
THE YEAR ENDED 31
ST
MARCH 2014
Name of
employee
Designation/
nature of duties
Gross remuneration
(subject to income
tax) (Rs)
(Years)
Age
(Years)
Date of
commencement
of employment
Last employment
held,
organization and
designation
Zhooben
Bhiwandiwala
Executive Director
(Commission
based
remuneration)
Rs 64,00,000 CA 28 54 17
th
January 2014
Harsh Kumar Managing
Director
Rs 2,11,70,306 B.Tech (Mech)-
IIT-Delhi, PGDBM
(Mktg/Finance)
XLRI
36 59 1
st
December
2005
Executive Vice
President -
Marketing &
Sales, Tata
Metaliks Ltd
Notes:
1. Nature of employment is permanent, subject to termination with three month notice on either side.
2. The above employees are not related to any other director of the Company.
3. The above employees do not hold by themselves, or along with their spouse and dependent children, 2% or more of the equity shares of
the Company.
4. Terms and conditions of employment are as per Companys rules.
5. Gross remuneration received as shown in the statement includes Salary, Commission, Bonus, House Rent Allowance, Stock Appreciation
Rights, value of perquisite for accommodation, car perquisite value/allowance, as applicable, employers contribution to Provident Fund and
Superannuation Scheme including group insurance premium, leave encashment, leave travel facility, reimbursement of medical expenses
and all allowances/perquisites and terminal benets as applicable.
Bharat Doshi
Mumbai, 29
th
April 2014 Chairman
942
MAHINDRA INTERTRADE LIMITED (the Company), which
st
March, 2014, the
of these nancial statements that give a true and fair view
of the nancial position, nancial performance and cash ows
of the Company in accordance with the Accounting Standards
dated 13
th
require that we comply with the ethical requirements and
misstatement.
Opinion
to the explanations given to us, the aforesaid nancial statements
give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
st
March, 2014;
and
5 of the Order.
th
st
st
of the Act.
(U. M. Neogi)
(Partner)
Mumbai, 29
th
April, 2014
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MAHINDRA INTERTRADE LIMITED
943
activities/results during the year, clauses (vi), (x), (xii),
(xiii), (xiv), (xv), (xvi), (xviii), (xix) and (xx) of paragraph 4
of the Order are not applicable to the Company.
assets to cover all the items in a phased manner
over a period of three years which, in our opinion, is
and the nature of its assets. Pursuant to the program,
certain xed assets were physically veried by the
Management during the year. According to the
information and explanations given to us no material
of the Company.
explanations given to us, the Company has neither granted
companies, rms or other parties covered in the register
that some of the items are of special nature for which
alternative sources are not readily available for obtaining
comparable quotations, there is an adequate internal control
and the nature of its business with regard to purchases
of inventory and xed assets and the sale of goods and
services. During the course of our audit, we have not observed
any major weakness in such internal control system.
arrangements referred to in Section 301 of the Companies
Act, 1956, particulars of which need to be entered in the
register required to be maintained under that section. As
there are no such contracts or arrangements, paragraph
4(v)(b) of the order is not applicable.
of its business.
under Section 209(1)(d) of the Companies Act, 1956
and are of the opinion that prima facie the prescribed
cost records have been maintained. We have, however,
not made a detailed examination of the cost records with
a view to determine whether they are accurate or complete.
State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and
Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other material statutory dues in arrears
as at 31st March, 2014 for a period of more than six
no dues of Income-tax, Sales Tax, Wealth Tax, Service
not been deposited as on 31st March, 2014 on
account of disputes.
in repayment of dues to banks.
(U. M. Neogi)
(Partner)
Mumbai, 29
th
April, 2014
944
Rs. in Crores
Particulars Notes
As at
31 March, 2014
As at
31 March, 2013
1 Shareholders fund
(a) Share capital .................................................................... 3 16.60 16.60
(b) Reserves and surplus...................................................... 4 328.41 283.46
345.01 300.06
2 Non current liabilities
(a) Deferred tax liabilities (net) ............................................. 30 4.02 5.05
(b) Long term provisions ...................................................... 5 2.25 1.88
6.27 6.93
(a) Short term borrowings .................................................... 6 0.11 0.18
(b) Trade payables ................................................................ 7 211.06 202.77
(c) Other current liabilities .................................................... 8 10.86 18.47
(d) Short term provisions ...................................................... 9 22.97 22.59
245.00 244.01
Total ......................................................................................... 596.28 551.00
B ASSETS
1 Non current assets
(a) Fixed assets
(i) Tangible assets ......................................................... 10 49.33 53.73
(ii) Intangible assets ...................................................... 0.01
49.34 53.73
(b) Non current investments ................................................. 11 55.51 35.60
(c) Long term loans and advances ..................................... 12 2.88 30.58
107.73 119.91
2 Current assets
(a) Current investments ........................................................ 13 6.00 36.01
(b) Inventories ....................................................................... 14 127.45 163.72
(c) Trade receivables ............................................................ 15 191.99 161.29
(d) Cash and cash equivalents ............................................ 16 135.90 47.31
(e) Short term loans and advances ..................................... 17 13.50 22.35
(f) Other current assets ........................................................ 18 13.71 0.41
488.55 431.09
Total ......................................................................................... 596.28 551.00
Harsh Kumar Managing Director
Rajeev Dubey
Sudhir Mankad
P. N. Shah
Parag Shah
}
Directors
Jyoti Walunj Chief Financial Ofcer
Abhishek Juvekar Company Secretary
U. M. Neogi
Partner
Place : Mumbai
Date : 29 April, 2014
Place : Mumbai
945
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2014
Rs. in Crores
Particulars Notes
For the year ended
31 March, 2014
For the year ended
31 March, 2013
1 Revenue from operations (gross) .......................................... 19 1,230.23 1,379.99
Less: Excise duty .................................................................... (75.59) (83.12)
Revenue from operations (net) .............................................. 1,154.64 1,296.87
2 Other income .......................................................................... 20 14.23 7.65
3 Total revenue (1+2) .............................................................. 1,168.87 1,304.52
4 Expenditure:
(a) Cost of materials consumed ........................................... 21(a) 962.22 1,089.46
(b) Purchase of stock in trade .............................................. 21(b) 67.33 86.11
(c) Changes in inventories of nished goods and stock in
trade ................................................................................. 21(c) (1.23) (8.02)
(d) Employee benets expense ............................................ 22 12.46 14.64
(e) Finance costs .................................................................. 23 1.46 3.07
(f) Depreciation and amortisation expense ......................... 10 5.99 6.09
(g) Other expenses ............................................................... 24 28.07 30.17
Total expenses ....................................................................... 1,076.30 1,221.52
5 Prot before tax (3-4) ........................................................... 92.57 83.00
6 Tax expense:
(a) Current tax expense ........................................................ 29.23 25.80
(b) Deferred tax ..................................................................... 30 (1.03) 0.50
7 Prot after tax (5-6) .............................................................. 64.37 56.70
8 Earnings per equity share (of Rs. 10 each): 29
Basic/Diluted (Rs.) .................................................................. 38.77 34.16
Rajeev Dubey
Sudhir Mankad
P. N. Shah
Parag Shah
}
Directors
Place : Mumbai
U. M. Neogi
Partner
Place : Mumbai
946
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2014
Rs. in Crores
Particulars
For the year ended
31 March, 2014
For the year ended
31 March, 2013
Prot before tax for the year .................................................................. 92.57 83.00
Adjustments for:
Depreciation and Amortisation .................................................................. 5.99 6.09
Interest income .......................................................................................... (3.74) (1.37)
Dividend income ........................................................................................ (7.70) (6.00)
Finance costs ............................................................................................. 1.46 3.07
Unrealised exchange loss .........................................................................
Net gain on sale of investments ............................................................... (2.38) (0.01)
Loss on sale of assets............................................................................... 0.04
Amortisation of ESOP expenses ............................................................... 0.01
(6.33) 1.79
Operating prot before working capital changes ............................... 86.24 84.79
Adjustments for (increase)/decrease in operating assets/liabilities:
Trade and other receivables ..................................................................... (23.98) 5.51
Inventories .................................................................................................. 36.27 (27.57)
Trade payables and other liabilities .......................................................... 1.34 21.82
13.63 (0.24)
Cash generated from operations ........................................................... 99.87 84.55
Net income tax paid ................................................................................. (27.21) (28.51)
NET CASH FLOW FROM OPERATING ACTIVITIES ............................. 72.66 56.04
B. CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES
Capital expenditure on xed assets, including capital advances ........... (1.75) (16.70)
Proceeds from sale of xed assets........................................................... 0.06 0.01
Inter corporate deposits placed ............................................................... (111.82) (53.62)
Inter corporate deposits refunded ............................................................ 114.06 71.97
Share application money paid .................................................................. (10.50)
Current investments not considered as cash and cash equivalents
Purchased ........................................................................................... (1,979.99) (1,419.30)
Proceeds from sale ............................................................................ 2,012.38 1,408.43
Purchase of non current investments
Subsidiaries/Joint Ventures ................................................................ (19.91)
Refund of Share application money ......................................................... 10.50
947
Rs. in Crores
Particulars
For the year ended
31 March, 2014
For the year ended
31 March, 2013
Interest received
Subsidiaries/Joint Ventures ................................................................ 1.91 1.54
Others ................................................................................................. 1.71 0.08
Dividend received
Subsidiaries/Joint Ventures ................................................................ 3.47 1.59
Others ................................................................................................. 4.23 4.41
NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES ........... 34.85 (12.09)
C. CASH FLOW USED IN FINANCING ACTIVITIES
(Proceeds)/Repayments from/(of) other short-term borrowings ............. (0.07) 0.12
Finance costs ........................................................................................... (1.37) (2.45)
Dividends paid ........................................................................................... (14.94) (17.43)
Tax on dividend.......................................................................................... (2.54) (2.83)
NET CASH FLOW USED IN FINANCING ACTIVITIES ......................... (18.92) (22.59)
NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) ...... 88.59 21.36
Cash and cash equivalents at the beginning of the year (refer note 16) .... 47.31 25.95
Cash and cash equivalents at the end of the year (refer note 16) ......... 135.90 47.31
88.59 21.36
Reconciliation of cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents as per Balance Sheet (refer note 16)
Component of cash and cash equivalents
Cash on hand ............................................................................................ * *
with banks: in current accounts .............................................................. 10.23 15.31
in deposit account ............................................................... 125.67 32.00
135.90 47.31
* Represents Rs. 29,240 (2013: Rs. 11,248)
U. M. Neogi
Partner
Place : Mumbai
Rajeev Dubey
Sudhir Mankad
P. N. Shah
Parag Shah
}
Directors
Place : Mumbai
948
Mahindra Intertrade Limited is a public limited company incorporated on
21 May, 1998 under the Companies Act, 1956. The Companys main activity
is steel processing and it has service centres at Nashik and Vadodara. The
Company processes automotive and electrical steel.
2. Signicant Accounting Policies followed by the Company:
2.1 Basis of accounting:
2.2 Use of estimates:
The preparation of the nancial statements in conformity with
Indian GAAP requires the Management to make estimates and
assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that
the estimates used in preparation of the nancial statements are
prudent and reasonable. Future results could differ due to these
estimates and the differences between the actual results and the
estimates, are recognized in the periods in which the results are
known/materialize.
2.3 Inventories:
Inventories are stated at cost or net realizable value, whichever is
lower. Cost is arrived at on a weighted average method and includes,
where appropriate, manufacturing overheads and excise duty.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement):
Cash equivalents are shortterm balances (with an original maturity
2.5 Cash ow statement:
2.6 Fixed Assets:
(a) Fixed Assets are stated at cost less accumulated depreciation/
amortization. The cost of xed assets comprises its purchase
price net of any trade discounts and rebates, any import duties
and other taxes (other than those subsequently recoverable
from the tax authorities), any directly attributable expenditure
on making the asset ready for its intended use, other incidental
expenses. Borrowing costs that are attributable to the
acquisition, construction or production of a qualifying asset are
included in the cost of asset up to the date the asset is ready
for its intended use.
(b) Leasehold land is amortised over the period of lease.
(c) Depreciation is calculated on the Straight Line Method (SLM) at
the rates and in the manner prescribed by Schedule XIV to the
Companies Act, 1956, except depreciation on vehicles which is
provided at 20% p.a. on the SLM.
(d) Goodwill arising on acquisition of business is being amortised
equally over a period of ten years.
(e) Software expenditure incurred is amortised over a period of
three years.
2.7 Revenue Recognition:
Sale of products are recognized, when the signicant risks and
rewards of ownership are transferred to the Buyer.
Sale of services are recognised when services are rendered.
2.8 Other Income:
accounted for when the right to receive it is established.
2.9 Foreign Currency Transactions:
Transactions in foreign currencies are recorded at the exchange
rate prevailing on the date of transaction. All foreign currency
monetary items outstanding at the year end (excluding long
term liability) are translated at the relevant rates of exchange
prevailing at the year end and the resulting exchange differences
are recognized in the Statement of Prot and Loss. In respect
of forward exchange contracts, the premium or discount arising
at the inception of such a contract is amortized as expense or
income over the life of the contract.
Exchange differences relating to long term foreign currency
monetary items, to the extent they are used for nancing the
acquisition of xed assets are added to or subtracted from the cost
of such xed assets.
2.10 Investments:
Long term Investments are valued at cost less provision, if any, for
decline other than temporary, in value of such investments. Current
investments are valued at the lower of cost and fair value, determined
by category of investments.
i) Dened Contribution Plan:
the provident fund, superannuation fund, employees state
insurance corporation and labour welfare fund are recognized
ii) Dened Benet Plan/Long Term Compensated Absences:
Companys liability towards gratuity, compensated absence
and post retirement medical benet schemes are determined
by independent actuaries using the projected unit credit
method. Past services are recognised on a straight line basis
over the average period until the benets become vested.
statement of Prot and Loss as income or expense. Obligation
is measured at the present value of estimated future cash ows
using a discounted rate that is determined by reference to
market yields at the Balance Sheet date on Government Bonds
where the currency and terms of the Government Bonds are
consistent with the currency and estimated terms of the dened
benet obligation.
2.12 Taxes on Income:
Tax expense comprises current and deferred tax. Current Tax is
determined as either (i) the amount of tax payable in respect of taxable
income after considering usual allowances and disallowances under
the Income-tax Act, 1961 or (ii) Minimum Alternate Tax for the year.
Credit in respect of Minimum Alternate Tax paid is recognised only if
there is convincing evidence of realisation of the same. Deferred tax
reects the impact of current year timing differences between taxable
income and accounting income and reversal of timing differences of
the earlier years.
949
Note 3 Share capital:
Particulars
Number of
Shares Rs. in Crores
Number of
Shares Rs. in Crores
(a) Authorised
Equity shares of Rs. 10 each ................................................................................... 28,000,000 28.00 28,000,000 28.00
Cumulative redeemable preference shares of Rs. 100 each ................................. 1,875,000 18.75 1,875,000 18.75
29,875,000 46.75 29,875,000 46.75
(b) Issued
(c) Subscribed and fully paid up
(d) Subscribed but not fully paid up
Equity shares of Rs. 10 each, Rs. 7 not paid up .................................................... 15,000,000 4.50 15,000,000 4.50
27,100,007 16.60 27,100,007 16.60
(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period
Particulars
Opening
Balance Fresh issue Buy back
Closing
Balance
Equity shares of Rs. 10 each:
Year ended 31 March, 2014 (subscribed and fully paid up)
Number of shares ..................................................................................................... 12,100,007 12,100,007
Amount (Rs. in crores) ............................................................................................. 12.10 12.10
Year ended 31 March, 2013 (subscribed and fully paid up)
Number of shares ..................................................................................................... 12,100,007 12,100,007
Year ended 31 March, 2014 (subscribed but not fully paid up)
Number of shares ..................................................................................................... 15,000,000 15,000,000
Year ended 31 March, 2013 (subscribed but not fully paid up)
Number of shares ..................................................................................................... 15,000,000 15,000,000
(ii) The Company has not allotted any equity shares for consideration other than cash, bonus shares, nor have any shares been bought back during the period
of ve years immediately preceding the Balance Sheet date.
Terms/rights attached to equity shares
The Company has only one class of equity share having a par value of Rs. 10/ per share. Each shareholder has the following voting rights (i) On a show of
hands: one vote for a member present in person or being a company present by a representative duly authorised or by proxy who is not himself a member
shall have one vote. and (ii) On a poll: one vote for each equity share registered in the name of the member or company present by a representative duly
authorised. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except
in case of interim dividend. In the event of winding up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction
required by the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of the company, whether they shall consist of
property of the same kind or not.
Deferred tax is recognised on timing differences, being the
differences between the taxable income and the accounting
income that originate in one period and are capable of reversal in
one or more subsequent periods. Deferred tax is measured using
the tax rates and the tax laws enacted or substantively enacted as
at the reporting date. Deferred tax liabilities are recognised for all
timing differences. Deferred tax assets are recognised for timing
differences of items other than unabosrbed depreciation and carry
forward losses only to the extent that reasonable certainty exists that
can be realised. However, if there are unabsorbed depreciation and
carry forward of losses, deferred tax assets are recognised only if
there is virtual certainty that there will be sufcient future taxable
income available to realise the assets. Deferred tax assets and
liabilities are offset if such items relate to taxes on income levied
by the same governing tax laws and the Company has a legally
enforceable right for such set off. Deferred tax assets are reviewed
at each balance sheet date for their realisability.
950
Note 4 Reserves and surplus:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Capital redemption reserve ........................ 18.75 18.75
(b) Share options outstanding account:
Opening balance ........................................ 0.07
Add: Amounts recorded on grants during
the year ............................................. 0.01
Less: Transferred to General reserve ......... (0.08)
Closing balance ......................................... 0.00
(c) General Reserve:
Opening balance ........................................ 39.21 33.46
Add: Transferred from surplus in the
statement of prot and loss............... 6.44 5.67
Add: Transferred from Share options
outstanding account .......................... 0.08
Closing balance ......................................... 45.65 39.21
(d) Surplus in the statement of prot and loss:
Opening balance ........................................ 225.50 191.95
Add: Prot for the year .............................. 64.37 56.70
Less: Transferred to General Reserve ........ 6.44 5.67
Proposed dividends ........................... 16.60 14.94
Tax on dividend ................................. 2.82 2.54
Closing balance ......................................... 264.01 225.50
328.41 283.46
Note 5 Long term provisions:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Provision for Employee benets:
(i) Provision for compensated absences ....... 1.64 1.56
(ii) Provision for post retirement medical
benets (refer note 26) ............................ 0.11 0.22
(iii) Provision for other employee benets
(refer note 32).......................................... 0.50 0.10
2.25 1.88
Note 6 Short term borrowings:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Unsecured:
Book overdrawn balance .................................. 0.11 0.18
0.11 0.18
Note 7 Trade payables:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Trade payables:
Acceptances ....................................................... 114.46 92.75
Other than acceptances micro and small
enterprises (refer note 25.2) ...............................
Other than acceptances Other than micro and
small enterprises ................................................ 96.60 110.02
211.06 202.77
Note 8 Other current liabilities:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Other payables:
(i) Statutory remittances (contribution to
provident fund and employees state
insurance corporation, withholding
taxes, excise duty, service tax, etc.) ..... 1.02 3.63
(ii) Value added tax payable ....................... 7.53 7.30
(iii) Payables on purchase of xed assets ... 0.03
(iv) Advance from customers ...................... 1.44 6.72
(v) Dealer deposit ....................................... 0.87 0.79
10.86 18.47
Note 9 Short term provisions:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(i) Provision for compensated absences .... 0.51 0.45
benet (refer note 26) ........................... 0.01 0.01
(iii) Provision for other employee benets
(refer note 32) ...................................... 0.35 0.15
(b) Provision Others:
(i) Provision for taxation (net of payments) ... 2.68 4.50
(ii) Provision for proposed equity dividend.. 16.60 14.94
(iii) Provision for tax on proposed dividend ... 2.82 2.54
22.97 22.59
(iii) Details of shares held by the holding company
Particulars
As at
31 March, 2014
As at
31 March, 2013
Mahindra and Mahindra Limited (including 6 equity shares held jointly with its nominees) ............................................... 27,100,006 27,100,006
(iv) Details of shares held by each shareholder holding more than 5% shares
Particulars
Number of
shares % of holding
Number of
shares % of holding
Mahindra and Mahindra Limited (including 6 equity shares held jointly with its
nominees) ................................................................................................................. 27,100,006 99.999% 27,100,006 99.999%
951
Note 10 Fixed assets:
Rs. in Crores
Gross Block Depreciation and Amortisation Net Block
Description of assets Balance
as at
1 April,
2013
Additions
during
the year
at cost
Deductions
and
adjustments
during the year
Balance
as at
31 March,
2014
Balance
as at
1 April,
2013
Depreciation
and
Amortisation
for the year
Deductions and
Adjustments of
Depreciation and
Amortisation
Balance
as at
31 March,
2014
Net Balance
as at
31 March,
2014
(a) Tangible assets:
Land ................................. 1.11 1.11 1.11
(1.11) () () (1.11) () () () () (1.11)
Land leasehold .............. 1.16 1.16 0.07 0.05 0.12 1.04
(1.16) () () (1.16) (0.06) (0.01) () (0.07) (1.09)
Buildings * ........................ 19.81 19.81 3.39 0.62 4.01 15.80
(18.65) (1.16) () (19.81) (2.77) (0.62) () (3.39) (16.42)
Electrical Installations ........ 0.03 0.03 *** 0.03
() () () () () () () () ()
Plant and equipment ......... 59.77 1.18 0.07 60.88 26.21 4.91 0.04 31.08 29.80
(57.86) (1.92) (0.01) (59.77) (21.17) (5.04) () (26.21) (33.56)
Furniture and xtures ........ 0.49 0.04 0.07 0.46 0.18 0.03 0.07 0.14 0.32
(0.37) (0.12) () (0.49) (0.15) (0.03) () (0.18) (0.31)
Vehicles ............................ 1.50 0.35 0.16 1.69 0.76 0.28 0.10 0.94 0.75
(1.44) (0.06) () (1.50) (0.48) (0.28) () (0.76) (0.74)
Ofce equipment ............... 0.40 0.01 0.02 0.39 0.11 0.02 0.01 0.12 0.27
(0.38) (0.02) () (0.40) (0.09) (0.02) () (0.11) (0.29)
Computers ........................ 1.56 0.08 0.26 1.38 1.35 0.08 0.26 1.17 0.21
(1.53) (0.05) (0.02) (1.56) (1.28) (0.09) (0.02) (1.35) (0.21)
Sub Total (a) ........................... 85.80 1.69 0.58 86.91 32.07 5.99 0.48 37.58 49.33
Previous year ........................... (82.50) (3.33) (0.03) (85.80) (26.00) (6.09) (0.02) (32.07) (53.73)
(b) Intangible assets:
Goodwill............................ 4.76 4.76 4.76 4.76
(4.76) () () (4.76) (4.76) () () (4.76) ()
Computer software ........... 0.51 0.01 0.52 0.51 ** 0.51 0.01
(0.51) () () (0.51) (0.51) () () (0.51) ()
Website ............................. 0.47 0.47 0.47 0.47
(0.47) () () (0.47) (0.47) () () (0.47) ()
Sub Total (b) ........................... 5.74 0.01 5.75 5.74 5.74 0.01
Previous year ........................... (5.74) () () (5.74) (5.74) () () (5.74) ()
TOTAL (a+b) .......................... 91.54 1.70 0.58 92.66 37.81 5.99 0.48 43.33 49.34
Previous year ........................... (88.24) (3.33) (0.03) (91.54) (31.74) (6.09) (0.02) (37.81) (53.73)
* Includes Rs. 500 (2013: Rs. 500) in respect of 10 shares of Rs. 50 each in Shah and Nahar Industrial Premises (A-1) Co-operative Society Limited.
** Represents Rs. 46,944 (2013: Rs. Nil)
*** Represents Rs. 4,680 (2013: Rs. Nil)
Note: gures in brackets are in respect of the previous year
Note 11 Non current investments:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Investment in equity shares (Non trade and
fully paid-up unless otherwise specied)
Unquoted (at cost unless otherwise
specied):
500 Ordinary shares of Rs. 1,000 each fully
paid up in Seekar Fashions Private Limited .. 0.05 0.05
Less: Provision for decline, other than
temporary, in the value .............................. 0.05 0.05

1 Ordinary share of Rs. 10 each fully paid
up in Mahindra Holdings Limited................ * *
(b) Investment in equity shares (Trade and
fully paid-up unless otherwise specied)
Unquoted (at cost unless otherwise specied):
In subsidiary companies:
900 Equity shares of USD 550 each in
Mahindra Middle East Electrical Steel
Service Centre (FZC), Sharjah ** ............... 2.25 2.25
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
50,000 Equity shares of Rs. 10 each in
Mahindra Electrical Steel Private Limited. ...... 0.05 0.05
10,089,257 (2013: 8,511,613) Equity
shares of Rs. 10 each in Mahindra Steel
Service Centre Limited ** .......................... 42.45 33.30
10,000 Equity shares of Rs. 10 each in
Mahindra Auto Steel Private Limited. .......... 0.01
44.76 35.60
(c) Investment in Debentures (trade and fully
paid-up unless otherwise specied)
Unquoted (at cost unless otherwise
specied):
In subsidiary company:
107,500 nos 0.25% Optionally Convertible
Unsecured Debentures of Rs. 1,000 each in
Mahindra Electrical Steel Private Limited ** ... 10.75
55.51 35.60
* Amount less than Rs. 1,000
** Which is also a Joint venture.
952
Note 12 Long term loans and advances:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Security deposits ...................................... 0.15 0.14
(b) Capital advance ........................................ 0.02 13.21
(c) Loans and advances to related party
(Refer note 1 & 2 below) .......................... 0.05 10.58
(d) Other Loans and advances
(i) Advance income tax (net of provisions) .. 2.55 6.48
(ii) Surplus of plan assets over
obligation - gratuity (refer note 26) ........... 0.11 0.17
2.88 30.58
Note 1: Long term loans and advances to related party includes share application money
pending allotment Rs. Nil (2013 Rs. 10.50 crores) to Mahindra Electrical Steel Private
Limited, a subsidiary.
Note 2: Includes Inter corporate deposits to related party:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Mahindra Electrical Steel Private Limited ............. 0.05 0.08
Note 13 Current investments:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Unquoted investments in Mutual funds
(At lower of cost and fair value):
(a) 59,980.171 (2013: NIL) units of Rs. 1,000
each in HSBC Cash Management Fund
Daily Dividend plan ...................................... 6.00
(b) Nil (2013: 59,875.51) units of Rs. 1,000
each in SBI Premier Liquid Fund Regular
Plan Daily Dividend of SBI Mutual Fund .... 6.01
(c) Nil (2013: 43,33,615.21) units of Rs. 10
each in Short Term Regular Plan Growth
Option of ICICI Prudential Mutual Fund ......... 10.00
(d) Nil (2013: 76,644.50) units of Rs. 1,000
each in Strategic Bond Fund Institutional Plan
Growth of DSP Blackrock Mutual Fund ..... 10.00
(e) Nil (2013: 5,256,265.31) units of Rs. 10
each in Dynamic Bond Fund Retail Growth
Regular Plan of Birla Sun life Mutual Fund ... 10.00
6.00 36.01
Note 14 Inventories:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(at lower of cost and net realisable value)
(a) Raw materials [refer note 21(a)] .................. 95.80 110.96
Goods in transit ........................................... 10.01 32.29
105.81 143.25
(b) Work-in-Progress [refer note 21(c)] ............. 6.59 6.62
(c) Finished goods [refer note 21(c)] ................ 11.41 10.54
(d) Stock in trade [refer note 21(c)] .................. 3.40 3.01
(e) Stores and spares ........................................ 0.24 0.30
127.45 163.72
Note 15 Trade receivables:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Trade receivables outstanding for a period
exceeding six months from the date they are
due for payment
Unsecured, considered good ....................... 0.04 0.11
Doubtful ....................................................... 1.63 1.74
1.67 1.85
Less: provision for doubtful trade receivables (1.63) (1.74)
0.04 0.11
(b) Other Trade receivables
191.99 161.29
Note 16 Cash and cash equivalents:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Cash on hand .............................................. * *
(i) In current account ................................. 10.23 15.31
(ii) In deposit account ................................ 125.67 32.00
135.90 47.31
* Represents Rs. 29,240 (2013: Rs. 11,248)
Note 17 Short term loans and advances:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Inter-corporate deposits to related party ...... 2.21
(b) Prepaid expenses ......................................... 0.01 0.04
(c) Balances with government authorities:
(i) CENVAT credit receivable ...................... 0.68 5.81
(ii) Value added tax credit receivable .......... 3.72 2.67
(iii) Service tax credit receivable.................. 1.71 0.23
6.11 8.71
(d) Other loans and advances:
(i) Advances to trade payables .................. 3.39 6.03
(ii) Refund receivable from custom
authorities ............................................. 3.70 3.49
(iii) Others ................................................... 0.29 1.87
7.38 11.39
13.50 22.35
Note 18 Other current assets:
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
(a) Interest accrued on inter corporate deposits
(refer note 1 below) ..................................... 0.02 0.36
(b) Interest accrued on xed deposits ............... 0.46
(c) DEPB licences ............................................. 0.02 0.05
(d) Leasehold land held for sale
(Ref. note 2 below) ...................................... 13.21
13.71 0.41
Note 1: Interest accrued on inter corporate deposits includes amounts due from:
953
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Mahindra Steel Service Centre Limited ................ 0.36
Mahindra Electrical Steel Private Limited ............. *
* Represents Rs. 13,305 .................................... 0.36
Note 2:
The Company had entered in to an Agreement to Lease with Maharashtra Industrial Development
Corporation (MIDC) during FY2014 for a plot of land at Chakan. As at the balance sheet date, the
Company was in the process of assigning the rights under the said agreement to its subsidiary,
Mahindra Auto Steel Private Limited, which was completed in April, 2014.
Note 19 Revenue from operations:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Revenue from
(a) Sale of products (Refer Note (i) below) ........... 1,195.80 1,333.31
(b) Sale of services (Refer Note (ii) below) ........... 2.34 6.16
(c) Other operating revenues
(Refer Note (iii) below) .................................... 32.09 40.52
1,230.23 1,379.99
Less: Excise duty ............................................. 75.59 83.12
1,154.64 1,296.87
Note
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Manufactured goods
Steel products ............................................. 1,122.14 1,216.62
Traded goods
Steel products ............................................. 73.66 116.69
Total Sale of products ................................... 1,195.80 1,333.31
Job work processing ................................... 0.78 3.00
Installation/repairs ........................................ 0.16 0.16
Management fees ........................................ 1.40 3.00
Total Sale of services ................................... 2.34 6.16
Scrap sales .................................................. 22.48 30.22
Commission income .................................... 6.58 6.84
Insurance claim ........................................... 0.46 0.71
Cash discount .............................................. 2.32 2.49
DEPB income............................................... 0.07 0.21
Other Operating income ............................... 0.18 0.05
Total Other operating revenues ...................... 32.09 40.52
1,230.23 1,379.99
Note 20 Other income:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Interest income:
Interest on inter - corporate deposits ............... 1.57 1.29
Interest on xed deposits ................................. 2.13 0.04
On others ......................................................... 0.04 0.04
(b) Dividend income:
(i) from long-term investments in subsidiaries ...
3.47 1.59
(ii) from current investments .......................... 4.23 4.41
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(c) Other:
Liabilities no longer required written back .... 0.29 0.01
Provision for doubtful debts no longer
required ....................................................... 0.12 0.11
Gain on sale of current investments, net ...... 2.38 0.01
Gain on sale of other xed assets, net ......... *
Miscellaneous .............................................. 0.15
14.23 7.65
* Represents Rs. 5,497
Note 21(a) Cost of materials consumed:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Opening Stock ........................................................... 143.25 123.77
Add: Purchases [includes processing charges
Rs. 15.28 crores (2013 Rs. 18.90 crores)] ....... 924.78 1,108.94
1,068.03 1,232.71
Less: Closing Stock ................................................... 105.81 143.25
962.22 1,089.46
Rs. in Crores
Details of Raw materials and components consumed:
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Steel products ........................................................... 962.22 1,089.46
Rs. in Crores
Details of closing stock of Raw materials & components:
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Steel products ........................................................... 105.81 143.25
Note 21(b) Purchase of stock in trade:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Traded goods Steel products ..................................... 67.33 86.11
67.33 86.11
Note 21(c) Changes in inventories of nished goods, work-in-progress and stock in trade:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Finished goods .......................................................... 11.41 10.54
Work-in-Progress ....................................................... 6.59 6.62
Stock in trade ............................................................ 3.40 3.01
21.40 20.17
Finished goods .......................................................... 10.54 5.97
Work-in-Progress ....................................................... 6.62 3.43
Stock in trade ............................................................ 3.01 2.75
20.17 12.15
(Increase)/Decrease in Stock ..................................... (1.23) (8.02)
954
Details of closing stock of Finished goods, work-in-progress and stock in trade
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Finished goods
Steel products ........................................................... 11.41 10.54
Work-in-Progress
Steel products ........................................................... 6.59 6.62
Stock-in-trade
Steel products ........................................................... 3.40 3.01
21.40 20.17
Note 22 Employee benets expense:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Salaries, wages, bonus, etc ............................. 9.70 8.87
(b) Stock Appreciation Rights expense
(refer note 32) ................................................. 1.72 4.73
(c) Contribution to Provident and other funds
(refer note 26) ................................................. 0.43 0.44
(d) Gratuity expense (refer note 26) ...................... 0.08 0.11
(e) Post retirement medical benet expense
(refer note 26) ................................................. (0.11) (0.03)
(f) Expense on Employee Stock Options Plan ....... 0.01
(g) Staff welfare .................................................... 0.64 0.51
12.46 14.64
Note 23 Finance costs:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Usance Interest ................................................ 1.37 3.07
(b) Interest on income tax ..................................... 0.09
1.46 3.07
Note 24 Other expenses:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Stores consumed ............................................. 0.32 0.29
(b) Power and fuel................................................. 0.85 0.91
(c) Rent including lease rentals ............................. 2.23 2.42
(d) Rates and taxes ............................................... 0.18 0.33
(e) Excise duty (refer note 33) .............................. 0.16 0.61
(f) Insurance ......................................................... 0.91 0.68
(g) Repairs and maintenance
Buildings ...................................................... 0.08 0.03
Machinery .................................................... 0.33 0.21
Others .......................................................... 0.62 0.48
(h) Freight outward ................................................ 9.48 11.16
(i) Bad debts and advances written off ................. 0.03
(j) Auditors remuneration (refer note below) ........ 0.19 0.20
(k) Directors fees ................................................. 0.02 0.02
(l) Commission to Non whole time Directors ........ 0.32 0.10
(m) Donations and contributions ............................ 0.11
(n) Loss on foreign exchange transactions and
translations ...................................................... 6.39 5.14
(o) Loss on Fixed Assets sold ............................... 0.04
(p) Miscellaneous expenses .................................. 5.92 7.48
28.07 30.17
Note:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Payment to statutory auditors:
(a) For audit .......................................................... 0.17 0.15
(b) For taxation work ............................................. 0.02
(c) For other services ............................................ 0.04
(d) Reimbursement of expenses ............................ # 0.01
0.19 0.20
# Represents out of pocket expenses Rs. 36,000
Note 25 Additional information to the nancial statements
25.1 Contingent liabilities (to the extent not provided for):
Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Claims against the Company not acknowledged as
debts:
Taxation demand for various assessment years,
which is being contested by the Company............... 0.55 1.07
25.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises
Development Act, 2006
(i) The identication of vendors as a Supplier under the Micro, Small and Medium
Enterprises Development Act, 2006 (The Act) has been done on the basis of the
information to the extent provided by the vendors to the Company. This has been
25.3 Derivative Instruments:
The Company has entered into forward exchange contracts and plain vanila option
contracts (being derivative instruments), which are not intended for trading or
speculative purposes, but for hedge purposes.
(i) The following are the outstanding forward exchange contracts entered into by the
Company:
Particulars As at Currency
Amt. in FC
in Crores Buy/Sell
Cross
currency
Payable on account
of import of raw
material
31 March 2014 USD 1.60 Buy Rupees
(ii) The following are the outstanding plain vanila option contracts entered into by the
Company:
Particulars As at Currency
Amt. in FC
in Crores Buy/Sell
Cross
currency
Payable on account
of import of raw
material
31 March 2013 USD Buy Rupees
(iii) The year end foreign currency exposures that have not been hedged by a derivatives
instrument or otherwise are given below:
As at 31 March,
2014
As at 31 March,
2013
Particulars Currency
Amt. in FC
in Crores
Rs.
in Crores
Amt. in FC
in Crores
Rs.
in Crores
Payable on account of
import of raw material ...
USD 0.28 17.13 0.29 15.89
EURO ** 0.12
Receivable on account of
commission and services
rendered ........................
EURO # * # 0.19
GBP ## 0.12
USD ### 0.07 0.01 0.74
# represents amount EURO 94.46 (2013: 28,251)
## represents amount GBP 14,851
### represents amount USD 11,615.64
* represents amount Rs 7,801
** represents amount Euro 21,258
955
25.4 Value of imports calculated on CIF basis:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Raw materials ............................................................ 197.37 319.25
25.5 Expenditure in foreign currency:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Travelling ........................................................ 0.10 0.59
Interest .......................................................... 1.15 1.87
Others ............................................................. 0.01 0.07
25.6 Details of consumption of imported and indigenous items:
Particulars
For the year ended
31 March, 2014
For the year ended
31 March, 2013
Rs. in Crores % Rs. in Crores %
Raw Material
Import ........................................ 183.00 19 306.66 28
Indigenous .................................. 779.22 81 782.80 72
962.22 100 1,089.46 100
25.7 Earnings in foreign exchange:
Rs. in Crores
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Export of goods on FOB basis ......................... 0.02 3.44
Commission .................................................... 6.42 6.81
Dividend .......................................................... 3.47 1.59
Services rendered ............................................ 0.88 0.79
Note 26 Employee benet plans:
Following are the relevant disclosures in pursuance of Accounting Standard 15 on Employee
Benets.
(i) The Company has recognized, in the Statement of Prot and Loss for the year, an amount
of Rs. 0.43 crore (2013: Rs. 0.44 crore) as expenses under dened contribution plans.
Rs. in Crores
Benet (contribution to) 2014 2013
Provident Fund ............................................... 0.29 0.26
Pension Fund ................................................. 0.06 0.06
Superannuation Fund ..................................... 0.08 0.12
Total .............................................................. 0.43 0.44
(ii) The Company operates dened benet plans as follows:
a. Funded Post Retirement Gratuity
b. Unfunded Post Retirement Medical Benets
a. Details of funded and unfunded dened benet obligations in respect of gratuity and
post retirement medical benets are as follows:
Rs. in Crores
For the year ended
31 March, 2014
For the year ended
31 March, 2013
Post-
employment
medical
benets Gratuity
Post-
employment
medical
benets
Components of employer expense
Current service cost .......................... 0.16 0.01 0.12 *
Interest cost ....................................... 0.12 0.02 0.11 0.02
Expected return on plan assets .......... (0.13) (0.12)
Rs. in Crores
For the year ended
31 March, 2014
For the year ended
31 March, 2013
Post-
employment
medical
benets Gratuity
Post-
employment
medical
benets
Actuarial losses/(gains) ..................... (0.08) (0.14) 0.01 (0.05)
Effect of the limit in Para 59(b) .......... * (0.01)
Total expense recognised in the
Statement of Prot and Loss ............. 0.08 (0.11) 0.11 (0.03)
Actual contribution and benet
payments for year
Actual benet payments ..................... 0.05 * 0.02 0.01
Net asset/(liability) recognised in
the Balance Sheet
obligation ...........................................
1.70 1.52
Fair value of plan assets .................... 1.81 1.70
Effect of the limit in Para 59(b) .......... * 0.01
Funded status [surplus/(decit)] ........ 0.11 0.17
Change in dened benet obligations
(DBO) during the year
Present value of DBO at beginning of
the year ............................................. 1.52 0.23 1.30 0.27
Current service cost .......................... 0.16 0.01 0.12 *
Interest cost ....................................... 0.12 0.02 0.11 0.02
Actuarial (gains)/losses ..................... (0.06) (0.14) 0.01 (0.05)
Benets paid ...................................... (0.05) * (0.02) (0.01)
Present value of DBO at the end of the
year ...................................................
1.70 0.11 1.52 0.23
Change in fair value of assets during
the year
Plan assets at beginning of the year .. 1.70 1.59
Expected return on plan assets .......... 0.13 0.12
Actuarial gain/(loss) ........................... 0.02 *
Benets paid ...................................... (0.05) (0.02)
Contribution yet to be accounted by
LIC/adjustments done by LIC ............. 0.02 0.01
Plan assets at the end of the year ..... 1.81 1.70
Expected employers contribution next
year ................................................... 0.05 0.01 0.20 0.02
Actuarial assumptions
Discount rate ..................................... 8.95% 8.95% 7.95% 7.95%
Expected return on plan assets .......... 7.5% 7.5%
Salary escalation ............................... 10% 10%
Attrition .............................................. 10% 10% 10% 10%
Medical cost ination ......................... 7% 7%
Mortality tables .................................. Indian
assured
lives
mortality
(2006-08)
Ult table
Indian
assured lives
mortality
(2006-08)
Ult table
Indian
assured
lives
mortality
(2006-08)
Ult table
Indian
assured lives
mortality
(2006-08)
Ult table
Rs. in Crores
Effect of 1% point change in the
assumed medical ination rate 31 March, 2014 31 March, 2013
Increase
by 1%
Decrease
by 1%
Increase
by 1%
Decrease
by 1%
Effect on the aggregate service and
interest cost of Post employment
medical enets................................... * (*) * (*)
Effect on the accumulated Post
employment medical benets
obligations ......................................... 0.01 (0.01) 0.02 (0.02)
956
(iii) Experience adjustment for gratuity
Rs. in Crores
2014 2013 2012 2011 2010
Dened benet obligation ........................ 1.70 1.52 1.30 1.25 1.12
Fair value of plan assets ......................... 1.81 1.70 1.59 1.88 1.26
Effect of the limit in Para 59(b) ............... 0.01 0.02
(Decit)/surplus ...................................... 0.11 0.17 0.27 0.63 0.14
Experience adjustment on plan assets .... 0.02 * 0.06 ** **
Experience adjustment on plan liabilities ..... 0.07 0.08 0.38 ** **
** The details of experience adjustments arising on account of plan liabilities and
assets for earlier years as required by paragraph 120 (n)(ii) of AS 15 are not
readily available in the valuation statement received from LIC and hence, are not
furnished for.
Due to absence of data provided by LIC, break-up of Plan assets (assets allocation) in
insurer managed funds have not been furnished.
(iv) Experience adjustments of Post-employment medical benets
Rs. in Crores
31.03.2014 31.03.2013 31.03.2012 31.03.2011 31.03.2010
Dened benet
obligation .............. 0.11 0.23 0.27 0.26 0.17
Surplus/(decit) .... (0.11) (0.23) (0.27) (0.26) (0.17)
Experience
adjustments on
plan liabilities ........
(0.13) (0.07) * 0.08 0.02
(v) Basis used to determine the expected rate of return:
Based on expectation of the average long term rate of return expected on investment of
the fund, during the estimated term of obligation.
(vi) The estimate of future salary increases takes into account ination, seniority, promotion
and other relevant factors.
Note: * Represents amount less than Rs. 50,000.
Note 27 Segment Reporting:
The Company has a single segment namely steel processing for the purpose of Accounting
Standard 17 on segment reporting.
Note 28 Related party transactions:
Related party disclosures as required by AS-18 Related Party Disclosures are given below.
Holding Company
MESL Mahindra Electrical Steel Private Limited
MASL Mahindra Auto Steel Private Limited
Subsidiary Companies and Joint Ventures
MSSCL Mahindra Steel Service Centre Limited
MMESS Mahindra MiddleEast Electrical Steel Service Centre (FZC)
Key Managerial Personnel
Mr. Harsh Kumar, Managing Director
Mr. Zhooben Bhiwandiwala, Executive Director
Other parties with whom transactions have taken place during the year
Fellow Subsidiaries:
MHRIL Mahindra Holidays & Resorts India Limited
MNAL Mahindra Navistar Automotives Limited
MUSCO Mahindra Ugine Steel Company Limited
MLL Mahindra Logistics Limited
MRL Mahindra Retail Private Limited
MVML Mahindra Vehicle Manufacturers Limited
MBPO Mahindra Integrated Business Solutions Private Limited (Formerly known
as Mahindra BPO Services Private Limited)
MSONAL Mahindra Sona Limited
NBS NBS International Limited
MGTPL Mahindra Gears Transmission Private Limited
MNEPL Mahindra Heavy Engines Pvt. Ltd.
NSSPL Mahindra Sanyo Special Steel Private Limited
Disclosure of transactions between the Company and related parties and the status of outstanding balance as on 31
st
March, 2014:
Rs. in Crores
(Receipt/income)/Expenditure/
payment
(a) Particulars Holding Company Subsidiary Company/
Subsidiary Companies and
Joint Ventures
Fellow Subsidiaries
2014 2013 2014 2013 2014 2013
Purchase of nished goods .............................................................................. 0.66 6.49 *
Purchase of xed assets ................................................................................... 0.15
Sale of xed assets .......................................................................................... (0.01)
Processing charges paid ................................................................................... 16.01 20.92
Sale of nished goods ** ................................................................................. (214.55) (262.23) (26.83) (36.36) (434.19) (494.22)
Income from services rendered ** ................................................................... (0.02) (0.52) (2.01)
Deputation of personnel to related parties ......................................................... (0.35) (0.79)
Deputation of personnel from related parties ..................................................... 0.03 0.04
Other income .................................................................................................... (0.94) (0.84) (0.13) (0.27)
Other expenses ................................................................................................. 2.19 2.30 0.34 1.24
Reimbursement received from parties ............................................................... (0.21) (0.22) (0.94) (0.36) (0.00) *
Reimbursement made to parties ....................................................................... 1.05 (1.23) 0.16 0.11 1.11
Interest received ............................................................................................... (1.09) (1.33) (0.48)
Dividend received.............................................................................................. (3.47) (1.59)
Inter corporate deposits placed ......................................................................... 81.83 53.62 30.00
Inter corporate deposits refunded by parties ..................................................... (84.06) (71.98) (30.00)
Capital advance paid ......................................................................................... 11.84
Other Deposit .................................................................................................. 0.02 0.02
Share application money received back ........................................................... (10.50)
Share application money paid .......................................................................... 10.50
Investment in Equity Shares ............................................................................. 9.16
Investment in Debentures ................................................................................ 10.75
Dividend on equity shares for the previous year paid during the current year .... 14.94 17.43
* Represents amount less than Rs. 1 lakh.
** excluding taxes.
957
2014
Rs. in Crores
2013
Rs. in Crores
(b) Transactions with Key Management Personnel:
Managerial Remuneration ............................................................................................................................................................................... 2.76 4.00
(c) Outstanding receivables as on 31
st
March from:
Holding company ........................................................................................................................................................................................... 3.23 2.90
Subsidiary company/Subsidiary companies and Joint Ventures (including Inter-corporate Deposits & Interest thereon) ................................. 4.62 9.75
Fellow subsidiaries ......................................................................................................................................................................................... 48.08 39.41
(d) Outstanding payables as on 31
st
March:
To Fellow subsidiaries .................................................................................................................................................................................... 0.25 1.33
To Key Managerial Personnel ......................................................................................................................................................................... 1.00 0.31
(e) Disclosure of transactions between the Company and fellow subsidiaries and the status of outstanding balance as on 31
st
March, 2014:
(Rs. in Crores) (previous years gures are in brackets)
Subsidiaries & Joint Ventures Fellow Subsidiaries
MMESS MSSCL MESL MASL TOTAL MUSCO MLL MNAL MHRIL MRL MVML MBPOMSONAL NBS MGTPL MNEPL NSSPL TOTAL
Purchase of nished goods ......... 0.66 0.66
() (6.49) () () (6.49) * () () () () () () () () () () () ()
Purchase of xed assets ..............
() () () () () () () () () () () () () () () () () ()
Sale of xed assets ..................... 0.01 0.01
() () () () () () () () () () () () () () () () () ()
Processing charges paid .............. 16.01 16.01
() (20.92) () () (20.92) () () () () () () () () () () () () ()
Sale of nished goods ** ............ 0.02 26.81 26.83 341.94 92.17 0.08 434.19
(3.44) (32.92) () () (36.36) (360.15) () () () () (134.00) () () () () () (0.06) (494.22)
Income from services rendered** ... () 0.52 () () 0.52
() (2.01) () () (2.01) () () () () () () () () () () () () ()
Deputation of personnel to related
parties ......................................... 0.35 0.35
() (0.79) () () (0.79) () () () () () () () () () () () () ()
Deputation of personnel from
related parties .............................. 0.03 0.03
() (0.04) () () (0.04) () () () () () () () () () () () () ()
Other income ............................... 0.88 0.06 0.94 0.13 0.13
(0.79) (0.05) () () (0.84) () () (0.19) () () (0.08) () () () () () () (0.27)
Other expenses ............................ 0.05 0.27 0.01 0.00 0.01 0.34
() () () () () (0.05) (0.61) () (0.56) () () (0.01) () (0.01) () () () (1.24)
Reimbursement received from parties 0.04 0.10 0.00 0.80 0.94 0.00 0.00 0.00
(0.05) (0.31) * () (0.36) () () () () () () () () () () () () ()
Reimbursement made to parties .. 0.16 0.16 0.01 1.04 0.03 0.03 1.11
() (0.11) () () (0.11) () () () () () () () () () () () () ()
Interest received .......................... 1.06 0.02 1.09 0.30 0.18 0.48
() (0.63) (0.70) () (1.33) () () () () () () () () () () () () ()
Dividend Received ....................... 3.47 3.47
(1.59) () () () (1.59) () () () () () () () () () () () () ()
Inter corporate deposits placed .... 81.78 0.05 81.83 10.00 20.00 30.00
() (53.48) (0.14) () (53.62) () () () () () () () () () () () () ()
Inter corporate deposits refunded
by parties .................................... 83.98 0.08 84.06 10.00 20.00 30.00
() (62.63) (9.35) () (71.98) () () () () () () () () () () () () ()
Capital advance paid ....................
() () () () () () () () () () () () () () (11.84) () () (11.84)
Other Deposit ............................. 0.02 0.02
() () () () () (0.02) () () () () () () () () () () () (0.02)
Share application money received
back ........................................... 10.50 10.50
() () () () () () () () () () () () () () () () () ()
Share application money paid ......
() () (10.50) () (10.50) () () () () () () () () () () () () ()
Investment in Equity Shares ......... 9.15 0.01 9.16
() () () () () () () () () () () () () () () () () ()
Investment in Debentures ............. (10.75) (10.75)
() () () () () () () () () () () () () () () () () ()
Outstanding receivables (including
Inter-corporate deposit & interest
thereon) .................................................. 0.22 3.58 0.02 0.80 4.62 46.00 2.08 48.08
(0.22) (9.43) (0.10) () (9.75) (39.33) () () () () (0.08) () () () () () () (39.41)
Outstanding payables ................... 0.07 0.15 0.02 0.00 0.01 0.25
() () () () () () (0.07) (1.15) (0.09) (0.02) () * () () () () () (1.33)
* Represents amount less than Rs. 1 lakh.
** excluding taxes.
958
Note 29 Earnings per share:
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Basic/Diluted
Prot after tax (Rs. in crores) (A) .............................. 64.37 56.70
Weighted average number of shares Basic (B) ....... 16,600,007 16,600,007
Earnings per share Basic/Diluted (Rupees) (A/B) .... 38.77 34.16
Nominal value per share (Rs.) ................................... 10 10
Note 30 Deferred tax (liability)/asset (net): Rs. in Crores
Particulars
As at
31 March, 2014
As at
31 March, 2013
Tax effect of items constituting deferred tax liability
On difference between book balance and tax balance
of xed assets ........................................................... (5.63) (6.60)
(5.63) (6.60)
Tax effect of items constituting deferred tax assets
On provision for doubtful debts .................................. 0.55 0.59
Stock Appreciation Rights .......................................... 0.29
Disallowance u/s 40a ................................................ 0.20
On provision for employee benets ........................... 0.77 0.76
1.61 1.55
Deferred Tax Liability (net) ....................................... (4.02) (5.05)
Note 31 Interest in joint ventures:
(i) In Jointly Controlled Entities:
Name of the Entity Country of
Incorporation
% of Ownership
Interest
A. Mahindra MiddleEast Electrical Steel
Service Centre FZC .......................................... Sharjah, UAE 90%
B. Mahindra Steel Service Centre Limited ...... India 61%
(ii) Interests in the assets, liabilities, income, expenses and contingent liabilities with
respect to Jointly Controlled Entities:
A. Mahindra MiddleEast Electrical Steel Service Centre FZC
Rs. in Crores
As at
31 March, 2014
As at
31 March, 2013
I. ASSETS
1. Non current assets
a) Property, plant and equipment ............ 20.34 18.94
b) Long-term loans and advance ............ 0.09
2. Current Assets
a) Inventories ......................................... 4.70 9.86
b) Trade and other receivables................ 12.94 13.66
c) Cash and cash equivalents................. 5.90 6.34
II. LIABILITIES
1. Non Current Liabilities ............................... 0.11 0.10
2. Current Liabilities ...................................... 13.03 21.46
III. INCOME
1. Sale of goods and Services ...................... 60.53 62.38
2. Other income ............................................ 0.71 0.30
Rs. in Crores
As at
31 March, 2014
As at
31 March, 2013
IV. EXPENDITURE
1. Cost of sales ............................................ 54.16 56.49
2. Administrative and general expenses ......... 1.69 1.94
3. Distribution costs ...................................... 0.84 1.24
4. Finance cost ............................................. 0.44 0.66
5. Depreciation .............................................. 1.32 1.17
V. Contingent liabilities ......................................... 14.67 9.89
VI. Capital commitments ....................................... 0.41
The information furnished above has been derived from the audited accounts of
Mahindra MiddleEast Electrical Steel Service Centre FZC for the year ended 31 March,
2014 wherein amounts reported in Indian Rupees for the years ended 31 March, 2014
have been given by translating the gures reported in Dhs., at the rate of Rs. 16.37 =
1 Dhs.
B. Mahindra Steel Service Centre Limited
Rs. in Crores
As at
31 March, 2014
As at
31 March, 2013
I. ASSETS
a) Fixed assets ....................................... 59.73 63.00
b) Long term loans and advances .......... 0.87 1.21
2. Current assets
a) Inventories ......................................... 16.96 19.59
b) Trade receivables ............................... 17.99 17.21
c) Cash and cash equivalents................. 4.69 3.32
d) Short term loans and advances ......... 14.90 16.95
e) Other current assets ........................... * 0.06
* represents Rs. 25,620
II. LIABILITIES
1. Non current liabilities
a) Long term borrowings ........................ 14.71 18.59
b) Deferred tax liabilities (net) ................. 5.69 5.37
c) Long term provision ........................... 0.38 0.31
a) Short term borrowings ....................... 9.31
b) Trade payables ................................... 25.14 30.55
c) Other current liabilities........................ 14.71 15.00
d) Short term provision .......................... 0.14 0.24
III. INCOME
1. Revenue from operations (net) .................. 74.25 75.27
2. Other income ............................................ 0.27 0.13
IV. EXPENDITURE
1. Cost of sales ............................................ 52.07 53.62
2. Employee benets expenses ..................... 3.84 4.36
3. Finance cost ............................................. 2.84 3.04
4. Depreciation .............................................. 4.70 4.57
5. Other expenses ......................................... 6.69 8.48
V. Contingent liabilities ......................................... 0.07 1.71
VI. Capital commitments ....................................... 0.04
959
Note 32 Stock Appreciation Rights:
The Company has granted Stock Appreciation Rights (SARs) to eligible employees in
accordance with the Stock Appreciation Rights Scheme 2013 (SARS-2013) during the years
ended 31st March 2013 and 31st March 2014. Under the scheme, eligible employees are
entitled to receive appreciation in value of equity shares over its face value on exercise of the
SARs. The SARs may be exercised up to a period of three years from the date of vesting.
The compensation cost of SARs granted to employees is accounted by the Company using the
intrinsic value method. The fair value of the equity shares is based on valuation obtained from
an independent valuer. Difference between market value and face value of the equity shares,
being the intrinsic value, has been recognised as compensation cost over the vesting period.
The related expenses for SARs amounting to Rs. 1.72 crores (2013: Rs. 4.73 crores) has
been recognised as employee cost.
Summary of SARs:
SARs outstanding on 1
st
April 2013 258,489
SARs granted during the year 4,577
SARs forfeited during the year 9,891
SARs excercised during the year 87,468
SARs outstanding on 31
st
March 2014 165,707
The fair value of SARs granted during the year is Rs. 85.17 per SARs.
Had the Company adopted fair value method as described in the Guidance note on Accounting
for Employee Share based Payments issued by the Institute of Chartered Accountants of
India, the employee compensation cost would have been lower by Rs. 0.58 crore, prot after
tax higher by Rs. 0.58 crore and the earnings per share would have been higher by Re. 0.03
The fair value has been calculated using the Black Scholes Options Pricing Model and the
signicant assumptions made in this regard are as follows:
Grant dated Grant dated
20
th
March, 2014 18
th
January, 2013
Risk free interest rate Annualised continuously compounded rate on
safe asset with same maturity
Expected volatility 17.36% 20.80%
Expected dividend yield 6.37% 7.60%
Note 33 Excise duty:
Excise duty disclosed under Other Expenses (Note 24) represents the difference between the
excise duty on opening stock and closing stock of nished goods.
Note 34 Previous years gures:
Previous years gures have been regrouped/reclassied wherever necessary to correspond
with the current years classication/disclosure.
Rajeev Dubey
Sudhir Mankad
P. N. Shah
Parag Shah
}
Directors
Place : Mumbai
960
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956,
RELATING TO SUBSIDIARY COMPANIES
Name of the
Subsidiary
companies
Number of shares in the
Subsidiary company held
by Mahindra Intertrade
year ending date:
The net aggregate of Prots/(Losses) of the Subsidiary companies so far as they concern
the members of Mahindra Intertrade Limited
Equity Extent of
holding
For current nancial year For previous nancial year
Dealt with in
the accounts of
Mahindra Intertrade
Limited for the year
ended 31 March,
2014
Not dealt with in
the accounts of
Mahindra Intertrade
ended 31 March
2014
Dealt with in
the accounts of
Mahindra Intertrade
ended 31 March,
2013
Not dealt with in
the accounts of
Mahindra Intertrade
ended 31 March
2013
Nos. % Rs. Crores Rs. Crores Rs. Crores Rs. Crores
Mahindra Middle
East Electrical Steel
Service Centre
(FZC) 900 90% 4.12 2.34
Mahindra Steel
Service Centre
Limited 8,511,673 61% 3.31 0.89
Mahindra Electrical
Steel Limited 50,000 100% (0.69) (0.78)
Mahindra Autosteel
Private Limited 10,000 100% (0.73)
Rajeev Dubey
Sudhir Mankad
P. N. Shah
Parag Shah
}
Directors
Place : Mumbai
MAHINDRA MIDDLEEAST ELECTRICAL STEEL SERVICE CENTRE (FZC)
961
Your directors are pleased to present their Tenth Report, together with the audited accounts of your Company, for the year ended
31
st
March 2014.
(Amount in Million)
For the year ended
31
st
March, 2014 31
st
March, 2013
USD INR USD INR
Total Income............................................................................. 11.33 680.53 12.81 769.07
Prot before depreciation & interest ....................................... 1.07 64.75 0.80 47.92
Depreciation ............................................................................. 0.24 14.71 0.24 14.41
Prot before interest ................................................................ 0.83 50.04 0.56 33.51
Interest ..................................................................................... 0.07 4.25 0.08 4.80
Prot for the year ..................................................................... 0.76 45.79 0.48 28.71
Balance of prot for earlier years ............................................ 4.76 285.83 4.61 276.94
Less : Dividend ........................................................................ 0.66 39.64 0.33 19.82
Balance carried to Balance Sheet .......................................... 4.86 291.98 4.76 285.83
Dividend
During the year, your directors declared an interim dividend of
USD 330 (INR 19,819.80) per share on 1,000 shares of the face
value of USD 550 (INR 33,033) each, fully paid up, aggregating
USD 3,30,000 (INR 3,30,33,000) to the shareholders whose names
appeared in the Register of Members as on 16
th
October 2013, the
Record Date xed for that purpose. For the year ended 31
st
March
2014, your directors also recommend a nal dividend of USD 330
(INR 19,819.80) per share on 1,000 shares of the face value of USD
550 (INR 33,033) each, fully paid up, aggregating USD 3,30,000
(INR 3,30,33,000). The said dividend will be paid, if approved, to
those shareholders whose names appear in the Register of Members
as on 24
th
April 2014, the Record Date xed for this purpose.
Operations
The total income for the year decreased to USD 11.33 million
(INR 680.53 million) from USD 12.81 million (INR 769.07 million),
a decrease of 12%.
Prot for the year was higher at USD 0.76 million (INR 45.79
million) as compared to USD 0.48 million (INR 28.71 million) in
the previous year.
Your Companys operations suffered during the year due to weak
demand for its products, and pricing pressures, which mirrors the
scenario for silicon steel in the rest of the world.
The transformer core line remained under-utilised during the year.
Outlook for the current year
Your Company expects to service the demand for built up cores
for distribution transformers from the second quarter of the current
nancial year with the setting up of a small width core cutting line.
This will enable your Company to offer the entire range from slit
coils to loose and built up core stack for the transformer industry
in the Middle East, and beyond.
Your Company expects to improve its performance in the current year.
Your directors state that:
(i) in the preparation of annual accounts, the applicable
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
st
March 2014 and of the prot
of the Company for the year ended on that date;
of adequate accounting records 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.
Codes of Conduct
Your Company has adopted Codes of Conduct (Codes) for its
directors and senior management and employees. These Codes
declarations under these Codes from members of the Board, and
senior management and employees, afrming compliance with
the respective Codes.
Auditors
M/s. KPMG, UAE, Auditors of the Company, have expressed their
willingness to accept re-appointment for the nancial year ending
31
st
March 2015. Members are requested to re-appoint Auditors
for the current year and x their remuneration.
Harsh Kumar
Director
Mumbai, 24
th
April 2014
962
The Shareholders
Mahindra MiddleEast Electrical Steel Service Centre (FZC)
Mahindra MiddleEast Electrical Steel Service Centre (FZC)
(the Company), which comprise the statement of nancial
position as at 31 March 2014, statements of prot or loss
and other comprehensive income, changes in equity and
cash ows for the year then ended, and notes, comprising
International Financial Reporting Standards, and for such
internal control as management determines is necessary to
enable the preparation of nancial statements that are free
accordance with International Standards on Auditing. Those
misstatement.
statements. The procedures selected depend on our
fraud or error. In making those risk assessments, we consider
internal control relevant to the entitys preparation and fair
opinion.
Opinion
material respects, the nancial position of the Company as at
31 March 2014, and of its nancial performance and its cash
ows for the year then ended in accordance with International
Financial Reporting Standards.
Emphasis of a matter
Without qualifying our opinion above, as discussed in note
2(c) to the nancial statements, we draw attention to the fact
that the amounts presented in United Arab Emirates Dirham
and Indian Rupees in the accompanying nancial statements
are supplementary information solely for the convenience of
users. Such supplementary information does not form part
of the audited nancial statements. We have not audited
this supplementary information and, accordingly, we do not
express an opinion on this supplementary information.
We further conrm that the nancial statements comply, in
all material respects, where appropriate, with the rules and
regulations of Sharjah Airport International Free Zone Authority.
KPMG
24 April 2014
963
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH
Unaudited Supplementary information (refer note 2 (c))
Note 2014 2013 2014 2013
USD USD Dhs. Rs. Dhs. Rs.
ASSETS
Property, plant and equipment ... 4 3,763,441 3,869,267 13,811,827 226,032,256 14,200,208 232,388,157
Long-term loans and advances .. 5 18,991 69,697 1,140,599
Total non-current assets ........... 3,763,441 3,888,258 13,811,827 226,032,256 14,269,905 233,528,756
Inventories .................................... 6 869,541 2,014,798 3,191,214 52,224,632 7,394,309 121,008,768
Trade and other receivables ....... 7 2,394,483 2,789,645 8,787,750 143,812,366 10,237,996 167,546,079
Cash and bank balances ............ 8 1,090,708 1,295,704 4,002,907 65,508,216 4,755,236 77,820,000
Total current assets ................... 4,354,732 6,100,147 15,981,871 261,545,214 22,387,541 366,374,847
Total assets ................................. 8,118,173 9,988,405 29,793,698 487,577,470 36,657,446 599,903,603
EQUITY
Share capital ................................ 9 550,000 550,000 2,018,500 33,033,000 2,018,500 33,033,000
Retained earnings ........................ 9 4,861,423 4,759,028 17,841,417 291,977,090 17,465,631 285,827,202
Statutory reserves ........................ 9 275,063 275,063 1,009,481 16,520,284 1,009,481 16,520,284
Total equity ................................. 5,686,486 5,584,091 20,869,398 341,530,374 20,493,612 335,380,486
LIABILITIES
Employee benets ....................... 20,832 20,758 76,452 1,251,170 76,182 1,246,725
Total non-current liabilities ....... 20,832 20,758 76,452 1,251,170 76,182 1,246,725
Short-term borrowings ................. 10 1,151,984 4,227,781 69,188,159
Trade and other payables ........... 11 2,371,866 3,190,163 8,704,758 142,454,247 11,707,900 191,601,208
Due to related parties .................. 12 38,989 41,409 143,090 2,341,679 151,971 2,487,025
Total current liabilities ............... 2,410,855 4,383,556 8,847,848 144,795,926 16,087,652 263,276,392
Total liabilities ............................. 2,431,687 4,404,314 8,924,300 146,047,096 16,163,834 264,523,117
Total equity and liabilities ......... 8,118,173 9,988,405 29,793,698 487,577,470 36,657,446 599,903,603
The attached notes 1 to 24 are an integral part of these nancial statements.
The Board of Directors has authorised the issue of these nancial statements on 24 April 2014.
Zhooben Bhiwandiwala
}
Directors
Harsh Kumar
K. Chandrasekar
Kazuhiro Koshikawa
Sumit Issar
964
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 MARCH
Note 2014 2013 2014 2013
Sale of goods and services ...... 13 11,197,712 12,743,060 41,095,602 672,534,613 46,767,030 765,348,184
Cost of sales .............................. 14 (10,019,611) (11,540,798) (36,771,973) (601,777,837) (42,354,729) (693,140,328)
Gross prot ............................... 1,178,101 1,202,262 4,323,629 70,756,776 4,412,301 72,207,856
Other income ............................. 15 131,439 44,024 482,382 7,894,227 161,568 2,644,082

Administrative and general
expenses ....................................
16 (313,146) (397,278) (1,149,250) (18,807,548) (1,458,010) (23,860,518)
Selling and distribution
expenses ..................................
(154,947) (254,135) (568,656) (9,306,117) (932,675) (15,263,341)
Finance income ......................... 1,632 18,000 5,990 98,018 66,059 1,081,058
Finance cost .............................. 17 (80,684) (134,838) (296,109) (4,845,852) (494,856) (8,098,375)
Prot for the year ..................... 762,395 478,035 2,797,986 45,789,504 1,754,387 28,710,762
Other comprehensive income ...
Total comprehensive income
for the year ............................... 762,395 478,035 2,797,986 45,789,504 1,754,387 28,710,762
}
Directors
Harsh Kumar
K. Chandrasekar
Kazuhiro Koshikawa
Sumit Issar
965
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH
2014 2013 2014 2013
Operating activities:
Prot for the year ............................................. 762,395 478,035 2,797,986 45,789,504 1,754,387 28,710,762
Adjustments for:
Depreciation .................................................... 244,928 239,151 898,886 14,710,383 877,685 14,363,410
Interest expenses ............................................. 70,775 80,463 259,745 4,250,747 295,299 4,832,608
Interest income ................................................ (1,632) (18,000) (5,990) (98,018) (66,059) (1,081,058)
Prot on sale of property, plant and
equipment ........................................................ (82) (301) (4,925)
Operating prot before changes in
working capital ............................................... 1,076,466 779,567 3,950,627 64,652,616 2,861,011 46,820,797
Changes in:
Inventories ........................................................ 1,145,257 (1,594,252) 4,203,095 68,784,135 (5,850,905) (95,750,775)
Trade and other receivables ........................... 563,123 334,987 2,066,659 33,821,167 1,229,402 20,119,319
Trade and other payables ............................... (759,343) 362,182 (2,786,788) (45,606,124) 1,329,208 21,752,651
Due to related parties ...................................... (2,420) (158,713) (8,881) (145,345) (582,477) (9,532,303)
Net cash from/(used in) operating
activities .......................................................... 2,023,083 (276,229) 7,424,712 121,506,449 (1,013,761) (16,590,311)
Investing activities:
Acquisition of property, plant and equipment
and capital advances ...................................... (175,252) (230,724) (643,172) (10,525,591) (846,758) (13,857,294)
Proceeds from sale of property, plant and
equipment ........................................................ 82 301 4,924
Interest received .............................................. 2,722 17,422 9,990 163,492 63,939 1,046,364
Net cash (used in) investing activities ....... (172,530) (213,220) (633,182) (10,362,099) (782,518) (12,806,006)
Financing activities:
Short-term borrowings availed ....................... (1,151,984) 1,151,984 (4,227,771) (69,188,018) 4,227,771 69,188,018
Interest paid ..................................................... (74,515) (109,321) (273,473) (4,475,373) (401,200) (6,565,763)
Dividend paid ................................................... (660,000) (330,000) (2,422,200) (39,639,600) (1,211,100) (19,819,800)
Net cash (used in)/ from nancing
activities .......................................................... (1,886,499) 712,663 (6,923,444) (113,302,991) 2,615,471 42,802,455
Net (decrease)/increase in cash and cash
equivalents ...................................................... (35,946) 223,214 (131,914) (2,158,641) 819,192 13,406,138
of the year # Refer Note 8 ..............................
1,126,654 903,440 4,134,821 67,666,857 3,315,629 54,260,719
Cash and cash equivalents at the end of
the year # Refer Note 8 ..............................
1,090,708 1,126,654 4,002,907 65,508,216 4,134,821 67,666,857
(35,946) 223,214 (131,914) (2,158,641) 819,192 13,406,138
# Refer Note 8
Reconciliation of Cash and cash
equivalents with the Balance Sheet
Cash on hand .................................................. 1 16
Bank balance in current accounts .................. 391,053 1,047,768 1,435,169 23,486,763 3,845,309 62,928,947
Fixed deposit account with banks
(with original maturity of 3 months or less) ....
699,655 78,886 2,567,738 42,021,453 289,512 4,737,894
Total ................................................................. 1,090,708 1,126,654 4,002,907 65,508,216 4,134,821 67,666,857

}
Directors
Harsh Kumar
K. Chandrasekar
Kazuhiro Koshikawa
Sumit Issar
966
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967
1. REPORTING ENTITY
Mahindra MiddleEast Electrical Steel Service Centre (FZE), was incorporated
and licensed on 8 August 2004 at Sharjah Airport International Free Zone,
Sharjah (FZ) with limited liability in United Arab Emirates (UAE). Subsequently,
the Company has entered into an agreement for subscription of capital by
Nippon Steel & Sumitomo Metal Corporation [(NSSMC) (formerly known as
Nippon Steel Corporation)], Japan to reorganise the Company and manage
as a FZC. Consequent upon the induction of NSC as a shareholder, the status
has changed from Free Zone Establishment (FZE) to Free Zone Company
(FZC) with limited liability with effect from 28 November 2005. The Company
is engaged in processing of steel coils and supply of slit coils and laminations.
The shareholding pattern as of 31 March 2014 is as follows:
Shareholders Percentage
Mahindra Intertrade Limited 90%
Nippon Steel & Sumitomo Metal Corporation
(formerly known as Nippon Steel Corporation) 10%
The ultimate holding Company being Mahindra & Mahindra Limited.
2. BASIS OF PREPARATION
(a) Statement of compliance
The nancial statements have been prepared under historical
cost convention and comply with International Financial Reporting
Standards issued by International Accounting Standards Board and
the rules and regulations of Sharjah Airport International Free Zone
Authority (SAIF Zone). The nancial statements were authorised for
issue by the Board of directors on 24 April 2014.
(b) Functional and presentation currency
These nancial statements are presented in United States Dollars
(USD), which is the Companys functional currency.
(c) Convenience translation
In addition to presenting the nancial statements in USD,
supplementary information in United Arab Emirates Dirham (Dhs)
and Indian Rupee (Rs) has been prepared for the convenience of
users of the nancials statements.
All amounts (including previous year information) are translated from
USD to Dhs. and Rs. at the closing exchange rate at 31 March 2014
based on average of the telegraphic transfer buying and selling rates
quoted by the Mumbai Branch of State Bank of India of Dhs. 3.67 to
USD 1 and Rs. 60.06 to USD 1 respectively.
(d) Use of estimates and judgments
The preparation of nancial statements requires management to make
judgments, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets and liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed by the
management on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are revised and
in every future period affected.
The Company makes estimates and assumptions that affect the
reported amounts of assets and liabilities within the next nancial year.
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
(i) Impairment losses on trade receivables
The Company reviews its trade receivables to assess impairment
at least on an annual basis. The Companys credit risk is
primarily attributable to its trade receivables. In determining
whether impairment losses should be reported in the prot
or loss, the Company makes judgments as to whether there
is any observable data indicating that there is a measurable
decrease in the estimated future cash ows. Accordingly, an
allowance for impairment is made where there is an identied
loss event or condition which, based on previous experience, is
evidence of a reduction in the recoverability of the cash ows.
(ii) Provision for obsolete and expired inventory
The Company reviews its inventory to assess loss on account
of obsolescence and expiry on a regular basis. In determining
whether provision for obsolescence should be recorded in the
prot or loss, the Company makes judgments as to whether
there is any observable data indicating that there is any future
saleability of the product and the net realisable value for such
product. Accordingly, provision for impairment is made where
the net realisable value is less than cost based on best estimates
by the management. The provision for obsolescence of inventory
is based on the ageing and past movement of the inventory.
(iii) Estimated useful lives of property, plant and equipment
The Company estimates the useful lives of property, plant
and equipment based on the period over which the assets are
expected to be available for use. The estimated useful lives are
reviewed periodically and are updated if expectations differ from
previous estimates due to physical wear and tear, technical or
commercial obsolescence and legal or other limits on the use of
the assets. In addition, estimation of the useful lives of property,
plant and equipment is based on collective assessment of
industry practice, internal technical evaluation and on the historical
experience with similar assets. It is possible, however, that future
results of operations could be materially affected by changes in
estimates brought about by changes in factors mentioned above.
The amounts and timing of recorded expenses for any period
would be affected by changes in these factors and circumstances.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to
all periods presented in these nancial statements.
(a) Property, plant and equipment and depreciation
Items of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses, if any. Cost
includes expenditures that are directly attributable to the acquisition
of the asset. When part of an item of property, plant and equipment
have different useful lives, they are accounted for as separate item
(major components) of property, plant and equipment.
Depreciation is calculated over the depreciable amount, which is the
cost of an asset, less its residual value. Depreciation is recognized in
prot or loss on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment. The estimated
useful lives for the current and comparative periods are as follows:
Factory Building 18 years
Plant and Machinery 20 years
Vehicles 5 years
Furniture and Fixtures 10 years
Ofce Equipment 5 years
Computers 5 years
Any gain or loss on disposal of an item of property, plant and equipment
(calculated as the difference between the net proceeds from disposal
and the carrying amount of the item) is recognised in prot or loss.
Property, plant and equipment having value less than or equal to
USD 136 [(Dhs. 500) (Rs. 8,168) as on 31 March 2014] each, are
fully depreciated in the year of acquisition. Depreciation methods,
useful lives and residual values are re-assessed at the reporting date.
(b) Inventories
Inventories are measured at the lower of cost and net realizable
value, after making due allowance for any obsolete or slow moving
items. Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion
and selling expenses. Cost is determined as follows:
Raw materials
The cost of raw materials includes insurance, freight and other
incidental charges incurred in acquiring the inventories and bringing
them to their present location and condition. Valuation of the raw
materials is determined on a weighted average cost basis.
Work in progress
The cost of work in progress includes cost of raw material and
an appropriate share of production overheads based on normal
operating capacity.
Finished goods
The cost of nished goods is arrived at on a weighted average cost
basis and includes cost of direct materials and direct labour plus
an appropriate share of production overheads based on normal
operating capacity.
968
(c) Revenue recognition
Revenue from the sale of goods in the course of ordinary activities
is measured at the fair value of the consideration received or
receivable, net of returns, trade discounts and volume rebates.
Revenue is recognised when persuasive evidence exists, usually
in the form of an executed sales agreement, that the signicant
risks and rewards of ownership have been transferred to the buyer,
recovery of the consideration is probable, the associated costs
and possible return of goods can be estimated reliably, there is
no continuing management involvement with the goods, and the
amount of revenue can be measured reliably.
(d) Finance Income and nance costs
Finance income comprises interest income. Interest income
is recognised as it accrues in prot or loss, using the effective
interest method.
Finance costs comprise interest expenses on borrowings and
preshipment credit. Interest costs is recognised as it accrues in prot
or loss, using the effective interest method.
(e) Foreign currency transactions and balances
Transactions in foreign currencies are translated to the functional
currency (USD) at the exchange rates ruling at the dates of the
transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain
or loss on monetary items is the difference between amortised cost
in the functional currency at the beginning of the year, adjusted for
effective interest and payments during the year, and the amortised
cost in foreign currency translated at the exchange rate at the end
of the year. Non-monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the
fair value was determined. Non-monetary items in a foreign currency
that are measured in terms of historical cost are translated using
the exchange rate at the date of the transaction. Foreign currency
differences arising on retranslation are recognised in prot or loss.
(f) Operating lease
Leases in terms of which the substantial risks and rewards of
ownership remain with the lessor are classied as operating leases.
Payments made under operating leases are recognized in prot or
loss on a straight-line basis over the term of the lease.
(g) Financial instruments
(i) Non-derivative nancial assets
The Company initially recognizes loans and receivables and
deposits on the date they are originated. All other nancial assets
are recognized initially on the trade date at which the Company
becomes a party to the contractual provisions of the instrument.
The Company derecognizes a nancial asset when the contractual
rights to the cash ows from the asset expire, or it transfers the
rights to receive the contractual cash ows on the nancial asset
in a transaction in which substantially all the risks and rewards
of ownership of the nancial asset are transferred. Any interest
in transferred nancial assets that is created or retained by the
Company is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of nancial position when, and only
when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realize the asset and
Loans and receivables
Loans and receivables are nancial assets with xed or
determinable payments that are not quoted in active markets.
Such assets are recognized initially at fair value, plus any
directly attributable transaction costs. Subsequent to initial
recognition non-derivative nancial instruments are measured
at amortized cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise long term loans and advances,
trade and other receivables and cash and cash equivalents.
Cash and cash equivalents comprise cash and bank balances
including xed deposits.
(ii) Non-derivative nancial liabilities
Financial liabilities are recognized initially on the trade date
at which the Company becomes a party to the contractual
provisions of the instrument.
The Company derecognizes a nancial liability when its
contractual obligations are discharged or cancelled or expired.
presented in the statement of nancial position when, and only
when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realize the asset and
Non-derivative nancial liabilities of the Company comprise
short-term borrowings, trade and other payables and due to
related parties.
Such nancial liabilities are recognized initially at fair value plus
any directly attributable transaction costs. Subsequent to initial
recognition these nancial liabilities are measured at amortized
cost using the effective interest method.
(h) Impairment
Non-derivative nancial assets
A nancial asset is assessed at each reporting date to determine
whether there is objective evidence that it is impaired. A nancial
asset is impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the loss
event had a negative effect on the estimated future cash ows of that
asset that can be estimated reliably.
Objective evidence that nancial assets are impaired can include
default or delinquency by a debtor, restructuring of an amount due
to the Company on terms that the Company would not consider
otherwise, indications that a debtor or issuer will enter bankruptcy.
Financial assets measured at amortised cost
The Company considers evidence of impairment for receivables at
both a specic asset and collective level. All individually signicant
receivables are assessed for specic impairment. All individually
signicant receivables found not to be specically impaired are then
collectively assessed for any impairment that has been incurred but
not yet identied. Receivables that are not individually signicant
are collectively assessed for impairment by grouping together with
similar risk characteristics.
In assessing collective impairment, the Company uses relevant historical
trends of the probability of default, timing of recoveries and the amount
of loss incurred, adjusted for managements judgment as to whether
current economic and credit conditions are such that the actual losses
are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a nancial asset measured at
amortized cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash ows
discounted at the original effective interest rate. Losses are
recognized in prot or loss.
Non-nancial assets
The carrying amount of the Companys non-nancial assets, other
than inventories, is reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication
exists then the assets recoverable amount is estimated.
The recoverable amount of an asset or cash generating unit is
the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash ows are
discounted to their present value using a discount rate that reects
current market assessments of the time value of money and the
risks specic to the asset. For the purpose of impairment testing,
assets are grouped together into the smallest group of assets
that generates cash inows from continuing use that are largely
independent of the cash inows of other assets or groups of assets
(the cash-generating unit).
An impairment loss is recognized if the carrying amount of an asset or
its cash generating unit exceeds its recoverable amount. Impairment
losses are recognized in prot or loss. Impairment losses are reversed
when there is an indication that the impairment loss may no longer exist
and there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent
that the assets carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortization, if
no impairment loss had been recognized.
(i) Provisions
A provision is recognized if, as a result of a past event, the Company
has a present legal or constructive obligation that can be measured
reliably, and it is probable that an outow of economic benets will
be required to settle the obligation.
969
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970
NOTES TO THE FINANCIAL STATEMENTS AS AT 31 MARCH 2014 (CONTINUED)
31 March 2014 31 March 2013 31 March 2014 31 March 2013
5. LONG-TERM LOANS AND ADVANCES
Capital advances 18,991 69,697 1,140,599
18,991 69,697 1,140,599
6. INVENTORIES
Raw materials (including packing materials) 584,243 1,349,500 2,144,171 35,089,635 4,952,665 81,050,970
Work in progress 42,240 155,022 2,536,934
Finished goods 243,058 665,298 892,021 14,598,063 2,441,644 39,957,798
869,541 2,014,798 3,191,214 52,224,632 7,394,309 121,008,768
7. TRADE AND OTHER RECEIVABLES
Trade receivables 2,349,734 2,690,020 8,623,522 141,124,935 9,872,373 161,562,602
Other receivables due from related parties 174 638 10,450
Deposits 24,439 23,676 89,690 1,467,706 86,891 1,421,981
Prepayments 20,136 33,720 73,900 1,209,275 123,752 2,025,223
Interest receivable 1,090 4,000 65,465
Advance to suppliers 41,139 150,980 2,470,808
2,394,483 2,789,645 8,787,750 143,812,366 10,237,996 167,546,079
8. CASH AND BANK BALANCES
Cash on hand 1 16
Bank balance in current accounts 391,053 1,047,768 1,435,169 23,486,763 3,845,309 62,928,947
Fixed deposit account with banks 699,655 78,886 2,567,738 42,021,453 289,512 4,737,894
(with original maturity of 3 months or less)
Other bank balances 169,050 620,414 10,153,143
1,090,708 1,295,704 4,002,907 65,508,216 4,755,236 77,820,000
9. SHARE CAPITAL
Authorized, issued and paid :
1,000 Shares of USD 550
(Dhs. 2,019) (Rs. 33,033) each 550,000 550,000 2,018,500 33,033,000 2,018,500 33,033,000
[900 Shares of USD 550 (Dhs. 2,019) (Rs. 33,033) each held by Mahindra Intertrade Limited, which is a subsidiary of Mahindra & Mahindra Limited] [100 Shares
of USD 550 (Dhs. 2,019) (Rs. 33,033) each held by Nippon Steel & Sumitomo Metal Corporation (formerly known as Nippon Steel Corporation)], Japan.
971
10. SHORT-TERM BORROWINGS:
Trust receipts 1,151,984 4,227,781 69,188,159
1,151,984 4,227,781 69,188,159
11. TRADE AND OTHER PAYABLES:
Trade payables 2,199,543 3,026,130 8,072,328 132,104,604 11,105,899 181,749,387
Capital creditors 55,140 202,364 3,311,708
Interest payable 11,813 15,552 43,354 709,489 57,076 934,053
Other payables and accrued expenses 104,010 93,341 381,722 6,246,764 342,561 5,606,060
Advance from customers 56,500 207,354 3,393,390
2,371,866 3,190,163 8,704,758 142,454,247 11,707,900 191,601,208
12. DUE TO RELATED PARTIES
Mahindra Intertrade Limited 36,357 41,409 133,429 2,183,601 151,971 2,487,025
Mahindra Steel Service Centre Limited 2,632 9,661 158,078
38,989 41,409 143,090 2,341,679 151,971 2,487,025
TRANSACTIONS WITH RELATED PARTIES
Managements policy is to conduct transactions with related parties on prices and terms substantially similar to those with unrelated parties.
List of related parties with whom the Company has transactions with:
Mahindra Intertrade Limited Joint Venture Partner
Mahindra Steel Service Centre Limited Fellow subsidiary
Nippon Steel & Sumitomo Metal Corporation (formerly known as Nippon Steel Corporation) Joint Venture Partner
Mahindra Intertrade Limited: USD USD Dhs. Rs. Dhs. Rs.
Reimbursements made 6,388 8,220 23,444 383,663 30,167 493,693
Purchase 2,479 662,886 9,098 148,889 2,432,792 39,812,933
Service charges paid* 145,217 144,832 532,947 8,721,733 531,533 8,698,610
Dividend paid 594,000 297,000 2,179,980 35,675,640 1,089,990 17,837,820
Mahindra Steel Service Centre Limited:
Purchase 307,131 1,127,172 18,446,288
Sales 5,350 19,635 321,321
Reimbursements of income 2,632 83,334 9,661 158,078 305,836 5,005,040
Reimbursements of expense 174 49 638 10,450 180 2,943
Nippon Steel & Sumitomo Metal
Corporation (formerly known as Nippon
Steel Corporation):
Dividend paid 66,000 33,000 242,220 3,963,960 121,110 1,981,980
* The managerial services are rendered by Joint Venture Partner Mahindra Intertrade Limited and the same is paid as service charges.
972
13. SALES
Sales of goods 11,197,712 12,736,127 41,095,602 672,534,613 46,741,586 764,931,788
Job work charges 6,933 25,444 416,396
11,197,712 12,743,060 41,095,602 672,534,613 46,767,030 765,348,184
14. COST OF SALES
Changes in inventories of nished goods
and work in progress 422,240 (649,732) 1,549,621 25,359,734 (2,384,516) (39,022,904)
Raw materials and consumables used 8,891,762 11,523,593 32,632,766 534,039,226 42,291,586 692,106,996
Employee benet expenses 323,043 286,410 1,185,570 19,401,963 1,051,125 17,201,785
Depreciation on plant and machinery and
building 237,537 232,424 871,760 14,266,472 852,996 13,959,385
Other expenses 145,029 148,103 532,258 8,710,442 543,538 8,895,066
10,019,611 11,540,798 36,771,973 601,777,837 42,354,729 693,140,328
15. OTHER INCOME
Insurance claim received 119,027 33,396 436,830 7,148,762 122,563 2,005,764
Prot on sale of xed assets 82 301 4,925
Other miscellaneous income 12,412 10,546 45,552 745,465 38,704 633,393
131,439 44,024 482,382 7,894,227 161,568 2,644,082
16. ADMINISTRATIVE AND GENERAL
EXPENSES
Travelling and conveyance 10,408 30,148 38,199 625,104 110,643 1,810,689
Communication expenses 14,060 15,725 51,601 844,444 57,711 944,444
Audit fees (includes out of pocket expenses) 12,550 11,989 46,057 753,753 44,000 720,059
Repairs and maintenance 25,955 41,913 95,253 1,558,857 153,821 2,517,295
Depreciation on others 7,391 6,727 27,127 443,903 24,688 404,024
Insurance 17,378 18,044 63,779 1,043,723 66,221 1,083,723
Service charges 145,217 144,832 532,947 8,721,733 531,533 8,698,610
Bank charges 39,101 86,101 143,502 2,348,406 315,991 5,171,226
General expenses 41,086 41,799 150,785 2,467,625 153,402 2,510,448
313,146 397,278 1,149,250 18,807,548 1,458,010 23,860,518
973
17. FINANCE COST
Interest expenses 70,775 80,463 259,745 4,250,747 295,299 4,832,608
Exchange loss (net) 9,909 54,375 36,364 595,105 199,557 3,265,767
80,684 134,838 296,109 4,845,852 494,856 8,098,375
18. CONTINGENT LIABILITIES AND
COMMITMENTS:
Capital Commitments 82,960 304,463 4,982,578
Letters of credit 2,714,598 2,021,210 9,962,576 163,038,756 7,417,841 121,393,873
2,714,598 2,104,170 9,962,576 163,038,756 7,722,304 126,376,451
19. STATUTORY RESERVE
According to the articles of association of the Company, 10% of the net
prot for each year is required to be transferred to a statutory reserve.
The management may resolve to discontinue such annual transfers when
the reserve reaches 50% of the paid up share capital. The reserve is
not available for distribution. No appropriations to the statutory reserve
have been made out of current year prots as the statutory reserve has
accumulated to 50% of the paid up share capital.
20. LEASES
The Company has entered into operating lease arrangements for the
custom built warehouse, the signicant terms and conditions of which are
as under :
The tenure of the lease agreement is generally for a period of 7 to 25
years, renewable thereafter for another equal term.
The future minimum lease payments under non-cancellable lease are
as follow:
Less than one year : USD 85,220 (2013 : USD 85,220) [2014 : (Dhs.
312,843) (Rs.5,118,313)] [2013 : (Dhs. 312,760) (Rs. 4,635,116)]
Between one and ve years : USD 340,880 (2013 : 340,880)
[2014 : (Dhs. 1,251,370) (Rs. 20,473,253)][2013 : (Dhs. 1,251,040)
(Rs. 18,540,463)]
Above ve years : USD 937,420 (2013 : 1,190,950) [2014 :
(Dhs. 3,441,269) (Rs. 56,301,445)][2013 : (Dhs. 4,058,027)
(Rs. 59,145,498)]
During the year an amount of USD 85,220 (2013 : USD 85,220) [2014 :
(Dhs. 312,843) (Rs. 5,118,313)] [2013 : (Dhs. 312,760) (Rs. 4,635,116)]
was recognised as an expense in prot or loss in respect of operating
leases.
21. FINANCIAL INSTRUMENTS
Overview
The Company has exposure to the following risks from its use of nancial
instruments:
Credit risk
Liquidity risk
Market risk
This note presents information about the Companys exposure to each
of the above risks, the Companys objectives, policies and processes for
measuring and managing risk, and the Companys management of capital.
The Companys Board of Directors have overall responsibility for the
establishment and oversight of the Companys risk management
framework. The Companys risk management policies are established to
identify and analyse the risks faced by the Company, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reect
changes in market conditions and the Companys activities.
Credit risk
Credit risk is the risk of nancial loss to the Company if counterparty to a
nancial instrument fails to meet its contractual obligations. Credit risk is
mainly attributable to cash at bank and trade and other receivables.
Trade receivables
The exposure to credit risk on trade receivables is monitored on an
ongoing basis by the management and these are considered recoverable
by the Companys management. The Companys exposure to credit risk is
inuenced mainly by the individual characteristics of each customer. The
demographics of the Companys customer base, including the default risk
of the industry and country, in which customers operate, has less of an
inuence on credit risk.
Management has established a credit policy under which each new
customer is analyzed individually for creditworthiness before the Companys
standard payment and delivery terms and conditions are offered. Purchase
limits are established for each customer, which represent the maximum
open amount.
The Company establishes an allowance for impairment that represents its
estimate of incurred losses in respect of trade receivables. The collective
loss allowance is determined taking into consideration the current
economic factors.
974
Exposure to credit risk :
The carrying amount of nancial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Trade receivables 2,349,734 2,690,020 8,623,522 141,124,935 9,872,373 161,562,601
Other receivables 24,613 24,766 89,690 1,467,706 90,891 1,487,446
Cash at banks 1,090,708 1,295,704 4,002,907 65,508,216 4,755,234 77,819,982
3,465,055 4,010,490 12,716,119 208,100,857 14,718,498 240,870,029
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Domestic 51,840 2 190,250 3,113,480 6 90
Other GCC countries 2,297,894 2,690,018 8,433,272 138,011,455 9,872,367 161,562,512
2,349,734 2,690,020 8,623,522 141,124,935 9,872,373 161,562,602
The age of trade receivables at the reporting date was:
Not past due 2,218,049 1,630,801 8,140,238 133,215,934 5,985,040 97,945,908
Past due 0-180 days 128,003 1,059,219 469,772 7,687,860 3,887,333 63,616,694
Past due more than 180 days 3,682 13,512 221,141
2,349,734 2,690,020 8,623,522 141,124,935 9,872,373 161,562,602
The allowance account in respect of trade receivables is used to record impairment losses unless the Company is satised that no recovery of the outstanding
receivable is possible; at that point such amount is considered uncollectible and hence, written off.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its nancial obligations as they fall due. Liquidity risk mainly relates to amounts due to a related
party, short term borrowings and trade and other payables. The Companys approach to managing liquidity is to ensure, as far as possible, that it will always
have sufcient liquidity to meet its liabilities when due without incurring unacceptable losses or risking damage to the Companys reputation. The Companys
objective is to maintain a balance between continuity of funding and exibility through the use of letter of credit facilities.
The following are the contractual maturities of nancial liabilities (including estimated interest payments).
Carrying amount
Short-term borrowings 1,151,984 4,227,781 69,188,159
Trade and other payables 2,371,867 3,190,164 8,704,758 142,454,247 11,707,900 191,601,220
Dues to related parties 38,989 41,409 143,090 2,341,679 151,971 2,487,025
Contractual cash ows
975
6 months or less :
More than 6 months :
Short-term borrowings
Dues to related parties
Market risk
Currency risk
Foreign exchange risk is limited since all signicant transactions are either in USD or Dhs (which is currently xed to USD).
Interest risk
The Company has placed xed deposits / margin money in form of xed deposits with banks at normal commercial rates.
Short term borrowings (Trust Receipts) carry interest at xed rate linked to USD Libor.
Preshipment credit from foreign banks have been availed at xed rate linked to USD Libor
Fair value
The fair values of the Companys nancial instruments approximate their carrying values.
Capital risk
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to the shareholders.
22. DIVIDEND
The Board of Directors has declared and paid the nal dividend for the year 2012-2013 at the rate of USD 330 (2013 : USD 330) [2014 : (Dhs. 1,211.10)
(Rs. 19,819.80)] [2013 : (Dhs. 1,211.10) (Rs. 19,819.80)] per share aggregating USD 330,000 (2013 : USD 330,000) [2014 : (Dhs.1,211,100) (Rs.19,819,800)]
[2013 :(Dhs.1,211,100) (Rs.19,819,800)] at its meeting held on 22 April 2013 which has been recognised as a distribution to its shareholders during the year
ended 31 March 2014.
The Board of Directors has declared and paid an interim dividend for the year 2013-2014 at the rate of USD 330 per share (2013 : Nil) [2014 : (Dhs. 1,211.00)
(Rs. 19,819.80)] aggregating USD 330,000 (2013 : USD Nil) [2014 : (Dhs.1,211,100) (Rs. 19,819,800)] [2013 : (Dhs. Nil ) (Rs. Nil]
The Board of Directors has declared the nal dividend for the year 2013-2014 at the rate of USD 330 (2013 : USD 330) [2014 : (Dhs. 1,211.10) (Rs. 19,819.80)] [2013
: (Dhs. 1,211.10) (Rs. 19,819.80)] per share aggregating USD 330,000 (2013 : USD 330,000) [2014 : (Dhs.1,211,100) (Rs.19,819,800)] [2013 : (Dhs.1,211,100)
(Rs.19,819,800)] at its meeting held on 24 April 2014 [2013 : 22 April 2013] which has not been recognised as a distribution to its shareholders during the year
31 March 2014 [2013 : 31 March 2013]
23. NEW STANDARDS AND INTERPRETATIONS
New standard and interpretations adopted
Effective 1 January 2013, new standard and interpretations has become effective and has been applied in preparing these nancial statements
Fair value measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. In accordance with the transitional
provisions, IFRS 13 has been applied prospectively from the effective date of 1 January 2013. The application of IFRS 13 has no signicant impact on the fair
value measurements carried out by the Company.
New standards and interpretations not yet effective
A number of new standards, amendments to standards and interpretations are effective for the annual periods beginning after 1 April 2013, and have not been
applied in preparing these nancial statements.
(i) IFRS 9 Financial instruments (2010), IFRS 9 Financial instruments (2009):
IFRS 9 (2009) introduces new requirements for the classication and measurement of nancial assets. Under IFRS 9 (2009), nancial assets are classied and
measured based on the business model in which they are held and the characteristics of their contractual cash ows. IFRS 9 (2010) introduces additions relating
to nancial liabilities. The IASB currently has an active project to make limited amendments to the classication and measurement requirements of IFRS 9 and
add new requirements to address the impairment of nancial assets and hedge accounting. IFRS 9 (2010 and 2009) are effective for annual periods beginning
on or after 1 January 2015 with early adoption permitted.
976
(ii) Amendments to IAS 36 Impairment of assets:
IAS 36 (Amendment) Impairment of Assets Recoverable Amount Disclosures for Non Financial Assets (effective for periods beginning on or after 1 January 2014).
These narrow scope amendments to IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if that
amount is based on fair value less costs of disposal.
(iii) Amendments to IAS 32 Offsetting nancial assets and nancial liabilities:
These amendments clarify the meaning of currently has a legally enforceable right to set-off. The amendments also clarify the application of the IAS 32 offsetting
criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments
are not expected to impact the Companys nancial position or performance and become effective for annual periods beginning on or after 1 January 2014.
Management has assessed the impact of the new standards, amendments to standards and interpretations and amendments to published standards, and
concluded that they are either not relevant to the Company or their impact is limited to the disclosures and presentation requirement in the nancial statements.
24. PRIOR YEAR COMPARATIVES
Prior years gures have been regrouped and rearranged wherever necessary to conrm to current years classication.
}
Directors
Harsh Kumar
K. Chandrasekar
Kazuhiro Koshikawa
Sumit Issar
MAHINDRA STEEL SERVICE CENTRE LIMITED
977
Your directors present their Twenty First Report, together with the audited accounts of your Company, for the year ended 31
st
March, 2014.
Rs. in lakhs
FINANCIAL RESULTS
Year ended 31st March,
2014 2013
Income 12,216.46 12,360.04
Prot before depreciation, interest and taxation 1,929.88 1,382.52
Less: Depreciation 770.55 749.73
Prot before interest and taxation 1,159.33 632.79
Less: Interest 440.83 415.06
Prot before tax 718.50 217.73
Less: Provision for taxation:
- Current tax 122.74 (42.96)
- Deferred tax 52.62 115.45
Prot for the year after tax 543.14 145.24
Add: Balance of prot of earlier years 2,521.05 2,375.81
Prot available for appropriation 3,064.19 2,521.05
Less: Transfer to General Reserve
Proposed dividend 90.97
Income-tax on proposed dividend 15.46
Balance carried forward 2,957.76 2,521.05
OPERATIONS
Domestic auto industry remained in de-growth mode throughout
the year resulting in subdued demand for processed steel
from the Companys auto vertical.
Domestic transformer industry continued to suffer from
sluggish demand resulting in pricing pressures. Capacity
utilisation, including job work load was, however, satisfactory.
As raw material consumed by the Companys electrical
vertical is fully imported, forex volatility impacted demand, and
margins, during the year.
During the year under review, the Company added marquee
clients for its Electrical Stampings facility, and expects to
improve capacity utilization in the coming months.
Income for the year was Rs 12,216.46 lakhs against
Rs 12,360.04 lakhs in the previous year. Prot before tax for
the year was signicantly higher at Rs 718.50 lakhs against
Rs 217.73 lakhs in the previous year.
DIVIDEND
In view of improved prots for the year, your directors recommend
a dividend of Re 0.55 per equity share on 1,65,39,759 equity
shares of Rs 10 each for the year ended 31
st
March, 2014,
payable to those shareholders whose names appear on the
Register of Members of the Company as on 31
st
July, 2014, being
the Record Date xed for the purpose. The dividend, including
tax on distributed prots, will absorb a sum of Rs 106.43 lakhs
as against no dividend paid for the previous year.
RIGHTS ISSUE OF SHARES
On 18
th
March, 2014, your Company allotted 25,86,192 equity
shares of Rs 10 each, at a premium of Rs 48 per share, on
Rights basis, to the shareholders of the Company, in the
ratio of forty three shares for every two hundred and thirty two
shares held as on 27
th
February, 2014 (Record Date). The
present issued, subscribed and paid up equity share capital
of the Company stands at Rs 16,53,97,590, divided into
1,65,39,759 equity shares of Rs 10 each.
Pursuant to sub-section 2AA of section 217 of the Companies
Act, 1956, your directors, based on a representation received
from operating management, and after due enquiry, conrm
that:
i) in the preparation of annual accounts, the applicable
ii) they have, in the selection of accounting policies,
consulted Statutory Auditors and these have been applied
consistently, and reasonable and prudent judgements
31
st
March, 2014 and of the prot of the Company for the
concern basis.
CORPORATE GOVERNANCE
Constitution of the Board
The Board of the Company presently has ve directors. Two of
the directors, Mr. Yoshihisa Miyamoto and Mr. Satoru Oki, have
978
their Alternate Directors to represent them on the Board. The
directors have wide experience in business related to steel,
nance and general corporate management.
Board Meetings
Meetings of the Board of Directors are generally held at the
Registered Ofce of the Company in Mumbai. Four Board
meetings were held during the year in which nancial results and
operations of the Company were reviewed. Senior executives of
the Company attended Board meetings as invitees.
Shareholding
Mahindra Intertrade Limited (MIL), a subsidiary of Mahindra
& Mahindra Limited (M&M), holds 61% of the paid up equity
share capital of your Company. The balance 39% is held by
Metal One Corporation, Japan. Your Company is a direct
subsidiary of MIL and an indirect subsidiary of M&M.
DIRECTORS
Mr. Naoki Setoguchi resigned as director of the Company with
effect from 5
th
August, 2013.
Mr. Toyokazu Makino was appointed as an Alternate Director
to Mr. Yoshihisa Miyamoto with effect from 5
th
August, 2013.
He ceased to be the Alternate Director with effect from
3
rd
February, 2014.
Mr. Satoru Oki was appointed as an Additional Director at
the meeting of the Board of Directors of the Company held
on 5
th
August, 2013 with effect from the said date. Mr. Oki
holds ofce up to the date of the forthcoming Annual General
Meeting of the Company. The Company has received a notice
from Mahindra Intertrade Limited, a member of the Company,
signifying their intention to propose the candidature of Mr. Oki
for the ofce of Director of the Company at the forthcoming
By circular resolutions dated 16
th
April, 2014, Mr. Toyokazu
Makino and Mr. Nobuaki Takashi were appointed as Alternate
Directors to Mr. Yoshihisa Miyamoto and Mr. Satoru Oki,
respectively, with effect from the said date.
Mr. Yoshihisa Miyamoto will retire by rotation at the forthcoming
Annual General Meeting, and being eligible, has offered
Your Board places on record its sincere appreciation of the
services rendered by Mr. Naoki Setoguchi during his tenure as
director of the Company.
AUDIT COMMITTEE
The terms of reference of the Audit Committee were revised
on 16
th
April, 2014 in accordance with section 177 of the
Companies Act, 2013 read with the Companies (Meetings of
Board and its Powers) Rules, 2014.
The Audit Committee of the Board presently comprises of the
following directors of the Company: -
Mr. Rajeev Dubey,
Mr. Zhooben Bhiwandiwala, and
Mr. Satoru Oki (or his Alternate Director, if any).
Mr. Rajeev Dubey is the Chairman of the Committee. Two
meetings of the Committee were held during the year.
In accordance with the provisions of section 178 of the
Companies Act, 2013 read with the Companies (Meetings of
Board and its Powers) Rules, 2014, the nomenclature of the
Remuneration Committee was changed to Nomination and
Remuneration Committee and the terms of reference of the
Committee were revised on 16
th
April, 2014.
presently comprises of the following directors of the Company:-
Mr. Rajeev Dubey, and
Mr. Zhooben Bhiwandiwala.
Mr. Rajeev Dubey is the Chairman of the Committee. One
meeting of the Committee was held during the year.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In view of the applicability of the provisions of section 135 of
the Companies Act, 2013 read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014, a Corporate Social
Responsibility Committee (CSR Committee) of the Board of
the Company was constituted on 23
rd
April, 2014.
The CSR Committee comprises of Mr. Rajeev Dubey as its
Chairman, and Mr. Zhooben Bhiwandiwala and Mr. Harsh
Kumar as its members.
KEY MANAGERIAL PERSONNEL
Presently, Mr. Harsh Kumar is the Managing Director and
Mr. Bakul Sheth is the Company Secretary of the Company.
In compliance with the provisions of section 203 of the
Companies Act, 2013 read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014,
Mr. Jitendra Rahate was appointed as the Chief Financial
Ofcer (CFO) of the Company with effect from 23
rd
April, 2014.
Under the provisions of the Companies Act, 2013, Mr. Harsh
Kumar, Mr. Bakul Sheth and Mr. Jitendra Rahate are the Key
Managerial Personnel of the Company.
Your Company has not accepted any deposits from the public,
or its employees, during the year under review.
Company pursuant to Clause 32 of the Listing Agreements
between the parent company, Mahindra & Mahindra Limited
and stock exchanges.
HUMAN RESOURCES
Happy and enthused employees is one of the strategic goals of
your Company and this is reected in its employee engagement
interventions. Your Company continues to invest in capability
building of its people and creating a future-ready talent pool.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Your Company has undertaken a number of initiatives in the
areas of education, health and environment for the welfare of
the community.
At Bhopal, an eye check-up camp was organised for local
villagers, and benches were provided to the local Government
school in an endeavour to improve its classroom infrastructure.
979
At Kanhe, paver blocks were laid in the local Zilla Parishad
school, and play infrastructure was provided for a Childrens
play park.
The Company part funded the construction of a water tank in
one of the tribal villages near Kanhe to provide safe drinking
water to its residents.
AWARDS
Your Company has been the recipient of the following awards
during the year:-
(i) Best Leadership Development Program for Workers at the
Global Training & Development Leadership Awards.
(ii) Award for promoting health at the workplace at the 22
nd

Global HR Excellence Awards.
(iii) First place at the 6
th
National CII Cluster Summit on energy
efciency.
CODES OF CONDUCT
Your Company has adopted Codes of Conduct for Corporate
Governance (the Codes) for its directors, and senior
management and employees of the Company. These Codes
declarations from its Board members, and from senior
management and employees, afrming their compliance with
the respective Codes.
CURRENT YEAR
Your Company expects to sustain its performance in its
automotive vertical, and improve capacity utilisation of its
electrical and home appliance verticals during the current year.
AUDITORS
Mumbai (Registration No.117365W), retire as auditors of the
Company at the conclusion of the forthcoming Annual General
Meeting and have given their consent for re-appointment.
Members of the Company will be required to appoint Auditors
to hold ofce from the conclusion of the forthcoming Annual
General Meeting until the conclusion of the Annual General
Meeting thereafter, and to x their remuneration.
As required under the provisions of sections 139 and 141
written certicate from the auditors to the effect that their re-
appointment, if made, would be in conformity with the limits
specied in section 139 and that they satisfy the criteria
mentioned in section 141 of the Companies Act, 2013.
COST AUDITORS
M/s. Shilpa & Co., Cost Accountants, Nashik (Firm Registration
No. 100558), were appointed as Cost Auditors by the Board
of Directors of your Company on 23
rd
April, 2013 to audit the
cost accounts of the Company for the nancial year ending
31
st
March, 2014. The appointment was approved by the
Central Government on 6
th
June, 2013.
The Board of Directors has, upon the recommendation of the
Audit Committee and subject to the approval of the Central
Government, re-appointed M/s. Shilpa & Co. as Cost Auditors
on 23
rd
April, 2014 to audit the cost accounts of the Company
for the nancial year ending 31
st
March, 2015.
As required under the provisions of sections 139, 141 and
148 of the Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules, 2014, the Company has obtained
a written conrmation from M/s. Shilpa & Co. to the effect that
they are eligible for appointment as Cost Auditors and that
they are an independent rm of Cost Accountants and have
an arms length relationship with your Company.
Being QEHS compliant, your Company pays attention to the
health and safety of its employees besides being sensitive to
damage to the environment caused by its operations. Continued
focus on safety awareness and training has ensured zero major
(reportable) accidents during the year under review. Your
Company bagged the runners up prize as the Most sustained
safety performer at the group level safety competition.
Use of wooden pallets is being reduced in a phased manner for
dispatch of nished goods to customers in order to conserve
natural resources.
CONSERVATION OF ENERGY
Metal halide lamps were replaced with induction lamps which
has resulted in considerable saving in energy consumption.
The Electrical Stampings facility installed gas recuperators in
its stress relieving equipment to recycle waste heat which has
resulted in signicant saving in LPG consumption.
TECHNOLOGY ABSORPTION
Research & Development (R&D):
Areas in which R&D is carried out: Nil.
Benets derived as a result of the above efforts: Nil.
Future plan of action: Nil.
Expenditure on R&D: Nil.
Technology absorption, adaptation and innovation: Nil.
Technology imported during the last 5 years: Nil.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on foreign exchange earnings and outgo is
furnished below: -
Rs. in lakhs
Year ended 31
st
March,
2014 2013
Foreign exchange earned 3.99 45.57
Foreign exchange outgo 5,326.16 4,814.15
Your Company had no employee who was employed
throughout the nancial year ended 31
st
March, 2014 and was
in receipt of remuneration of not less than Rs 60,00,000 during
the said year, or was employed for a part of the nancial year
and was in receipt of remuneration of not less than Rs 5,00,000
per month during any part of the said year.
For and on behalf of the Board of Directors of
Mahindra Steel Service Centre Limited
ZHOOBEN BHIWANDIWALA
CHAIRMAN
Mumbai, 23
rd
April, 2014.
980
TO THE MEMBERS OF
of MAHINDRA STEEL SERVICE CENTRE LIMITED (the
st
Flow Statement for the year then ended, and a summary of
the signicant accounting policies and other explanatory
information.
dated 13
th
misstatement.
opinion.
Opinion
st
March, 2014;
and
5 of the Order.
th
st
st
of the Act.
(U. M. Neogi)
(Partner)
MUMBAI, 23
rd
April, 2014
981
even date)
activities/results during the year, clauses (vi), (x), (xii),
(xiii), (xiv), (xv), (xviii), (xix) and (xx) of paragraph 4 of the
Order are not applicable to the Company.
assets to cover all the items in a phased manner
over a period of three years which, in our opinion, is
and the nature of its assets. Pursuant to the program,
certain xed assets were physically veried by the
Management during the year. According to the
information and explanations given to us no material
of the Company.
verication.
register maintained under Section 301 of the Companies
Act, 1956.
(v) In our opinion and according to the information
and explanations given to us, having regard to the
explanations that some of the items are of special nature
for which alternative sources are not readily available for
obtaining comparable quotations, there is an adequate
control system.
there are no such contract or arrangements, paragraph
4(v)(b) of the Order is not applicable.
of its business.
Accounting Records) Rules, 2011 prescribed by the Central
Government under Section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that the prescribed cost
records have been maintained. We have, however, not
made a detailed examination of the cost records with a
State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and
Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other material statutory dues in
arrears as at 31
st
(c) According to the records of the Company, there
are no dues of Income-tax, Sales Tax, Service Tax,
Custom Duty, Wealth Tax, Excise Duty and Cess
which have not been deposited as on 31
st
March,
2014 on account of disputes.
in repayment of dues to banks.
982
explanations given to us, the term loans were applied by
the Company for the purpose for which the loans were
obtained.
term basis have, prima facie, not been used during the
year for long-term investment.
(U. M. Neogi)
Partner
MUMBAI, 23
rd
April, 2014
983
Particulars Notes As at
31 March, 2014
Rs. in Lakhs
As at
31 March, 2013
Rs. in Lakhs
1. Shareholders funds
(a) Share capital ............................................................................................ 3 1,653.98 1,395.36
(b) Reserves and surplus .............................................................................. 4 7,153.35 5,475.26
8,807.33 6,870.62
(a) Long-term borrowings.............................................................................. 5 2,411.51 3,048.11
(b) Deferred tax liabilities (Net) ..................................................................... 36 933.49 880.85
(c) Long-term provisions ............................................................................... 6 61.77 51.71
3,406.77 3,980.67
(a) Short-term borrowings ............................................................................. 7 1,526.15
(b) Trade payables ......................................................................................... 8 4,121.34 5,002.65
(c) Other current liabilities ............................................................................. 9 2,411.65 2,459.80
(d) Short-term provisions ............................................................................... 10 129.62 43.33
6,662.61 9,031.93
18,876.71 19,883.22
B. ASSETS
(a) Fixed assets
(i) Tangible assets .................................................................................. 11 9,792.19 10,328.59
(b) Long-term loans and advances ............................................................... 12 142.14 198.94
9,934.33 10,527.53
2. Current assets
(a) Inventories ................................................................................................ 13 2,780.62 3,211.42
(b) Trade receivables ..................................................................................... 14 2,949.42 2,821.91
(c) Cash and cash equivalents ..................................................................... 15 769.27 544.44
(d) Short-term loans and advances .............................................................. 16A 2,442.65 2,768.07
(e) Other Current Assets .............................................................................. 16B 0.42 9.85
8,942.38 9,355.69
18,876.71 19,883.22
ST
MARCH, 2014
U. M. Neogi
Partner
Bakul Sheth
Company Secretary Zhooben Bhiwandiwala Chairman
Rajeev Dubey Director
Jitendra Rahate Nobuaki Takashi
}
Alternate Directors
Chief Financial Ofcer Toyokazu Makino
Place: Mumbai
Place: Mumbai
984
Particulars Notes For the year ended
31 March, 2014
Rs. in Lakhs
For the year ended
31 March, 2013
Rs. in Lakhs
Income
1 Revenue from operations (gross) ............................................... 17 13,306.30 13,467.53
Less: Excise duty ........................................................................ (1,134.21) (1,128.57)
Revenue from operations (net) ................................................... 12,172.09 12,338.96
2 Other Income ............................................................................... 18 44.37 21.08
3 Total Revenue (1+2) ................................................................. 12,216.46 12,360.04
4 Expenses
(a) Cost of materials consumed ............................................... 19 (a) 8,366.13 9,003.87
(b) Changes in Inventories of nished goods and
work-in-progress .....................................................................
19 (b) 169.33 (214.60)
(c) Employee benets expense ................................................ 20 630.21 714.02
(d) Finance cost ......................................................................... 21 465.02 461.10
(e) Depreciation and amortisation expense ............................. 11 770.55 749.73
(f) Other expenses .................................................................... 22 1,096.72 1,428.19
Total expenses ........................................................................... 11,497.96 12,142.31
5 Prot before tax (3-4) ................................................................ 718.50 217.73
6 Tax expense
- Current tax: Minimum Alternate Tax (MAT) ............................. 154.54 43.59
- Less MAT credit entitlement ..................................................... (31.80) (86.55)
- Deferred tax .............................................................................. 36 52.62 115.45
7 Prot for the year (5-6) ............................................................. 543.14 145.24
8 Earnings per equity share (of Rs. 10 each): 35
(a) Basic/Diluted ........................................................................ 3.87 1.04
ST
MARCH, 2014
U. M. Neogi
Partner
Bakul Sheth
Jitendra Rahate Nobuaki Takashi
}
Alternate Directors
Place: Mumbai
Place: Mumbai
985
ST
MARCH, 2014
31 March, 2014
Rs. in Lakhs
For the year ended
31 March, 2013
Rs. in Lakhs
Net Prot before tax .......................................................................................................................... 718.50 217.73
Adjustments for:
Depreciation and amortisation expense ........................................................................................... 770.55 749.73
Sundry advances written off ............................................................................................................. 24.57
Interest expense ................................................................................................................................ 440.83 415.06
Interest income .................................................................................................................................. (21.36) (15.36)
Dividend income................................................................................................................................ (0.10) (3.66)
Bad debts and Advances written off ................................................................................................ 0.69 0.07
Liabilities no longer required written back ....................................................................................... (22.76) (1.14)
Prot on xed assets sold................................................................................................................. (0.15)
1,192.27 1,144.70
Operating prot before working capital changes ............................................................................ 1,910.77 1,362.43
Adjustments for (increase)/decrease in operating assets/liabilities:
Inventories ......................................................................................................................................... 430.80 (1,002.94)
Trade and other receivables ............................................................................................................. 228.15 (58.25)
Trade payables and other liabilities .................................................................................................. (868.71) 922.23
(209.76) (138.96)
Cash generated from operations ...................................................................................................... 1,701.01 1,223.47
Net income tax paid .......................................................................................................................... (147.70) (151.27)
Net cash ow from operating activities (A) ................................................................................. 1,553.31 1,072.20
Capital expenditure on xed assets, including capital advances # ............................................... (246.92) (148.44)
Proceeds from sale of xed assets .................................................................................................. 3.64
Current investments not considered as Cash and cash equivalents
- Purchase of investment ................................................................................................................ (290.00) (3,040.00)
- Sale of investment......................................................................................................................... 290.00 3,040.00
Interest received ................................................................................................................................ 30.79 5.51
Dividend received .............................................................................................................................. 0.10 3.66
Bank balance not considered as Cash and cash equivalents ...................................................... 239.37 (228.78)
Net cash ow from/(used in) investing activities (B) ................................................................. 26.98 (368.05)
Proceeds from issue of equity shares .............................................................................................. 1,500.00
Proceeds from long-term borrowings .............................................................................................. 1,855.00 1,512.76
Repayment of long-term borrowings ................................................................................................ (2,467.52) (2,197.55)
Proceeds from other short-term borrowings .................................................................................... 6,906.49
Repayment of other short-term borrowings ..................................................................................... (1,526.15) (6,515.34)
Interest Paid # ................................................................................................................................... (477.42) (382.93)
Net cash ow used in nancing activities (C) ............................................................................ (1,116.09) (676.57)
Net increase in Cash and cash equivalents (A+B+C) .............................................................. 464.20 27.58
# interest paid is exclusive of borrowing cost paid and purchase of Fixed Assets
is inclusive of borrowing cost paid and capitalised Rs. Nil (2013: Rs. 15.99 Lakhs)
Cash and cash equivalents at the beginning of the year ............................................................... 305.07 277.49
Cash and cash equivalents at the end of the year ......................................................................... 769.27 305.07
Cash and cash equivalents as per Balance Sheet (Refer Note 15) ............................................... 769.27 544.44
Less: Bank balance not considered as Cash and cash equivalents as dened
in AS 3 Cash Flow Statements:
(i) in earmarked accounts
-held as security against borrowings ............................................................................................... 239.37
Cash and cash equivalent at the end of the year ...................................................................... 769.27 305.07
U. M. Neogi
Partner
Bakul Sheth
Jitendra Rahate
Nobuaki Takashi
}
Alternate Directors
Place: Mumbai
Place: Mumbai
986
1. Corporate information:
Mahindra Steel Service Centre Limited is a public limited company
incorporated on 15 January, 1993 under the Companies Act, 1956. The
Companys main activity is steel processing from the plants located at Kanhe
and Bhopal. The Company processes automotive and electrical steel.
2. Signicant Accounting Policies followed by the Company:
2.1 Basis of accounting and preparation of nancial statements:
year. The Management believes that the estimates used in preparation
of the nancial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates, are recognized in the periods in which
the results are known/materialize.
2.3 Inventories:
Inventories are stated at cost and net realizable value, whichever is
lower. Cost is arrived at on a weighted average method and includes,
where appropriate, manufacturing overheads and excise duty.
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignicant risk of changes in value.
investing and nancing activities of the Company are segregated based
on the available information.
2.6 Fixed Assets:
expenses. Borrowing costs that are attributable to the acquisition,
construction or production of a qualifying asset are included in the
cost of asset upto the date the asset is ready for its intended use.
(b) (i) Leasehold land is amortized over the period of the lease.
(ii) Depreciation on other xed assets is calculated on Straight
Line Method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
2.7 Revenue Recognition:
Sale of products are recognized, when the signicant risks and rewards
of ownership are transferred to the Buyer.
Sale of services are recognised when services are rendered.
2.8 Other Income
accounted for when the right to receive it is established.
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction. All foreign currency monetary items
outstanding at the year end (excluding long term liability) are translated
at the relevant rates of exchange prevailing at the year end and the
resulting exchange differences are recognized in the Statement of Prot
and Loss. In respect of forward exchange contracts, the premium or
discount arising at the inception of such a contract is amortized as
expense or income over the life of the contract.
Exchange differences relating to long term foreign currency monetary
items, to the extent they are used for nancing the acquisition of xed
assets are added to or subtracted from the cost of such xed assets.
2.10 Investments:
Long term Investments are valued at cost less provision, if any, for
decline other than temporary, in value of such investments. Current
investments are valued at the lower of cost and fair value determined
by category of investment.
i) Dened Contribution Plan:
Companys contributions paid/payable during the year to the
provident fund, superannuation fund, Employee State Insurance
Scheme and labour welfare fund are recognized in the Statement
of Prot and Loss based on the amount of contribution required to
be made and when services are rendered by the employees.
ii) Dened Benet Plan/Long Term Compensated Absences:
Companys liability towards gratuity, compensated absence and
post retirement medical benet schemes are determined by
independent actuaries using the projected unit credit method at
each balance sheet date. Past service cost are recognized on a
straight-line basis over the average period until the benets become
vested. Actuarial gains and losses are recognized immediately in
the statement of Prot and Loss as income or expense. Obligation
is measured at the present value of estimated future cash ows
using a discounted rate that is determined by reference to market
yields at the Balance Sheet date on Government Bonds where the
currency and terms of the Government Bonds are consistent with
the currency and estimated terms of the dened benet obligation.
2.12 Borrowing Costs:
Borrowing costs, allocated to and utilised for qualifying assets, pertaining
to the period from commencement of activities relating to construction/
development of the qualifying asset upto the date of capitalisation of
such asset is added to the cost of the assets.
2.13 Taxes on Income:
Tax expense comprises current and deferred tax. Current Tax is
determined as either (i) the amount of tax payable in respect of taxable
income after considering usual allowances and disallowances under the
Income-tax Act, 1961 or (ii) Minimum Alternate Tax for the year. Credit
in respect of Minimum Alternate Tax paid is recognised only if there is
convincing evidence of realisation of the same. Deferred tax reects the
impact of current year timing differences between taxable income and
accounting income and reversal of timing differences of the earlier years.
are recognised for timing differences of items other than unabosrbed
depreciation and carry forward losses only to the extent that reasonable
certainty exists that sufcient future taxable income will be available
against which these can be realised. However, if there are unabsorbed
depreciation and carry forward of losses, deferred tax assets are
future taxable income available to realise the assets. Deferred tax
assets and liabilities are offset if such items relate to taxes on income
levied by the same governing tax laws and the Company has a legally
enforceable right for such set off. Deferred tax assets are reviewed at
each balance sheet date for their realisability.
987
Particulars As at 31 March, 2014 As at 31 March, 2013
Number of
Shares
Rs. in
Lakhs
Number of
Shares
Rs. in
Lakhs
(a) Authorised
Equity shares of Rs. 10 each ...... 17,000,000 1,700.00 15,000,000 1,500.00
17,000,000 1,700.00 15,000,000 1,500.00
(b) Issued, Subscribed and fully paid up
Equity shares of Rs. 10 each ...... 16,539,759 1,653.98 13,953,567 1,395.36
16,539,759 1,653.98 13,953,567 1,395.36
beginning and at the end of the reporting period
Particulars Opening
Balance
Fresh
issue
Buy
back
Closing
Balance
Number of shares ....................... 13,953,567 2,586,192 16,539,759
Amount (in Lakhs) ...................... 1,395.36 258.62 1,653.98
Number of shares ....................... 13,953,567 13,953,567
Amount (in Lakhs) ...................... 1,395.36 1,395.36
(ii) The Company has not allotted any equity shares for consideration other
than cash, bonus shares, nor have any shares been bought back during the
period of ve years immediately preceding the Balance Sheet date.
Terms/rights attached to equity shares
The Company has only one class of equity share having a par value of
Rs. 10/- per share. Each shareholder has the following voting rights (i) On
a show of hands: one vote for a member present in person and (ii) On a
poll: one vote for each equity share registered in the name of the member.
The dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing annual general meeting, except in case
of interim dividend. In the event of winding up, the liquidator may, with the
sanction of a special resolution of the Company and any other sanction
required by the Act, divide amongst the members, in specie or kind, the
whole or any part of the assets of the company, whether they shall consist
of property of the same kind or not.
(iii) Details of shares held by the holding company
Particulars As at
31 March,
2014
As at
31 March,
2013
Mahindra Intertrade Limited, the holding
Company (including 7 equity shares held
jointly with its nominees) ........................ 10,089,257 8,511,673
(iv) Details of shares held by each shareholder holding more than 5% shares
Particulars As at
31 March, 2014
As at
31 March, 2013
Number
of shares
% of
holding
Number
of shares
% of
holding
Mahindra Intertrade
Limited (including 7 equity
shares held jointly with its
nominees) ............................ 10,089,257 61% 8,511,673 61%
Metal One Corporation. ....... 6,450,502 39% 5,441,894 39%
Particulars
As at
31 March,
2014
As at
31 March,
2013
Rs. in Lakhs Rs. in Lakhs
(a) Capital Reserve 20.00 20.00
(b) Securities Premium Account
Add: Premium on shares issued during the year 1,241.38
(c) General Reserve 164.44 164.44
(d) Surplus in the statement of prot and loss
Add: Prot for the year ........................... 543.14 145.24
Less: Transferred to:
Proposed dividend 90.97
Tax on dividend 15.46
Closing balance ...................................... 2,957.76 2,521.05
7,153.35 5,475.26
Note 5 Long-term borrowings
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Term loan from Banks [Refer note (i)]
Secured ................................................... 2,975.60 1,797.20
Less: Current maturities of long term
debt (refer note 9) (1,074.60) (599.60)
1,901.00 1,197.60
(b) Deferred payment liabilities
[Refer note (ii)]
Unsecured ............................................... 156.97 179.44
debt (refer note 9) (6.41)
150.56 179.44
(c) Other loans and advances
(i) Foreign currency loans from
Banks [Refer note (iii)]
Secured ............................................. 1,168.65 2,957.18
debt (refer note 9) (1,168.65) (1,646.86)
1,310.32
(ii) Interest free sales tax loan from
SICOM [Refer note (iv)]
Unsecured ........................................ 360.75 360.75
debt (refer note 9) (0.80)
359.95 360.75
2,411.51 3,048.11
(i) (a) The Company has a term loan of Rs. 678 Lakhs (2013: Rs. 400 Lakhs)
under sanction extended by Axis Bank [interest payable at the rate of
11.00% p.a. (FY 2013: 12.25% p.a.) [payable monthly] linked to the base
rate] which is secured by rst pari passu charge on the movable xed
assets of the Company situated at Kanhe plant, Maharashtra and second
charge over the present and future current assets of the Company. The
repayment details are as follows:
Repayment Details Amount
to be repaid
Rs. in Lakhs
Repayment
Year
4 quarterly installments of Rs. 150.00
Lakhs each from 30 June 2014 ....... 600.00 FY 2014-15
One installment of Rs. 78 Lakhs 78.00 FY 2015-16
988
(b) The Company has a term loan of Rs. 1,197.60 Lakhs (2013: Rs. 1,397.20
Lakhs) under sanction extended by YES Bank [interest payable at the rate
of 11.75% p.a. (payable monthly) linked to the base rate], secured by rst
pari passu charge on movable xed assets situated at Bhopal and Kanhe
plant with a minimum cover of 1.25x and negative lien on the immovable
xed assets of Bhopal plant. The repayment details are as follows:
to be repaid
Rs. in Lakhs
Repayment
Year
Lakhs each from 8 April 2014 .......... 199.60 FY 2014-15
Lakhs each ........................................ 399.20 FY 2015-16
Lakhs each ........................................ 399.20 FY 2016-17
Lakhs each ........................................ 199.60 FY 2017-18
(c) The Company has a term loan of Rs. 1,100 Lakhs (2013: Rs. Nil) under
sanction extended by HDFC Bank [interest payable at the rate of 11.50%
p.a.(payable monthly) linked to the base rate], secured by rst pari passu
charge on movable xed assets situated at Kanhe plant. The repayment
details are as follows:
to be repaid
Rs. in Lakhs
Repayment
Year
Lakhs each from 12 May 2014 ........ 275.00 FY 2014-15
Lakhs each ........................................ 275.00 FY 2015-16
Lakhs each ........................................ 275.00 FY 2016-17
Lakhs each ........................................ 275.00 FY 2017-18
(ii) The Company has received a Certicate of Entitlement from the Deputy
Commissioner of Sales Tax, Maharashtra State, in terms of the Package
Scheme of Incentives, 1993 of the Government of Maharashtra, consequent
to which the Company has deferred the sales tax liability with effect from
1 May, 2002 which will be payable with effect from 30 April, 2015. The Sales
Tax liability so deferred is Rs. 156.97 Lakhs as at 31 March, 2014 (2013:
Rs. 179.44 Lakhs).
Repayment Details of Sales Tax
VAT liability
Amount
to be repaid
Rs. in Lakhs
Repayment
Year
VAT liability of FY 2002-2003 to FY
2003-2004 ........................................... 6.41 30 April, 2014
2004-2005 ........................................... 25.34 30 April, 2015
2005-2006 ........................................... 31.87 30 April, 2016
2005-2006 ........................................... 31.87 30 April, 2017
2005-2006 ........................................... 29.47 30 April, 2018
2005-2006 ........................................... 25.46 30 April, 2019
VAT liability of FY 2005-2006 ............. 6.55 30 April, 2020
(iii) (a) The Company has taken buyers credit of Rs. 1,168.65 Lakhs (2013:
Rs. 1,858.29 Lakhs) under sanction of LUT extended by AXIS Bank
(Interest payable on buyers credit is linked to USD LIBOR), secured
by rst pari passu charge on the movable xed assets of the Company
situated at Kanhe plant, Maharashtra and second charge over present
and future current assets of the Company.
Date of Repayment Amount (Rs. in Lakhs)
As at
31 March,
2014
09 May, 2014 ........................................................ 532.90
25 April, 2014 ....................................................... 57.91
12 May, 2014 ........................................................ 197.79
31 October, 2014 ................................................... 380.05
(b) The company has taken buyers credit of Rs. Nil (2013: Rs. 1,098.89
Lakhs) under sanction of LUT extended by YES Bank (Interest payable on
buyers credit is linked to USD LIBOR), secured by exclusive charge on
movable xed asset at Bhopal plant with a minimum cover of 1.25x and
negative lien on the immovable xed assets situated at the Bhopal plant.
(iv) Interest Free SICOM Loan of Rs. 360.75 Lakhs (FY 2013: 360.75 Lakhs) is
repayable with effect from 25 February, 2015. The repayment details as at 31
March, 2014:
Loan
taken on
Amount
Rs. in Lakhs
Loan
taken on
Amount
Rs. in Lakhs
Loan
taken on
Amount
Rs. in Lakhs
25-Feb-05 4.00 8-Sep-05 114.75 24-July-06 242.00
Repayment Details Repayment Details Repayment Details
25-Feb-15 0.80 25-Sep-15 22.95 25-July-16 48.40
25-Feb-16 0.80 25-Sep-16 22.95 25-July-17 48.40
25-Feb-17 0.80 25-Sep-17 22.95 25-July-18 48.40
25-Feb-18 0.80 25-Sep-18 22.95 25-July-19 48.40
25-Feb-19 0.80 25-Sep-19 22.95 25-July-20 48.40
Note 6 Long-term provisions
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Provision for employee benets
(i) Provision for compensated
absences.............................................. 52.32 48.47
benet (Refer note 31) ........................ 0.75 2.05
(iii) Provision for Stock Appreciation
Rights ................................................... 8.70 1.19
61.77 51.71
Note 7 Short-term borrowings
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Loans and advances from related party
[refer note (i)]Unsecured. .......................... 220.00
(b) Other loans and advances [refer note (ii)]
Secured ...................................................... 1,306.15
1,526.15
(i) Loan and advances from related party represent Inter Corporate Deposits
from Mahindra Intertrade Limited, the holding Company.
Particulars As at
31 March,
2014
As at
31 March,
2013
Mahindra Intertrade Limited ...................... 220.00
(ii) The Company has taken working capital buyers credit of Rs. Nil (2013:
Rs. 1,306.15 Lakhs) under sanction of LUT extended by Axis Bank (secured
by rst hypothecation charge on the current assets of the Company situated
at Bhopal plant and rst pari passu charge on current assets of Kanhe
plant and second hypothecation pari passu charge over the movable xed
assets of the Company situated at Kanhe plant) and HDFC Bank (secured
by rst pari passu charge on stock and book debts of the Company).
Interest payable on buyers credit is linked to USD LIBOR in both Axis Bank
and HDFC Bank.
989
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Trade Payables
Acceptances ........................................... 1,128.95 1,979.82
Other than Acceptance Micro and
small enterprises (refer note 24) ............ 7.54
Other than Acceptance Other than
micro and small enterprises ................... 2,992.39 3,015.29
4,121.34 5,002.65
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Current maturities of long-term debt
[Refer note 5] .......................................... 2,250.46 2,246.46
(b) Interest accrued but not due on
borrowings. ............................................. 35.23 71.82
(c) Other payables
(i) Statutory remittances (contribution to
Provident Fund and Employee State
Insurance Scheme, withholding taxes,
excise duty, service tax, etc.) .......... 25.48 55.62
Particulars As at
31 March,
2014
As at
31 March,
2013
(ii) Value Added Tax payable ................ 26.49 9.23
(iii) Payables on purchase of xed
assets ................................................ 7.10 16.38
(iv) Advance from customers ................. 47.74 37.97
(v) Dealer deposit .................................. 8.77 17.27
(vi) Other current liabilities ..................... 10.38 5.05
2,411.65 2,459.80
Particulars As at
31 March,
2014
As at
31 March,
2013
(a) Employee benets
(i) Provision for compensated absences 10.63 8.01
(b) Provision - Others
Provision for income tax (net of
payments) 5.46 31.55
Provision for fringe benet tax (net of
payments) 0.16
Provision for proposed equity dividend 90.97
Provision for tax on proposed dividend 15.46
Provision for Stock Appreciation Rights 7.10 3.61
129.62 43.33
Note 11 Fixed Assets
Tangible Assets
Gross Block Depreciation and amortisation expense Net Block
Balance as
at 1 April,
2013
Additions Disposals Balance as
at 31 March,
2014
Balance as
at 1 April,
2013
For the year Disposals /
Adjustments
Balance as
at 31 March,
2014
Balance as
at 31 March,
2014
Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs
Land Leasehold .......................... 69.46 69.46 12.23 2.20 14.43 55.03
(69.36) (0.10) () (69.46) (10.03) (2.20) () (12.23) (57.23)
Buildings ........................................ 2,915.49 2,915.49 472.28 96.36 568.64 2,346.85
(2,894.25) (21.24) () (2,915.49) (376.32) (95.96) () (472.28) (2,443.21)
Plant and Equipment ** ................. 11,019.43 224.82 11,244.25 3,329.56 647.59 3,977.15 7,267.10
(10,596.53) (422.90) () (11,019.43) (2,702.98) (626.58) () (3,329.56) (7,689.87)
Furniture and Fixtures ..................... 56.11 3.05 59.16 17.08 3.23 20.31 38.85
(54.08) (2.03) () (56.11) (14.02) (3.06) () (17.08) (39.03)
Vehicles ......................................... 49.18 7.91 41.27 28.44 8.67 4.42 32.69 8.58
(48.73) (0.45) () (49.18) (18.64) (9.80) () (28.44) (20.74)
Ofce Equipment ........................... 46.95 6.75 53.70 7.60 2.42 10.02 43.68
(46.95) () () (46.95) (5.37) (2.23) () (7.60) (39.35)
Computers ..................................... 70.67 3.02 2.59 71.10 31.51 10.08 2.59 39.00 32.10
(65.42) (5.25) () (70.67) (21.61) (9.90) () (31.51) (39.16)
Total............................................... 14,227.29 237.64 10.50 14,454.43 3,898.70 770.55 7.01 4,662.24 9,792.19
Previous year ................................. (13,775.32) (451.97) () (14,227.29) (3,148.97) (749.73) () (3,898.70) (10,328.59)
** The Company has opted for accounting exchange differences arising on reporting of long term foreign currency monetary items in so far as they relate to the acquisition of a depreciable
capital asset in line with the Companies (Accounting Standards) Amendment Rules, 2009 on Accounting Standard 11 (AS 11) notied by the Government of India on 31 March, 2009.
Accordingly, foreign exchange revaluation loss amounting to Rs. 135.16 lakhs (net) [for the year 2013: Rs. 174.96 lakhs (net)] has been included under additions during the year.
Note: gures in brackets are in respect of the previous year
Note 12 Long-term loans and advances
Particulars
As at
31 March,
2014
As at
31 March,
2013
(a) Unsecured, Considered Good
Security deposits ................................................................................................................................................................................. 23.10 22.17
(b) Other loans and advances
Advance income tax (Net of provisions) ............................................................................................................................................ 113.61 171.10
(c) Payment towards fringe benet tax (Net of provisions) ..................................................................................................................... 0.18
(d) Surplus of plan assets over obligation gratuity (Refer note 31)..................................................................................................... 5.43 5.49
142.14 198.94
990
Note 13 Inventories
(at lower of cost and net realisable value)
Particulars
As at
31 March,
2014
As at
31 March,
2013
(a) Raw materials [refer note 19(a)] .............. 1,827.29 1,098.98
Goods in transit ........................................ 994.88
1,827.29 2,093.86
(b) Work in progress ...................................... 544.26 366.84
(c) Finished goods [refer note 19(b)] ........... 347.57 694.32
(d) Stores and spares .................................... 61.50 56.40
2,780.62 3,211.42
Particulars
As at
31 March,
2014
As at
31 March,
2013
(a) Trade receivables outstanding for a
period exceeding six months from the
date they are due for payment ..............
Unsecured, considered good ................ 13.88 21.42
(b) Other Trade receivables
Unsecured, considered good ................ 2,935.54 2,800.49
2,949.42 2,821.91
Particulars
As at
31 March,
2014
As at
31 March,
2013
(a) Cash on hand ......................................... 0.27 0.30
(i) In current accounts .......................... 94.00 304.77
(ii) In Fixed Deposit Receipts ................ 675.00
(iii) In earmarked account balance held
as margin money .............................
239.37
769.27 544.44
Of the above, the balances that
meet the denition of cash and cash
equivalents as per AS 3 Cash Flow
Statements is .................................... 769.27 305.07
Note 16A Short-term loans and advances
Particulars
As at
31 March,
2014
As at
31 March,
2013
Other loans and advances
Unsecured, considered good ................
(a) Advances to suppliers ............................ 23.05 158.11
(b) Custom deposits ..................................... 42.01 36.81
(c) Advance to employees ........................... 10.30 8.37
(d) Prepaid expenses ................................... 14.21 19.28
(e) Minimum Alternate Tax (MAT) credit
entitlement ............................................... 320.66 288.86
(f) Balances with government authorities ...
(i) CENVAT credit receivable ................ 1,513.19 1,915.72
(ii) Value Added Tax credit receivable .. 185.85 72.71
(iii) Service Tax credit receivable ........... 174.12 129.60
(iv) Entry Tax receivable ......................... 159.26 138.61
2,442.65 2,768.07
Note 16B Other Current Assets
Particulars
As at
31 March,
2014
As at
31 March,
2013
Unsecured, considered good .............
Interest Receivable .............................. 0.42 9.85
0.42 9.85
Note 17 Revenue from Operations
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Revenue from
(a) Sale of products [Refer Note (i) below] ... 10,860.15 10,613.71
(b) Sale of services [Refer Note (ii) below] .... 1,919.41 2,483.77
(c) Other operating revenues [Refer Note (iii)
below] ........................................................ 526.74 370.05
13,306.30 13,467.53
Less: Excise duty ....................................... 1,134.21 1,128.57
12,172.09 12,338.96
Notes:
Manufactured goods ...........................
Steel products ...................................... 10,860.15 10,613.71
Steel processing .................................. 1,919.41 2,483.77
Scrap sales .................................... 376.47 347.79
Insurance claim ............................. 53.04 18.27
Cash discount ................................ 1.42 1.58
Vat subsidy .................................... 87.83
Other operating income ................ 7.98 2.41
526.74 370.05
Note 18 Other Income
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Dividend income
Dividend from current investments
(other than trade) ................................. 0.10 3.66
(b) Interest income
Interest from banks .............................. 18.49 13.21
Others ................................................... 2.87 2.15
(c) Liabilities no longer required
written back ........................................
22.76 1.14
(d) Other income ...................................... 0.15 0.92
44.37 21.08
Note 19 (a) Cost of Material Consumed
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Opening Stock ........................................... 2,093.86 1,320.81
Add: Purchases ......................................... 8,099.56 9,776.92
10,193.42 11,097.73
Less: Closing Stock ................................... (1,827.29) (2,093.86)
8,366.13 9,003.87
991
Details of Raw Materials and Components
Consumed
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Steel Products ........................................... 8,366.13 9,003.87
Details of Closing Stock of Raw Materials
and Components
As at
31 March,
2014
As at
31 March,
2013
Steel Products ........................................... 1,827.29 2,093.86
Note 19 (b) Changes in inventories of nished goods and work-in-progress
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Inventories at the end of the year
Finished goods .................................... 347.57 694.32
Work-in-progress .................................. 544.26 366.84
Total ...................................................... 891.83 1,061.16
Inventories at the beginning of the year
Finished goods .................................... 694.32 631.22
Work-in-progress .................................. 366.84 215.34
Total ...................................................... 1,061.16 846.56
Decrease/ (Increase) in Stock ............. 169.33 (214.60)
Details of inventory of Finished
Goods at the end of the year
As at
31 March,
2014
As at
31 March,
2013
Steel Products ..................................... 347.57 694.32
Details of inventory of work-in-
progress at the end of the year
As at
31 March,
2014
As at
31 March,
2013
Steel Products ..................................... 544.26 366.84
Note 20 Employee Benet Expenses
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Salaries and wages 515.47 506.50
(b) Stock Appreciation Rights Scheme
Expenses (Refer note 38) .................... 34.01 122.72
(c) Contribution to provident and other
funds .................................................... 27.57 26.58
(d) Gratuity expense [Refer note 31(ii)(b)] ...... 0.06 10.14
(e) Post retirement medical benet
expense [Refer note 31(ii)(a)] ............. (1.30) *
(f) Staff welfare ......................................... 54.40 48.08
630.21 714.02
*(Expenses on account of Post retirement medical benet is Rs. 52)
Note 21 Finance Cost
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Interest expense on
(i) Borrowings ..................................... 373.88 331.00
(ii) Other
Usance Interest ......................... 66.46 80.26

delayed/deferred payment of
income tax .................................. 3.80

delayed payment of deferred
payment liability .......................... 0.49
(b) Other Borrowing Cost .......................... 24.19 46.04
465.02 461.10
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
(a) Stores consumed ................................ 10.99 43.00
(b) Power and fuel ..................................... 207.06 219.75
(c) Rent including lease rentals ................ 5.61 4.68
(d) Rates and taxes ................................... 16.82 28.47
(e) (Decrease)/Increase of excise duty on
inventory (Refer note 37) ..................... (21.39) 56.64
(f) Insurance ............................................. 35.00 39.34
(g) Repairs and Maintenance:
Buildings ........................................ 6.30 14.01
Machinery ...................................... 19.24 43.42
Others ............................................ 85.59 67.00
(h) Software Charges ................................ 4.97 11.24
(i) Legal and Professional Charges ......... 24.47 19.95
(j) Freight outward .................................... 155.15 197.50
(k) Subcontracting, Hire and Service
Charges ................................................ 238.65 339.48
(l) Auditors' remuneration
[Refer note (i) below] .......................... 10.18 6.65
(m) Loss on foreign exchange transactions
and translations ................................... 157.42 195.53
(n) Bad debts and Advances written off .. 0.69 0.07
(o) Sundry advances written off................ 24.57
(p) Miscellaneous expenses ..................... 115.40 141.46
1,096.72 1,428.19
Note
(i) Auditors remuneration For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Auditors' remuneration includes
payment to auditors -
(a) As statutory auditor ............................. 7.30 6.00
(b) For certication work ........................... 0.20 0.60
(c) For reimbursement of expenses ......... 0.18 0.05
(d) For Taxation work ................................ 2.50
10.18 6.65
Note 23 Contingent liabilities and commitments
(to the extent not provided for)
Particulars
As at
31 March,
2014
As at
31 March,
2013
(i) Claims against the Company not
acknowledged as debts:
(a) Corporate Guarantee given by
the Company to M/s SHV Energy
Private Limited ............................... 12.00 12.00
(b) Bill discounted under Letter of
Credit by HDFC Bank ................... 268.33
(ii) Commitments:
(a) Estimated amount of contracts
account and not provided for
Tangible assets .................................... 6.24
992
Note 24 Disclosures required under Section 22 of the Micro, Small and
Particulars
As at
31 March,
2014
As at
31 March,
2013
(i) Principal amount remaining unpaid
accounting year 7.54
(ii) Interest due thereon remaining unpaid
accounting year
(iii) The amount of interest paid along with
the amounts of the payment made to
the supplier beyond the appointed day
Particulars
As at
31 March,
2014
As at
31 March,
2013
(iv) The amount of interest due and payable
for the year
(v) The amount of interest accrued and
remaining unpaid at the end of the
accounting year
(vi) The amount of further interest due and
payable even in the succeeding year,
until such date when the interest dues
as above are actually paid
such parties have been identied on the basis of information received by the
Note 25 Repairs and maintenance of machinery includes machinery spares consumed Rs. Nil (2013 : Rs. 12.39 Lakhs).
Note 26 Derivative Instruments
The Company has entered into Forward Exchange Contracts (being a derivative instrument), which are not intended for trading or speculative purposes, but for
hedge purposes.
(i) The following are the outstanding Forward Exchange Contracts entered into by the Company:
Particulars Currency As at 31 March, 2014
(gures in Lakhs)
As at 31 March, 2013
(gures in Lakhs)
Buy/Sell Cross
currency
Amount in
Foreign Currency
Amount in Rs. Amount in
Foreign Currency
Amount in Rs.
Foreign currency loan (Import of
Machinery) ........................................
USD 19.07 1,153.45 51.97 2,848.09 Buy Rupees
Import of Raw Material ..................... USD 40.84 2,470.00 53.36 2,923.96 Buy Rupees
(ii) The year end foreign currency exposures that have not been hedged by a derivatives instrument or otherwise are given below.
Particulars Currency As at 31 March, 2014
(gures in Lakhs)
(gures in Lakhs)
Payable on account of Amount in
Foreign
Currency
Amount in Rs. Amount in
Foreign
Currency
Amount in Rs.
Import of goods and services ......................................................................... USD 6.48 391.62
Note 27 Value of imports calculated on CIF basis
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Plant and Machinery ............................... 16.96
Spares ..................................................... 97.28 37.41
Raw materials ......................................... 5,189.75 4,695.76
Note 28 Details of consumption of imported and indigenous items
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Rs. in
Lakhs %
Rs. in
Lakhs %
Import ..................................... 5,595.13 67 6,113.08 68
Indigenous ............................. 2,771.00 33 2,890.79 32
8,366.13 100 9,003.87 100
Note 29 Earning in foreign exchange
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Sale of goods ......................................... 45.57
Sale of Spares ........................................ 2.75
Reimbursements of expenses ................ 1.24
Note 30 Expenditure in foreign currency
Particulars
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Interest ................................................ 39.13 64.02
Note 31 Employee Benets:
Following are the relevant disclosures in pursuance of the Accounting
Standard 15, Employee Benets.
i) The Company has recognized, in the statement of prot and loss for the
year, an amount of Rs. 27.57 Lakhs (2013 : Rs.26.58 Lakhs) as expenses
under dened contribution plans.
Benet (Contribution to) For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Provident Fund 22.80 20.86
Pension Fund 4.77 4.80
Superannuation Fund 0.92
Total 27.57 26.58
ii) The Company operates dened benet plans as follows :
a. Unfunded Post Retirement Medical Benets
b. Funded Post Retirement Gratuity
993
a. Details of unfunded dened benet obligations in respect of Post
Retirement Medical Benets are as follows:
Particulars For the
year ended
31 March, 2014
For the
year ended 31
March, 2013
1. Reconciliation of opening and closing
balances of obligation
a. Opening Obligation ....................... 2.05 2.05
b. Current Service Cost ..................... 0.26 0.25
c. Interest Cost .................................. 0.18 0.19
d. Actuarial (gain)/loss ...................... (1.74) (0.44)
e. Benets paid ..................................
f. Closing Obligation ......................... 0.75 2.05
2. Expected employers contribution
next year .............................................
3. Expense recognised in the year
a. Current Service Cost ..................... 0.26 0.25
b. Interest Cost .................................. 0.18 0.19
c. Actuarial (gain)/loss ...................... (1.74) (0.44)
d. Expenses recognized in the year ....... (1.30) **
The expense is included in the line
item- Post retirement medical benet
expense.
4. Assumptions
a. Discount rate ................................. 8.95% 7.95%
b. Salary Growth Rate ....................... 10% 10%
c. Annual Increase in Healthcare
cost ................................................
7% 7%
d. Normal retirement age .................. 60 years 60 years
e. Attrition rate ................................... 9% 9%
f. Mortality ......................................... *Note *Note
* Note: Indian Assured Lives Mortality (2006-08)
** Rs. 52
5. Effect of one percentage point change in the
assumed medical ination rate
One percentage
point increase in
medical ination
rates
One percentage
point decrease in
medical ination
rates
2014 2013 2014 2013
Effect on the aggregate service and interest
cost of Post Employment Medical Benets .... 0.04 0.10 (0.03) (0.08)
Effect on the accumulated Post Employment
Medical Benet obligations ............................ 0.16 0.44 (0.13) (0.36)
6. Experience adjustments
Rs. in Lakhs
Particulars 2014 2013 2012 2011 2010
Dened Benet obligation ............................... 0.75 2.05 2.05 1.62 0.70
Decit ........................................................ 0.75 2.05 2.05 1.62 0.70
Experience adjustments on plan liabilities ....... (1.58) (0.59) 0.26 0.49 0.38
b. Details of Gratuity Plan are as follows:
Particulars For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
1. Reconciliation of opening and closing
balances of obligation:
a. Opening Obligation ........................... 76.38 63.55
b Current Service Cost ......................... 9.00 6.71
c. Interest Cost ...................................... 6.53 5.66
Particulars For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
d. Actuarial (gain)/loss .......................... (8.19) 3.11
e. Benets paid ...................................... (2.65)
f. Closing Obligation ............................. 83.72 76.38
The dened benet obligation is wholly
funded by the company
2. Change in Plan Assets (Reconciliation
of opening & closing balances):
a. Opening fair value of plan assets ........... 81.87 66.03
b. Expected return on plan assets .............. 6.26 5.11
c. Actuarial gain/(loss) ................................. 1.02 0.23
d. Contributions ........................................... 13.15
e. Benets paid ............................................ (2.65)
f. Closing fair value of plan assets ............ 89.15 81.87
3. Expected employers contribution next
year: ......................................................... 10.00 5.00
4. Reconciliation of fair value of assets
and obligations:
a. Fair value of plan assets as at the
year end ................................................... 89.15 81.87
b. Present value of obligation as at the
year end ................................................... 83.72 76.38
c. Amount recognised in the balance sheet
- (assets) / liabilities................................. (5.43) (5.49)
5. Expense recognised in the year:
a. Current service cost ................................ 9.00 6.71
b. Interest cost ............................................. 6.53 5.66
c. Expected return on plan assets .............. (6.26) (5.11)
d. Actuarial (gain)/loss ................................. (9.21) 2.88
e. Expenses recognized in the year ........... 0.06 10.14
6. Investment Details:
a. Insurer (LIC) Managed funds .................. 100% 100%
7. Assumptions:
a. Discount rate (per annum) ...................... 8.95% 7.95%
b. Estimated rate of return on plan assets
(per annum) ............................................ 7.50% 7.50%
c. Salary Growth Rate (per annum) ............ 10% 10%
d. Mortality Rate* ......................................... *Note *Note
*Note: Indian Assured Lives Mortality (2006-08)
8. Experience adjustments
Rs. in Lakhs
Particulars 2014 2013 2012 2011 2010
Dened Benet obligation ........................ 83.72 76.38 63.55 33.17 28.60
Fair Value of Plan Assets ........................ 89.15 81.87 66.03 35.48 31.03
Surplus ................................................... (5.43) (5.49) (2.48) (2.31) (2.43)
Experience adjustments
on plan assets ........................................ 1.02 0.23 0.48
Experience adjustments
on plan liabilities ..................................... (0.87) 0.25 13.81 0.06 **
* Due to absence of data provided by LIC, break-up of Plan assets (assets
allocation) in insurer managed funds have not been furnished.
** The details of experience adjustments arising on account of plan liabilities
as required by paragraph 120 (n)(ii) of AS 15 are not readily available in the
valuation statement received from LIC and hence, are not furnished.
Basis used to determine the expected rate of return :
Based on expectation of the average long term rate of return expected on
investment of the fund, during the estimated term of obligation.
The estimates of future salary increases take into account ination, seniority,
promotion and the other relevant factors.
Note 32 Borrowing cost:
Borrowing costs capitalised during the year as Fixed Assets Rs. Nil (FY 2013:
Rs. Nil).
994
Note 33 Segment Reporting:
The company has a single segment namely steel processing for the purpose of
Accounting Standard 17 on segment reporting.
Note 34 Related Party transactions:
Related party disclosures as required by AS-18 Related Party Disclosures are
given below.
Ultimate Holding Company Mahindra & Mahindra Ltd.
Holding Company Mahindra Intertrade Limited
Key Management Personnel Mr. Harsh Kumar
(Refer Note 39)
Other parties with whom transactions have taken place during the year.
(i) Fellow Subsidiaries
Mahindra MiddleEast Electrical Steel Service Centre (FZC) (MME)
Mahindra Logistics Limited (MLL)
Mahindra Integrated Business Solutions Pvt. Ltd (MIBS)
Mahindra Electrical Steel Private Limited (MESPL)
Mahindra Ugine Steel Company Limited (MUSCO)
Mahindra Hinoday Industries Limited (MHIL)
Mahindra Holidays & Resorts India Limited (MHRIL)
(ii) A Company having signicant
inuence
Metal One Corporation
(a) Disclosure of transactions between the company and related parties during the year ended 31 March, 2014 :
(Receipt/Income)/Expenditure/Payment
Ultimate
Holding Company
Holding
Company
Fellow
Subsidiary
Fellow
Subsidiary
Fellow
Subsidiary
Fellow
Subsidiary
Fellow
Subsidiary
Fellow
Subsidiary
Fellow
Subsidiary
A Company having
Signicant inuence
MME MLL MIBS MESPL MUSCO MHIL MHRIL
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
31st
March,
2014
31st
March,
2013
Purchase of Fixed Assets 0.60 5.28 4.80
Issue of share capital 915.00
Processing Income (1,601.08) (2,091.88) (4.38) (7.52)
Sales (66.39) (648.55) 2.75 (45.57)
Purchases 2,681.14 3,292.07 173.76 4,568.76 2,888.33
Transport charges paid 3.27
Inter corporate deposits received (8,178.00) (5,348.00)
Inter corporate deposits paid 8,398.00 6,263.00
Marketing and support service
charges 51.90 200.84
Sublease Expenses 5.61 4.68
Interest Expenses 106.45 63.47
Professional Expenses 4.04 2.50 1.23 1.25
Travelling Expenses 0.84
Reimbursement received from
Parties (16.12) (10.96) (1.59) (0.03) (0.21)
Reimbursement made to Parties (0.22) 0.42 10.44 31.31 0.11 0.46
Deputation of Personnel to related
parties (2.68) (4.16)
Deputation of Personnel from
related parties 35.49 78.77
(b) Outstanding receivable:
31st
March, 2014
Rupees lakhs
31st
March, 2013
Rupees lakhs
From Fellow Subsidiaries .................... 1.48 1.62
(c) Outstanding payable:
31st
March, 2014
Rupees lakhs
31st
March, 2013
Rupees lakhs
To Ultimate Holding Company
(excludes equity share capital) ........... 0.26 0.74
To Holding Company (excludes equity
share capital) ....................................... 358.38 1,163.25
To Fellow Subsidiaries......................... 7.02 6.99
To Company having signicant
inuence ............................................. 2,832.08 2,473.88
1. In respect of the outstanding balances recoverable as at 31 March, 2014, no
provision for doubtful debts was made in respect of these parties.
2. During the year there were no amounts written off and written back from
such parties.
Note 35 Earnings per share
Particulars As at
31 March, 2014
Rupees lakhs
As at
31 March, 2013
Rupees lakhs
Prot after tax (Rs. in Lakhs) (A) ............. 543.14 145.24
Weighted average number of shares
Basic (B) .................................................... 14,045,679 13,953,567
Earnings per share Basic/Diluted (Rupees)
(A/B) .......................................................... 3.87 1.04
Nominal value of equity share (Rupees) ..... 10 10
Note 36 Deferred tax liabilities
Particulars As at
31 March, 2014
Rs. in lakhs
As at
31 March, 2013
Rs. in lakhs
liability
On difference between book balance and
tax balance of xed assets ........................ 959.28 899.84
959.28 899.84
assets
Provision for Employee Benets .............. 25.79 18.99
25.79 18.99
Deferred Tax Liability (net) ....................... 933.49 880.85
995
Note 37 Excise duty
Excise duty disclosed under Other Expenses Note No 22 represents difference
between the excise duty on opening stock and closing stock of nished goods.
Note 38 Stock Appreciation Rights
The Company has granted Stock Appreciation Rights (SARs) to eligible
employees in accordance with the Stock Appreciation Rights Scheme 2013
(SARS-2013) during the years ended 31st March 2013 and 31st March 2014.
Under the scheme, eligible employees are entitled to receive appreciation in
value of equity shares over its face value on exercise of the SARs. The SARs
may be exercised up to a period of three years from the date of vesting.
The compensation cost of SARs granted to employees is accounted by the
Company using the intrinsic value method. The fair value of the equity shares
is based on valuation obtained from an independent valuer. Difference between
market value and face value of the equity shares, being the intrinsic value, has
been recognised as compensation cost over the vesting period. The related
expenses for SARs amounting to Rs 34.01 lakhs (2013: Rs 122.72 lakhs) have
been recognised as employee cost.
Summary of SARs:
SARs outstanding on 1st April 2013 44,175
SARs granted during the year 1,372
SARs forfeited during the year 4,355
SARs exercised during the year 11,917
SARs outstanding on 31st March 2014 29,275
The fair value of SARs exercised during the year is Rs. 84.63 per SAR.
Had the Company adopted fair value method as described in the Guidance note
on Accounting for Employee Share - based Payments issued by the Institute of
Chartered Accountants of India, the employee compensation cost would have
been lower by Rs. 7.98 lakhs, prot after tax higher by Rs. 7.98 lakhs and the
earnings per share would have been higher by Re 0.06.
Model and the signicant assumptions made in this regard are as follows:
Grant dated
27
th
March, 2014
Grant dated
22
nd
February, 2013
Risk free interest rate Annualised continuously compounded rate on safe
asset with same maturity
Note 39 Managerial Remuneration
The Company is not required to pay any managerial remuneration in respect
of the Managing Director appointed under section 269 and other applicable
provisions of the Companies Act, 1956, from time to time, as per the terms
approved.
Bakul Sheth
Nobuaki Takashi
}
Alternate Directors
Jitendra Rahate Toyokazu Makino
Place: Mumbai
MAHINDRA ELECTRICAL STEEL PRIVATE LIMITED
996
Your directors present their fth report together with the audited accounts of your Company for the year ended 31
st
March, 2014.
(Amount in Rupees)
Financial Results For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Income
Loss before taxation .................................................................................................................... (6,900,387) (7,802,245)
Provision for taxation for the year .................................................................................................
Loss for the year after taxation .................................................................................................... (6,900,387) (7,802,245)
Balance brought forward from previous year .............................................................................. (14,104,566) (6,302,321)
Loss carried forward to Balance Sheet ........................................................................................ (21,004,953) (14,104,566)
Operations
In the context of the persisting economic slowdown and weak demand
trends for processed electrical steel, the Company is re-examining the
viability of both its projects.
Dividend
In view of losses, your Directors have not recommended any dividend
on Equity Shares for the period under review.
Capital
The authorized equity share capital of the Company is Rs 15 crore and
paid-up share capital of the Company is Rs 5 lakh.
Debentures
Your Company has allotted 1,07,500, 0.25% Optionally Converted
Unsecured Debentures of face value of Rs. 1000/- each aggregating
Rs 10.75 crore to Mahindra Intertrade Limited, the holding company
of the Company by way of private placement.
Directors
Mr. Harsh Kumar retires by rotation, and being eligible, offers himself
for re-appointment.
Pursuant to section 217(2AA) of the Companies Act, 1956, your
directors, based on representations received from operating
(i) in preparation of annual accounts, the applicable accounting
standards have been followed;
the Statutory Auditors and these policies have been applied
estimates have been made so as to give a true and fair view of
the state of affairs of the Company as at 31st March, 2014 and of
the loss of the Company for the year ended on that date;
(iii) proper and sufcient care has been taken for 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) annual accounts have been prepared on a going concern basis.
Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai
(Registration No:117365W), retires as Auditor at the forthcoming
Annual General Meeting and are eligible for re-appointment.
Members are requested to re-appoint auditors to hold ofce from
the conclusion of the forthcoming Annual General Meeting till
th
Annual General Meeting and x their
remuneration.
The Company has not accepted deposits from the public, or its
employees, during the year under review.
The Company has not made any loans/advances which are required
to be disclosed in the annual accounts of the Company pursuant to
Clause 32 of the Listing Agreement of the ultimate parent company,
Mahindra & Mahindra Limited, with Stock Exchanges.
harassment in which it has formalized a free and fair enquiry process
with clear timelines. The Company has also constituted an Internal
Complaints Committee to which employees can write their complaints.
During the year under review no complaints were received by the said
Committee.
absorption and foreign exchange earnings and outgo, as required
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are given in Annexure to this Report.
Particulars of employees as required under section 217(2A) of the
Companies Act, 1956 and Rules framed there under
The Company has not paid any remuneration attracting the provisions
of the Companies (Particulars of Employees) Rules, 1975 read with
Section 217(2A) of the Companies Act, 1956. Hence, no information
is required to be appended to this report in this regard.
Acknowledgement
Your Directors would like to express their grateful appreciation for
assistance and cooperation received from Bank and Members during
Rajeev Dubey Harsh Kumar
Director Director
Mumbai, 29
th
April, 2014
997
ST
MARCH, 2014
(a) Energy Conservation measures taken: Not applicable
impact on the cost of production of goods: Not applicable
6. Imported technology for the last 5 years : None
There was no foreign exchange earning or outgo during the year under review.
Rajeev Dubey
Director
Harsh Kumar
Director
Mumbai, 29
th
April, 2014
998
TO THE MEMBERS OF
MAHINDRA ELECTRICAL STEEL PRIVATE LIMITED (the
st
Flow Statement for the year then ended, and a summary of the
of these nancial statements that give a true and fair view of the
Company in accordance with the Accounting Standards notied
under the Companies Act, 1956 (the Act) (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013
in terms of General Circular 15/2013 dated 13
th
September, 2013
of the Ministry of Corporate Affairs) and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal
control relevant to the preparation and presentation of the nancial
statements that give a true and fair view and are free from material
we comply with the ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the nancial
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
nancial statements.
Opinion
to the explanations given to us, the aforesaid nancial statements
give the information required by the Act in the manner so required
Company as at 31
st
March, 2014;
(b) in the case of the Statement of Prot and Loss, of the loss of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash ows of
the Company for the year ended on that date.
Emphasis of Matter
We draw attention to Note 17 to the nancial statements, as
stated in the Note, although the accumulated losses as at the year
end has wiped out the net worth of the Company, the nancial
statements have been prepared on a going concern basis for the
reasons stated therein.
1. As required by the Companies (Auditors Report) Order, 2003
(the Order) issued by the Central Government in terms
of Section 227(4A) of the Act, we give in the Annexure a
statement on the matters specied in paragraphs 4 and 5 of
the Order.
(b) In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears
from our examination of those books.
and the Cash Flow Statement dealt with by this Report
(d) In our opinion, the Balance Sheet, the Statement of Prot
and Loss, and the Cash Flow Statement comply with
the Accounting Standards notied under the Act (which
continue to be applicable in respect of Section 133 of
15/2013 dated 13
th
September, 2013 of the Ministry of
Corporate Affairs).
st
record by the Board of Directors, none of the directors is
disqualied as on 31
st
March, 2014 from being appointed
as a director in terms of Section 274(1)(g) of the Act.
(U. M. Neogi)
(Partner)
Mumbai, 29
th
April, 2014
999
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even
date)
(i) Having regard to the nature of the Companys business/activities/results during the year, clauses (ii), (vi), (vii), (viii), (x), (xi),
(xii), (xiii), (xiv), (xv), (xvi), (xviii) and (xx) of paragraph 4 of the Order are not applicable to the Company.
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of xed
assets.
(b) The Company has not commenced any operations and has only leasehold land as its xed assets, which have been
veried by the management during the year.
(c) During the year, the Company has not disposed off any xed assets.
(iii) In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken
any loans, secured or unsecured, to/from companies, rms or other parties covered in the register maintained under Section
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system
commensurate with the size of the Company with regard to purchase of xed assets. During the course of our audit, we have
not observed any major weakness in such internal control system. Having regard to the nature of the Companys activities
during the year, the provisions of clause (iv) of the Order, with regard to internal control system for purchase of inventory and
the sale of goods and services are not applicable.
(v) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements
referred to in Section 301 of the Companies Act, 1956, particulars of which need to be entered in the register required to
be maintained under that section. As there are no such contracts or arrangements, paragraph 4(v)(b) of the Order is not
applicable.
(vi) According to the information and explanation given to us in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax and other material
statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax and other material statutory dues in arrears as at
31
st
March, 2014 for a period of more than six months from the date they became payable.
(c) According to the records of the Company, there are no dues of Income-tax and other material statutory dues which have
not been deposited as on 31
st
March, 2014 on account of disputes.
(vii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance
Sheet of the company, we report that funds raised on short-term basis have, prima facie, not been used during the year for
long-term investment.
(viii) According to the information and explanations given to us, during the period covered by our audit report, the Company has
issued unsecured debentures. Accordingly clause (xix) of the Order is not applicable.
(ix) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and
no material fraud on the Company has been noticed or reported during the year.
(U. M. Neogi)
(Partner)
Mumbai, 29
th
April, 2014
1000
Particulars
Note
No.
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
1. Shareholders Funds
(a) Share capital.............................................................
3 500,000 500,000
(b) Reserves and Surplus .................................................
4 (21,004,953) (14,104,566)
(20,504,953) (13,604,566)
2. Share application money pending allotment .............................. 14 105,000,000
3. Non-Current liabilities
(a) Long term borrowings .................................................
5A 107,500,000
(a) Short-term borrowings .................................................
5B 500,000 750,000
(b) Trade payables ..........................................................
6 191,300 512,174
(c) Other current liabilities ................................................
7 196,721 419,841
888,021 1,682,015
Total 87,883,068 93,077,449
B. ASSETS
(a) Fixed Assets
(i) Tangible assets ....................................................
8 87,511,502 11,104,459
(ii) Capital work- in- progress ......................................
4,050,088
87,511,502 15,154,547
(b) Long term loans and advances .....................................
9 77,344,780
2. Current assets
(a) Cash and cash equivalents ..........................................
10 371,566 578,122
Total 87,883,068 93,077,449
U. M. Neogi
Partner
Harsh Kumar
Rajeev Dubey
}
Directors
Place : Mumbai
Place : Mumbai
1001
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2014
Particulars
Note
No.
For the Year
ended
For the Year
ended
31 March, 2014 31 March, 2013
Rupees Rupees
1. Expenses
(a) Finance cost .................................................................................... 11 219,106 7,009,802
(b) Amortisation expense ...................................................................... 8 2,250,810 126,585
(c) Other expenses ................................................................................ 12 4,430,471 665,858
Total Expenses .............................................................................................. 6,900,387 7,802,245
2. Loss before tax ...................................................................................... (6,900,387) (7,802,245)
3. Tax expense ............................................................................................
4. Loss for the year (2-3) .......................................................................... (6,900,387) (7,802,245)
5. Earnings per share (of Rs. 10/- each): 16
Basic/Diluted ............................................................................................ (138.01) (156.04)
U. M. Neogi
Partner
Harsh Kumar
Rajeev Dubey
}
Directors
Place : Mumbai
Place : Mumbai
1002
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2014
For the Year ended
31 March, 2014
For the Year ended
31 March, 2013
Particulars Rupees Rupees Rupees Rupees
Loss before tax ............................................................................... (6,900,387) (7,802,245)
Adjustments for:
Amortisation expense ...................................................................... 2,250,810 126,585
Capital work-in-progress written off ................................................ 2,737,015
Finance cost .................................................................................... 219,106 7,009,802
5,206,931 7,136,387
Operating loss before working capital changes ............................ (1,693,456) (665,858)
Adjustment for (decrease) in operating liabilities
Trade payables ................................................................................ (320,874) 21,789
Other current liabilities .................................................................... (393,287) (84,216)
(714,161) (62,427)
Cash generated from operations .................................................... (2,407,617) (728,285)
Net income tax paid .......................................................................
Net cash ow used in operating activities (A) .......................... (2,407,617) (728,285)
Capital expenditure on xed assets, including capital advances ... (749,005)
Net cash used in investing activities (B) ................................... (749,005)
Share application money refunded ................................................ (105,000,000)
Share application money received ................................................. 105,000,000
Debentures issued .......................................................................... 107,500,000
Repayment of Inter Corporate Deposit ......................................... (750,000) (92,118,638)
Inter Corporate Deposit received ................................................... 500,000
Interest paid ..................................................................................... (48,939) (11,348,602)
Net cash ow from nancing activities (C) ............................... 2,201,061 1,532,760
Net (decrease)/increase in cash and cash equivalents
(A+B+C) .........................................................................................
(206,556) 55,470
Cash and cash equivalents at beginning of the year .......................... 578,122 522,652
Cash and cash equivalents at end of the year .............................. 371,566 578,122
(206,556) 55,470
Reconciliation of Cash and cash equivalents with the
Balance Sheet:
Cash and cash equivalents as per Balance Sheet (Refer note 10) 371,566 578,122
U. M. Neogi
Partner
Harsh Kumar
Rajeev Dubey
}
Directors
Place : Mumbai
Place : Mumbai
1003
1 Corporate information:
Mahindra Electrical Steel Limited was incorporated in India on 10 June,
2009 as a Public Company with authorised share capital of Rs.150,000,000.
The Ministry of Corporate Affairs has approved the change of name from
Mahindra Electrical Steel Limited to Mahindra Electrical Steel Private Limited
with effect from 13 January, 2012. The Company is a public Company by
virtue of section 3(1)(iv) of the Companies Act, 1956 as it is a subsidiary
of a public limited Company. The Companys main object is to trade in or
process non-ferrous/ferrous materials including various grades of steel.
2 Signicant Accounting Policies followed by the Company
between the actual results and the estimates, are recognized in the
2.4 Fixed Assets:
expenses. Borrowing costs that are attributable to the
acquisition, construction or production of a qualifying asset are
included in the cost of asset upto the date the asset is ready
for its intended use.
(b) Leasehold land is amortized over the balance period of the
lease.
Particulars
Number of
Shares Rupees
Number of
Shares Rupees
(a) Authorised
Equity Shares of Rs. 10
each........................... 15,000,000 150,000,000 15,000,000 150,000,000
15,000,000 150,000,000 15,000,000 150,000,000
(b) Issued, subscribed and
fully paid up
Equity Shares of Rs. 10
each........................... 50,000 500,000 50,000 500,000
50,000 500,000 50,000 500,000
Particulars
Opening
Balance Fresh issue Buy back
Closing
Balance
For the year ended
31 March, 2014
Number of shares ....................... 50,000 50,000
Amount (in Rupees) ................... 500,000 500,000
For the year ended
31 March, 2013
Number of shares ....................... 50,000 50,000
Amount (in Rupees) ................... 500,000 500,000
The Company has not allotted any equity shares for consideration other
than cash, bonus shares, nor have any shares been bought back since its
incorporation (i.e. 10 June, 2009).
Terms and rights attached to equity shares
Rs. 10/- per share. Each shareholder has the following voting rights (i)
On a show of hands: one vote for a member present in person and (ii)
On a poll: in proportion to the share in paid-up equity share capital of the
Company. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing annual general meeting,
except in case of interim dividend. In the event of winding up, if the assets
available for distribution are less/more than sufcient to repay the whole
of the paid up share capital, the losses/excess shall be borne/distributed
amongst the members in proportion to the capital at the commencement
of the winding up, paid up or which ought to have been paid up on the
shares held by them respectively.
(ii) Details of shares held by the holding company
Particulars
As at
31 March, 2014
As at
31 March, 2013
Number of
shares
Number of
shares
(Including 6 equity shares
held jointly with its nominees) ......... 50,000 50,000
(iii) Details of shares held by each shareholder holding more than 5%
shares
Particulars
Number of
shares
% of
holding
Number of
shares
% of
holding
Mahindra Intertrade
Limited (Including
6 equity shares
held jointly with its
nominees)................... 50,000 100% 50,000 100%
Particulars
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
Surplus/(Decit) in Statement of
Prot and Loss
Opening balance ............................. (14,104,566) (6,302,321)
Add: Loss for the year .................... (6,900,387) (7,802,245)
Closing balance ............................. (21,004,953) (14,104,566)
1004
Note 5A Long-term borrowings
Particulars
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
0.25% Optionally Convertible Unsecured
Debentures of Rs. 1,000 each (Refer Note
below) ........................................................ 107,500,000
107,500,000
Note:
The Company has issued 107,500 non transferable 0.25% Optionally Convertible
Unsecured Debentures of Rs. 1,000 each to its Holding Company, Mahindra
Intertrade Limited. The issuer/holder has agreed not to redeem the debentures
at any time before 31 March, 2015 at face value plus interest for the completed
year or convert debentures in full or part thereof into equity shares of the face
value of Rs 10 each issued at par equivalent to the face value of debentures plus
interest for the completed year.
Note 5B Short-term borrowings
Particulars
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
Unsecured Inter Corporate Deposit ......... 500,000 750,000
500,000 750,000
Particulars
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
Trade payables:
Micro and small enterprises
(Refer Note 13) .........................................
Other than micro and small enterprises .. 191,300 512,174
191,300 512,174
Particulars
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
(a) Other payables:
(i) Interest accrued but not due ... 182,142 11,975
(ii) Land charges ........................... 400,000
(iii) Statutory remittances
(withholding taxes) ...................
14,579 7,866
196,721 419,841
Note 8 Fixed Assets
Tangible assets
Gross Block Amortization Net Block
Balance as at
1 April, 2013 Addition Disposal
Balance as at
31 March, 2014
Balance as at
1 April, 2013 For the year
Disposal/
adjustments
Balance as at
31 March, 2014
Balance as at
31 March, 2014
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Land - Leasehold-Naini 11,392,657 2,033,359 13,426,016 288,198 485,552 773,750 12,652,266
(11,392,657) () () (11,392,657) (161,613) (126,585) () (288,198) (11,104,459)
Land - Leasehold-Dahej 76,624,494 76,624,494 1,765,258 1,765,258 74,859,236
() () () () () () () () ()
Total 11,392,657 78,657,853 90,050,510 288,198 2,250,810 2,539,008 87,511,502
Previous year (11,392,657) () () (11,392,657) (161,613) (126,585) () (288,198) (11,104,459)
Note: gures in brackets are in respect of the previous year.
Note 9 Long term loans and advances
Particulars
As at 31 March,
2014
As at 31 March,
2013
Rupees Rupees
(a) Capital advances:
Unsecured, considered good ......... 77,344,780
77,344,780
Particulars
As at 31 March,
2014
As at 31 March,
2013
Rupees Rupees
In current accounts .................................... 371,566 578,122
371,566 578,122
Note 11 Finance Costs
Particulars
For the
Year ended
31 March, 2014
For the
Year ended
31 March, 2013
Rupees Rupees
Interest on Inter Corporate Deposits ........ 17,360 7,009,802
Interest on Debentures .............................. 201,746
219,106 7,009,802
Particulars
For the
Year ended
31 March, 2014
For the
Year ended
31 March, 2013
Rupees Rupees
(a) Lease rent ......................................... 8,270 8,129
(b) Rates and taxes ................................ 1,439,832 415,614
(c) Capital work-in-progress written off .. 2,737,015
1005
Particulars
For the
Year ended
31 March, 2014
For the
Year ended
31 March, 2013
Rupees Rupees
(d) Printing and Stationery..................... 5,663
(e) Legal and professional ................... 19,243 21,613
(f) Payment to auditors (Refer note
below) ............................................... 113,658 68,596
(g) Security ............................................. 106,075 72,184
(h) Bank charges ................................... 562 90
(i) Other Miscellaneous expenses ........ 5,816 73,969
4,430,471 665,858
Note:
Particulars
For the
Year ended
31 March, 2014
For the
Year ended
31 March, 2013
Rupees Rupees
Payment to auditors:
To statutory auditors for audit .......... 113,658 68,596
Note 13 Micro small and medium enterprises
The identication of vendors as a Supplier under the Micro, Small and
Medium Enterprises Development Act, 2006 has been done on the basis of the
information to the extent provided by the vendors to the Company. This has
been relied upon by the auditors.
Note 14 Share application money pending allotment
During the nancial year 2012-13, the Company had received an amount of
Rs. 105,000,000 as share application money towards equity shares of the
Company. The share application money was received pursuant to an invitation
to offer shares and in terms of such invitation, the Company was required
to complete the allotment formalities by 30 June, 2013. The Company has
refunded the share application money during the current nancial year.
Note 15 Related Party Disclosures
given below.
(A) List of Related Parties:
Holding Company Mahindra Intertrade Limited
Fellow Subsidiary Company Mahindra Steel Service Centre
Limited
(B) (a) Disclosure of transactions between the Company and
related parties during the year ended 31 March, 2014 :
(i) Holding Company
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Rupees Rupees
received
500,000 1,400,000
repaid
750,000 93,518,638
Debentures issued 107,500,000
Interest on Inter
Corporate Deposits
17,360 7,009,802
Interest on Debentures 201,746
Share application money
(refunded)/received
(105,000,000) 105,000,000
Reimbursement of
expenses
4,883 256,970
(ii) Fellow Subsidiary Company
For the
year ended
31 March, 2014
For the
year ended
31 March, 2013
Rupees Rupees
Reimbursement of
expenses
6,336
(b) Outstanding payable
As at
31 March, 2014
As at
31 March, 2013
Rupees Rupees
Holding Company 187,025 1,020,275
Fellow Subsidiary Company .... 81,184
During the year, there is no amount written off or written back in
respect of such parties.
Particulars
As at
31 March, 2014
As at
31 March, 2013
Loss after tax (Rs.) (A) ............................. (6,900,387) (7,802,245)
Weighted average number of shares (B) 50,000 50,000
Earnings per share [Basic/Diluted]
(Rs.) (A/B) .................................................
(138.01) (156.04)
Nominal value of equity share (Rs.) ........ 10.00 10.00
Note 17 Support from holding company
As at March 31, 2014, the accumulated losses aggregating Rs. 21,004,953 has
wiped out the net worth of the Company. Leasehold lands have been taken
by the Company at two locations namely Naini (Uttar Pradesh) and Dahej
(Gujarat). The Company is currently evaluating options for both of its projects.
In view of the foregoing and on account of the continuing support from the
holding company, the nancial statements have been prepared on a going
concern basis.
Harsh Kumar
Rajeev Dubey
}
Directors
Place : Mumbai
MAHINDRA AUTO STEEL PRIVATE LIMITED
1006
DIRECTORS REPORT TO SHAREHOLDERS
Your directors present their First Report together with the audited accounts of your Company for the period ended 31
st
March 2014.
FINANCIAL RESULTS
(Amount in Rupees)
For the period ended
31
st
March 2014
Income Nil
Loss before taxation (72,75,256)
Provision for taxation for the period
Loss for the period after taxation (72,75,256)
Loss carried forward (72,75,256)
OPERATIONS
Your Company was incorporated on 12
th
December 2013
primarily to carry on the business of processing automotive
steel.
Your Company is yet to commence commercial operations.
JOINT VENTURE
Your Company was incorporated as a Joint Venture pursuant
to the Joint Venture Agreement dated 15
th
November 2013
between Mahindra Intertrade Limited, China Steel Global
Trading Corporation, CSGT International Corporation and
Mitsui & Co. (Asia Pacic) Pte Ltd.
DIVIDEND
Your directors do not recommend any dividend for the period
under review.
DIRECTORS
Mr. Rajeev Dubey, Mr. Zhooben Bhiwandiwala and Mr. Harsh
Kumar are the rst directors of your Company and hold ofce
till the ensuing Annual General Meeting.
Pursuant to the Joint Venture Agreement dated 15
th
November
2013 between Mahindra Intertrade Limited, China Steel Global
Trading Corporation, CSGT International Corporation and
Mitsui & Co. (Asia Pacic) Pte Ltd., your Company appointed
Mr. Wang Chia-Tang of China Steel Global Trading Corporation
and Mr. Toshiaki Shinozaki of Mitsui & Co. (Asia Pacic) Pte
Ltd. as Additional Directors with effect from 28
th
April 2014 and
they hold ofce till the ensuing Annual General Meeting.
All the directors of your Company have given requisite
declarations pursuant to Section 164 of the Companies Act,
2013 that they are not disqualied to be appointed as directors
of your Company. The Company has also received notices
pursuant to Section 160 of the Companies Act, 2013, along
with the necessary deposit, proposing the candidature of
Mr. Rajeev Dubey, Mr. Zhooben Bhiwandiwala, Mr. Harsh
Kumar, Mr. Wang Chia-Tang and Mr. Toshiaki Shinozaki as
directors at the ensuing Annual General Meeting.
your directors, based on representations from operating
i. in preparation of accounts, the applicable accounting
standards have been followed;
ii. they have, in the selection of accounting policies,
as at 31
st
March 2014 and of the loss of the Company for
the period ended on that date;
iii. proper and sufcient care has been taken for maintenance
iv. the accounts have been prepared on a going concern
basis.
AUDITORS
Mumbai (Registration No:117365W), the rst Auditors of your
Company appointed by the Board of Directors, hold ofce till
the conclusion of the forthcoming Annual General Meeting.
Pursuant to Sections 139 and 141 of the Companies Act,
2013, your Company has obtained a written certicate from
them to the effect that their re-appointment, if made, would be
in conformity with the conditions and criteria specied in the
said Sections.
Members are requested to re-appoint auditors to hold ofce
from the conclusion of the forthcoming Annual General
Meeting till the conclusion of the sixth Annual General Meeting
1007
SHARE CAPITAL
Authorised Share Capital of your Company is Rs 76,00,00,000
divided in 7,60,00,000 equity shares of Rs 10 each. As on
31
st
March 2014, the paid-up capital of your Company stood
at Rs 1,00,000.
Following allotment of equity shares to Mahindra Intertrade
Limited, CSGT International Corporation and Mitsui & Co. (Asia
Pacic) Pte Ltd. on 28
th
April 2014, the shareholding of the
Joint Venture partners in your Company is Rs 17,85,00,000,
Rs 8,57,50,000 and Rs 8,57,50,000 respectively which
represents 51%, 24.5% and 24.5% respectively of the total
share capital of your Company.
AUDIT COMMITTEE
the Companies (Meetings of Board and its Powers) Rules,
2014, your Company has, with effect from 28
th
April 2014,
constituted an Audit Committee comprising three directors,
viz, Mr. Zhooben Bhiwandiwala, Mr. Wang Chia-Tang, and
Mr. Harsh Kumar.
Pursuant to Section 178 of the Companies Act, 2013 read
with the Companies (Meetings of Board and its Powers)
Rules, 2014, your Company has, with effect from 28
th
April
2014, constituted Nomination and Remuneration Committee
comprising three Directors, viz, Mr. Rajeev Dubey, Mr. Wang
Chia-Tang, and Mr. Harsh Kumar.
APPOINTMENT OF MANAGER
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, Mr. Iqbal Shaikh was appointed as
Manager of your Company with effect from 28
th
April 2014.
Appointment of Mr. Iqbal Shaikh is subject to approval of the
shareholders by way of a Special Resolution and that the
same is sought from the shareholders at their ensuing Annual
General Meeting.
Your Company has not accepted deposits from the public, or
its employees, during the period under review.
required to be disclosed in the accounts of your Company
pursuant to Clause 32 of the Listing Agreement between the
ultimate parent company, Mahindra & Mahindra Limited, and
Particulars relating to energy conservation, technology
absorption and foreign exchange earnings, and outgo, as
employees can write their complaints. During the period under
Your Company had no employee who was in receipt of
remuneration of not less than Rs 60,00,000 during the period
ended 31
st
March 2014, or not less than Rs 5,00,000 per
month, during any part of the said period.
Harsh Kumar Wang Chia-Tang
Director Director
Mumbai, 28
th
April 2014
1008
ST
MARCH 2014
(a) Energy Conservation measures taken: None
impact on the cost of production of goods: None
Research & Development (R & D) :
There was no foreign exchange earning or outgo during the period under review.
Harsh Kumar Wang Chia-Tang
Director Director
Mumbai, 28
th
April 2014
1009
TO THE MEMBERS OF
of MAHINDRA AUTO STEEL PRIVATE LIMITED (the
31
st
Cash Flow Statement for the period 12 December, 2013
(date of incorporation) to 31 March, 2014, and a summary
information.
dated 13
th
misstatement.
Opinion
the Company as at 31 March, 2014;
of the Company for the period 12 December, 2013 (date
of incorporation) to 31 March, 2014; and
of the Company for the period 12 December, 2013 (date
of incorporation) to 31 March, 2014.
5 of the Order.
th
st
st
of the Act.
U. M. Neogi
(Partner)
Mumbai, 28
th
April, 2014
1010
even date)
activities/results during the period, clauses (i), (ii), (iv), (vi),
(vii), (viii), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xviii), (xix)
and (xx) of paragraph 4 of the Order are not applicable to
the Company.
(ii) In our opinion and according to the information and
register maintained under Section 301 of the Companies
Act, 1956.
there are no such contracts or arrangements, paragraph
4(v)(b) of the Order is not applicable.
(iv) According to the information and explanation given to us
undisputed statutory dues, including Income-tax and
arrears as at 31
st
no dues of Income-tax and other material statutory
dues which have not been deposited as on 31
st
March,
2014 on account of disputes.
raised on short-term basis amounting to Rs. 1,266,459
have been used during the nancial year for long-term
investment.
(vi) To the best of our knowledge and according to the
been noticed or reported during the nancial year.
U. M. Neogi
(Partner)
Mumbai, 28
th
April, 2014
1011
As at
31 March, 2014
Amount (Rs.)
1 Shareholders Funds
(a) Share capital ................................................................................................................ 4 100,000
(b) Reserves and surplus.................................................................................................. 5 (7,275,256)
(7,175,256)
(a) Trade payables ............................................................................................................ 6 437,012
(b) Other current liabilities ................................................................................................ 7 8,064,141
8,501,153
TOTAL ................................................................................................................................. 1,325,897
B ASSETS
Capital work-in-progress .................................................................................................... 1,266,459
1,266,459
2 Current assets
Cash and cash equivalents ................................................................................................ 8 59,438
TOTAL ................................................................................................................................. 1,325,897
Chartered Accountants Jyoti Walunj Harsh Kumar
}
Directors
Chief Financial Ofcer Wang Chia-Tang
U. M. Neogi Abhishek Juvekar Iqbal Shaikh
Partner Company Secretary Manager
Date: 28 April, 2014 Date: 28 April, 2014
1012
STATEMENT OF PROFIT AND LOSS FOR THE PERIOD 12 DECEMBER, 2013 (DATE OF
INCORPORATION) TO 31 MARCH, 2014
For the
period ended
31 March, 2014
Amount (Rs.)
1 Expenses
Other expenses ................................................................................................................... 9 7,275,256
Total Expenses .................................................................................................................. 7,275,256
2 Loss before tax ................................................................................................................. (7,275,256)
3 Less: Tax expense ............................................................................................................
4 Loss for the period (2-3) .................................................................................................. (7,275,256)
5 Earnings per equity share (of Rs. 10/- each) 12
Basic/Diluted ....................................................................................................................... (727.53)
}
Directors
1013
CASH FLOW STATEMENT FOR THE PERIOD 12 DECEMBER, 2013 (DATE OF INCORPORATION)
TO 31 MARCH, 2014
Particulars
For the
period ended
31 March, 2014
Amount (Rs.)
Loss before tax ................................................................................................................... (7,275,256)
Operating loss before working capital changes ............................................................... (7,275,256)
Increase in Trade payables ................................................................................................ 437,012
Increase in other current liabilities ..................................................................................... 6,797,682
Cash generated from operations ....................................................................................... (40,562)
Net income tax paid ...........................................................................................................
Net cash ow used in operating activities (A) ............................................................. (40,562)
B. Cash ow from investing activities ................................................................................
Proceeds from issue of equity shares ............................................................................... 100,000
Net cash ow from nancing activities (B) ................................................................... 100,000
Net increase in cash and cash equivalents (A + B) ................................................... 59,438
Cash and cash equivalents at beginning of the period....................................................
Cash and cash equivalents at end of the period .............................................................. 59,438
59,438
Cash and cash equivalents as per Balance Sheet (Refer Note 8) .................................. 59,438
}
Directors
1014
1. CORPORATE INFORMATION:
Mahindra Auto Steel Private Limited is incorporated in India on
12th December, 2013 with authorised share capital of Rs. 760,000,000.
The Company is a public company by virtue of section 3(1)(iv) of the
Companies Act, 1956 as it is a subsidiary of a public limited Company.
The Companys main object is to trade in or process non-ferrous/ferrous
material including various grades of steel and it is in the process of setting
up its operations.
2. SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE COMPANY
The preparation of the nancial statements in conformity with the Indian
and the estimates, are recognized in the periods in which the results are
known/materialize.
Cash ows are reported using the indirect method, whereby prot / (loss)
before extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash ows from operating, investing and
nancing activities of the Company are segregated based on the available
information.
2.4 Capital work-in-progress:
Projects under which tangible xed assets are not yet ready for their
intended use are carried at cost, comprising direct cost, related incidental
expenses and attributable interest.
3. The Company has not commenced operations. Disclosure of other
signicant accounting policies would be made in the year when operations
commence or otherwise considered appropriate.
Particulars As at 31 March, 2014
Number of
Shares
Amount
(Rs.)
(a) Authorised
Equity Shares of Rs.10 each 76,000,000 760,000,000
76,000,000 760,000,000
(b) Issued, subscribed and fully
paid up
Equity Shares of Rs.10 each 10,000 100,000
10,000 100,000
Particulars
Opening
Balance
Fresh
issue
Buy
back
Closing
Balance
Equity Shares of Rs.10 each
Number of shares 10,000 10,000
Amount (in Rupees) 100,000 100,000
The Company has not allotted any equity shares for consideration other
than cash, bonus shares, nor have any shares been bought back since its
incorporation (i.e. 12 December, 2013).
Terms and rights attached to equity shares
The Company has only one class of equity share having a par value of
Rs. 10/- per share. Each shareholder has the following voting rights (i)
On a show of hands: one vote for a member present in person and (ii)
On a poll: in proportion to the share in paid-up equity share capital of the
Company. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing annual general meeting,
except in case of interim dividend. In the event of winding up, if the assets
available for distribution are less/ more than sufcient to repay the whole
of the paid up share capital, the losses/ excess shall be borne/ distributed
amongst the members in proportion to the capital at the commencement
of the winding up, paid up or which ought to have been paid up on the
shares held by them respectively.
(ii) Details of shares held by the holding company
Particulars
As at
31 March, 2014
Number of
Shares
Mahindra Intertrade Limited (Including 2 equity shares
held jointly with its nominees) 10,000
(iii) Details of shares held by each shareholder holding more than 5%
shares
Particulars As at 31 March, 2014
Number of
Shares
%
of holding
(Including 2 equity shares held
jointly with its nominees) 10,000 100%
Particulars
As at
31 March, 2014
Amount (Rs.)
Surplus/ (Decit) in Statement of Prot and Loss
Opening balance
Add: Loss for the year (7,275,256)
Closing balance (7,275,256)
Particulars
As at
31 March, 2014
Amount (Rs.)
Trade Payables:
Micro and small enterprises (Refer Note 10)
Other than micro and small enterprises 437,012
437,012
Particulars
As at
31 March, 2014
Amount (Rs.)
Other payables -
(a) Statutory remittances (Withholding Taxes) 14,826
(b) Payable to the Holding Company for expenses
incurred on behalf of the Company (including for
capital work-in-progress Rs. 1,266,459) 8,049,315
8,064,141
Particulars
As at
31 March, 2014
Amount (Rs.)
In current accounts 59,438
59,438
1015
Particulars
For the
period ended
31 March, 2014
Amount (Rs.)
(a) Auditors' remuneration [Refer note (i) below] 112,360
(b) Ground breaking ceremony expenses [Refer note (ii)
below] 1,715,096
(c) Preliminary expenses 5,447,800
7,275,256
Note (i):
Particulars
For the
period ended
31 March, 2014
Amount (Rs.)
Payment to auditors:
To statutory auditors for audit 112,360
Note (ii):
The lease hold land for setting up of plant of the Company has been
acquired by the holding Company and the Company was in the process
of getting it registered in its name as at the Balance Sheet date, which was
completed in April, 2014.
Note 10 Micro small and medium enterprises
The identication of vendors as a Supplier under the Micro, Small and
Medium Enterprises Development Act, 2006 has been done on the basis of the
information to the extent provided by the vendors to the Company. This has
been relied upon by the auditors.
Note 11 Related Party Disclosures
given below.
(A) List of Related Parties:
Ultimate Holding company Mahindra & Mahindra Limited
Holding company Mahindra Intertrade Limited
(B) Disclosure of transactions between the Company and related party
during the period ended 31 March, 2014:
Amount (Rs.)
Holding
Company
Particulars
For the
period ended
31 March, 2014
(a) (Receipt / Income) / Expenditure / Payment
Equity shares issued 100,000
Reimbursement of expenses 8,049,315
(b) Outstanding payable:
As at
31 March, 2014
Holding company 8,049,315
During the year, there is no amount written off or written back in respect
of such parties.
Particulars
For the
period ended
31 March, 2014
Loss after tax (Rs.) (A) (7,275,256)
Weighted average number of shares (B) 10,000
Earnings per share [Basic / Diluted] (Rs.) (A/B) (727.53)
Nominal value of equity share (Rs.) 10.00
The period between 12 December, 2013 and 31 March, 2014 is the rst nancial
year of the Company and accordingly there are no corresponding previous year
gures.
Harsh Kumar
}
Directors
Wang Chia-Tang
Iqbal Shaikh Manager
Place: Mumbai
MAHINDRA UGINE STEEL COMPANY LIMITED
1016
The Directors present their 51
st
Report together with the audited
accounts of your Company for the year ended 31
st
March, 2014.
FINANCIAL RESULTS
(Rupees in crore)
2013-14 2012-13*
Gross income 728.84 992.89
Prot before interest and depreciation 56.84 60.87
Less: interest 13.91 37.14
Less: depreciation 16.07 20.15
Prot/ (Loss) before exceptional items
and taxation
26.86 3.58
Add: Exceptional item (loss on hive
off)/ prot on sale of land and sale of
long term investments in a subsidiary,
an associate and other group
companies
229.17 (47.00)
Prot/(Loss) after exceptional item
(before tax)
256.03 (43.42)
Less: Provision for taxation
- Current tax 69.70 2.53
- Deferred tax (3.87) (12.23)
- Short provision in respect of earlier
years (net)
2.05
Prot/(Loss) after tax 188.15 (33.72)
Balance of prot brought forward from
earlier years
43.46 77.18
Prot available for appropriation 231.61 43.46
Less: Proposed dividend on equity
shares
Less: Tax on dividend (excess for

earlier year written back)
Less: Transfer to General Reserves
Balance carried forward to Balance Sheet 231.61 43.46

*Note: Figures for the nancial year (FY) 2012-13 includes
nancials of the Steel business up to 9
th
July 2012 being the
date of transfer of the Steel business to the erstwhile wholly
owned subsidiary of the Company as at the closing hours of
9
th
July 2012 on slump sale basis as a going concern. Hence
the nancial gures for FY 2013-14 are not comparable with
FY 2012-13.
DIVIDEND
In view of anticipated merger of the Company, your Board has
not recommended any dividend for the nancial year 2013-14.
PERFORMANCE
The net sales value for the Stampings business for the year was
Rs. 723.02 crore as compared to Rs. 766.39 crore recorded in
the previous year registering a decline of around 5.9%. The
corresponding sales volume of the Stampings business was
recorded at 62836 tons as compared to the sales of 69318
tons in the previous year, registering a decline of around
9.4% over the previous year. During the year under review the
performance of the Stampings business was affected, mainly
due to industry de-growth in Utility Vehicle segment (declined
by 2%), Light Commercial Vehicle segment (declined by 14%)
and medium & heavy vehicle segment (declined by 21%)
and accordingly the Stampings sales volume declined as
compared to the previous year.
The Company has utilized the phase of slowdown in the
economy as an opportunity to:
Successfully develop products like Cargo Load body,
Fuel Tank, Lower Control Arm, Semi Trailing Arm and
Cross Car Beam Assembly, which shall be contributing
to increasing our sales of Value-added-Products in the
near future.
Implement various process improvement projects to
improve productivity and protability across all locations.
Commission Robotic Welding Assembly lines at Kanhe,
Pune and Nashik plants which enable to improve the
quality of products as well as productivity while reducing
the need of manpower.
These initiatives have strengthened the operations of the
Company and helped it to face the challenges of slowdown
in the economy and to some extent also absorb, the high
inationary pressures during the year.
During the nancial year under review, your Company earned a
prot of Rs. 26.86 crores before exceptional item and taxation
as compared to Rs. 3.58 crores recorded in the previous
year. The gross income of the Company witnessed a decline
from Rs. 992.89 crores (includes steel business gures upto
9
th
July 2012) as recorded in previous year to Rs. 728.84 crores
registered in the nancial year under review. The earnings
before other income, interest and depreciation for the nancial
year under review was Rs. 51.02 Crores (around 7.0%) as
compared to Rs. 58.81 Crores (around 5.9%) recorded in the
previous nancial year.
After the proposed merger of the Company (through an
Integrated Scheme of Merger, explained in detail in this
report) with Mahindra CIE Automotive Limited, the stampings
business expects to add new customers by leveraging the
reach of CIE Automotive. The stampings business also expects
to derive benets from such merger in respect of the technical
support for developing many new products and processes.
Your Company is also setting up a new plant at Zaheerabad
in Andhra Pradesh for manufacturing of Skin panels, welded
assemblies and products. This plant is expected to be
operational in last quarter of the nancial year 2014-15.
During the nancial year under review, the Company sold its
land of about 76 acres alongwith the buildings and structures
situated at Khopoli, Maharashtra. The said land and buildings
were sold as per the valuation report of an Independent Valuer
for approxmately Rs. 126 crores. The said sale of the land,
buildings and structures was with a view to monetize the
value of its unutilized assets and improve shareholder value
by freeing up capital to reduce debt and facilitate growth.
DIRECTORS REPORT
1017
SUBSIDIARY COMPANY:
During the nancial year under review, on 3
rd
October 2013,
your Company sold its entire equity stake of 51% (51,00,000
equity shares of Rs. 10 each) held by it in the equity share
capital of Mahindra Sanyo Special Steel Private Limited
(MSSSPL) formerly known as Navyug Special Steel Private
Limited, to Mahindra & Mahindra Limited and accordingly
MSSSPL ceased as the subsidiary of the Company with effect
from 3
rd
October 2013.
The Statement pursuant to Section 212 of the Companies Act,
1956 containing details of the Companys erstwhile subsidiary
for the part of the year is attached.
In accordance with the General Circular dated 8
th
February
2011, issued by the Ministry of Corporate Affairs, Government
of India, the Balance Sheet, Statement of Prot and Loss and
other documents of the subsidiary company for the part of
the year under review, are not being attached to the Balance
Sheet of the Company. The Company will make available
the Annual Accounts of MSSSPL, which was the subsidiary
Company for the part of the year under review, and the related
detailed information, to any Member of the Company who
may be interested in obtaining the same. Further, the Annual
Accounts of the erstwhile subsidiary would also be available
for inspection by any Member at the Registered Ofce of the
Company during working hours up to the date of the Annual
General Meeting.
INTEGRATED SCHEME OF MERGER
On 15
th
June 2013, the Board of Directors, subject to
necessary approvals and satisfaction of contractual and
statutory conditions, approved the Integrated Scheme of
Merger (Scheme) consisting of merger of the Company,
Mahindra Hinoday Industries Limited, Mahindra Investments
(India) Private Limited, Mahindra Gears International Limited,
Participaciones Internacionales Autometal Tres, S.L. (PIA 3)
with Mahindra Forgings Limited {now known as Mahindra
CIE Automotive Ltd. (MCIE)}. Subsequent to the approvals
received from the stock exchanges, on which securities of the
Company are listed and other statutory applicable provisions,
the Company has led the said Scheme with Honble High
Court of Judicature at Bombay seeking its directions for
holding the meeting of equity shareholders of the Company
for approval of the Scheme. The Honble High Court vide by
an Order made on 2
nd
May, 2014, has directed a meeting of
the equity shareholders of the Applicant Company be held
on the 5
th
day of June, 2014 for the purpose of considering,
approving, with or without modication(s), the Scheme. The
notice to this effect has already sent to the shareholders of
the Company.
The Company is also seeking the approval of the public
shareholders of the Company to the Integrated Scheme
of Merger by way of postal ballot and e-voting process in
compliance with the requirements of circular number CIR/
CFD/DIL/5/2013 dated February 4, 2013 read with circular
number CIR/ CFD/DIL/8/2013 dated May 21, 2013, both
issued by the Securities and Exchange Board of India (SEBI
Circular), conditions laid down in the observation letters
dated March 7, 2014, issued by the BSE Limited and the
National Stock Exchange of India Limited (collectively referred
to as Observation Letters) and under relevant provisions of
applicable laws.
After receipt of all approvals and satisfactions of the conditions,
contractual and legal, the Scheme will be implemented
and the record date will be determined for considering the
shareholders entitlement to the equity shares of MCIE as per
the share swap ratio mentioned in the Scheme i.e. 284 (Two
Hundred Eighty Four) fully paid-up Equity Share of Rs. 10
each of MCIE for every 100 (One Hundred) Equity Shares of
Rs. 10 each held by the shareholders in the Company.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statement of the Company, and
its erstwhile subsidiary (MSSSPL) prepared, in accordance
with Accounting Standard AS 21 forms part of this Annual
Report. The Consolidated Financial Statements presented
by the Company include the nancial results of its erstwhile
subsidiary company and its associate.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A detailed analysis of the Companys performance is mentioned
CORPORATE GOVERNANCE:
Your Company is committed to following the highest standards
of corporate governance. A Report on Corporate Governance
along with a certicate from the Auditors of the Company
regarding compliance thereof as stipulated under Clause 49
of the Listing Agreement forms part of the Annual Report.
FINANCE:
During the nancial year under review, the liquidity position
of the Company has improved substantially due to receipt of
proceeds from sale of land and investments and subsequent
repayment of debts. During the nancial year under review the
Company met its obligations towards capital expenditure and
working capital through mix of internal accruals and external
borrowings.
STOCK OPTIONS:
During the nancial year under review the Company allotted
1,81,750 equity shares to the stock options holders who have
exercised their options as per the Employees Stock Option
Scheme, 2006, of the Company. Accordingly the paid-up
equity share capital of the Company has been increased to
Rs. 32,66,42,790/- comprising of 3,26,64,279 equity shares of
Rs. 10 each.
set out in Annexure I to this Report.
1018
INDUSTRIAL RELATIONS:
During the year under review, the industrial relations scenario
at all the operating plants of the Company was satisfactory.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE:
Your Company has a dened policy on general health,
safety and environmental conservation and every employee
is responsible for the observance of measures designed
to prevent accidents, damage to health and to avoid
environmental pollution.
The Safety Committee members comprising representatives
of workers and executives from various departments meet
periodically for reviews.
DIRECTORS:
During the year under review, Mr. Keshub Mahindra, step down
from his directorship and Chairmanship of the Company, after a
long and eventful innings of about 50 years of service of which
more than 13 years were as the Chairman of the Company, with
effect from the conclusion of the Meeting of the Board of the
Directors held on 29
th
October, 2013. The Board has, placed on
its record a note of appreciation in recognition of Mr. Keshub
Mahindras outstanding contribution to the Company. The
Board of Directors has appointed Mr. Anand Mahindra as the
Chairman of the Company with effect from the conclusion of the
Board meeting dated 29
th
October, 2013.
Further During the year under review, Mr. S Ravi, has tendered
his resignation as the Director of the Company with effect
from 24
th
September 2013, the same was also accepted by
the Board of directors after placing of a note of appreciation
for his valuable contribution, at the Meeting of the Board of the
Directors held on 29
th
October, 2013.
Mr. Anand Mahindra and Mr. Uday Gupta, Directors, retires
by rotation at the ensuing Annual General Meeting, and being
eligible, offer themselves for re-appointment.
During the year Mr. Mukesh Kumar Gupta was appointed as
an additional director of the Company. He holds the ofce of
director upto the date of the ensuing Annual General Meeting.
A notice has been received from a member proposing the
candidature of Mr. Mukesh Kumar Gupta for the ofce of Director
of the Company at the forthcoming Annual General Meeting.
As per provisions of Section 149, 152 read with Schedule
IV and all other applicable provisions of the Companies Act,
2013 and the Companies (Appointment and Qualication of
Directors) Rules, 2014 (including any statutory modication(s) or
re-enactment thereof for the time being in force) and Clause 49 of
the Listing Agreement, the Board recommends the appointment
of Mr. Manojkumar Maheshwari, Mr. R. R. Krishnan, Mr. Sanjiv
Kapoor and Mr. Daljit Mirchandani as the Independent Directors
of the Company for a xed period of 1(one) year from the date
of forthcoming Annual General Meeting. Further, Mr. Nikhilesh
Panchal, Independent Director, whose period of ofce was liable
to determination by retirement of Directors by rotation under the
provisions of the Companies Act, 1956 and whose term expires
at this Annual General Meeting is proposed to be appointed for
a xed term of 1 (one) year as an independent director from
the date of forthcoming Annual General Meeting. The above
directors have being eligible, offered themselves for their above
proposed respective appointments. The Company has received
requisite notices in writing from member proposing Mr. Nikhilesh
Panchal, Mr. Manojkumar Maheshwari, Mr. R. R. Krishnan,
Mr. Sanjiv Kapoor and Mr. Daljit Mirchandani as the Independent
Directors of the Company.
The Company has received declarations from all the Independent
Directors of the Company conrming that they meet with the
criteria of independence as prescribed both under the applicable
provisions of the Companies Act, 2013 and under Clause 49 of
the Listing Agreement with the Stock Exchanges.
your Board of Directors, based on the representations received
conrm that:
as at 31
st
concern basis.
AUDITORS:
M/s. Deloitte Haskins & Sells LLP (DHS), Chartered
Accountants, retire as the Statutory Auditors of the Company
at the ensuing Annual General Meeting and have given their
consent for re-appointment as the Statutory Auditors of the
Company. The Shareholders will be required to elect Auditors
for the current year and x their remuneration.
The Company has received a Certicate from M/s. Deloitte
Haskins & Sells, LLP, to the effect that if their re-appointment is
made which would be within the prescribed limits under section
141(3)(g) and other applicable provisions of the Companies
Act, 2013 read with the Companies (Audit and Auditors)
Rules 2014 and declared that they are not disqualied for
re-appointment.
COST AUDIT REPORT:
Your Company had appointed Mr. Kishore Bhatia, a qualied
practicing Cost Accountant holding valid Membership No.
8241 for the nancial year 2012-13 with the approval of the
Central Government, Ministry of Corporate Affairs, New Delhi
to carry out cost audit of the Company. The Cost Auditor has
led the Cost Audit Report for the nancial year 2012-13 on
27
th
September, 2013 to the Central Government, Ministry of
1019
Corporate Affairs, New Delhi. The due date for ling the said
Cost Report was 30
th
September, 2013. The Board of Directors
of your Company has upon recommendation of the Audit
Committee appointed Mr. Kishore Bhatia, Cost Accountant,
to audit the cost accounts of the Company for the nancial
year ending 31
st
March, 2014 and the Central Government has
approved the appointment. As required under the provisions of
Section 224(1B) read with Section 233 (B)(2) of the Companies
Act, 1956, the Company has obtained a written conrmation
from Mr. Kishore Bhatia to the effect that he is eligible for
appointment as Cost Auditor under Section 233B of the
Companies Act, 1956. The Audit Committee has also received
a certicate from the Cost Auditor certifying his independence
and arms length relationship with the Company.
An amount of Rs 0.55 Lakhs in the aggregate consisting
of 3 matured xed deposits had remained unclaimed as at
31
st
March, 2014. Your Company had, from 1
st
May, 2005
discontinued acceptance of and renewal of deposits under the
provisions of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
etc., required to be disclosed in the Annual Accounts of the
Company pursuant to Clause 32 of the Listing Agreement are
furnished separately.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION
AND PROTECTION FUND
Pursuant to the provisions of Section 205A(5) and 205C of
the Companies Act, 1956, relevant amounts which remained
unpaid or unclaimed for a period of seven years have been
transferred by the Company, from to time to time on due
dates, to the Investor Education and Protection Fund.
Pursuant to the provisions of Investor Education and Protection
Fund (Uploading of information regarding unpaid and
unclaimed amounts lying with companies) Rules, 2012, the
Company has uploaded the details of unpaid and unclaimed
amounts lying with the Company as on 25
th
July, 2013 (date of
last Annual General Meeting) on the Companys website and
also on the Ministry of Corporate Affairs website.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Your Company is committed to its social responsibilities and
takes initiatives to serve the society as a good corporate
citizen. Your Company, during the year under review, has
successfully undertaken several CSR activities under the
groups Employees Social Option Scheme (ESOPS) such as;
A Sustainability Awareness Program conducted for
students about Environmental, Water and Energy
Conservation at Rudrapur Plant.
Distribution of stitched 104 uniforms, bags to students
including few blind students.
Distribution of school stationary to water bottles, bags &
uniforms.
Health/Eye check up camp, medication & advise for the
students, Children.
In addition to above few more notable initiatives take are
plantation of about 7775 trees at Kanhe, Nashik and Rudrapur
plants of the Company and nearby villages, distributed of Solar
Lanterns, Donation of school benches, Blood donation camps
at Kanhe, Nasik, Rudrapur plants, Health check up camps
with Symptomatic treatment for 114 villagers & 59 students at
Sangvi village and Vahangaon village, etc.
Your Company continue its emphasis on its CSR objective
of performing its responsibility towards society at large and,
during the year under review, the Board of Directors has
constituted the Corporate Social Responsibility Committee
(CSR) Committee comprising of directors namely Mr. R.R.
Krishnan (Chairman), Mr. Uday Gupta and Mr. Nikhilesh
Panchal, as its members. The major role of this Committee
is to formulate, recommend, implement and monitor the CSR
activities to be undertaken by the Company to meet/contribute
towards its Corporate social responsibility and sustainability
objectives. Accordingly the Committee has also framed its
CSR policy for carrying out activities in compliance with the
provisions of the Companies Act 2013 read with relevant Rules
framed thereunder. The said Policy has been approved by the
Board. Some of the activities which have been undertaken by
the Company during the year under review are;
Donation to Project Nanhi Kali Employees voluntarily
contribute donations to Nanhi Kali Project.
Project Hariyali Contribution towards Hariyali Project to
increase green cover by planting trees every year on an
ongoing basis.
Education: Scholarships/Felicitation is given to the
meritorious wards of the employees and village students
to help/support in their further education.
Employees Social Option Scheme (ESOPs) Employees
are encouraged to volunteer for various CSR projects in
the areas of education, health and environment.
Disaster Relief and Rehabilitation consistent and
timely support to relief and rehabilitation initiatives to
those who are affected due to natural calamities by either
contributing to the Prime Ministers or Chief Ministers
Relief Fund by contributing one day salary, donating
clothes & other items.
Health Services Organize health check up services
for school students and villagers to detect and take early
treatment for the various illnesses/diseases.
Environment Providing of street light and poles, solar
lanterns, drinking water tanks and coolers, tree plantation,
development of gardens inside the plant premises, etc.
SUSTAINABILITY INITIATIVES:
Your Company continues to be aligned to Mahindra Groups
approach towards sustainable development by making
conscious efforts to reduce environmental impact of business
as well as enhancing its responsibility towards society.
Your company continued its drive to identify and implement
projects for reduction in energy, water consumption, and
1020
waste generation and GHG emissions, to achieve the targets
set under its Sustainability Roadmap. During the year under
review various initiatives/activities were taken by the Company
on eco-efciencies, employee health & safety as well as
community development, the highlights of which are given
below:
1. A Common Guaranteed Safety Program was run across
all plants, to ensure improved awareness, on the job
safety training and use of personal protective equipment
was rolled out.
2. Energy efciency continued to be high on the agenda
which led to improvement in the specic energy use per
ton of production, as well as reduction in GHG emissions.
3. During the year, the new facility at Pantnagar was also
OHSAS 18001 and ISO 14001 certied.
4. In 2012-13, a beginning was made to cascade sustainability
awareness to the supply chain. During 2013-14, this
initiative was taken forward through a series of training
programs and audits of key suppliers having signicant
impact on our material supplies.
5. All plants continued to effectively engage the local
communities through employee volunteering programs
(ESOPs), which has brought about positive change in and
around the areas of operation.
These initiatives have also earned a series of awards for your
company, and more importantly, recognition from a valued
customer, Tata Motors Limited, for best performance.
During the year the triple bottom line performance for the
nancial year 2012-13 was published as a part of the Mahindra
Groups Sustainability Report, in accordance with the latest
guidelines of the internationally accepted Global Reporting
Initiative or the GRI standards and like the previous reports,
this report was externally assured by E&Y with an A+ rating
and GRI checked.
The Company has no employee who was in the emplopment
of the Company throughout the nancial year under review and
was in receipt of remuneration of not less than Rs 60,00,000
per annum during the nancial year ended 31
st
March, 2014
or not less than Rs 5,00,000 per month during any part of the
said year.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Rules, 1988 are set out in Annexure II to this Report.
ACKNOWLEDGEMENTS:
Your Directors wish to express their appreciation of the
continued support and co-operation received from the Banks,
Financial Institutions, Government Departments, Vendors,
Customers and Employees of the Company.
Anand Mahindra
Chairman
Mumbai: 21
st
May, 2014.
1021
ST
MARCH, 2014
Stock Purchase Scheme) Guidelines 1999:
Employees Stock Option Scheme 2006 (ESOS 2006)
(a) Options granted 10,98,000
(b) The Pricing Formula 1
st
Tranche 2
nd
Tranche
Discount of 15% on the average
Price preceding the specied
date -18
th
August 2006
Discount of 15% on the average
Price preceding the specied
date -24
th
October 2007
Average Price: Average of the daily high and low of the prices
for the Companys Equity Shares quoted on Bombay Stock
Exchange Limited during the 15 days preceding the specied
date.
The specied date: Date on which the Remuneration Committee
decided to grant options to eligible employees of the Company.
(c) Options vested 3,56,875
(d) Options Exercised 1,81,750
(e) The Total number of shares arising as a result of
exercise of Options
1,81,750
(f) Options Lapsed 7,41,125
(g) Variation of terms of Options At the Annual General Meeting held on 26
th
July, 2007, the
Company has passed a special resolution to provide for
recovery of Fringe Benet Tax from employees. Accordingly the
terms of options of ESOS scheme of the Company were varied
so as to enable the Company to recover Fringe Benet Tax from
employees.
(h) Money realised by exercise of Options Rs. 1,75,05,750/-
(i) Total number of Options in force as on 31.03.14 1,75,125
(j) Employee-wise details of Options granted to:
(i) Senior Managerial personnel As per Statement.
(ii) Any other employee who receives a grant in any
one year of Option amounting to 5% or more of
Option granted during that year.
None
(iii) Identied employees 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.
None
(k) Diluted Earnings Per Shares (EPS) pursuant to issue of
shares on exercise of option calculated in accordance
with Accounting Standard (AS) 20 Earnings per Share
Before exceptional items = Rs. 4.83
After exceptional items = Rs. 57.82
(l) Where the company has calculated 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 recognized
if it had used the fair value of the Options, shall be
disclosed. The impact of this difference on prots 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,
the employee compensation cost would have been lower by
Rs. 0.56 crores. Prot after tax would have been lower by
Rs. 0.37 crores and the basic and diluted earnings per share
would have been higher by Rs. 0.11.
1022
(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.
96.32
(n) A description of the method and signicant assumptions
used during the year to estimate the fair values of
options, including the following weighted average
information :
Method - Black Scholes Options Pricing Model
Signicant Assumptions 1
st
Tranche 2
nd
Tranche
(i) risk-free interest rate, 7.95% 7.27%
(ii) expected life, 3.5 Yrs. 3.5 Yrs.
(iii) expected volatility, 60.00% 73.54%
(iv) expected dividend yield and 4.32% 4.65%
(v) the price of the underlying share in market at the
time of option grant.
Rs. 85.50 Rs. 117.45
During the year the Company has not granted any options to employees or senior managerial personnel.
STATEMENT ATTACHED TO ANNEXURE I TO THE DIRECTORS REPORT FOR THE YEAR
ENDED 31
ST
MARCH, 2014.
Name of Senior Managerial Persons to whom Stock Options have been granted Options granted
on 18.08.06
Mr. K.V. Ramarathnam* 100000
Mr. Deepak Dheer* 75000
Mr. Hemant Luthra 125000
Mr. R.R. Krishnan 15000
Mr. M.R. Ramachandran* 15000
Dr. H.N. Sethna* 15000
Mr. S. Ravi* 15000
Mr. Rajeev Dubey* 15000
Mr. N.V. Khote* 15000
*ceased to be director of the Company.
1023
ANNEXURE II
STATEMENT PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH 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 31
ST
MARCH, 2014.
Your company continued its drive to identify and implement projects for reduction in energy, water consumption, and
waste generation and GHG emissions, to achieve the targets set under its Sustainability Roadmap. During the year some
of the initiatives/activities were taken as under:
Conservation of Energy
1. Project-Energy saving by simple electrical modication, replacing Tube lights with CFL bulb
2. Making Energy conservation display/Gallery at all the plants
3. Installation timer for fans and conveyor
4. Timer for main motor stop in ideal run
5. Cooling Tower Motor capacity reduced
6. Installing and operating VFD efciently
7. Compressor Loading/unloading Set Point
8. Installed Magnetic device at Propane burner
9. Installed Heat Recovery system
Nil.
(c) Impact of the measures taken at (a) & (b) above for reduction of energy consumption and consequent impact on
the cost of production of goods:
1. Energy consumption saving of about 57 KWH per hour due to above initiatives.
2. Magnetic device at Propane burner (tentative saving 2 Kg of Propane per hour) at Rudrapur Plant
3. Heat Recovery system (tentative saving of 6 Kg of Propane /Hr) at Rudrapur Plant
1024
(d) Total energy consumption and energy consumption per unit of production as per FormA of the Annexure to the
Rules is as follows:-
FORM A

Financial Year 2013-2014 Financial Year 2012-2013**
A) POWER & FUEL
CONSUMPTION
The Company
(stampings
business) TOTAL STEEL** STAMPINGS TOTAL**
1
ELECTRICITY

a) PURCHASED
UNITS (KWH) 17,010,024.00 17,010,024.00 45,535,945.00 17,757,199.00 63,293,144.00
TOTAL AMOUNT (Rs) 107,977,656.93 107,977,656.93 306,225,997.00 119,741,222.00 425,967,219.00
RATE/UNIT (Rs) 6.35 6.35 6.72 6.74 6.73
b) OWN GENERATED
(KWH)
390,062.00 390,062.00 14,044.00 670,952.00 684,996.00
2 COAL FOR GASIFIER (MT) N.A 531.00 N.A 531.00
TOTAL AMOUNT (Rs) N.A 3,540,104.00 N.A 3,540,104.00
RATE/UNIT (Rs) N.A 6,666.86 N.A 6,666.86
3 FURNACE OIL K.LTRS N.A 3,030.00 N.A 3,030.00
RATE/UNIT (Rs) N.A 42,299.61 N.A 42,299.61
4 CARBON BLACK K.LTRS N.A 1,390.00 N.A 1,390.00
RATE/UNIT (Rs) N.A 40,418.81 N.A 40,418.81
5 OTHER FUEL OIL (L.D.O.)
K.LTRS
N.A 124.00 N.A 124.00
RATE/UNIT (Rs) N.A 58,492.55 N.A 58,492.55
B) CONSUMPTION PER UNIT OF
PRODUCTION

1 PRODUCTS (MT) * 62,109.00 62,109.00 30,827.00 63,548.00 186,354.00
2 ELECTRICITY (KWH/MT)
Total for the Plant
280.15 280.15 1,477.60 289.99 2,078.00
3 FURNACE OIL (K.LTRS/MT)
Total for the Plant
N.A 0.098 N.A 0.10
4 COAL FOR GASIFIER (MT/MT)
Total for the Plant
N.A 0.017 N.A 0.02
5 OTHER FUEL OIL (K.LTRS/MT)
Total for the Plant
N.A 0.004 N.A
6 TOTAL FUEL (FURNACE
OIL+L.D.O.) (K.Litres /MT)
N.A 0.102 N.A 0.10
* Indicates in house production only.
** The gures of steel business are upto 9
th
July, 2012, the date of transfer of the steel business by the Company.
1025
Efforts made in technology absorption as per Form B of the Annexure to the Rules is as follows :
FORM B
RESEARCH & DEVELOPMENT (R&D)
1. Specic areas in which R & D carried out by the company during the nancial year 2013-14 and benets derived as
result of the same:
There were no Research and Development activities undertaken by the Company during the nancial year under review.:-
2. Future Plan of action: Nil
3. Expenditure on R&D: Nil
4. Technology Absorption, Adaptation and Innovation: Nil
5. Import of Technology for the last ve years: Nil
C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Particulars with regard to Foreign Exchange and outgo are given in the
notes to Accounts.
Anand Mahindra
Chairman
Mumbai: 21
st
May, 2014.
1026
COMPANY OVERVIEW
Mahindra Ugine Steel Company Limited (MUSCO) is one of
the leading manufacturers of Stampings products in India
and caters to the automobile industry with a wide range of
automobile stampings- products.
MUSCO manufactures stampings products like skin and
non skin panels, chassis reinforcements, cross members,
engine components etc. from its production units located at
Kanhe, Nashik, Rudrapur and Pantnagar and these units are
located near important automotive clusters in India. Majority
of the revenue of the stampings business comes from the
utility vehicle segments though the company has signicant
presence in the tractor, light commercial vehicles, passenger
cars and three wheeler segments of the automotive market.
Some of the largest automotive and tractor manufactures
in India are the customers of the stampings products of the
Company.
The manufacturing facilities at the stampings business
of your company provide various services ranging from
conceptualization to design, testing, and manufacture of
stamping products. The core strengths of the business lies in
tool design and development, and in providing value-added
services like welded assemblies and nishing operations
such as powder coating and electrophoretic deposition (ED)
coating.
INDUSTRY STRUCTURE AND OUTLOOK
Indian Economy
Economic growth in India eased to 4.6 per cent in the rst
three quarters of FY14 and the just-concluded nancial year
may log a lower growth rate than last year. Overall, the
Indian economy had been exhibiting inationary tendencies
in the previous years and as a response the Reserve Bank
of India (RBI) started raising policy rates from March 2010.
High rates as well as policy constraints adversely impacted
investment, and in the subsequent two years viz. 2011-12 and
2012-13, the growth rate slowed to 6.2 per cent and 5.0 per
cent respectively.
The slowdown, especially in 2012-13, has been across the
board, with no sector of the economy unaffected. With the
global economy also showing signs of a sustained recovery
in 2013, and the post elections improved sentiments should
help improve economic conditions. The country is expected to
grow for the next ve years, due to a likely stable government
post-elections.
Automotive Market
The target segments of the Company in India are the passenger
car, utility vehicles (UV), Light Commercial Vehicles (LCV) &
tractor markets. In the current nancial year, the cumulative UV
production has declined marginally by ~2% compared to the
previous year. Similarly, the production of cars the cumulative
passenger cars production has declined by 7.4% compared
to the previous year. Overall, passenger vehicle (cars +
UVs) production shrank marginally by ~4% compared to the
corresponding period in the previous year.
The cumulative LCV production fell even more sharply
by approximately 14%. However, the Tractor industry
production has shown a healthy 20% growth compared to the
corresponding period in the previous year.
Leading auto industry analyst Crisil, expects the auto industry
to return on to the growth trajectory in 2014-15, but this return
to growth is expected to be gradual. Similarly they expect
the LCV segment sales to remain sluggish for the rst two
quarters, and thereafter recover moderately.
In line with this we expect a slight growth in the overall
passenger vehicles and LCV markets. The domestic tractor
market is also expected to retain its growth momentum, even
though Crisil expects the growth to slow down.
Performance
During the year under review the business of the Company;
on the back of de-growth in Utility Vehicle, Passenger Vehicle
and Light Commercial Vehicle segment, posted a negative
growth in sales as compared to the previous year. The Farm
equipment sector registered a good performance in the
nancial year under review, due to which the Company was
able to ll the decit of negative growth in the automotive
sector to some extent.
In nancial year 2013-14, the Stampings business had posted
a negative growth. The key performance parameters are as
follows:
Sale of stampings & assemblies decreased from 69,318
tonnes in the nancial year 2012-13 to 62,836 tonnes
in the nancial year 2013-14 posting a negative growth
of 9%.
Operating Income witness drop from Rs 766.39 crore
recorded in nancial year 2012-13 to Rs 723.02 crore in
nancial year 2013-14 posting a negative growth of 6%.
Operating margin (EBIDTA) dropped from Rs 66.28 crore
in nancial year 2012-13 to Rs 56.84 crore in nancial
year 2013-14 mainly due to de-growth in Utility Vehicle,
Light Commercial Vehicle and medium & heavy vehicle
segment, in the year under review
Opportunities and Strategic Outlook
Your company operates in sheet metal components,
assemblies and sub-assemblies, BIW segment of the Auto
Components Industry. The demand for the auto components
is directly related to the uptake by OEMs. By all estimates the
Indian auto industry will continue to grow, even though there
has been a slowdown in the growth in recent quarters. The
Indian auto components industry is thus well poised to achieve
strong growth in the near term. The drive towards localization
by many foreign car manufacturers in India, also presents an
opportunity for Indian Auto component manufacturers.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
1027
According to the Auto Components Manufacturers Association
(ACMA), the Indian auto components industry is likely to
grow to US$ 110 billion by 2020 with the domestic market
share of ~US$ 80 billion. The share of the auto components
industry in the countrys GDP is likely to increase to 3.60% by
2020, up from 2.40% in FY12. Given good long term demand
prospects in the domestic market and with India emerging
as a favored low-cost sourcing destination, auto component
manufacturers are likely to invest in increasing production
capacities and technological capabilities. Your company is also
looking to expand its manufacturing capacity to cater to the
growing demand of automotive products from southern parts
of India.
Furthermore, companies would continue to diversify their
product portfolio to de-risk their businesses. However,
competition is expected to increase and prices of raw material
are likely to follow an upward trend. This is expected to exert
pressure on the industrys prot margins. In such a scenario,
cost control programs would assume greater signicance for
the industry players, both big and small.
Threats and Risks
Indian auto components industry is poised to sustain its
revenue growth momentum over the short to medium term.
However, the industry protability may face pressures due to;
a) Pricing pressures from OEMs, which in turn are entering
into a phase of heightened competitive intensity thus
putting constraints on their pricing power
b) Threat of rising commodity prices
c) Likely higher cost of funds consequent to hardening of
interest rates
d) Import from other low cost locations
e) Increasing trend towards light weighting vehicle design
and aluminum competent.
The move towards stricter emission norms is also expected
to lead to lighter weight auto components, smaller engines
and greater usage of Aluminium and Plastics. The Company is
conscious of this fact and many of its innovations are focused
around lighter weight components and newer materials.
In addition companies engaged in select product categories
within the auto components industry are expected to incur
large capex for enhancing production capacities to meet the
growing demand, which could affect the capital structure
and return metrics of such companies over the short term.
However, the anticipated strong business growth should result
in healthy cash accruals and enable companies to tide over
the short term pressures and emerge with a stronger over the
medium term.
Other risks to growth and protability of Indian component
industry include increase in competition from other countries
to capture business both in the international as well as
domestic markets, uncertainty arising from currency volatility
and, ability to acquire capabilities in tune with technological
advancements. The industry efforts to mitigate the above risks
along with policy measures of the government would determine
the impact of the above risks on the auto components industry
going forward.
FINANCIAL PERFORMANCE
In continuance with the details provided above, summary of nancial performance of the Company is presented below:
Amount in (Rs) crore
Particulars Steel
(including Bearing Races)*
Stampings Total*
April-Mar 14 April-Mar 13 April-Mar 14 April-Mar 13 April-Mar 14 April-Mar 13*
Sales 224.44 723.02 766.39 723.02 990.83
Other Income 1.41 5.82 0.65 5.82 2.06
Total Income 225.85 728.84 767.04 728.84 992.89
EBIDTA (5.41) 56.84 66.28 56.84 60.87
PBT (25.26) 26.86 28.84 26.86 3.58
Exceptional items (loss on
hive off) / prot on sale of
land & investments 229.17 229.17 (47.00)
PAT 188.15 188.15 (33.72)
*Note: The gures of nancial year 2012-13 for the Steel business are up to 9
th
July 2012 being date of transfer of Steel business
to the wholly owned subsidiary of the Company as at the closing hours of 9
th
July 2012, on slump sale basis as a going concern.
Accordingly, the gures of the nancial year 2012-13 of the Company comprises of nancials gures of the Steel business up to
9
th
July 2012. Hence the total nancial gures of FY 2013-14 are not comparable with FY 2012-13.
1028
The Mahindra CIE Deal
On 15
th
June 2013, Mahindra & Mahindra Limited (M&M) and
CIE Automotive Group of Spain (CIE) got into an agreement
to create one of Indias larger multi-technology automotive
component companies.
Step 1:
CIE has purchased controlling stakes in Mahindra CIE
Automotive Ltd (MCAL) (formerly known as Mahindra
Forgings Limited), Mahindra Composites Limited (MCL)
and Mahindra Hinoday Industries Limited (MHIL) and is
a majority shareholder after the closure of Open Offer of
MCAL & MCL.
Simultaneously, M&M has purchased an equity stake
of 13.5% in CIE Automotive Limited. Therefore, M&M
continues to be a strategic investor in the auto components
business with participation in Mahindra CIE and CIE Spain
(parent level).
Effective 29
th
November 2013, Mahindra Forgings Limited
has been renamed as Mahindra CIE Automotive Limited.
Step 2:
MUSCO, MHIL, Mahindra Investments (India) Private Limited,
Mahindra Gears International Limited, Participaciones
Internacionales Autometal Tres, S.L. (PIA 3) and Mahindra
Investment India Private Limited will merge in to MCAL through
an integrated scheme of merger. MCL will merge into MCAL
through a separate scheme of merger. This is expected to be
completed by October 2014 subject to regulatory approvals.
The structure of the deal is also indicative that M&M is
reafrming its commitment to the automotive components
business.
The Rationale for the Deal
Both CIE and M&M have had a strategy to globalize their auto
components business interests. This partnership will help both
the groups in furthering that aim.
SYNERGIES WITH PARENT
In light of the deal with CIE, your company would benet in
a lot of areas. Some of the partnering process has already
begun in the form of technological support for new products
in existing materials.
Relationship with CIE Group
CIE group is a group specialised in providing automotive
components and sub-assemblies to, to the global automotive
industry, working with complementary technologies and a
number of different associated processes.
With the active involvement of the CIE group MUSCO intends
to achieve the following synergies:
1. CIE products and customers can be introduced in India.
2. Gaining Market Share in India with existing CIE customers
(Western OEMs from global markets) and expanding into
all the technologies which CIE operates in viz. Aluminium,
Painting, and Plastics.
3. Improving operational efciencies by using CIEs expertise
and enhancing the product offerings.
MUSCO will adhere to the corporate values, principles and
established corporate governance practices of the CIE Group.
Relationship with Mahindra Group
Mahindra & Mahindra; which holds a majority stake in MUSCO,
is the agship company of the Mahindra group and one of the
leading automotive manufacturers in India. M&M is an anchor
customer but there is an arms-length relationship between
M&M and MUSCO. Association with the Mahindra Group aids
MUSCO in winning new businesses due to higher brand recall
and obtaining nancial assistance, whenever required.
SAFETY, HEALTH AND ENVIRONMENT
The Company has an effective policy framework; on Safety,
Health & Environment (SHE) for protecting the safety, health
and welfare of its employees and workers. The Company
accords sufcient priority to the objectives of preserving and
developing the environment, maintaining a safe work place,
enhancing the quality of the work conditions and health
aspects of its employees. The companys SHE policy not only
meets all applicable statutory requirements but also focuses
on motivation, learning and training of employees. The process
dened under the SHE Policy ensures leadership from the top
management for improving safety, environment and health
aspects in operations while laying down norms. It also lays
down norms for participation from across the management
and workforce hierarchy. External audits are conducted to
ensure effectiveness of the SHE policy and initiatives and
recommendations are considered for further improvements
in SHE process. SHE issues are addressed proactively and
effectively in terms of ISO standards and guidelines. The
Company plant at Rudrapur received ISO 14001 and OHSAS
18001 certicates. The Kanhe and Nashik locations received
(EMS) ISO 14001: 2004 and OHSAS 18001: 2007 certicates.
The Company accords the highest importance to adopting
safety measures for preventing accidents. In case of any
accident, a thorough investigation is carried out to identify
the root cause and immediate steps are taken to eliminate
the root cause to ensure it does not recur. The Company
regularly conducts counselling and safety review meetings for
employees to appraise and educate them on the adoption of
safety measures and avoidance of unsafe practices. Awareness
and rst aid trainings are conducted regularly along with mock
drills as an exercise in disaster management readiness. The
Company is in compliance with the regulations pertaining to
safety. The objective is to achieve zero accident, zero incidents
and a safe work environment.
The Company periodically conducts health checkups and
health awareness programmes, First Aid training given by
Govt. authorized institutes for all employees and if necessary
provides prompt medical assistance to its employees. The
Company has an internal plant dispensary which operates
round the clock and is manned by qualied doctors supported
by staff who are available for addressing health issues of
employees. The Company maintains high hygienic and
housekeeping standards across the work places. The goal of
all occupation health and safety measures is to encourage a
safe work environment.
1029
MATERIAL DEVELOPMENT IN HUMAN RESOURCES /
The total employee strength of the Company at the end of the
nancial year 2013-14 was 997 employees comprised of 383
Ofcers and 614 permanent workmen and employees. Apart
from above employee strength, the Company hires Apprentice,
Trainees and Contract workers from time to time.
The Company conducts regular training programs for ofcers
and workmen through internal and external professionals,
experts in various areas of operations and selectively sends
ofcers to attend Business Education Programs of reputed
Institutions to improve their skills and knowledge.
The Company involves its employees in all HR Activities
to develop them and recognize them from time to time to
increase the Employee Morale and Motivation. The Human
Resources policies are comprehensive and based on the best
of the prevailing HR practise. The performance evaluation and
management process continues to be the backbone of all HR
activities and is based on an appropriate goal-setting process.
The Company encourages all employees and workers to
participate in a fair and transparent feedback system called
Bindass Bol (talk candidly) for sharing views, concerns and
opinions.
harassment in which it formalized a free and fair enquiry
process with clear timeline. The Company has also constituted
an internal complaint committee at major location to which
employees can write their complaints. There was no case/
complaint reported under the Sexual Harassment of Women
at Workspace (Prevention, Prohibition and Redressal) Act,
2013 during the nancial year 2013-14. The relationship of
the Company with its Human Resources was cordial in the
nancial year 2013-14.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has adequate internal controls for its business
processes across departments to ensure efcient operations,
compliance with internal policies, applicable laws and
regulations, protection of resources and assets, and accurate
reporting of nancial transactions. The Company also has an
internal audit system which is conducted by an independent rm
of Chartered Accountants/Consultants so as to cover various
operations on continuous basis. Summarized Internal Audit
Observations/Reports are reviewed by the Audit Committee
on a regular basis. The nance and accounts functions of
the Company are well staffed with qualied and experienced
members. The internal controls are complemented, on an
on-going basis, by an extensive program of internal audits
being implemented through-out the year. The Company
uses an Enterprise Resource Planning (ERP) package, which
enhances the internal control mechanism. The internal controls
are designed to ensure that the nancial and other records of
the Company are reliable for preparing nancial statement and
other data for maintaining the accountability of assets.
Looking Ahead
With continued support of its parents the Mahindra and CIE
groups, your company will continue to strive for improved
nancial performance. The Company also recognizes the long
term trend towards growth especially in India, and will continue
to look out for and evaluate opportunities in this direction.
Certain statements in the Management Discussion & Analysis
expectations or predictions may be forward looking
statements within the meaning of applicable securities laws
and regulations. Actual results could differ from those express
or implied. Important factors that could make a difference to
the Companys operations include raw material availability and
prices, cyclical demand and pricing in the Companys 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.
Particulars of loans/advances and investment in its own shares by listed companies, their
subsidiaries, associates, etc., pursuant to Clause 32 of the Listing Agreement as on 31
st
March, 2014
Loans and advances in nature of loans to subsidiaries;
Name of the Company
Balance as on
31
st
March, 2014
Rs Crores
Maximum amount
outstanding during the year
Rs Crores
Investment by the loanee in
the shares of parent company
No. of shares
Mahindra Sanyo Special Steel
Private Limited (subsidiary till
3
rd
October 2013)
0.11 0.11 NIL
Loans and advances in the nature of loans to associates
Name of the Company
Balance as on
31
st
March, 2014
Rs Crores
Maximum amount
outstanding during the year
Rs Crores
Investment by the loanee in
the shares of parent company
No. of shares
Mahindra Hotels and Resorts Limited.
(associate till 3
rd
October 2013)
0.64 * 0.64 * Nil
1030
Companys philosophy on code of Corporate Governance
The Company follows the good Corporate Governance
practices in all spheres of its activities and operations.
The sound corporate governance is an integral part of the
philosophy of the Company with an objective of value creation
for its stakeholders. The management governs the affairs of
the Company in a fair, honest, ethical, transparent and legal
manner to ensure optimum utilization of available resources
for maximizing benets for all its stakeholders. The Company
has well dened Codes of Conduct for its employees as well
as its Directors. Both these codes are available on the website
of the Company. The Company makes prompt, complete
and accurate disclosures under the applicable laws about
its nancials, shareholding and other material information
for knowledge of its stakeholders. The corporate structure,
business and disclosure practices at the Company are in
complete adherence to its Corporate Governance Philosophy.
The Company believes in setting high standards of ethical
values, transparency, integrity and a disciplined approach
to achieve excellence in all its sphere of activities for value
creation for its stakeholders.
A Report on compliance with the Code of Corporate
Governance as prescribed by the Securities and Exchange
Board of India and incorporated in Clause 49 of the Listing
Agreement is given below.
I. BOARD OF DIRECTORS - Constitution and Composition
The Board of Directors of your Company as on 31
st
March,
2014 comprises of ten directors and the composition
of the Board is in accordance with the requirements of
Clause 49 of the Listing Agreement. All Directors have
extensive experience, knowledge and expertise in their
respective functional areas.
The Company has a Non-Executive Chairman and
the number of Non-Executive Independent Directors
comprises of more than fty percent of the total number
of Directors as on 31
st
March, 2014. The Managing
Director along with the Senior Management Personnel
of the Company, manage the day-to-day affairs of the
Company. The Managing Director functions under the
overall supervision and control of the Board.
The Chairman of the Company, though professional
Director in his own individual capacity, belong to the
promoter group of the holding company Mahindra &
Mahindra Limited (M&M). Mr. Hemant Luthra, Non-
Executive Director of the Company, is in the whole
time employment of M&M, and draws remuneration
from it. Professional fees of Rs. 33,43,225/- for the year
2013-2014, has been paid to Khaitan & Co., Advocates &
Solicitors, in which Mr. Nikhilesh Panchal, Non-Executive
Independent Director is a partner.
Mr. Harsh Kumar, Non-Executive Director of the Company,
is the Managing Director of Mahindra Intertrade Limited,
a subsidiary of M&M and he draws remuneration from it.
Apart from the above and the reimbursement of
expenses incurred in the discharge of their duties and
the remuneration that these Directors would be entitled
to under the Companies Act, 1956 or the Companies Act
2013 as Non-Executive Directors, none of the Directors
and Independent Directors, have any other material
pecuniary relationship or transaction with the Company,
its Promoters, its Directors, its Senior Management, its
holding Company, subsidiaries and associate which, in
their judgment, would affect their independence. The
Independent Directors are not related to Promoters or
senior management of the Company. The Directors of the
Company are not inter-se related to each other.
Board conrming that there are no material, nancial
and/or commercial transactions between them and the
Company which could have potential conict of interest
with the Company at large.
A. Composition of Board
The total strength of the Board as on 31
st
March, 2014 is
Ten Directors comprising of a Non-Executive Chairman,
Managing Director, Two Non-Independent Non-Executive
Directors and Six Independent Non-Executive Directors.
During the year under review, Mr. Keshub Mahindra,
resigned as the Director and the Chairman of the Board
with effect from the conclusion of the Board meeting dated
29
th
October 2013. All Directors including Independent
Directors are professionals in their respective elds
with expertise and experience in general corporate
management, nance, banking and other allied elds.
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 of more than 10 Committees
and Chairman of more than 5 Committees (as specied
in Clause 49 of the Listing Agreement), across all the
companies in which he is a Director.
CORPORATE GOVERNANCE REPORT
1031
The Constitution of the Board as on 31
st
March, 2014 is as under:
Directors Category Total number
of Committee
Memberships of
Public Companies
as on 31
st
March,
2014. +
Total number of
Chairmanships
of Committees of
Public Companies
as on 31
st
March,
2014. +
Directorships of
Public Companies
as on 31
st
March,
2014. *
Non-Executive
Mr. Anand G. Mahindra - Chairman Non Independent 1 Nil 8
Mr. Hemant Luthra Non Independent 2 2 7
Mr. Harsh Kumar Non Independent 1 Nil 3
Mr. R.R. Krishnan Independent 2 1 2
Mr. Mukesh Kumar Gupta** Independent Nil Nil 1
Mr. Manoj Kumar Maheshwari Independent 3 Nil 6
Mr. Sanjiv Kapoor Independent 7 5 7
Mr. Daljit Mirchandani Independent 2 1 2
Mr. Nikhilesh Panchal Independent 1 Nil 2
Executive
Mr. Uday Gupta - Managing Director Non Independent 1 Nil 1
laws applicable to the Company, as well as steps taken
by the Company to rectify instances of non-compliances,
if any, review of major legal issues, minutes of the Board
Meetings of your Companys unlisted subsidiary company,
adoption of quarterly/half-yearly/annual results, signicant
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, information
on recruitment of Ofcers just below the Board level,
including the Company Secretary/Compliance Ofcer.
C. Number of Board Meetings, attendance record of the
Directors at Meetings of the Board and at the last
Six Meetings of Board of Directors were held during the
year 1
st
April, 2013 to 31
st
March, 2014 on the following dates:
- 3
rd
May, 2013 - 15
th
June, 2013 - 25
th
July, 2013
- 29
th
October, 2013 - 7
th
February, 2014 - 31
st
March, 2014
The gap between two meetings did not exceed four
months. These meetings were well attended by Directors.
The Fiftieth Annual General Meeting (AGM) of the
Company was held on 25
th
July, 2013.
** Treated as Non-independent with effect from 1
st
April,
2014 as per the provisions of the Companies Act, 2013.
* Excludes Directorships/membership in Private Companies,
Foreign Companies, Companies registered under
Section 25 of the Companies Act, 1956 and Government
Bodies but includes Directorship in Mahindra Ugine Steel
Company Limited.
+ Committees considered are Audit Committee and
Stakeholders relationship Committee or Shareholders/
Investors Grievance Committee, including in Mahindra
Ugine Steel Company Limited. Total number of committee
membership includes the Chairmanship.
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 Managing
Director briefs the Board at every Meeting on the overall
performance of the Company, followed by presentations
by other Senior Executives of the Company. A detailed
functional report is also placed at Board Meetings. The
Board also inter alia reviews strategy and business
plans, annual operating and capital expenditure budgets,
investment and exposure limits, compliance reports of all
1032
The attendance of the Directors at these Meetings was as
under:
Director Number
of Board
Meetings
Attended
Attendance
at the last
AGM
Mr. Keshub Mahindra 1 No
Mr. Anand G. Mahindra 4 Yes
Mr. Uday Gupta 5 Yes
Mr. Hemant Luthra 5 Yes
Mr. R.R. Krishnan 6 Yes
Mr. S. Ravi (upto 24.09.2013) No
Mr. Manoj Kumar Maheshwari 4 No
Mr. Harsh Kumar 5 Yes
Mr. Sanjiv Kapoor 5 Yes
Mr. Daljit Mirchandani 4 No
Mr. Nikhilesh Panchal 5 Yes
Mr. Mukesh Kumar Gupta *
(Nominee of LIC)
4 No
* Appointed w.e.f. 25.07.2013.
D. Directors seeking appointment/re-appointment
Mr. Anand Mahindra and Mr. Uday Gupta, retire by
rotation and, being eligible, have offered themselves for
re-appointment.
During the year Mr. Mukesh Kumar Gupta was appointed
as an additional director of the Company. His appointment,
as Directors liable to retire by rotation, is proposed at the
forthcoming annual general meeting. Mr. Mukesh Kumar
Gupta holds the ofce of director upto the date of the
forthcoming Annual General Meeting. A notice has been
received from him proposing his candidature for the ofce
of Director at the ensuing Annual General Meeting.
Mr. Uday Gupta was reappointed by the Board of Directors
at its meeting held on 31
st
March, 2014, as the Managing
Director of the Company for a period of 1(one) year with
effect from 5
th
May, 2014, on the terms, as approved
and recommended, by the Nomination & Remuneration
Committee of the Board, subject to approval of the
members of the Company and such other approvals as
may be required. His re-appointment as the Managing
Director is proposed for the approval of the members at
the forthcoming Annual General Meeting.
The Companies Act, 2013 provides appointment of
Independent Directors. Further in terms of Section 152 (6)
of the Companies Act 2013, independent directors are not
are liable to retire by rotation, and pursuant to Section 149
they can hold ofce for not more than two consecutive
terms of ve years each. In view of the above provisions,
Mr. R.R. Krishnan, Mr. Manojkumar Maheshwari, Mr. Sanjiv
Kapoor, Mr. Daljit Mirchandani directors, are proposed
to be appointed as an independent Director, under
the provisions of the Companies Act 2013, for a xed
period of 1 year with effect from the date of forthcoming
Annual General Meeting. Further, Mr. Nikhilesh Panchal,
Independent Director, whose period of ofce was liable to
determination by retirement of Directors by rotation under
the provisions of the Companies Act, 1956 and whose term
expires at this Annual General Meeting is proposed to be
appointed for a xed term of 1 (one) year as an independent
director with effect from the date of forthcoming Annual
General Meeting.
Brief resume of the directors seeking re-appointment/
appointment are presented below:
Mr. Anand Mahindra (DIN 00004695)
Mr. Anand G. Mahindra, Chairman of the Company,
graduated with Honors (Magna cum laude) from Harvard
College, Cambridge, Massachusetts, in 1977. In 1981
he secured an MBA degree from the Harvard Business
School, Boston, Massachusetts. He returned to India
that year and joined Mahindra Ugine Steel Company Ltd
(MUSCO), the countrys foremost producer of specialty
steels, as Executive Assistant to the Finance Director. In
1989 he was appointed President and Deputy Managing
Director of the company.
During his stint at MUSCO, he initiated the Mahindra
Groups diversication into the new business areas of real
estate development and hospitality management.
In the summer of 1991, he was appointed Deputy
Managing Director of Mahindra & Mahindra Ltd., the
countrys dominant producer of off-road vehicles and
agricultural tractors. He initiated a comprehensive change
programme in Mahindra & Mahindra Ltd. to make the
company an efcient and aggressive competitor in the
new liberalized economic environment in India.
In April 1997, he was appointed Managing Director of
Mahindra & Mahindra Ltd, and in January 2003 given the
additional responsibility of Vice Chairman. On 9
th
August
2012, he was appointed Chairman and Managing Director
of Mahindra & Mahindra Ltd.
Today, the Mahindra Group is a US $ 16.7 billion
organization, and one of Indias top 10 industrial houses.
Mahindra has evolved into a socially and environmentally
responsible global federation of companies with a leading
presence in each sector in which it is present.
Mahindra Group is present across the automotive
spectrum two-wheelers, three-wheelers, commercial
vehicles, SUVs, MPVs to sedans, tractors, and even
powerboats and aircrafts. In addition, the Groups
diversied nature of business spans many frontiers
automotive components, Finance, Insurance, IT, Retail,
Real Estate, Hospitality, Logistics, After-Market.
During Mr. Anand Mahindras tenure, Mahindra Group has
also grown inorganically, seizing opportunities across the
globe. Recent acquisitions include Ssangyong Motors,
Reva Electric Car Company, Satyam Computer Services,
Aerostaff Australia, Gippsland Aeronautics among others.
1033
Mr. Anand Mahindra is the co-founder of the Harvard Business
School Association of India, an association dedicated to the
promotion of professional management in India.
He was a co-promoter of Kotak Mahindra Finance Ltd.,
which in 2003 was converted into a bank. Kotak Mahindra
is one of the foremost private sector banks today.
As a leading industry gure, he has served as President
of the Confederation of Indian Industry in 2003-04 and
has also been President of the Automotive Research
Association of India (ARAI). He also served on the Boards
of the National Stock Exchange of India and the National
Council of Applied Economic Research, and as a member
of the Council of Scientic & Industrial Research.
Recognition
Mr. Anand Mahindra continues to receive several honours,
a few of which are:
Knight of the Order of Merit by the President of
the French Republic.
Rajiv Gandhi Award 2004 for outstanding
contribution in the business eld.
2005 Leadership Award from the American India
Foundation for his, and the Mahindra Groups
commitment to corporate social responsibility.
CNBC Asia Business Leader Award for the year
2006.
The Most Inspiring Corporate Leader of the Year
2007 from NDTV Prot.
Business Man of the Year 2007 from Business India.
Harvard Business School Alumni Achievement
Award 2008.
National Statesman for Excellence in Business
Practices Qimpro Platinum Standard 2008 Award
by Qimpro Foundation.
CNBC TV18 Outstanding Business Leader of the
Year 2009.
Business Leader of the Year 2009 by Economic Times.
Ernst & Young Entrepreneur of the Year India
award for 2009.
Indian of the Year award 2009 by NDTV.
IMC Juran Quality Medal 2010 by IMC Ramkrishna
Bajaj National Quality Award Trust.
Featured in Asias 25 most powerful business
people of 2011 by Fortune magazine.
Lloyds Banking Group Business Leader of the
Year Award at The Asian Awards 2011.
JRD Tata Corporate Leadership Award 2011 from
the All India Management Association.
Global Leadership Award June 2012 by the US-
India Business Council.
Business Courage Award 2012 by Asia Business
Leadership Forum.
Best Transformational Leader Award 2012 by
the Asian Centre For Corporate Governance &
Sustainability.
Business Leader of the Year 2012 by NDTV.
Special Recognition for Creating a True Global
Indian MNC at Indias Best Market Analyst Award
2013 by Zee Business.
Forbes India Leadership Awards 2013 Entrepreneur
for the Year.
Sustainable Development Leadership Award 2014
from The Energy and Resources Institute (TERI).
Mr. Anand Mahindra serves on the following Boards of
other companies:
1. Mahindra & Mahindra Limited,
2. Tech Mahindra Ltd.,
3. Mahindra First Choice Wheels Ltd.,
4. Mahindra Two Wheelers Ltd.,
5. Mahindra Holdings Ltd.,
6. Araku Originals Ltd.,
7. Prudential Management & Services Pvt. Ltd.,
8. Naandi Community Water Services Pvt. Ltd.,
9. Tech Mahindra Foundation,
10. Avion Aerosols Pvt. Ltd.,
11. Prana Holdings Inc.,
12. US-India Business Council.
Mr. Anand Mahindra is a member of the following
committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
1. Mahindra &
Mahindra Ltd.
Share Transfer
& Shareholders/
Investors
Grievance
Committee
Member
Loans &
Investment
Committee
Member
Research &
Development
Committee
Member
2. Mahindra Two
Wheelers Ltd.
Remuneration
Committee
Member
Mr. Anand Mahindra holds 13,617 shares in the Company.
1034
Mr. Uday Gupta (DIN 03514282)
Mr. Uday Gupta, 55 years, Bachelors of Engineering
with 1
st
class honors, Jadavpur University and Master of
Technology from IIT Madras, (Chennai) where he was
the recipient of A Grade Merit Award.
Mr. Uday Gupta has rich and vast experience in the
eld of manufacturing sector particularly metal and alloy
industry. Mr. Uday Gupta was appointed as the CEO of the
erstwhile Steel Division of the Company in the year 2008.
As the CEO of Steel Division, Mr. Uday Gupta has taken
various initiatives to streamline the operations and infuse
technological expertise for enhancing the overall working
of the Divisions. Prior his appointment as the CEO (Steel),
Mr. Uday Gupta was Executive Director of First Aluminum
Nigeria Plc Group, the Company listed on the in Nigeria
Stock Exchange. There Mr. Uday Gupta was a member of
the Audit Committee of the Board and also heading the
Prot Centre of Rolling Mill & Coating Division.
Mr. Uday Gupta has long association with Indian Aluminum
Company Ltd., where he has worked in various capacities
and has certain major achievements to his credit as listed
below:
Strategy Implementation for growing revenue from
USD 53 million in 2006 to USD 100 million in 2009 by
product market stretch installation of a new colour
coating line (with Chinese soft credit) in January 2007.
Paint tie-up with BASF for superior technology,
exibility of colours to customers in terms of range
& delivery stay ahead of the competition and
strengthen brand. (2002 2006).
Establish an operating JV for value added trading
in the Manufacturing & Oil and Gas sectors. This
germinated a separate SBU within First Aluminum.
Increasing the customer base by way of increasing
delivered value and maintaining customer relationship
in Nigeria to market 12,000 TPA in 2006 from 6,000
TPA in 1998.
Selectively upgrade plant & machinery of 60s
vintage with state of the art technology for volume
enhancement, quality upgrade and increased
customer satisfaction in collaboration with VAI, UK
Project Cost USD 10 million. This modernization
was done to retain market share. This also included
building of a 33 KV sub-station & gas generating plant
to leverage the low cost of natural gas and thereby
reduce fabrication cost. (2000 2003).
Introduced Becoming Globally Competitive
concept of TQM (as was practiced by Ford & other
companies) in First Aluminum Nigeria for overall
process improvement across the value chain.
Installation / Commissioning of a state of the art
Aluminum Cold Rolling Mill in Indal, Belur at a
project cost of USD 7 million. The project was done
in consortium with SMS (Germany), ABB (Sweden,
Germany & India) and L & T. The plant capacity of
INDAL, Belur moved from 20,000 TPA to 40,000 TPA.
Capital Expenditure Projects : Annealing Furnaces,
Slitters, Cut to Lengths, Layout Changes of plant for
increasing material handling efciency (1982 1988),
Product Development.
Mr. Gupta has also taken various initiatives in his past
employments signicantly contributing to the growth of
such organizations.
Mr. Uday Gupta is also the Managing Director of Mahindra
Sanyo Special Steel Private Limited. He is a Member of
Stakeholders Relationship Committee and Corporate
Social Responsibility (CSR) Committee of the Company.
Mr. Uday Gupta does not hold any shares in the Company.
Mr. Mukesh Kumar Gupta (DIN 06638754)
Mr. Mukesh Kumar Gupta, 52 years, holds degree of
Bachelor of Science from University of Rajasthan and
M.B.A. (HRM) from Sikkim Manipal University, Gangtok.
Mr. Mukesh Gupta joined Life Insurance Corporation of
India in the year 1984 as a Direct Recruit Ofcer and
thereafter was elevated to the next higher cadre. During
his illustrious career he has held very prominent positions
and has worked at the Corporate Ofce and in 4 Zones.
Job rotated in February 1992 as a Branch Manager he
has remained in Marketing for a phenomenal period of
more than 20 years. His key postings include Marketing
Manager of Bikaner DO and Sr. Divisional Manager of
two important Divisions viz., Amritsar and Hyderabad. He
was also Regional Manager (Bancassurance & Alternate
Channels) in South Central Zone and Regional Manager
(Mktg.) of Western Zone twice Once in Mumbai and
later in Ahmedabad. His penchant for Marketing surfaced
signicantly during his tenure in the Corporate Ofce
as Chief (Marketing). He was Principal, Zonal Training
Centre, Agra before becoming the Director, Management
Development Centre, LIC, Mumbai.
He has attended a training program of FALIA (Foundation
of the Advancement of Life & Insurance around the
world) and also some notable training programs at
ISB-Hyderabad and NIA, Pune.
His Hobbies include reading and listening music.
Mr. Mukesh Gupta is a member of Nomination &
Remuneration Committee of the Company.
Mr. Mukesh Gupta does not hold any shares in the
Company.
Mr. Nikhilesh Panchal (DIN 00041080)
Mr. Nikhilesh Panchal, 46 years, holds masters degree
in law and is practicing as an Advocate for more than
15 years. He is a Solicitor registered as Patent and
Trademark Attorney. He is member of Bar Association of
Maharashtra & Goa, Incorporated Law Society and the
Supreme Court of England and Wales. He is a partner in
M/s. Khaitan & Co. and M/s. Khaitan & Co. LLP.
1035
Mr. Panchal has rich experience in acquisitions, takeover
and mergers, foreign collaborations, joint ventures and
technology transfers including connected procedures
under Foreign Exchange Management Act (FEMA); and
Corporate Law, Capital Markets transactions including
public offerings; international offerings by Indian companies
Intellectual Property and related rights matters etc.
Mr. Nikhilesh Panchal holds Directorships of other Indian
companies namely EPC Industrie Limited and Vayugrid
Marketplace Services Private Limited.
Mr. Nikhilesh Panchal is a member of the following
committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
1. Mahindra Ugine Steel
Co. Ltd.
CSR Committee Member
2. EPC Industrie Limited Remuneration
Committee
Member
Mr. Nikhilesh Panchal does not hold any shares in the
Company.
Mr. R.R. Krishnan (DIN 00097716)
Mr. Krishnan is an Honors graduate in Mathematics from
University of Delhi and has also done his GPMD course
from Michigan Business School. Mr. R.R. Krishnan was
with Mahindra Group for around 47 years and has held
several senior positions during his stint with Mahindra
Group. He was Member of the Group Management Board
of Mahindra & Mahindra Ltd., until March 2005 and was
also the Managing Director of Mahindra Intertrade Ltd.
and Mahindra Steel Service Center Ltd. (MSSCL).
Mr. Krishnan was responsible for the activities of the then
Intertrade Division of Mahindra and Mahindra Limited
(M&M), which subsequently became Mahindra Intertrade
Ltd. (MIL). During his tenure he was responsible for
setting up the facilities of MSSCL and the expansion
thereof. MIL also expanded globally to set up a facility
in UAE Mahindra Middleeast Electrical Steel Service
Centre FZC. Mr. R.R. Krishnan carries with himself
rich experience and expert knowledge of steel industry.
Mr. Krishnan was a senior advisor in M&M.
Mr. R.R. Krishnan holds Directorship of Mahindra
Composites Ltd. He is a member of the following Board
Committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
Co. Ltd
CSR Committee Chairman
2. Mahindra Composite
Ltd.
Shareholders/
Investors
Grievance
Committee
Chairman
Mr. Krishnan holds 7500 shares in the Company.
Mr. Manojkumar Maheshwari (DIN 00012341)
Mr. Manoj Kumar Maheshwari is 56 years of age and
is a second-generation entrepreneur with interests in
the Information Technology, Marketing and Chemical
industries. He is a graduate from the Bombay University
with a major in Chemistry and has done his post
graduation in Industrial Management. Mr. Maheshwari
work experience encompasses the project management,
production, marketing, nancial and general management
areas of medium sized companies.
He is also a Director of Mahindra CIE Automotive Ltd.,
Hamilton & Co. Ltd., RPG Life Sciences Ltd., Ador
Welding Ltd., Metro Shoes Ltd., Ignite Education Pvt. Ltd.,
Maheshwari Investors Pvt. Ltd., R.J. Investments Pvt. Ltd.,
Quadrum Solutions Pvt. Ltd. As a director he brings a
judicious mix of entrepreneurial and professional skills to
the various Boards that he serves on.
Mr. Manoj Kumar Maheshwari is a member of the following
committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
1. Mahindra CIE
Automotive Limited
2. Ador welding Ltd. Audit Committee Member
Remuneration
Committee
Member
Co. Ltd.
Mr. Manoj Kumar Maheshwari does not hold any shares in
the Company.
Mr. Sanjiv Kapoor (DIN 00004005)
Mr. Sanjiv Kapoor is a Commerce Graduate and Fellow
member of Institute of Chartered Accountant of India. He
is the senior partner of M/s. S. K. Kapoor & Co., Chartered
Accountants, one of the leading Chartered Accountancy
rms. As the partner of the rm, he has conducted audits
of number of large Corporates such as R.B.I., L.I.C.,
N.T.P.C., Indian Oil, U.T.I., Banks etc.
Mr. Kapoor was a Director of Mahindra & Mahindra Ltd.,
Ballarpur Industries Ltd., Indian Bank, Corporation Bank,
UPSE Securities Ltd., Sahara Asset Management Co. (P)
Ltd. Sahara India Life Insurance Co. Ltd and U. P. Stock
Exchange Ltd. He was the president of Kanpur Chartered
Accountants Society in the year 1988-89. He was also the
Vice President of Upper India Chamber of Commerce.
At the present Mr. Kapoor is also Director on the Board of
Mahindra Lifespace Developers Limited, Mahindra World
City Developers Limited, Sahara India Medical Institute
Ltd., HLL Life Care Limited, General Insurance Corporation
of India and HLL Biotech Ltd.
1036
Mr. Sanjiv Kapoor is a chairman/member of the following
committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
1.

Mahindra Life Space
Developers Ltd.

Remuneration
Committee
Chairman
2. Mahindra World City
Developers Ltd.
3. HLL Life Care Ltd. Strategy
formulation
& Investment
Committee
Member
Remuneration
Committee
Chairman
4. Sahara India Medical
Institute Ltd.
Remuneration
Committee
Member
Co. Ltd.
Nomination and
Remuneration
Committee
Chairman
6. General Insurance
Corporation of India
Ethics
Committee
Member
7. HLL Biotech Ltd. Audit Committee Member
Mr. Sanjiv Kapoor does not hold any shares in the
Company.
Mr. Daljit Mirchandani (DIN 00022951)
Mr. Daljit Mirchandani was appointed as an Additional
th
October,
2010.
Mr. Daljit Mirchandani, born in Karachi on October 26
th

1947, is a Graduate Engineer from Birla Institute of
Technology.
Beginning his career in 1971 as Graduate Trainee
Engineer, in 1992 he rose to the position of Executive
Director in Kirloskar Oil Engines, the agship company
of the Kirloskar Group. Between 1992 and 1997, for the
Kirloskar Group, he set up the rst in a kind, Pig Iron
plant with a capacity of 500 thousand ton integrated to a
state-of-the-art Foundry with a capacity of 60 thousand
tons per annum.
In 1998, he joined Ingersoll-Rand India as the Chairman
and Managing Director and retired in 2008.
In 2005, he was the Chairman of the Karnataka State
Council of the Confederation of Indian Industries (CII),
and in 2007 was nominated by the CII to be the Chairman
of the Task Force formed by the Ministry of Agriculture,
to examine and recommend policy interventions and set
technical standards for the formation of the Cold Chain
Infrastructure in India for Fresh Fruits and Vegetables.
Implementation of these recommendations has been
initiated by the Ministry of Agriculture.
Presently, in partnership with the Sarva Shikhsha Abhayan,
the agship project of the Government of India, he is
working on the development of a scalable interventions
to bring the joy of learning and improve the quality of
education to children enrolled in Government Aided
schools in Rural Maharashtra.
He serves on the advisory and statutory Board of various
Companies in the space of Bio Fuels, Infrastructure
Development, Infrastructure Finance, Forgings and a MNC.
Mr. Daljit Mirchandani holds Directorships of other Indian
companies namely Mahindra CIE Automotive Limited and
Mahindra Sanyo Special Steel Private Limited.
Mr. Daljit Mirchandani is a member of the following
committees:
Sr.
No.
Name of the
Company
Name of the
Committee
Chairman/
Member
1.

Mahindra Ugine Steel
Company Limited.

Audit
Committee
Member
Nomination &
Remuneration
committee
Member
2. Mahindra CIE
Automotive Limited
Audit
Committee
Chairman
Mr. Daljit Mirchandani does not hold any shares in the
Company.
E. Codes of Conduct
The Board has laid down two separate Codes of Conduct-
one for Board Members and the other for Senior Management
and Employees of the Company. These Codes have been
posted on the Companys website www.muscoindia.com.
All Board Members and Senior Management Personnel
have afrmed compliance with these Codes of Conduct. A
declaration signed by the Managing Director to this effect
is enclosed at the end of this report.
F. CEO/CFO Certication
As required under clause 49 V of the Listing Agreement
with Stock Exchanges, the Managing Director and Chief
Finance Ofcer have certied to the Board on the nancial
statements, internal controls and frauds, if any, for the
year ended 31
st
March, 2014.
II. REMUNERATION TO DIRECTORS
A. Remuneration Policy
While deciding on the remuneration of Directors, the
Board and the Nomination & Remuneration Committee
considers the performance of the Company, the
current trends in the industry, the qualications of the
appointee(s), their experience, past performance and other
1037
relevant factors. The Board/Nomination & Remuneration
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 Companys remuneration
policies from time to time.
B. Remuneration to Non-Executive Directors for the year
ended 31
st
March, 2014.
Non-Executive Directors are paid a sitting fee of Rs. 7,500/-
each for every Meeting of the Board and Audit Committee
attended and a sitting fee of Rs. 3,750/- each is paid per
Meeting in case of Investors Grievance and Nomination
& Remuneration Committee Meetings. The fees paid to
Non-Executive Directors for the year ended 31
st
March,
2014 along with their shareholdings are as under:
Director Sitting Fees
for Board and
Committee
Meetings Paid
during the year
(Rs)
No. of
Equity
shares
held as on
31
st
March,
2014
Mr. Keshub Mahindra
(Resigned w.e.f. the
conclusion of Board
meeting dated 29/10/2013)
7500 1231
Mr. Anand G. Mahindra 30000 13617
Mr. Hemant Luthra 68406
Mr. R.R. Krishnan 97500 7500
Mr. S. Ravi
Mr. Manojkumar
Maheshwari
52500
Mr. Harsh Kumar
Mr. Sanjiv Kapoor 82500
Mr. Daljit Mirchandani 63750
Mr. Nikhilesh Panchal 82500
Mr. Mukesh Kumar Gupta
(Appointed w.e.f.
25/07/2013)
33750
A total of 2,15,000 Stock Options have been granted
to Non-Executive Directors under the Companys Stock
Option Scheme on 18
th
August, 2006. The Stock options
were granted at 15% discount to the average of high and
low share prices of the Company on the Bombay Stock
Exchange Limited during the 15 days preceding the
date of grant of options. Details of these are given in the
Statement attached to Annexure I of the Directors Report.
Apart from the above sitting fees, Non-Executive Directors
received no remuneration during the year under review.
C. Remuneration paid/payable to the Managing Director
Remuneration paid/payable to Mr. Uday Gupta, Managing
Director, for the year ended 31
st
March, 2014, was xed by
the Nomination & Remuneration Committee and approved
by the Board of Directors and the shareholders within the
limits as specied under the provisions of the Companies
Act, 1956.
Following are the details of the remuneration paid/payable
to Mr. Uday Gupta, as the Managing Director during the
year ended 31
st
March, 2014.
1. Mr. Uday Gupta was also appointed as the Managing
Director, with effect from 4
th
August 2012, of Mahindra
Sanyo Special Steel Private Limited (MSSSPL), (the
subsidiary of the Company upto 3
rd
October 2013)
after complying with necessary statutory provisions
in this respect, on the same terms and conditions
of his appointment on which he was appointed as
the Managing Director of the Company. Accordingly,
he holds the position of Managing Director of the
Company and MSSSPL and is entitled to remuneration
from the Company or MSSSPL or from both the
companies provided that his total remuneration in
aggregate from the Company or MSSSPL or both
shall not exceed the maximum remuneration as
approved by the Company or MSSSPL.
2. Mr. Uday Gupta received entire remuneration for the
nancial year 2013-14 from MSSSPL and he has not
drawn any remuneration from the Company. The
performance pay, if any, for the nancial year 2013-
14 may be paid by MSSSPL.
3. The Company has not granted any stock option to
Mr. Uday Gupta, Managing Director. Mr. Uday Gupta
does not hold any shares in the Company.
4. The contract period of Mr. Uday Gupta as the
Managing Director is from 5
th
May, 2011 to 4
th
May
2014 and has been renewed for further 1 year upto
4
th
May, 2015, subject to approval of the shareholders
of the Company at the ensuing Annual General
Meeting of the Company. Notice period applicable to
Mr. Uday Gupta is three months.
5. Performance pay is the only component of
remuneration that is linked to the performance.
All other components are xed. The Nomination &
Remuneration Committee, on the basis of detailed
appraisal of the performance of the Company and the
Managing Director recommends and approves the
performance payment for any particular nancial year.
III. RISK MANAGEMENT
The Company has a well dened framework of Risk
management. The said framework comprises objectives
of the Risk framework, the process through which risks
(Internal as well as External Risks) to the Company and
its businesses are identied and steps to be taken for
mitigating such risks and threats to the Company. The
frame work has proper procedure for reporting the risks
to various levels of operating management depending
on the criticality and sensitivity of risk to the business
of the Company. The framework denes the roles of the
risk control owners, risk committee, risk manager, audit
committee and the Board. The operating management
periodically places before the Board, a report on the Risk
Assessment and management process followed by the
1038
Company and steps taken for mitigating the risks to the
Company. The broad threats and risks to the businesses
of the Company are discussed in the Management
Discussion and Analysis chapter of this Annual Report.
IV. COMMITTEES OF THE BOARD OF DIRECTORS
A. Audit Committee
The Audit Committee of the Board of Directors comprises
Mr. Sanjiv Kapoor (Chairman), Mr. R.R. Krishnan,
Mr. Manoj Kumar Maheshwari, Mr. Daljit Mirchandani and
Mr. Nikhilesh Panchal. All the members of the Committee
are Independent-Non-Executive Directors. All the Members
of the Committee have vast experience and knowledge of
corporate affairs and nancial management and possess
strong accounting and nancial management expertise.
The Company Secretary acts as the Secretary to the
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 authorized to select and establish accounting policies,
review reports of the Statutory and the Internal Auditors and
meet with them to discuss their ndings, suggestions and
other related matters. The Committee is empowered inter
alia to review the remuneration payable to the Statutory
Auditors and to recommend a change in the Auditors, if
felt necessary. It is also empowered to review Financial
Statements of the Company, Management Discussion &
Analysis and Material individual transactions with related
parties not in normal course of business or which are
not on an arms length basis. It is also empowered to
review Financial Statements and investments of unlisted
subsidiary company. 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 Managing Director, Chief Executive ofcer, Chief
Finance Ofcer, the Statutory Auditors and the Internal
Auditors.
The Chairman of the Committee, Mr. Sanjiv Kapoor, was
present at the Annual General Meeting held on 25
th
July,
2013 to answer queries of shareholders.
Six (6) Meetings of Committee were held during the year
1
st
April, 2013 to 31
st
March, 2014 on the following dates:
- 3
rd
May, 2013 - 15
th
June, 2013 - 25
th
July, 2013
- 29
th
October, 2013 - 7
th
February, 2014 - 31
st
March, 2014
The gap between two Meetings did not exceed four
months. The attendance at the Meetings were as under:
Sr.
No.
Members Meetings
Attended
Remarks
1. Mr. Sanjiv Kapoor
Chairman
5
2. Mr. R.R. Krishnan 6
3. Mr. Manoj Kumar
Maheshwari
3
4. Mr. S. Ravi Resigned w.e.f
24/09/2013
5. Mr. Daljit Mirchandani 4
6. Mr. Nikhilesh Panchal 5
B. Stakeholders Relationship Committee
The Investors Grievance Committee was renamed as
Stakeholders Relationship Committee. The said Committee
has been re-constituted by the Board of Directors and it
comprises of Mr. Hemant Luthra, Mr. Harsh Kumar and
Mr. Uday Gupta, as its members. Mr. Hemant Luthra is the
Chairman of the Committee.
Mr. Ajay Kadhao the Company Secretary, is the Compliance
Ofcer of the Company.
The Committee meets as and when required, to deal with
matters relating to transfers/transmissions of shares, issue
of duplicate share certicates etc. and monitors redressal
of complaints from shareholders relating to transfers,
non-receipt of balance-sheet, non-receipt of dividends
declared etc.
One Committee Meeting was held on 7
th
February, 2014,
during the year 2013-14. The attendance at this Meeting
was as under:
Sr.
No.
Members Meetings
Attended
1. Mr. Hemant Luthra Chairman 1
2. Mr. Uday Gupta
3. Mr. Harsh Kumar 1
The Board of Directors has authorized the Managing
Director, the Chief Finance Ofcer and the Company
Secretary to deal with the matters relating to approval
of the transfer, transmission, replacement, consolidation
of shares etc., to certain extent, in order to expedite the
process of Share Transfer/Transmission. Normally the
said ofcials approve once in 15 days the share transfers
and other related matters, if any. The details of share
transfer/transmission approved by above ofcials are
properly recorded in the Stakeholders Relationship
Committee meetings and are also placed before Board,
for its record.
1039
During the year, 6 Letters/complaints were received from
the shareholders, all of which were attended to/resolved
to date.
As on date, there were no pending share transfers
pertaining to the year under review.
C. Nomination & Remuneration Committee.
The Remuneration Committee has been re-constituted
by the Board of Directors as Nomination & Remuneration
Committee. The Powers and duties of the Nomination &
Remuneration Committee are well dened by the Board.
The role of the Committee is to review the qualications,
positive attributes and independence of a director while
recommending to the Board the appointment and/or
remuneration of the directors. The Committee also review
the market practices while deciding the remuneration
packages applicable to the Managing Director/Executive
Director. During the course of its review, the Committee
also decides on the Commission or Performance pay
and/or other incentives payable, taking into account the
individuals performance as well as that of the Company.
The Nomination & Remuneration Committee is also
empowered to decide on matters relating to Employee
Stock Option Scheme of the Company.
The Nomination & Remuneration Committee comprises
of Mr. Sanjiv Kapoor, Mr. Hemant Luthra, Mr. Mukesh
Kumar Gupta, and Mr. Daljit Mirchandani. The Company
Secretary acts as the Secretary to the Committee.
Mr. Sanjiv Kapoor is the Chairman of the Committee.
Two Committee Meetings were held on 25
th
July, 2013 and
31
st
March, 2014, during the year 2013-14. The attendance
at these Meetings were as under:
Sr.
No.
Members Meetings
Attended
1. Mr. Sanjiv Kapoor Chairman 2
2. Mr. Daljit Mirchandani 1
3. Mr. Hemant Luthra 2
4. Mr. Mukesh Kumar Gupta 1
D. Corporate Social Responsibility (CSR) Committee:
During the year under review the Board of Directors of your
Company has established Corporate Social Responsibility.
The major role of this Committee is to formulate and
recommend to the Board of Directors the CSR Policy and
indicate the activities to be undertaken by the company to
meet/contribute to objectives of the CSR policy. Accordingly
the Committee has also framed its CSR policy and empower
to monitor the same, it will provide its recommendations to
the Board for the amount of expenditure to be incurred on
activities specied in the policy.
The Corporate Social Responsibility (CSR) Committee of
the Board of Directors comprises of Mr. R.R. Krishnan,
Mr. Uday Gupta and Mr. Nikhilesh Panchal. The Company
Secretary acts as the Secretary to the Committee.
Mr. R.R. Krishnan is chairman of the Committee.
One Committee Meeting was held on 31
st
March, 2014,
during the year 2013-14. The attendance at this Meeting
was as under:
Sr.
No.
Members Meetings
Attended
1. Mr. R.R. Krishnan Chairman 1
2. Mr. Uday Gupta 1
3. Mr. Nikhilesh Panchal 1
The Committees constitution and terms of reference are in
compliance with provisions of the Companies Act, 2013.
V. SUBSIDIARY COMPANY
Clause 49 denes 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 denition, as on 31
st
March, 2014 the Company
did not have any material non-listed subsidiary. Mahindra
Sanyo Special Steel Private Limited (MSSSPL), earlier
known as Navyug Special Steel Private Limited, ceased
to be the subsidiary of the Company with effect from
3
rd
October 2013. The Company has complied with the
relevant provisions of clause 49 applicable in respect
of the erstwhile material subsidiary, MSSSPL, till
3
rd
October, 2013.
VI. DISCLOSURES
A. Disclosures relating to related party
and its Promoters, Directors or the Management,
Subsidiaries or Relatives, etc. that may have potential
conict with the interests of the Company at large.
Further, details of related party transactions are presented
in Note no. 39 to nancial statements in the Annual
Report.
B. Disclosure of Accounting Treatment in Preparation of
Financial Statements
Your Company has followed the Guidelines of Accounting
Standards as notied under the Companies (Accounting
Standards) Rules, 2006 in preparation of its nancial
statements.
C. Code for Prevention of Insider Trading Practices
In compliance with SEBIs regulation on prohibition and
prevention of insider trading, your Company has instituted
a comprehensive Code of Conduct for prohibition and
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.
1040
VII. SHAREHOLDER INFORMATION
(i) Company Registration Details
The Company is registered in the State of Maharashtra,
India. The Corporate Identity Number (CIN) allotted to the
Company by the Ministry of Corporate Affairs (MCA) is
L99999MH1962PLC012542.
(ii) Annual General Meeting
The Fifty rst Annual General Meeting of the Company
will be held on Tuesday, the 5
th
August, 2014 at 4.00 p.m.
at Pama Thandani Auditorium, Jai Hind College, A road,
Churchgate, Mumbai-400020 to transact such business
as stated in the Notice of the Meeting.
(iii) Financial Year of the Company
The nancial year covers the period 1
st
April to 31
st
March.
Financial Reporting for:
Quarter ending 30.06.2014 by end of July, 2014.
Half-year ending 30.09.2014 by end of October,
2014.
Quarter ending 31.12.2014 by end of January, 2015.
Year ending 31.03.2015 by end of April, 2015.
(iv) Date of Book Closure
Wednesday, the 30
th
July, 2014 to Tuesday, the 5
th
August,
2014 (both days inclusive).
(v) Dividend Payment date
Not Applicable.
(vi) Listing of Equity Shares on Stock Exchanges
1. Bombay Stock Exchange Limited.
2. National Stock Exchange of India Limited.
The Company has paid the Listing Fees to Bombay
Stock Exchange Limited and National Stock Exchange
of India Limited.
(vii) Stock Codes:
(a) Bombay Stock Exchange Limited (BSE)-504823
(b) National Stock Exchange of India Ltd. (NSE)
MAHINDUGIN
(c) International Securities Identication Number (ISIN) in
NSDL and CDSL for Equity Shares INE 850A01010
(viii) Stock Market price data:
High/low prices during each month in last nancial year
on Bombay Stock Exchange Limited/National Stock
Exchange of India Limited.
Month Bombay Stock
Exchange Ltd.
National Stock
Exchange of
India Ltd.
High
(Rs)
Low
(Rs)
High
(Rs)
Low
(Rs)
April 2013 53.65 46.45 53.65 46.40
May 2013 50.70 41.50 50.50 41.50
June 2013 100.30 40.65 100.35 40.55
July 2013 86.00 74.20 85.75 74.05
August 2013 76.35 66.05 77.50 66.00
September 2013 85.00 65.80 84.90 63.45
October 2013 113.15 83.05 113.15 83.10
November 2013 114.90 106.00 113.45 106.00
December 2013 122.45 106.85 122.70 106.25
January 2014 135.00 115.00 133.95 114.00
February 2014 201.90 122.75 202.40 125.15
March 2014 210.60 174.35 210.45 174.15
(ix) Stock Performance in comparison to BSE - Sensitive
Index.
0
50
100
150
200
250
7,000.00
8,000.00
9,000.00
10,000.00
11,000.00
12,000.00
13,000.00
14,000.00
15,000.00
16,000.00
17,000.00
18,000.00
19,000.00
20,000.00
21,000.00
22,000.00
23,000.00
24,000.00
Apr/13 May/13 Jun/13 Jul/13 Aug/13 Sep/13 Oct/13 Nov/13 Dec/13 Jan/14 Feb/14 Mar/14
Closing Price on last trading day of the month
BSE Sensex Points MUSCO Price
B
S
E

S
e
n
s
e
x

P
o
i
n
t
s
M
U
S
C
O

P
r
i
c
e

v
a
l
u
e

i
n

R
s
.
Months
Stock Performance in comparison to NSE Nifty.
0
50
100
150
200
250
0
1000
2000
3000
4000
5000
6000
7000
8000
Apr/13 May/13 Jun/13 Jul/13 Aug/13 Sep/13 Oct/13 Nov/13 Dec/13 Jan/14 Feb/14 Mar/14
Closing Price on last trading day of the month
S&P CNX Nify
Months
N
S
E
N
if
y
M
U
S
C
O
P
r
ic
e
v
a
lu
e
in
R
s
.
MUSCO Price
(x) Registrar and Transfer Agents-
Sharepro Services (India) Private Limited.
Unit: Mahindra Ugine Steel Co. Ltd.
2
nd
Off Andheri Kurla Road, Sakinaka,
Andheri (East), Mumbai - 400 072
1041
Tel. No. 022-67720300/67720400
Fax No. 022-28591568/28508927
E-mail: sharepro@shareproservices.com
(xi) Share Transfer System
The Board of Directors has authorized the Managing
Director, the Chief Finance Ofcer and the Company
Secretary to deal with all matters relating to approval of
the transfer, transmission, replacement, consolidation of
shares etc., in order to expedite the process of Share
Transfer/Transmission. Normally the said ofcials meet
once in 15 days to approve share transfers and other
related matters, if any. The details of share transfer/
transmission approved by above ofcials are properly
recorded in the Stakeholders Relationship Committee
meetings and are also placed before Board, for its record.
(xii) Pattern of shareholding as on 31
st
March, 2014
Sr.
No.
Description Number of
Shares
% to
capital
1. Promoters and
Promoter Group
18,019,489 55.17
2. Mutual Funds/UTI 173864 0.53
3. Financial Institutions/
Banks
22171 0.07
4. Insurance Companies 1,539,159 4.71
5. Foreign Institutional
Investors
18,450 0.06
6. Bodies Corporate 1,460,181 4.47
7. Foreign Company 1,000 0.00
8. Non Resident Indian/
Foreign National
267530 0.82
9. Indian Public (Individuals) 11,162,204 34.17
10. Trusts 231 0.00
TOTAL 32,664,279 100.00
(xiii) Distribution of shareholding as on 31
st
March, 2014
Shares Held No. of
Shareholders
% to
Shareholders
No. of
Shares
% to
Shares
Up to 500 20116 89.19 2,181,937 6.68
501 1000 1200 5.32 956,631 2.93
1001 2000 541 2.40 844,045 2.58
2001 3000 219 0.98 565,656 1.73
3001 4000 101 0.44 360,500 1.10
4001 5000 91 0.40 434,967 1.33
5001 10000 156 0.69 1,175,517 3.60
10001 and
above
131 0.58 26,145,026 80.05
TOTAL 22555 100.00 32,664,279 100.00
(xiv) Dematerialization of Shares and Liquidity as on 31
st

March, 2014.
Physical Form : 1.96%
Dematerialized Form : 98.04%
Trading in equity shares of the Company is permitted in
dematerialized form only as per the notication issued
by Securities and Exchange Board of India (SEBI). Non-
promoters share holding is 44.83% and the liquidity of the
stock is fairly good.
(xv) Outstanding ADRs/GDRs/ Warrants or any Convertible
Instruments, conversion date and likely impact on
Equity.
Your Company has not issued any ADRs/GDRs/Warrants
or any convertible instruments.
(xvi) Plant Locations:
a) 371, Takwe Road, At & Post-Kanhe, Tal. Maval,
Dist. Pune- 412 106.
b) D-2, MIDC, Ambad, Nashik- 422 010.
c) Maharajapur Road, Lalpur, Rudrapur,
(U.S. Nagar), Uttarakhand.
d) Plot No. 2, Sector-11, Tata Vendor Park,
IIE, Pantnagar, Rudrapur 263 153 Uttarakhand.
(xvii) Address for correspondence
Registered Ofce:-
74, Ganesh Apartment, Opp. Sitaladevi Temple,
L. J. Road, Mahim (W), Mumbai - 400 016.
Tel.: 022-24444287, Tele fax: 022-24458196
Email: investors_relation@mahindra.com and
kadhao.ajay@mahindra.com
For all investor related matters, Mr. Ajay Kadhao, Company
Secretary & Compliance Ofcer, can be contacted at the
above address.
(xviii) Other disclosures
1. Annual General Meetings held during the past three years:
Financial Year Date Time
2010-11 27.07.2011 3.00 p.m.
2011-12 03.08.2012 4.00 p.m.
2012-13 25.07.2013 4.00 p.m.
Meetings for the year 2010-11 was held at Amar Gian
Grover Auditorium, Lala Lajpatrai Marg, Mahalaxmi,
Mumbai 400034 and meeting for the year 2011-12
and 2012-13 were held at Rama Watumull Auditorium,
Kishinchand Chellaram College, Dinshaw Wacha Road,
Churchgate, Mumbai 400 020.
1042
The following Special Resolutions were passed in the
previous three Annual General Meetings:
Financial
Year
Date of
Meeting
Special Resolutions passed
2010-11 27.07.2011 1. Appointment of Mr. Uday Gupta as the
Managing Director of the Company for
a period of 3 (Three) years with effect
from 5
th
May, 2011 and approval of
remuneration.
2. Approval of revision in remuneration
payable to Mr. K. V. Ramarathnam for
a period with effect from 1
st
April, 2011
upto the remainder of his tenure i.e.
4
th
May, 2011.
3. Payment of remuneration to Non-Executive
Directors by way of Commission upto one
percent of the net prots of the Company,
for a period of ve years with effect from
1
st
April, 2011.
2011-12 03.08.2012 1. Alteration/substitution of Article
No. 126 of the Articles of Association of
the Company in respect of appointment
of Directors.
2. Alteration of the Articles of Association
of the Company in respect of :
i. Participation through Electronic
Mode-the Company may provide
Video Conference facility and/or
other permissible electronic or virtual
facilities for communication to enable
the Shareholders of the Company
to participate in General Meetings of
the Company.
ii. Participation through Electronic
Mode-the Director(s) may participate
in Meetings of the Board and
Committees thereof, through Video
Conference facility and/or other
permissible electronic or virtual
facilities for communication.
iii. Participation through Electronic Mode-
a Director participating in a Meeting
through use of Video Conference or
any other permissible electronic mode
of communication shall be counted for
the purpose of quorum.
iv. A document may be served by the
Company on any Member by any
electronic mode of communication
and in such manner as is/ may be
permitted by any law.
2012-13 25.07.2013 Alteration/substitution of Article No. 187
of the Articles of Association of the
Company in respect of authorisation
and manner of afxing of the Common
Seal of the Company.
Postal Ballot
During the year under review, the Company has not passed
any special resolution by way of Postal Ballot process. The
Company has not proposed any special resolution to be
conducted through postal ballot.
2. Details of non-compliance etc.
Your 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 respectively. These are not sent individually
to the Shareholders. The Companys nancial results and
ofcial news releases are displayed on the Companys
website http://www.muscoindia.com.
During the year ended 31
st
March, 2014, no presentations
were made to institutional investors or analysts.
4. Management Discussion and Analysis Report (MDA):
The Management Discussion and Analysis Report (MDA),
has been attached and forms part of this Annual Report.
5. Compliance with mandatory & non-mandatory
requirements:
Your Company has complied with all the mandatory
requirements of Clause 49 of the Listing Agreement
relating to Corporate Governance.
Further, your Company has adopted the following non-
mandatory requirements of the Clause:
I Your Company has set up the Nomination &
Remuneration Committee (earlier known as
Remuneration Committee).
II During the year under review, there is no audit
qualication in the Companys nancial statements.
Your Company has not adopted the other non-mandatory
requirements as specied in Annexure ID of the
Clause 49.
Your Company has been a strong believer in good
corporate governance and has been adopting the best
practices that have evolved over the last two decades.
Your Company will always be endeavour to attain the best
practices in Corporate Governance.
Mumbai, 21
st
May, 2014.
1043
DECLARATION BY THE MANAGING DIRECTOR PURSUANT TO CLAUSE 49 OF THE LISTING
AGREEMENT
To
The Members of Mahindra Ugine Steel Company Limited
I, Uday Gupta, Managing Director of Mahindra Ugine Steel Company Limited, declare that all the members of the Board of
Directors and Senior Management Personnel have afrmed compliance with the Codes of Conduct for the year ended 31
st
March,
2014.
Uday Gupta
Managing Director
Place: Mumbai
Date: 21
st
May, 2014.
CERTIFICATE
To the Members of Mahindra Ugine Steel Company Limited
We have examined the compliance of the conditions of Corporate Governance by Mahindra Ugine Steel Company Limited for
the year ended 31
st
March, 2014, as stipulated in Clause 49 of the Listing Agreements of the said Company with relevant stock
exchanges (hereinafter referred to as clause 49).
The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination has been
limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance of the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion of the nancial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made
by the directors and the management, we certify that the Company has complied, in all material respects, with the conditions of
Corporate Governance as stipulated in clause 49.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or effectiveness
with which the management has conducted the affairs of the Company.
(Firms Registration No.117366W/W-100018)
Rajesh K. Hiranandani
Partner
Place: Mumbai
Date: 21
st
May, 2014.
1044
of MAHINDRA UGINE STEEL COMPANY LIMITED (the
st

Flow Statement for the year then ended, and a summary of
the signicant accounting policies and other explanatory
information.
dated 13
th
misstatement.
of the accounting policies used and the reasonableness
of the accounting estimates made by the Management,
as well as evaluating the overall presentation of the
nancial statements.
opinion.
TO THE MEMBERS OF MAHINDRA UGINE STEEL COMPANY LIMITED
Opinion
st
March, 2014;
5 of the Order.
th
st
st
of the Act.
(Firms Registration No. 117366W/W-100018)
Partner
MUMBAI, 21
st
May, 2014
1045
activities/result, clauses (xii), (xiii), (xiv), (xvi), (xviii), (xix)
and (xx) of CARO are not applicable.
a) The Company has maintained proper records
b) The Company has a programme of verication of xed
assets to cover all the items in a phased manner over a
period of three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature
of its assets. Pursuant to the programme, certain xed
assets were physically veried by the Management
during the year. According to the information and
explanations given to us, no material discrepancies
c) The xed assets disposed off during the year do not
constitute a substantial part of the xed assets of the
Company and such disposal has, in our opinion, not
affected the going concern status of the Company.
a) As explained to us, the inventories were physically
reasonable intervals. The stock of scrap, having regard
to its nature and manner of storage, was veried by the
Management by visual estimation (relied upon by us). In
respect of inventories lying with third parties, a signicant
portion of inventory items has been conrmed by them.
b) In our opinion and according to the information
and explanations given to us, having regard to our
comments with regard to stock of scrap referred in
(iii) (a) above, the procedures of physical verication
of inventories followed by the Management were
reasonable and adequate in relation to the size of the
c) In our opinion and according to the information
maintained proper records of its inventories. As the
stock of scrap is veried by visual estimation (relied
upon by us), no adjustments have been made for
the difference between the stocks so determined
and the book records as it has been explained to
us by the Management that such an adjustment
would not be proper having regard to the method
of verication and the quantum of discrepancy
noticed. No material discrepancies were noticed on
physical verication.
secured or unsecured, to/from companies, rms or
other parties listed in the Register maintained under
TO THE MEMBERS OF MAHINDRA UGINE STEEL COMPANY LIMITED
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even date)
for obtaining comparable quotations, there is an adequate
control system.
us, we are of the opinion that there are no contracts or
arrangements that need to be entered into the register
maintained under section 301 of the Companies Act, 1956.
us, the Company has not accepted any deposits from
the public during the year. In respect of unclaimed
deposits, the Company has complied with the provisions
of Sections 58A and 58AA or any other relevant provisions
(viii) In our opinion, the internal audit function carried out
during the year by an external agency appointed by the
Management has been commensurate with the size of the
(ix) We have broadly reviewed the cost records maintained by
under Section 209(1)(d) of the Companies Act, 1956 and
are of the opinion that, prima facie, the prescribed cost
records have been maintained. We have, however, not made
a detailed examination of the cost records with a view to
(x) According to the information and explanations given to us
a) The Company has generally been regular in
depositing undisputed statutory dues, including
Provident Fund, Investor Education and Protection
Duty and other material statutory dues applicable to
b) There were no undisputed amounts payable in respect
Duty and other material statutory dues in arrears as at
31
st
March, 2014 for a period of more than six months
c) Details of dues of Income-tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty and Excise Duty which
have not been deposited as on 31st March, 2014 on
account of disputes are given below:
1046
Name of Statute Nature of
Dues
Forum where Dispute
is Pending
Period to which the Amount
Relates
Amount Involved
(Rs. Crores)
Sales Tax Laws Sales Tax Joint Commissioner
Appeals
F.Y. 2008-2009,
F.Y. 2010-2011 and
F.Y. 2011-2012
3.62
Maharashtra Sales Tax
Tribunal
F.Y. 2006-2007 and
F.Y. 2007-2008
8.51
The Central Excise
and Customs Act,
1944
Excise Duty Customs, Excise &
Service Tax Appellate
Tribunal
April 1999 to March 2007 and
April 2008 to March 2010
6.43
Deputy Commissioner July 2001 to June 2003 and
July 2010 to March 2011
0.93
Assistant
Commissioner
January 2004 to September 2004
and April 2008 to June 2010
0.47
Joint Commissioner October 2004 to October 2006 1.49
Commissioner November 2006 to July 2007 0.53
Additional
Commissioner
July 2003 to December 2003,
August 2007 to March 2008 and
April 2010 to July 2012
0.78
Chapter V of
Finance Act, 1994
Service Tax Customs, Excise &
Service Tax Appellate
Tribunal
April 2007 to March 2012 4.47*
* The Company is in the process of ling an appeal with Customs, Excise & Service Tax Appellate Tribunal against a demand of
Rs. 2.94 Crores.
(xi) The Company does not have any accumulated losses as
at 31
st
March, 2014. The Company has not incurred cash
losses during the nancial year covered by our audit, but
has incurred cash losses in the immediately preceding
nancial year.
(xii) In our opinion and accordingly to the information and
in the repayment of dues to banks and nancial institutions.
(xiv) In our opinion and according to the information and
explanations given to us, the terms and conditions of the
guarantees given by the Company (for part of the year)
for loans taken by its subsidiary from banks and nancial
institutions are not, prima facie, prejudicial to the interests
of the Company.
(xv) To the best of our knowledge and according to the
Partner
MUMBAI, 21
st
May, 2014
1047
ST
MARCH, 2014
Note No. 31
st
March, 2014 31
st
March, 2013
Rs. Crores Rs. Crores
Shareholders funds
(a) Share capital 1 32.66 32.48
(b) Reserves and surplus 2 324.99 135.59
357.65 168.07
(a) Long-term borrowings 3 159.38
(b) Deferred tax liability (net) 4 6.90 10.77
(c) Long-term provisions 5 7.81 7.54
14.71 177.69
Current liabilities
(a) Short-term borrowings 6 68.52
(b) Trade payables 7 77.78 75.30
(c) Other current liabilities 8 10.14 12.71
(d) Short-term provisions 9 7.09 1.74
95.01 158.27
TOTAL 467.37 504.03
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets 10 137.16 136.76
(ii) Intangible assets 10 0.01 0.04
(iii) Capital work-in-progress 6.42 2.77
(b) Non-current investments 11 111.35
(c) Long-term loans and advances 12 63.50 65.68
(d) Other non-current assets 13 0.84 0.95
207.93 317.55
Current assets
(a) Current investments 14 7.00
(b) Inventories 15 37.32 40.68
(c) Trade receivables 16 111.91 132.15
(d) Cash and bank balances 17 30.91 5.41
(e) Short-term loans and advances 18 68.76 7.41
(f) Other current assets 19 3.54 0.83
259.44 186.48
TOTAL 467.37 504.03
See accompanying notes forming part of the nancial statements 1 - 48
Chartered Accountants Uday Gupta Managing Director
Hemant Luthra
}
Directors
Harsh Kumar
Rajesh K. Hiranandani Sandeep Jain Ajay Kadhao Daljit Mirchandani
Partner Chief Finance Ofcer Company Secretary Sanjiv Kapoor
Mumbai : 21
st
May, 2014 Mumbai : 21
st
May, 2014
1048
ST
MARCH, 2014
Note No. 31
st
March, 2014 31
st
March, 2013
Continuing operations (Stampings division)
I Revenue from operations 20 799.63 849.73
Less : Excise duty 76.61 83.34
723.02 766.39
II Other income 21 5.82 0.64
III Total revenue (I+II) 728.84 767.03
IV Expenses:
Cost of raw materials and components consumed (See note 31)
(includes processing cost Rs. 5.83 Crores; 2012-13 Rs. 8.84 Crores)
533.11 579.10
Changes in inventories of nished goods and work-in-progress 22 (0.01) (4.39)
Employee benets expense 23 65.39 66.71
Finance costs 24 13.91 26.16
Depreciation and amortisation expense (See note 10) 16.07 14.73
Provision for doubtful trade receivables 15.46
Other expenses 25 58.05 55.88
Total expenses 701.98 738.19
V Prot before exceptional item and tax (III-IV) 26.86 28.84
VI Exceptional items:
- Prot on sale of land and buildings 124.55
- Prot on sale of long term investments 104.62
VII Prot for the year from continuing operations before tax (V+VI) 256.03 28.84
VIII Tax expense:
- Current tax 69.70 12.40
- Short provision in respect of earlier years (net) 2.05
- Deferred tax (credit) / charge (3.87) 1.30
67.88 13.70
Prot for the year from continuing operations (VII-VIII) (A) 188.15 15.14
Discontinuing operations (Steel division) (See note 41)
IX Loss for the year from discontinuing operations before tax (25.26)
X Loss on transfer of steel business (47.00)
XI Tax expense:
- Current tax credit (10.45)
- Current tax charge relating to transfer of steel business 0.58
- Deferred tax credit (13.53)
(23.40)
Loss for the year from discontinuing operations (IX+X-XI) (B) (48.86)
XII Prot / (Loss) for the year (A+B) 188.15 (33.72)
XIII Earnings per share (EPS) (See note 40)
(a) Basic EPS for (face value Rs. 10 per share)
- Prot for the year from continuing operations
- Before exceptional item (in Rupees) 4.84 4.66
- After exceptional item (in Rupees) 57.91 4.66
- Prot/(Loss) for the year from total operations
- Before exceptional item (in Rupees) 4.84 (10.38)
- After exceptional item (in Rupees) 57.91 (10.38)
(b) Diluted EPS for (face value Rs. 10 per share)
- Prot for the year from continuing operations
- Prot/(Loss) for the year from total operations
See accompanying notes forming part of the nancial statements 1 - 48
Hemant Luthra
}
Directors
Harsh Kumar
Mumbai : 21
st
st
May, 2014
1049
ST
MARCH, 2014
Particulars 31
st
March, 2014 31
st
March, 2013
Rs. Crores Rs. Crores Rs. Crores Rs. Crores
Prot/(Loss) before tax 256.03 (43.42)
Adjustments for:
Depreciation and amortisation 16.07 20.15
Loss on sale/write off of xed assets (net) 0.06 0.18
Write back on account of ESOPs lapsed (0.32) (0.32)
Finance costs 13.91 42.19
Interest income (4.69) (0.39)
Dividend income (0.18) (0.00) *
Provision for doubtful trade receivables made/(written back) 15.46 (1.15)
Provision for water charges (disputed) 0.17
Prot on sale of land and buildings (124.55)
Prot on sale of long term investments (105.09)
Loss on transfer of steel business 47.00
Net unrealised exchange loss 0.05
(189.33) 107.88
Operating prot before working capital changes 66.70 64.46
Inventories 3.36 (42.92)
Trade receivables 4.78 (7.25)
Short-term loans and advances (1.94) (6.54)
Long-term loans and advances (0.35) (24.06)
Trade payables 2.49 (32.37)
Other current liabilities 0.39 (0.84)
Short-term provisions 1.16 (0.54)
Long-term provisions 0.27 2.36
10.15 (112.16)
Cash generated from operations 76.85 (47.70)
Income tax paid (0.77) (11.89)
Net cash ow from/(used in) operating activities (A) 76.08 (59.59)
Capital expenditure on xed assets, including capital advances (27.69) (24.57)
Proceeds from transfer of steel business (See note 1 below) 22.25
Proceeds from sale of other xed assets 0.20 0.12
Proceeds on sale of long term investment in subsidiary 214.33
Proceeds from sale of land and buildings 124.99
Proceeds from sale of other long-term investments 2.11
Bank balances not considered as cash and cash equivalents 0.23 (0.86)
Inter-corporate deposit placed (59.13)
Investment in mutual funds (net) (7.00)
Interest received 1.70 0.39
Dividend received 0.18 0.00
Cash generated from investing activities 249.92 (2.67)
Income tax paid (55.04)
Net cash ow from/(used in) investing activities (B) 194.88 (2.67)
1050
Particulars 31
st
March, 2014 31
st
March, 2013
Proceeds from issue of equity shares under ESOP 1.75
Proceeds from long-term borrowings 150.00
Repayment of long-term borrowings (163.13) (61.16)
Net increase/(decrease) in working capital borrowings (68.52) 43.99
Repayment of other short-term borrowings (net) (25.00)
Finance costs (15.35) (42.88)
Dividend paid (0.09) (0.07)
Net cash ow from/(used in) nancing activities (C) (245.34) 64.88
Net increase in cash and cash equivalents (A+B+C) 25.62 2.62
Cash and cash equivalents at the beginning of the year # 5.07 2.57
Less: Cash and cash equivalents transferred on divestiture of steel
business (0.12)
Cash and cash equivalents at the end of the year # 30.69 5.07
# Comprises:
(a) Cash on hand 0.04 0.01
(b) Cheques, drafts on hand 0.11 4.95
(c) Balances with banks
In xed deposit accounts 15.01
30.54 0.11
30.69 5.07
* denotes amounts less than Rs. 50,000
Notes:
(i) The previous year's gures exclude non cash effect of equity shares amounting to Rs. 111.25 Crores of Mahindra Sanyo
Special Steel Private Limited received for transfer of steel business pursuant to the business transfer agreeement.
(ii) The previous year's gures include cash ow of steel business (discontinuing operations) upto 9
th
July, 2013, subsequent to
which the same was transferred to Mahindra Sanyo Special Steel Private Limited and accordingly the gures for the current
year are not comparable with that of the previous year.
(iii) Total tax paid during the year Rs. 55.81 Crores; (2012-13 Rs. 11.89 Crores)
(iv) Previous year's gures have been regrouped, wherever necessary to conform to current year's classications.
ST
MARCH, 2014
See accompanying notes 1 to 48 forming part of the nancial statements
Hemant Luthra
}
Directors
Harsh Kumar
Mumbai : 21
st
st
May, 2014
1051
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
1. Share capital
Authorised capital
119,000,000 Equity shares of Rs. 10 each 119.00 119.00
3,100,000 Redeemable cumulative
preference shares of Rs. 100 each 31.00 31.00
Issued, subscribed and fully paid-up
32,664,279 (2012-13 32,482,529) Equity
shares of Rs. 10 each fully paid up 32.66 32.48
32.66 32.48
(a) Reconciliation of the number of equity shares outstanding at the
beginning and at the end of the year:
31
st
March, 2014 31
st
March, 2013
No. of shares Rs. Crores No. of shares Rs. Crores
Issued,
subscribed and
fully paid up
Balance at the
beginning of the
year 32,482,529 32.48 32,482,529 32.48
Add:
Equity shares
issued under
ESOP scheme 181,750 0.18
32,664,279 32.66 32,482,529 32.48
(b) Terms/rights and restrictions attached to equity shares:
The Company has only one class of equity shares having a face value of
Rs. 10 per share. The rights of the equity shareholders rank pari-passu
for all matters, including dividend and each shareholder is entitled to one
vote per share. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
(c) Shares held by the holding company:
31
st
March, 2014 31
st
March, 2013
No. of shares Rs. Crores No. of shares Rs. Crores
Mahindra &
Mahindra Limited 16,466,789 16.47 16,466,789 16.47
(d) Shares held by each shareholder holding more than 5% shares,
specifying the number of shares held:
31
st
March, 2014 31
st
March, 2013
Name of the
Shareholder
No. of shares % holding No. of shares % holding
Mahindra &
Mr. Girdharilal
Agrawal 2,024,152 6.20% 2,041,510 6.28%
(e) Shares reserved for issue under ESOP scheme: (See note 43)
31
st
March,
2014
31
st
March,
2013
No. of shares No. of shares
Number of shares
reserved for ESOP
scheme 175,125 536,500
Number of shares
vested but not
exercised 175,125 536,500
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
(a) Capital Reserve
(on redemption of
preference shares, being
the amount originally
paid-up on shares
forfeited)
As per last balance
sheet 0.00* 0.00*
0.00 0.00
(b) Capital Redemption
Reserve
As per last balance
sheet 16.46 16.46
16.46 16.46
(c) Securities Premium
Reserve
As per last balance
sheet
Add:
Amount received on
exercise of ESOPs 1.57
Transfer from share
options outstanding on
exercise of ESOPs 0.32
1.89
(d) Share Options
Outstanding
As per last balance
sheet 0.95 1.27
Less:
Transfer to Securities
premium reserve on
exercise of ESOPs (0.32)
Written back during
the year on account of
ESOPs lapsed
(See note 43) (0.32) (0.32)
0.31 0.95
(e) General Reserve
As per last balance
sheet 74.72 74.72
74.72 74.72
(f) Surplus i.e. Balance in the
Statement of Prot and
Loss
As per last balance
sheet 43.46 77.18
Add/(Less): Prot/(Loss)
for the year 188.15 (33.72)
231.61 43.46
324.99 135.59
* denotes amounts less than
Rs. 50,000
Secured (See note 27)
Term loans
From banks 159.38
159.38
Notes forming part of the nancial statements as at and for the year ended 31
st
March, 2014
1052
st
March, 2014
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
4. Deferred tax liability (net)
On scal allowances on
xed assets 14.37 13.43
14.37 13.43
Less: Deferred tax assets
On employee separation
and retirement 1.59 1.46
On provision for doubtful
debts 5.44 0.18
On other timing differences 0.44 1.02
7.47 2.66
Deferred tax liability (net) 6.90 10.77
Provision for employee
benets
Provision for water charges
(disputed) (See note 42) 3.68 3.68
7.81 7.54
Secured
Loans repayable on demand -
from banks
Cash credit and working
capital demand loan 68.52
(secured by hypothecation
of raw materials, nished
goods, work in progress,
stores and book debts)
68.52
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
7. Trade payables
Due to micro and small
enterprises (See note 37) 0.93 1.66
Due to others 76.18 72.46
77.78 75.30
debt (See note 27) 3.75
Interest accrued and due on
borrowings 1.43
Unclaimed dividends 0.21 0.30
Unclaimed matured deposits
and interest on xed deposits 0.01 0.02
Other payables
Statutory dues 4.48 3.90
Capital creditors 3.36 1.04
Security deposits received 1.60 1.76
Others 0.48 0.51
9.92 7.21
10.14 12.71
Provision for employee
benets
Gratuity (See note 44) 1.91 1.31
Other employee benets 0.45
2.90 1.74
Provision - Others
Provision for taxation (net of
advance tax
Rs. 65.51 Crores;
2012-13 Rs. Nil) 4.19
7.09 1.74
10. Fixed assets Rs. Crores
Particulars
COST DEPRECIATION
WRITTEN
DOWN VALUE
As at
1
st
April,
2013
Additions
and
adjustment
Deletions
and
adjustment
Deletions
on transfer
of Steel
business
As at 31
st
March,
2014
As at
1
st
April,
2013
For the year
discontinuing
operations
steel
For the year
continuing
operations
stampings
Deletions
and
adjustment
Deletions
on transfer
of Steel
business
As at 31
st
March,
2014
As at 31
st
March,
2014
Tangible assets:
Freehold land 0.46 2.50 0.06 2.90 2.90
(0.52) () () (0.06) (0.46) () () () () () () (0.46)
Leasehold land 2.36 2.36 0.36 0.05 0.41 1.95
(2.36) (0.00) * () () (2.36) (0.30) () (0.06) () () (0.36) (2.00)
Buildings 39.70 1.18 0.81 40.07 14.19 1.30 0.44 15.05 25.02
(68.17) (0.85) (0.31) (29.01) (39.70) (23.10) (0.24) (1.26) (0.06) (10.35) (14.19) (25.51)
Plant and equipment 250.03 13.15 1.24 261.94 143.81 13.98 0.96 156.83 105.11
(552.37) (27.04) (0.26) (329.12) (250.03) (285.86) (5.06) (12.74) (0.26) (159.59) (143.81) (106.22)
Furniture and xtures 2.24 0.03 2.27 1.20 0.12 1.32 0.95
(3.07) (0.17) () (1.00) (2.24) (1.61) (0.02) (0.15) (0.01) (0.57) (1.20) (1.04)
Ofce equipments 1.40 0.06 1.46 0.68 0.20 0.88 0.58
(2.49) (0.13) () (1.22) (1.40) (1.08) (0.02) (0.15) (0.01) (0.56) (0.68) (0.72)
Computers 2.68 0.22 0.01 2.89 2.33 0.25 0.01 2.57 0.32
(5.63) (0.17) (1.02) (2.10) (2.68) (5.07) (0.02) (0.21) (1.01) (1.96) (2.33) (0.35)
Vehicles 1.51 0.35 1.16 1.05 0.14 0.36 0.83 0.33
(3.68) (0.25) (0.66) (1.76) (1.51) (2.67) (0.06) (0.14) (0.60) (1.22) (1.05) (0.46)
300.38 17.14 2.47 315.05 163.62 16.04 1.77 177.89 137.16
(638.29) (28.61) (2.25) (364.27) (300.38) (319.69) (5.42) (14.71) (1.95) (174.25) (163.62) (136.76)
Intangible assets:
Computer Software 1.54 1.54 1.50 0.03 1.53 0.01
(4.14) () () (2.60) (1.54) (4.08) () (0.02) () (2.60) (1.50) (0.04)
TOTAL 301.92 17.14 2.47 316.59 165.12 16.07 1.77 179.42 137.17
Previous year (642.43) (28.61) (2.25) (366.87) (301.92) (323.77) (5.42) (14.73) (1.95) (176.85) (165.12) (136.80)
*denotes amounts less than Rs. 50,000
Previous years gures have been disclosed in parentheses.
1053
st
March, 2014
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
11. Non-current investments
Trade investments: (fully
paid up) (At cost)
a) Investments in equity
shares
Quoted
Orissa Sponge Iron Ltd.
Nil (2012-13 - 2,785)
equity shares of Rs. 10
each 0.00*
Dena Bank
Nil (2012-13 - 9,917)
each 0.03
Unquoted
(i) Investment in a
subsidiary:
Mahindra Sanyo
Special Steel
Private Ltd.
Nil (2012-13 -
51,00,000) equity
shares of Rs. 10
each 111.26
Other Investments: (fully
paid up) (At cost)
a) Investments in equity
shares
Quoted
Kotak Mahindra Bank
Ltd.
Nil (2012-13 - 6,000)
each 0.00*
Unquoted
(i) Investment in an
associate :
Mahindra Hotels
and Resorts Ltd.
Nil (2012-13 -
49,990) equity
shares of Rs. 10
each 0.05
(ii) Investment in other
companies:
Mahindra &
Mahindra Contech
Ltd.
Nil (2012-13 -
35,000) equity
shares of Rs. 10
each 0.04
The Indian and
Eastern Engineer
Co. Ltd.
Nil (2012-13 - 3)
ordinary shares of
Rs. 10 each 0.00*
Nil (2012-13 -
10,000) equity
shares of Rs. 10
each 0.02
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
Mahindra
Construction Co.
Ltd.
Nil (2012-13 -
300,000) equity
shares of Rs. 10
each 0.30
111.70
Less : Provision for diminution 0.35
111.35
* denotes amounts less than
Rs. 50,000
Notes :
(1) Aggregate of quoted
investments:
Cost 0.03
Market value 0.50
(2) Aggregate of unquoted
investments:
Cost 111.67
(3) All investments have been
sold during the year
12. Long-term loans and
advances
Capital advances 11.18 1.96
Security deposits (includes
amounts deposited under
protest) 28.28 28.01
Loans and advances to a
related party (See note 39)
Security deposit to holding
company 0.57 0.57
Taxation - advance tax less
provision for tax (net of
provision for tax of
Rs. 104.06 Crores;
2012-13 - Rs. 100.89
Crores) 21.84 25.00
MAT credit entitlement 8.59
Employee loans and
advances 0.28 0.19
Advances (considered
doubtful) 2.73 2.73
Less : Provision for doubtful
advances (2.73) (2.73)

Others 1.35 1.36
63.50 65.68
13. Other non-current assets
Deposits with banks held as
margin money or security
against guarantees issued 0.84 0.95
0.84 0.95
1054
st
March, 2014
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
(at lower of cost and fair
value)
Investments in mutual funds
Unquoted
Prudential ICICI Mutual
Fund QIP Series III
6,875,890 (2012-13
Nil) units of Rs. 10 each 7.00
7.00
15. Inventories
(At lower of cost and net
realisable value)
Raw materials
(includes in transit Rs. 0.61
Crore; 2012-13
Rs 1.53 Crores) 14.43 17.52
Work-in-progress
Pressed sheet
metal components,
assemblies and dies 11.75 12.24
Finished goods
Pressed sheet metal
components, assemblies
and dies 7.59 7.09
Stores and spares 3.55 3.83
37.32 40.68
(Unsecured)
Outstanding for a period
exceeding six months from
the date they were due for
payment
considered doubtful 15.46
18.77 20.28
Others
considered good # 108.60 111.87
127.37 132.15
Less : Provision for doubtful
debts 15.46
111.91 132.15
# includes debts due from a
private company in which a
director is a director 0.11
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
17. Cash and bank balances
Cheques on hand 0.11 4.95
Balances with banks
In xed deposit
accounts 15.01
30.69 5.07
Other bank balances :
Earmarked balances
In earmarked current
accounts for:
Unclaimed dividend/
interest on xed
deposits accounts 0.22 0.34
30.91 5.41
18. Short-term loans and
advances
Inter corporate deposit
(ICD) 59.13
Trade advance
considered doubtful 0.54 0.54
doubtful advance (0.54) (0.54)

Balances with excise,
customs and other
statutory authorities 4.30 4.01
Prepaid expenses 0.70 0.35
Employee loans and
advances 0.14 0.15
68.76 7.41
Interest accrued on ICD 2.99
Others 0.55 0.83
3.54 0.83
1055
st
March, 2014
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
Sale of
Pressed metal, sheet
components and dies 670.46 708.85
Sale of services
Income from processing 6.19 9.52
Other operating revenue
Sale of scrap 122.37 130.97
Others 0.61 0.39
122.98 131.36
799.63 849.73
21. Other income
Interest income
Fixed deposits with banks 1.54 0.07
ICD 2.99
Others 0.16
4.69 0.07
Dividend income from
Long term investments 0.00* 0.00*
Current investments 0.18
0.18 0.00*
Rent income 0.05 0.05
Provision for doubtful debts/
advances written back
Opening provision for
doubtful debts 5.65
Less: Provision relating
to steel business written
back, included in
discontinuing operations 1.07
Less: transferred on
divestiture of steel
business 4.50
0.08
Prot on sale of long term
investments (other than
disclosed as an exceptional
item) 0.47
Other non-operating income 0.43 0.44
5.82 0.64
22. Changes in inventories of
nished goods and work-in-
progress
Opening stock: (Pressed metal,
sheet components and dies)
Work-in-progress 12.24 9.01
Finished goods 7.09 5.93
Total 19.33 14.94
Less: Closing stock: (Pressed
metal, sheet components and
dies)
Work-in-progress 11.75 12.24
Finished goods 7.59 7.09
19.34 19.33
Net (increase) (0.01) (4.39)
Rs. Crores
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
23. Employee benets expense
Salaries and wages 57.18 57.91
Contribution to
- Provident and other
funds (See Note 44)
2.89 2.33
- Gratuity fund 0.60 1.27
3.49 3.60
Employee stock option
write back (See note 43) (0.32) (0.32)
65.39 66.71
24. Finance costs
Interest expense on
borrowings 13.26 22.16
income tax 0.04
others 0.36 0.55
13.66 22.71
Other borrowing costs 0.25 3.45
13.91 26.16
25. Other expenses
Stores consumed 8.74 8.38
Packing material consumed 8.31 5.24
Power and fuel 12.83 14.19
Rent including lease rentals 1.30 1.31
Insurance 0.68 0.37
Buildings 0.51 0.46
Machinery
(including stores and spares
consumed - Rs. 3.45 Crores;
2012-13 - Rs. 3.18 Crores)
4.48 3.39
Others
(including stores and spares
consumed - Rs. 0.28 Crores;
2012-13 - Rs. 1.68 Crores)
3.01 2.86
8.00 6.71
Legal and professional
charges 4.87 4.99
Freight outward 5.29 7.04
transactions and translations
(net) 0.07 0.05
Loss on xed assets
scrapped/written off (net) 0.06 0.18
Excise duty charge 0.19 0.10
Investment written off
(Rs. Nil; 2012-13 Rs. 200) 0.00*
Miscellaneous expenses
(see note 28) 7.16 6.65
58.05 55.88
1056
st
March, 2014
a) Basis of accounting and preparation of nancial statements:
The nancial statements have been prepared on accrual basis and
comply in all material respects with the Generally Accepted Accounting
Principles in India (Indian GAAP) and the relevant provisions of the
Companies Act, 1956 including the Accounting Standards notied under
the said Act.
b) Use of estimates:
contingent liabilities) and the reported revenue and expenses during the
year. The management believes that the estimates used in preparation
of the nancial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known/materialise.
c) (A) Tangible xed assets:
Fixed assets are recorded at historical cost of purchase and do
not reect current values. Cost includes interest and other nancial
charges attributable to the acquisition of xed assets.
Depreciation is provided for as follows:
The Company provides depreciation on straight line method and
except as stated in note (i) below, at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956:
i) Depreciation on heavy vehicles, other vehicles, ofce equipment
and data processing equipment are provided at 25%, 20%,20%
and 33% of cost respectively.
ii) Leasehold land is amortised over the period of lease.
iii) In respect of extra shift, depreciation is provided on the basis of
the actual utilisation of assets. In determining actual utilisation,
it has been assumed that the individual items of plant in
each shop have worked for the same number of hours as the
main plant in that shop, except where separate records are
maintained for any item.
When an asset is disposed off, the cost and related depreciation
are removed from the books of account and the resultant prot
(including capital prot) or loss is reected in the Statement of Prot
and Loss.
(B) Intangible assets:
Software expenditure incurred is amortised equally over the period of
36 months.
d) Investments:
Non-current investments are valued at cost. Provision for diminution is
made to recognise a decline, other than temporary, in the value of non-
current investments. Dividend income is recognised when the right to
receive payment is established. Current investments are stated at lower
of cost and fair value.
e) Inventories:
Inventories are valued at cost or net realisable value, whichever is lower.
Cost of inventories is arrived at on a weighted average basis and is
inclusive of overheads and duties, where appropriate. Scrap generated
is valued at net realisable value.
f) Foreign exchange transactions:
Foreign exchange transactions are initially recognised at the exchange
rate prevailing on the transaction date. At each balance sheet date
foreign currency monetary items are translated at the relevant rates
of exchange prevailing at that date. In respect of forward contracts,
the premium or discount arising at the inception of such a contract is
amortised as expense or income over the life of the contract.
In case of monetary items, the exchange differences are recognised in
g) Revenue recognition:
Sales of products are recognised when the products are shipped or on
transfer of signicant risks and rewards of ownership to the buyer depending
upon the terms agreed with the customers. Sales of services are recognised
when the services are rendered.
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable rate of interest.
h) Employee benets:
i) Provident fund:
The Companys contribution to the recognised provident fund,
paid/payable during the year, is debited to the Statement of Prot
and Loss. The shortfall, if any between the return guaranteed by
the statute and actual earnings of the fund is provided for by the
Company and contributed to the fund.
ii) Superannuation and other funds/schemes:
Companys contributions paid/payable during the year to ofcers
superannuation fund, employees pension scheme, employees
state insurance scheme and labour welfare fund are recognised in
iii) Gratuity and compensated absences:
Companys liability towards gratuity and compensated absences is
determined using the projected unit credit method which considers
present value of estimated future cash ow using a discount rate
determined by reference to market yield at the balance sheet date on
government bonds where the currency and terms of the government
bonds are consistent with the currency and the estimated terms of
the dened benet obligation.
i) Borrowing costs:
Borrowing costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is ready
for its intended use. A qualifying asset is an asset that necessarily
takes substantial period of time to get ready for its intended use. Other
borrowing costs are recognised as an expense in the period in which
they are incurred. No borrowing costs are eligible for capitalisation
during the year.
j) Earnings per share:
Basic earnings per share are computed by dividing the prot/(loss) after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the prot/
(loss) after tax as adjusted for dividend, interest and other expense or
income relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earnings
per share and the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net prot or increase
the net loss per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The dilutive
potential equity shares are adjusted for the proceeds receivable had the
shares been actually issued at fair value (i.e. average market value of
the outstanding shares). Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share splits/reverse
share splits and bonus shares, as appropriate.
k) Taxes on income:
taxable income for the year.
1057
st
March, 2014
the Company will pay normal income tax during the specied period.
Accordingly, MAT is recognised as an asset in the balance sheet when
it is probable that future economic benet associated with it will ow to
the Company.
Deferred tax assets and liabilities are recognised, subject to consideration
income and accounting income, that originate in one period and are
assets arising on account of unabsorbed depreciation or carry forward
of losses under tax laws are recognised only to the extent that there
future taxable income will be available against which such deferred tax
assets can be realised. Deferred tax assets on account of other timing
differences are recognised to the extent that there is a reasonable
certainty of its realisation.
l) Research and development expenditure:
Revenue expenditure pertaining to research is charged to the Statement
of Prot and Loss. Development costs of products are also charged
to the Statement of Prot and Loss unless a products technological
feasibility has been established, in which case such expenditure is
capitalised. The amount capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
Fixed assets utilised for research and development are capitalised and
depreciated in accordance with the policies stated for tangible xed
assets and intangible assets.
m) Impairment of assets:
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
impairment is recognised, if the carrying amount of these assets exceeds
their recoverable amount. The recoverable amount is the greater of the
loss recognised for an asset in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment loss is recognised
in the Statement of Prot and Loss, except in case of revalued assets.
n) Provisions and contingencies:
A provision is recognised when an enterprise has a present obligation
as a result of past event and it is probable that an outow of resources
will be required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are not discounted to their present
values and are determined based on management estimate required
to settle the obligation at the balance sheet date. These are reviewed
at each balance sheet date and adjusted to reect the current
management estimates. Contingent liabilities are disclosed in the
nancial statements.
a. Terms of repayment of secured term loans from banks are as under:-
Sr.
No.
As at 31
st
st
March, 2013
Terms of repayment and other relevant terms Non-current Current Non-current Current
1. 9.38 3.75 The loan was to be repaid in 16 equal quarterly instalments of Rs. 0.9375 Crore
each from December 2012 till September 2016. The interest rate applicable was
11.50% p.a.
2. 150.00 The loan was to be repaid in 12 equal quarterly instalments of Rs. 12.50 Crores each
from September 2014 till June 2017. The interest rate applicable was 11.50% p.a.
159.38 3.75
b) Company has prepaid both the term loans at Sr. No 1 and 2 in table above in November 2013 and October 2013 respectively consequent to which rst
equitable mortgage on entire xed assets of the Company is released.
28. Payment to Auditors*:
31
st
March, 2014 31
st
March, 2013
To Statutory Auditor Rs. Crores Rs. Crores
(a) As auditor 0.15 0.15
(b) For other services 0.13 0.13
(c) For company law matters**
(Rs. 15,000; 2012-2013:
Rs. 15,000)
0.00** 0.00**
(d) For reimbursement of
expenses***
(Rs. 29,539; 2012-2013:
Rs. 97,607)
0.00*** 0.01***
To Cost Auditor
(a) As auditor 0.01 0.01
*Amounts mentioned are exclusive of service tax.
Amounts paid to network rms of auditors, not included above is Rs 0.03
Crore; 2012-13 Rs 0.01 Crore.
29. Estimated amount of contracts remaining to be executed on capital account
and not provided for as on 31
st
March, 2014 Rs. 36.40 Crores (2012-2013:
Rs. 8.25 Crores).
30. Contingent liabilities not provided for in respect of :
a) Customer bills discounted but not matured Rs.5.10 Crores (2012-2013:
Rs. 7.26 Crores).
b) Excise duty and Service Tax:
Excise and Service Tax matters for which the Company is contingently
liable amounting to Rs. 16.31 Crores (2012-2013: Rs. 13.34 Crores). This
includes:
i) Rs. 0.52 Crore (2012-2013: Rs. 0.52 Crore) - relating to the method
of valuation of customer processed nished goods for the purpose
of discharge of excise duty, where the customer supplies raw
material. This matter has been settled by Custom, Excise & Service
Tax Appellate Tribunal (CESTAT) in favour of the Company. The
Department has gone in further appeal in the Supreme Court.
ii) Rs. 5.05 Crores (2012-2013: Rs. 4.96 Crores) demand relating
to alleged availment of Cenvat credit on invoices issued by certain
registered dealers without actually receiving the material covered
therein. The Company has led an appeal in CESTAT against the
said demand.
iii) Rs. 0.45 Crore (2012-2013: Rs. 0.42 Crore) being matters related to
availment of service tax credit.
iv) Rs. 1.08 Crores (2012-2013: Rs. 1.01 Crores) being disallowance of
input credit availed on canteen expenses.
v) Rs. 2.94 Crores (2012-2013: Rs Nil) being disallowance of input
credit availed on banking services without having registration as
input service distributor.
vi) Rs. 1.78 Crores (2012-2013: Rs. 1.90 Crores) - being other matters.
In respect of (b) (i) above and other valuation issues, the excise
department has continued to issue show cause cum demand notices
for subsequent periods aggregating Rs. 4.53 Crores (2012-2013:
Rs. 4.53 Crores).
1058
st
March, 2014
c) Sales Tax:
Sales Tax matters for which the Company is contingently liable amounting
Rs. 12.96 Crores (2012-2013: Rs. 9.31 Crores). This includes:
i) A demand of Rs. 8.51 Crores (2012-2013: Rs. 8.51 Crores) for
nancial year 2006-07 and nancial year 2007-08 by treating the
branch transfer of goods as sales made by the Company and for
non-submission of C forms. The amount is inclusive of interest
and penalty. The Company has led an appeal in Sales Tax Tribunal
against the said demand.
ii) A demand of Rs 3.65 Crores (2012-2013 : Rs Nil) for nancial year
2008-09 by disallowing the input vat set off claimed by the Company
and for non submission of C forms. The amount is inclusive of
interest and penalty. The Company has led an appeal with Joint
Commissioner Appeals against the said demand.
iii) Other sales tax matters Rs. 0.80 Crore (2012-2013: Rs. 0.80 Crore)
d) Taxation demands against which the Company is in appeal Rs. 7.11
Crores (2012-2013: Rs. 6.33 Crores).
e) Other matter for which the Company is contingently liable is Rs. 58.74
Crores (2012-2013: Rs. 58.74 Crores). This represents dispute in the
rate of water charges, inclusive of penal charge of Rs. 10.19 Crores
(2012-2013: Rs. 10.19 Crores) and late fee charge of Rs. 22.31 Crores
(2012-2013: Rs. 22.31 Crores), demanded by the Irrigation department.
The Company is in dispute with the Irrigation Department (Water
Resource Department) in respect of levy of charge for use of water
from Patalganga River, for the period from July 1991 to May 2012.
The Honble Court of Alibag district, before whom the appeal was
led by the Irrigation Department against the Order of the Court of
the Civil Judge, Senior Division Panvel, decided the appeal against
the Company. Consequently the Company led an appeal before the
Honble High Court of Judicature of Bombay challenging the Order
of the Alibag Court. The Honble Bombay High Court has admitted
the appeal for the disputed period of July 1991 to March 2001, since
for the period April 2001 to May 2012 there has been no agreement
in force between the Company and the Irrigation department. As per
the directions of the Honble Bombay High Court, the Company has
deposited Rs. 2.88 Crores with the Honble Bombay High Court, being
the demand as per the Irrigation department for the said period of July
1991 to March 2001.
In respect of the demand for period from April 2001 to May 2012, the
Company has led a writ petition before the Honble Bombay High Court.
The Honble Bombay High Court, vide Order dated 2nd July, 2012, has
admitted the writ petition of the Company in relation to water charges
demanded by the Irrigation Department, District - Raigad for the said
period. In compliance with the conditions of the Order, the Company
has paid an amount of Rs. 23.35 Crores with the Irrigation Department,
being the arrears of water charges for the period from July 1991 to May
2012 and has also given a bank guarantee towards penal rate charges of
Rs. 10.19 Crores claimed by the Irrigation Department. The High Court
has also allowed the Irrigation Department to withdraw the amount of
arrears of Rs. 2.88 Crores deposited earlier with it in respect of disputed
water charge claim for the period from July 1991 to March 2001. As per
the Order, the Company is entitled to pursue the proceedings led by it
before the Honble Bombay High Court and that the State of Maharashtra
(Irrigation Department) shall not adopt any coercive steps for recovery of
the aforesaid penal rate charges of Rs. 10.19 Crores and the late fee of
Rs. 22.31 Crores.
Pending the hearing and nal disposal of these proceedings and based
on the Companys assessment of water charges dues, the aforesaid
amount of Rs. 26.23 Crores is considered as recoverable and an amount
of Rs. 3.68 Crores has been cumulatively provided for based on the
managements estimate as to the expected charge on this account.
f) Other claims against the Company not acknowledged as debts:
i. Claim pertaining to material supply contract Rs. Nil (2012-2013:
Rs. 9.66 Crores). The arbitration award is received during the year.
ii. Claims relating to lease rentals Rs. 1.02 Crores (2012-2013: Rs. 1.02
Crores).
31. Cost of raw materials and components consumed:
Continuing operations
Stamping division
31
st
March,
2014
31
st
March,
2013
1) Metal sheets 474.95 497.24
2) Components, Paints and tools 52.33 73.02
3) Processing charges 5.83 8.84
533.11 579.10
Discontinuing operations
Steel division
1) Ferrous scrap 100.64
2) Ferro alloys 37.37
3) Processing charges 3.59
4) Others 6.55
148.15
31
st
March, 2014 31
st
March, 2013
Rs. Crores % Rs. Crores %
Stamping division
Imported at landed cost 1.12 0.21 5.67 0.98
Indigenously obtained 531.99 99.79 573.43 99.02
533.11 100.00 579.10 100.00
Steel division
Imported at landed cost 54.65 36.89
Indigenously obtained 93.50 63.11
148.15 100.00
Consumption value is after considering excesses and shortages ascertained
on physical verication and write off for obsolescence.
32. Stores and spares consumed:
31
st
March, 2014 31
st
March, 2013
Rs. Crores % Rs. Crores %
Stamping division
Imported at landed cost
Indigenously obtained 12.47 100.00 13.24 100.00
12.47 100.00 13.24 100.00
Steel division
Imported at landed cost 2.57 12.96
Indigenously obtained 17.23 87.04
19.80 100.00
Consumption value is after considering excesses and shortages ascertained
on physical verication and write off for obsolescence.
1059
st
March, 2014
33. C.I.F. value of imports:
31
st
March, 2014 31
st
March, 2013
(a) Raw materials 0.54 87.32
(b) Stores and spares 4.48
(c) Capital goods 0.17
34. Expenditure in foreign currency:
31
st
March, 2014 31
st
March, 2013
Interest 0.43
Others 0.00* 0.10
* Denotes amount less than Rs. 50,000
35. Earnings in foreign exchange:
31
st
March, 2014 31
st
March, 2013
(a) F.O.B. value of exports 14.29
(b) Freight and insurance 0.41
36. Research and development expenditure debited to the Statement of Prot
and Loss aggregates Rs. Nil (2012-2013: Rs. 0.46 Crores) consisting of
materials, salaries and power based on allocations made by the Company.
37. Disclosure required under Micro, Small and Medium Enterprises Development
Act, 2006 (the Act) are as follows:
Rs. Crores
Sr.
No.
Particulars 31
st
March,
2014
31
st
March,
2013
(a) Principal amount outstanding 0.93 1.66
(b) Interest due on the above
(c) Principal amount paid during the year
beyond appointed day 3.29 2.91
(d) Interest paid during the year beyond the
appointed day 0.03 0.03
(e) Amount of interest due and payable for the
period of delay in making payment without
adding the interest specied under the Act 0.00*
(f) Amount of interest accrued and remaining
unpaid at the end of the year 0.00*
(g) Amount of further interest remaining due
and payable even in the succeeding
years, until such date when the interest
dues as above are actually paid to
the small enterprise for the purpose of
disallowance as a deductible expenditure
under section 23 of the Act.
* Denotes amount less than Rs. 50,000.
Note:
a. The above information and that given in Note 7 Trade payables
regarding micro enterprises and small enterprises has been determined
on the basis of information available with the Company. This has been
b. The interest computation for vendors, who have submitted their
registration certicates during the year, is done from the date of receipt
of such certicates by the Company.
38. Foreign currency exposures:
The year-end foreign currency exposures that have not been hedged by a
a. Amount payable in foreign currency on account of the following:
Indian Rupees Foreign Currency
Import of goods and services Nil Euro Nil
(0.45) (Euro 0.01)
Previous years gures have been disclosed in parenthesis.
39. Related party disclosures:
a) Related parties where Control exists:
Holding Company Mahindra & Mahindra Ltd.
b) Names of other related parties with whom transactions have taken place
during the year:
1) Subsidiary Company Mahindra Sanyo Special Steel Pvt. Ltd. #
2) Associate Company Mahindra Hotels and Resorts Ltd. #
3) Fellow subsidiaries Mahindra Forgings Ltd.#
Mahindra Gujarat Tractors Ltd.
Mahindra Inter trade Ltd.
Mahindra Logistics Ltd.
Mahindra Gears and Transmission Pvt. Ltd.
Mahindra Vehicle Manufacturers Ltd.
Mahindra Steel Service Centre Ltd.
Mahindra Trucks and Bus Ltd.
Mahindra BPO Services Pvt. Ltd.
Mahindra Hinoday Industries Ltd #
Mahindra Automobile Distributors Pvt. Ltd.
Metalcastello S.p.A.
Mahindra Sanyo Special Steel Pvt. Ltd. ##
4) Key Management Personnel Mr. Uday Gupta, Managing Director
Mr. Ajit Lele, Chief Executive Ofcer
# Related party up to 3
rd
October, 2013
## Fellow subsidiary w.e.f. 3
rd
October, 2013
1060
3
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1062
st
March, 2014
40. Earnings per share (EPS):
31
st
March,
2014
31
st
March,
2013
a) Prot for the year from continuing
operations (Rs. Crores) 188.15 15.14
b) Exceptional items [2013 -14
Rs 229.17 Crores less tax thereon
Rs. 56.74 Crores : 2012-13 Rs. Nil]
(Rs. Crores) 172.43
c) Prot for the year from continuing
operations before exceptional items
(Rs. Crores) (a)-(b) 15.72 15.14
d) Prot/(Loss)for the year (Rs. Crores) 188.15 (33.72)
e) Prot/(Loss) for the year before
exceptional items
(Rs. Crores) (d)-(b) 15.72 (33.72)
f) Weighted Average Equity Shares (Nos.)
-32,482,529 shares outstanding for
349 days (2012-13 365 days)
-32,664,279 shares outstanding for
16 days 32,490,496 32,482,529
g) Diluted Equity Shares (Nos.)
Weighted average equity shares plus
48,900 shares (2012-13 Nil) that
would be issued for no consideration
to ESOP holders on account of
difference between the exercise price
and fair value of shares 32,539,456 32,482,529
h) i) Basic earnings per equity share
for (in Rupees)
Before exceptional item (c)/(f) 4.84 4.66
After exceptional item (a)/(f) 57.91 4.66
Total operations
Before exceptional item (e)/(f) 4.84 (10.38)
After exceptional item (d)/(f) 57.91 (10.38)
31
st
March,
2014
31
st
March,
2013
ii) Diluted earnings per equity share
for (in Rupees)
Before exceptional items (c)/(g) 4.83 4.66
After exceptional items (a)/(g) 57.82 4.66
Total operations
Before exceptional items (e)/(g) 4.83 (10.38)
After exceptional items (d)/(g) 57.82 (10.38)
41. Discontinuing operations:
The Company had in previous year, pursuant to a Business Transfer
Agreement had transferred its Steel business to Mahindra Sanyo Special
Steel Private Limited (Mahindra Sanyo), an erstwhile subsidiary of the
Company, by way of a slump sale, with effect from the closing hours of
9th July, 2012 after obtaining necessary approvals and satisfying various
contractual conditions mentioned in the aforesaid agreements. The
Company had received consideration of Rs. 133.50 Crores in the form of
50,90,000 equity shares of Rs. 10 each of Mahindra Sanyo at a premium of
Rs. 208.57 per equity share and cash consideration of Rs. 22.25 Crores. The
gures for the current year are accordingly not comparable with that of the
previous year.
The shortfall of Rs. 47.00 Crores between the value of net assets of steel
business transferred and the consideration received had been debited to the
Statement of Prot and Loss. Further, the deferred tax liability of Rs. 13.53
Crores relating to the steel business as at 9th July, 2012, not taken over by
Mahindra Sanyo, had been credited to deferred tax expense.
The steel business had accordingly been classied as Discontinuing
Operations in the nancial statements of the Company.
The following table summarises the nancial information for discontinuing
operations (also given alongside is the corresponding nancial information
for the continuing operations and the aggregate):
Rs. Crores
Particulars
Continuing Operations Discontinuing Operations Total
(Stamping Division) (Steel Division) Company
31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
I. Assets
Non-current assets 207.93 317.55 207.93 317.55
Current assets 259.44 186.48 259.44 186.48
Total assets 467.37 504.03 467.37 504.03
II. Liabilities
Non-current liabilities 14.71 177.69 14.71 177.69
Current liabilities 95.01 158.27 95.01 158.27
Total Liabilities 109.72 335.96 109.72 335.96
III. Revenues and expenses
Revenues
Revenues from operations 723.02 766.39 224.44 723.02 990.83
Other income 5.82 0.64 1.41 5.82 2.05
Total revenue 728.84 767.03 225.85 728.84 992.88
Expenses
Cost of materials and components consumed 533.11 579.10 148.15 533.11 727.25
Changes in inventories of nished goods
and work in progress (0.01) (4.39) (18.65) (0.01) (23.04)
Employee benets expense 65.39 66.71 12.20 65.39 78.91
Finance costs 13.91 32.76 9.43 13.91 42.19
Depreciation and amortisation expense 16.07 14.74 5.41 16.07 20.15
Other expenses including provision for
doubtful trade receivables
73.51 56.30 87.54 73.51 143.84
Total expenses 701.98 745.22 244.08 701.98 989.30
1063
st
March, 2014
Rs. Crores
Particulars
Continuing Operations Discontinuing Operations Total
(Stamping Division) (Steel Division) Company
31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
31
st
March,
2014
31
st
March,
2013
Prot/(Loss)

before exceptional item,
loss on transfer of steel business and
tax expense
26.86 21.81 (18.23) 26.86 3.58
Estimated effect of expenses then included
in discontinuing operations which will
continue in continuing operations and hence
included / (excluded) in/from amounts
reported above for respective division *
7.03 (7.03)
Prot/(Loss) before exceptional item, loss on
transfer of steel business and tax expense
as per the Statement of Prot and Loss
26.86 28.84 (25.26) 26.86 3.58
*comprising of
Finance costs 6.60 (6.60)
Depreciation and amortisation 0.01 (0.01)
Other expenses 0.42 (0.42)
Total 7.03 (7.03)
IV. Cash Flows:
Net Cash from/(used in) Operating Activities 76.08 77.61 (137.20) 76.08 (59.59)
Net Cash from/(used in) Investing Activities 194.88 (2.67) 194.88 (2.67)
Net Cash from/(used in) Financing Activities (245.34) (73.42) 138.30 (245.34) 64.88
42. Provision for water charges (disputed):
Rs. Crores
Particulars Opening
balance
Provision
made during
the year
Amount
utilised/
written back
Closing
balance
Water Charges 3.68 3.68
(3.51) (0.17) (3.68)
Note: Previous years gures have been disclosed in parentheses.
The details regarding dispute in water charges have been mentioned in
Note 30 (e).
43. The Company had granted 142,500 and 955,500 Options during the year
ended 31
st
March, 2008 and 31
st
March, 2007 respectively to eligible
employees including Directors of the Company. Out of the above Options
granted, 741,125 Options have lapsed till 31
st
March, 2014. 179,625 Options
have lapsed during the year and 181,750 Options have been exercised
during the year.
The equity settled Options vest one year from the date of the grant and are
exercisable on specied dates in 4 tranches within a period of 5 years from
the date of each vesting. The eligible employee must exercise a minimum
of 50 (Fifty only) Options or Options vested, whichever is lower; and the
Options in respect of each tranche may be exercised on the date of vesting
or at the end of each year from the date of each vesting, provided that at the
end of ve (5) years from the date of each vesting (or such extended period
as may be decided by the Remuneration Committee), the eligible employee
may exercise all Options vested but not exercised by him/her failing which
all the unexercised Options shall lapse.
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
average
exercise price
(Rs.)
st
April, 2013 536,500 95.10
Options exercised during the year 181,750 96.32
Options lapsed during the year 179,625
st
March, 2014 175,125 92.82
Options vested but not exercised on
31
st
March, 2014 175,125 92.82
Information in respect of Options outstanding as at 31st March, 2014:
Exercise price Number of
Options
Weighted
average
remaining life
Rs. 99.00 133,500
Rs. 73.00 41,625
The fair value of Options granted on 18
th
August, 2006 is Rs. 67.25 per share.
The fair value of Options granted during the year on 24
th
October, 2007 is
Rs. 43.39 per share.
model and the signicant assumptions made in this regards are as follows:
Grant dated
24
th
October,
2007
Grant dated
18
th
August,
2006
Risk free interest rate 7.95% 7.27%
Expected life 3.5 Yrs. 3.5 Yrs.
Exercise price Rs. 73.00 Rs. 99.00
Stock price Rs. 85.50 Rs. 117.45
The volatility is calculated considering the daily volatility of the stock prices
on National Stock Exchange, over a period prior to the date of grant,
corresponding with the expected life of the options.
In respect of options granted under the Employee Stock Options Plan, in
accordance with guidelines issued by the SEBI, since the scheme provides
for graded vesting, the vesting period is determined separately for each
vesting portion of the option, as if the option was, in substance a multiple
option and the amount of employee compensation cost is accounted for
and amortised accordingly on a straight line basis over the vesting periods.
Consequently salaries, wages, bonus, etc. includes credit of Rs. 0.32
Crore (2012-13: Rs. 0.32 Crore) being the reversals on account of options
lapsed/expired.
1064
st
March, 2014
Had the Company adopted fair value method in respect of Options granted,
the employee compensation cost would have been lower by Rs. 0.56 Crore
(2012-13: lower by Rs. 0.56 Crore), prot for the year after tax higher by
Rs. 0.37 Crore (2012-13: loss for the year lower by Rs. 0.38 Crore) and the
basic and diluted earnings per share would have been higher by Rs. 0.11
(2012-13: Rs. 0.12).
The above disclosures have been made consequent to the issue of Guidance
Note on Accounting for Employee share based payments issued by the
Institute of Chartered Accountants of India in the year 2005 and applicable
for the period on or after 1st April, 2005.
*Denotes amounts less than 50,000/-
44. Employee benet plans:
A. Dened benet plans:
Provident Fund:
The Company makes monthly contributions to Provident Fund managed
by MUSCO Staff Provident Fund Trust for qualifying employees. Under
the schemes, the Company is required to contribute a specied
percentage of the payroll costs to fund the benets. During the year, the
Company has contributed Rs. 1.25 Crores (2012-13: Rs. 1.43 Crores;
Steel Rs. 0.35 Crores, Stamping Rs. 1.08 Crore) to the Provident Fund
Trust. The Company is obliged to meet interest shortfall, if any, with
respect to covered employees. Having regard to the assets of the fund
and return on investments, the Company provides for the shortfall in
interest on an estimated basis. Accordingly a provision of Rs. 0.45 Crore
(2012-13: Rs. Nil) has been made during the year towards the guarantee
given for notied interest rates.
The major categories of plan assets in which the contributions are
invested by MUSCO Staff Provident Fund Trust are as under:
Category % of each to total plan assets
Particulars 31
st
March, 2014 31
st
March, 2013
Bonds and Securities of
Central Government 11.53 13.97
Bonds and Securities of State
Government 13.21 10.67
Bonds and Securities of
Public Sector Undertakings 38.79 38.78
Special Deposits with Banks 36.47 36.58
Gratuity:
The Company makes annual contributions to the Employees Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation
of India, a funded dened benet plan for qualifying employees. The
scheme provides for lump sum payment to vested employees at
retirement or on termination of employment of an amount equivalent to
15 days salary for each completed year of service or part thereof in
excess of six months. In case of one unit, the Company pays two third
months salary to executives who have completed 10 years of service
payable for each completed year of service or part thereof in excess of
six months. In case of death of the employee while in service, gratuity is
paid for an amount equivalent to 30 days salary for each completed year
of service or part thereof in excess of six months.
The ceiling limit for gratuity payment is as per the Gratuity Act, 1972
except for executives at one unit who enjoy no ceiling limit. Vesting
occurs upon completion of ve years of service.
Detailed disclosures on Dened Benet Plan Gratuity is as follows:
Particulars GRATUITY
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
I Expenses/(Income) recognised in
the Statement of Prot and Loss for
the year ended 31
st
March, 2014
3. Expected return on plan assets (0.54) (0.60)
4. Actuarial (Gains)/Losses 0.02 0.38
5. Gain on transfer of steel business (0.82)
6. Total Expense/(Income) 0.60 0.19
31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
II Net Asset/(Liability) recognised in
the Balance Sheet as at 31
st
March,
2014
Obligation as at 31
st
March, 2014 6.53 6.37
2. Fair value of plan assets as at
31
st
March, 2014 (4.62) (5.06)
3. Net Asset/(Liability) as at
31
st
March, 2014 (1.91) (1.31)
III Change in Obligation during the
year ended 31
st
March, 2014
Obligation at the beginning of the
year 6.37 17.50
4. Actuarial (Gains)/ Losses (0.07) 0.21
5. Liabilities settled on transfer of
steel business (12.51)
6. Benet Payments (0.89) (0.06)
Obligation as at the end of the
year 6.53 6.37
IV Change in Assets during the year
ended 31
st
March, 2014
1. Plan assets at the beginning of the
year 5.06 16.02
3. Contributions by employer 0.36
4. Assets distributed on transfer of
steel business (11.69)
5. Actual benets paid (0.89) (0.06)
6. Actuarial Gains/(Losses) (0.09) (0.17)
7. Plan assets at the end of the year 4.62 5.06
V Actual return on plan assets (1+2) 0.45 0.43
2. Actuarial Gains/(Losses) (0.09) (0.17)
VI The major categories of plan assets
as a percentage of total Plan
Funded with LIC of India (See note
below)
100% 100%
VII Actuarial Assumptions:
1. Discount Rate 9.15% 8.00%
2. Expected rate of return on plan
assets
9.40% 9.40%
3. Mortality 2006-08
Mortality
base
2006-08
Mortality
base
4. Turnover rate 1 to 2% 1 to 2%
5. Salary escalation rate 7.50% 7.50%
Note: The Company is unable to obtain the details of major category of plan
assets from the Insurance Company (LIC of India) and hence the disclosure
thereof is not made.
1065
st
March, 2014
B. Net Assets/ (Liabilities) recognised in the Balance Sheet as at respective
year ends and experience adjustments:
Particulars 31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
31
st
March,
2012
Rs. Crores
31
st
March,
2011
Rs. Crores
31
st
March,
2010
Rs. Crores
1. Present Value of
Dened Benet
Obligation
6.53 6.37 17.50 16.19 15.01
2. Fair value of plan
assets
(4.62) (5.06) (16.02) (15.15) (15.33)
3. Funded Status
[Surplus/(Decit)]
(1.91) (1.31) (1.48) (1.04) 0.32
4. Net Asset/(liability) (1.91) (1.31) (1.48) (1.04) 0.32
5. Experience
adjustment arising on:
a. Plan Liabilities 0.77 (0.06) 0.83 0.18 0.42
b. Plan Assets (0.09) (0.16) 0.13 (0.26) 0.34
C. Basis used to determine expected rate of return on assets:
This is based on expectation of the average long term rate of return expected
on investments of the fund during the estimated term of the obligations.
D. The estimates of future salary increases, considered in actuarial
valuation, takes into account the ination, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
E. The Company expects to fund the entire shortfall in the Employees
Group Gratuity-cum-Life Assurance Scheme with Life Insurance
Corporation of India during the rst quarter of the next nancial year.
F. Dened Contribution Plans:
The Company makes contribution to Employees pension scheme,
Superannuation fund and Employees State Insurance Scheme (ESIS),
which are dened contribution retirement benet plans for qualifying
employees. Under the schemes, the Company is required to contribute
a specied percentage of the payroll costs to fund the benets.
Companys contribution paid/payable during the year to Employees
pension scheme, Superannuation fund and ESIS are recognised in
the Statement of Prot and Loss. These amounts are recognised as
an expense and included in Note 23 of the Statement of Prot and
Loss under the heading Employee benets expense in line item
Contribution to provident and other funds.
Particulars 31
st
March,
2014
Rs. Crores
31
st
March,
2013
Rs. Crores
Continuing operations Stamping
division
i) Superannuation fund 0.15 0.14
ii) Employees pension scheme 0.78 0.80
iii) Employees State Insurance
Scheme 0.27 0.31
Discontinuing operations Steel
division
i) Superannuation fund 0.06
ii) Employees pension scheme 0.14
45. The net foreign exchange loss debited to the Statement of Prot and Loss
is Rs. 0.07 Crore (2012-2013: Rs. 2.19 Crores) of which Rs. Nil (2012-2013:
Rs. 2.14 Crores) pertains to discontinuing operations.
46. The Company has presented segmental information in its consolidated
nancial statements which are presented in the same annual report.
Accordingly, in terms of the provisions of Accounting Standard (AS17)
Segment Reporting, no disclosures related to segments are presented in
its standalone nancial statements.
47. As a part of Mahindra Group strategy to consolidate the auto components
business and formation of global alliance with CIE Automotive, Spain (CIE),
the Board of Directors of the Company, at their meeting held on 15
th
June,
2013, duly considering the recommendation of the Audit committee, has
approved the Integrated Scheme (the scheme) of Amalgamation under
Sections 391 to 394 of the Companies Act, 1956, involving the Company,
Mahindra Hinoday Industries Limited, Mahindra Gears International
Limited, Mahindra Investments (India) Private Limited and Participaciones
Internacionales Autometal Tres S.L. (Transferor Companies) with Mahindra
Forgings Limited (Transferee Company), with effect from 1
st
October, 2013
(the Scheme).
The Company had intimated the Stock Exchanges on which it is listed on
15
th
June, 2013 detailing the share SWAP ratios.
The BSE Limited (BSE) and the National Stock Exchange of India limited
(NSE), vide their Observation letters both dated 7
th
March 2014, have
conveyed their respective no-objections to le the Integrated Scheme as
mentioned in point a) above with the Honble High Court of Bombay.
Subsequently, the Company has led application under Sections 391-394
of the Companies Act, 1956 before the Honble High Court Of Judicature
at Bombay seeking its directions for; a) holding meetings of its equity
shareholders to seek their approval to the Scheme and b) dispensing
with the requirement of convening meetings of its secured and unsecured
creditors. As per the Order dated 2
nd
May, 2014 of the Honble Bombay High
Court, the meeting of equity shareholders of the Company will be convened
on 5
th
June, 2014, as per the notice dated 6
th
May, 2014 of the said meeting
sent to the shareholders of the Company. The Honble Bombay High Court
vide its above Order has dispensed with requirement of convening meetings
of secured and unsecured creditors of the Company. The Company is in
process of ling necessary petition under section 391-394 of the Companies
Act 1596 read with applicable provisions of the Companies Act, 2013, if
any, with Honble Bombay High Court of Judicature at Bombay, seeking its
approval for the Scheme.
The Company has also sent notice of postal ballot dated 10
th
May, 2014,
alongwith required annexure and explanatory statement, for seeking the
approval of public shareholders of the Company to the Scheme through
postal ballot and e-voting, as required under the provisions of the relevant
circulars issued by Securities Exchange Board of India (SEBI), in this respect
and will take such other steps as may be necessary for the approval and
implementation of the scheme.
48. Previous years gures have been regrouped wherever necessary to conform
to current years classication.
Signature to Notes 1 to 48 For and on behalf of the Board
Uday Gupta Managing Director
Hemant Luthra
}
Directors
Harsh Kumar
Sandeep Jain Ajay Kadhao Daljit Mirchandani
Chief Finance Ofcer Company Secretary Sanjiv Kapoor
Mumbai : 21
st
st
May, 2014
1066
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies
for the nancial ended 31
st
March, 2014.
Name of the
Subsidiary
Company
Number of shares
in the Subsidiary
Company held by
Company Limited
at the end of the
nancial year
The net aggregate of prots/(losses) of the Subsidiary Company so far as
they concern the members of Mahindra Ugine Steel Company Limited.
Equity Extent of
holding
Dealt with in
the accounts of
Mahindra Ugine
Steel Company
Limited for the
year ended
31
st
March, 2014.
Not Dealt with in
the accounts of
Mahindra Ugine
Steel Company
Limited for the
year ended
31
st
March, 2014.
Dealt with in
the accounts of
Mahindra Ugine
Steel Company
Limited for the
year ended
31
st
March, 2013.
Not Dealt with in
the accounts of
Mahindra Ugine
Steel Company
Limited for the
year ended
31
st
March, 2013.
Nos. % Rupees crores Rupees crores Rupees crores Rupees crores
Mahindra Sanyo
Special Steel
Pvt. Ltd.
51,00,000
(till 3
rd

October,
2013)
51% (31.53) (38.03)
Uday Gupta Managing Director
Hemant Luthra
}
Directors
Harsh Kumar
Sandeep Jain Ajay Kadhao Daljit Mirchandani
Chief Finance Ofcer Company Secretary Sanjiv Kapoor
Mumbai : 21
st
st
May, 2014
MAHINDRA SANYO SPECIAL STEEL PRIVATE LIMITED
1067
PERFORMANCE:
Given the economic slow down particularly that in the Auto
segment during the year under review, the Steel and Ring
business both suffered a loss. Due to a decrease in demand
there was intense competitive pressure on pricing in the special
alloy steel market and a consequent contraction in margin due
to pricing pressures coupled with increase in input cost and a
steep dollar devaluation. With the technical support of our joint
venture partners management continues to undertake initiatives
for increasing margin by way of rationalization of product
mix and processes and further improvements in operating
efciencies, productivity and yield. The Company also foresees
a signicant increase in sales in the value added segments as
process/quality audits by several global MNCs currently under
way are expected to fructify into sales in the near future.
During the year under review, your Company sold 102,969
tonnes of alloy steel products. Your Company registered sales
revenue of Alloy and Steel products aggregating Rs. 70,311.17
lakhs for the year under review.
Your Company also registered sales of 3,301 tonnes of Ring
(Bearing Races) products for a value of Rs. 5,069.22 lakhs
The Company has incurred a loss of Rs. 6,833.84 lakhs during
DIVIDEND:
In view of losses your directors do not recommend any
dividend for the period under review.
DIRECTORS:
Mr. Hemant Luhtra, Director, retire by rotation at the ensuing
Annual General Meeting, and being eligible, offers himself for
re-appointment.
Mr. Daljit Mirchandani, who was appointed as Director of the
Company designated as Independent Director by the Board
of Directors. The Company has received requisite notice in
writing from members proposing for appointment of Mr. Daljit
Mirchandani as an Independent Director of the Company.
The Company has received declarations from Mr. Daljit
Mirchandani, conrming that he meets with the criteria of
independence as prescribed under sub-section (6) of Section
149 of the Companies Act, 2013. The Board proposes to
appoint him for a period of 5 years from the conclusion of
ensuing Annual General Meeting of the Company.
Mr. Shinichi Hori, Director has resigned from the Directorship
st
May, 2014. The Board
has placed on record its sincere appreciation of the services
rendered by Mr. Shinichi Hori during his tenure as the Director
of the Company.
Pursuant to the provisions of Section 161(1) of the Companies
Act, 2013. Mr. Tomofumi Osaki, who was appointed as an
additional Director of Company with effect from 21
st
May, 2014
and holds ofce upto the date of ensuing Annual General
Meeting. The Company has received Notice from Member
under Section 160(1) of the Companies Act, 1956, signifying
DIRECTORS REPORT
To
The Members,
The Directors present their Third Report together with the audited accounts of your Company for the nancial year ended
31
st
March, 2014.
(Rs. In lacs)
2013-14 2012-13
Gross Income .......................................................................................................... 76,946.47 59,118.83
Prot/(Loss) before Interest and Depreciation ....................................................... (2,914.08) (2,321.31)
Less: Interest ............................................................................................................ 1,807.78 1,336.59
Less: Depreciation ................................................................................................... 2,111.98 1,498.29
Prot/(Loss) before Tax .......................................................................................... (6,833.84) (5,156.19)
Less: Provision for Taxation .................................................................................... (1,353.49)
Prot/(Loss) after Tax ............................................................................................... (6,833.84) (3,802.70)
Less: Transfer to General Reserves ........................................................................
Balance Carried Forward to Balance Sheet ........................................................... (6,833.84) (3,802.70)
1068
his intention to propose the candidature of Mr. Tomofumi Osaki,
for the ofce of Director of the Company at the forthcoming
HOLDING COMPANY:
Mahindra Ugine Steel Company Limited (Musco), which was
holding 51% of the Shares in the Share Capital of the Company
has sold and transferred its entire shareholding to Mahindra &
Mahindra Limited (M&M) on 3
rd
October, 2013. Due to transfer
of the said shares, M&M has became the Holding Company of
the Company with effect from 3
rd
October, 2013.
the Board of Directors, based on the representations received
conrm that:
as at 31
st
the period ended on that date;
concern basis.
AUDITORS:
M/s. Deloitte Haskins & Sells LLP (DHS), Chartered
Accountants, Statutory Auditors of the Company, hold ofce
till the conclusion of the ensuing Annual General Meeting
of the Company and being eligible, given their consent for
re-appointment.
The Company has received a Certicate from M/s. Deloitte
Haskins & Sells, LLP, Statutory Auditors of the Company, to
the effect that if their re-appointment is made which would
be within the prescribed limits under section 141(3) (g) of the
Companies Act, 2013 and that they are not disqualied for
re-appointment.
COST AUDIT REPORT:
Your Company had appointed Mr. Kishore Bhatia, a qualied
practicing Cost Accountant holding valid Membership No.
8241 for the nancial year 2012-13 with the approval of the
Central Government, Ministry of Corporate Affairs, New Delhi
to carry out cost audit of its steel plant. The Cost Auditor has
led the Cost Audit Report for the nancial year 2012-13 on
04.09.2013 to the Central Government, Ministry of Corporate
Affairs, New Delhi. The due date for ling the said Cost Report
was 28.09.2013. In terms of section 148(1) of the Companies
Act, 2013, the Board of Directors of your Company has
upon recommendation of the Audit Committee appointed
Mr. Kishore Bhatia, Cost Accountant, to audit the cost accounts
of the Company for the nancial year ended 31
st
March, 2014
and the Central Government has approved the appointment.
As required under the provisions of Section 224(1B) read with
Section 233 (B)(2) of the Companies Act, 1956, the Company
has obtained a written conrmation from Mr. Kishore Bhatia to
the effect that he is eligible for appointment as Cost Auditor
under Section 233B of the Companies Act, 1956. The Audit
Committee has also received a certicate from the Cost Auditor
certifying his independence and arms length relationship with
the Company.
or its employees during the period under review.
The Company has not made any loans and advances which
Company pursuant to Clause 32 of the Listing Agreement of
the Holding Company Mahindra & Mahindra Limited.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A detailed analysis of the Companys performance is mentioned
FINANCE:
During the year under review, the operating losses put some
pressure on the liquidity of the Company. The company faced
inationary pressure and was not able to avoid an increase in the
cost of capital. The company met its obligations towards capital
expenditure and working capital requirements through external
funding in the form of short term debts from a consortium of
banks pending approvals for further injection of equity.
AUDIT COMMITTEE:
The Company has constituted Audit Committee of the Board
of Directors of the Company. The members of the Audit
Committee comprising of Mr. Sanjay Joglekar, Mr. Daljit
Mirchandani, Mr. Yutaka Tsukamoto, Mr. Tomofumi Osaki.
Mr. Daljit Mirchandani is the Chairman of the Committee.
NOMINATION AND REMUNERATION COMMITTEE:
The Company constituted the Nomination and Remuneration
Committee comprising of Mr. Hemant Luthra, Mr. Daljit
Mirchandani, Mr. Yutaka Tsukamoto, and Mr. Tomofumi Osaki,
with Mr. Daljit Mirchandani as the Chairman of the Committee.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Jagdish Chandra Mahindra Memorial School (JCMM),
Khopoli undertook many initiatives in improving the specic
consumption of air, water, land, energy and waste through small
1069
project groups consisting of the teachers and the students.
The school has undertaken a programme on How Green is
my Neighbourhood?. The school participated in the Pan India
Green School Self Audit Programme and has been awarded
with Gobar Times Green Schools Programme Awards from
the Centre for Science and Environment, New Delhi. JCMM
was in the Top Ten Schools in the category of Change makers
category for the year 2013-14.
The Company held a workshop on The UN Guiding Principles
on Human Rights and Business: Practical Approaches to
Embedding in Business, Reporting & Assurance Framework,
Conducted by: Shift, USA & Facilitated by: CRB, India. The
Company was also audited on the Human Rights clauses by
the Global customer. The Company was adjudged the Star
Performer Award in CSR in Mahindra Group Company for the
year 2012-13. The company continues to support the Old age
home and carry out various medical camps for the benet of
the society.
SUSTAINABILITY INITIATIVES:
Your company is fully aligned with Mahindra Groups approach
towards sustainability and consciously endeavours to reduce
the environmental impact of the business.
Your company continues its drive to identify and implement
projects for reducing energy usage and GHG emission, as
dened in its 5 years Sustainability Roadmap. Some of the
initiatives undertaken by the company is:
Materiality Test & Stakeholder Engagement:
Conducted Materiality Test through active engagement
of key stakeholders. Identied 68 issues and narrowed it
down to Top-16 issues for special focus.
Conducted survey on Social Need and Expectations
through third party and included the results in the
Roadmap.
Roadmap:
Created an ambitious 5 years Sustainability Roadmap in
84 dimensions.
Conservation of energy:
Implemented oxy-fuel technology, which has a potential to
signicantly reduce cost and GHG emission (~55%).
Conducting energy month for generating suggestions/
ideas from employees. Received 1180 suggestions.
Maintained power factor above 0.995.
Carried out 3
rd
Party energy audit for the facilities.
Carbon Foot printing and Abatement:
Conducted process wise carbon foot printing with the
help of India GHG Programme, in which your Company
is a Founder Member.
Water Stewardship:
Reduced water uplift from the river by 21% during the year
in comparison to previous year.
Controlled leakages and spillages in operations as well as
other area. Reduced specic water usage by 18%.
Connected STP treated water to all toilets thereby reducing
usage of drinking water.
Waste reduction:
Reduced waste generation by 13% during the year in
comparison to the previous year.
Recycled 154 tonnes of used bricks and the same was
reused in the process.
Conducted Waste to Wealth Month and generated 1405
suggestions from employees.
Product Stewardship:
Conducted Environmental Life Cycle Assessment (E-LCA)
for Top-20 products in terms of volume and process length.
Focussed on increasing green products (microalloy).
Legal compliance:
Implemented legal compliance software proInd with
escalation mechanism for capturing all types of statutory
and regulatory compliances.
Sustainable Supply Chain Management (SSCM):
Created a new SSCM Policy and released Suppliers
Code of Conduct.
Conducted two SSCM workshops involving 35 Tier-1
suppliers.
Started capturing EHS data from the suppliers.
Started audit of suppliers facilities based on Code of
Conduct and EHS performance.
Mahindra Hariyali
Planted 11429 trees against target of 11000.
POLICY FOR PREVENTION OF SEXUAL HARASSMENT:
harassment in which it formalized a free and fair enquiry
process with clear timeline. The Company has also constituted
an internal complaints committee to which employees can write
their complaints. There was no case/complaint reported under
the Act during the nancial year 2013-14.
Pursuant to provisions of section 217(2A) of the Companies
Act, 1956, the Company has one employee who was in receipt
of remuneration of not less than Rs. 60,00,000 p.a. during the
period ended 31st March, 2014 or not less than Rs. 5,00,000
the provisions of section 219(1)(b)(iv) of the Companies Act,
1956, the Directors Report and Accounts are being sent to all
the shareholders of the Company excluding the Statement of
particulars of employees as required pursuant to Section 217(2A)
1070
of the Companies Act, 1956 and rules framed thereunder. Any
shareholder interested in obtaining a copy of the Statement
may write to the Company Secretary of the Company.
INDUSTRIAL RELATIONS:
The relations with the workers and their respective unions
remained cordial.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE:
Your Company has a dened policy on general health,
safety and environmental conservation through which every
employee is responsible for the observance of the measures
designed to prevent accidents, damage to health and to avoid
environmental pollution.
The Safety committee members comprising representatives
of workers and executives from various departments meet
periodically to review the situation.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Rules, 1988 are set out in Annexure to this Report.
ACKNOWLEDGEMENTS:
Your Directors wish to express their appreciation of the
continued support and co-operation received from the Banks,
Financial Institutions, and Government Departments.
Hemant Luthra
Mumbai, 21
st
May, 2014. Chairman
1071
ANNEXURE I
STATEMENT PURSUANT TO SECTION 217(1)(e) OF THE
COMPANIES ACT, 1956 READ WITH THE COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF
BOARD OF DIRECTORS) RULES, 1988 AND FORMING
PART OF THE DIRECTORS REPORT FOR THE PERIOD
ENDED 31
ST
MARCH, 2014.
1) Oxy Fuel technology implemented in 2 nos of
Chamber furnaces in Blooming Mill.
2) Diluted oxygen combustion technology
implemented in 2 nos of Chamber furnaces in
Forge Shop.
3) Replacement of Air Blast Circuit Breaker(ABCB)
with Vacuume Circuit Breaker (VCB) at Heat
Treatment and Finishing Shop (HTFS) to reduce
electricity consumption.
4) Old chiller replaced with energy efcient chiller in
Blooming Mill to reduce electricity consumption.
5) Revamping of a Quenching furnace in HTFS to
reduce electricity consumption.
6) Replacement of old inefcient vertical pump with
energy efcient horizontal pump.
7) Installation of additional 20 meters for Supervisory
Control and Data Acquisition (SCADA) as to
monitor daily energy consumption.
8) Inefcient ID fan motor replaced with high
efciency motor.
(b) Additional investments and proposals, if any,
being implemented for reduction of consumption
of energy:
1) Oxy Fuel technology for additional 2 nos of
Chamber furnaces in blooming mill.
2) Installation of oxy fuel technology in ladle pre-
heater.
3) Installation of auto control valve to match
boiler operation with Vacuume Degassing (VD)
operation.
4) Electrode regulation system to be installed in
Electric Bottom Tapping Furnace (EBT).
5) Revamping of Controlled Cooling Pits.
6) Relay coordination at High Tension (HT) side to
enable fault tripping at fault line.
7) Installation of SCADA and Programmable Logic
Control (PLC) system for Maximum Demand
(MD) control.
8) Replacement of low efcient motor with energy
efcient motor.
(c) Impact of the measures taken at (a) & (b) above for
There has been overall energy saving of around 3.7
MU during the year due to various energy saving
initiatives and measures taken by the company as
stated above. This has resulted in energy cost to the
company.
per unit of production as per FormA of the
Annexure to the Rules is as follows:
A POWER & FUEL
CONSUMPTION
Financial
Year
2013-14
Financial
Year
2012-13
(From 10
th

July12 to
31.3.13)
1 ELECTRICITY
a) PURCHASED
Units (KWH) 14,06,29,531 10,76,35,324
Total Amount (Rs.) 94,91,89,300 76,38,02,225
Rate/Unit (Rs.) 6.75 7.10
b) OWN GENERATED
(KWH) 40,312 43,500
2 COAL FOR GASIFIER (MT) 176 31
Total Amount (Rs.) 13,18,393 2,17,594
Rate/Unit (Rs.) 7,480 7,019
3 FURNACE OIL K.LTRS 11,666 7,008
Total Amount (Rs.) 47,95,00,959 27,34,13,899
Rate/Unit (Rs.) 41,102 39,015
4 CARBON BLACK K.LTRS 4,040 4,308
Total Amount (Rs.) 17,05,09,307 16,54,57,765
Rate/Unit (Rs.) 42,207 38,407
5 L.D.O. (K.LTRS) 376 269
Total Amount (Rs.) 2,31,00,113 1,57,36,603
Rate/Unit (Rs.) 61,401 58,500
6 OXY FUEL(M
3
) 12,90,816
Total Amount (Rs.) 1,29,08,157
Rate/Unit (Rs.) 10.00
7 OTHER FUEL OIL (Bio Fuel)
(K.LTRS) 5
Total Amount (Rs.) 2,40,000
Rate/Unit (Rs.) 48,000
1072
B CONSUMPTION PER UNIT
OF PRODUCTION
Financial
Year
2013-14
Financial
Year
2012-13
(From 10
th

July12 to
31.3.13)
1 PRODUCTS (MT) * 1,09,338 84,043
2 ELECTRICITY (KWH/MT)
(Total for the Plant)
1,286 1,281
3 FURNACE OIL (K.LTRS/MT)
0.107 0.083
4 CARBON BLACK (K.LTRS/MT
0.037 0.051
5 COAL FOR GASIFIER
(MT/MT)(Total for the Plant)
0.0016 0.0004
B CONSUMPTION PER UNIT
OF PRODUCTION
Financial
Year
2013-14
Financial
Year
2012-13
(From 10
th

July12 to
31.3.13)
6 L.D.O. (K.LTRS/MT)
0.0034 0.0032
7 OXY FUEL OIL (M
3
/MT) 11.8057
8 OTHER FUEL OIL (Bio Fuel)
(K.LTRS/MT)
0.00005
9 TOTAL FUEL (FURNACE
OIL+L.D.O.+CBFS)
(K. Litres/MT)
0.147 0.138
* Indicates in house production only.
Efforts made in technology absorption as per Form B of the Annexure to the Rules is as follows:
FORM B
RESEARCH & DEVELOPMENT (R&D)
1. Specic areas in which R&D carried out by the company during the nancial year 2013-14
2. Benets derived as result of the same:
Sr.
No.
Product & process improvement Benets derived
New Product development
1. Developed cylindrical ingots casting. This has helped to increase the customer order and enhance
business.
2. New size of 180RCS with 50mm radius developed for
Bharat Forge Ltd.
This has enabled to fulll the stringent quality requirement
of customer.
3. Developed H13 grade with ne grain structure and
improved mechanical properties.
This will add extra life for extrusion dies. This helps to
capture the 100% market for tool & die steel in India.
4. Developed SAE 4130 C for Western India Forgings. Customer requirement of stringiest inclusion level was
successfully achieved.
5. Developed H11 grade with tempering for export to
Sandvik, Australia.
New export business.
6. Developed total 20 new products of steel successfully. This has help to improve feasibility of making more grades
and enhance business.
New equipment installment/improvements
1. Installed water immersion ultrasonic testing system. This development helps to detect the micro level of inclusion
in-house. This will help in reducing the complaint for micro
inclusion.
2. Installed handling system for ultrasonic testing by 360C
bar rotation.
This has helped to detect the defect in total portion of the bar.
This has reduced complaint related to internal soundness.
3. Modernization of QA lab: Installed ASTM impact testing
machine, prole projector, micro hardness tester, stereo
microscope.
Improved the analytical ability and helped in failure analysis.
4. HTFS quenching furnace heating elements modied. This has helped to improve capability to achieve higher
temperature for heating to enable new grades heat treatment
and enhance business.
Process improvement
1. HT cycles modied for power reduction without affecting
the properties.
This has helped to reduce power consumption.
1073
3. Future Plan of action:
Modernization of QA laboratory through installation
of new analytical instruments like oxygen nitrogen
analyzer and WD XRF.
Installing of handling system for MPI testing of steel
bars for improvement in productivity and testing.
Development of moziac crystals of ultrasonic
probes to reduce scanning with 100% coverage in
conventional ultrasonic aw detector. This will further
reduce the fatigue of operator and increase the rate
of inspection.
4. Expenditure on R&D:
Rs. In Lakhs
2013-14 2012-13
a) Capital 23
b) Recurring 144 120
c) Total 167 120
d) Total R&D expenditure as
percentage of total turnover 0.22% 0.20%
5. Technology Absorption, Adaptation and Innovation
(Efforts in brief towards technology absorption, adaptation
and innovation and benets derived as a result of the
above efforts).
Sr.
No.
Technology Benets
1. Modication in
tempering furnaces.
This will help to achieve
homogeneity in structure
and properties.
2. Installation of automatic
ultrasonic testing set up.
This will help to increase
the capacity of ultrasonic
testing and reduce the
human error due to
fatigue.
6. Import of Technology for the last ve years: Nil
The Company continues to strive to improve its export
earnings. Further details in respect of exports are set out
elsewhere in the Report.
Particulars with regard to Foreign Exchange Earnings and
outgo are given in the notes to Accounts.
Hemant Luthra
Mumbai, 21
st
May, 2014. Chairman
1074
COMPANY OVERVIEW
Mahindra Sanyo Special Steel Private Limited (MSSSPL),
earlier known as Navyug Special Steel Private Limited, is a
subsidiary of Mahindra & Mahindra Ltd.(M&M). During the
year under review Mahindra Ugine Steel Co. Ltd., which used
to hold 51% of shares in the share Capital of the Company,
sold and transferred its stake to M&M with effect from
3
rd
October, 2013. The Company is a manufacturer of Alloy
steel products and ring rolling and its plant is located at
Khopoli, Maharashtra.
ANALYSIS OF STEEL AND RING (BEARING RACES)
BUSINESS
Overview
The Company produces special alloy steel through Electric
Furnace (EAF) route where steel scrap is the main raw material,
and caters mainly to Automotive, Engineering, Oil & Gas, Tools
& Die Industry, Power Generation Sector, Bearings and other
capital goods industries.
The Ring Rolling business is forward integration for the
Steel business and caters to the Bearing industry (especially
antifriction bearings) as well as Auto parts both in as forged
and/or green machined condition. It manufactures rings
through the closed die forging as well as seamless ring rolling
processes.
Industry Structure and Development
The performance of the Alloy steel industry is very closely
linked to the performance of the Indian automotive and
engineering industries in particular. Alloy steel, a value added
product, is a vitally important segment of the Indian steel
industry, even though it constitutes only about 8% of the
production of the total steel production in India. Alloy steels
are used in specialized area like Automotive, Engineering,
Defence, Railways and Textile sectors. Some of the end
uses of the Alloy Steel are in making of Transmission parts,
Bearings, Axles, Gears, Crankshafts, Fuel Injection pumps etc.
The Alloy steel is also used in the Oil and Gas sector and
Power generation sectors. India is fast becoming a global hub
for Automobile industry and with availibility of skilled labour at
relatively lower cost provides good growth opportunity for the
alloy steel industry. However, the industry is currently facing a
slew of challenges viz. slowing economic growth, inadequate
availabilty of power and iron ore at competative rates, volatility
in Forex which adversely impacts the import of raw materials,
threats of cheaper imports on account of global surplus
capacites, high nance cost etc.
As per the Economic Survey of India, the growth rate of the
Indian economy decelerated to a rate of around 4.9% in the
FY2014 as compared 5% recorded in the previous nancial
year. The moderation in growth is primarily attributable to
weakness in industry comprising the mining and quarrying,
manufacturing, electricity, gas and water supply and
construction sectors.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
Uncertainty in governmental decision making led to policy
stagnation, consequently the overall economic growth and
consumer sentiment have also been affected negatively. The
new Government elected has signalled commitment to revive
the economy by reforming certain policy related decisions.
However, poor consumer sentiment and the slowdown of the
global economy means that the revival of the Indian economy
can take some time. The GDP growth is projected to marginally
improve to 5.5% in FY2015.
FINANCIAL PERFORMANCE
After acquisition of the Steel including Ring Business of the
Company w.e.f. 9
th
July, 2012, the Company has carried out
its business for the full year FY 13-14, summary of nancial
performance of the Company is presented below:
Amount in (Rs.) Lakhs
Particulars Steel (including Bearing Races)
April-Mar 14 April-Mar 13
Sales 76,223.52 58,656.97
Total Income 76946.47 59,118.83
EBIDTA (2,914.08) (2,321.31)
PBT (6,833.84) (5,156.19)
PAT (6,833.84) (3,802.70)
The year under review continued to witness the effect of
economic slowdown, inationary trends in the cost of metallic
and costlier import of raw materials due to volatility in Forex
all of which have impacted the Companys performance.
Increased power and fuel costs which largely remain un-
recovered from the customers due to competitive pressure
further compounded the problem although there is some relief
due to the Governments announcement of reduction in power
tariff. The Company has taken several cost cutting measures
to improve the efciency in performance which has resulted in
reducing the loss in the last quarter of the period under review.
Post operational of the joint venture, the steel business
has been taking every effort with the help of technical and
marketing expertise of the joint venture partners, Sanyo
Special Steel Co., Ltd. and Mitsui & Co., Ltd., respectively to
improve the quality, process efciency, productivity, marketing
strategy and at the same time continue to take steps to reduce
the cost, and optimize the available resources for improving
overall performance of the steel business.
During the year under review, the sales revenue of the
Ring Business recorded modest growth. The rise in sales
indicates improvement in customer satisfaction. To further
meet customer requirement of machined rings, the company
is in the process of developing and establishing machining
capacity with Vendors. With strong order book, the Ring
1075
business is expected to improve operational performance in
the next nancial year.
Opportunities and Strategic Outlook
India is one of the leading producers of Steel at global level.
The liberalization of industrial policy and other initiatives taken
by the Government have given a denite impetus for entry,
participation and growth of the private sector in the steel
industry. India is expected to show robust growth in steel use
in the coming years due to its domestic economy, massive
infrastructure needs and expansion of industrial production.
This growth is mainly driven by construction and automobile
industries.
In the past two years, the continuing Euro-zone problem,
economic stagnation or slow growth in developed economies
and a cooling of emerging economies took a toll on the
industry. Growth in the Chinese economy, which in recent years
has been one of the main demand drivers for steel, slowed
down. Global overcapacity has been a perennial problem.
Stiff competition from cheaper imports and from domestic
producers with new or expanded facilities continues to result
in signicant oversupply of steel compared to demand.
The slowdown in the Auto sector impacted the demand for
the steel. As a result, the Steel business continues to increase
its focus on exploring business opportunities in the Tool and
dies; Oil, Gas & Mining and Power generation sectors both
domestically and for exports. New areas like renewable energy
sector are also been explored. Similarly the Rings business
is also focusing on improving its export business by adding
new international overseas Original Equipment Manufacturer
(OEM) of Bearings. These OEMs prefer MSSSPL Rings since it
has a captive steel source and the approval of steel and rings
can happen together. The company is committed to achieve
the stated objectives of the joint venture viz. operational
excellence, improved productivity and enhancement of both
cost and quality to international standards to enable it to
achieve its full business potential.
The overall scenario is expected to improve in near future.
India demand will pick up pace. After two years of contraction,
steel demand is likely to improve thanks to a rise in demand
from the automobile sector and recovery in the construction
sector. Steel demand is expected grow in the U.S. on the back
of an improving global economy and the strong momentum in
the automotive markets. Demand in Japan will also increase
due to rebuilding activity in the major earthquake affected
areas and as Tokyo gears up to host the 2020 Olympic
Games. Overall, with the global economy gradually on the
mend and activities picking up in automotive and construction
industries, prospects look brighter for the steel industry in the
years to come. The World Steel Association expects continued
recovery in steel demand in 2014 and projects global steel
usage to increase 3.3% in 2014. Improving demand is also
expected to perk up steel prices.
Threats and Risks
The steel industry in India going through slowdown due to
general sluggish performance of the domestic and global
economy. Steel prices are generally volatile owing to the
highly cyclical nature of the global steel industry. The volatility
in dollar rate also impacted the cost of imported raw material.
Rising raw material prices have a direct impact on steel
prices. Furthermore, overcapacity, a glut in cheaper Chinese
steel imports, economic conditions and shifts toward other
substitutes signicantly impact steel prices. The oversupply of
steel due to imports from China, the slowdown in Europe and
tempering growth in Asia helped keep prices in check. The
lower steel prices have affected margins of major steelmakers.
Recent increase in production capacity and foreign investment
in India is pushing the Indian steel production higher and
thereby creating oversupply in the alloy steel market. The
competitive pressures on steel product pricing both from
domestic and overseas market also are threats for the alloy
steel industry. Availability of efcient manpower is the biggest
hurdle in the development of Indian steel industry. Adoption
of new eco-friendly technologies in the production process
for improving efciency and quality, recycling of steel etc., to
sustain in a longer run, is also a challenge. The steel business
is susceptible to the inherent risk of volatile foreign exchange
as bulk of the major raw materials is imported.
To diversify the risks and threats the steel business has been
taking initiatives like increasing its exposure to non-auto sector
in domestic market, focusing on Oil & Gas and Renewable
energy sector, Power Generation sector in India and overseas.
With the support of joint venture partners the steel business is
expected to receive the technical expertise to improve process,
quality and efciency and reduction cost. This will make the
steel products more competitive. The marketing strategies and
reach of the steel business is also expected to receive a thrust
due to the expertise of the joint venture partners.
The complete dependence on outsourced machining vendors
in the ring business continues to be a risk in the supply chain.
It is proposed to put a machining facility in house through third
party Vendor at the premises of the steel business.
SAFETY, HEALTH AND ENVIRONMENT
The Company has an effective policy framework; of highest
standard, on Safety, Health & Environment (SHE) for
protecting the safety, health and welfare of its employees
and workers. The Company accords sufcient priority to the
objectives of preserving and developing the environment,
maintaining a safe work place, enhancing work conditions and
health aspects of its employees. The companys SHE policy
not only meets all applicable statutory requirements but also
focuses on motivation, learning and training of employees
in these areas. The process dened under the SHE Policy
ensures leadership from the top management in laying down
norms for improving safety, environment and health aspects
in operations. It also lays down norms for participation from
across the management and workforce hierarchy. External
audits are conducted to ensure effectiveness of the SHE
policy and initiatives and recommendations are considered
for further improvements in SHE process. SHE issues
are addressed proactively and effectively in terms of ISO
standards and guidelines.
1076
The Company accords the highest importance to adopting
safety measures for preventing accidents. In case of any
accident, a thorough investigation is carried out to identify
the root cause and immediate steps are taken to eliminate
the root cause to ensure it does not recur. The Company
regularly conducts counselling and safety review meetings for
employees to appraise and educate them on the adoption of
safety measures and avoidance of unsafe practices. Awareness
and rst aid trainings are conducted regularly along with mock
drills as an exercise in disaster management readiness. The
Company is in compliance with the regulations pertaining to
safety. The objective is to achieve zero accident, zero incidents
and a safe work environment.
The Company periodically conducts health checkups and
health awareness programmes for all employees and
if necessary provides prompt medical assistance to its
employees. The Company has an internal plant dispensary
which operates round the clock and is manned by qualied
doctors supported by staff who are available for addressing
health issues of employees. The Company maintains high
hygienic and housekeeping standards across the work places.
The goal of all occupation health and safety measures is to
encourage a safe work environment.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES/
The total employee strength of the Company at the end of
the nancial year 2013-14 was 1,007 employees comprised of
478 Ofcers and 529 regular workmen employees. Apart from
above employee strength, the Company hires Apprentice,
Trainees and Contract workers from time to time.
The Company conducts regular training programs for ofcers
and workmen through internal and external professionals,
experts in various areas of operations and selectively sends
ofcers to attend Business Education Programs of reputed
Institutions to improve their skills and knowledge.
The Company involves its employees in all HR Activities to
develop them and recognize them from time to time to increase
the Employee Morale and Motivation. It also takes regular
feedback from employees on Employee Engagement activities
(through MCARES Survey) to assess the effectiveness and
to improve overall engagement. The Company has adopted
the concept of The Mahindra Way (formerly known as the
Mahindra Quality Way) and works closely with the Mahindra
Management Development Centre and Mahindra Institute of
Quality (MIQ) by actively participating in the programmes
organised by them.
The Human Resources policies are comprehensive and based
on the best of the prevailing HR practise. The performance
evaluation and management process continues to be the
backbone of all HR activities and is based on an appropriate
goal-setting process. The Company encourages all employees
and workers to participate in a fair and transparent feedback
system called Bindass Bol (talk candidly) for sharing views,
concerns and opinions. The Company also formulated the
Whistle Blower Policy /Mechanism with view to provide a
mechanism for employees, directors and other stakeholders of
the Company to approach the Chairman of the Audit Committee
of the Company or Chairman of the Company to redress their
relevant concerns. The relationship of the Company with its
Human Resources was cordial in the nancial year 2013-14.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has adequate internal controls for its business
processes across departments to ensure efcient operations,
compliance with internal policies, applicable laws and
regulations, protection of resources and assets, and accurate
reporting of nancial transactions. The Company also has an
internal audit system which is conducted by an independent
rm of Chartered Accountants so as to cover various operations
on continuous basis. Summarized Internal Audit Observations/
Reports are reviewed by the Audit Committee on a regular
basis. The nance and accounts functions of the Company
are well staffed with qualied and experienced members. The
internal controls are complemented, on an on-going basis, by
an extensive program of internal audits being implemented
through-out the year. The Company uses an Enterprise
Resource Planning (ERP) package, which enhances the
internal control mechanism. The internal controls are designed
to ensure that the nancial and other records of the Company
are reliable for preparing nancial statement and other data for
maintaining the accountability of assets.
SYNERGIES WITH PARENTS
Relationship with Mahindra Group
Mahindra & Mahindra Ltd. (M&M), Companys parent company
and the agship company of the Mahindra group is one of the
leading automotive manufacturers in India. M&M is an anchor
customer but there is an arms-length relationship between
M&M and Mahindra Sanyo Special Steel Pvt. Ltd. (MSSSPL).
Association with the Mahindra Group aids MSSSPL in
winning new businesses and obtaining nancial assistance.
MSSSPL also adheres to the corporate values, principles and
established corporate governance practices of the Mahindra
Group.
In January 2011, the Mahindra Group launched a new brand
identity Rise which rests on three brand pillars: accepting
no limits, alternative thinking, and driving positive change.
MSSSPL is using the idea of RISE to invigorate its employees
and achieve its long term goals. RISE provides a clear guide
for business decisions by catalyzing ambitious and innovative
internal growth.
Synergies with Sanyo Special Steel
Sanyo Special Steel Co., Ltd. (Sanyo), which holds 29% equity
stake in the Company is a leading Japanese Specialty Steel
manufacturer established in 1933 with a $ 2 billion turnover
in 2012 and approximately 1.5 million tons of steel making
capacity. Globally, it is renowned as one of the best special
steel manufacturers. Sanyo manufactures and sells various
special steel products, capitalizing on its high cleanliness steel
manufacturing technology, including bearing steel, engineering
steel, stainless steel, heat resistant steel and tool steel.
1077
Sanyo aims to make Mahindra Sanyo Special Steel Pvt. Ltd. a
successful entity by unlocking the value of this company and
making it the best in India in its chosen segments with respect to
quality, productivity and customer satisfaction. Sanyo has already
placed a dedicated team for providing the requisite technical
expertise and leading the manufacturing function. The local team
enjoys a full back-up support from all the Sanyo Group.
Synergies with Mitsui
Mitsui & Co., Ltd. (Mitsui), holding a 20% stake in the Company,
is one of the most diversied and comprehensive trading,
investment and service enterprises in the world, with 150
ofces in 67 countries as of May 2013. Mitsuis enormous global
network covering a wide spectrum of activities and many years
of experience in the eld of iron & steel business can enhance
the Companys customer base. Mitsuis commitment to the
Indian market since 1893 assists the Company to increase its
business volume by developing the growing alloy steel market
in India. The synergies with Mitsui will contribute toward:
Comprehensive and precise market analysis to derive
optimum product mix & customer portfolio.
Development of new customers in India and overseas
markets, leveraging Mitsuis global customer base.
Sourcing of raw materials at competitive rates from reliable
overseas suppliers.
Improvement of the Companys operational efciency in
terms of customer service and logistics.
Certain statements in the Management Discussion & Analysis
expectations or predictions may be forward looking
statements within the meaning of applicable securities laws
and regulations. Actual results could differ from those express
or implied. Important factors that could make a difference to
the Companys operations include raw material availability and
prices, cyclical demand and pricing in the Companys 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.
1078
(the Company), which comprise the Balance Sheet as at
31
st
Cash Flow Statement for the year then ended, and a summary
information.
dated 13
th
misstatement.
opinion.
Opinion
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MAHINDRA SANYO SPECIAL STEEL PRIVATE LIMITED
st
March, 2014;
loss of the Company for the year ended on that date;
and
Order, 2003 (the Order) issued by the Central
Government in terms of Section 227(4A) of the Act,
we give in the Annexure a statement on the matters
2. As required by Section 227(3) of the Act, we report
that:
explanations which to the best of our knowledge
and belief were necessary for the purposes of
our audit.
(b) In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Prot and
Loss and the Cash Flow Statement dealt with by
this Report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, the Statement
of Prot and Loss, and the Cash Flow Statement
comply with the Accounting Standards notied
under the Act (which continue to be applicable
in respect of Section 133 of the Companies Act,
2013 in terms of General Circular 15/2013 dated
13
th
Affairs).
(e) On the basis of the written representations
received from the directors as on 31
st
March,
2014 taken on record by the Board of Directors,
none of the directors is disqualied as on
31
st
March, 2014 from being appointed as a
director in terms of Section 274(1)(g) of the Act.
Rajesh K Hiranandani
Partner
Mumbai, 21
st
May, 2014 (Membership No. 36920)
1079
TO THE MEMBERS OF MAHINDRA SANYO SPECIAL STEEL
PRIVATE LIMITED
even date)
(i) Having regard to the nature of the Companys
business/activities/result, clauses (x), (xii), (xiii),
(xiv), (xv), (xviii), (xix) and (xx) of CARO are not
applicable.
details and situation of the xed assets.
(b) The Company has a programme of verication
of xed assets to cover all the items in a phased
manner over a period of three years which, in
our opinion, is reasonable having regard to the
size of the Company and the nature of its assets.
Pursuant to the programme, certain xed assets
were physically veried by the Management
during the year. According to the information
and explanations given to us, no material
(c) The xed assets disposed off during the year, in
our opinion, do not constitute a substantial part
of the xed assets of the Company and such
disposal has, in our opinion, not affected the
going concern status of the Company.
(iii) I n respect of its inventory:
reasonable intervals. The stock of scrap, having
regard to its nature and manner of storage, was
veried by the Management by visual estimation
(relied upon by us). In respect of inventories lying
with third parties, the same have been conrmed
by them.
and explanations given to us, having regard to
our comments with regard to stock of scrap
referred in (iii) (a) above, the procedures of
physical verication of inventories followed by
the Management were reasonable and adequate
in relation to the size of the Company and the
maintained proper records of its inventories. As
the stock of scrap is veried by visual estimation
(relied upon by us), no adjustments have been
made for the difference between the stocks so
determined and the book records as it has been
explained to us by the Management that such an
adjustment would not be proper having regard
to the method of verication and the quantum of
discrepancy noticed. No material discrepancies
were noticed on physical verication.
(iv) The Company has neither granted nor taken any
loans, secured or unsecured, to/from companies,
rms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information
and explanations given to us, having regard to the
explanations that some of the items purchased are
of special nature and suitable alternative sources
are not readily available for obtaining comparable
quotations, there is an adequate internal control
and the nature of its business with regard to purchases
of inventory and xed assets and the sale of goods.
During the course of our audit, we have not observed
any major weakness in such internal control system.
(vi) According to the information and explanations
given to us, we are of the opinion that there are no
contracts or arrangements that need to be entered
into the register maintained under section 301 of the
(vii) According to the information and explanations given
to us, the Company has not accepted any deposits
from the public during the year.
(viii) In our opinion, the internal audit functions carried out
during the year by an external agency appointed by
the Management have been commensurate with the
size of the Company and the nature of its business.
(ix) We have broadly reviewed the cost records maintained
Companies Act, 1956 and are of the opinion that
prima facie the prescribed cost records have been
maintained. We have, however, not made a detailed
examination of the cost records with a view to
(x) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company is regular in depositing undisputed
statutory dues, including Provident Fund,
Employees State Insurance Scheme, Income-
tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and other material statutory
dues applicable to it with the appropriate
authorities. We are informed that Investor
education and Protection Fund is not applicable
to the Company.
1080
respect of Provident Fund, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty
and other material statutory dues in arrears as
at 31
st
(c) There are no dues of Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty and
Excise Duty which have not been deposited as
on 31
st
March, 2014 on account of any disputes.
(xi) In our opinion and according to the information
defaulted in the repayment of dues to banks and
nancial institutions.
(xii) In our opinion and according to the information
and explanations given to us, the term loans have
been applied for the purposes for which they were
obtained.
(xiii) In our opinion and according to the information
and explanations given to us, and on an overall
examination of the Balance Sheet of the Company,
we report that funds raised on short-term basis have,
prima facie, not been used during the year for long-
term investment.
(xiv) To the best of our knowledge and according to the
information and explanations given to us, no fraud
by the Company and no fraud on the Company has
Partner
Mumbai, 21
st
May, 2014 (Membership No. 36920)
1081
ST
MARCH, 2014
Note No. 31
st
March,
2014
31
st
March,
2013
Rs. Lakhs Rs. Lakhs
Shareholders funds
(a) Share capital ................................................................................................... 1 1,000.00 1,000.00
(b) Reserves and surplus...................................................................................... 2 24,604.97 31,438.81
25,604.97 32,438.81
(a) Long-term borrowings ..................................................................................... 3 5,437.50 7,927.16
(b) Deferred tax liability (net) ................................................................................ 4
(c) Other long term liabilities ................................................................................ 5 500.00 500.00
(d) Long-term provisions ...................................................................................... 6 453.46 469.34
6,390.96 8,896.50
Current liabilities
(a) Short-term borrowings .................................................................................... 7 7,124.22 2,185.47
(b) Trade payables ................................................................................................ 8 15,062.46 16,231.26
(c) Other current liabilities .................................................................................... 9 2,948.68 998.65
(d) Short-term provisions ...................................................................................... 10 370.41 149.79
25,505.77 19,565.17
TOTAL ..................................................................................................................... 57,501.70 60,900.48
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets ......................................................................................... 11 18,303.08 19,790.65
(ii) Intangible assets ...................................................................................... 11 2.77
(iii) Capital work-in-progress .......................................................................... 203.04 186.83
(b) Non-current investments ................................................................................. 12 1,400.00 1,400.00
(c) Long-term loans and advances ...................................................................... 13 245.25 185.16
20,154.14 21,562.64
Current assets
(a) Inventories ....................................................................................................... 14 12,079.92 13,993.96
(b) Trade receivables ............................................................................................ 15 16,284.40 16,345.45
(c) Cash and cash equivalents ............................................................................ 16 7,553.98 7,678.11
(d) Short-term loans and advances...................................................................... 17 1,201.54 1,177.87
(e) Other current assets ........................................................................................ 18 227.72 142.45
37,347.56 39,337.84
TOTAL ..................................................................................................................... 57,501.70 60,900.48
See accompanying notes forming part of the nancial statements 144
For Deloitte Haskins & Sells LLP Uday Gupta Managing Director
Hemant Luthra Chairman
Sanjay Joglekar
Yutaka Tsukamoto
Nobuyuki Tanaka
Tomofumi Osaki
Daljit Mirchandani
}
Directors
Partner
Sudhir Yagnik
Chief Finance Ofcer
Pradeep Salian
Company Secretary
Mumbai, 21
st
May, 2014 Mumbai, 21
st
May, 2014
1082
ST
MARCH, 2014
Note No. 31
st
March,
2014
31
st
March,
2013
Rs. Lakhs Rs. Lakhs
I. Revenue from operations ........................................................................ 19 84,781.68 65,482.37
Less: Excise duty ..................................................................................... (8,558.16) (6,825.40)
76,223.52 58,656.97
II. Other income ........................................................................................... 20 722.95 461.86
III. Total revenue (I+II) ................................................................................ 76,946.47 59,118.83
IV. Expenses:
Cost of raw materials consumed (See note 32) .................................... 46,480.10 34,460.65
(includes processing cost Rs. 1,154.79 Lakhs; 2012-13 Rs. 621.57
Lakhs)
Changes in inventories of nished goods and work-in-progress .......... 21 (220.96) 2,225.10
Employee benets expense .................................................................... 22 5,561.13 3,895.13
Finance costs ........................................................................................... 23 1,807.78 1,336.59
Depreciation and amortisation expense (See note 11) ......................... 2,111.98 1,498.29
Other expenses ........................................................................................ 24 28,040.28 20,859.26
Total expenses ........................................................................................ 83,780.31 64,275.02
V. (Loss) before tax (III-IV) ........................................................................... (6,833.84) (5,156.19)
VI. Tax expense:
Deferred tax credit ................................................................................ (1,353.49)
(1,353.49)
VII. (Loss) for the year ................................................................................... (6,833.84) (3,802.70)
VIII. Earnings per equity share (EPS) (See note 41) .....................................
Basic and Diluted EPS (face value Rs. 10 per share) ........................... (68.34) (58.52)
See accompanying notes forming part of the nancial statements 1 44
Sanjay Joglekar
Yutaka Tsukamoto
Nobuyuki Tanaka
Tomofumi Osaki
Daljit Mirchandani
}
Directors
Partner
Sudhir Yagnik
Chief Finance Ofcer
Pradeep Salian
Company Secretary
Mumbai, 21
st
st
May, 2014
1083
ST
MARCH, 2014
Particulars 31
st
March, 2014 31
st
March, 2013
Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs
(Loss) before tax ........................................................ (6,833.84) (5,156.19)
Adjustments for:
Depreciation and amortisation ........................... 2,111.98 1,498.29
(Prot)/loss on sale/write off of xed
assets (net) .............................................................. (2.22) 8.19
Finance costs ..................................................... 1,807.78 1,336.59
Interest income .................................................... (702.40) (435.11)
Provision for doubtful debts ............................... 44.34 174.79
Share issue expenses ......................................... 7.41
Net unrealised exchange loss ............................ 68.61 82.16
3,328.09 2,672.32
Operating prot before working capital changes ..... (3,505.75) (2,483.87)
Adjustments for (increase)/decrease in
operating assets:
Inventories .................................................... 1,914.04 3,476.82
Trade receivables ......................................... 16.71 68.73
Short-term loans and advances .................. (23.67) 607.20
Long-term loans and advances .................. 10.06 43.77
Other current assets .................................... (26.48) 50.58
Adjustments for increase/(decrease) in
operating liabilities:
Trade payables ............................................ (1,237.40) (2,663.78)
Other current and non current liabilities ..... (10.17) (186.22)
Short-term and long-term provisions .......... 204.74 121.19
847.83 1,518.29
Cash generated from operations (2,657.92) (965.58)
Income tax (paid) ................................................ (73.13) (39.01)
Net cash ow from/(used in) operating
activities (A) .............................................................. (2,731.05) (1,004.59)
Capital expenditure on xed assets, including
capital advances ......................................................... (626.47) (2,146.21)
Proceeds from sale of other xed assets .................. 3.40 8.39
Cash consideration paid for acquisition of steel
business ...................................................................... (2,225.00)
Interest received on xed deposits............................ 643.61 382.53
Net cash ow from/(used in) investing activities (B) 20.54 (3,980.29)
1084
Particulars 31
st
March, 2014 31
st
March, 2013
Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs
Proceeds from issuance of share capital ................ 21,769.19
Proceeds from long-term borrowings ....................... 7,000.00
Repayment of long-term borrowings ......................... (546.88) (847.65)
Net increase/(decrease) in working
capital borrowings ...................................................... 2,438.75 (1,841.38)
Proceeds from other short-term borrowings ............ 2,500.00 4,000.00
Repayment of other short-term borrowings ............. (16,000.00)
Share issue expenses ................................................ (7.41)
Finance costs ............................................................. (1,805.49) (1,422.59)
Net cash ow from/(used in) nancing
activities (C) ................................................................... 2,586.38 12,650.16
Net increase/(decrease) in cash and
cash equivalents (A+B+C) .............................................. (124.13) 7,665.28
Cash and cash equivalents at the beginning of the
year (See note 16) ...................................................... 7,678.11 1.10
Cash and cash equivalents acquired on
purchase of steel business ........................................ 11.73
Cash and cash equivalents at the end of the
year (See note 16) .................................................... 7,553.98 7,678.11
Note:
The previous year gures exclude the effect of a transaction of a non cash nature by issue of equity shares towards part of the consideration
amounting to Rs. 11,125.00 lakhs (50,90,000 equity shares of Rs. 10 each at a premium of Rs. 218.57 per share for acquisition of steel business
from Mahindra Ugine Steel Company Limited pursuant to the Business Transfer Agreement.
See accompanying notes 1 to 44 forming part of the nancial statements
Sanjay Joglekar
Yutaka Tsukamoto
Nobuyuki Tanaka
Tomofumi Osaki
Daljit Mirchandani
}
Directors
Partner
Sudhir Yagnik
Chief Finance Ofcer
Pradeep Salian
Company Secretary
Mumbai, 21
st
st
May, 2014
ST
MARCH, 2014
1085
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
1. Share capital
Authorised capital
100,00,000 Equity shares of Rs. 10 each 1,000.00 1,000.00
100,00,000 Equity shares of Rs. 10 each
fully paid up .............................................. 1,000.00 1,000.00
1,000.00 1,000.00
(a) Reconciliation of the number of shares outstanding at the beginning and
at the end of the year:
31
st
March, 2014 31
st
March, 2013
No. of
shares
Rs. Lakhs No. of
shares
Rs. Lakhs
Balance as at the
beginning of the year ... 100,00,000 1000.00 10,000 1.00
Add:
Shares issued during
the year ......................... 99,90,000 999.00
Balance as at the end
of the year ..................... 100,00,000 1,000.00 100,00,000 1,000.00
(b) Terms/rights and restrictions attached to equity shares:
The Company has only one class of equity shares having a face value of
Rs. 10 per share. The rights of the equity shareholders rank pari-passu for
all matters, including dividend and each shareholder is entitled to one vote
per share. In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts. The distribution will be in proportion
to the number of equity shares held by the shareholders.
(c) Shares held by the holding company:
51,00,000 (2012-13 Nil) equity shares held by Mahindra & Mahindra
Limited, the holding company. Nil (2012-13 51,00,000) equity shares
held by Mahindra Ugine Steel Company Limited, the erstwhile holding
Company till 3
rd
October, 2013.
(d) Shares held by each shareholder holding more than 5% shares, specifying
the number of shares held:
31
st
March, 2014 31
st
March, 2013
No. of
shares
% holding No. of
shares
% holding
Mahindra & Mahindra
Limited ............................ 51,00,000 51%
Company Limited .......... 51,00,000 51%
Sanyo Special Steel
Company Limited .......... 29,00,000 29% 29,00,000 29%
Mitsui & Company
Limited ............................ 20,00,000 20% 20,00,000 20%
(e) Shares issued pursuant to contract without payment being received in
cash:
31
st
March, 2014 31
st
March, 2013
No. of
shares
Rs. Lakhs No. of
shares
Rs. Lakhs
Equity shares issued to
Company Limited for
acquisition of steel
business pursuant to
the Business Transfer
Agreement. ..................... 50,90,000 509.00
NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED
31
ST
MARCH, 2014

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
(a) Capital reserve
As per last balance sheet ......... 3,346.89
Add: Addition on acquisition of
steel business ...................... 4,700.38
Less: Deferred tax liability (net)
arising thereon .................... 1,353.49
3,346.89
3,346.89 3,346.89
(b) Securities premium reserve
As per last balance sheet ......... 31,895.19
Add: Addition during the year ..... 31,895.19
31,895.19 31,895.19
(c) (Decit) i.e. Balance in the
Statement of Prot and Loss
As per last balance sheet ......... (3,803.27) (0.57)
Add: (Loss) for the year .............. (6,833.84) (3,802.70)
(10,637.11) (3,803.27)
24,604.97 31,438.81
(Secured)
Term loans (See note 26)
From banks ........................................ 5,437.50 7,927.16
5,437.50 7,927.16
4. Deferred tax liability (net)
On scal allowances on xed assets 1,935.35 2,019.66
1,935.35 2,019.66
Less: Deferred tax assets
On employee separation and
retirement ............................................ 256.90 187.45
On provision for doubtful debts ......... 227.30 212.23
On unabsorbed depreciation and
business loss ...................................... 1,451.15 1,619.98
1,935.35 2,019.66

Note: Deferred tax asset on
unabsorbed depreciation and business
loss has been recognised only to the
extent of the net deferred tax liability.
Trade advance .................................... 500.00 500.00
500.00 500.00
Compensated absences .................... 443.63 458.67
Other employee benets ................... 9.83 10.67
453.46 469.34
1086
31
ST
MARCH, 2014

31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
(Secured)
Loans repayable on demand - from
banks
Cash credit ......................................... 2,624.22 185.47
Working capital demand loan ............ 4,500.00 2,000.00
(Secured by rst charge by way of
hypothecation of raw materials, nished
goods, goods in process, stores and
book debts and second pari passu
charge on immovable properties and
movable xed assets of the Company.)
7,124.22 2,185.47
8. Trade payables
Acceptances .......................................... 7,990.62 9,142.53
Due to micro and small enterprises
(See note 39) ......................................... 436.00 408.31
Due to others ......................................... 6,635.84 6,680.42
15,062.46 16,231.26

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
(See note 26) ......................................... 2,552.16 609.38
borrowings ............................................. 7.55 22.54
Interest accrued and due on
borrowings ............................................. 45.10 27.82
Other payables
Statutory dues..................................... 210.55 219.76
Capital creditors .................................. 105.36 90.24
Others.................................................. 27.96 28.91
343.87 338.91
2,948.68 998.65
Gratuity (Funded) (See note 43) ........ 66.31 66.13
Compensated absences .................... 88.20 80.08
Increment in employee benets
expense (See note 38) ....................... 212.23
Other employee benets .................... 1.92 2.08
368.66 148.29
Provision for taxation ............................. 1.75 1.50
370.41 149.79
11. Fixed assets
Rs. Lakhs
COST DEPRECIATION WRITTEN
DOWN
VALUE
Particulars As at
1
st
April,
2013
Acquired
on
purchase
of steel
business
Additions/
adjustments
Deletions/
adjustments
As at
31
st
March,
2014
As at
1
st
April,
2013
Acquired
on
purchase
of steel
business
For the
year
Deletions/
adjustments
As at
31
st
March,
2014
As at
31
st
March,
2014
Tangible assets:
Freehold land 734.69 734.69 734.69
() (6.04) (728.65) () (734.69) () () () () () (734.69)
Buildings 3,671.98 160.36 3,832.34 1,108.42 113.35 1,221.77 2,610.57
() (2,900.80) (771.18) () (3,671.98) () (1,034.58) (73.84) () (1,108.42) (2,563.56)
Plant and equipment 33,275.68 409.62 33,685.30 17,139.68 1,923.81 19,063.49 14,621.81
() (32,911.75) (583.47) (219.54) (33,275.68) (15,959.48) (1,384.35) (204.15) (17,139.68) (16,136.00)
Furniture and xtures 120.66 13.68 134.34 60.90 6.62 67.52 66.82
() (99.86) (20.80) () (120.66) () (56.82) (4.08) () (60.90) (59.76)
Ofce equipment 141.87 18.68 14.38 146.17 62.10 5.99 13.30 54.79 91.38
() (121.73) (20.14) () (141.87) () (58.22) (3.88) () (62.10) (79.77)
Computers 222.19 16.45 0.32 238.32 202.80 12.94 0.23 215.51 22.81
() (209.68) (12.51) () (222.19) () (194.86) (7.94) () (202.80) (19.39)
Vehicles 316.56 6.00 20.47 302.09 119.08 48.47 20.46 147.09 155.00
() (176.48) (168.53) (28.45) (316.56) () (122.14) (24.20) (27.26) (119.08) (197.48)
38,483.63 624.79 35.17 39,073.25 18,692.98 2,111.18 33.99 20,770.17 18,303.08
() (36,426.34) (2,305.28) (247.99) (38,483.63) () (17,426.10) (1,498.29) (231.41) (18,692.98) (19,790.65)
Intangible assets:
Computer software 259.84 3.57 263.41 259.84 0.80 260.64 2.77
() (259.84) () () (259.84) () (259.84) () () (259.84) ()
Total 38,743.47 628.36 35.17 39,336.66 18,952.82 2,111.98 33.99 21,030.81 18,305.85
Previous year () (36,686.18) (2,305.28) (247.99) (38,743.47) () (17,685.94) (1,498.29) (231.41) (18,952.82) (19,790.65)
Note: Previous years gures have been disclosed in parenthesis
1087
31
ST
MARCH, 2014

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
12. Non-current investments
Trade investments: (fully paid up)
(at cost)
Unquoted
a) Investments in equity shares
Wardha Power Company Ltd.
6,191,395 class A equity shares
of Rs. 10 each .............................. 619.14 619.14
b) Investments in preference shares
Wardha Power Company Ltd.
7,808,605 class A redeemable
preference shares of Rs. 10 each 780.86 780.86
1,400.00 1,400.00
13. Long-term loans and advances
otherwise stated)
Capital advances ................................. 18.17 21.15
Security deposits ................................. 96.71 94.85
Taxation - advance tax less
provision for tax ............................... 112.14 39.01
Employee loans and advances ....... 12.25 20.38
Others ............................................... 5.98 9.77
130.37 69.16
245.25 185.16
14. Inventories
(At lower of cost and net
realisable value)
Raw materials ...................................... 2,842.54 4,762.82
(includes in transit Rs. 669.36 lakhs;
2012-13 Rs. 1,451.24 lakhs)
Work-in-progress .................................. 6,365.57 5,731.26
Finished goods .................................... 256.70 670.05
2012-13 Rs. 670.05 lakhs)
Stores and spares ............................... 2,488.18 2,664.01
2012-13 Rs. 48.34 lakhs)
Loose tools .......................................... 126.93 165.82
12,079.92 13,993.96
(Unsecured)
Outstanding for a period exceeding
six months from the date they were
due for payment
considered good .............................. 48.08 118.06
considered doubtful ......................... 482.25 498.61
530.33 616.67
Others
considered good .............................. 16,236.32 16,227.39
considered doubtful ......................... 186.48 125.78
16,422.80* 16,353.17*
16,953.13 16,969.84
Less: Provision for doubtful debts ...... 668.73 624.39
16,284.40 16,345.45
* Includes debts due by a private
company in which a director is a
director .............................................. 104.28 56.68

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
Cash on hand .................................. 3.60 1.56
Balances with banks ........................
In current accounts .......................... 50.38 126.55
In xed deposit accounts (having
original maturity of upto 3 months) . 7,500.00 7,550.00
7,550.38 7,676.55
7,553.98 7,678.11
otherwise stated)
Loans and advances to related
parties
Security Deposits .............................. 22.09
Trade advance .................................. 6.03
28.12
Security deposits ................................. 12.40
Trade advances ................................ 519.48 364.65
Balances with excise, customs and
other statutory authorities ................ 495.45 697.14
Prepaid expenses ............................. 105.00 78.27
Employee loans and advances ........ 22.92 26.45
Others................................................ 18.17 11.36
1,201.54 1,177.87
Interest accrued - xed deposits ........ 111.37 52.58
Unamortised premium on forward
contracts .............................................. 73.65 66.83
Export Duty Drawback Receivable ..... 42.70 23.04
227.72 142.45
Sale of:
Tool alloy and special steel ............. 84,423.89 65,261.07
Other operating revenue
Sale of scrap .................................... 250.46 123.46
Others ............................................... 107.33 97.84
357.79 221.30
84,781.68 65,482.37
20. Other income
Interest income on
Fixed deposits with banks ............... 697.13 426.76
Others ............................................... 5.27 8.35
702.40 435.11
Prot on sale of xed assets ............... 3.30 7.21
Other non-operating income ............... 17.25 19.54
722.95 461.86
1088
31
ST
MARCH, 2014

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
21. Changes in inventories of nished goods and work-in-progress
Opening stock:
Work-in-progress .................................. 5,731.26
Finished goods .................................... 670.05
6,401.31
Add: Acquired on purchase of steel
business
Work-in-progress .................................. 8,347.56
Finished goods .................................... 278.85
8,626.41
Less:
Closing stock:
Work-in-progress .................................. 6,365.57 5,731.26
Finished goods .................................... 256.70 670.05
6,622.27 6,401.31
Net (increase)/decrease (220.96) 2,225.10
22. Employee benets expense
Salaries and wages ............................. 4,762.66 3,218.78
funds (See note 43) ............................. 242.51 255.38
Staff welfare expenses......................... 555.96 420.97
5,561.13 3,895.13
23. Finance costs
Interest expense on
borrowings........................................ 1,752.14 1,299.10
others ................................................ 3.56 3.81
1,755.70 1,302.91
Other borrowing costs ......................... 52.08 33.68
1,807.78 1,336.59
24. Other expenses
Stores consumed ................................ 5,553.45 3,993.62
Power and fuel ..................................... 16,428.69 12,186.28
Rent including lease rentals ................ 99.64 62.19
Rates and taxes ................................... 110.19 102.97
Insurance ............................................. 89.67 72.05
Buildings ........................................... 395.00 271.50
(including stores and spares consumed
Rs. 79.54 lakhs; 2012-13 Rs. 98.22
lakhs)

Rs. Lakhs
31
st

March,
2014
Rs. Lakhs
31
st

March,
2013
Rs. Lakhs
Machinery ......................................... 1,341.79 1,085.44
(including stores and spares consumed
Rs. 1,059.04 lakhs; 2012-13
Rs. 901.00 lakhs)
Others ............................................... 276.12 288.94
Legal and professional charges .......... 1,488.47 883.20
Freight outward .................................... 306.42 179.43
Loss on foreign exchange transactions
and translations (net of foreign
exchange gain of Rs. 207.39 lakhs;
2012-13 Rs. 6.38 lakhs).................... 146.03 164.04
Loss on xed assets scrapped/
written off ............................................. 1.08 15.40
Provision for doubtful debts (net)
Closing provision for doubtful debts .. 668.73 624.39
Less: Provision acquired on purchase
of steel business .................................. 449.60
Less : Opening provision for doubtful
debts .................................................... 624.39
44.34 174.79
Excise duty ........................................... 34.77 42.28
Bank charges ....................................... 328.62 187.78
Share issue expenses ......................... 7.41
Miscellaneous expenses (See note 27) 1,396.00 1,141.94
28,040.28 20,859.26
a) Basis of accounting and preparation of nancial statements:
The nancial statements have been prepared on accrual basis
and comply in all material respects with the Generally Accepted
Accounting Principles in India (Indian GAAP) and the relevant
provisions of the Companies Act, 1956 including Accounting
Standards notied under the said Act.
b) Use of estimates:
contingent liabilities) and the reported revenue and expenses during
the year. The management believes that the estimates used in
periods in which the results are known/materialise.
c) (A) Tangible xed assets
Fixed assets are recorded at historical cost of purchase and
do not reect current values. Cost includes interest and other
nancial charges attributable to the acquisition of xed assets.
Depreciation is provided for as follows:
The Company provides depreciation on straight line method
and except as stated in note (i) below, at the rates and in
1089
31
ST
MARCH, 2014
the manner prescribed in Schedule XIV to the Companies
Act, 1956:
i) Depreciation on heavy vehicles, other vehicles and data
processing equipment are provided at 25%, 20% and
33% of cost respectively.
ii) In respect of extra shift, depreciation is provided on the
basis of the actual utilisation of assets. In determining
actual utilisation, it has been assumed that the individual
items of plant in each shop have worked for the same
number of hours as the main plant in that shop, except
where separate records are maintained for any item.
When an asset is disposed off, the cost and related depreciation
are removed from the books of account and the resultant prot
(including capital prot) or loss is reected in the Statement of
Prot and Loss.
(B) Intangible assets:
Software expenditure incurred is amortised over the period of
36 months equally commencing from the year in which the
expenditure is incurred.
d) Investments:
Investments, all of which are non-current investments, are valued
at cost. Provision for diminution is made to recognise a decline,
other than temporary, in the value of non-current investments.
Dividend income is recognised when the right to receive payment is
established.
e) Inventories:
Inventories are valued at cost or net realisable value, whichever is
lower. Cost of inventories is arrived at on a weighted average basis
and is inclusive of overheads and duties, where appropriate.
f) Foreign exchange transactions:
Foreign exchange transactions are initially recognised at the
exchange rate prevailing on the transaction date. At each balance
sheet date foreign currency monetary items are translated at the
relevant rates of exchange prevailing at the date. In respect of
forward contracts, the premium or discount arising at the inception
of such a contract is amortised as expense or income over the life of
the contract.
In case of monetary items, the exchange differences are recognised
g) Revenue recognition:
Sales of products are recognised when the products are shipped or
on transfer of signicant risks and rewards of ownership to the buyer
depending upon the terms agreed with customers. Sales of services
are recognised when the services are rendered.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rate of interest.
h) Employee benets:
i) Provident fund:
The Companys contribution to the recognised provident fund,
paid/payable during the year, is debited to the Statement of
Prot and Loss.
ii) Superannuation and other funds/schemes:
ofcers superannuation fund, employees pension scheme,
employees state insurance scheme and labour welfare fund
are recognised in the Statement of Prot and Loss.
iii) Gratuity and compensated absences:
Companys liability towards gratuity and compensated
absences is determined using the projected unit credit method
which considers each period of service as giving rights to an
additional unit of benet entitlement and measure each unit
separately to build up the nal obligation. Past services are
recognised on straight line basis over the average period until
the benets become vested. Actuarial gains and losses are
recognised immediately in the Statement of Prot and Loss
value of estimated future cash ow using discounted rate i.e.
determined by reference to market yield at the balance sheet
date on government bonds where the currency and terms of
the government bonds are consistent with the currency and the
i) Borrowing costs:
Borrowing costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is ready
for its intended use. A qualifying asset is an asset that necessarily
takes substantial period of time to get ready for its intended use.
Other borrowing costs are recognised as an expense in the period
in which they are incurred. No borrowing costs are eligible for
capitalisation during the year.
j) Earnings per share:
Basic earnings per share is computed by dividing the prot/(loss) after
tax by the weighted average number of equity shares outstanding
during the year. Diluted earnings per share is computed by dividing
the prot/(loss) after tax as adjusted for dividend, interest and other
changes to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on
the conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net prot or increase the net loss per
share from continuing ordinary operations. Potential dilutive equity
shares are deemed to be converted as at the beginning of the
period, unless they have been issued at a later date. The dilutive
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value (i.e. average market
value of the outstanding shares). Dilutive potential equity shares are
determined independently for each period presented. The number of
equity shares and potentially dilutive equity shares are adjusted for
share splits/reverse share splits and bonus shares, as appropriate.
k) Taxes on income:
taxable income for the year.
Accordingly, MAT is recognised as an asset in the balance sheet
Deferred tax assets and liabilities are recognised, subject to
consideration of prudence, on timing differences, being the
difference between taxable income and accounting income, that
originate in one period and are capable of reversal in one or
more subsequent periods. Deferred tax assets arising on account
of unabsorbed depreciation or carry forward of losses under tax
laws are recognised only to the extent that there is virtual certainty
supported by convincing evidence that sufcient future taxable
income will be available against which such deferred tax assets
can be realised. Deferred tax assets on account of other timing
differences are recognised to the extent that there is a reasonable
certainty of its realisation.
1090
31
ST
MARCH, 2014
l) Research and development expenditure:
Revenue expenditure pertaining to research is charged to the
Statement of Prot and Loss. Development costs of products are
also charged to the Statement of Prot and Loss unless a products
technological feasibility has been established, in which case such
expenditure is capitalised. The amount capitalised comprises
expenditure that can be directly attributed or allocated on a
reasonable and consistent basis to creating, producing and making
the asset ready for its intended use. Fixed assets utilised for research
and development are capitalised and depreciated in accordance with
the policies stated for tangible xed assets and intangible assets.
m) Impairment of assets:
balance sheet date are reviewed for impairment. If any indication
estimated and impairment is recognised, if the carrying amount of
indication that an impairment loss recognised for an asset in earlier
reversal of impairment loss is recognised in the Statement of Prot
n) Provisions and contingencies:
A provision is recognised when an enterprise has a present
estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to
reect the current management estimates. Contingent liabilities are
disclosed in the nancial statements.
a) Terms of repayment of secured term loans from banks are as under:
Sr.
No.
As at
31
st
March,
2014
As at
31
st
March,
2013
Terms of repayment and other
relevant terms with respect to the
balance sheet date
Non-
current
Current Non-
current
Current
Rs.
Lakhs
Rs.
Lakhs
Rs.
Lakhs
Rs.
Lakhs
1. 302.16 302.16 296.88 The loan is to be repaid in 12
equal quarterly installments of
Rs. 74.22 Lakhs each from April
2012 till March 2015.
2. 437.50 250.00 625.00 312.50 The loan is to be repaid in 16
Rs. 62.50 Lakhs each from
September 2012 till September
2016.
3. 5,000.00 2,000.00 7,000.00 The loan is to be repaid in 14
Rs. 500.00 Lakhs each from
April 2014 till July 2017.
Total 5,437.50 2,552.16 7,927.16 609.38
a) The interest rate applicable on above term loans is prevailing base
rate and applicable premium which varied upto 11.80%.
b) Details of security given for secured loans: - Term loans from banks
at Sr. No 1 to 3 in the table above, are secured by rst charge on
all existing and future immovable and movable properties ranking
pari passu.
27. Payment to auditors: *
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
To Statutory Auditor
As auditor ................................................ 15.00 15.00
For other services ................................... 6.00 3.40
To Cost Auditor
As auditor ................................................ 0.76 0.75
* Amounts mentioned are exclusive of service tax
28. In the previous year, the Company had, pursuant to a Business Transfer
Agreement for the purchase of Steel business from Mahindra Ugine Steel
Company Limited (MUSCO), approved by the Board of directors at their
meeting held on 11
th
November, 2011, acquired MUSCOs steel business
from 10
th
July, 2012 for a consideration of Rs. 133,50.00 Lakhs. The
consideration of Rs. 133,50.00 Lakhs is paid in the form of 50,90,000 equity
shares of Rs. 10 each at a premium of Rs. 208.57 per share and cash
consideration of Rs. 22,25.00 lakhs. The net value of steel business assets
acquired is higher than the consideration paid by Rs. 47,00.38 Lakhs,
which is credited to the capital reserve account. The deferred tax liability
amounting to Rs. 1,353.49 Lakhs relating to the steel business assets as
on 10th July, 2012 has also been created at the time of acquisition and is
debited to the capital reserve account.
Accordingly, the current year gures are not comparable with the previous
years gures.
29. Capital and other commitments:
(a) Estimated amount of contracts remaining to be executed on capital
account and not provided for as on 31st March, 2014 Rs. 124.02
Lakhs (2012-2013: Rs. 57.56 Lakhs).
(b) The Company has entered into a Technical Assistance Agreement
(TAA) with Sanyo Special Steel Company Limited, Japan whereby
a xed fee of US Dollars 10.50 million; approximately Rs. 6,300.00
lakhs (2012-13 Rs. 5,739.30 lakhs), exclusive of applicable taxes,
would become payable.
30. Contingent Liability:
Customers bills discounted but not matured Rs. 920.45 Lakhs (2012-2013:
Rs. 1,744.61 Lakhs).
31. Segment reporting:
The Company is in the business of tool alloy and special steel which is
the only business segment and accordingly segment disclosures are not
applicable.
32. Cost of raw materials consumed:
31
st
March, 2014
Rs. Lakhs
31
st
March, 2013
Rs. Lakhs
1) Ferrous scrap .............. 31,253.42 22,508.91
2) Ferro alloys ................. 12,122.17 9,387.49
3) Processing charges .... 1,154.79 621.57
4) Others .......................... 1,949.72 1,942.68
46,480.10 34,460.65
31
st
March, 2014 31
st
March, 2013
Rs. Lakhs % Rs. Lakhs %
Imported at landed cost 13,014.22 28.00 12,265.42 35.59
Indigenously obtained ...... 33,465.88 72.00 22,195.23 64.41
46,480.10 100.00 34,460.65 100.00
1091
31
ST
MARCH, 2014
33. Stores and spares consumed:
31
st
March, 2014 31
st
March, 2013
Rs. Lakhs % Rs. Lakhs %
Imported at landed cost .. 983.91 14.70 671.76 13.45
Indigenously obtained ...... 5,708.12 85.30 4,321.08 86.55
6,692.03 100.00 4,992.84 100.00
34. C.I.F. value of imports:
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
(a) Raw materials ................................... 12,847.13 13,506.70
(b) Stores and spares ............................ 990.74 387.08
(c) Capital goods ................................... 18.10 31.44
35. Expenditure in foreign currency:
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
(a) Interest .............................................. 47.84 94.30
(b) Professional and consultation fees.. 64.13 54.32
(c) Others ............................................... 131.48 61.09
36. Earnings in foreign exchange:
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
(a F.O.B. value of exports ..................... 3,923.28 2,777.13
(b) Freight and insurance ...................... 113.33 81.69
(c) Reimbursement of expenses ........... 17.49 10.28
37. Research and development expenditure debited to the Statement of Prot
and Loss aggregates Rs. 144.15 Lakhs (2012-2013: Rs. 120.01 Lakhs)
consisting of materials, salaries and power, based on allocations made by
the Company.
38. Provision made for increment in employee benets expense:
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
Opening balance .......................................
Add : Provision made during the year ..... 212.23
Less : Utilised/reversed during the year
Closing balance ......................................... 212.23
39. Disclosure required under Micro, Small and Medium Enterprises
Development Act, 2006 (the Act) are as follows:
Rs. Lakhs
Sr.
No.
Particulars 31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
(a) Principal amount outstanding ....................... 436.00 408.31
(b) Interest due on the above ............................
(c) Principal amount paid during the year
beyond the appointed day ............................ 4.56 49.49
(d) Interest paid during the year beyond the
appointed day .............................................. 0.02 0.51
(e) Amount of interest due and payable for the
period of delay in making payment without
adding the interest specied under the Act
(f) Amount of interest accrued and remaining
unpaid at the end of the year .......................
(g) Amount of further interest remaining due and
payable even in the succeeding years, until
such date when the interest dues as above
are actually paid to the small enterprise for
the purpose of disallowance as a deductible
expenditure under section 23 of the Act.......
Note:
a. The above information and that given in Note 8 Trade payables
regarding micro enterprises and small enterprises has been
determined on the basis of information available with the Company.
This has been relied upon by the auditors.
b. The interest computation for vendors, who have submitted their
registration certicates during the year, is done from the date of
receipt of such certicates by the Company.
40. Related party disclosures:
a) Related parties where Control exists:
(upto 2
nd
October, 2013)
Holding Company Mahindra Ugine Steel Company
Limited (upto 2
nd
October, 2013)
(from 3
rd
October, 2013)
b) Investing Parties Sanyo Special Steel Company
Limited, Japan (29.00%)
Mitsui & Company Limited,
Japan (20.00%)
c) Names of other related parties with whom transactions have taken
place during the year:
Fellow subsidiaries Mahindra Ugine Steel Company
Limited (from 3
rd
October, 2013)
Mahindra Forgings Limited (upto
4
th
October, 2013)
Mahindra Gears and
Transmission Pvt. Limited
Mahindra Hinoday Industries
Limited (upto 4
th
October, 2013)
Metalcastello S.p.A.
Key Management Personnel Mr. Uday Gupta, Managing
Director
1092
40. (d) Transactions carried out with the related parties referred to in (a) and (b) above in the ordinary course of business: FS: Fellow Subsidiaries
Rs. Lakhs
Sr.
No.
Particulars Holding Co.
(from 3
rd

Oct'13)
Holding Co.
(upto 2
nd

Oct'13)
Investor
Associate
Co.
Investor
Associate
Co.
FS
(from 3
rd

Oct13)
FS FS FS FS FS FS FS Key
Management
Personnel
Mahindra &
Mahindra
Ltd.
Mahindra
Ugine Steel
Co. Ltd.
Sanyo
Special
Steel
Co. Ltd.,
Japan
Mitsui &
Co. Ltd.,
Japan
Mahindra
Ugine
Steel Co.
Ltd.
Mahindra
Forgings
Ltd.
Mahindra
Intertrade
Ltd.
Mahindra
Logistics
Ltd.
Mahindra
Gears &
Transmission
Pvt Ltd.
Mahindra
Vehicle
Manufacturers
Limited
(formerly
Mahindra
Automotive
Limited)
Mahindra
Hinoday
Industries
Ltd.
Metalcastello
S.p.A
Mr. Uday
Gupta
1 Purchases of goods or services 847.85 43.46 25.86 846.44 9.58 16.21
(0.38) (129.58) () () () (1,673.35) (6.44) () () () (3.66) () ()
2 Receiving of services 217.58 15.11 101.08
(211.78) () () () () () () (16.71) () () () () ()
3 Technical assistance fees paid 1,227.87 *
() () (369.20) * () () () () () () () () () ()
4 Shared IT services received 116.99
(153.18) () () () (-) () () () () () () () ()
5 Rent paid 1.69
(1.16) () () () () () () () () () () () ()
6 Sale of goods 578.49 6,189.29 368.69 16.42
(276.99) () () () () (7,858.05) () () (171.40) () () (38.83) ()
7 Reimbursement of expenses 17.49 #
() () () (10.28) # () () () () () () () () ()
8 Purchase of xed assets/capex
services
(80.78) () () () () () () () () () () () ()
9 Deputation of personnel
(0.58) () () () () () () () () () () () ()
10 Remuneration to key managerial
personnel 110.91
() () () () () () () () () () () () (58.60)
11 Provision for doubtful debts
made during the year
(0.35) () () () () (28.25) () () () () () () ()
12 Consideration paid for purchase
of steel business
() (13,350.00) () () () () () () () () () () ()
13 Share capital issued (includes
share premium)
() (11,125.00) (12,883.81) (8,885.38) () () () () () () () () ()
14 Guarantees and collaterals
() (28,500.00) () () () () () () () () () () ()
15 Outstandings:
Payables
i) Payables/creditors 943.84 109.80 ** 11.03 52.04 26.64
(796.89) (17.34) (65.03) ** () () () () (9.53) () () () () (21.80)
ii) Guarantees and collaterals
() (28,500.00) () () () () () () () () () () ()
i) Receivables
Trade Receivables 132.55 104.29
(74.12) () () () () (2,052.08) () () (56.68) () () (26.58) ()
Advances 25.21 6.14 ## 0.99 1.92
() () () (10.28) ## () () () () () () () () ()
ii) Provision for doubtful
debts and advances 0.01
(0.35) () () () () (28.98) () () () () () () ()
* Includes Rs. 1,179.02 Lakhs ( 2012-2013: Rs. 327.47 Lakhs) billed by Sanyo Special Steel India Pvt. Ltd., an Indian subsidiary of that company.
** Includes Rs. 72.86 Lakhs (2012-2013: Rs. 65.03 Lakhs) payable to Sanyo Special Steel India Pvt. Ltd., an Indian subsidiary of that company.
# Includes Rs. 13.80 Lakhs (2012-2013: Rs. 10.04 Lakhs) billed to Mitsui & Co. (Asia Pacic) Pvt. Ltd., an subsidiary of that company.
## Includes Rs. 4.75 Lakhs (2012-2013: Rs. 65.03 Lakhs) receivable from Mitsui & Co. (Asia Pacic) Pvt. Ltd., an subsidiary of that company.
Notes:
1 The transaction amounts reported above are inclusive of applicable taxes.
2 Previous years gures have been disclosed in parenthesis.
31
ST
MARCH, 2014
1093
31
st
March,
2014
31
st
March,
2013
a) Net (Loss) after tax (Rs. Lakhs) .......... (6,833.84) (3,802.70)
b) Weighted average equity
shares (Nos.) ....................................... 100,00,000 64,97,808
c) Basic and diluted earnings per equity
share (Rs.) ........................................... (68.34) (58.52)
42. Foreign currency exposures:
The Company has entered into Forward Foreign Exchange Contracts and
plain vanilla options [being derivative instruments], which are not intended
for trading or speculative purpose, but for hedge purpose, to establish the
amount of reporting currency required or available at the settlement date
of trade payables.
The following are the outstanding Forward Foreign Exchange Contracts as
on 31
st
March, 2014:
Mode of Hedging Currency Amount in
Lakhs
Buy/Sell
Forward Cover ......... US Dollar 62.37 Buy
(US Dollar) (127.96) (Buy)
The year end foreign currency exposures that have not been hedged by a
a. Amounts payable in foreign currency on account of the following:
Indian
Rupees
Rs. Lakhs
Foreign
Currency
Lakhs
Import of goods and services ... 159.44 US $ 2.66
(66.50) (US $ 1.22)
b. Amounts receivable in foreign currency on account of the following:
Indian
Rupees
Rs. Lakhs
Foreign
Currency
Lakhs
Export of goods and services ... 50.57 US $ 0.84
(37.98) (US $ 0.70)
527.54 Euro 6.38
(178.59) (Euro 2.56)
Reimbursement of expenses .... 5.87 US $ 0.10
() ()
Previous years gures have been disclosed in parenthesis.
43. Employee Benet Plans:
A. Dened Benet Plans:
Gratuity:
The Company makes annual contributions to the Employees Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of
India, a funded dened benet plan for qualifying employees. The scheme
provides for lump sum payment to vested employees at retirement or on
termination of employment of an amount equivalent to 15 days salary for
each completed year of service or part thereof in excess of six months.
In case of death of the employee while in service, gratuity is paid for an
amount equivalent to 30 days salary for each completed year of service or
part thereof in excess of six months.
The ceiling limit for gratuity payment is restricted to 20 months salary.
Vesting occurs upon completion of ve years of service.
Detailed disclosures on Dened Benet Plan Gratuity are as follows:
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
I Expenses/(Income) recognised in
the statement of Prot and Loss
Account for the year ended 31st
March, 2014 included in Note 22
under line item Contribution to
provident and other funds
1. Current Service Cost ..................... 71.83 45.56
2. Interest Cost .................................. 105.37 73.21
3. Expected return on plan assets ... (115.07) (70.92)
4. Actuarial (Gains)/Losses ............... (61.38) 92.87
5. Losses/(Gains) on Acquisition/
Divestiture ...................................... 81.77
6. Total Expense/(Income) ................ 0.75 222.49
II Net Asset/(Liability) recognised in
the Balance Sheet as at 31
st
March,
2014
Obligation ...................................... (1,340.34) (1,355.99)
2. Fair value of plan assets ............... 1,274.03 1,289.86
3. Net Asset/(Liability) ....................... (66.31) (66.13)
III Change in Obligation during the
year ended 31
st
March, 2014
Obligation at the beginning of the
year ................................................ 1355.99
2. Current Service Cost ..................... 71.83 45.56
3. Interest Cost .................................. 105.37 73.21
4. Actuarial (Gains)/Losses ............... (65.32) 133.81
5. Benet Payments .......................... (127.53) (147.61)
6. Liabilities assumed on Acquisition 1,251.02
Obligation as at the end of the
year ................................................ 1,340.34 1,355.99
IV Change in Assets during the year
ended 31
st
March, 2014
1. Plan assets at the beginning of the
year ................................................ 1289.86
2. Expected return on plan assets ... 115.07 70.92
3. Contributions by employer ........... 0.57 156.36
4. Actual benets paid ...................... (127.53) (147.61)
5. Actuarial Gains/ (Losses) .............. (3.94) 40.94
6. Assets acquired on Acquisition .... 1,169.25
7. Plan assets at the end of the year 1,274.03 1,289.86
V Actual return on Plan Assets (1+2) 111.12 111.86
1. Expected return on plan assets ... 115.07 70.92
2. Actuarial Gains/(Losses) ............... (3.95) 40.94
VI The major categories of plan assets
as a percentage of total Plan
Funded with LIC of India
(See note below) ................................. 100% 100%
VII Actuarial Assumptions:
1. Discount Rate ................................ 9.15% 8.00%
2. Expected rate of return
on plan assets ............................... 9.40% 9.40%
3. Mortality pre-retirement ................. 2006-08
Mortality
base
2006-08
Mortality
base
4. Turnover rate ................................. 1 to 2% 1 to 2%
5. Salary escalation rate .................... 7.50% 7.50%
Note: The Company is unable to obtain the details of major category of
plan assets from the Insurance Company (LIC of India) and hence
the disclosure thereof is not made.
31
ST
MARCH, 2014
1094
B. Net Assets/(Liabilities) recognised in the Balance Sheet as at
respective year ends and experience adjustments:
Particulars
31
st
March,
2014
Rs. Lakhs
31
st
March,
2013
Rs. Lakhs
31
st
March,
2012
Rs. Lakhs
Obligation .................................. (1,340.34) (1,355.99)
2. Fair value of plan assets ............ 1,274.03 1,289.86
3. Funded Status [Surplus/(Decit)] (66.31) (66.13)
4. Net Asset/(liability) ...................... (66.31) (66.13)
5. Experience adjustment arising on:
a. Plan Liabilities ...................... 7.93 107.22
b. Plan Assets .......................... (3.95) 40.94
Note : The company was incorporated in November 2011 and accordingly the
gures for the years ended 31
st
March 2010 and 2011 are not presented above.
C. Basis used to determine expected rate of return on assets:
This is based on expectation of the average long term rate of return
expected on investments of the Fund during the estimated term of the
obligations.
D. The estimates of future salary increases, considered in actuarial valuation,
takes into account the ination, seniority, promotion and other relevant
factors such as supply and demand in the employment market.
E. The Company expects to fund the entire shortfall in the Employees Group
Gratuity-cum-Life Assurance Scheme with Life Insurance Corporation of
India during the rst quarter of the next nancial year.
F. Dened Contribution Plans:
contributions to dened contribution retirement benet plans for qualifying
employees. Under the schemes, the Company is required to contribute a
specied percentage of the payroll costs to fund the benets.
Companys contribution paid/payable during the year to Ofcers
Superannuation Fund, Pension Fund and Provident Fund are recognized
in the Statement of Prot and Loss. These amounts are recognized as
an expense and included in the Note No. 22 of the Statement of Prot
and Loss under the heading Employee benets expense in line item
Companys contribution to provident and other funds.
31
st
March,
2014
Rs. Lakhs
31
st
March
2013
Rs. Lakhs
i) Provident Fund ................................. 148.87 94.00
ii) Superannuation Fund ....................... 40.49 31.79
ii) Employees Pension Scheme .......... 52.40 40.08
44. Previous years gures have been regrouped wherever necessary to
conform to current years classication.
Signature to Notes 1 to 44 Uday Gupta Managing
Director
Sanjay Joglekar
Yutaka Tsukamoto
Nobuyuki Tanaka
Tomofumi Osaki
Daljit Mirchandani
}
Directors
Sudhir Yagnik
Chief Finance Ofcer
Pradeep Salian
Company Secretary
Date: 21
st
May, 2014
Place: Mumbai
31
ST
MARCH, 2014
MAHINDRA ENGINEERING SERVICES LIMITED
1095
Your Directors present their Nineteenth Report together with the Audited Accounts of the Company for the Financial Year ended
31
st
March, 2014.
Financial Results
Rupees in Lakhs
Particulars
For the year Ended
31
st
March 2014
For the year Ended
31
st
March 2013
Income 22,542.52 20,835.72
Prot before Depreciation, Amortization, Interest, Taxation 7,204.37 5,709.37
Depreciation & Amortization 271.54 285.15
Prot before Interest and Taxation 6,932.83 5,424.22
Interest & Financial Charges

Prot before Taxation 6,932.83 5,424.22
Exceptional Items

Current Tax 2,493.33 2,248.08
Income Tax for earlier years (39.05)
Deferred Tax 195.59 (170.90)
Prot for the year after Taxation 4,282.96 3,347.04
Proposed Dividend 1,430.22 1,112.48
Transfer to General Reserve 428.30 334.70
Balance of Prot from earlier years 9,218.03 7,507.24
Balance carried forward to Balance sheet 11,399.40 9,218.03
Operations
The year witnessed stable revenue streams from its existing
customer base. The Company was able to bag some very big
projects from an European Original Equipment Manufacturers
and the revenues from this client alone more than doubled
from Rs. 13 Crs last year to Rs. 29 Crs in the current year.
There were some heartening developments in the protability
side. Through a sustained and focussed application of prudent
cost control measures, your Company was not only able to
sustain but also enhance its Operating Prot and Net Prot
Margins compared to the previous year. The EBITDA margins
increased to 32% in the current year from 27% last year, and
this represents an increase of 26% year-over-year. The Prots
After Tax also increased to 19% of Revenues, up from 16%
of last year, representing a jump of 28% year-over-year. All
these indicators clearly vindicate that your Company, by virtue of
being a high-end engineering service provider and by adopting
innovative operational / delivery strategies, will continue to
remain as a premium international player in this segment.
Dividend
Your Directors are pleased to recommend a dividend of
Rs. 14.88 per Equity Share on 1,02,21,602 fully paid-up Equity
Shares of Rs. 10 each. The total Equity Dividend for the year
under review, together with tax thereon, will absorb a sum of
Rs. 1673.29 Lakhs (as against Rs. 1301.55 Lakhs paid in the
previous year).
Share Capital
Your Company allotted 9,19,905 equity shares of Rs. 10 each to
Mahindra Engineering Services Employees Stock Option Trust
(Trust) during the year under review. Pursuant to the issue and
allotment of the said shares the issued, subscribed and paid up
capital of the Company stood at Rs. 10,22,16,020 as on the
last day of the year under review.
Alteration of Articles of Association
Articles of Association of your Company was altered with
shareholders approval to include a clause authorising buy
back of shares.
Merger with Tech Mahindra Limited
As you may be aware, the Board of Directors in its meeting held
on 29
th
November, 2013 approved the Scheme of Amalgamation
and Arrangement (The Scheme) of your Company with Tech
Mahindra Limited (Transferee Company). The Scheme, inter
alia, provides:-
i) Transfer of all assets and liabilities of the Company to the
Transferee Company will be on an ongoing basis with an
appointed date 1
st
April, 2013 and
ii) The shareholders of the Company are entitled to 5 (ve)
Equity Shares of Rs. 10/- each of the Transferee Company
for every 12 (twelve) Equity Shares of Rs. 10/- each held
in the Company. This swap ratio is jointly valued by two
independent valuers.
1096
The necessary regulatory approvals are in progress and therefore
the accounts are prepared without giving effect to the Scheme.
Director
Mr. Ulhas N Yargop retires by rotation and, being eligible, offers
Your Directors, based on the representations received from the
at 31
st
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for
and detecting fraud and other irregularities;
concern basis.
Codes of Conduct
Your Company had adopted separate Codes of Conduct for
Corporate Governance (the Codes) for its Directors and
Senior Management Personnel and Employees. These Codes
your Companys business and seek to reiterate the fundamental
perception that good governance must and would always be
an integral part of your Companys ethos.
declarations under the Codes from the Board of Directors and
the Senior Management Personnel and Employees afrming
compliance with the respective Codes.
Subsidiaries
The audited statements of accounts of your Companys
subsidiaries as at 31
st
March, 2014, together with reports of their
Directors and Auditors and the Statement pursuant to section 212
of the Companies Act, 1956 are attached to the report.
Constitution of Corporate Social Responsibility Committee
(CSR Committee)
During the year under review, CSR Committee was constituted
comprising of Mr. Hemant Luthra, Mr. Ulhas N Yargop and
Dr. Pawan Kumar Goenka. Mr. Hemant Luthra is the Chairman
of the Committee.
The Committee met once during the year and recommended
the Corporate Social Responsibility Policy to the Board of the
Company which was subsequently adopted by the Board.
The details of CSR activities being carried out by the Company
have been spelt out elsewhere in this report.
Pursuant to the provisions of the Companies Act 2013, the name
of the Remuneration Committee was changed to Nomination
and Remuneration Committee at the Board Meeting held on
27
th
March, 2014. At the same meeting, the Board also adopted
terms of reference for the Nomination and Remuneration
Committee as prescribed under the said Act.
The Committee comprises of all the four members of the Board
namely Mr. Hemant Luthra, Mr. Ulhas N. Yargop, Dr. Pawan
Kumar Goenka and Mr. V S Parthasarathy. Ulhas N Yargop
is the Chairman of the Committee. The Committee met three
times during the year under review.
Selection Committee
The Committee comprises of Mr. Hemant Luthra, Mr. V S
Parthasarathy, Directors, and Brig. (Retd.) Xerxes Adrianwala.
Audit Committee
The Audit Committee comprises of three Directors namely
Mr. Ulhas N. Yargop, Dr. Pawan Kumar Goenka and Mr. V. S.
Parthasarathy. Mr. Ulhas N Yargop is the Chairman of the
Committee. The Committee met once during the year under
review. At the Board meeting held on 27
th
March, 2014, the
Board adopted terms of reference for the Audit Committee as
prescribed under the provisions of the Companies Act, 2013.
Auditors
Messrs. B. K. Khare & Co., Chartered Accountants, (ICAI
Registration Number 105102W) retire as Auditors of your
have given their consent for re-appointment. The members
are requested to appoint Auditors from the conclusion of
forthcoming Annual General Meeting until the conclusion of
next Annual General Meeting and x their remuneration.
As required under the provisions of section 139 of the
Companies Act, 2013, your Company has obtained a written
consent and certicate from the above Auditors to the effect
that their reappointment, if made, would be in conformity with
the conditions and criteria specied therein.
Employees Stock Option Schemes
The Employees Stock Option Scheme-2 (ESOS-2) was
formulated pursuant to the resolution passed by the
Shareholders at the Extraordinary General Meeting held on 12
th

April, 2010.
Pursuant to the exercise of option under the Scheme, during
the year under review, stock options for 79,684 equity shares
were exercised by employees.
Summary of Stock Options is given in the Notes on Accounts.
This Scheme was formulated during the year 2011-12, pursuant
to approval of the shareholders granted on 22
nd
August,
2011. 9,28,332 options were granted, in accordance with this
Scheme, to a Director of the Company and three employees
of the Holding Company.
1097
This Scheme was also formulated during 2011-12, pursuant to
shareholders approval on 14
th
December, 2011, for granting
options to Directors and Employees of the Company. 1,55,666
options were granted, in accordance with the Scheme, to two
Directors of the Company under this Scheme.
The Board of Directors in its meeting held on 25
th
November,
2013 amended the ESOS 2, 3 & 4 as under:
i) The administration of ESOS 3 & 4 is entrusted to the ESOS
Trust.
ii) The Outstanding options under all the Schemes are made
vested with immediate effect.
iii) The Options held by the beneciaries other than those in
employment of the Company/its subsidiaries, to the extent
remaining unexercised on the effective date of Merger will
lapse.
Pursuant to the above amendment, 9,19,905 shares were
issued to Mahindra Engineering Employees Stock Options
Trust for administering ESOS 3 & 4.
Exchange Earnings & Outgo
The particulars relating to the Energy Conservation, Technology
Absorption and Foreign Exchange Earnings and Outgo, as
read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 are given in Annexure I to
this Report.
The particulars of employees who were employed throughout
the nancial year and were in receipt of remuneration of not
less than Rs. 60,00,000 per annum are given in Annexure II
to this report. There was no employee, during the year under
review, who was employed for part of the nancial year and
was drawing not less than Rs. 5,00,000 per month.
Public Deposits and Loans /Advances
Your Company has not accepted deposits from the public or its
The particulars of loans/advances which are required to be
disclosed in the annual accounts of your Company pursuant
to Clause 32 of the Listing Agreement between the Parent
Company, Mahindra and Mahindra Limited and the stock
exchanges, are furnished separately in Annexure III to this report.
Safety health and environmental performance
Safety, Environment and occupational health of Companys
employees are core organizational values and your Company
continues to demonstrate a strong commitment towards these
values through a well established Safety, Occupational Health
& Environmental Policy under which suitable measures and
actions were taken during the year under review.
The Policy is focussed on safety of public, employees, facilities
and equipment. Training on the policy requirements is imparted
to all employees on regular basis and policy compliance is
evaluated on monthly basis. Fire and Safety drills are regularly
conducted and the facilities are assessed for safety compliances
through professional and certied agencies.
Your Company also conducts regular medical and occupational
check ups of its employees and promotes health friendly
sustainable activities.
Corporate Social Responsibility Activities (CSR)
CSR continues to be an integral part of the vision of your
Company. Your Company has pledged 1% of its prot after
tax for CSR initiatives, largely to benet the socially and
economically disadvantaged sections of the society.
During the year under review, your Company had decided to
majorly focus on supporting education facilities in rural areas.
Your Company provided educational furniture for a school
located at Ratnagiri and a school in Sindhudurg district which
focus on educating students with poor nancial background.
This contribution was towards providing class room and library
furniture, the basic necessities for imparting quality education.
Your Company has rolled out a policy for prevention of Sexual
Harassment in which it has formalised a free and fair enquiry
process with clear time lines. Your Company has also constituted
an Internal Complaints Committee to which employees can
write their complaints. No complaints were received by the said
Committee during the year under review.
Acknowledgements
Your Directors wish to take this opportunity to thank the
bankers, customers, vendors and other stakeholders for their
continued contribution to the growth of the Company.
Hemant Luthra
Chairman
Mumbai, 22
nd
April, 2014
1098
ST
MARCH, 2014.
The operations of your Company, being a service industry, are not energy intensive and hence this clause is not
applicable. However, adequate measures to reduce energy consumption are being taken up on an ongoing basis.
(b) Additional investments and proposals, if any, are being implemented for reduction of consumption of energy:
Nil
Not Applicable
in respect of Industries specied in the Schedule.
Not Applicable
1. Areas in which Research & Development is carried out: None
2. Benets derived as a result of the above efforts: Not Applicable
3. Future plan of action: Not Applicable
4. Expenditure on R & D: Nil
Total Foreign Exchange Earned & Used are:
(Rs. In Lakhs)
For the Financial
year ended
31
st
March, 2014
For the Financial
year ended
31
st
March, 2013
Foreign Exchange Earned 10989.10 10574.13
Foreign Exchange Used 1824.25 1732.16
Hemant Luthra
Chairman
Mumbai, 22
nd
April, 2014
1099
INFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (PARTICULARS
OF EMPLOYEES) RULES 1975, AND FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31
ST
MARCH,
2014:
Sl. No. Name of Employee Designation Qualication Age
(Year)
Date of
Joining
(Year)
Experience
(years)
Remuneration
(Rs.)
Previous
Employment &
Designation
1 Mr Prashant P Kamat Manager M. TECH. 48 1
ST
July,
2001
24 Yrs 1,35,58,017 TVS Motor
Company
General
Manager,
R& D, Engines
NOTES:
1. The nature of employment is contractual.
2. The above employee is not related to any Director of your Company.
3. He does not hold by himself or along with his spouse and dependent children 2% or more of the equity shares of your
Company.
4. Terms and conditions of employment are as per Companys Rules.
5. Gross remuneration received as shown in the statement includes Salary, Commission, Bonus, House Rent Allowance or value
of perquisites for accommodation, car perquisites value/allowances as applicable, employers contribution to Provident Fund
and Superannuation Scheme including group insurance premium, leave encashment, leave travel facility, reimbursement of
medical expenses and all allowances/perquisites and terminal benets, as applicable.
6. The above Employee is on deputation basis from your Companys holding Company i.e. Mahindra and Mahindra Limited
(M&M) and the remuneration mentioned above represents the amount reimbursed to M&M by the Company with regard to
his remuneration.
Hemant Luthra
Chairman
Mumbai, 22
nd
April, 2014
1100
ANNEXURE III TO THE DIRECTORS REPORT
Particulars of loans/advances and investment which are required to be disclosed in the Annual Accounts of the Company
pursuant to Clause 32 of the Listing Agreement between the parent company, Mahindra and Mahindra Limited and
Stock Exchanges.
1. Loans and advances in the nature of loans to Subsidiaries, Associates, and where there is no repayment schedule or
repayment beyond seven years or no interest or interest below section 372A of the Companies Act, 1956 NIL
2. Loans and advances in the nature of loans to rms/companies in which Directors are interested:
Rupees in Lakhs
Name of the Company Balance as on 31
st
March, 2014 Maximum outstanding during the year
Mahindra Gears & Transmissions Private Ltd NIL 1,000 Lakhs
Hemant Luthra
Chairman
Mumbai, 22
nd
April, 2014
1101
To the Members of
Mahindra Engineering Services Limited (the Company),
and the Statement of Prot and Loss and Cash Flow
Statement for the year then ended, and a summary of
signicant accounting policies and other explanatory
information.
Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 (the Act) read
with the General Circular 15/2013 dated September 13,
Section 133 of the Companies Act 2013. This responsibility
internal control relevant to the preparation and presentation
of the nancial statements that give a true and fair view
and are free from material misstatement, whether due to
fraud or error.
nancial statements based on our audit. We conducted our
audit in accordance with the Standards on Auditing issued
by the Institute of Chartered Accountants of India. Those
Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable
assurance about whether the nancial statements are free
from material misstatement.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness
of the accounting estimates made by management,
nancial statements.
5. We believe that the audit evidence we have obtained
is sufcient and appropriate to provide a basis for our
audit opinion.
Opinion
accepted in India:
prot for the year ended on that date; and;
(Amendment) Order, 2004, issued by the Central
227 of the Act (hereinafter referred to as the Order), and
the Company as we considered appropriate and according
to the information and explanations given to us, we give
c. the Balance Sheet, Statement of Prot and Loss, and
d. in our opinion, the Balance Sheet, Statement of Prot
and Loss, and Cash Flow Statement comply with the
Accounting Standards referred to in subsection (3C)
of section 211 of the Companies Act, 1956 read with
the General Circular 15/2013 dated 13 September
section 133 of the Companies Act, 2013;
section (1) of section 274 of the Companies Act, 1956;
For
B. K. Khare & Co.
Devdatta Mainkar
Partner
1102
accounts of Mahindra Engineering Services Limited for the
year ended on 31
st
March, 2014
1) (i) The Company is maintaining proper records showing
full particulars, including quantitative details and
situation of xed assets.
(ii) The Company has a program for physical verication
of xed assets at periodic intervals. In our opinion, the
period of verication is reasonable having regard to
the size of the Company and the nature of its assets.
Discrepancies reported on such verication have been
properly dealt in the accounts.
(iii) In our opinion, the disposal of xed assets during the
year does not affect the going concern assumption.
2) The Company does not hold any inventory. Hence,
provisions of clause (ii) (a) to (ii) (c) of paragraph 4 of the
3) The Company has not granted or taken any loans, secured
Companies Act, 1956. Therefore, the provisions of sub-
clause (b) to (g) of sub-paragraph (iii) of paragraph 4 of
the Order are not applicable.
explanations given to us, there were no transactions
with any party that needed to be entered in the Register
maintained in pursuance of section 301 of the Companies
Act, 1956. As there are no transactions in case of any party
that need to be entered in the Register maintained pursuant
to section 301 of the Companies Act, 1956, sub-clause (b)
of sub-para (v) of Para 4 of the Order is not applicable.
any deposits from the public within the meaning of section
framed thereunder.
7) The Company has an internal audit system, which in our
opinion is commensurate with the size of the Company
and nature of its business.
8) As informed to us, the maintenance of cost records has
not been prescribed by the Central Government under
section 209(1)(d) of the Companies Act, 1956, in respect
of the activities carried on by the Company.
9) (i) According to the records of the Company, the Company
is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and
Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,
Excise Duty, cess and other statutory dues applicable
to it with the appropriate authorities. According to
the information and explanations given to us, no
undisputed amounts payable in respect of Income
tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty
and Excise Duty were outstanding, at the year-end for
became payable.
(ii) According to the information and explanations given
to us, there are no dues of Sales Tax, Service Tax,
Customs Duty, Wealth Tax, Excise Duty or Cess
outstanding on account of any dispute, other than
disputed Income Tax demand as under:
Sr.
No.
Financial
Year
Nature of
Dues
Amount
Rs. in lacs
Forum where
case is pending
1 2010-11 Income Tax 524.64 Commissioner of
Income Tax (A)
2 2008-09 Tax by
Government
of Italy on
purchase of
shares
88.26 Regional
Court of Emilia
Romagna, Italy
3 2006-07 Stamp Duty 10.75 Karnataka High
Court
10) The Company does not have accumulated losses at the
end of the nancial year and it has not incurred any cash
losses in the current year and in the immediately preceding
nancial year.
11) Based on our audit procedures and on the basis of
the Company has not defaulted in the repayment of dues
to nancial institutions and banks.
the Company has not granted loans and advances on the
basis of security by way of pledge of shares and other
securities.
Company does not attract any special statute applicable
to chit fund and nidhi/mutual benet fund/societies.
14) In our opinion, the Company has maintained proper records
of the transactions and contracts of the investments dealt
in by the Company and timely entries have been made
therein. The investments made by the Company are held
in its own name except to the extent of the exemption
under section 49 of the Act.
1103
the Company has not given any guarantee for loans taken
by others from banks or nancial institutions, the terms
and conditions whereof are prejudicial to the interest of
the Company.
16) The Company has not obtained any term loan during
the year.
17) According to the information and explanations given to us
on an overall examination of the Balance Sheet and Cash
Flows of the Company, we report that the Company has
not utilized funds raised on short-term basis for long term
investment.
18) During the year, there is no preferential allotment of shares
to any of the entities covered by register maintained u/s
19) The Company did not issue any debentures during
the year.
20) During the year, the Company has not made any public
issue of equity shares.
we report that no fraud on or by the Company has been
B. K. Khare and Co.
Devdatta Mainkar
Partner
M. No. 109795
1104
ST
MARCH 2014
In Rs. Lacs
Note Mar 2014 Mar 2013
SHAREHOLDERS FUNDS
Share Capital ....................................................................................................... 2.1 831.74 831.26
Reserves and Surplus ......................................................................................... 2.2 17,427.42 13,543.30
18,259.15 14,374.56
NON CURRENT LIABILITIES
Other Long Term Liabilities ................................................................................. 2.3 1,273.58 186.69
Long Term Provisions .......................................................................................... 2.4 506.89 649.88
1,780.47 836.57
CURRENT LIABILITIES
Trade Payables .................................................................................................... 2.5 610.04 1,170.08
Other Current Liabilities ....................................................................................... 2.6 1,165.32 1,031.75
Short Term Provisions ......................................................................................... 2.7 1,804.68 1,428.25
3,580.04 3,630.09
Total ..................................................................................................................... 23,619.66 18,841.22
ASSETS
NON-CURRENT ASSETS
Fixed Assets ......................................................................................................... 2.8
Tangible Assets .................................................................................................... 365.18 457.86
Intangible Assets ................................................................................................. 202.15 257.72
567.32 715.58
Non Current Investments .................................................................................... 2.9 681.36 69.64
Deferred Tax Assets (Net) ................................................................................... 2.10 276.51 472.10
Long Term Loans and Advances ........................................................................ 2.11 1,512.19 1,281.50
Other Non Current Assets ................................................................................... 2.12 33.18 27.85
3,070.57 2,566.67
CURRENT ASSETS
Current Investments ............................................................................................ 2.9 9,667.38 4,829.20
Trade Receivables ............................................................................................... 2.13 2,874.36 3,601.50
Cash & Cash Equivalents ................................................................................... 2.14 4,225.76 2,428.35
Short Term Loans and Advances ........................................................................ 2.15 2,923.05 4,300.21
Other Current Assets ........................................................................................... 2.16 858.55 1,115.28
20,549.09 16,274.55
Total ..................................................................................................................... 23,619.66 18,841.22
SIGNIFICANT ACCOUTING POLICIES AND NOTES ON ACCOUNTS ............ 1& 2
for Mahindra Engineering Services Ltd.
Mr. Hemant Luthra Dr. Pawan Goenka
Chairman Director
Mr. Ulhas N. Yargop Mr. V. S. Parthasarathy
Director Director
Mr. Prashant Kamat
Manager
As per our report of even date
Devdatta Mainkar
Partner
M. No. 109795
Place: Mumbai
Date: 22
nd
April, 2014
1105
ST
MARCH 2014
In Rs. Lacs
Revenue from Operations 2.17 20,597.59 19,631.97
Other Income ....................................................................................................... 2.18 1,944.93 1,203.75
Total Revenue .................................................................................................... 22,542.52 20,835.72
Expenses
Employee Benets Expense ............................................................................... 2.19 12,106.51 11,412.69
Depreciation and Amortisation Expense ............................................................ 271.54 285.15
Other Expenses ................................................................................................... 2.20 3,231.64 3,713.66
Total Expenses ................................................................................................... 15,609.69 15,411.50
PROFIT BEFORE TAX ........................................................................................ 6,932.83 5,424.22
Less: Tax Expense ..............................................................................................
Current Tax ................................................................................................ 2,493.33 2,248.08
Income Tax for earlier years .................................................................... (39.05)
Deferred Tax .............................................................................................. 195.59 (170.90)
PROFIT AFTER TAX ........................................................................................... 4,282.96 3,347.04
EARNINGS PER EQUITY SHARE
Basic ..................................................................................................................... 51.85 40.26
Diluted .................................................................................................................. 42.72 33.19
Number of shares used in computing Earnings Per Share
Basic ..................................................................................................................... 8,260,097 8,312,623
Diluted .................................................................................................................. 10,026,151 10,083,060
SIGNIFICANT ACCOUTING POLICIES AND NOTES ON ACCOUNTS ............ 1& 2
Chairman Director
Director Director
Mr. Prashant Kamat
Manager
Devdatta Mainkar
Partner
M. No. 109795
Place: Mumbai
Date: 22
nd
April, 2014
1106
ST
MARCH 2014
in Rs. Lacs
CASH FLOW FROM OPERATING ACTIVITIES:
Net Prot/(Loss) before taxation ..................................................................... 6,932.83 5,424.22
Adjustments for :
Depreciation/Amortisation of Expenditure as ESOP ................................... 1,545.98 1,567.62
Interest and Dividend Income ...................................................................... (1,023.76) (621.15)
Loss/(Prot) on sale of Fixed assets ........................................................... 0.23 13.51
Unrealised Foreign Exchange Loss/(Gain) ................................................. 50.99 (16.45)
Provision for doubtful debts written back .................................................. (89.24) (134.98)
Provision of earlier year written back .......................................................... (495.01) (42.43)
(10.81) 766.13
Operating Prot before Working Capital changes 6,922.02 6,190.34
Changes in:
Trade and other receivables ....................................................................... 1,510.50 (952.89)
Trade and other payables ............................................................................ 308.27 677.48
1,818.77 (275.41)
Cash Generated from Operations ....................................................................... 8,740.80 5,914.93
Income Taxes Paid............................................................................................... (2,710.18) (2,450.54)
NET CASH FROM OPERATING ACTIVITIES .................................................. 6,030.62 3,464.40
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of xed assets and intangibles ........................................................... (139.31) (272.64)
Sale of xed assets and intangibles ................................................................... 15.78 85.21
Purchase of Current Investments (Net) ............................................................. (4,838.18) (2,988.29)
Interest & Dividend received .............................................................................. 843.20 502.43
Purchase/Sale of Long-term Investments ........................................................... (611.73)
Inter Corporate Deposits (Net) ............................................................................ 1,000.00
NET CASH USED IN INVESTING ACTIVITIES ................................................ (3,730.23) (2,673.29)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Share Capital ........................................................ 798.57 0.07
Dividend and Dividend Tax ................................................................................. (1,301.55) (375.06)
NET CASH USED IN FINANCING ACTIVITIES ............................................... (502.98) (374.99)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS .......... 1,797.41 416.11
Cash & Cash Equivalents at the beginning of the year ............................... 2,428.35 2,012.24
Cash & Cash Equivalents at the end of the year .......................................... 4,225.76 2,428.35
Chairman Director
Director Director
Mr. Prashant Kamat
Manager
Devdatta Mainkar
Partner
M. No. 109795
Place: Mumbai
Date: 22
nd
April, 2014
1107
1.1 Basis for preparation
Generally Accepted Accounting Principles (IGAAP) under the historical cost
convention as a going concern and on accrual basis and in accordance with
the provisions of the Companies Act, 1956 and the Accounting Standards
notied under the said Act.
as per the Companys normal operating cycle and other criteria set out
in the Schedule VI of the Companies Act, 1956. Based on the nature of
services and their realisation in cash and cash equivalents, the company
has ascertained its operating cycle as 12 months for the purpose of
current non current classication of assets & liabilities.
The preparation of nancial statements in conformity with IGAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the nancial statements and the reported amounts
of revenues and expenses during the reporting period. Examples of such
estimates include estimates of expected contract costs to be incurred to
complete software development, provision for doubtful debts, and the
useful life of xed assets. Actual results could differ from those estimates.
Difference between the actual results and estimates are recognized in the
year in which the results are known/materialized.
1.3 Tangible - Fixed Assets
a. All Fixed Assets are stated at cost less depreciation. Cost of acquisition
is inclusive of purchase price, levies and any directly attributable cost
of bringing the assets to its working condition for the intended use.
b. When an asset is scrapped or otherwise disposed off, the cost and
related depreciation are removed from the books of accounts and
the Prot and Loss Account.
c. Items of xed assets that have been retired from active use and are
held for disposal are stated at the lower of their net book value and
estimated net realisable value and are disclosed separately in the
nancial statements.
d. Capital Work-in-Progress includes the cost of assets that are not
ready for intended use at the Balance sheet date.
1.4 Depreciation on xed assets is charged over the estimated useful life of the
asset on a Straight line basis as per the table given below:
Asset Class Useful life Depreciation
rate used by
the Company
Depreciation
rate prescribed
in Sch. XIV
(SLM)
Computer Hardware 4 years 25% 16.21%
Furniture & Fixtures 5 years 20% 6.33%
Ofce Equipments 5 years 20% 4.75%
Electrical ttings 5 years 20% 4.75%
Vehicles 5 years 20% 9.5%
Depreciation is charged on pro-rata basis on assets added or deleted
during the year.
1.5 Intangible - Fixed Assets
a. All intangible assets are initially measured at cost and amortised so
consumed.
b. Software capitalized as intangible asset is amortised over a maximum
period of three years.
Management periodically assesses using external and internal indications
whether there is an indication that an asset may be impaired. Impairment
occurs where the carrying amount exceeds the present value of future cash
ows expected to arise from the continuing use of the asset or its eventual
disposal. The impairment loss to be expensed is determined as the excess
of the carrying amount over the higher of the assets net sale price or
present value as determined above.
1.7 Employee benets
Companys contributions paid/payable during the year to Provident
Fund/Superannuation Fund are charged to the Prot & Loss account
on accrual basis.
b. Dened Benet Plans
Companys liabilities towards gratuity being post employment benet
and leave encashment being other long term benet are determined
actuarially using the projected unit credit method which considers
each period of service as giving rise to an additional unit of benet
entitlement and measures each unit separately to build up the nal
obligation. Past service costs are recognised on straight line basis over
the average residual period until the amended benets become vested.
Actuarial gain and losses are recognised immediately in the Statement
of Prot and loss as income or expense. Obligation is measured at the
present value of estimated future cash ows and the gross obligation is
duly adjusted by the fair value of plan assets on reporting date. Gratuity
Liability is funded whereas Leave Encashment is unfunded.
a. Export Revenues and collections deposited in foreign currency bank
accounts are recorded at the exchange rate as of the date of the
respective transactions. Expenditure in foreign currency is accounted
at the exchange rate prevalent when such expenditure is incurred.
b. In the case of monetary assets and liabilities denominated in foreign
currency, the exchange rate prevalent on the Balance Sheet date is
applied to restate such assets and liabilities. Exchange differences
arising on restatement of foreign currency assets and liabilities are
recognized as income or expenditure in Prot & Loss Account.
c. The company uses foreign currency forward contracts to hedge its
risk associated with foreign currency uctuations. In terms of the risk
management strategy, the company does not use forward cover con-
tracts for trading or speculative purposes.
In case where the forward exchange contract is other than
against highly probable forecasted transactions, any premium or dis-
count arising at the inception of the contract is recognised as income
or expense over the life of the contract. Further, exchange differences
are recognised as an income or expense in the reporting period in
which the exchange rates change. Any prot or loss arising on can-
cellation or expiry of such forward exchange contract is recognised
as income or expense for the period.
Provision for losses in respect of outstanding forward contracts
against highly probably forecast transactions on balance sheet date
is made based on mark to market valuation of such contracts.
g. Exchange difference arising on payment of liabilities for purchase
of xed assets from outside India and year end conversion of such
liabilities are charged/credited to the Prot and Loss Account.
The Company follows the accrual method of accounting for its income and
expenditure. In respect of service activity, income is accounted for as and
when the services are rendered.
a. Revenue from income on Software Engineering Services in cases
where services are rendered on a Time and Material basis, is
recognised as and when the services are performed.
b. In cases of xed price engagements, revenue is recognized using the
proportionate completion method of accounting.
c. Unbilled revenue represents the amounts recognized, based on
the services performed in advance of billing in accordance with
contract terms.
d. Revenue is net of volume discounts which are estimated and
accounted for based on the terms of the contracts.
e. Provision for estimated loss if any, on incomplete contracts are
recorded in the period in which such losses become probable based
on the current contract estimates.
Signicant Accounting Policies and Notes to Accounts for the year ended 31 March 2014
1108
f. When there is uncertainty as to measurement or ultimate collectability,
revenue recognition is postponed till such uncertainty is resolved.
g. Revenue from income on Marketing support services is recognized
on the basis of services rendered by the company pursuant to
Agreements with Customers based on the rendering and completion
of services by such customers to their eventual clients.
h. Revenue from income on Sourcing and training is recognized on the
basis of services rendered by the company pursuant to Agreement
with Customers.
i. Interest on deployment of surplus funds is recognised using the time
proportion method, based on the underlying interest rates.
j. Income from Dividend is recognized when right to receive the same
is established.
1.10 Investments
Trade investments are the investments made to enhance the Companys
business interests. Investments are either classied as Current Investments
and Long Term Investments. Current investments are carried in the Balance
Sheet at lower of Cost and Fair Market Value as on the date of Balance
Sheet. Long Term Investments are stated at cost comprising of acquisition
and incidental expenses less provision for diminution in value that is other
than temporary, if any.
1.11 Employee Stock Option Scheme
The excess of fair value of the underlying equity shares as of the date of
the grant of the options over the exercise price of the options, including up-
front payments, if any, is recognized and amortized on a straight line basis
over the vesting period.
1.12 Leases
Lease payments under operating lease are recognized as expense on
straight line basis over the lease period.
1.13 Income Taxes
income for the year. Minimum Alternate Tax (MAT) credit is recognised as
an asset only when and to the extent there is convincing evidence that
the company will pay income tax higher than that computed under MAT,
during the period that MAT is permitted to be set-off under the Income Tax
Act, 1961 (specied period). In the year in which the MAT credit becomes
eligible to be recognised as an asset in accordance with the Guidance Note
issued by ICAI, the said asset is created by way of credit to the Prot & Loss
account and known as MAT credit entitlement. The company reviews the
same at each Balance Sheet date and writes down the carrying amount of
MAT credit entitlement to the extent there is no longer convincing evidence
to the effect that the company will pay income tax higher than MAT during
the specied period.
Deferred tax is measured based on the tax rates and tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax is recognised,
subject to consideration of prudence, on timing differences, being the
difference between taxable incomes and accounting income that originate
periods. Deferred tax assets arising on account of unabsorbed depreciation
or carry forward of tax losses are recognised only to the extent that there
is virtual certainty supported by convincing evidence that sufcient future
taxable income will be available against which such deferred tax assets can
be realised. Timing differences, which reverse within the tax holiday period,
do not result in tax consequence and therefore no deferred taxes are
recognized in respect of the same. For this purpose, the timing differences,
which originate rst, are considered to reverse rst.
1.14 Provisions and Contingent Liabilities
a. Provision is recognised in the Balance sheet when, the Company has
a present obligation as a result of a past event; it is probable that an
outow of economic benets will be required to settle the obligation;
and a reliable estimate of the amount of the obligation can be made.
b. Contingent liabilities are disclosed in respect of possible obligations
occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the company.
The company operates in single business segment namely Engineering
& Design Services. Disclosure of geographical segments viz., Domestic &
Overseas is given as per AS 17 on Segment Reporting.
1.16 Earnings per Share
a. Basic earnings per share are computed by dividing net income by the
weighted average number of common stock outstanding during the
period.
b. The number of shares used in computing diluted earnings per share
comprises the weighted average shares considered for deriving
basic earning per share, and also the weighted average number of
equity shares that could have been issued on the conversion of all
dilutive potential equity shares. The diluted potential equity shares are
adjusted for the proceeds receivable, had the shares been actually
issued at fair value (i.e., the average market value of the outstanding
shares). Diluted potential equity shares are deemed converted as of
the beginning of the period, unless issued at a later date.
2. Notes on Accounts
2.1 Share Capital
A) Details of Authorised, Issued, Subscribed & Paid up Share Capital
Particulars As at 31 Mar 2014 As at 31 Mar 2013
Nos Rs. Lacs Nos Rs. Lacs
Authorised:
Equity Shares of Rs. 10/-
each ................................ 15,000,000 1,500.00 15,000,000 1,500.00
Total ................................ 15,000,000 1,500.00 15,000,000 1,500.00
Equity Shares of Rs. 10/-
each fully paid ..............
10,221,602 1,022.16 9,301,697 930.17
Less:
Issued to ESOP Trust not
alloted to employees ....
1,904,246 190.42 989,074 98.91
Adjusted: Issued,
Subscribed and
Paid up .......................... 8,317,356 831.74 8,312,623 831.26
B) Number of shares outstanding as at 31
st
March 2014
Particulars As at 31 Mar 2014 As at 31 Mar 2013
Number Rs. Lacs Number Rs. Lacs
Shares outstanding at
the beginning of the
year ...............................
9,301,697 930.17 9,301,697 930.17
Shares issued during
the year .........................

Shares allotted under
ESOPs Scheme ............
919,905 91.99
the end of the year ........
10,221,602 1,022.16 9,301,697 930.17
Less: Issued to ESOP
Trust not alloted to
employees* ....................
1,904,246 190.42 989,074 98.91
the end of the year ........ 8,317,356 831.74 8,312,623 831.26
* During the year 4733 shares alloted to employees out of shares issued to ESOP
Trust
Note: 59049 Shares held by the Trust pursuant to buy back under ESOS1 not
excercised by the employees have not been reduced from the paid up Share
Capital above, although the same will be utilised for issue of shares under
ESOS 3 and ESOS 4.
C) Number of Shares held by Holding Company/Fellow Subsidiaries
Particulars As at
March-14 March-13
Mahindra & Mahindra Limited ....... Holding Co. 8,126,218 8,126,218
Mahindra Holding Limited ............. Fellow Subsidiary 121,143 121,143
1109
D) Shareholders holding more than 5% of the Share Capital
Name of Shareholder As at 31 March 2014 As at 31 March 2013
No. of
Shares
% of
Holding
No. of
Shares
% of
Holding
Mahindra & Mahindra
Limited .......................... 8,126,218 79.50% 8,126,218 87.36%
Mahindra Engineering
Services ESOP Trust A/c... 1,963,295 19.21% 1,048,811 11.28%
Out of the above shares held by Mahindra Engineering ESOP Trust, 1,904,246
(PY 989,074) shares are not alloted to employees.
E) Rights & restrictions attached to Equity Shares on disribution of
dividend and repayment of capital
The Company has only one class of Equity Shares having a par value of Rs. 10/-
per share. Each Shareholder is eligible for one vote per share held.The dividend
proposed by the Board of Directors is subject to the approval of the shareholders
in the ensuing Annual General Meeting.
2.2 Reserves & Surplus
Rs. In Lacs
Particulars As at March, 31
2014 2013
a. Securities Premium Account
Opening Balance .................................. 740.37 740.37
Add: On shares allotted under ESOPs
Scheme ........................................ 706.10
Add: Securities Premium credited on
shares exercised by employees
under ESOP scheme .................. 4.94
Less: Premium on Shares issued
to ESOP Trust not alloted to
employees .................................. 1,083.15 377.05
Closing Balance 368.26 363.32
b. Share Options Outstanding Account
Opening Balance ................................ 2,496.34 1,226.07
Add: Charge of the current year ......... 1,274.44 1,282.47
Less: Transferred to Securities
Premium on exercise of shares
by employees ............................. 4.94
Less: Transferred to General Reserve
on forfeiture of options ............... 9.72 12.20
Closing Balance ................................... 3,756.12 2,496.34
c. General Reserve
Opening Balance .................................. 1,465.63 1,118.73
Add: Current Year Transfer
i) From Share Options Outstanding
Account ............................................. 9.72 12.20
ii) From Surplus in statement of Prot
and loss ............................................ 428.30 334.70
Closing Balance ................................... 1,903.65 1,465.63
d. Surplus
Opening Balance .................................. 9,218.02 7,507.23
Add: Net Prot for the current year ..... 4,282.96 3,347.04
Deductions/Appropriations
Proposed Dividend ............................... 1,430.22 1,112.48
Tax on Proposed Dividend ................... 243.07 189.07
Transfer to General Reserves .............. 428.30 334.70
Closing Balance ................................... 11,399.39 9,218.02
Total ..................................................... 17,427.42 13,543.30
2.3 Other Long Term Liabilities
Rs. In Lacs
2014 2013
ESOP Trust payable (Refer Note No. 2.23) ... 1,273.58 186.69
Total .............................................................. 1,273.58 186.69
2.4 Long Term Provisions
Rs. In Lacs
2014 2013
Provision for Employee benets (Refer
Note 2.25)
Provision for Gratuity (Funded) (Net) ........ 39.39 221.52
Provision for compensated absences ....... 467.50 428.36
Total .............................................................. 506.89 649.88
2.5 Trade Payable
Rs. In Lacs
2014 2013
Trade Payables
Micro & Small Enterprises.......................... 12.50 0.11
Others 597.54 1,169.97
Total .............................................................. 610.04 1,170.08
2.6 Other Current Liabilities
Rs. In Lacs
2014 2013
Salaries and other benets ........................... 1,038.05 903.53
Service Tax Payable ....................................... 0.34
TDS Payable .................................................. 118.78 109.87
Other Payables .............................................. 3.19 3.14
Payable for Fixed Assets ............................... 4.96 15.21
Total .............................................................. 1,165.32 1,031.75
2.7 Short Term Provisions
Rs. In Lacs
2014 2013
Employee Benets
Provision for Gratuity (Funded) .................. 59.52 52.82
Provision for compensated absences ....... 59.75 52.40
Provision for Other current employee
benets ........................................................ 12.12 21.48
Others
Proposed Dividend ..................................... 1,430.22 1,112.48
Provision for tax on Proposed Dividend .... 243.07 189.07
Total ............................................................... 1,804.68 1,428.25
1110
2.8 Fixed Assets
Tangible Assets Rs. In Lacs
Particulars Gross Block Depreciation Net Block Net Block
Cost
as at
01.04.2013
Additions
during
the year
Deletions
during
the year
Cost
as at
31.3.2014
Upto the
31
st
March
2013
For the
year
Deletions
during
the year
Total
31.3.2014
As at
31.3.2014
As at
31.3.2013
Plant & Equipment ................. 848.25 14.46 18.12 844.62 680.72 62.91 17.63 726.00 118.62 167.54
Furniture & Fixtures ............... 268.84 0.99 5.18 264.65 174.59 52.40 4.84 222.15 42.50 94.25
Motor Vehicles ....................... 336.89 66.14 30.82 372.20 149.01 69.65 18.38 200.29 171.92 187.88
Ofce Equipments ................. 49.80 31.08 15.18 65.70 41.62 5.52 13.57 33.56 32.14 8.19
Total ...................................... 1,503.79 112.67 69.30 1,547.17 1,045.94 190.48 54.42 1,182.00 365.18 457.86
Previous Year ........................ 1,582.02 163.42 241.56 1,503.88 958.29 234.57 146.92 1,045.94 457.94 623.74
Intangible Assets Rs. In Lacs
Particulars Gross Block Depreciation Net Block Net Block
Cost
as at
01.04.2013
Additions
during
the year
Deletions
during
the year
Cost
as at
31.3.2014
Upto the
31
st
March
2013
For the
year
Deletions
during
the year
Total
31.3.2014
As at
31.3.2014
As at
31.3.2013
Computer Software ................ 2,774.89 26.62 273.09 2,528.43 2,517.18 81.06 271.96 2,326.28 202.15 257.72
Total ...................................... 2,774.89 26.62 273.09 2,528.43 2,517.18 81.06 271.96 2,326.28 202.15 257.72
Previous Year ........................ 2,777.48 109.22 111.81 2,774.89 2,574.42 50.58 107.82 2,517.18 257.72 203.07
2.9 Investments
Rs. In Lacs
2014 2013
Non Current Investments
Trade (Unquoted) Investment in Equity
Instruments at Cost
Mahindra Engineering Services (Europe)
Limited ............................................................ 45.82 45.82
[65000 (PY 65000) Shares of GBP 1/- each
fully paid up]
Mahindra Engineering GmbH ...................... 25.57 25.57
[59000 (PY 59000) Shares of Euro 1/- each
fully paid up]
Mahindra Technologies Services Inc. ........... 635.55 23.82
105000 Shares (PY 5000 Shares) at US $
10/- each fully paid -up]
[100000 Shares subscribed during the year
for Rs. 611.73 lacs]
706.93 95.21
Provision for Diminution in value of
Investment
Mahindra Engineering GmbH ...................... 25.57 25.57
25.57 25.57
Total .............................................................. 681.36 69.64
Current Investment at Cost or Market
value whichever is lower
Non Trade - Unquoted
Units of Mutual Fund ..................................... 6,367.38 3,732.09
Other Investments (Bank Deposits
maturing after 3 months) ............................. 3,300.00 1,097.11
Total .............................................................. 9,667.38 4,829.20
2.9.1 Details of Investment in Liquid Mutual Funds
The balance held in liquid Mutual Funds as at Mar 2014 is as follows
In. Rs. Lacs
Particulars Units Amount (Rs.)
Kotak Liquid Scheme Plan A Growth
Plan .............................................................. 55,919.27 1,453.23
Birla Sun Life Cash Plus-Growth-Regular
Plan .............................................................. 417,697.36 857.91
ICICI Prudential Liquid-Regular Growth ........ 612,856.12 1,161.67
HSBC Cash Fund Growth ......................... 81,191.76 1,037.92
Tata Floater Fund Plan A Growth ............. 59,177.78 1,137.76
Tata Liquidity Managment Fund Plan A
Growth .......................................................... 18,082.17 311.01
Sundaram Money Fund Regular Growth ... 1,509,719.91 407.87
(Aggregate Market Value Rs. 6,374 lacs) 6,367.37
Details of Investment in Liquid Mutual Funds
The balance held in liquid Mutual Funds as at March 31
st
2013 is as follows
In. Rs. Lacs
Particulars Units Amount (Rs.)
Kotak Liquid -(Institutional Premium) Daily
Dividend ......................................................... 78,821.21 963.83
Birla Sun Life Cash Plus-Daily Dividend-
Regular Plan Investment .............................. 1,337,350.94 1,339.96
ICICI Prudential Flexible Income-Regular
Plan-Daily Dividend ........................................ 1,427,978.14 1,428.30
(Aggregate Market Value Rs. 3,732 lacs) 3,732.09
1111
2.10 Deferred Tax Asset (Net)
Rs. In Lacs
2014 2013
On scal allowance of Fixed assets ............. 19.62
On scal allowance of Fixed assets ............. 27.27
On Disallowance U/s 43B ............................. 178.84 222.67
On Doubtful Debts and advances ................ 1.34 28.40
Others ............................................................. 69.06 240.63
Net Deferred Tax Assets/(Liabilities) ......... 276.51 472.10
2.11 Long Term Loans & Advances
Rs. In Lacs
2014 2013
Security Deposits
Considered Good ...................................... 415.52 835.55
Considered Doubtful ................................ 12.71 12.71
Less : Provision for Doubtful Deposits ........ 12.71 12.71
415.52 835.55
Advance Tax/TDS (Net of Provision) ............ 1,096.67 445.95
Total .............................................................. 1,512.19 1,281.50
2.12 Other Non Curent Assets
Rs. In Lacs
2014 2013
Other Non-Current Assets ............................. 30.54 27.14
Prepaid Expense............................................ 2.64 0.71
Total .............................................................. 33.18 27.85
2.13 Trade Receivable Current
Rs. In Lacs
2014 2013
Trade Receivables outstanding from the
date they are due for payment for more
than six months
Doubtful .......................................................... 3.93 43.05
Less: Allowance for trade receivables ......... (3.93) 43.05
364.38 547.71
Trade Receivables outstanding from the
date they are due for payment for less
than six months
Unsecured, considered good ....................... 2,509.98 3,053.79
Unsecured, considered doubtful ................. 50.12
Less: Allowance for trade receivables .......... 50.12
2,509.98 3,053.79
Total .............................................................. 2,874.36 3,601.50
2.14 Cash & Cash Equivalents
Rs. In Lacs
2014 2013
Cash & Cash Equivalents
Cash on hand ................................................ 0.11
Cheques, Drafts on hand ..............................
Other Bank Balances
On Current Account ...................................... 854.28 142.67
Deposit Account (Maturity less than
3 months) ....................................................... 3,335.22 2,260.56
Margin Money Deposits ................................ 36.15 25.12
Total .............................................................. 4,225.76 2,428.35
2.15 Short Term Loans & Advances
Rs. In Lacs
2014 2013
Unsecured, considered good ....................... 1,000.00
Advance tax & TDS (Net of Provisions)........ 2,559.74 2,931.04
Service Tax Receivable .................................. 129.27 109.41
Prepaid Expenses .......................................... 166.76 117.65
Employees Advances .................................... 38.22 27.80
Other Advances ............................................. 29.06 114.31
Total .............................................................. 2,923.05 4,300.21
2.16 Other Current Assets
Rs. In Lacs
2014 2013
Unbilled Receivables ..................................... 514.34 959.94
Interest Receivable ........................................ 319.26 138.67
Other Receivables ......................................... 1.98 5.52
Unamortised premium of Forward
Contracts ....................................................... 22.97 11.15
Total .............................................................. 858.55 1,115.28
2.17 Revenue From Operations
Rs. In Lacs
2014 2013
Revenue from
Income from Engineering Services ............. 20,351.54 19,397.72
Income from Marketing Support Services .... 246.05 234.25
Total .............................................................. 20,597.59 19,631.97
2.18 Other Income
Rs. In Lacs
2014 2013
Dividend received on Investment in Mutual
Fund ............................................................... 344.26 184.58
Income from Facilities Provided .................... 336.89 341.93
Interest Income
Bank Deposits............................................. 452.92 301.89
Others.......................................................... 36.13 44.65
Interest on Income Tax Refunds ................ 190.45 90.03
Excess Provisions Writen back ..................... 495.01 42.43
Write back of Provision for Doubtful Debts .. 89.24 134.98
Bad Debt Recovery ....................................... 20.53
Prior period Income ....................................... 30.25
Others ............................................................. 0.03 12.48
Total ............................................................... 1,944.93 1,203.75
1112
2.19 Employee Benets Expense
In Rs. Lacs
2014 2013
Salaries, Wages, Bonus, etc ......................... 9,824.68 8,954.63
Contribution to Provident & other funds....... 544.37 521.08
Gratuity Expense ........................................... 126.39 256.02
Expense on Employee Stock Option Plan ... 1,274.44 1,282.47
Staff Welfare ................................................... 336.63 398.49
Total .............................................................. 12,106.51 11,412.69
2.20 Other Expenses
In Rs. Lacs
2014 2013
Power and fuel ............................................... 191.17 207.76
Rent including lease rentals .......................... 493.97 580.10
Rates and taxes ............................................. 20.21 37.18
Insurance ....................................................... 108.38 92.20
Buildings ..................................................... 32.87 43.34
Machinery.................................................... 42.25 40.24
Others.......................................................... 87.72 83.15
Postage, Telephone and Communication .... 97.78 97.90
Software charges ........................................... 238.09 445.79
Legal and Professional charges ................... 1,011.67 1,015.72
Sales promotion expense.............................. 19.15 22.17
Travelling & Conveyance expenses .............. 697.89 665.29
Subcontracting, Hire & Sevice charges ....... 68.04 187.51
Auditors remuneration (Refer Note 2.21)..... 14.87 14.33
Donations and contributions ......................... 28.43 27.98
Loss/(gain) on foreign exchange
transactions and translations ........................
20.60 68.19
Loss on sale of Fixed Assets/assets written
off 0.23 20.88
Miscellaneous expenses ............................... 56.55 63.93
Bad debts ....................................................... 0.28
Prior Period expenses ................................... 1.49
Total .............................................................. 3,231.64 3,713.66
2.21 Auditor Remuneration
Rs. In Lacs
2014 2013
Auditors remuneration includes payment
to auditors -
As statutory auditor ....................................... 7.00 7.00
For Tax Audit .................................................. 1.50 1.50
For Taxation & other services ........................ 6.35 5.80
For reimbursement of expenses ................... 0.02 0.03
14.87 14.33
2.22 Merger with Tech Mahindra
The Board of Directors in their meeting held on 29
th
November 2013 approved
the Scheme of amalgamation and Arrangement (The Scheme) with Tech
Mahindra Limited (Transferee Company). The Scheme inter alia provides that
i) Transfer of all assets and liabilities of the Company to the Transferee
Company on going concern basis with an appointed date 1st April
2013 and
ii) The shareholders of the Company are entitled to 5 (ve) Equity
Shares of Rs. 10/- each of the Transferee Company for every 12
(twelve) Equity Shares of Rs. 10/- each held in the Company. This
swap ratio is jointly valued by two independent valuers.
The Scheme is subject to the requisite regulatory approvals.
2.23 Employee Stock options Plans
I. Employee Stock Option Scheme 2 (ESOS 2)
a). Pursuant to the authority given by the Board of Directors at its meeting
held on 8
th
April, 2010, the Remuneration Committees at its meeting
held on 12
th
April, 2010 has formulated an Employees Stock Option
Scheme-2 (ESOS-2). The Shareholders at the Extraordinary General
Meeting held on 12
th
April 2010, have authorised the Board to issue
and allot not exceeding 14,00,000 Equity Shares of Rs. 10 each in the
aggregate under ESOS 2.
For this purpose the Company has created a trust viz. Mahindra
Engineering Services Employees Stock Option Trust (ESOS trust),
which will hold the shares for the benet of the eligible employees,
including directors of the Company or of its holding company(ies)
or of the subsidiary company(ies) or of the subsidiaries of its
holding company.
Accordingly, in terms of the ESOS-2, the Remuneration Committee
has recommended to the Trust to grant Stock options as below:
For Past
contribution
at a Exercise
Price of Rs.
10/- per share
For Future
contribution
at a Exercise
Price of Rs.
116/- per share
At its Meeting held on 12
th
April 2010 ...... 258,254 147,478
At its meeting held on 21
st
March, 2011 .. 375,801 208,229
The Company has granted interest free loan of Rs. 4.76 crores to
the Trust for subscription of aforesaid shares. The trust has repaid
the said loan amounting to Rs. 4.76 cores (including Rs. 2.26
crores in the current year). Balance payable towards share capital
and securities premium net of loan given is shown under other
long term liabilities.
b) The ESOP granted for Past Contribution shall vest in three equal
instalments on the expiry of 12 months, 24 months and 36 months
from the date of grant and are exercisable over a period of 7 years
from the date of grant. The number of options exercisable in each
tranche is between the minimum of 100 and maximum of the
options vested, except in case of the last of exercise, where the
employee can exercise all the options vested but not exercised/
lapsed till that date.
The ESOP granted for Future Contribution vest at the end of three
years from the date of the grant and is exercisable over a period of
7 years from the date of grant. The number of options exercisable in
each tranche is between the minimum of 100 and maximum of the
options vested, except in case of the last tranch of exercise, where
the employee can exercise all the options vested but not exercised/
lapsed till that date.
(Please refer Point IV of this note for accelerated vesting)
1113
c) Summary of Stock Options:-
No of Stock
Options
Exercise
price (Rs.)
Options Outstanding as on 1
st
April 2013 ......... 5,71,015 10.00
3,34,243 116.00
Options granted during the year .........................
Options Forfeited during the year ....................... 14,091 10.00
8,927 10.00
Options Exercised during the year ..................... 4733 10.00
116.00
Options Exercised during the year but not
allotted .....................................................................
65,605 10.00
9,346 116.00
st
Mar 2014 ........ 4,86,586 10.00
3,15,970 116.00
d) In respect of options granted during the earlier years, on the basis
of fair value method, an amount to Rs. 719.51 lacs is treated as form
of employee compensation, to be amortised on as straight line basis
over the vesting period. Amount of Rs. 55.91 lacs (P Y Rs. 143.05
lacs) as Expenses on employee stock option plan is charged to the
Statement of Prot & Loss included under the head Employee benet
Expense.
e) The fair value of the Options granted has been calculated using the
Black Scholes Options Pricing Model and signicant assumptions
made in this regard are as follows:
Shares issued
for Past
contribution
Shares issued
for Future
Performance
Risk Free Interest Rate ...................... 6.67% 7.95%
Expected Term (Years) ........................ 2.00 4.85
Expected Volatility ............................. 64.89% 60.46%
Dividend (Rs/Share).......................... 8.60 8.60
Exercise Price ................................... 10 116
Share Price ....................................... 116 116
Fair Value of Options Granted ......... 91.15 39.72
II. Employee Stock Option Scheme 3 (ESOS 3)
a) Based on the recommendation of the remuneration committee at
its Meeting held on 4
th
Feb 2011 and 26
th
April 2011, the Board of
Directors in its meeting on the same date approved formulation of
Employees Stock Option Scheme-3 (ESOS-3). As per the scheme
the shares were issued as below:
i) 2,82,151 numbers of options to be vested in three tranches at
an exercise price of Rs. 10 each
ii) 6,46,181 numbers of options to be vested in one tranche at an
exercise price of Rs. 116 each
b) Summary of Stock Options:-
No of Stock
Options
Exercise
price (Rs.)
st
April 2013 ....... 2,82,151 10.00
6,46,181 116.00
Options granted during the year .....................
Options Forfeited during the year ....................
Options Exercised during the year ..................
st
Mar 2014 ...... 2,82,151 10.00
6,46,181 116.00
c) The ESOP granted is exercisable over a period of 7 years from the
date of grant. On the basis of fair value method, an amount to Rs.
2674.55 lacs is treated as form of employee compensation, to be
amortised on straight line basis over the vesting period. Amount of Rs.
1005.84 lacs (PY Rs. 961.29 lacs) as Expenses on employee stock
option plan is charged to the Statement of Prot & Loss included
under the head Employee benet Expense.
d) The fair value of the Options granted has been calculated using the
Options issued
at Exercise price
of Rs. 10
Options issued
at Exercise price
of Rs. 116
Risk Free Interest Rate........................ 8.22% 8.19%
Expected Term (Years) ..................... 1.76 4.64
Dividend (Rs/Share).......................... 6.23 6.23
Exercise Price ................................... 10 116
Share Price ....................................... 359.96 359.96
Fair Value of Options Granted ......... 340.44 264.23
III. Employee Stock Option Scheme 4 (ESOS 4)
a) Based on the recommendation of the remuneration committee
at its Meeting held on 2
nd
November 2011, the Board of Directors
by circulation resolution dated 9
th
November 2011 approved the
formulation of Employees Stock Option Scheme-4 (ESOS-4 ). As per
the scheme the shares were issued as below:
i) 47,312 numbers of options to be vested in three tranches at an
ii) 1,08,354 numbers of options to be vested in one tranche at an
b) Summary of Stock Options:-
No of Stock
Options
Exercise
price (Rs.)
st
April 2013 ...... 47,312 10.00
1,08,354 116.00
Options granted during the year .....................
Options Forfeited during the year ....................
Options Exercised during the year ..................
st
Mar 2014 ...... 47,312 10.00
1,08,354 116.00
c) The ESOP granted are exercisable over a period of 7 years from
the date of grant. On the basis of fair value method, an amount to
Rs. 448.78 lacs is treated as form of employee compensation, to be
amortised on as straight line basis over the vesting period. Amount of
Rs. 212.68 lacs (PY Rs. 178.11 lacs) as Expenses on employee stock
option plan is charged to the Statement of Prot & Loss included
under the head Employee benet Expense
d) The fair value of the Options granted has been calculated using the
Options issued
at Exercise
price of Rs. 10
Options issued
at Exercise
price of Rs. 116
Risk Free Interest Rate............................... 8.31% 8.36%
Expected Term (Years) ............................... 1.64 4.48
Dividend (Rs./Share) .................................. 6.23 6.23
Exercise Price .............................................. 10 116
Share Price ................................................... 359.96 359.96
Fair Value of Options Granted .................. 341.08 264.37
IV. The Board of Directors in their meeting held on 25
th
November 2013
amended the ESOS 2,3 & 4 as under.
i) The administration of ESOS 3 & 4 is entrusted to the ESOS Trust.
ii) The Outstanding options under all the Schemes are vested with
immediate effect.
iii) The Options held by the beneciaries other than those in employment
of the Company/its Subsidiaries to the extent remaining unexercised
on the effective date of Merger of the Company with Tech Mahindra
Limited would lapse.
Pursuant to the above amendment, unamortised portion of Deferred
employees compensation is charged to the Statement of Prot and Loss
and 919,905 Equity Shares are issued to the ESOS Trust for administering
ESOS 3 & 4.
1114
2.24 Contingent Liabilities
Estimated amount of contracts remaining to be executed on capital
expenditure account not provided for as at Mar 31
st
, 2014 is Rs. 11.21
lacs (PY Rs. 12.93 lacs).
Other Contingent Liabilities
Rs. In Lacs
st

March 2014
As at 31
st

March 2013
(i) Disputed stamp duty (of
erstwhile Plexion Technologies
India Pvt. Ltd.) for creation of
Mortgage (Appeal pending
before Karnataka High Court) ... 10.75 10.75
(ii) Taxation Matters :
(a) Demands against
the Company not
acknowledged as debts
and not provided for,
in respect of which the
Company is in appeal and
exclusive of the effect of
similar matters in respect
of assessments remaining
to be completed. 992.77 1600.40
(b) Items in respect of
which the Company has
succeeded in appeal,
but the Income-tax
Department is pursuing/
likely to pursue in appeal/
reference and exclusive
of the effect of similar
matters in respect of
assessments remaining to
be completed. 2124.90 2124.72
(iii) Towards Customs duty ne and
penalty against which company
has preferred an appeal before
CESTAT .......................................... 19.00 19.00
(iv) Towards Letter of Comfort
provided to Mahindra
Engineering Services (Europe)
Limited for loan given by them to
Mahindra Engineering GmbH ....... 459.03 457.38
(v) Towards tax claim from Italian
Tax authorities on purchase of
shares in Engines Engineering
S.r.l., Italy ...................................... 88.26 74.32
2.25 Employee Benets
A. Dened Benets Plans-
a) Gratuity Liability
The Gratuity liability under dened benet plan as on 31
st
Mar 2014 is
Rs. 813.12 lacs (PY 721.94 lacs).
Amount in Rs. Lacs
Particulars 2013-14 2012-13 2011-12 2010-11 2009-10
(i) Reconciliation of opening and
closing balances of the present
value of gratuity liability.
Opening gratuity liability ............. 721.95 520.93 407.02 322.98 248.32
Service cost .............................. 105.63 218.40 136.25 91.04 63.05
Interest cost .............................. 63.34 39.20 32.31 24.60 19.60
Amount in Rs. Lacs
Particulars 2013-14 2012-13 2011-12 2010-11 2009-10
Actuarial/(gains) and losses on
liability ....................................... (3.42) 35.04 (0.93) (0.81) (1.31)
Benets paid .............................. (74.38) (91.62) (53.72) (30.79) (6.68)
Closing gratuity liability .............. 813.12 721.95 520.93 407.02 322.98
(ii) Reconciliation of the opening
and closing balances of the fair
value of the plan asset (being an
eligible insurance policy)
Opening Value of Plan Assets ..... 447.61 352.41 285.82 251.90 178.57
Expected return on plan assets ... 32.91 30.53 26.87 20.52 16.46
Actuarial /gains and (losses) ....... 6.25 6.08 (6.56) 4.33 2.61
Contribution by the employer ..... 301.82 150.20 100.00 39.86 60.94
Benets paid .............................. (74.38) (91.62) (53.72) (30.79) (6.68)
Closing fair value of plan assets ... 714.21 447.60 352.41 285.82 251.90
(iii) Reconciliation of the present
value of the gratuity liability and
the fair value of the plan assets
to the assets and liabilities
recognized in the balance sheet:
Plan Liability ............................... 813.12 721.94 520.93 407.02 322.98
Fair value of Plan Asset ............. 714.21 447.60 352.41 285.82 251.90
Closing Net Liability ................... 98.91 274.34 168.52 121.20 71.08
(iv) Total expense recognized in the
Prot and loss Account:
Service cost .............................. 105.63 218.40 136.25 91.04 63.05
Interest cost on gratuity liability . 63.34 39.20 32.31 24.60 19.60
Expected return on plan assets .. (32.91) (30.53) (26.87) (20.52) (16.45)
Net actuarial (gains) and losses
recognized in the year ................. (9.68) 28.96 (5.62) (5.14) (3.92)
Net gratuity expense charged
under the head Employee
benet Expense 126.39 256.02 147.31 89.98 62.28
Actual return on plan assets ...... 39.16 36.61 20.30 24.83 19.06
(v) The major categories of plan
assets as a percentage of the
fair value of the total plan assets
are as follows:
Investments with insurer ............ 714.21 447.60 352.41 285.82 251.90
(vi) Return on Plan Assets
The overall expected rate of
return on assets is determined
based on ................................... 8% 8% 8% 8% 8%
Actual rate of return on plan
assets ........................................ 9.25% 9.25% 8.75% 9.25% 9.25%
(vii) Principal actuarial assumptions
used in determining gratuity
liability as at the balance sheet
date are:
Discount rate ............................. 9.25% 8.25% 8.5% 8% 8%
for the year under report ........... 9.25% 8.25% 8% 8% 8%
Any other material actuarial
assumption (to specify)
Salary Increase ........................... 10% 10% 15% 15% 15%
Attrition rate ................................ 10% 10% 10% 10% 10%
Retirement age ............................ 60 60 60 60 60
b) Leave Encashment
Employees are entitled for accumulation of leave which can be encashed
at the time of retirement or termination. The leave encashment benet
scheme is a dened benet plan and is wholly unfunded. Hence, there
1115
are no plan assets attributable to the obligation. The Leave encashment
liability under dened benet plan as on 31
st
Mar 2014 is Rs. 527.25 lacs
(PY 480.77 lacs).
Amount in Rs. Lacs
2013-14 2012-13
(i) Reconciliation of opening and closing balances
of the present value of Leave Encashment
liability.
Opening Leave encashment liability .................. 480.77 372.03
Service cost ......................................................... 60.35 126.54
Interest cost ......................................................... 41.42 20.88
Actuarial (gains) and losses on liability .............. 10.71 30.64
Benets paid ........................................................ (66.00) (69.32)
Closing Leave encashment liability .................... 527.25 480.77
(ii) Reconciliation of the present value of the
leave encashment liability and the fair value
of the plan assets to the assets and liabilities
recognized in the balance sheet:
Leave Encashment .............................................. 527.25 480.77
Fair value of plan asset
Past service cost not yet recognized in the
balance sheet ......................................................

Other amount recognized in the balance sheet
Plan asset/liability ................................................
(iii) Total expense recognized in the Prot and loss
Account:
Service cost ......................................................... 60.35 126.54
Interest cost ......................................................... 41.42 20.88
Net actuarial (gains) and losses recognized in
the year ............................................................... 10.71 30.64
Net Leave encashment expense charged under
the head Employee benet expenses .............. 112.48 178.05
(iv) The major categories of plan assets as a
percentage of the fair value of the total plan
assets are as follows:
Investments with insurer ..................................... Nil Nil
(v) Principal actuarial assumptions used in
determining leave liability as at the balance
sheet date are:
Discount rate ....................................................... 9.25% 8.25%
Expected return on plan assets for the year
under report .........................................................
Any other material actuarial assumption (to
specify) -
Salary Increase .................................................... 10% 10%
Attrition rate ......................................................... 10% 10%
Retirement age .................................................... 60 60
B. Dened Contribution Plans
Amount recognized as an expense and included in the item Contribution
to Provident and Other Funds of note on Employee benets expenses Rs.
544.37 lacs (PY 521.08 lacs).
2.26 The Company has entered into foreign currency forward contracts in
respect of rm commitments as well as against highly probable forecasted
transactions relating to its export of services. Such foreign currency
forward contracts outstanding as at the Balance Sheet date aggregate
USD: 10,00,000, GBP :100,000 (PY USD: 21,00,000, GBP : NIL). The mark
to market loss on the contracts outstanding as at the Balance sheet date
aggregates to Rs. Nil (PY loss Rs. 94.96 lacs) which has been provided in
the books.
2.27 The period-end foreign currency exposures in respect of monetary items
that have not been hedged by a derivative instrument or a forward contract
are given below
Particulars Amount in
Rs. lacs
Amount in
FC lacs
Export of services ............................. 956.58 USD 16.04
(1797.89) USD (33.31)
Export of services ............................. 559.84 GBP 5.66
(180.28) GBP (2.21)
Export of services ............................. 43.13 Euro 0.53
(84.17) Euro (1.23)
Figures in brackets represent gures of previous year 2012-13.
2.28 Related Party Disclosures
Related parties during the period ending on 31
st
Mar 2014 are as follows:
Holding Company 1 Mahindra & Mahindra Ltd.
Subsidiary Companies 1 Mahindra Engineering Services (Europe) Ltd.
2 Mahindra Engineering GmbH.
3 Mahindra Technologies Services Inc.
1 Mahindra Holdings Ltd.
2 Mahindra Two Wheelers Ltd.
3 Mahindra Reva Electric Vehicles Pvt. Ltd.
4 Mahindra Holidays & Resorts India Ltd.
Fellow subsidiary 5 Mahindra Integrated Business Solutions Pvt. Ltd.
6 Mahindra Gears & Transmissions Pvt. Ltd.
7 Defence Land Systems India Pvt. Ltd.
8 Mahindra First Choice Wheels Ltd.
9 Mahindra Defence Naval Systems Pvt. Ltd.
10 Mahindra Racing s.r.l.
Associate Companies 1 Tech Mahindra Limited
Key Management
Personnel 1 Mr. Hemant Luthra
Manager 1 Mr. Prashant Kamat
Nature of Transaction
Financial
Year
Holding
Company Subsidiaries
Fellow
Subsidiaries
Associate
Company
Key
Management
personnel/
Manager
Total
(Rs. In Lacs)
Amount receivable/(payable) as on 31
st
Mar 2014 ........... 2013-14 620.00 972.22 71.76 (1.02) 1662.96
2012-13 623.24 1668.26 201.87 (1.68) 2491.69
Services rendered ............................................................... 2013-14 10099.97 1922.66 326.35 12348.98
2012-13 8472.16 1822.81 1174.72 11,469.69
Services Received .............................................................. 2013-14 0.27 8.67 11.60 20.54
2012-13 137.69 9.85 147.54
Inter Corporate Deposit Accepted/(Given) ........................ 2013-14 (500.00) (500.00)
2012-13 (1000.00) (1000.00)
1116
2.29 Quantitative Details
The Company is primarily engaged in IT enabled engineering services and
Engineering Contract Business. The production and sales of engineering
services cannot be expressed in any generic unit. Therefore, disclosure of
the quantitative details of sales and certain information as required under
paragraphs 5(viii) of General Instructions for Preparation of Statement of
Prot and Loss of Schedule VI to the Companies Act, 1956 is not applicable.
2.30 Transactions in foreign currency
I. Earnings in foreign currency during the year are Revenue from
Engineering Services and marketing support services Rs.10,989 lacs
(PY Rs. 10,574 lacs). Earnings in Foreign Currency include amounts
billed under Rupee- rial mechanism.
II. Expenditure in foreign currency is as follows:
Amount in Rs. Lacs
A Professional & Consultancy Fees ................. 276.58 479.90
B Towards other revenue expenses ................ 193.28 110.13
C Foreign Branch Expenses ............................. 1354.39 1142.13
Total .............................................................. 1824.25 1732.16
2.31 Operating Leases:
The Company has taken various residential/commercial premises and plant
and machinery on cancellable operating lease. These agreements are
normally renewed on expiry. These lease agreements provide for an option
for the Company to renew the lease period at the end of the lease period.
There are no exceptional/restrictive covenants in the lease agreements.
Lease expenditure for operating leases is recognized on straight line basis
over the period of lease.
Details of lease rentals payable in future are as follows:
Amount in Rs. Lacs
Not later than 1 year ........................................... 528.01 360.33
Later than 1 year and not later than 5 years ...... 1685.37 131.95
Later than 5 years .................................................
2.32 CIF Value of imports during the year is Rs. 27.21 lacs (PY Rs. 47.75),
including the assets received on free of charge basis.
2.33 Earnings per Share
Mar 14 Mar 13
Equity Share of par value Rs. 10/- each
Basic .............................................................. 51.38 40.26
Diluted ........................................................... 42.71 33.19
Number of shares used in computing
earnings per share
Basic .............................................................. 8,335,048 8,312,623
Diluted ............................................................ 10,028,688 10,083,060
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS 17) issued by the Institute of Chartered Accountants of India,
the Company has two reportable segments, viz., Domestic & Overseas.
Primary Segment:
Rs. in Lacs
Revenue by Geographical
Market
Domestic Overseas Total
Revenues ....................................... 9,609 10,989 20,598
(9,058) (10,574) (19,632)
Direct Expenses ............................. 6,970 5,052 12,022
(6,510) (4,886) (11,396)
Segment Results ............................ 2,639 5,937 8,576
(2,548) (5,688) (8,236)
Un-allocable Expenses .................. 3,316
(3,731)
Depreciation ................................... 272
(285)
Other Income ................................. 1,945
(1,204)
Net Prot before Tax ...................... 6,933
(5,424)
Current Tax ................................... 2,454
(2,248)
Deferred Tax ................................... 196
(-171)
Net Prot after Taxes ..................... 4,283
(3,347)
Financial
Year
Holding
Company Subsidiaries
Fellow
Subsidiaries
Associate
Company
Key
Management
personnel/
Manager
Total
(Rs. In Lacs)
Inter Corporate Deposit (Refunded)/Repaid ...................... 2013-14 1500.00 1500.00
2012-13
Interest on ICD paid/(received) .......................................... 2013-14 (34.37) (34.37)
2012-13 (134.68) (134.68)
Other expenses paid ......................................................... 2013-14 295.61 276.04 571.65
2012-13 217.70 289.86 507.56
Reimbursement of expenses received .............................. 2013-14 702.07 236.76 93.16 1031.99
2012-13 704.60 187.09 45.11 936.80
Managerial Remuneration Paid (To Manager) ................... 2013-14 135.58 135.58
2012-13 135.00 135.00
Purchase of xed assets .................................................... 2013-14 22.97 5.25 28.22
2012-13 12.68 5.71 18.39
Sale of xed assets ............................................................ 2013-14
2012-13 5.42 5.42
Investment in subsidiaries/(divestment)............................. 2013-14
2012-13
Lease Rent Received (From KMP) ..................................... 2013-14 11.67 11.67
2012-13 18.00 18.00
Proposed Dividend ............................................................. 2013-14 1209.18 18.03 1272.21
2012-13 971.90 14.49 986.39
1117
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANY
Sl.
No.
Name of the Subsidiary
Company
Financial
year to
which
accounts
relate
Holding Companys interest
as at close of nancial year
of the Subsidiary Company
Shareholding
Net aggregate amount of
Subsidiary Companys Prots
after deducting its losses or vice
versa, so far it concerns members of
Holding Company which are not dealt
with in the Companys accounts
Net aggregate amount of
Subsidiary Companys
Prots after deducting its
losses or vice versa, so
far it concerns members of
Holding Company which are
dealt within the
Companys accounts
(No. of Shares)
Extent of
Holding (%)
For the
period ended
Mar 31, 2014
(in Rs. lacs)
For previous
nancial years
(in Rs. lacs)
For the
period ended
Mar 31, 2014
(in Rs. lacs)
For previous
nancial years
(in Rs. lacs)
1 Mahindra Engineering GmbH 31-03-14 (59,000 shares
of Euro 1 each)
100% (36.22) (42.96) Nil Nil
2 Mahindra Engineering Services
(Europe) Ltd
31-03-14 (65,000 shares
of GBP 1 each)
100% 277.23 169.19 Nil Nil
3 Mahindra Technologies
Services Incorporated.
31-03-14 (105,000 shares
of USD 10
each)
100% 268.20 291.54 Nil Nil
Hemant Luthra Dr. Pawan Goenka Ulhas N. Yargop Mr. V. S. Parthasarathy Mr. Prashant Kamat
Chairman Director Director Director Manager
Place: Mumbai
Date: 22.04.2014
For Mahindra Engineering Services Limited
Chairman Director
Mr. Ulhas N Yargop Mr. V.S. Parthasarathy
Director Director
Mr. Prashant Kamat
Manager
For B.K. Khare & Co.
Firm Reg. No. :105102W
Devdatta Mainkar
Partner
M. No.109795
Place: Mumbai
Date: 22
nd
April, 2014
Earnings in Foreign Currency include amounts billed under Rupee- rial mechanism.
Figures in brackets represent gures of previous year 2012-13.
Segregation of assets, liabilities, depreciation and other non-cash expenses
into various primary segments has not been done as the assets are used
interchangeably between segments and the management is of the view that it
is not practical to reasonably allocate liabilities and other non cash expenses to
individual segments and an Adhoc allocation will not be meaningful.
2.35 Principal amount payable to Micro, Small and Medium Enterprises (to the
extent Identied by the company from available information) as at 31
st
Mar,
2014 is Rs. 12.50 lacs, (PY Rs. 0.11 lacs). There is no interest paid or
payable during the year. (PY Nil)
2.36 Previous years gures have been regrouped/reclassied wherever
necessary to Correspond with the current years classication/disclosure.
MAHINDRA ENGINEERING SERVICES (EUROPE) LIMITED
1118
REPORT OF THE DIRECTORS
For the Year Ended 31
st
March 2014
Your Directors present their Fourteenth report with the nancial
statements of the Company for the year ended 31
st
March,
2014.
PRINCIPAL ACTIVITY
The principal activity of the Company in the year under review
was to provide I.T. services for the automotive industries.
REVIEW OF BUSINESS
The results for the year under review and nancial position of
the company are as follows:
In 000
GBP
In 000
INR
In 000
GBP
In 000
INR
Turnover 2,773 276,844 1,687 168,446
Prot before
taxation
361 36,039 223 22,247
Prot for the year
after taxation
278 27,723 169 16,919
DIVIDEND
Keeping in mind the funding requirements for growth of the
Company, no dividend is recommended for the year ended
31 March, 2014.
OPERATIONS
Due to the signicant investments made in business
developments in the previous year, the Company saw an
impressive growth in revenues from its key client which
resulted in both revenues and Prots After Tax (PAT) growing
by around 64% compared with the previous year.
DIRECTORS
The Directors shown below have held ofce during the whole
of the period from 1 April 2013 to the date of this report.
Prashant Kamat
Sanjay Joglekar
COMPANYS POLICY ON PAYMENT OF CREDITORS
It is the Companys policy that payments to suppliers are
made in accordance with the terms and conditions agreed
between the Company and its suppliers, provided all terms
and conditions are met.
At 31 March, 2014 the Company had no purchases outstanding
(previous year 18 days).
HOLDING COMPANY
The Companys immediate parent Company is Mahindra
Engineering Services Limited, a Company incorporated in India.
The Companys ultimate parent Company is Mahindra and
Mahindra Limited, a Company also incorporated in India.
STATEMENT OF DIRECTORS RESPONSIBILITIES
The Directors are responsible for preparing the Report of the
Directors and the nancial statements in accordance with
applicable laws and regulations.
The Company law requires the Directors to prepare nancial
statements for each nancial year. Under that law the Directors
have elected to prepare the nancial statements in accordance
with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law).
Under Company Law, the Directors must not approve the
nancial statements unless they are satised that they give a
true and fair view of the state of affairs of the Company and of
the Prot or Loss of the Company for that period. In preparing
these nancial statements, the Directors are required to:
consistently;
make judgments and accounting estimates that are
reasonable and prudent;
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in the nancial statements;
prepare the nancial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufcient to show and explain the Companys
transactions and disclose with reasonable accuracy at
any time the nancial position of the Company and enable
them to ensure that the nancial statements comply with
the Companies Act, 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO
AUDITORS
So far as the Directors are aware, there is no relevant audit
information (as dened by Section 418 of the Companies Act,
2006) of which the Companys auditors are unaware, and they
have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant
audit information and to establish that the Companys auditors
are aware of that information.
AUDITORS
The auditors, Lipson & Co Limited, will be proposed for
re-appointment at the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
Prashant Kamat Sanjay Joglekar
Director Director
Date: 22
nd
April 2014
Place: Mumbai
1119
REPORT OF THE INDEPENDENT AUDITORS
TO THE MEMBERS OF MAHINDRA
ENGINEERING SERVICES (EUROPE) LIMITED
We have audited the nancial statements of Mahindra
Engineering Services (Europe) Limited for the year ended
31 March 2014. The nancial reporting framework that has
been applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the companys members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the companys members those matters
we are required to state to them in a Report of the Auditors and
for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than
the company and the companys members as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors
Responsibilities, the directors are responsible for the preparation
of the nancial statements and for being satised that they
give a true and fair view. Our responsibility is to audit and
express an opinion on the nancial statements in accordance
with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with
the Auditing Practices Boards Ethical Standards for Auditors.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts
and disclosures in the nancial statements sufcient to give
reasonable assurance that the nancial statements are free
from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting
policies are appropriate to the companys circumstances and
have been consistently applied and adequately disclosed;
the reasonableness of signicant accounting estimates made
by the directors; and the overall presentation of the nancial
statements. In addition, we read all the nancial and non-
nancial information in the Strategic Report and the Report
of the Directors to identify material inconsistencies with the
audited nancial statements and to identify any information
that is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course
of performing the audit. If we become aware of any apparent
material misstatements or inconsistencies we consider the
implications for our report.
Opinion on nancial statements
In our opinion the nancial statements:
give a true and fair view of the state of the companys
affairs as at 31 March 2014 and of its prot for the year
then ended;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements
of the Companies Act 2006.
Opinion on other matter prescribed by the Companies
Act 2006
In our opinion the information given in the Strategic Report
and the Report of the Directors for the nancial year for which
the nancial statements are prepared is consistent with the
nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
the nancial statements are not in agreement with the
accounting records and returns; or
certain disclosures of directors remuneration specied by
law are not made; or
we have not received all the information and explanations
we require for our audit.
MYRON LIPSON FCCA (Senior Statutory Auditor)
for and on behalf of Lipson & Co Ltd
Chartered Certied Accountants
& Statutory Auditors
6-8 Sevenways Parade
Gants Hill
Ilford
Essex
IG2 6XH
22 April 2014
1120
2014 2013
Rs Rs
Fixed Assets .................................................................... 14 1,398 28 2,796
Investments ..................................................................... 9,230 921,616
Curent Assets
Loan & Advances ................................................................ 678,527 67,750,900 646,216 64,524,647
Debtors ............................................................................... 695,232 69,418,915 349,419 34,889,487
Cash at Bank ....................................................................... 1,009,679 100,816,448 860,013 85,872,298
2,383,438 237,986,263 1,855,648 185,286,432
Creditors: amounts falling due within one year ........... 656,690 65,570,497 397,327 39,673,101
Net current assets .......................................................... 1,726,748 172,415,766 1,458,321 145,613,331
TOTAL ASSETS LESS CURRENT LIABILITIES ............. 1,735,992 173,338,780 1,458,349 145,616,127
CAPITAL AND RESERVES
Share Capital ....................................................................... 65,000 6,490,250 65,000 6,490,250
Reserves............................................................................... 1,670,992 166,848,530 1,393,349 139,125,877
1,735,992 173,338,780 1,458,349 145,616,127
The nancial statements were approved by the Board of Directors on 22
nd
April,2014 and were signed on its behalf by:
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April 2014
Place: Mumbai
BALANCE SHEET AS AT 31 MARCH 2014
1121
Year Ended
31.03.2014
Year Ended
31.03.2013
Notes Rs Rs
TURNOVER ............................................................... 2,772,603 276,844,410 1,687,000 168,446,950
Cost of sales .............................................................. 2,133,181 212,998,123 1,190,865 118,907,871
GROSS PROFIT ........................................................ 639,422 63,846,287 496,135 49,539,079
Administrative expenses ............................................ 316,681 31,620,598 308,633 30,817,025
OPERATING PROFIT ............................................... 322,741 32,225,689 187,502 18,722,054
Interest receivable and other income ....................... 38,191 3,813,371 35,298 3,524,505
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION ................................................................ 360,932 36,039,060 222,800 22,246,559
Tax on prot on ordinary activities ............................ 3 83,289 8,316,407 53,357 5,327,696
PROFIT FOR THE FINANCIAL PERIOD AFTER
TAXATION ................................................................. 277,643 27,722,653 169,443 16,918,863
Prot For the Year ...................................................... 277,643 27,722,653 169,443 16,918,863
Rendered Prot Brought forward .............................. 1,393,349 139,125,877 1,223,906 122,207,014
RETAINED PROFIT CARRIED FORWARD............. 1,670,992 166,848,530 1,393,349 139,125,877
CONTINUING OPERATIONS
None of the companys activities were acquired or discontinued during the current year or previous period.
TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains or losses other than the prots for the current year or previous period.
For and on behalf of Board of Directors
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April 2014
Place: Mumbai
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2014
1122
2014 2013
Rs. Rs.
Net Prot/(Loss) before taxation ....................................... 360,932 36,039,060 222,800 222,800
Adjustment for:
Depreciation/Amortisation ................................................. 14 1,398 1,229 122,716
Interest Income .................................................................. (33,199) (3,314,920) (35,298) (3,524,505)
Interest and Finance Charges ...........................................
Loss on sale of Fixed assets ............................................ (33,185) (3,313,522) (34,069) (3,401,789)
Operating Prot before Working Capital changes ...........
327,747 32,725,538 188,731 (3,178,989)
Changes in:
Trade and other receivables ............................................. (345,709) (34,519,043) (73,573) (7,346,264)
Trade and other payables ................................................. 246,074 24,570,489 88,473 8,834,029
(99,635) (9,948,554) 14,900 1,487,765
Cash Generated from Operations ..................................... 228,112 22,776,984 203,631 (1,691,224)
Income Taxes Paid............................................................. (70,000) (6,989,500) (72,975) (7,286,554)
NET CASH FROM OPERATING ACTIVITIES .................... 158,112 15,787,484 130,656 13,046,002
Purchase of xed assets ...................................................
Sale of xed assets ...........................................................
Purchase of Investments ................................................... (9,230) (921,616)
Sale of Current Investments ............................................
Interest received/Prot on sale of Investment .................. 784 78,281 1,147 114,497
Loss on sale of Fixed assets ............................................
NET CASH USED IN INVESTING ACTIVITIES ................. (8,446) (843,335) 1,147 114,497
Issue of Share Capital .......................................................
Inter corporate deposits (net) ...........................................
Proceeds from borrowings ................................................
Repayment of borrowings .................................................
Interest and Finance Charges ...........................................
NET CASH USED IN FINANCING ACTIVITIES ................
Net Increase/(decrease) in cash and cash Equivalents ... 149,666 14,944,150 131,803 13,160,499
Opening Balance ............................................................... 860,013 85,872,298 728,210 72,711,769
Closing Balance ................................................................. 1,009,679 100,816,448 860,013 85,872,298
For and on behalf of Board of Directors
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April 2014
Place: Mumbai
1123
Accounting convention
The nancial statements have been prepared under the historical cost convention
and are in accordance with applicable accounting standards.
Turnover
Turnover represents net invoiced sales of services, excluding value added tax.
Tangible xed assets
Depreciation is provided at the following annual rates in order to write off each
asset over its estimated useful life.
Computer software - 25% on cost
Computer equipment - 25% on cost
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated
but not reversed at the balance sheet date.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the date
of transaction. Exchange differences are taken into account in arriving at the
operating result.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the prot and loss account
on a straight line basis over the period of the lease.
Cash ow exemption
The company has taken advantage of the exemption in Financial Reporting
Standard No 1 (Revised 1996) from the requirement to produce a cash ow
statement on the grounds that it is a subsidiary undertaking where 90 percent
or more of the voting rights are controlled within the group.
2. STAFF COSTS
Year Ended
31.03.14
Period
31.03.13
Rs. Rs.
Wages and salaries 733,702 73,260,145 686,101 68,507,185
Social security costs 34,084 3,403,287 28,397 2,835,440
767,786 76,663,432 714,498 71,342,625
The average monthly number of employees during the year was as follows:
Year Ended
31.03.14
Year Ended
31.03.13
Management 0 0
Administrative 1 1
Direct costs 26 27
27 28
3. TAXATION
Analysis of the tax charge
The tax charge on the prot on ordinary activities for the year was as follows:
Year Ended
31.03.14
Year Ended
31.03.13
Rs. Rs.
Current tax:
UK corporation tax 83,289 8,316,407 53,379 5,329,909
Previous year tax (22) (2,213)
Tax on prot on ordinary
activities 83,289 8,316,407 53,357 5,327,696
Factors affecting the tax charge
The tax assessed for the year is higher than the standard rate of corporation
tax in the UK. The difference is explained below:
Year Ended
31.03.14
Year Ended
31.03.13
Rs. Rs.
Prot on ordinary activities
before tax 360,932 36,039,060 222,800 22,246,559
Prot on ordinary activities
multiplied by the standard
rate of corporation tax in
the UK of 23%
(2013 - 24%) 83,014 8,288,923 53,472 5,339,173
Effects of:
Non deductible expenses 852 85,072 351 35,012
Depreciation add back 3 300 295 29,498
Capital allowances (580) (57,913) (739) (73,790)
Prot on disposal of xed
assets
Tax relating to prior years (22) (2,197)
Current tax charge 83,289 8,316,382 53,357 5,327,696
4. TANGIBLE FIXED ASSETS
Computer Software Computer equipment Total
Rs. Rs. Rs.
COST
At 1 April 2013 18,958 1,892,956 34,634 3,458,205 53,592 5,351,161
and 31 March 2014 18,958 1,892,956 34,634 3,458,205 53,592 5,351,161
DEPRECIATION
At 1 April 2013 18,958 1,892,956 34,606 3,455,409 53,564 5,348,365
Disposal
Charge for year 14 1,398 14 1,398
At 31 March 2013 18,958 1,892,956 34,620 3,456,807 53,578 5,349,763
NET BOOK VALUE
At 31 March 2014 14 1,398 14 1,398
At 31 March 2013 28 2,796 28 2,796
5. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2014 2013
Rs. Rs.
Trade debtors 686,006 68,497,699 345,072 34,455,439
Other debtors 9,226 921,216 4,347 434,048
695,232 69,418,915 349,419 34,889,487
6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2014 2013
Rs. Rs.
Amounts owed to group
undertakings 369,702 36,914,745 151,127 15,090,031
Provision for Tax 168 16,775 (13,121) (1,310,132)
Social security and other
taxes 7,831 781,925 7,310 729,904
VAT 129,725 12,953,041 81,225 8,110,316
Trade Creditors 16,390 1,636,542
656,690 65,570,497 397,327 39,673,101
1124
7. FIXED ASSET
Shares in group undertakings
Rs.
COST
Additions 9,230 921,616
NET BOOK VALUE
At 31 March 2014 9,230 921,616
At 31 March 2013
8. INVESTMENTS
The company has invested 11,000 (15.71% of the Share capital) in Mahindra
Engineering Services GmbH, a company incorporated in Germany. At the
balance sheet date, the allotment of shares is still pending for allotment.
9. CALLED UP SHARE CAPITAL
Authorised: Nominal 2014 2013
Number: Class value Rs. Rs.
1,000,000 Ordinary 1 1,000,000 99,850,000 1,000,000 99,850,000
Allotted, issued
and fully paid: Nominal 2013 2012
Number: Class value Rs. Rs.
65,000 Ordinary 1 65,000 6,490,250 65,000 6,490,250
10. ULTIMATE PARENT COMPANY
The company was a wholly owned subsidiary of Mahindra Engineering
Service Ltd, a company incorporated in India throughout the year.
The ultimate parent undertaking is Mahindra & Mahindra Ltd, a company
incorporated in India.
11. RELATED PARTY DISCLOSURES
The company has taken advantage of the exemption in Financial Reporting
Standard Number 8 from the requirement to disclose transactions with
group companies on the grounds that consolidated nancial statements
are prepared by the ultimate parent company.
At the balance sheet date, the amount due to Mahindra Engineering Service
Ltd amounted to 369,702 Rs 36,914,721 (2013 - 151,127 Rs 15,090,031).
As on 31.3.2014 the ICD given to Mahindra Engineering GMBH is
678,527 Rs 6,77,50,900 (2013 is 646,216 Rs 6,45,24,647)
12. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
2014 2013
Rs. Rs.
Prot for the nancial year 277,643 27,722,654 169,443 16,918,863
Net addition to
shareholders funds 277,643 27,722,654 169,443 16,918,863
Opening shareholders
funds 1,393,349 139,125,877 1,223,906 122,207,014
Closing shareholders
funds 1,670,992 166,848,531 1,393,349 139,125,877
13. FC amounts are translated for convenience into Indian Rupees at the
exchange rate of Rs.99.85 = FC 1 Which is the average of the telegraphic
transfer buying and selling rates quoted by the Mumbai Branch of State
Bank of India on 28th March 2014
14. Figures for the previous year have been regrouped/rearranged wherever
necessary.
MAHINDRA ENGINEERING GmbH
1125
DIRECTORS REPORT
To
The Members of Mahindra Engineering GmbH
Your Directors have pleasure in presenting their Thirteenth Annual Report on the business and operations of your Company and
the Audited Financial Results for the period from April 01, 2013 to March 31, 2014
FINANCIAL RESULTS:
The nancial results for the current year are for the period from 01.04.2013 to 31.03.2014 and those of the previous year are for
the period from 01.04.2012 to 31.03.2013.
For the year ended on
3/31/2014
For the year ended on
3/31/2013
INR INR
Income from Operations ...................................................................... 176,682 14,592,187 94,691 7,820,550
Prot / (Loss) before Depreciation and Tax ......................................... (43,747) (3,613,030) (50,612) (4,180,050)
Less: Depreciation ................................................................................ (112) (9,267) (1,403) (115,880)
Prot / (Loss) before Taxation .............................................................. (43,859) (3,622,297) (52,015) (4,295,930)
Less: Provision for Taxation ................................................................. 0 0 0 0
Prot / (Loss) after Taxation ................................................................. (43,859) (3,622,297) (52,015) (4,295,930)
Add: Adjustment pertaining to previous year ...................................... 0 0 0 0
Prot / (Loss) after Prior period adjustment ........................................ (43,859) (3,622,297) (52,015) (4,295,930)
Add : Balance as per last Balance Sheet ........................................... (838,425) (69,245,498) (786,410) (64,949,568)
Balance carried forward to Balance Sheet .......................................... (882,284) (72,867,794) (838,425) (69,245,498)
OPERATIONS AND FUTURE PROSPECTS:
1. PRINCIPAL ACTIVITIES
The principal activities of the Company are software
development and providing IT enabled service viz CAD,
CAE, etc.
2. NOTES ON OPERATIONS
During the previous year, your Company had some
fruitful meetings with some potential customers and
also submitted a few engineering services proposals.
These initiatives have started paying off, with your
Companys revenues virtually doubling to Euros 176,682
(INR 14,592,187) during the year under review.
3. ISSUE OF SHARES AND DEBENTURES
The Companys Authorised, Issued and Paid up Share
Capital is 59,000 Euros divided into 59,000 Equity shares
of 1 Euro each. No Debentures were issued during the
year under review.
4. DIVIDEND
No dividends have been paid or declared or recommended
by the Company since the date of incorporation. The
Directors of the Company do not recommend any dividend
for the year due to losses.
5. BAD AND DOUBTFUL DEBTS
Before the nancial statements of the Company were
that action has been taken in relation to the writing off and
providing for bad and doubtful debts of the Company and
have satised themselves that there were no known bad or
doubtful debts. At the date of this report, the Directors of
the Company are not aware of any circumstances which
would render it necessary to write off or provide for any
bad and doubtful debts.
6. CURRENT ASSETS
Before the nancial statements of the Company were
that current assets of the Company which were unlikely to
realise their book values in the ordinary course of business
have been written down to their estimated realisable
values and that adequate provisions have been made
for the diminution in value of such current assets. At the
date of this report, the Directors of the Company are not
aware of any circumstances which would render the values
attributable to current assets in the nancial statements of
the Company misleading.
1126
7. CHARGES AND CONTINGENT LIABILITIES
At the date of this report:-
a) There does not exist any charge on the assets of the
Company which has arisen since the end of the nancial
year which secures the liability of any other person.
b) There does not exist any contingent liability of the
Company, which has arisen since the end of the
nancial period.
8. OTHER CIRCUMSTANCES AFFECTING THE FINANCIAL
STATEMENTS
circumstances not otherwise dealt within this report or the
nancial statements, which would render any amount stated
in the nancial statements of the Company misleading.
9. UNUSUAL ITEMS
In the opinion of the Directors, the results of the operations
of the Company have not been substantially affected by
any item, transaction or event of a material and unusual
nature during the nancial period.
10. UNUSUAL ITEMS AFTER THE YEAR END DATE
In the opinion of the Directors, no item, transaction or event
of a material and unusual nature has arisen in the interval
between the end of the nancial period and the date of
this report which would affect substantially the results of
the operations of the Company for the nancial period for
which this report is made.
11. AUDITORS
M/s A K Verma & Associates, Chartered Accountants,
Auditors of the Company, hold ofce until the conclusion
of the forthcoming Annual General Meeting and being
eligible have offered themselves for re-appointment.
The Directors of the Company hereby state and conrm:
(i) that in the preparation of the annual accounts, the
applicable accounting standards have been followed along
with proper explanations relating to material departures;
(ii) that the Directors have selected such accounting policies
and applied them consistently and made judgments and
estimates that were reasonable and prudent so as to give
as at 31st March, 2014 and of the Loss of the Company for
(iii) that the Directors have taken proper and sufcient care
for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, for
and detecting frauds and other irregularities;
(iv) that the Directors have prepared the annual accounts on a
going concern basis.
ACKNOWLEDGEMENTS:
Your Directors would like to thank Investors, Financial Institutions,
Banks, Government authorities, our esteemed Corporate clients
and Customers. The services and co-operation of employees,
business/alliance partners and technology partners are also
earnestly appreciated. Finally your Directors would like to take
this opportunity to express their gratitude to one and all for
the whole hearted support which has always been a source of
inspiration to move towards success, to scale greater heights
and achieve higher targets.
Place : Frankfurt am Main Vijay Verma
Date : 20.04.2014 (Director)
1127
To,
The Members of Mahindra Engineering GmbH
We have audited the attached Balance Sheet of Mahindra
Engineering GmbH (the Company) as at 31
st
March, 2014
and the Prot and Loss Account of the Company for the period
ended on that date annexed thereto and report that :
a) We have obtained all the information and explanations
necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books.
c) The Balance Sheet and Prot and Loss Account dealt with
by this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and Prot and Loss
Account complies with the Accounting standards referred
to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
AUDITORS REPORT
e) According to the information given to us, no director is
disqualied from being appointed as director under clause
(g) of sub-section 274 of the Companies Act, 1956.
f) In our opinion and to best of our information and according
to the explanations given to us, the said statement of
accounts read with the other notes thereon give the
information required by the Companies Act, 1956, in the
manner so required and give a true and fair view:
i) in the case of the Balance Sheet of the state of affairs
st
March, 2014 and
ii) in the case of the Prot and Loss Account of the Loss
For A. K. Verma & Associates
Ashok K. Verma
Place: Frankfurt am Main Partner
Date: 20.04.2014 (Membership No. 082084)
1128
ST
MARCH 2014
SCHEDULES 1 TO 9 FORM AN INTEGRAL PART OF THE ACCOUNTS.
This is the Balance Sheet referred to in our Report of even date attached.
For A.K. Verma & Associates,
Ashok K. Verma
Partner (Membership No. 082084)
Mrs. Vijay Verma
Director
Place: Frankfurt am Main
Date: 20.04.2014
Particulars
As at
31
st
March, 2014
As at
31
st
March, 2013
Schedule EUR Rs. EUR Rs.
SOURCES OF FUNDS
1. SHAREHOLDERS FUNDS:
a. Share Capital .......................................................... 1 59,000 4,872,810 59,000 4,872,810
b. Reserves and Surplus ............................................ 2
Share Application Money ............................................... 11,000 908,490
2. LOAN FUNDS
a. Secured Loans ........................................................
b. Unsecured Loans .................................................... 820,328 67,750,922 765,722 63,240,982
Total Sources of Funds ......................................... 890,328 73,532,222 824,722 68,113,792
APPLICATION OF FUNDS
1. FIXED ASSETS .............................................................. 3
Gross Block ................................................................... 561 46,330 83,982 6,936,075
Less Depreciation .......................................................... 337 27,799 83,642 6,908,030
224 18,531 340 28,045
2. INVESTMENTS ...............................................................
3. CURRENT ASSETS, LOANS & ADVANCES .............. 4
a. Sundry Debtors ........................................................ 40,811 3,370,595 27,538 2,274,371
b. Cash and Bank Balances ........................................ 23,883 1,972,461 20,509 1,693,852
c. Loans and Advances ............................................... 24 1,946 146 12,058
64,717 5,345,002 48,193 3,980,281
Less:
CURRENT LIABILITIES AND PROVISIONS: 5
a. Current Liabilities ..................................................... 25,695 2,122,117 32,414 2,677,112
b. Provisions ................................................................. 31,202 2,576,994 29,821 2,462,920
56,897 4,699,111 62,235 5,140,032
Net Current Assets .......................................................... 7,820 645,892 (14,042) (1,159,751)
4. MISCELLANEOUS EXPENDITURE TO THE
EXTENT NOT WRITTEN OFF OR ADJUSTED
a. Preliminary Expenses ...............................................
b. Prot & Loss Account .............................................. 882,284 72,867,799 838,425 69,245,498
Total Application of Funds ...................................... 890,328 73,532,222 824,722 68,113,792
Signicant Accounting Policies ....................................... 8
Notes forming Part of Accounts ..................................... 9
1129
STATEMENT OF PROFIT & LOSS ACCOUNT FOR THE PERIOD FROM 01.04.2013 TO 31.03.2014
Particulars
For the Year ended
31
st
March, 2014
For the Year ended
31
st
March, 2013
Schedule EUR Rs. EUR Rs.
INCOME
Income from Services rendered............................................. 176,682 14,592,187 94,691 7,820,550
Interest Income ....................................................................... 0 0 10 813
Total Income............................................................................ 176,682 14,592,187 94,701 7,821,363
EXPENDITURE
Employment Expenses ........................................................... "6" 119,603 9,878,007 85,411 7,054,078
Administration and Other Expenses ...................................... "7" 61,637 5,090,620 20,185 1,667,063
Depreciation ............................................................................ "3" 112 9,267 1,403 115,880
Interest Expense ..................................................................... 39,189 3,236,590 39,718 3,280,272
Total Expenditure .................................................................... 220,541 18,214,484 146,716 12,117,293
Prot/(Loss) for the Year ......................................................... (43,859) (3,622,297) (52,015) (4,295,930)
Less: Provision for Tax ........................................................... 0 0 0 0
Prot/(Loss) after Tax .............................................................. (43,859) (3,622,297) (52,015) (4,295,930)
Add: Adjustment pertaing to previous year .......................... 0 0 0 0
Prot/(Loss) after Prior period adjustment ............................ (43,859) (3,622,297) (52,015) (4,295,930)
Add: Balance as per last Balance Sheet ............................. (838,425) (69,245,498) (786,410) (64,949,568)
Balance carried to Balance Sheet ......................................... (882,284) (72,867,794) (838,425) (69,245,498)
Notes forming Part of Accounts 9
For A.K. Verma & Associates,
Ashok K. Verma
Partner (Membership No. 082084)
Mrs. Vijay Verma
Director
Date: 20.04.2014
1130
CASH FLOW STATEMENT FOR THE YEAR ENDING (APRIL13 TO MARCH14)
Particulars 31
st
March, 2014 31
st
March, 2013
EUR Rs. EUR Rs.
CASH FLOW OPERATING ACTIVITIES
Net Prot before taxation (43,859) (3,622,297) (52,015) (3,614,531)
Adjustments:
Depreciation 112 9,267 1,403 97,499
Assets written off 3 248
Interest, Commitment and Finance charges 39,189 3,236,590 39,708 2,759,288
Unrealised Forex loss 15,593 1,287,786 (6,434) (447,093)
Operating prot before working capital changes 11,038 911,594 (17,338) (1,431,969)
Changes in
Trade and other receivables (13,151) (1,086,112) (27,303) (1,897,319)
Trade and other payable (5,513) (455,349) 16,865 1,171,970
Cash generated from operations (7,626) (629,867) (27,776) (1,930,186)
Income taxes paid (net of refunds)
NET CASH FROM/(USED IN) OPERATING ACTIVITIES (7,626) (629,867) (27,776) (1,930,186)
Purchase of xed assets
Interest received 10 684
NET CASH USED IN INVESTING ACTIVITIES 10 684
Proceeds from the issue of share capital 11,000 908,490
NET CASH (USED IN)/FROM FINANCING ACTIVITIES 11,000 908,490
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 3,374 278,623 (27,767) (2,293,244)
Opening Balance 20,509 1,693,838 48,276 3,987,083
Closing Balance 23,883 1,972,461 20,509 1,693,838
1131
SCHEDULES TO BALANCE SHEET
As at
31
st
March, 2014
As at
31
st
March, 2013
EUR Rs. EUR Rs.
SCHEDULE 1
AUTHORISED SHARE CAPITAL
59.000 (Previous year: 59.000) Equity Shares
of 1/- Euro each ........................................................................... 59,000 4,872,810 59,000 4,872,810
59,000 4,872,810 59,000 4,872,810
ISSUED, SUBSCRIBED AND PAID UP CAPITAL
59.000 (Previous year: 59.000) Equity Shares
of 1/- Euro each fully paid ........................................................... 59,000 4,872,810 59,000 4,872,810
(Whole of the common stock is held by the Parent Company -
Mahindra Engineering Services Limited)..................................
59,000 4,872,810 59,000 4,872,810
SCHEDULE 2
RESERVES AND SURPLUS
Prot and Loss Account:
Balance as per last Balance Sheet ............................................. (838,425) (69,245,503) (786,410) (64,949,568)
Less: Carried to prot & loss Account ....................................... 838,425 69,245,503 786,410 64,949,568
Balance carried to Balance Sheet .............................................. 0 0 0 0
0 0 0 0
As at
31
st
March, 2014
As at
31
st
March, 2013
EUR Rs. EUR Rs.
SCHEDULE 3
CURRENT ASSETS
Sundry Debtors (Unsecured - Considered Good)
Outstanding for a period exceeding six months
Others 40,811 3,370,595 27,538 1,913,622
40,811 3,370,595 27,538 1,913,622
Cash and Bank Balances:
In Current Account in Foreign Currency with
Commerz Bank AG, Frankfurt
(Maximum balance at any time during the year 41.725,40
Rs. 3,446,101 PY Year 61.243,23 Rs. 5,058,078) 23,883 1,972,461 20,509 1,693,852
Total 23,883 1,972,461 20,509 1,693,852
Loans & Advances (Unsecured - Considered Good)
Advances recoverable in cash or in kind or for value to be received:
Advance Tax 24 1,946 146 10,326
24 1,946 146 10,326
1132
As at
31
st
March, 2014
As at
31
st
March, 2013
EUR Rs. EUR Rs.
SCHEDULE 4
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors 11,109 917,529 14,072 1,162,206
Interest Accrued but not due 2,620 216,426 2,446 201,990
Wage Tax Payable 1,687 139,323 4,606 380,394
VAT Payable 10,278 848,839 11,291 932,521
25,695 2,122,117 32,414 2,677,112
Provisions
Provision for Expenses 31,202 2,577,005 29,821 2,462,911
31,202 2,577,005 29,821 2,462,911
56,897 4,699,122 62,235 5,140,023
SCHEDULES TO PROFIT & LOSS ACCOUNT
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
EUR Rs. EUR Rs.
SCHEDULE 5
EMPLOYMENT EXPENSES:
Salary and Other Allowances 102,161 8,437,506 70,248 5,801,813
Contribution to German Social Security 17,442 1,440,501 15,162 1,252,265
119,603 9,878,007 85,411 7,054,078
SCHEDULE 6
ADMINISTRATIVE AND OTHER EXPENSES
Accounting and Consultancy Fees 17,923 1,480,295 13,040 1,076,962
Audit Fees 2,704 223,323 2,704 223,323
Bank Charges 511 42,227 573 47,356
Membership and Subscription 40 3,304
Postage & Courier 216 17,823
Misc. Expenses 254 20,999
Markeing & other allied services 24,161 1,995,480 9,469 782,045
Telephone Expenses 272 22,438 792 65,451
Assets written off 3 248
Exchange Loss on restatement 15,593 1,287,786 (6,434) (531,377)
61,637 5,090,620 20,185 1,667,063
1133
SCHEDULE 7
FIXED ASSETS
Particulars
01.04.2013 Additions/
(Reduc-
tions)
Additions/
(Reduc-
tions)
31.03.2014 01.04.2013 Provided
During
the Year
Deletion During
the Year
31.03.2014 31.03.2014 31.03.2013
Computer
Rs Rs Rs Rs Rs Rs Rs Rs
8,366 690,961 (8,366) (690,961) 0 0 8,365 690,879 0 0 (8,365) (690,879) 0 0 0 0 1 83
EDP Software 75,000 6,194,250 (75,000) 6,194,250 0 0 74,999 6,194,167 0 0 (74,999) (6,194,167) 0 0 0 0 1 83
Small value
items 55 4,534 (55) (4,534) 0 0 54 4,452 0 0 (54) (4,452) 0 0 0 0 1 83
Small value
composite
items 561 46,330 0 0 561 46,330 224 18,532 112 9,267 337 27,799 224 18,531 337 27,797
Total 83,982 6,936,075 (83,421) (6,889,745) 561 46,330 83,642 6,908,030 112 9,267 (83,418) (6,889,498) 337 27,799 224 18,531 340 28,045
Previous Year 83,982 5,835,911 0 0 83,982 5,835,911 82,239 5,714,815 1,403 97,499 0 0 83,642 5,812,314 340 23,597 1,743 121,096
1134
SIGNIFICANT ACCOUNTING POLICIES
SCHEDULE 8
1. Accounting Convention and Concepts:
The Company follows the Historical Cost Convention and the Mercantile
System of Accounting where the income and expenditure are recognised
on accrual basis. Adequate provision is made for all known losses and
liabilities.
2. Revenue Recognition:
In case of xed price contracts, under which revenue is recognised using
the percentage of completion method of accounting, unless work completed
cannot be reasonably estimated. Provisions for estimated losses on such
engagements are made during the year in which a loss becomes probable
and can be reasonably estimated. Unbilled jobs represent recognised
amount based on services performed in advance of billing in accordance
with contract terms.
3. Fixed Assets:
Fixed assets are valued at cost less accumulated depreciation. Cost
includes all expenses incurred for aquisition of assets.
4. Depreciation:
Depreciation on EDP -Software & computer is provided on Straight-Line
Method of depreciation on a pro rata basis at the 33,33% per year in
accordance with the German Tax Laws.
5. Foreign Currency Transactions:
i) Value of Fixed Assets is converted at the rate prevailing on the date
of remittance and acquisition.
ii) Monetary items denominated in foreign currency at the year-end are
translated at the year end rates. Gain/loss on conversion is charged
to Prot and Loss account.
iii) Transactions done during the year are converted at the rate prevailing
on the date of transaction.
SCHEDULE 9
NOTES FORMING PART OF THE ACCOUNTS
1) Mahindra Engineering Services (Europe) Limited has invested 11,000
(15.71% of the Share capital) in the Company. At the balance sheet date,
the allotment of shares is still pending.
2) Estimated amount of contracts remaining to be executed on capital account
and not provided for: Nil (Previous year - Nil)
3) Contingent Liabilities in respect of:
Claims against the Company not acknowledged as debts: Nil (Previous
year - Nil).
4) Remuneration to Wholetime Directors (incl. Managing Director):23.000,46

(Rs. 1,899,608) (Previous year 22.935,66
(Rs. 1,894,256) Since no

commission is paid/payable to any director, the computation of prot under
Section 349 of the Companies Act, 1956 has not been made.
5) Details of Expenditure in Foreign Currency
i) CIF Value of Imports - Nil (Previous year Nil)
ii) Expenditures in Foreign Currency:
16.432 (Rs. 1,357,119) Previous Year 9.469 (Rs. 782,045)
iii) Earnings in Foreign Exchange:
Income from Software Development, Technical Services and Royalities
Nil
(Previous period Nil)
5) Related Party Disclosure:
Party Relationship
Mahindra Engineering Services Ltd Holding Company
(Europe) Ltd
Group Company
Schoneweiss & Co GmbH Group Company
Vijay Verma Managing Director
6) Transactions with Related Party:
Marketing Services Received Mahindra Engineering
Services-16.432 (Rs. 1,357,119)
Previous year 9.469
(Rs. 782,045)
Income from Services rendered Schoneweiss & Co GmbH-
36.405 (Rs. 3,006,689)
Previous year 94.691
(Rs. 7,820,530)
Interest on Loan Mahindra Engineering
Services (Europe) Ltd
-39.189 (Rs. 3,236,620)
Previous year 39.718
(Rs. 3,280,310)
7) FC amounts are translated for convenience into Indian Rupees at the
exchange rate of Rs. 82.59 = FC 1 which is the average of the telegraphic
transfer buying and selling rated quoted by the Mumbai Branch of State
Bank of India on 31
st
March 2014
8) Figures for the previous year have been regrouped/rearranged wherever
necessary.
For A. K. Verma & Associates
Ashok K. Verma
Partner
Mrs.Vijay Verma
Director
Date: 20.04.2014
MAHINDRA TECHNOLOGIES SERVICES INC.
1135
DIRECTORS REPORT
Your Directors present their Fifth Report together with the audited accounts of your Company for the period from 1
st
April 2013
to 31
st
March, 2014.
The results for the period and nancial position of the Company are as given below
Financial Results
Particulars
2014 2013
In 000 USD In 000 INR In 000 USD In 000 INR
Income ............................................................................. 9,148 549,419 10,811 649,298
Prot before Taxation ....................................................... 693 41,601 693 41,595
Prot for the year after Taxation ...................................... 447 26,820 485 29,154
HOLDING COMPANY
Your Companys immediate parent Company is Mahindra
Engineering Services Limited, a company incorporated in
India. Your Companys ultimate parent Company is Mahindra
and Mahindra Limited, a company incorporated in India.
OPERATIONS:
The revenues for the current year were marginally lower as
compared to last year mainly due to stagnation in one of
the anchor customers of the Company. However in spite of
the revenue dip, your Company was able to maintain the
PBT (Prots Before Tax) gures in absolute terms, as per
last year due to tight scal controls and close monitoring of
costs. During the year, the Company hired some senior level
executives with the purpose of giving renewed thrust to the
business development initiatives. As your Company begins the
new year, there are already signs of good traction in terms of
sales pipeline for the coming year.
Prashant Kamat Sanjay Joglekar
Director Director
Date: 22
nd
April, 2014
Place: Mumbai.
1136
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF MAHINDRA TECHNOLOGIES SERVICES INC
Mahindra Technologies Services Inc (a Michigan Corporation),
which comprise the balance sheets as of March 31, 2014 and
2013, and the related statements of income, retained earnings,
and cash ows for the years then ended, and the related notes
to nancial statements.
accordance with auditing standards generally in the United
States of America. Those standards require that we plan
misstatements.
presentation of the nancial statements in order to design the
opinion.
Opinion
Mahindra Technologies Services as of March 31, 2014 and
2013, and the results of its operations and its cash ows for
the years then ended in accordance with accounting principles
generally accepted in the United States of America.
RAM ASSOCIATES
Hamilton, NJ
April 22, 2014.
1137
2014 2014 2013 2013
US $ IN Rs. US $ IN Rs.
ASSETS
Current assets:
Cash .................................................................................... 1,158,770 69,595,726 712,470 42,790,948
Accounts receivable ........................................................... 1,547,631 92,950,718 2,457,199 147,579,372
Other current assets ........................................................... 370,355 22,243,521 338,972 20,358,658
Total current assets .......................................................... 3,076,756 184,789,965 3,508,641 210,728,978
Fixed assets, net ............................................................... 235,991 14,173,619 259,772 15,601,906
Security deposit ................................................................ 4,324 259,699 4,324 259,699
TOTAL ASSETS ................................................................. 3,317,071 199,223,283 3,772,737 226,590,583
Accounts payable and accrued expenses ........................ 425,305 25,543,818 501,785 30,137,207
Deferred tax liabilities ......................................................... 49,285 2,960,057 36,618 2,199,277
Total current liabilities ...................................................... 474,590 28,503,875 538,403 32,336,484
Inter-company payables ................................................... 1,011,843 60,771,291 2,850,254 171,186,254
Stockholders equity
Common Stock $10 per share par value 1,000,000
shares authorized, 105,000 shares issued and
outstanding ......................................................................... 1,050,000 63,063,000 50,000 3,003,000
Retained earnings ............................................................... 780,638 46,885,117 334,080 20,064,845
Total stockholders equity ................................................ 1,830,638 109,948,117 384,080 23,067,845
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY .. 3,317,071 199,223,283 3,772,737 226,590,583
For MAHINDRA TECHNOLOGIES SERVICES INC.
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April, 2014
Place: Mumbai
-See accompanying notes to the nancial statements-
1138
STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2014
2014 2014 2013 2013
Net revenue ....................................................................... 9,147,843 549,419,451 10,810,821 649,297,909
Cost of revenue................................................................. 7,418,955 445,582,437 9,041,869 543,054,652
Gross income .................................................................... 1,728,888 103,837,014 1,768,952 106,243,257
Operating expenses:
Selling, general and administration expenses .................. 976,111 58,625,228 1,047,117 62,889,847
Income before other income/(expense)......................... 752,777 45,211,786 721,835 43,353,410
Interest income ................................................................... 2,431 146,006
Depreciation ........................................................................ (62,188) (3,735,011) (29,145) (1,750,449)
Amortization ........................................................................ (358) (21,501) (125) (7,508)
Income before income tax benet/(expense) ............... 692,662 41,601,280 692,565 41,595,453
Income tax benet/(expense) ............................................. (246,104) (14,781,006) (207,143) (12,441,009)
Net income ......................................................................... 446,558 26,820,274 485,422 29,154,444
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April, 2014
Place: Mumbai
1139
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY/(DEFICIENCY)
FOR THE YEAR ENDED MARCH 31, 2014
Common stock Retained earnings/
(decit)
Total stockholders
equity/(deciency)
Shares Amount
US $ IN Rs. US $ IN Rs. US $ IN Rs.
Balance at March 31, 2012 ......... 5,000 50,000 3,003,000 (151,342) (9,089,601) (101,342) (6,086,601)
Net income ..................................... 485,422 29,154,444 485,422 29,154,444
Balance at March 31, 2013 ......... 5,000 50,000 3,003,000 334,080 20,064,843 384,080 23,067,843
Issuance of stock ......................... 100,000 1,000,000 60,060,000 1,000,000 60,060,000
Net income ................................... 446,558 26,820,274 446,558 26,820,274
Balance at March 31, 2014 ......... 105,000 1,050,000 63,063,000 780,638 46,885,117 1,830,638 109,948,117
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April, 2014
Place: Mumbai
1140
2014 2014 2013 2013
Net income ........................................................................ 446,558 26,820,274 485,422 29,154,444
Adjustments to reconcile net income/(loss) to net cash
provided by/(used in) operating activities
Depreciation ....................................................................... 62,188 3,735,011 29,145 1,750,449
Amortization ....................................................................... 358 21,501 125 7,508
Deferred taxes .................................................................... 12,667 760,780 73,588 4,419,695
(Increase)/Decrease in accounts receivable .................... 909,568 54,628,654 (953,561) (57,270,874)
(Increase)/Decrease in other current assets .................... (31,383) (1,884,863) (297,544) (17,870,493)
(Increase)/Decrease in security deposit ........................... (4,324) (259,700)
Increase/(Decrease) in accounts payable
and accrued expenses ...................................................... (76,480) (4,593,389) 352,501 21,171,210
Total adjustments ............................................................... 876,918 52,667,694 (800,070) (48,052,205)
Net cash provided by /(used in) operating activities ... 1,323,476 79,487,968 (314,648) (18,897,761)
Purchase of xed assets ................................................ (38,765) (2,328,225) (276,148) (16,585,447)
Net cash used in investing activities ............................ (38,765) (2,328,225) (276,148) (16,585,447)
Increase/(Decrease) in inter-company payables .............. (1,838,411) (110,414,965) 1,180,285 70,887,917
Issuance of common stocks ............................................. 1,000,000 60,060,000
Net cash provided by /(used in) nancing activities ... (838,411) (50,354,965) 1,180,285 70,887,917
Net increase/(decrease) in cash .................................... 446,300 26,804,778 589,489 35,404,709
Cash at the beginning of the year................................. 712,470 42,790,948 122,981 7,386,239
Cash at the end of the year ........................................... 1,158,770 69,595,726 712,470 42,790,948
Supplementary disclosures of cash ows information
Cash paid during the years-
Interest
Income taxes 40,000 2,402,400 75,000 4,504,500
Prashant Kamat
Director
Sanjay Joglekar
Director
Date: 22
nd
April, 2014
Place: Mumbai
1141
SUPPLEMENTARY SCHEDULE SELLING, GENERAL AND ADMINISTRATION EXPENSE
2014 2014 2013 2013
US $ Rs. US $ Rs.
Cost of revenue
Payroll expenses .............................................................. 6,237,280 374,611,037 4,317,365 259,300,942
Payroll taxes ..................................................................... 510,155 30,639,909 361,239 21,696,014
Cost of project ................................................................. (47) (2,823) 1,867,011 112,132,681
Consultancy charges ....................................................... 671,567 40,334,314 2,496,254 149,925,015
Total ................................................................................. 7,418,955 445,582,437 9,041,869 543,054,652
Selling, general and administration expense
Audit fees ......................................................................... 5,000 300,300 5,000 300,300
Audit fees- other services ................................................ 3,825 229,730 1,600 96,096
Auto expenses ................................................................. 7,061 424,084 16,659 1,000,540
Bank service charges ...................................................... 1,372 82,402 674 40,480
Business promotion ......................................................... 16,609 997,537 13,869 832,972
Commission Local ........................................................ 199,142 11,960,469 230,636 13,851,998
Consultancy charges ....................................................... 81,367 4,886,902 144,148 8,657,529
Dues and subscription .................................................... 1,359 81,622 1,222 73,393
Foreign currency loss ..................................................... 289 17,357
Insurance ......................................................................... 197,995 11,891,580 57,633 3,461,438
Legal and professional fees ............................................
Lease car ......................................................................... 1,863 111,892 763 45,826
Medical expenses ............................................................
Miscellaneous expenses ................................................. 2,279 136,877 2,920 175,375
Miscellaneous expenses ................................................. 15,118 907,987
Miscellaneous expenses Registration fees .................. 526 31,592
Ofce rent......................................................................... 71,937 4,320,536 31,073 1,866,244
Other service charges ..................................................... 212 12,733
Printing and stationery .................................................... 8,845 531,231 5,304 318,558
Postage and delivery ....................................................... 1,760 105,706 2,243 134,715
Relocation expense ......................................................... 10,000 600,600 30,138 1,810,088
Repairs and maintenance ............................................... 21,922 1,316,635 8,887 533,753
Recruitment expenses .................................................... 76,773 4,610,986 78,545 4,717,413
Round off ........................................................................ 3 179
Sales promotion expenses .............................................. 167,501 10,060,110 285,550 17,150,133
Staff welfare expenses..................................................... 7,721 463,723 2,765 166,066
Software expense ............................................................ 1,575 94,595 586 35,195
State tax ........................................................................... 6,528 392,072 1,519 91,231
Telephone ......................................................................... 25,291 1,518,977 19,857 1,192,611
Training and Sourcing expenses .................................... 10,104 606,846 36,042 2,164,683
Travel and entertainment expenses ................................ 44,530 2,674,472 50,825 3,052,550
Utilities .............................................................................. 3,460 207,808 2,803 168,348
Total selling, general and administration expenses ...... 976,111 58,625,228 1,047,117 62,889,847
1142
1) ORGANIZATION AND DESCRIPTION OF BUSINESS
Mahindra Technologies Services Inc, the Company was incorporated
under the laws of the State of Michigan on June 04, 2009 for the purpose
of providing Information Technology enabled engineering services that
envelope CAD, CAE, e-Engineering and software engineering solutions
for automotive, aerospace and manufacturing industries. Mahindra
Technologies Services Inc is a 100% owned subsidiary of Mahindra
Engineering Services Limited(MESL).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies
These nancial statements are prepared on the accrual basis of accounting
in conformity with accounting principles generally accepted in the United
States of America (GAAP); consequently, revenue is recognized when
services are rendered rather than when received. Expenses and purchase
of assets are recognized when incurred.
Use of Estimates
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the nancial
the reporting period. These estimates are often based on judgments,
probabilities and assumptions that management believes are reasonable
but that are inherently uncertain and unpredictable. As a result, actual
Management periodically evaluates estimates used in the preparation
of the consolidated nancial statements for continued reasonableness.
Appropriate adjustments, if any, to the estimates used are made
prospectively based on such periodic evaluations.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of highly liquid investments
with maturities of three months or less from the date of purchase.
Accounts Receivable
The Company extends credit to clients based upon managements
assessment of their creditworthiness on an unsecured basis. The
Company provides an allowance for uncollectible accounts based on
historical experience and management evaluation of trend analysis. The
allowances for uncollectible accounts as of March 31, 2014 and 2013 were
$ Nil (Rs. Nil) and $ Nil (Rs. Nil), respectively.
Revenue Recognition
The Company recognizes revenue in accordance with the SECs Staff
Accounting Bulletin Topic 13 (Topic 13), Revenue Recognition.
Revenue is recognized when all of the following criteria are met: (1)
persuasive evidence of an arrangement exists, (2) delivery has occurred
or services have been rendered, (3) the sellers price to buyer is xed and
determinable, and (4) collectability is reasonably assured.
Revenues are primarily derived from professional services under time and
materials contracts, which are recognized in the period in which services
are provided.
Revenue related to services performed without a signed agreement or work
order are not recognized until there is evidence of an arrangement, such
as when agreements or work orders are signed or payment is received;
however, the cost related to the performance of such work is recognized
in the period the services are rendered.
For all services, revenue is recognized when, and if, evidence of an
arrangement is obtained and the other criteria to support revenue
recognition are met, including the price is xed or determinable, services
have been rendered and collectability is assured. Unbilled accounts
receivable represents amounts recognized as revenue based on services
performed in advance of customer billings. As of March 31, 2014 and
2013, the Company had unbilled accounts receivable of $ 666,963 (Rs.
40,057,798) and $ 322,189 (Rs. 19,350,671), respectively.
Revenues related to xed price contracts for professional services are
recognized using a model that is similar to the proportional performance
method. Anticipated losses are recognized when they become known.
Revisions in estimated prots are made in the month in which the
circumstances requiring the revision become known.
Concentrations
The Companys nancial instruments that are exposed to concentration
of credit risks consist primarily of cash and accounts receivable. The
Company maintains its cash in bank accounts, which, sometimes, exceed
federally insured limits.
The Company has not experienced any losses in such accounts. The
Company believes it is not exposed to signicant credit risk on cash.
Concentration of credit risks with respect to accounts receivable are
limited because of the credit worthiness of the Companys major
customers. Revenue from the Companys major two customers accounted
for 87% and 72% of the Companys net sale for the years ended March 31,
2014 and 2013, respectively, and the accounts receivable from the same
major two customers were 96% and 72% as of March 31, 2014 and 2013,
respectively.
Property and Equipment
Property and equipment is stated at cost. The Company provides for
depreciation of property and equipment using the straight-line method over
the estimated useful lives of the related assets ranging from 3 to 7 years.
At March 31, 2014 and 2013 property and equipment consisted of the
following:
March 31,
2014
US $
March 31,
2014
Rs.
March 31,
2013
US $
March 31,
2013
Rs.
Computers 168,095 10,095,786 133,601 8,024,076
Ofce equipment 35,042 2,104,623 34,819 2,091,229
Furniture 125,327 7,527,140 123,664 7,427,260
Software 3,459 207,748 1,074 64,504
331,923 19,935,297 293,158 17,607,069
Less: Accumulated
depreciation
95,932 5,761,678 33,386 2,005,163
Fixed assets, net 235,991 14,173,619 259,772 15,601,906
The Company charges repairs and maintenance costs that do not extend
the lives of the assets to expenses as incurred.
The depreciation and amortization expenses were $62,546 (Rs. 3,756,513)
and $ 29,270 (Rs. 1,757,957) for the years ended March 31, 2014 and
2013, respectively.
Issue of Stock
The Company increased the authorized capital to 1,000,000 shares of
common stock at par value of $10. During the current year, the Company
issued additional 100,000 shares of common stock at $10 par value to
MESL, which were fully paid at March 31, 2014.
Fair Value Measurements
FASB ASC 820, Fair Value Measurements and Disclosures denes fair
value and establishes a hierarchy for reporting the reliability of input
measurements used to assess fair value for all assets and liabilities. FASB
ASC 820 denes fair value as the selling price that would be received for an
asset, or paid to transfer a liability, in the principal or most advantageous
market on the measurement date. That framework provides a hierarchy
that prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (level 1 measurements)
and the lowest priority to unobservable inputs (level 3 measurements).
The asset or liabilitys fair value measurement level within the fair value
hierarchy is based on the lowest level of any input that is signicant to the
1143
fair value measurement. Valuation techniques used need to maximize the
use of observable inputs and minimize the use of unobservable inputs.
Certain nancial instruments are carried at cost on the balance sheet,
which approximates fair value due to their short-term, highly liquid nature.
These instruments include cash, accounts receivable, accounts payable
and accrued expenses and other liabilities.
3) RELATED PARTY
Mahindra Technologies Services Inc is a 100% owned subsidiary of
Mahindra Engineering Services Limited.
During the years ended March 31, 2014 and 2013, the Company received
goods and services worth of $919,117 (Rs.55,202,167) and $2,594,584
(Rs.155,830,715), respectively, from the Parent Company. The Company
during the years ended March 31, 2014 and 2013 provided services worth
$2,255,180 (Rs.135,446,111) and $2,671,352 (Rs.160,441,401) to the
ultimate Parent Company.
As of March 31, 2014 and 2013, the Company had a payable balance of
$ 1,011,843 (Rs.60,771,291) and $ 2,850,254 (Rs.171,186,254), respectively,
to the Parent Company. The Company had a receivable balance of $604,209
(Rs.36,288,793) from the Parent Company as of March 31, 2013.
4) FOREIGN CURRENCY TRANSLATION
Foreign Currency (FC) amounts for the years ended March 31, 2014
and 2013, respectively, are translated for convenience into Indian Rupees
at the exchange rate of Rs. 60.06 = US $1, which is the average of the
of State Bank of India on March 31, 2014.
5) LITIGATION AND CONTIGENCIES
The Company does not have any knowledge of any involvement in legal
proceedings, either of which the Company has initiated or has been brought
against it. The Companys liabilities have been reported on the balance
sheet and have no knowledge of any further liabilities or contingencies.
6) INCOME TAX
Income taxes have been provided for using an assets and liability approach
in which deferred tax assets and liabilities are recognized for the differences
between the nancial statement and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. A valuation allowance is provided for the portion of deferred tax
assets when, based on available evidence, it is not more-likely-than-not
that a portion of the deferred tax assets will not be realized.
Deferred income taxes reect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for nancial reporting
purposes and the amounts used for income tax purposes. The differences
relate primarily to depreciable assets (using accelerated depreciation
methods) and net operating losses carryovers.
March 31,
2014
March 31,
2014
March 31,
2013
March 31,
2013
Property and equipment $ (49,285) Rs. (2,960,057) $ (36,618) Rs. (2,199,277)
Total deferred income
taxes $ (49,285) Rs. (2,960,057) $ (36,618) Rs. (2,199,277)
Income tax expense (benet) was computed as follows:
March 31,
2014
March 31,
2014
March 31,
2013
March 31,
2013
Federal income tax $ 193,965 Rs. 11,649,538 $ 104,717 Rs. 6,289,303
State Income tax 39,472 2,370,688 28,838 1,732,010
Total income taxes,
current provision $ 233,437 Rs. 14,020,226 $ 133,555 Rs. 8,021,313
Deferred income taxes
(benet) 12,667 760,780 73,588 4,419,695
Total benet/(expense) $ 246,104 Rs. 14,781,006 $ 207,143 Rs. 12,441,008
The Companys effective tax rate for years ended March 31, 2014 and
2013 were 35.53% and 34%, respectively. The future effective income tax
rate depends on various factors, such as the Companys income (loss)
before taxes, tax legislation and the geographic composition of pre-tax
income.
The Companys tax returns for last three years are subject to examination
by federal and state taxing authorities following the date of ling.
7) NEW ACCOUNTING PRONOUNCEMENTS
In July 2013, the FASB issued revised accounting guidance on the
presentation of an unrecognized tax benet when a net operating loss carry
forward exists. The amended guidance claries when the unrecognized tax
benet should be presented in the nancial statements as a reduction to a
deferred tax asset for a net operating loss and when the unrecognized tax
benet should be presented in the nancial statements as a liability and
not combined with the deferred tax asset. The guidance is effective for
scal years, and interim periods, beginning after December 15, 2013. The
Company does not expect that the adoption of the guidance will have a
material effect on its results of operations, nancial position or cash ows.
8) LEASE COMMITMENTS
The Company has entered into an ofce lease expiring through December
2017. The future minimum rental payments under the lease agreement is
as follows:
For year ended March 31,
2015 $ 73,548
2016 76,584
2017 80,633
2018 62,752
Total $ 293,517
For the years ended March 31, 2014 and 2013, rent expenses were
$ 71,937 (Rs. 4,320,536) and $ 31,073 (Rs. 1,866,244), respectively.
9) SUBSEQUENT EVENTS
For the year ended March 31, 2014, the Company has evaluated
subsequent events for potential recognition and disclosure through April
22, 2014, the date the nancial statements were available for issuance.
MAHINDRA AEROSPACE PRIVATE LIMITED
1144
Your Directors present their Seventh Report together with the audited accounts of your Company for the year ended 31
st
March, 2014.
FINANCIAL RESULTS
(Rs. in Lakh)
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Income ........................................................................................................................ 463.99 482.78
Loss before Interest, Depreciation, Amortisation and Tax ........................................ 51.39 117.75
Depreciation and Amortisation ................................................................................... 11.65 12.55
Interest Expense ......................................................................................................... 39.30 60.42
Loss before Tax........................................................................................................... 102.34 190.72
Less : Provision for Tax .............................................................................................. 5.00
Loss after Tax ............................................................................................................. 107.34 190.72
Loss brought forward ................................................................................................. 709.07 518.35
Balance carried to Balance Sheet ............................................................................. 816.41 709.07
Operations
Aircraft Division
Subsequent to the successful test ight of the rst prototype
CNM5 aircraft in Australia during September, 2011, the
Company and its CNM5 development partner, National
Aerospace Laboratories, have discussed the potential benets
and approach to obtain Type Certication of the CNM5 in
Australia and have collaboratively prepared a detailed project
plan for the same.
Since this is a different approach to certication than was
originally planned, the Company has requested National
Aerospace Laboratories to obtain a formal acceptance from
its parent body, Council of Scientic and Industrial Research
and other Government bodies as may be required, for the
modied plan duly explaining the reasons for the changes to
the original plan. The Company has been following up and is
waiting for this approval to launch formal certication program
in Australia which will take approximately 24 months.
During the year, your Companys step down subsidiary M/s.
GippsAero Pty Ltd (GA) continued to implement its strategy to
expand its global footprint by entering new regions in North
and Central America. The company successfully introduced
GA8 aircraft into the regions of Alaska and Mexico. During
the Financial Year ending on 2015, your company is planning
to expand into South America, by entering Brazil. Alaska and
Brazil are part of your Companys plan to secure long term
sales growth for GA8 and GA10 aircraft.
The year under review continued to be an year where the
subsidiary had to encounter overall sales downturn and this
necessitated a major restructuring exercise. During May 2013,
the Company therefore successfully restructured operations
to support the overall Company strategy to increase focus
on sales, and reduce operational cost. The year ended with
the sale of 19 aircrafts. Focus on sales and operations will
continue to be very high in the current year as well.
The GA10 Type Certication activity is expected to be completed
during the second quarter of the Financial Year ending
31
st
March, 2015. The Company is anticipating demand for this
aircraft across several markets, including Africa, US, Australia
and emerging markets.
Aerostructures Division
During the year, construction of the manufacturing facility, being
set up by the Companys subsidiary Mahindra Aerostructures
Private Limited (MASPL), was completed. The facility was
formally inaugurated on 21
st
October 2013. Installation of
majority of the equipment is completed. Employees of
MASPL underwent training at the facilities of Aerometallic
Components S.A.U, Spain located in Spain and Mexico, as
per the Technology Transfer and Training agreement signed
during FY 13. The MASPL achieved the rst milestone by
getting the AS 9100 certication in April 14 and is working
towards achieving the NADCAP certications during 1st half
of FY 15. The management of MASPL is closely working with
major aerospace OEMs/Tier 1 suppliers on various business
opportunities Commercial production is expected to start
during the 1st half of FY 15.
Dividend
Capital
During the year under review, the authorized share capital
of the Company was increased from Rs.175 crore to Rs.200
crore. The Paid up share capital of the Company has been
increased from Rs.146,26,89,650/- to Rs.185,53,96,900/-.
Directors
Mr. Hemant Luthra and Mr. V. S. Parthasarathy retire by rotation
and, being eligible, offer themselves for re-appointment.
Mr. S Ramkrishna was appointed as an additional director of
the Company at the Board Meeting held on 22
nd
May, 2014. Mr.
S Ramkrishna holds ofce up to the date of the forthcoming
Annual General Meeting. The Company has received notice
1145
from a member, signifying its intention to propose Mr. S
Ramkrishna as candidates for the ofce of Director at the
forthcoming Annual General Meeting.
as at 31
st
concern basis.
Audit Committee
The Audit Committee presently comprises of Mr. V. S.
Parthasarathy, Mr. Sanjay Joglekar and Mr. R. Laxman. The
Audit Committee met twice during the year under review.
th
March, 2014 in
Act, 2013.
effect from 28
th
Mr. Hemant Luthra, Mr. Sanjay Joglekar and Mr. R. Laxman.
Subsidiaries
The audited statements of accounts of the Companys
subsidiaries as at 31
st
March, 2014, together with reports of
their Directors and Auditors and the Statement pursuant to
section 212 of the Companies Act, 1956 are attached to the
Balance Sheet.
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai retire
as Auditors of the Company at the forthcoming Annual General
Members are requested to appoint Auditors to hold ofce from
the conclusion of the forthcoming Annual General Meeting
until the conclusion of next Annual General Meeting and x
their remuneration.
As required under the provisions of the Companies Act, 2013,
the Company has obtained a written certicate from the above
Auditors to the effect that their re-appointment, if made, would
said section.
The Company has not made any loans and advances which are
required to be disclosed in the annual accounts of the Company
pursuant to Clause 32 of the Listing Agreement of the parent
Company, Mahindra & Mahindra Limited with Stock Exchanges.
Codes of Conduct
of the Companies Act, 1956 and Rules made there under.
less than Rs.60,00,000 per annum during the year ended 31
st
March, 2014, or was employed for a part of Financial Year and
was in receipt of remuneration of not less than Rs.5,00,000
per month.
Acknowledgement
for assistance and cooperation received from Banks,
Employees and Members during the year under review.
Mr. Sanjay Joglekar Mr. Arvind Mehra
Director Director
Mumbai, 26
th
May, 2014
1146
ST
MARCH, 2014.
energy consumption.
in respect of Industries specied in the Schedule thereto : Not Applicable
1. Areas in which R & D is carried out by the Company : None
2. Benets derived as a result of the above efforts R & D: Not Applicable
3. Future plan of action: Further quality improvement
4. Expenditure on R & D: NIL
(Rs. in Lakh)
2013-14 2012-13
Mr. Sanjay Joglekar Mr. Arvind Mehra
Director Director
Mumbai, 26
th
May, 2014
1147
To the Members of Mahindra Aerospace Private Limited
of MAHINDRA AEROSPACE PRIVATE LIMITED (the
March 31, 2014, and the Statements of Prot and Loss
information.
opinion.
Opinion
accepted in India:
of the Order.
and the Statement of Cash Flow dealt with by this
Report are in agreement with the books of account;
from the directors as on March 31, 2014, and taken
directors is disqualied as on March 31, 2014, from
Act, 1956.
Partner
Mumbai, Dated : 26
th
May, 2014
1148
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements of the Auditors Report of even date to
the members of Mahindra Aerospace Private Limited on the nancial statements for the year ended March 31, 2014)
details and situation of its xed assets.
(b) The xed assets of the Company were physically
veried by the management during the year at
reasonable intervals and no discrepancies were
(c) The xed assets disposed-off during the year were
not substantial and therefore do not affect going
(ii) Clause 4(ii) of the Companies (Auditors Report) Order,
2003 (the Order) is not applicable to the Company.
(iii) Based on the records examined by us and according
Company has:
Register maintained under Section 301 of the
explanations given to us, the Company has an adequate
internal control system commensurate with the size
of the Company and the nature of its business, for
purchase of xed assets and for the sale of services. On
the basis of our examination of the books and records
explanations given to us we have not observed any
major weakness in such internal control system.
(v) According to the information and explanations given to
be entered in the register maintained under Section 301
(vi) On our verication and according to the information
accepted any deposits from public within the meaning
of Section 58A and 58AA of the Companies Act, 1956,
and the rules framed thereunder.
(vii) In our opinion, and according to the information and
explanations provided to us, the Company has an
internal audit system, which is commensurate with the
size of the Company and the nature of its business.
(viii) According to the information and explanations provided
to us and to the best of our knowledge the maintenance
of cost records has not been prescribed by the Central
Government under Section 209 (1)(d) of the Companies
Act, 1956, in respect of the activities carried on by the
Company.
(ix) (a) According to the records of the Company, the
undisputed dues, including Provident Fund, Investor
Education and Protection Fund, Employees State
Insurance, Income-tax, Sales Tax, Wealth Tax,
Custom Duty, Excise Duty, Cess and other material
authorities. According to the information and
explanations given to us, there were no undisputed
amounts payable in respect of Income-tax, Wealth
Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues in arrears as at March 31,
2014 for a period of more than six months from the
(b) Based on our verication and according to the
information and explanations given to us, there
are no dues of Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty and Cess
which have not been deposited as on March 31,
2014 on account of any dispute.
the nancial year have not exceeded fty percent of its
net worth. The Company has incurred cash losses in
the nancial year and had incurred cash losses in the
(xi) Based on the records examined by us and according
Company has not defaulted in the repayment of dues to
banks, nancial institutions and debenture holders.
us, the Company has not granted loans and advances
on the basis of security by way of pledge of shares and
other securities.
Company does not attract the provisions of any special
statute applicable to chit fund and nidhi/mutual benet/
societies.
(xiv) According to the information and explanations given to
securities, debentures and other investments. Therefore
the provisions of sub-para (xiv) of para 4 of the Order are
us, the Company has given guarantee for loans taken by
others from banks or nancial institutions the terms and
conditions whereof are not prejudicial to the interest of
the Company.
(xvi) According to the information and explanations given
to us the Company has not availed any term loans.
1149
Therefore reporting on whether the term loans taken by
the Company have been applied for the purposes for
which the loans were obtained is not applicable.
(xvii) According to the information and explanations given to
us and on an overall examination of the Balance Sheet
and Cash Flows of the Company, we report that the
Company has not utilised funds raised on short-term
basis for long-term purposes.
(xviii) The Company has not made any preferential allotment
of shares during the year to parties and companies
(xix) The Company has not issued any debentures during the
year.
(xx) The Company has not raised any money through a
public issue during the nancial year.
(xxi) Based on audit procedures performed and as per
the information and explanations given to us by the
Management, we report that no fraud on or by the
Company has been noticed or reported during the year.
Partner
Mumbai, Dated : 26
th
May, 2014
1150
Rupees
Particulars Note As at
March 31, 2014
As at
March 31, 2013
I. Equity and Liabilities
1. Shareholders Funds :
(i) Share Capital 3 1,855,396,900 1,462,689,650
(ii) Reserves and Surplus 4 1,582,868,484 1,219,387,223
3,438,265,384 2,682,076,873
2. Non-Current liabilities
(i) Other long term liabilities 5 2,680,920
(ii) Long term provisions 6 750,306 1,064,118
750,306 3,745,038
(i) Trade payables 7 12,416,864 10,068,022
(ii) Other current liabilities 8 3,511,279 1,765,371
(iii) Short term Provisions 9 117,725 174,182
16,045,868 12,007,575
Total 3,455,061,558 2,697,829,486
II. Assets
Non-current assets
1. (a) Fixed Assets 10
(i) Tangible assets 954,280 1,903,795
(ii) Intangible assets 585,550 590,884
(iii) Capital work in progress 27,476,241 29,936,551
(iv) Intangible assets under development 209,863,011 209,863,008
238,879,082 242,294,238
(b) Non-current Investments 11 2,801,599,445 2,309,894,195
(c) Long term loans and advances 12 175,880,823 13,573,070
(d) Other non current asset 13 61,691,712 14,118,827
3,278,051,062 2,579,880,330
2. Current assets
(i) Current Investments 11 26,771,721 35,753,837
(ii) Trade receivables 14 19,123,460 12,929,244
(iii) Cash and Bank balances 15 75,280,317 28,561,864
(iv) Short term loans and advances 16 53,075,482 39,666,348
(v) Other current assets 17 2,759,516 1,037,863
177,010,496 117,949,156
Total 3,455,061,558 2,697,829,486
For B.K. Khare & Co. For Mahindra Aerospace Private Ltd.
Partner Mr. Yashesh Bhatt Mr. Sanjay Joglekar Mr. Arvind Mehra
M. No. 044784 Company Secretary Director Director
Mumbai, Dated : 26
th
May 2014 Mumbai, Dated : 22
nd
May 2014
1151
Rupees
March 31, 2014
Year ended
March 31, 2013
I. Income from Services 29,540,591 29,673,271
Other Income 18 16,858,166 18,604,637
Total Revenue 46,398,757 48,277,908
II. Expenditure :
Employee benets expense 19 20,292,829 23,190,137
Finance cost 20 3,930,118 6,041,680
Depreciation and amortisation expense 10 C 1,165,236 1,255,527
Other expenses 21 31,244,660 36,862,532
56,632,843 67,349,876
III. Loss before tax (10,234,086) (19,071,968)
IV. Less: Tax expense
Current tax 500,000
Deferred tax
V. Prot/(Loss) for the period (10,734,086) (19,071,968)
VI. Basic and Diluted Earnings Per Share [Refer Note No. 30] (0.06) (0.16)
Mumbai, Dated : 26
th
nd
May 2014
1152
Rupees
March 31, 2014
For the year ended
March 31, 2013
Net Prot / (Loss) before extraordinary items and tax (10,234,086) (19,071,968)
Adjustments for:
Depreciation and amortisation 1,165,236 1,255,527
Finance costs 3,930,118 6,041,680
Provision for doubtful advances 2,312,352
Prototype materials written off 570,000
Interest income (6,224,911) (3,675,907)
Prot on sale of xed assets (281,318) (19,258)
Net (gain) / loss on sale of investment (5,388,122) (7,942,640)
Rental income from operating leases (2,766,208) (2,768,098)
Liabilities / provisions no longer required written back (1,522,607) (492,812)
Net unrealised exchange (gain) / loss 1,621,326 144,292
(8,896,486) (5,144,864)
Operating prot / (loss) before working capital changes (19,130,572) (24,216,832)
Adjustments for (increase) / decrease in operating
assets:
Trade receivables (6,646,073) 6,273,255
Short-term loans and advances (7,268,201) 37,796,980
Long-term loans and advances 5,361,840 3,474,260
Adjustments for increase / (decrease) in operating
liabilities:
Trade payables 2,346,423 (16,027,455)
Other current liabilities 3,268,515 556,559
Other long-term liabilities (2,680,920)
Short-term provisions (56,457) 102,450
Long-term provisions (313,812) 516,501
(5,988,685) 32,692,550
Cash generated from operations (25,119,257) 8,475,718
Net income tax (paid) / refunds (934,593) (858,406)
Net cash ow from / (used in) operating
activities (A) (26,053,850) 7,617,312
capital advances (411,292) (3,482,958)
Proceeds from sale of xed assets 1,177,914 295,141
Current investments not considered as cash and
cash equivalents
Purchased (451,700,000) (708,313,143)
Proceeds from sale 466,070,238 789,785,052
Purchase of long-term investments in subsidiaries (658,940,250) (1,046,611,580)
Non current margin money deposits (44,683,500) (13,879,500)
Inter corporate deposit given (17,307,983) (2,312,352)
Inter corporate deposit received back 10,000,000
Interest received
from Subsidiaries 50,959
from Bank deposits 2,757,530 4,861,185
Rental income from operating leases 2,766,208 2,768,098
Net cash ow from / (used in) investing activities (B) (690,220,176) (976,890,057)
1153
March 31, 2014
For the year ended
March 31, 2013
Proceeds from issue of equity shares 766,922,597 960,496,441
Proceeds from other short-term borrowings 90,000,000 180,000,000
Repayment of other short-term borrowings (90,000,000) (180,000,000)
Finance cost (3,930,118) (6,041,680)
Net cash ow from / (used in) nancing
activities (C) 762,992,479 954,454,761
Net increase / (decrease) in Cash and cash
equivalents (A+B+C) 46,718,453 (14,817,984)
Cash and cash equivalents at the beginning of
the year 28,561,864 43,379,848
Cash and cash equivalents at the end of the year
[Refer Note No. 15]
75,280,317 28,561,864
Mumbai, Dated : 26
th
nd
May 2014
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014 (CONTINUED)
Rupees
1154
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO
Name of the Subsidiary companies Number of shares in the
Subsidiary Company
held by Mahindra
Aerospace Private
year ending 31
st
March,
2014
The net aggregate of prots/(losses) of the Subsidiary
Company for its nancial year so far as they concern the
members of Mahindra Aerospace Private Limited
For Current Financial Year For Previous Financial Year
Equity Extent of
holding
Dealt with in
the accounts
of Mahindra
Aerospace
Private
Limited for
the year
ended
31
st
March,
2014
Not dealt
with in the
accounts of
Mahindra
Aerospace
Private for
the year
ended
31
st
March
2014
Dealt with in
the accounts
of Mahindra
Aerospace
Private
Limited for
the year
ended
31
st
March,
2014
Not dealt
with in the
accounts of
Mahindra
Aerospace
Private for
the year
ended
31
st
March
2014
NOS. % Rs Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs
Mahindra Aerostructures Pvt Ltd 106,510,000 100% (1,753.99) (874.09)
Mahindra Aerospace Australia Pty Ltd 35,250,500 100% (10.53) 3.60
Aerostaff Australia Pty Ltd 100% (721.87) (699.30)
Gipp Aero Investments Pty Ltd 75.10% 20.17 (3.87)
Gipps Aero Pty Ltd 75.10% (3,856.08) (3,959.32)
Airvan Flight Services Pty Ltd 75.10%
GA8 Airvan Pty Ltd 75.10%
GA200 Pty Ltd 75.10%
Nomad TC Pty Ltd 75.10%
For Mahindra Aerospace Private Ltd.
Mr. Yashesh Bhatt Mr. Sanjay Joglekar Mr. Arvind Mehra
Company Secretary Director Director
Mumbai, Dated : 22
nd
May 2014
1155
1. Mahindra Aerospace Private Limited (the Company) was incorporated on
28th February, 2008 with an objective of exploring various opportunities
available in the Aerospace Sector. Presently the Company is engaged in
design and development of 5 seat aircraft in technical collaboration with
National Aerospace Laboratories (NAL). Also the company is exporting
design services.
(A) Basis for preparation of nancial statements:
and in accordance with the applicable provisions of the Companies
Act, 1956 and the Accounting Standards notied under the said Act.
All assets and liabilities have been classied as current and non
current as per the Companys normal operating cycle and other
criteria set out in the Revised Schedule VI of the Companies Act,
1956. Based on the nature of services/ operations, the Company
has ascertained its operating cycle as 12 months for the purpose of
current and non-current classication of assets and liabilities.
(B) Use of estimates:
(C) Cash ow statement:
investing and nancing activities of the Company are segregated.
(D) Fixed Assets:
a) Tangible Fixed Assets:
I. All Fixed Assets are stated at cost less depreciation. Cost
of acquisition is inclusive of purchase price, levies and
any directly attributable cost of bringing the assets to its
working condition for the intended use.
II. Exchange difference arising on payment of liabilities for
purchase of xed assets in foreign currency and year end
conversion of such liabilities are charged / credited to the
Statement of Prot and Loss Account.
III. When an asset is scrapped or otherwise disposed of,
the cost and related depreciation are removed from the
books of accounts and resultant prot or loss, if any, is
reected in the statement of Prot and Loss Account.
IV. Items of xed assets that have been retired from active
use and are held for disposal are stated at the lower of
their net book value and estimated net realizable value
and are disclosed separately in the nancial statements
as current assets
V. Depreciation is provided on a pro-rata basis on the
straight line method over the estimated useful lives of the
assets or the rates prescribed under Schedule XIV of the
Companies Act, 1956, whichever is higher, as follows:
Asset Rates
Data Processing Equipment 25%
Ofce Equipment 20%
Furniture and Fixtures 10%
Vehicle 25%
Notes to the nancial statements for the year ended 31
st
March, 2014
VI. Assets costing less than Rs. 5000/- are fully depreciated
in the period of purchase.
b) Intangible Assets
I. All intangible assets comprising of computer software are
initially measured at cost and amortized so as to reect
the pattern in which the assets economic benets are
consumed
II. Computer Software capitalized as intangible asset and
amortised over a maximum period of three years or the
license period whichever is lower.
c) Capital Work-in-Progress includes the cost of assets that are
not ready for intended use at the Balance sheet date.
(E) Investments
Investments that are readily realizable and are intended to be held
for not more than one year from the date, on which such investments
are made, are classied as current investments. All other investments
are classied as long term investments. Current investments
are carried at cost or fair value, whichever is lower. Long-term
investments are carried at cost. However, provision for diminution
is made to recognize a decline, other than temporary, in the value
of the investments, such reduction being determined and made for
each investment individually.
(F) Employee Benets
a. Dened Contribution Plans:
Companys contributions paid / payable during the year to
Provident Fund are charged to the Statement of Prot and Loss
account on accrual basis
b. Gratuity:
Liabilities with regard to the gratuity benet payable in future
are determined by actuarial valuation at each balance sheet
date using the projected unit credit method and contributed to
employee gratuity fund managed by Life Insurance Corporation
of India. Actuarial gains and losses arising from changes in
actuarial assumptions are recognized in the Statement of prot
and loss in the period in which they arise.
c. Leave encashment / compensated absences:
pay subject to certain rules. The employees are entitled to
accumulate leave subject to certain limits for future encashment
/ availment. The liabilities provided based on the number of
days of unutilized leave at each balance sheet date on the
basis of an independent actuarial valuation.
(G) Foreign Currency Transactions:
a) The Companys reporting currency is Indian Rupee (INR).
are accounted at the exchange rates prevailing on the date of
the transaction or at rates that closely approximate the rate at
the date of the transaction.
b) As at the Balance Sheet date non-monetary items which are
carried in terms of historical cost denominated in a foreign
currency are reported using the exchange rate at the date of
the transaction.
c) In the case of monetary assets and liabilities denominated in
foreign currency, the exchange rate prevalent on the Balance
Sheet date is applied to restate such assets and liabilities.
Exchange differences arising on restatement of foreign
currency assets and liabilities are recognized as income or
expenditure in Statement of Prot and Loss.
d) Exchange differences on forward exchange contracts, entered
into for hedging foreign exchange uctuation risk in respect of
an underlying asset/liability, are recognised in the Statement of
1156
Prot and Loss in the reporting period in which the exchange
rate changes. Premium/Discount on forward exchange
contracts are recognised as an expense/income over the life of
the contract
(H) Revenue Recognition
a) Income from Services:
In contracts involving the rendering of services, revenue is
recognized pro-rata over the period of contract as and when
services are rendered.
b) Interest
Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable
(I) Taxes on income
Deferred tax is measured based on the tax rates and tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax is recognized, subject to consideration of prudence, on timing
differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets
arising on account of unabsorbed depreciation or carry forward of
tax losses shall be recognized only when there is a virtual certainty
be realized.
(J) Provisions and Contingencies
a. Provisions are recognized in accounts in respect of present
estimated
b. Contingent liabilities are disclosed in respect of possible
obligations that arise from past events but their existence is
conrmed only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within the control of
the company.
(K) Leases
a. Lease arrangements where the risks and rewards incidental
straight-line basis over the lease period
b. Lease income on an operating lease is recognized in the
statement of prot and loss on a straight-line basis over the
lease period.
(L) Borrowing costs
of qualifying assets are capitalised as part of the cost of such assets.
A qualifying asset is one that necessarily takes a substantial period
of time to get ready for its intended use or sale. Ancillary expenditure
incurred in connection with the arrangement of borrowings is
amortised over the tenure of the respective borrowings.
(M) Segment Reporting
The Company is operating in a single segment viz. designing and
commercial production of aircraft and providing related support
services and hence no separate disclosure is made under Accounting
Standard (AS) 17, Segment Reporting.
(N) Earnings per Share
a. Basic earnings per share is computed by dividing net income
by the weighted average number of equity shares outstanding
during the period.
b. The number of shares used in computing diluted earnings
per share comprises the weighted average shares considered
for deriving basic earnings per share, and also the weighted
average number of equity shares that could have been issued
on the conversion of all dilutive potential equity shares. The
diluted potential equity shares are adjusted for the proceeds
receivable, had the shares been actually issued at fair value
(i.e., the average market value of the outstanding shares).
Diluted potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date
(O) Impairment of assets
Management periodically, but at least annually, assesses using
external and internal indicators whether there is an indication that
an asset may be impaired. Impairment occurs where the carrying
amount exceeds the present value of future cash ows expected to
arise from the continuing use of the asset or its eventual disposal.
The impairment loss to be expensed is determined as the excess of
the carrying amount over the higher of the assets net present value
or sale price as determined above.
3. Share Capital:
Rupees
Particulars March 31, 2014 March 31, 2013
Nos Amount Nos Amount
1. Authorised :
(Equity shares of
Rs. 10 each) 200,000,000 2,000,000,000 175,000,000 1,750,000,000
Total ................... 200,000,000 2,000,000,000 175,000,000 1,750,000,000
2. Issued and
Subscribed :
Equity shares:
Opening Balance 146,268,965 1,462,689,650 96,885,061 968,850,610
Add: Issued
during the year 39,270,725 392,707,250 49,383,904 493,839,040
Closing Balance 185,539,690 1,855,396,900 146,268,965 1,462,689,650
Total ................... 185,539,690 1,855,396,900 146,268,965 1,462,689,650
Additional information:
1) Out of the above 123,697,041 (2013: 97,515,249) shares are held by
Mahindra and Mahindra Ltd., the holding company, Including shares
held jointly with nominees
2) Details of sharholders holding more than 5% shares in the Company
Name of the
Shareholder
March 31, 2014 March 31, 2013
Nos % Nos %
Mahindra and
Kotak Mahindra
Trustee Limited
(Trustee of Kotak
India Growth Fund II) 44,697,379 24.09% 35,237,061 24.09%
Kotak India Private
Equity Fund 16,328,880 8.80% 12,873,056 8.80%
3) Rights, preferences and restrictions attached to equity shares:
The company has one class of equity shares having a par value
of Rs. 10 per share. Each shareholder is eligible for one vote per
share held. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting, except in case of interim dividend. In the event
of liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
1157
4. Reserves and Surplus:
Rupees
1. Securities Premium Account
Opening Balance 1,290,293,883 823,636,482
Add : Premium on shares
issued during the year 374,642,717 471,122,444
Less : Share Issue Expenses (427,370) (4,465,043)
1,664,509,230 1,290,293,883
2. Decit in Statement of Prot
and Loss
Opening Balance (70,906,660) (51,834,692)
Add : Loss for the year (10,734,086) (19,071,968)
(81,640,746) (70,906,660)
Total ........................................ 1,582,868,484 1,219,387,223
5. Other Long-term Liabilities:
Rupees
Rent deposit received 2,680,920
Total ........................................ 2,680,920
6. Long term provisions:
Rupees
Provision for gratuity 534,886 574,952
Provision for compensated
absences 215,420 489,166
Total ........................................ 750,306 1,064,118
7. Trade Payables:
Rupees
1. Trade Payables
Trade Payables - Micro
& Small Enterprises
Trade Payables - Others 12,416,864 10,068,022
Total ........................................ 12,416,864 10,068,022
8. Other Current Liabilities:
Rupees
1. Statutory dues 827,747 951,262
2. Rent deposit received 2,680,920
3. Other payables 2,612 814,109
Total ........................................ 3,511,279 1,765,371
9. Short term Provisions:
Rupees
1. Provision for compensated
absences 24,880 66,929
2. Provision for gratuity 92,845 107,253
Total ........................................ 117,725 174,182
10. Fixed Assets
A : Tangible Assets Rupees
Particulars Gross Block (At Cost) Depreciation Net Block
As at
April 1,
2013
Additions Deletions As at
March 31,
2014
As at
April 1,
2013
For the
year
Deletions As at
March 31,
2014
As at
March 31,
2014
As at
April 1,
2013
Plant and
Equipment 531,525 25,703 505,822 365,872 94,248 21,058 439,062 66,760 165,653
Furniture and
Fittings 87,425 70,150 17,275 42,024 5,877 30,631 17,270 5 45,401
Vehicles 2,283,347 999,847 1,283,500 852,182 576,499 939,016 489,665 793,835 1,431,165
Ofce
Equipments 689,812 17,408 179,022 528,198 482,669 64,726 83,112 464,283 63,915 207,143
Computers 150,804 150,804 96,371 24,668 121,039 29,765 54,433
Total ................... 3,742,913 17,408 1,274,722 2,485,599 1,839,118 766,018 1,073,817 1,531,319 954,280 1,903,795
Previous Year 3,003,172 1,353,188 613,447 3,742,913 1,313,442 863,240 337,564 1,839,118 1,903,795
Particulars Gross Block (At Cost) Amortization Net Block
As at
April 1,
2013
Additions Deletions As at
March 31,
2014
As at
April 1,
2013
For the
year
Deletions As at
March 31,
2014
As at
March 31,
2014
As at
April 1,
2013
Software
Expenditure 7,226,759 393,884 7,620,643 6,635,875 399,218 7,035,093 585,550 590,884
Total ................... 7,226,759 393,884 7,620,643 6,635,875 399,218 7,035,093 585,550 590,884
Previous Year 7,062,539 164,220 7,226,759 6,243,588 392,287 6,635,875 590,884
C : Depreciation and Amortization Expense
March 31, 2014
Year ended
March 31, 2013
Depreciation on tangible Assets 766,018 863,240
Amortization on intangible Assets 399,218 392,287
Depreciation and Amortization Expense 1,165,236 1,255,527
Note:
1. Movable xed assets (present and future) are hypothecated to AXIS Bank Limited for the SBLC facilities availed by the Company
1158
11. Current & Non-Current Investments:
Rupees
Non Current Current Non Current Current
Investments
(At Cost, unless otherwise
specied) :
Shares
(Trade and fully paid-up
unless otherwise
specied) :
Unquoted :
Equity Shares in
wholly owned
subsidiaries
Mahindra Aerospace
Australia PTY Ltd 1,736,499,445 1,579,794,195
[35,250,500
(2013:32,500,500)
Shares of AU $ 1
each]
Mahindra
Aerostructures Pvt
Ltd 1,065,100,000 730,100,000
[106,510,000
(2013:73,010,000)
Equity Shares of
Rs. 10 each]
2,801,599,445 2,309,894,195
Other Investments :
Units :
Unquoted :
ICICI Prudential
Liquid Super
Institutional Plan -
Growth
[62,807.99
(2013:93,908.745)
units of Rs. 100
each] 11,794,419 15,962,020
ICICI Prudential
Liquid Direct Plan -
Growth
[6,096.477
(2013:NIL) units of
Rs. 100 each] 1,100,730
Axis Liquid Fund
Growth
[9,308.228
(2013:15,562.40)
units of Rs. 1000
each] 13,128,828 19,791,817
Axis Liquid Fund
Direct - Growth
[552.463 (2013:Nil)
units of Rs. 1000
each] 747,744
26,771,721 35,753,837
2,801,599,445 26,771,721 2,309,894,195 35,753,837
Total ...................... 2,828,371,166 2,345,648,032
Notes: 1. Aggregate Net Asset value of Mutual Funds Rs. 2,70,92,483 (2013:
Rs. 36,518,656)
2. Shares of Mahindra Aerospace Australia Pty Ltd is being pledged as a Security
to the Axis Bank Ltd for the SBLC facilities sanctioned
12. Long-Term Loans & Advances:
Rupees
1. Security deposits
Unsecured, Considered
Good 5,000 5,366,840
2. Share application money
pending allotment
[Refer Note No. 25] 167,235,000
3. Other loans and advances
TDS Receivables (Net
of Provision for taxation) 8,640,823 8,206,230
Total ........................................ 175,880,823 13,573,070
13. Other Non current Assets:
Rupees
1. Margin money deposits 58,563,000 13,879,500
2. Interest accrued on deposits 3,128,712 239,327
Total ........................................ 61,691,712 14,118,827
14. Trade Receivable:
Rupees
Trade Receivables outstanding
for less than six months from the
date they are due for payment
Total ........................................ 19,123,460 12,929,244
15. Cash & Bank balances:
Rupees
1. Cash & Cash Equivalents
60,045 2,978
2. Balances with Scheduled
Banks
On Current account 17,146,834 2,626,149
Margin Money Deposits 58,073,438 25,932,737
75,220,272 28,558,886
Total ........................................ 75,280,317 28,561,864
16. Short-term Loans & Advances:
Rupees
1. Unsecured, Considered Good
Service tax receivables 14,679,948 12,346,523
Dues from subsidiaries 23,473,464 25,412,547
Security deposits 5,361,840
Others 2,252,247 1,907,279
45,767,499 39,666,348
2. Unsecured, considered doubtful
to the extent provided for
Inter company deposits 9,620,335 2,312,352
Less: Provision for doubtful
inter corporate deposits 2,312,352 2,312,352
7,307,983
Total .................................... 53,075,482 39,666,348
1159
Rupees
1 Asset held for sale 1,194,616
2 Interest accrued on deposits 1,564,900 1,037,863
Total ........................................ 2,759,516 1,037,863
18. Other Income
Rupees
March 31, 2014
Year ended
March 31, 2013
1. Interest income
On Bank deposists 6,173,952 3,675,907
On Inter corporate deposits 50,959
6,224,911 3,675,907
2. Gain/(loss) on foreign
exchange translation, net 839,600
3. Prot on sale of xed asset 281,318 19,258
4. Gain/(loss) on sale of other
investments, net 5,388,122 7,942,640
5. Rental income 2,766,208 2,768,098
6. Income from high sea sale
(Net) 2,866,322
7. Liabilities written back to the
extent no longer required 1,522,607 492,812
8. Other miscellaneous income 675,000
Total ........................................ 16,858,166 18,604,637
19. Employee Benet Expenses
Rupees
March 31, 2014
Year ended
March 31, 2013
1. Salaries, wages, bonus, etc 18,370,573 20,333,340
2. Contribution to provident
funds 753,377 858,811
3. Gratuity expense 188,020 578,956
4. Staff welfare 980,859 1,419,030
Total ........................................ 20,292,829 23,190,137
20. Finance Cost
Rupees
March 31, 2014
Year ended
March 31, 2013
1. Interest on inter corporate
deposits 3,784,565 2,510,412
2. Interest on short term
borrowings 3,322,341
3. Other interest costs 24,188
4. Finance charges 145,553 184,739
Total ........................................ 3,930,118 6,041,680
21. Other Expenses
Rupees
March 31, 2014
Year ended
March 31, 2013
1. Rates and taxes [Refer Note
No. 27] 3,595,311 9,313,016
2. Electricity 542,726 576,549
3. Insurance 121,931 127,179
4. Rent 5,248,578 5,248,722
5. Professional and consultancy
charges 9,684,096 9,043,494
6. Travelling and conveyance
expenses 5,099,499 3,766,299
7. Communication expenses 673,233 560,094
8. Business promotion expenses 719,492 558,157
9. Auditors remuneration 924,279 500,850
10. Loss on foreign exchange
translation, net 399,076 62,466
11. Ofce and administrative
expenses 2,602,179 2,275,316
12. Provision for doubtful loans
and advances 2,312,352
13. Prototype materials written off 570,000
14. Miscellaneous expenses 1,064,260 2,518,038
Total ........................................ 31,244,660 36,862,532
Notes:
Rupees
March 31, 2014
Year ended
March 31, 2013
Auditors remuneration includes
Statutory audit 300,000 200,000
Taxation matters 75,000 50,000
Attestation services 328,427 100,850
For other services 215,000 150,000
For reimbursement of expenses 5,852
Total ........................................ 924,279 500,850
22. During November 2008, erstwhile M/S. Plexion Technologies India Pvt. Ltd.,
which was later on merged with Mahindra Engineering Services Limited
(MESL), had entered into a Collaboration Agreement with Council of
Scientic Industrial Research (CSIR), represented by National Aerospace
Laboratories (NAL) for Joint Development, Commercial Production and
Marketing of a 4-Seater Aircraft (NM 5 Project). By virtue of a Deed of
Assignment dated 28
th
May, 2008, signed between MESL, the Company
and Council of Scientic Industrial Research (CSIR), the rights, obligations
and benets of MESL under the said Collaboration Agreement was
assigned to the Company by MESL and duly afrmed by CSIR. As per
the Collaboration Agreement, the Company jointly owns the Intellectual
Property Rights arising from joint development of the aircraft. Such
Intellectual Property Rights arising from joint development of the aircraft
will be a jointly held intangible asset.
1160
The Company has built a prototype of the aircraft which has carried out
a successful test ight. The Company is in the process of obtaining the
required certication.
The Company had so far incurred an expenditure of Rs. 20,98.63 Lakhs (till
2013: Rs. 20,98.63 Lakhs) towards the design & development and building
one prototype aircraft.
As on 31
st
March 2013, the Company held materials required for
building a prototype and Tools & jigs amounting to Rs. 299.37 lakhs.
During the year, materials amounting to Rs. 6.95 lakhs was sold to
Mahindra Aerostructures private limited, and materials amounting to
Rs. 11.95 lakhs was identied to be disposed. Further an amount of
Rs. 5.70 lakhs charged off to the statement of Prot and Loss being the
value of unusable materials.
Techno-commercial feasibility has been established and therefore this
asset is being carried in the books of accounts. On receipt of certication,
which would enable the Company to commence commercial sale, these
assets would be depreciated / amortized.
23. Contingent Liabilities
a. Corporate Guarantees issued in respect of borrowings availed by
subsidiary companies and others Rs. 115,00.00 Lakhs (2013:
Rs. 115,00.00 Lakhs)
b. Guarantee given to Banks in consideration of the Standby Letter
of Credit (SBLC) opened by them in favor of certain overseas
banks as security for loan granted by such overseas banks to the
Australian subsidiaries of the Company Rs. 103,12.25 Lakhs (2013:
Rs. 75,62.25 Lakhs) [equivalent to AUD 18.75 mn (2013: AUD 13.75 mn)]
c. Service tax matter of Rs. 98.96 lakhs
24. The estimated amount of contracts remaining to be executed on Capital
account and not provided for as at 31
st
March 2014 is NIL (2013: Rs. NIL).
25. The Company has invested in its wholly owned subsidiary Mahindra
Aerospace Australia Pty. Limited (MAAPL) which in turn has invested
in various downstream subsidiaries. The subsidiary companies have
been incurring losses and are dependent on nancial support from the
Company. Such investments are, long term and strategic in nature and
management based on future business plans and independent valuation
of the subsidiaries determined that no provision for diminution other than
temporary in the value of these investments is required at March 31, 2014.
During the year, the Company has invested Rs. 3239.40 Lakhs (2013:
Rs. 5766.12 Lakhs) in MAAPL. Out of these, shares at the face value
of AUD 1 each were allotted for Rs. 1567.05 lakhs (equivalent to AUD
2.750 million) and shares are yet to be allotted for the balance amount
of Rs. 1672.35 lakhs (equivalent to AUD 3.000 million). This amount was
used to fund the ongoing requirements of downstream subsidiaries viz.
M/s. Gippsaero Pty Ltd and M/s. Aerostaff Australia Pty Ltd.
Further, during the year, the Company has invested Rs. 3350 Lakhs
(2013: Rs. 4700 Lakhs) in Mahindra Aerostructures Private Limited
(MASPL), a wholly owned subsidiary. This amount was utilized by MASPL
to fund the requirements of the aerospace components project.
26. During the year, the Company has raised Rs. 7673.50 Lakhs (2013:
Rs. 9649.61 Lakhs) from shareholders on rights basis at a premium of
Rs. 9.54 per share. An amount of Rs. 4.27 lakhs (2013: Rs. 44.65 lakhs)
being the share issue expenses is adjusted against the share premium.
27. An amount of Rs. 16.40 lakhs (2013: Rs. 93.08 lakhs), being the withholding
tax deducted by the overseas subsidiary M/s. Gippsaero Pty Ltd, Australia,
has been charged off to the statement of Prot and Loss, as the Company
cannot take credit for the same.
28. Employee Benets
a. Gratuity Liability
The Gratuity liability under dened benet plan as on 31.3.2014
is Rs. 12.67 Lakhs (2013: Rs. 15.33 Lakhs)
Rupees Lakhs
closing balances of the present value
of gratuity liability.
Opening gratuity liability 15.33 11.09
Service cost 0.67 6.07
Actuarial gains and losses on liability 0.78 (0.33)
Benets paid (5.24) (2.30)
Closing gratuity liability 12.67 15.33
(ii) Reconciliation of the opening and
closing balances of the fair value of
the plan asset.
Opening Value of Plan Assets 8.51 9.93
Difference in Opening Balance (0.04)
Expected return on plan assets 0.69 0.71
Actuarial gains and losses 0.01 0.04
Contribution by the employer 2.46 0.12
Benets paid (5.24) (2.30)
Closing fair value of plan assets 6.39 8.51
(iii) Reconciliation of the present value of
the gratuity liability and the fair value
of the plan assets to the assets and
liabilities recognized in the balance
sheet:
Fair value of plan asset 6.39 8.51
Liability recognized in the
balance sheet 6.28 6.82
Plan liability 12.67 15.33
(iv) Total expense recognized in
statement of Prot and loss.
Interest cost on gratuity liability 1.12 0.80
Expected return on plan assets (0.69) (0.71)
Net actuarial gains and losses
recognized in the year 0.77 (0.37)
Net gratuity expense charged under
the head Personnel Costs 1.88 5.79
Actual return on plan assets 0.70 0.75
(v) The major cateogies of plan asset as
percentage of Total plan
The insurer managed funds 100% 100%
(vi) Principal actuarial assumptions used
in determining gratuity liability as at
the balance sheet date are:
Expected return on plan assets for
the year under report 8.00% 8.00%
Salary Increase 10% 10%
Attrition rate 5% 5%
Retirement age 60 60
Interest rate 8.85% 8.00%
1161
Rupees Lakhs
(vii) Experience Adjustments
Dened Benet Obligation at the end
of the year 12.67 15.33
Plant asset at the end of the period 6.39 8.51
Funded status 6.28 6.82
Experience adjustments on plan
liabilities 0.78 (0.32)
Experience adjustments on plant
assets 0.01 0.04
Note: In the absence of detailed information regarding plan asset which is
funded with insurance company, the composition of each major category
of plan asset, the percentage or amount for each category to the fair
value of plan assets and details of experience adjustments prior to
2012-13 have not been disclosed.
b) Leave Encashment
Employees are entitled to accumulation of leave which can be
encashed at the time of retirement or termination. The leave
encashment benet scheme is a dened benet plan and is not
funded. Hence, there are no plan assets attributable to the obligation.
The Leave encashment liability under dened benet plan as on
31.3.2014 is Rs. 2.40 Lakhs (2013: Rs. 5.56Lakhs).
Rupees Lakhs
closing balances of the present value
of Leave Encashment liability
Opening Leave encashment liability 5.56 5.04
Actuarial gains and losses on liability (3.75) (0.39)
Benets paid
Closing Leave encashment liability 2.40 5.56
(i) Reconciliation of the present value
of the leave encashment liability and
the fair value of the plan assets to
the assets and liabilities recognized
in the balance sheet:
Leave Encashment 2.40 5.56
Past service cost not yet recognized
Other amount recognized in the
balance sheet
Plan asset / liability
(ii) Total expense recognized in the
Prot and loss Account:
recognized in the year (3.75) (0.39)
Net Leave encashment expense
charged under the head Personnel
Costs (3.16) 0.52
Rupees Lakhs
(iii) The major categories of plan assets
as a percentage of the fair value of
the total plan assets are as follows:
Investments with insurer Nil Nil
(iv) Principal actuarial assumptions used
in determining liability as at the
balance sheet date are:
the year under report
Salary Increase 10% 10%
Attrition rate 5% 5%
Retirement age 60 60
Amount recognized as an expense and included in the schedule
Contribution to Provident and Other Funds of Personnel Expenses
Rs 6.82 Lakhs (2013: Rs. 7.78 Lakhs).
29. Related Party Disclosure
a. Name of the Related party and nature of relationship where
control exists:
S.No. Name of the party Nature of Relationship
1. Mahindra & Mahindra Ltd. Holding Company
2. Mahindra Aerostructures Pvt. Ltd. Subsidiary
3. Mahindra Aerospace Australia
Pty Ltd
Subsidiary
4. Aerostaff Australia Pty Ltd Step Down Subsidiary
5. Gipp Aero Investments Pty Ltd Step Down Subsidiary
6. Gipps Aero Pty Ltd Step Down Subsidiary
7. Airvan Flight Services Pty Ltd Step Down Subsidiary
8. GA 8 Airvan Pty Ltd Step Down Subsidiary
9. GA 200 Pty Ltd Step Down Subsidiary
10. Nomad TC Pty Ltd Step Down Subsidiary
b. Related Party transactions are as under:
Rupees Lakhs
Name of
Related party
Description
of
Relationship
Nature of
Transactions
Amount of
Transactions
Amount
outstanding
at the end
of the year
(Payable)
Amount
outstanding
the end of
the Year
(Receivable)
Mahindra &
Mahindra Ltd
Holding
Company
Services
Received
51.56
(46.09)
56.22
(30.93)
Reimbursement
of Expenses
paid
3.81
(7.33)
Capital
contribution
received
5,115.92
(6,433.40)
1162
Name of
Related party
Description
of
Relationship
Nature of
Transactions
Amount of
Transactions
Amount
outstanding
at the end
of the year
(Payable)
Amount
outstanding
the end of
the Year
(Receivable)
Mahindra
Aerostructures
Pvt Ltd
Subsidiary
Company
Services
Received
4.05
()
3.97
()
Sale of goods/
Services
19.42
(22.78)
Rental Income 30.10
(28.42)
Sale of assets 1.40
()
High Sea sale
of Equipment
(159.97)
Intercompany
Deposit(ICD)
Given
100.00
()
ICD Received
back
100
()
Interest on ICD 0.51
()
Reimbursement
of expenses
received
0.09
(712.88)
(37.52)
Investment in
Equity
3,350.00
(4700.00)
Rent Deposit
Received
26.81
(26.81)
Mahindra
Aerospace
Australia Pty
Ltd
Subsidiary
Company
Reimbursement
of expenses
received
246.41
(218.95)
234.73
(216.61)
Investment in
Equity
3239.40
(5766.12)
GippsAero
Pty Ltd
Step Down
Subsidiary
Services
Rendered
295.41
(296.73)
191.23
(129.29)
Mahindra First
Choice &
Wheels Ltd
Fellow
Subsidiary
ICD Received 400.00
()
ICD Repaid 400.00
()
()
Mahindra
Automobile
Distributor
Private Ltd
Fellow
Subsidiary
ICD Received 500.00
()
ICD Repaid 500.00
()
()
Mahindra
Engineering
Services Ltd
Fellow
Subsidiary
ICD Received
(700.00)
ICD Repaid
(700.00)
Interest on ICD
(25.10)
Mahindra
Integrated
Business
Solutions Pvt
Ltd.
Fellow
Subsidiary
Services
Received
1.04
(1.05)
0.09
(0.08)
Mahindra &
Mahindra
Financial
Services Ltd
Fellow
Subsidiary
Corporate
Guarantee
issued
200
(200)
Note:
Previous Years gures are in brackets
30. Earnings Per Share
Rupees Lakhs
2013-14 2012-13
Loss as per Statement of Prot and Loss (107.34) (190.72)
Weighted Average No. of Equity Shares
outstanding during the year 165,214,374 117,294,312
Basic Earnings Per Share (Rs.) (0.06) (0.16)
Diluted Earnings Per Share (Rs.) (0.06) (0.16)
31. Operating Leases:
The Company has taken commercial premises on operating lease. The
lease begins on 6th January, 2011 for a term of 5 years with a lock-in
period of 3 years. This lease agreement provides for an option for the
Company to renew the lease period for a term of 5 years. There are no
exceptional / restrictive covenants in the lease agreements.
over the period of lease. Details of future minimum lease rentals payable
are as follows:
Rupees Lakhs
1 year 60.25
1 5 years
Beyond 5 years
The Company has let out part of the ofce premises to its Subsidiary for
a period of 5 years and Lease income receivable in future is as follows:
Rupees Lakhs
1 year 30.12
1 5 years
Beyond 5 years
32. Details of Current investments purchased and sold during the year
ended 31
st
March 2014
Particulars Purchased Sold
No. of Units Amount
(Rupees Lakhs)
No. of Units Amount
(Rupees Lakhs)
1525 ICICI Flexi
Income Plan
() () (27,948.66) (56.58)
1565 ICICI Prudential
Liquid Regular Plan
Growth 11,68,308.42 2,056.00 11,99,409.27 2,122.00
(13,88,298.41) (2,316.48) (18,18,490.78) (3,020.00)
Liquid Super
Daily Dividend
(1,75,213.73) (175.07) (1,75,213.73) (175.25)
Liquid Direct Plan
Growth 1,05,232.96 190.00 99,136.48 180.00
() () () ()
Axis Liquid Fund-
Institutional Growth 18,522.43 260.00 24,776.62 338.70
(3,72,230.47) (4,591.65) (3,74,984.39) (4,646.02)
Axis Liquid Fund-
Direct Growth 153,138.99 2011.00 152,586.52 2,020.00
() () () ()
1163
33. CIF Value of imports and Payments made for NM5 prototype during the
year is Rs. Nil Lakhs (2013: Rs. NIL Lakhs)
34. Expenditure in Foreign Currency
Rupees Lakhs
Travel 14.88 2.08
Professional and Consultancy Fee 20.30 39.86
Others 0.59 26.91
35. Earnings in Foreign Exchange
Rupees Lakhs
Export of Services 295.41 296.73
36. Unhedged Foreign Currency exposure
The year-end foreign currency exposures that have not been hedged by a
Rupees
Lakhs
Foreign
Currency
Rupees
Lakhs
Foreign
Currency
Receivables 425.97 AUD 764,619 345.90 AUD 610,054
Payable for consultancy 9.41 AUD 16,897 3.94 AUD 6,942
6.18 USD 11,376
37. Deferred tax asset on the business loss amounting to Rs. 121.25 Lakhs
(2013: Rs. 126.15 Lakhs) is not recognized in view of absence of virtual
certainty of future prots as required by Accounting Standard (AS) 22,
Accounting for taxes on Income.
38. There are no micro and small enterprises to which the Company owes
dues, which are outstanding for more than 45 days as at 31
st
March,
2014. This information as required under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identied on the basis of information available with
the Company. This information has been relied upon by the Auditors
39. Previous year gures have been reclassied wherever necessary to
conform to the current year classication.
Mumbai, Dated : 26
th
nd
May 2014
MAHINDRA AEROSPACE AUSTRALIA PTY LTD
ACN 142 078 564
1164
DIRECTORS REPORT
The directors present their report together with the nancial
report of Mahindra Aerospace Australia Pty Ltd for the year
ended 31 March 2014 and auditors report thereon. This
nancial report has been prepared in accordance with
Australian Accounting Standards.
Directors names
The names of the directors in ofce at any time during or since
the end of the year are:
Arvind Mehra
Sanjay Joglekar
Parthasarathy Vankipuram Srinivasa
Hemant Luthra
Laxman Ramnarayan
Keith Douglas (appointed 25 June 2013)
Dr. Terence Miles (resigned 25 June 2013)
The directors have been in ofce since the start of the year to
the date of this report unless otherwise stated.
Results
The loss of the company for the year after providing for income
tax amounted to $18,908 (Rs. 1,053,366) (2013 prot: $6,351,
Rs. 353,815).
Review of operations
The company continued to engage in its principal activity, the
results of which are disclosed in the attached nancial statements.
Signicant changes in state of affairs
There were no signicant changes in the companys state of
affairs that occurred during the nancial year, other than those
referred to elsewhere in this report.
The principal activity of the company during the year was
holding of investments.
No signicant change in the nature of these activities occurred
during the year.
After balance date events
affect the operations of the company, the results of those
operations, or the state of affairs of the company in future
nancial years.
Likely developments
The company expects to maintain the present status and level
of operations.
Environmental regulation
The companys operations are not regulated by any signicant
of a State or Territory.
Dividends paid, recommended and declared
No dividends were paid or declared since the start of the year.
No recommendation for payment of dividends has been made.
Options
No options over unissued shares or interests in the company
were granted during or since the end of the year and there
were no options outstanding at the end of the year.
Indemnication of ofcers
During or since the end of the year, the ultimate parent
company on behalf of the company has given indemnity or
entered an agreement to indemnify, or paid or agreed to pay
insurance premiums in order to indemnify the directors of the
company against liabilities arising as result of the performance
of their duties as directors.
Further disclosure required under section 300(9) of the
corporations law is prohibited under the terms of the contract.
Indemnication of auditors
No indemnities have been given or insurance premiums paid,
during or since the end of the year, for any person who is or
has been an auditor of the entity.
Proceedings on behalf of the company
No person has applied for leave of Court to bring proceedings
on behalf of the company or intervene in any proceedings
to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or any part of
those proceedings.
Signed on behalf of the board of directors.
Keith Douglas Arvind Mehra
Director Director
Dated this 22 day of May 2014
DIRECTORS DECLARATION
The directors have determined that the entity is not a reporting
entity and that this special purpose nancial report should be
prepared in accordance with the accounting policies outlined
in Note 1 to the nancial statements.
The directors of the entity declare that:
1. The nancial statements and notes, as set out on following
pages presents fairly the entitys nancial position as at
31 March 2014 and performance for the year ended on
that date of the entity in accordance with the accounting
policies outlined in Note 1 to the nancial statements.
2. In the directors opinion there are reasonable grounds to
believe that the entity will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution
of the Board of Directors.
Director Director
ACN 142 078 564
1165
TO THE MEMBERS OF MAHINDRA AEROSPACE AUSTRALIA
PTY LTD
a special purpose nancial report of Mahindra Aerospace
Australia Pty Ltd, which comprises the statement of nancial
position as at 31 March 2014, the statement of comprehensive
income, statement of changes in equity and statement of cash
ows for the year then ended, notes comprising a summary
information, and the directors declaration.
The directors of the company are responsible for the preparation
of the nancial report that gives a true and fair view and have
determined that the basis of preparation described in Note 1
to the nancial report is appropriate to meet the requirements
of the Corporations Act 2001 and is appropriate to meet the
needs of the members.
The directors responsibility also includes such internal
control as the directors determine is necessary to enable the
preparation of a nancial report that gives a true and fair view
and is free from material misstatement, whether due to fraud
or error.
internal control relevant to the companys preparation of the
effectiveness of the companys internal control. An audit also
opinion.
Independence
In conducting our audit, we have complied with APES 110
Code of Ethics for Professional Accountants.
Opinion
In our opinion the nancial report presents fairly, in all material
respects, the nancial position of Mahindra Aerospace Australia
Pty Ltd as at 31 March 2014 and of its nancial performance
and its cash ows for the year then ended in accordance with
the accounting policies described in Note 1 to the nancial
report.
Basis of Accounting
The nancial report has been prepared to assist the directors
of Mahindra Aerospace Australia Pty Ltd to meet the nancial
reporting responsibilities under the Constitution. As a result,
the nancial report may not be suitable for another purpose.
N R BULL PITCHER PARTNERS
Partner Melbourne
Date: 22
nd
May 2014
AUDITORS INDEPENDENCE DECLARATION
TO THE DIRECTORS OF MAHINDRA AEROSPACE
AUSTRALIA PTY LTD
In relation to the independent audit for the year ended
31 March 2014, to the best of my knowledge and belief there
have been:
(i) No contraventions of the auditor independence
requirements of the Corporations Act 2001; and
(ii) No contraventions of any applicable code of professional
conduct.
Partner Melbourne
Date: 22
nd
May 2014
ACN 142 078 564
1166
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2014
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Revenue
Interest income 4 910,469 50,722,228 158,839 8,848,921
Other revenue 4 77,004 4,289,893 382,025 21,282,613
987,473 55,012,121 540,864 30,131,534
Less: expenses
Finance costs 5 (992,381) (55,285,546) (522,513) (29,109,199)
Professional fees (14,000) (779,941) (12,000) (668,520)
(1,006,381) 56,065,487 (534,513) (29,777,719)
Prot / (loss) before income tax expense (18,908) (1,053,366) 6,351 353,815
Income tax expense
Net income/(loss) from continuing
operations (18,908) (1,053,366) 6,351 353,815
Total comprehensive loss (18,908) (1,053,366) 6,351 353,815
ACN 142 078 564
1167
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Current assets
Cash and cash equivalents 6 1,502,268 83,691,350 9,975 555,707
Receivables 7 228,217 12,713,969 9,191 512,031
Other assets 8 421,351 23,473,464 110,490 6,155,398
Total current assets 2,151,836 119,878,783 129,656 7,223,136
Non-current assets
Receivables 7 18,793,069 1,046,961,874 12,595,298 701,684,052
Investment in subsidiaries 9 37,900,004 2,111,409,223 33,773,000 1,881,493,830
Total non-current assets 56,693,073 3,158,371,097 46,368,298 2,583,177,882
Total assets 58,844,909 3,278,249,880 46,497,954 2,590,401,018
Current liabilities
Payables 10 435,351 24,253,404 419,488 23,369,676
Borrowings 11 18,600,000 1,036,206,000 12,000,000 668,520,000
Provisions 12 1,600,000 89,136,000 1,600,000 89,136,000
Total current liabilities 20,635,351 1,149,595,404 14,019,488 781,025,676
Total liabilities 20,635,351 1,149,595,404 14,019,488 781,025,676
Net assets 38,209,558 2,128,654,476 32,478,466 1,809,375,342
Equity
Share capital 13 35,250,500 1,963,805,355 32,500,500 1,810,602,855
Reserves 14 3,000,000 167,130,000
Accumulated losses 15 (40,942) (2,280,879) (22,034) (1,227,513)
Total equity 38,209,558 2,128,654,476 32,478,466 1,809,375,342
ACN 142 078 564
1168
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2014
Contributed
equity
$
Retained
earnings
$
Accumulated
losses
$
Total
equity
$
Australian dollars
Balance as at 1 April 2012 22,400,500 (28,385) 22,372,115
Total comprehensive income for the year 6,351 6,351
Transactions with owners in their capacity as owners:
Contributions 10,100,000 10,100,000
Total transactions with owners in their capacity as owners 10,100,000 10,100,000
Balance as at 31 March 2013 32,500,500 (22,034) 32,478,466
Balance as at 1 April 2013 32,500,500 (22,034) 32,478,466
Loss for the year (18,908) (18,908)
Total comprehensive income for the year (18,908) (18,908)
Contributions 2,750,000 3,000,000 5,750,000
Total transactions with owners in their capacity as owners 2,750,000 3,000,000 5,750,000
Balance as at 31 March 2014 35,250,500 3,000,000 (40,942) 38,209,558
ACN 142 078 564
1169
Contributed
equity
Rupees
Reserves
Rupees
Accumulated
losses
Rupees
Total
equity
Rupees
Indian rupees
Balance as at 1 April 2012 1,247,931,855 (1,581,328) 1,246,350,527
Total comprehensive income for the year 353,815 353,815
Contributions 562,671,000 562,671,000
Total transactions with owners in their capacity as owners 562,671,000 562,671,000
Balance as at 31 March 2013 1,810,602,855 (1,227,513) 1,809,375,342
Balance as at 1 April 2013 1,810,602,855 (1,227,513) 1,809,375,342
Loss for the year (1,053,366) (1,053,366)
Total comprehensive income for the year (1,053,366) (1,053,366)
Contributions 153,202,500 167,130,000 320,332,500
Total transactions with owners in their capacity as owners 153,202,500 167,130,000 320,332,500
Balance as at 31 March 2014 1,963,805,355 167,130,000 (2,280,879) 2,128,654,476
ACN 142 078 564
1170
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2014
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Payment of TDS 9,191 512,031 (761) (42,395)
Payments to suppliers (149,445) (8,325,582) (12,000) (668,521)
Interest received 599,608 33,404,162 48,349 2,693,523
Finance costs (992,290) (55,280,476) (116,563) (6,493,725)
Net cash used in operating activities (532,936) (29,689,865) (80,975) (4,511,118)
Payment for investments (4,127,000) (229,915,170) (10,600,000) (590,526,000)
Net cash used in investing activities (4,127,000) (229,915,170) (10,600,000) (590,526,000)
Proceeds from share issue 2,750,000 153,202,500 10,100,000 562,671,000
Payment received for shares not yet issued 3,000,000 167,130,000
Loan from nanciers 6,600,000 367,686,000 12,000,000 668,520,000
Loans to related entities (6,197,771) (345,277,822) (11,438,000) (637,210,980)
Net cash provided by nancing activities 6,152,229 342,740,678 10,662,000 593,980,020
Reconciliation of cash
Cash at beginning of the nancial year 9,975 555,707 28,950 1,612,805
Net increase / (decrease) in cash held 1,492,293 83,135,643 (18,975) (1,057,098)
Cash at end of nancial year 1,502,268 83,691,350 9,975 555,707
ACN 142 078 564
1171
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This nancial report is a special purpose nancial report prepared for use by
the directors and members of the entity. The directors have determined that the
entity is not a reporting entity. Mahindra Aerospace Australia Pty Ltd is a for prot
entity for the purpose of preparing the nancial statements.
The nancial report was approved by the directors as at the date of the directors
report.
The nancial report has been prepared in accordance with all applicable
Accounting Standards, with the exception of:
AASB 7: Financial Instruments: Disclosures
AASB 101: Presentation of Financial Statements
AASB 107: Cash Flow Statements
AASB 112: Income Taxes
AASB 124: Related Party Disclosures
The following specic accounting policies have been adopted in the preparation
of this report:
(a) Basis of preparation of the nancial report
Historical Cost Convention
The nancial report has been prepared under the historical cost convention,
as modied by revaluations to fair value for certain classes of assets as
described in the accounting policies.
(b) Foreign currency translations and balances
Functional and presentation currency
The functional currency of the company is measured using the currency
of the primary economic environment in which the company operates. For
disclosure purposes at year end this has been converted into the currency
of the ultimate parent company, Indian Rupees, at a pre-determined
convenient rate. This is displayed as comparative balances for both the
current and prior years.
All Foreign currency amounts, including comparatives are translated for
convenience into Indian Rupees at the exchange rate of Rs 55.71 =
AUD$1.00 as advised by the ultimate parent entity.
(c) Going concern
The nancial report has been prepared on a going concern basis, which
contemplated continuity of normal business activities and the realisation of
assets and settlement of liabilities in the ordinary course of business.
The entity incurred a loss from ordinary activities of $18,908 (Rs. 1,053,366)
during the year ended 31 March 2014.
The company is dependant on ongoing nancial support of the ultimate
parent entity to meet its nancial obligations at 31 March 2014.
(d) Revenue
Interest revenue is recognised when it becomes receivable on a
proportional basis taking in to account the interest rates applicable to the
nancial assets.
All revenue is stated net of the amount of goods and services tax (GST).
(e) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-
term deposits with an original maturity of three months or less held at call
with nancial institutions, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities on the statement of nancial position.
(f) Investments in subsidiaries
Non-current investments are recorded at cost. The carrying amount of the
investments is reviewed annually by directors to ensure it is not in excess
of the recoverable amount of these investments.
(g) Provisions
Provisions are recognised when the company has a legal or constructive
obligation, as a result of past events, for which it is probable that an
out ow of economic benets will result and that outow can be reliably
measured.
(h) Comparatives
Where necessary, comparative information has been reclassied and
repositioned for consistency with current period disclosures.
NOTE 2: ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT
NOT OPERATIVE AT 31 MARCH 2014
The following standards and interpretations have been issued at the reporting
date but are not yet effective. The directors assessment of the impact of these
standards and interpretations is set out below.
A number of accounting standards and interpretations have been issued at the
reporting date but are not yet effective. The directors have not yet assessed the
impact of these standards and interpretations.
(i) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian
Accounting Standards arising from AASB 9, AASB 2010-7 Amendments to
Australian Accounting Standards arising from AASB 9 (December 2010), AASB
2012-6 Amendments to Australian Accounting Standards Mandatory Effective
Date of AASB 9 and Transition Disclosure and AASB 2013-9 Amendments to
Australian Accounting Standards Conceptual Framework, Materiality and
Financial Instruments (effective from 1 January 2017).
AASB 9 Financial Instruments improve and simplify the approach for classication
and measurement of nancial assets compared with the requirements of AASB
139. Most of the requirements for nancial liabilities were carried forward
unchanged. However, some changes were made to the fair value option for
nancial liabilities to address the issue of own credit risk. Requirements for
general hedge accounting were included in December 2013. In December 2013,
the new hedge accounting model was incorporated into AASB 9. The new model
aligns hedging accounting more closely with risk management, will be easier to
apply and reduce the costs of implementation. However, the new model requires
extended disclosure. The standard is not applicable until 1 January 2017 but is
available for early adoption.
When adopted, the standard could change the classication and measurement
of nancial assets. AASB 9 only permits the recognition of fair value gains and
losses in other comprehensive income for equity investments that are not held
for trading. In the current reporting period, the group recognised $nil in other
comprehensive income in relation to the movements in the fair value of available
for sale nancial assets, which are not held for trading.
The entity does not have any nancial liabilities that are designated at fair
value through prot or loss. The new requirements only affect the accounting
for nancial liabilities that are designated at fair value through prot or loss.
Therefore, there will be no impact on the consolidated entitys accounting for
nancial liabilities.
The entity does not apply hedge accounting.
The entity has decided not to early adopt AASB 9 at 31 March 2014.
NOTE 3: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Certain accounting estimates include assumptions concerning the future, which,
by denition, will seldom represent actual results. Estimates and assumptions
based on future events have a signicant inherent risk, and where future events
are not as anticipated there could be a material impact on the carrying amounts
of the assets and liabilities discussed below:
(a) Investment in Subsidiaries
All investments in subsidiaries are assessed for impairment by evaluating
whether indicators of impairment exist in relation to their carrying values.
For the purposes of impairment assessment, the investments in subsidiaries
are regarded as a single cash generating unit (CGU), relating primarily to
the manufacturing and sale of aircraft.
The recoverable amount of the CGU is based on managements projected
cashows covering a period of 10 years and managements industry
overview of January 2014 which was prepared in conjuction with the long
term budgets at the time. A formal valuation has also been completed by
a qualied business valuer for the investments in the subsidiary companies
which management has used in its assessments of impairment.
The present value of the future cashows has been calculated using an
average growth rate of 3% for the sale price of aircraft, a terminal value
growth rate of 2.5%, a discount rate in the range of 1517% and sales
volumes as anticipated by management following its analysis of the
aerospace industry.
ACN 142 078 564
1172
2014
$
2014
Rupees
2013
$
2013
Rupees
NOTE 4: REVENUE
Interest income 910,469 50,722,228 158,839 8,848,921
Other revenue 77,004 4,289,893 382,025 21,282,613
987,473 55,012,121 540,864 30,131,534
NOTE 5: OPERATING PROFIT
Prot/(losses) before
income tax has been
determined after:
Finance costs 561,829 31,299,494 135,567 7,552,437
Borrowing costs 430,461 23,980,982 386,946 21,556,762
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank 1,502,268 83,691,350 9,975 555,707
NOTE 7: RECEIVABLES
CURRENT
Other receivables 228,217 12,713,969 9,191 512,031
NON CURRENT
Loans to associates
GippsAero Pty Ltd 17,687,069 985,346,614 11,489,298 640,068,792
Aerostaff Australia
Pty Ltd 1,106,000 61,615,260 1,106,000 61,615,260
18,793,069 1,046,961,874 12,595,298 701,684,052
NOTE 8: OTHER ASSETS
CURRENT
Accrued income 421,351 23,473,464 110,490 6,155,398
NOTE 9: INVESTMENT IN SUBSIDIARIES
NON CURRENT
Investment
Aerostaff Australia
Pty Ltd 4,850,004 270,193,723 3,643,000 202,951,530
Investment Gipp
Aero Investments
Pty Ltd 33,050,000 1,841,215,500 30,130,000 1,678,542,300
Total investment in
subsidiaries 37,900,004 2,111,409,223 33,773,000 1,881,493,830
The recoverable amount of the carrying value of investment in subsidiaries has
been assessed on the basis of projected cashows approved by management
covering a period of 10 years. The present value of future cashows has been
calculated using an average growth rate of 3% for the sale price of aircraft, a
terminal value growth rate of 2.5%, a discount rate in the range of between 15%
and 17% and sales volumes as anticipated by management following its analysis
performed of the aerospace industry.
Management has obtained a formal valuation prepared by qualied valuer to
assist in its assessment of impairment.
2014
$
2014
Rupees
2013
$
2013
Rupees
NOTE 10: PAYABLES
CURRENT
GippsAero Pty Ltd 435,351 24,253,404 419,488 23,369,676
2014
$
2014
Rupees
2013
$
2013
Rupees
NOTE 11: BORROWINGS CURRENT
Secured liabilities
Bank loans 18,600,000 1,036,206,000 12,000,000 668,520,000
NOTE 12: PROVISIONS
CURRENT
Provision for
additional
consideration
on purchase of
investments 1,600,000 89,136,000 1,600,000 89,136,000
NOTE 13: SHARE CAPITAL
Issued and
paid up capital
35,250,500 (2013:
32,500,500)
Ordinary shares 35,250,500 1,963,805,355 32,500,500 1,810,602,855
NOTE 14: RESERVES
General reserve 3,000,000 167,130,000
The general reserve is used to record funds received for shares not yet issued.
NOTE 15: ACCUMULATED LOSSES
Accumulated
losses at
beginning of year (22,034) (1,227,513) (28,385) (1,581,328)
Net prot / (loss)
for year (18,908) (1,053,366) 6,351 353,815
(40,942) (2,280,879) 22,034 (1,227,513)
NOTE 16: EVENTS SUBSEQUENT TO REPORTING DATE
There has been no matter or circumstance, which has arisen since 31 March
2014 that has signicantly affected or may signicantly affect:
(a) the operations, in nancial years subsequent to 31 March 2014, of the (a)
entity, or
(b) the results of those operations, or
(c) the state of affairs, in nancial years subsequent to 31 March 2014, of the
entity.
NOTE 17: COMPANY DETAILS
The registered ofce of the entity is:
Mahindra Aerospace Australia Pty Ltd
Latrobe Valley Airport
Aireld Rd
TRARALGON VIC 3844
AEROSTAFF AUSTRALIA PTY LTD
1173
DIRECTORS REPORT
The directors present their report together with the nancial report
of Aerostaff Australia Pty Ltd for the year ended 31 March 2014 and
auditors report thereon. This nancial report has been prepared in
accordance with Australian Accounting Standards.
Directors names
The names of the directors in ofce at any time during or since the
end of the year are:
Arvind Mehra
Sanjay Joglekar
Hemant Luthra
Laxman Ramnarayan
Parthasarathy Vankipuram Srinivasa
Dr Terence Miles (resigned 25 June 2013)
Stephen Roebuck (resigned 28 February 2014)
The directors have been in ofce since the start of the year to the date
of this report unless otherwise stated.
Results
The loss of the company for the year after providing for income
tax amounted to $1,295,761 (Rs 72,186,846), (2013: $1,233,325,
Rs 68,708,537).
The company continued to engage in its principal activity, the results
of which are disclosed in the attached nancial statements.
There were no signicant changes in the companys state of affairs
that occurred during the nancial year, other than those referred to
elsewhere in this report.
The principal activity of the company during the year was aircraft sheet
metal manufacture and assembly.
No signicant change in the nature of these activities occurred during
the year.
After balance sheet date events
nancial year which signicantly affected or may signicantly affect
the operations of the company, the results of those operations, or the
state of affairs of the company in future nancial years.
Likely developments
The company expects to maintain the present status and level of
operations.
environmental regulation under a law of the Commonwealth or of a
State or Territory.
No dividends were paid or declared since the start of the year. No
recommendation for payment of dividends has been made.
Options
No options over unissued shares or interests in the company were
granted during or since the end of the year and there were no options
outstanding at the end of the year.
During or since the end of the year, the company has given indemnity
or entered an agreement to indemnify, or paid or agreed to pay
insurance premiums in order to indemnify the directors of the company
against liabilities arising from performance of their duties as directors.
Further disclosure required under section 300(9) of the corporations
law is prohibited under the terms of the contract.
No person has applied for leave of Court to bring proceedings on
behalf of the company or intervene in any proceedings to which the
company is a party for the purpose of taking responsibility on behalf
of the company for all or any part of those proceedings.
Director Director
Dated this 22
nd
day of May 2014
The directors have determined that the company is not a reporting
entity and that this special purpose nancial report should be prepared
in accordance with the accounting policies outlined in Note 1 to the
nancial statements.
The directors of the company declare that:
1. The nancial statements and notes, as set out on following pages
presents fairly the companys nancial position as at 31 March
2014 and performance for the year ended on that date of the
company in accordance with the accounting policies outlined in
Note 1 to the nancial statements.
2. In the directors opinion there are reasonable grounds to believe
that the company will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of the Board
of Directors.
Director Director
Dated this 22
nd
day of May 2014
1174
TO THE MEMBERS OF AEROSTAFF AUSTRALIA PTY LTD
a special purpose nancial report, of Aerostaff Australia Pty
Ltd, which comprises the statement of nancial position as
at 31 March 2014, the statement of comprehensive income,
statement of changes in equity and statement of cash ows for
the year then ended, notes comprising a summary of signicant
directors declaration.
preparation and fair presentation of the nancial report and
have determined that the basis of preparation described
in Note 1 to the nancial report is appropriate to meet the
nancial reporting requirements of the constitution.
preparation and fair presentation of a nancial report that is
Our responsibility is to express an opinion on the nancial report
based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. Those standards require
that we comply with relevant ethical requirements relating to
audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the nancial report is
presentation of the nancial report in order to design audit
nancial report.
opinion.
Independence
Opinion
In our opinion, the nancial report presents fairly, in all material
respects, the nancial position of Aerostaff Australia Pty Ltd
as at 31 March 2014 and of its nancial performance and its
cash ows for the year then ended in accordance with the
accounting policies described in Note 1 to the nancial report.
Basis of Accounting
of Aerostaff Australia Pty Ltd to meet the nancial reporting
responsibilities under the Constitution. As a result, the nancial
report may not be suitable for another purpose.
Partner Melbourne
Date 22
nd
day of May 2014
1175
Note 2014 2014 2013 2013
$ ` $ `
Revenue
Sales revenue .................................................. 3 1,656,781 92,299,270 2,253,690 125,553,070
Other revenue .................................................. 3 10,824 603,005 7,810 435,095
3 1,667,605 92,902,275 2,261,500 125,988,165
Less: expenses
Cost of sales .................................................... 4 (1,268,586) (70,672,926) (1,559,714) (86,891,667)
Administration expenses ................................. (840,235) (46,809,492) (1,429,234) (79,622,626)
Distribution expenses ...................................... (573) (31,922) (2,491) (138,774)
Occupancy expenses ...................................... (506,463) (28,215,054) (274,739) (15,305,710)
Borrowing costs ............................................... 4 (72,781) (4,054,630) (77,669) (4,326,940)
Depreciation expense ..................................... 4 (45,872) (2,555,529) (60,405) (3,365,163)
Other expenses ................................................ (228,856) (12,749,568) (90,573) (5,045,822)
(2,963,366) (165,089,121) (3,494,825) (194,696,702)
Loss before income tax expense................. (1,295,761) (72,186,846) (1,233,325) (68,708,537)
Income tax expense ........................................
Total comprehensive income........................ (1,295,761) (72,186,846) (1,233,325) (68,708,537)
1176
Note 2014 2014 2013 2013
$ ` $ `
Current assets
Cash and cash equivalents ............................. 5 160,454 8,938,892 300,691 16,751,496
Receivables ...................................................... 6 382,778 21,324,562 271,178 15,107,326
Inventories ........................................................ 7 644,999 35,932,894 508,215 28,312,657
Other assets ..................................................... 8 68,952 3,841,316 23,887 1,330,745
Total current assets ....................................... 1,257,183 70,037,664 1,103,971 61,502,224
Non-current assets
Plant and equipment ....................................... 9 243,122 13,544,327 249,364 13,892,068
Total non-current assets ............................... 243,122 13,544,327 249,364 13,892,068
Total assets ..................................................... 1,500,305 83,581,991 1,353,335 75,394,292
Current liabilities
Payables ........................................................... 10 1,676,645 93,405,895 1,025,582 57,135,174
Borrowings ....................................................... 11 105,448 5,874,508 199,879 11,135,259
Provisions ......................................................... 12 19,309 1,075,704 247,712 13,800,036
Other liabilities ................................................. 13 81,609 4,546,437
Total current liabilities ................................... 1,801,402 100,356,107 1,554,782 86,616,906
Payables ........................................................... 10 1,106,000 61,615,260 1,106,000 61,615,260
Borrowings ....................................................... 11 3,955 220,333 9,383 522,727
Provisions ......................................................... 12 4,000 222,840 2,461 137,102
Total non-current liabilities ........................... 1,113,955 62,058,433 1,117,844 62,275,089
Total liabilities ................................................. 2,915,357 162,414,540 2,672,626 148,891,995
Net assets ....................................................... (1,415,052) (78,832,549) (1,319,291) (73,497,703)
Equity
Share capital .................................................... 14 2,250,004 125,347,723 2,250,004 125,347,723
Reserves 15 1,200,000 66,852,000
Accumulated losses ........................................ 16 (4,865,056) (271,032,272) (3,569,295) (198,845,426)
Total equity ..................................................... (1,415,052) (78,832,549) (1,319,291) (73,497,703)
1177
Australian dollars Contributed
equity
Reserves Accumulated
losses
Total equity
$ $ $ $
Balance as at 1 April 2012 ............................................... 350,004 (2,335,970) (1,985,966)
Loss for the year .................................................................. (1,233,325) (1,233,325)
Contributions ........................................................................ 1,900,000 1,900,000
Total transactions with owners in their capacity as
owners ................................................................................. 1,900,000 1,900,000
Balance as at 31 March 2013 ........................................... 2,250,004 (3,569,295) (1,319,291)
Balance as at 1 April 2013 ............................................... 2,250,004 (3,569,295) (1,319,291)
Loss for the year (1,295,761) (1,295,761)
Contributions ........................................................................ 1,200,000 1,200,000
owners ................................................................................. 1,200,000 1,200,000
Balance as at 31 March 2014 ........................................... 2,250,004 1,200,000 (4,865,056) (1,415,052)
1178
Indian rupees Contributed
equity
losses
Total equity
` ` ` `
Loss for the year .................................................................. (68,708,537) (68,708,537)
Contributions ........................................................................ 105,849,000 105,849,000
owners ................................................................................. 105,849,000 105,849,000
Balance as at 31 March 2013 ........................................... 125,347,723 (198,845,426) (73,497,703)
Loss for the year (72,186,846) (72,186,846)
Contributions ........................................................................ 66,852,000 66,852,000
owners ................................................................................. 66,852,000 66,852,000
Balance as at 31 March 2014 ........................................... 125,347,723 66,852,000 (271,032,272) (78,832,549)
1179
Note 2014 2014 2013 2013
$ ` $ `
Receipts from customers ................................ 1,451,023 80,836,491 2,737,850 152,525,624
Payments to suppliers and employees .......... (3,532,840) (196,814,516) (4,091,178) (227,919,526)
Finance costs ................................................... (72,781) (4,054,630) (77,669) (4,326,940)
Net cash used in operating activities ......... (2,154,598) (120,032,655) (1,430,997) (79,720,842)
Payment for property, plant and equipment ... (44,943) (2,503,775)
Net cash used in investing activities .......... (44,943) (2,503,775)
Proceeds from share issue ............................. 1,900,000 105,849,000
Payment received for shares not yet issued .. 1,200,000 66,852,000
Net repayments of borrowings ....................... (99,859) (5,563,145) (167,234) (9,316,606)
Loans from parent, associated and director
related entities.................................................. 959,623 53,460,597 719,258 40,069,863
Net cash provided by nancing activities ... 2,059,764 114,749,452 2,452,024 136,602,257
Cash at beginning of the nancial year .......... 300,691 16,751,497 (720,336) (40,129,919)
Net increase/(decrease) in cash held ............. (139,777) (7,786,978) 1,021,027 56,881,415
Cash at end of nancial year ....................... 160,914 8,964,519 300,691 16,751,496
1180
This nancial report is a special purpose nancial report prepared for use by the
directors and members of the company. The directors have determined that the
company is not a reporting entity. Aerostaff Australia Pty Ltd is a forprot entity
for the purpose of preparing the nancial statements.
report.
The following specic accounting policies, which are consistent with the
previous period unless otherwise stated, have been adopted in the preparation
of this report:
(b) Going concern
The nancial report has been prepared on a going concern basis.
The company incurred a loss from ordinary activities of $1,295,761
(Rs: 72,186,846) during the year ended 31 March 2014, and as at that
date the companys total liabilities exceeded total assets by $1,415,052
(Rs: 78,832,549).
The company is dependent on the ongoing nancial support at of its
ultimate parent entity to meet its nancial obligations 31 March 2014. At
this time, the directors believe that the ongoing nancial support of the
ultimate parent entity will be continued.
(c) Foreign currency translations and balances
The nancial statements of the entity are measured using the currency
of the primary economic environment in which that entity operates (the
functional currency). The nancial statements are presented in Australian
dollars which is the entitys functional and presentation currency.
convenience into Indian Rupees at the exchange rate of Rs. 55.71 =
(d) Revenue
Revenue from sale of goods is recognised when the signicant risks and
rewards of ownership of the goods have passed to the buyer and the costs
incurred or to be incurred in respect of the transaction can be measured
reliably. Risks and rewards of ownership are considered passed to the
buyer at the time of delivery of the goods to the customer.
nancial assets.
(e) Income tax
Current income tax expense or revenue is the tax payable on the current
periods taxable income based on the applicable income tax rate adjusted
by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences
at the applicable tax rates when the assets are expected to be recovered
or liabilities are settled. No deferred tax asset or liability is recognised in
relation to temporary differences if they arose in a transaction, other than
a business combination, that at the time of the transaction did not affect
either accounting prot or taxable prot or loss.
Deferred tax assets are recognised for deductible temporary differences
and unused tax losses only if it is probable future taxable amounts will be
available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised
directly in equity are also recognised directly in equity.
(f) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-
term deposits with an original maturity of three months or less held at
call with nancial institutions, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the statement of nancial
position.
(g) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of manufactured products includes direct material, direct labour
and a proportion of manufacturing overheads based on normal operating
capacity. Inventories include raw materials, work in progress and nished
goods.
(h) Plant and equipment
Each class of plant and equipment is carried at cost or fair value less,
where applicable, any accumulated depreciation and any accumulated
impairment losses.
Plant and equipment
Plant and equipment is measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by
directors to ensure it is not in excess of the recoverable amount from those
assets. The recoverable amount is assessed on the basis of the expected
net cash ows which will be received from the assets employment and
subsequent disposal. The expected net cash ows have been discounted
to present values in determining recoverable amounts.
Depreciation
The depreciable amount of all xed assets is depreciated over their
estimated useful lives commencing from the time the asset is held ready
for use.
Leasehold improvements are depreciated over the shorter of either
the unexpired period of the lease or the estimated useful lives of the
improvements.
Class of xed asset Depreciation rates Depreciation basis
Leasehold improvements at cost 10-20% Diminishing value
Plant and equipment at cost 15-40% Diminishing value
Motor vehicles at cost 22-5% Diminishing value
Ofce equipment at cost 15-40% Diminishing value
(i) Provisions
obligation, as a result of past events, for which it is probable that an
out ow of economic benets will result and that outow can be reliably
measured.
1181
(j) Leases
Leases are classied at their inception as either operating or nance leases
based on the economic substance of the agreement so as to reect the
risks and benets incidental to ownership.
(k) Employee benets
(i) Short term employee benet obligations
Liabilities arising in respect of wages and salaries, annual leave and
any other employee benets expected to be settled within twelve
months of the reporting date are measured at their nominal amounts
based on remuneration rates which are expected to be paid when
the liability is settled. The expected cost of short term employee
benets in the form of compensated absences such as annual leave
is recognised in the provision for employee benets. All other short
term employee benet obligations are presented as payables.
(ii) Long term employee benet obligations
Liabilities arising in respect of long service leave and annual leave
which is not expected to be settled within twelve months of the
reporting date are measured at the present value of the estimated
future cash outow to be made in respect of services provided by
employees up to the reporting date.
Employee benet obligations are presented as current liabilities in
the balance sheet if the entity does not have an unconditional right
to defer settlement for at least twelve months after the reporting date,
regardless of when the actual settlement is expected to occur.
(l) Borrowing costs
Borrowing costs can include interest, amortisation of discounts or
premiums relating to borrowings, ancillary costs incurred in connection
with arrangement of borrowings, foreign exchange losses net of hedged
amounts on borrowings.
Borrowing costs are expensed as incurred, except for borrowing costs
incurred as part of the cost of the construction of a qualifying asset are
capitalised until the asset is ready for its intended use or sale.
(m) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST,
except where the amount of GST incurred is not recoverable from the Tax
Ofce. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and
payables in the statement of nancial position are shown inclusive of GST.
Cash ows are presented in the statement of cash ows on a gross basis,
except for the GST component of investing and nancing activities, which
are disclosed as operating cash ows.
(n) Comparatives
repositioned for consistency with current year disclosures.
(i) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian
Accounting Standards arising from AASB 9, AASB 2010-7 Amendments to
Australian Accounting Standards arising from AASB 9 (December 2010), AASB
2012-6 Amendments to Australian Accounting Standards Mandatory Effective
Date of AASB 9 and Transition Disclosure and AASB 2013-9 Amendments to
Australian Accounting Standards Conceptual Framework, Materiality and
Financial Instruments (effective from 1 January 2017)
139. Most of the requirements for nancial liabilities were carried forward
unchanged. However, some changes were made to the fair value option for
nancial liabilities to address the issue of own credit risk. Requirements for
general hedge accounting were included in December 2013. In December 2013,
the new hedge accounting model was incorporated into AASB 9. The new model
aligns hedging accounting more closely with risk management, will be easier to
apply and reduce the costs of implementation. However, the new model requires
extended disclosure. The standard is not applicable until 1 January 2017 but is
available for early adoption.
for trading. In the current reporting period, the group recognised $nil in other
The entity does not have any nancial liabilities that are designated at fair
value through prot or loss. The new requirements only affect the accounting
for nancial liabilities that are designated at fair value through prot or loss.
Therefore, there will be no impact on the entitys accounting for nancial
liabilities.
The entity does not apply hedge accounting.
The entity has decided not to early adopt AASB 9 at 31 March 2014.
NOTE 3: REVENUE
2014 2014 2013 2013
$ ` $ `
Sale of goods 1,656,781 92,299,270 2,253,690 125,553,070
Other revenue 10,824 603,005 7,810 435,095
1,667,605 92,902,275 2,261,500 125,988,165
NOTE 4: OPERATING PROFIT
Losses before income
tax has been determined
after:
Cost of sales
Purchases/Materials
used 684,144 38,113,662 670,006 37,326,034
Direct labour costs 721,226 40,179,500 1,118,540 62,313,863
Changes in inventory (136,784) (7,620,237) (228,832) (12,748,231)
1,268,586 70,672,925 1,559,714 86,891,666
Finance costs 72,781 4,054,630 77,669 4,326,940
Depreciation 45,872 2,555,529 60,405 3,365,163
Foreign currency
translation losses (565) (31,476) 2,154 119,999
Indirect employee benet
costs 1,414,891 79,487,251 1,266,907 68,350,989
Cash at bank 160,454 8,938,892 300,691 16,751,496
NOTE 6: RECEIVABLES
CURRENT
Trade debtors 369,285 20,572,867 152,513 8,496,499
debts (5,368) (299,051)
369,285 20,572,867 147,145 8,197,448
Other debtors 6,576 366,349 8,468 471,752
Amounts receivables
from:
Mahindra Aerostructures
Limited 6,917 385,346 115,565 6,438,126
382,778 21,324,562 271,178 15,107,326
1182
NOTE 7: INVENTORIES
2014 2014 2013 2013
$ ` $ `
CURRENT
At cost
Raw materials 57,961 3,229,007 31,609 1,760,937
Work in progress 587,038 32,703,887 476,606 26,551,720
644,999 35,932,894 508,215 28,312,657
CURRENT
Prepayments 20,293 1,130,523 23,887 1,330,745
Other current assets 48,659 2,710,793
68,952 3,841,316 23,887 1,330,745
NOTE 9: PLANT AND EQUIPMENT
Leasehold improvements
At cost 41,452 2,309,291 57,962 3,229,063
Accumulated depreciation (53,343) (2,971,739)
41,452 2,309,291 4,619 257,324
Plant and equipment
Plant and equipment at
cost 1,635,804 91,130,641 1,632,404 90,941,227
Accumulated depreciation (1,470,710) (81,933,254) (1,432,953) (79,829,812)
165,094 9,197,387 199,451 11,111,415
Accumulated depreciation (8,662) (482,560) (23,286) (1,297,263)
11,338 631,640 16,016 892,251
Ofce equipment at cost 239,615 13,348,952 239,615 13,348,952
Accumulated depreciation (214,377) (11,942,943) (210,337) (11,717,874)
25,238 1,406,009 29,278 1,631,078
Total plant and equipment 243,122 13,544,327 249,364 13,892,068
(a) Reconciliations
Leasehold
improvements
Opening carrying
amount 4,619 257,325 5,146 286,684
Additions 41,452 2,309,290
Write offs (4,147) (231,029)
Depreciation
expense (472) (26,295) (527) (29,359)
Closing carrying
amount 41,452 2,309,291 4,619 257,325
Plant and equipment
Opening carrying
amount 199,451 11,111,415 247,218 13,772,515
Additions 3,400 189,414
Depreciation
expense (37,757) (2,103,442) (47,767) (2,661,100)
Closing carrying
amount 165,094 9,197,387 199,451 11,111,415
2014 2014 2013 2013
$ ` $ `
Motor vehicles
Opening carrying
amount 16,016 892,251 20,666 1,151,303
Additions 91 5,126
Write offs (1,076) (59,944)
Depreciation
expense (3,604) (200,779) (4,650) (259,052)
Closing carrying
amount 11,427 636,654 16,016 892,251
Ofce equipment
Opening carrying
amount 29,278 1,631,078 36,739 2,046,730
Depreciation
expense (4,039) (225,013) (7,461) (415,652)
Closing carrying
amount 25,239 1,406,065 29,278 1,631,078
Total plant and
equipment
Carrying amount at
1 April 249,364 13,892,069 309,769 17,257,232
Additions 44,943 2,503,830
Write offs (5,223) (290,973)
Depreciation
expense (45,872) (2,555,529) (60,405) (3,365,163)
Carrying amount at
31 March 243,212 13,549,397 249,364 13,892,069
NOTE 10: PAYABLES
CURRENT
Trade creditors 129,068 7,190,378 80,479 4,483,485
Sundry creditors and
accruals 620,816 34,585,662 869,317 48,429,651
Loan from associates
GippsAero Pty Ltd 922,396 51,386,681
Roebuck Family Trust 4,365 243,174 75,786 4,222,038
1,676,645 93,405,895 1,025,582 57,135,174
NON CURRENT
Loan from associates
Mahindra Aerospace
Australia Pty Ltd 1,106,000 61,615,260 1,106,000 61,615,260
1183
NOTE 11: BORROWINGS
2014 2014 2013 2013
$ ` $ `
CURRENT
Secured liabilities
Bank loans 100,000 5,571,000 195,000 10,863,450
Hire purchase liability 5,448 303,508 4,879 271,809
105,448 5,874,508 199,879 11,135,259
NON CURRENT
Secured liabilities
Hire purchase liability 3,955 220,333 9,383 522,727
NOTE 12: PROVISIONS
CURRENT
Employee benets (a) 19,309 1,075,704 247,712 13,800,036
NON CURRENT
Employee benets (a) 4,000 222,840 2,461 137,102
(a) Aggregate
employee benets
liability 23,309 1,298,544 250,173 13,937,138
NOTE 13: OTHER LIABILITIES
CURRENT
Deferred income 81,609 4,546,437
Issued and paid-up
capital
2,250,010 (2013: 2,250,010)
Ordinary shares 2,250,004 125,347,723 2,250,004 125,347,723
NOTE 15: RESERVES
General reserve 1,200,000 66,852,000
The general reserve is used to record funds received for shares not yet issued.
Accumulated losses at
beginning of year (3,569,295) (198,845,426) (2,335,970) (130,136,889)
Net loss (1,295,761) (72,186,846) (1,233,325) (68,708,537)
(4,865,056) (271,032,272) (3,569,295) (198,845,426)
NOTE 17: CAPITAL AND LEASING COMMITMENTS
2014 2014 2013 2013
$ ` $ `
(a) Hire purchase
commitments
Payable
not later than one
year 6,120 340,945 6,120 340,945
later than one year
and not later than
ve years 4,100 228,411 10,200 568,242
Minimum hire
purchase payments 10,220 569,356 16,320 909,187
Less future nance
charges (817) (45,515) (2,058) (114,651)
Total hire purchase
liability 9,403 523,841 14,262 794,536
Represented by:
Current liability 5,448 303,508 4,879 271,809
Non-current liability 3,955 220,333 9,383 522,727
9,403 523,841 14,262 794,536
Hire purchases
relate to plant and
equipment and motor
vehicles.
(b) Operating lease
commitments
Non-cancellable
operating leases
contracted for but
not capitalised in the
nancial statements:
Payable
not later than one
year 244,983 13,648,003
later than one year
and not later than
ve years 22,578 1,257,820
267,561 14,905,823
(a) the operations, in nancial years subsequent to 31 March 2014, of the
company, or
company.
The registered ofce of the company is:
Aerostaff Australia Pty Ltd
Latrobe Regional Airport
Aireld Road
TRARALGON VIC 3844
GIPP AERO INVESTMENTS PTY LTD
1184
DIRECTORS REPORT
report of Gipp Aero Investments Pty Ltd (the company), for
the year ended 31 March 2014 and auditors report thereon.
This nancial report has been prepared in accordance with
Australian Accounting Standards.
Directors names
George Morgan
Arvind Mehra
Sanjay Joglekar
Results
The prot of the company for the year after providing for
income tax amounted to $36,203 (Rs 2,016,869) (2013 loss:
$6,819, Rs 379,886).
The company continued to engage in its principal activity,
statements.
holding of investments.
during the year.
nancial years.
Likely developments
of operations.
Options
During or since the end of the year, ultimate parent entity on
behalf of the company has given indemnity or entered an
agreement to indemnify, or paid or agreed to pay insurance
premiums in order to indemnify the directors of the company
against liabilities arising as a result of the performance of their
duties as directors.
has been an auditor of the company.
those proceedings.
Director Director
Dated this 22
nd
day of May 2014
The directors have determined that the company is not a
reporting entity and that this special purpose nancial report
should be prepared in accordance with the accounting policies
outlined in Note 1 to the nancial statements.
pages presents fairly the companys nancial position as
at 31 March 2014 and performance for the year ended
on that date of the company in accordance with the
accounting policies outlined in Note 1 to the nancial
statements.
believe that the company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the
Board of Directors.
Director Director
Dated this 22
nd
day of May 2014
1185
TO THE MEMBERS OF GIPP AERO INVESTMENTS PTY LTD
We have audited the accompanying nancial report, being a
special purpose nancial report, of Gipp Aero Investments Pty
Ltd, which comprises the statement of nancial position as
at 31 March 2014, the statement of comprehensive income,
statement of changes in equity and statement of cash ows for
the year then ended, notes comprising a summary of signicant
directors declaration.
nancial report.
opinion.
Independence
Opinion
respects, the nancial position of Gipp Aero Investments Pty
Ltd as at 31 March 2014 and of its nancial performance and
its cash ows for the year then ended in accordance with the
Basis of Accounting
The nancial report has been prepared to assist the directors of
Gipp Aero Investments Pty Ltd to meet the nancial reporting
Partner Melbourne
Date: 22
nd
day of May 2014
1186
2014 2014 2013 2013
$ ` $ `
Revenue
Other revenue ................................................. 36,203 2,016,869
36,203 2,016,869
Less: expenses
Professional fees ............................................ (6,819) (379,886)
(6,819) (379,886)
Prot/(loss) before income tax expense ... 36,203 2,016,869 (6,819) (379,886)
Income tax expense .......................................
Prot/(loss) from continuing operations ... 36,203 2,016,869 (6,819) (379,886)
Total comprehensive income....................... 36,203 2,016,869 (6,819) (379,886)
1187
Note 2014 2014 2013 2013
$ ` $ `
Current assets
Cash and cash equivalents ............................ 4 804 44,791 804 44,791
Total current assets ...................................... 804 44,791 804 44,791
Non-current assets
Other nancial assets ..................................... 5 32,250,018 1,796,648,502 29,329,918 1,633,969,731
Total non-current assets .............................. 32,250,018 1,796,648,502 29,329,918 1,633,969,731
Total assets .................................................... 32,250,822 1,796,693,293 29,330,722 1,634,014,522
Current liabilities
Payables .......................................................... 6 36,103 2,011,298
Total current liabilities .................................. 36,103 2,011,298
Total liabilities ................................................ 36,103 2,011,298
Net assets ...................................................... 32,250,822 1,796,693,293 29,294,619 1,632,003,224
Equity
Share capital ................................................... 7 7,017,275 390,932,390 7,017,275 390,932,390
Reserves.......................................................... 8 27,250,000 1,518,097,500 24,330,000 1,355,424,300
Accumulated losses ....................................... 9 (2,016,453) (112,336,597) (2,052,656) (114,353,466)
Total equity .................................................... 32,250,822 1,796,693,293 29,294,619 1,632,003,224
1188
Australian Dollars Contributed
equity
losses
Total equity
$ $ $ $
Balance as at 1 April 2012 ........................... 7,017,275 15,630,000 (2,045,837) 20,601,438
Loss for the year .............................................. (6,819) (6,819)
Total comprehensive income for the year .... (6,819) (6,819)
Transactions with owners in their capacity
as owners:
Contributions .................................................... 8,700,000 8,700,000
Total transactions with owners in their
capacity as owners ........................................ 8,700,000 8,700,000
Balance as at 31 March 2013 ....................... 7,017,275 24,330,000 (2,052,656) 29,294,619
Balance as at 1 April 2013 ........................... 7,017,275 24,330,000 (2,052,656) 29,294,619
Prot for the year ............................................. 36,203 36,203
Total comprehensive income for the year .... 36,203 36,203
as owners:
Contributions .................................................... 2,920,000 2,920,000
capacity as owners ........................................ 2,920,000 2,920,000
Balance as at 31 March 2014 ....................... 7,017,275 27,250,000 (2,016,453) 32,250,822
1189
Indian Rupees Contributed
equity
losses
Total equity
` ` ` `
Balance as at 1 April 2012 .......................... 390,932,390 870,747,300 (113,973,580) 1,147,706,110
Loss for the year ............................................. (379,886) (379,886)
Total comprehensive income for the year .... (379,886) (379,886)
as owners:
Contributions ................................................... -484,677,000 -484,677,000
capacity as owners ....................................... -484,677,000 -484,677,000
Balance as at 31 March 2013 ...................... 390,932,390 1,355,424,300 (114,353,466) 1,632,003,224
Balance as at 1 April 2013 .......................... 390,932,390 1,355,424,300 (114,353,466) 1,632,003,224
Prot for the year ............................................ 2,016,869 2,016,869
Total comprehensive income for the year .... 2,016,869 2,016,869
as owners:
Contributions ................................................... -162,673,200 -162,673,200
capacity as owners ....................................... -162,673,200 -162,673,200
Balance as at 31 March 2014 ...................... 390,932,390 1,518,097,500 (112,336,597) 1,796,693,293
1190
2014 2014 2013 2013
$ ` $ `
Payments to suppliers and employees .......... (6,819) (379,886)
Net cash used in operating activities ......... (6,819) (379,886)
Payment for investments in subsidiaries ........ (2,920,000) (162,673,200) (8,700,000) (484,677,000)
Net cash used in investing activities .......... (2,920,000) (162,673,200) (8,700,000) (484,677,000)
Funds received from parent entity .................. 2,920,000 162,673,200 8,700,000 484,677,000
Net movement in related party loans ............. 7,066 393,647
Net cash provided by nancing activities .... 2,920,000 162,673,200 8,707,066 485,070,647
Cash at beginning of the nancial year .......... 804 44,791 557 31,030
Net increase in cash held ............................... 247 13,761
Cash at end of nancial year ....................... 804 44,791 804 44,791
1191
company is not a reporting entity. Gipp Aero Investments Pty Ltd is a forprot
report.
of this report:
(b) Going concern
The company earned a prot from ordinary activities of $36,203
(Rs 2,061,869) during the year ended 31 March 2014.
The company is dependent on the ongoing nancial support of the
ultimate parent entity to meet its nancial obligations at 31 March 2014.
At this time, the directors believe that the ongoing nancial support of the
(c) Foreign currency translations and balances
convenience into Indian Rupees at the exchange rate of Rs 55.71 =
(d) Revenue
nancial assets.
(e) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short
term deposits with an original maturity of three months or less held at call
with nancial institutions, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the statement of nancial position.
(f) Other nancial assets
Non-current investments are recorded at cost. The carrying amount of the
investments is reviewed annually by directors to ensure it is not in excess
of the recoverable amount of these investments.
(g) Goods and services tax (GST)
acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of nancial position are shown inclusive
of GST.
(h) Comparatives
(a) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian
Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments
to Australian Accounting Standards arising from AASB 9 (December 2010)
and AASB 2012-6 Amendments to Australian Accounting Standards
Mandatory Effective Date of AASB 9 and Transition Disclosure (effective
from 1 January 2015).
AASB 9 Financial Instruments improve and simplify the approach for
classication and measurement of nancial assets compared with the
requirements of AASB 139. The standard is not applicable until 1 January
2015 but is available for early adoption.
When adopted, the standard could change the classication and
measurement of nancial assets. AASB 9 only permits the recognition
of fair value gains and losses in other comprehensive income for equity
investments that are not held for trading. In the current reporting period,
the company recognised $nil in other comprehensive income in relation to
the movements in the fair value of available for sale nancial assets, which
are not held for trading.
The company does not have any nancial liabilities that are designated
at fair value through prot or loss. The new requirements only affect the
accounting for nancial liabilities that are designated at fair value through
prot or loss. Therefore, there will be no impact on the companys
accounting for nancial liabilities. The company has not yet decided when
to adopt AASB 9. The company has decided not to early adopt AASB 9 at
31 March 2014.
Other standards and interpretations have been issued at the reporting
date but are not yet effective. When adopted, these standards and
interpretations are likely to impact on the nancial information presented,
however the assessment of impact has not yet been completed.
(a) Investment in Subsidiaries
All investments in subsidiaries are assessed for impairment by evaluating
whether indicators of impairment exist in relation to their carrying values.
For the purposes of impairment assessment, the investments in subsidiaries
are regarded as a single cash generating unit (CGU), relating primarily to
the manufacturing and sale of aircraft.
1192
term budgets at the time. A formal valuation has also been completed by
a qualied business valuer for the investments in the subsidiary companies
which management has used in its assessments of impairment.
average growth rate of 3% for the sale price of aircraft, a terminal value
growth rate of 2.5%, a discount rate in the range of 15-17% and sales
volumes as anticipated by management following its analysis of the
aerospace industry.
2014 2014 2013 2013
$ ` $ `
Cash at bank 804 44,791 804 44,791
804 44,791 804 44,791
NOTE 5: OTHER FINANCIAL ASSETS
NON CURRENT
Investments at cost:
Investment in GA8
Airvan Pty Ltd 3 167 3 167
Investment in GA200
Pty Ltd 3 167 3 167
Investment in Airvan
Flight Services Pty Ltd 2 111 2 111
Investment in Nomad
TC Pty Ltd 5,000,000 278,550,000 5,000,000 278,550,000
Investment in Gipps
Aero Pty Ltd 27,250,010 1,518,098,057 24,329,910 1,355,419,286
32,250,018 1,796,648,502 29,329,918 1,633,969,731
The recoverable amount of the carrying value of investment in subsidiaries has
been assessed on the basis of projected cashows approved by management
covering a period of 10 years. The present value of future cashows has been
calculated using an average growth rate of 3% for the sale price of aircraft, a
terminal value growth rate of 2.5%, a discount rate in the range of between 15%
and 17% and sales volumes as determined by management following its the
analysis performed of the aerospace industry.
Management has also obtained a formal valuation prepared by qualied valuer
to assist in its assessment of impairment.
On the basis of the information currently available, management is of the view
that the key assumptions are valid and accordingly the present value calculation
of future cashows does not result in an impairment.
2014 2014 2013 2013
$ ` $ `
NOTE 6: PAYABLES
CURRENT
Amounts payable to:
Gipps Aero Pty Ltd 24,016 1,337,931
Sundry creditors and
accruals 12,087 673,367
36,103 2,011,298
Issued and paid-up
capital
32,247 (2013: 32,247)
Ordinary shares 7,017,275 390,932,390 7,017,275 390,932,390
NOTE 8: RESERVES
General reserve 27,250,000 1,518,097,500 24,330,000 1,355,424,300
The general reserve is used to record funds transferred from the ultimate
parent to Gipp Aero Investments Pty Ltd for operational purposes which takes
the form of equity.
Net prot / (loss) for
the year 36,203 2,016,869 (6,819) (379,886)
(2,016,453) (112,336,597) (2,052,656) (114,353,466)
company, or
company.
NOTE 11: ENTITY DETAILS
Gipp Aero Investments Pty Ltd
Aireld Road
TRARALGON VIC 3844
GIPPSAERO PTY LTD
1193
DIRECTORS REPORT
report of GippsAero Pty Ltd for the year ended 31 March 2014
and auditors report thereon. This nancial report has been
prepared in accordance with Australian Accounting Standards.
Directors names
George Morgan
Arvind Mehra
Sanjay Joglekar
Hemant Luthra
Laxman Ramnarayan
Parthasarathy Vankipuram Sninivasa
Results
The loss of the company for the year after providing for
income tax amounted to $6,921,694 (Rs 385,607,574) (2013:
$6,982,929, Rs 389,018,975).
The company continued to engage in its principal activity, the
results of which are disclosed in the attached nancial statements.
The principal activity of the company during the year was the
manufacture and sale of aircraft.
during the year.
nancial years.
Likely developments
of operations.
Options
During or since the end of the year, the ultimate parent entity
on behalf of the company has given indemnity or entered an
has been an auditor of the company.
those proceedings.
Director Director
Dated this 22
nd
day of May 2014
pages presents fairly the companys nancial position as
at 31 March 2014 and performance for the year ended on
that date of the company in accordance with the accounting
Board of Directors.
Director Director
Dated this 22
nd
day of May 2014
GIPPSAERO PTY LTD
1194
TO THE MEMBERS OF GIPPSAERO PTY LTD
special purpose nancial report of GippsAero Pty Ltd, which
comprises the statement of nancial position as at 31 March
2014, the statement of comprehensive income, statement of
changes in equity and statement of cash ows for the year then
ended, notes comprising a summary of signicant accounting
policies and other explanatory information, and the directors
declaration.
The directors of the company are responsible for the preparation
of the nancial report that gives a true and fair view and have
determined that the basis of preparation described in Note 1
to the nancial report is appropriate to meet the requirements
of the Corporations Act 2001 and is appropriate to meet the
needs of the members.
preparation of a nancial report that gives a true and fair view
and is free from material misstatement, whether due to fraud
or error.
based on our audit. We have conducted our audit in accordance
reasonable assurance whether the nancial report is free from
material misstatement.
internal control relevant to the companys preparation of the
effectiveness of the companys internal control. An audit also
Independence
Opinion
In our opinion, the nancial report presents fairly, in all
material respects, the nancial position of GippsAero Pty Ltd
as at 31 March 2014 and of its nancial performance and its
cash ows for the year then ended in accordance with the
Basis of Accounting
Partner Melbourne
Date: 22
nd
May 2014
GIPPSAERO PTY LTD
1195
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Revenue
Sales revenue 4 13,880,535 773,284,605 8,147,480 453,896,111
Other revenue 4 1,828,229 101,850,637 2,122,205 118,228,040
15,708,764 875,135,242 10,269,685 572,124,151
Less: expenses
Changes in inventories of nished goods and
work in Progress (6,037,091) (336,326,340) 3,646,016 203,119,551
Materials and consumables used (3,590,274) (200,014,164) (7,532,458) (419,633,235)
Transport expenses (222,739) (12,408,790) (423,308) (23,582,489)
Depreciation & Amortisation expenses 5 (756,059) (42,120,047) (754,419) (42,028,682)
Employee benets expense 5 (7,582,557) (422,424,250) (9,606,505) (535,178,394)
Occupancy expense (363,540) (20,252,813) (328,071) (18,276,835)
Marketing & Promotional expense (769,931) (42,892,856) (686,033) (38,218,898)
Finance costs 5 (1,004,269) (55,947,826) (472,824) (26,341,025)
Travel expense (513,859) (28,627,085) (628,092) (34,991,005)
Other expense (1,790,139) (99,728,645) (466,920) (26,012,114)
(22,630,458) (1,260,742,816) (17,252,614) (961,143,126)
Loss before income tax expense (6,921,694) (385,607,574) (6,982,929) (389,018,975)
Income tax expense
Loss for the year (6,921,694) (385,607,574) (6,982,929) (389,018,975)
Total comprehensive income (6,921,694) (385,607,574) (6,982,929) (389,018,975)
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31
st
MARCH 2014
GIPPSAERO PTY LTD
1196
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Current assets
Cash and cash equivalents 6 746,649 41,595,816 656,192 36,556,457
Receivables 7 4,590,420 255,732,298 1,644,760 91,629,579
Inventories 8 5,405,457 301,138,009 11,442,548 637,464,349
Other assets 9 1,736,452 96,737,741 1,517,572 84,543,936
Total current assets 12,478,978 695,203,864 15,261,072 850,194,321
Non-current assets
Intangible assets 10 15,937,667 887,887,430 10,892,629 606,828,363
Plant and equipment 11 4,344,288 242,020,283 3,006,512 167,492,783
Total non-current assets 20,281,955 1,129,907,713 13,899,141 774,321,146
Total assets 32,760,933 1,825,111,577 29,160,213 1,624,515,467
Current liabilities
Payables 12 3,381,822 188,401,304 3,500,903 195,035,306
Borrowings 13 192,573 10,728,242 387,129 21,566,957
Provisions 14 888,953 49,523,572 1,060,946 59,105,302
Other liabilities 15 855,822 47,677,844 1,138,603 63,431,574
Total current liabilities 5,319,170 296,330,962 6,087,581 339,139,139
Payables 12 17,550,000 977,710,500 11,107,273 618,786,179
Borrowings 13 1,981,417 110,384,741 27,857 1,551,913
Provisions 14 25,562 1,424,059
Total non-current liabilities 19,531,417 1,088,095,241 11,160,692 621,762,151
Total liabilities 24,850,587 1,384,426,203 17,248,273 960,901,290
Net assets 7,910,346 440,685,374 11,911,940 663,614,177
Equity
Share capital 16 10 557 10 557
Reserves 17 27,250,000 1,518,097,500 24,329,900 1,355,418,729
Accumulated losses 18 (19,339,664) (1,077,412,683) (12,417,970) (691,805,109)
Total equity 7,910,346 440,685,374 11,911,940 663,614,177
GIPPSAERO PTY LTD
1197
Contributed
equity
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Australian dollars
Balance as at 1 April 2012 10 15,629,900 (5,435,041) 10,194,869
Loss for the year (6,982,929) (6,982,929)
Contributions 8,700,000 8,700,000
owners 8,700,000 8,700,000
Balance as at 31 March 2013 10 24,329,900 (12,417,970) 11,911,940
Loss for the year (6,921,694) (6,921,694)
Contributions 2,920,100 2,920,100
owners 2,920,100 2,920,100
Balance as at 31 March 2014 10 27,250,000 (19,339,664) 7,910,346
GIPPSAERO PTY LTD
1198
Contributed
equity Reserves
Accumulated
losses Total equity
Indian rupees
Loss for the period (389,018,975) (389,018,975)
Contributions 484,677,000 484,677,000
owners 484,677,000 484,677,000
Balance as at 31 March 2013 557 1,355,418,729 (691,805,109) 663,614,177
Balance as at 1 April 2013 557 1,355,418,729 (691,805,109) 663,614,177
Loss for the year (385,607,574) (385,607,574)
Contributions 162,678,771 162,678,771
owners 162,678,771 162,678,771
Balance as at 31 March 2014 557 1,518,097,500 (1,077,412,683) 440,685,374
GIPPSAERO PTY LTD
1199
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Receipts from customers 14,427,673 803,765,663 10,402,671 579,532,801
Payments to suppliers and employees (18,140,021) (1,010,580,570) (20,564,498) (1,145,648,184)
Interest received 54,599 3,041,710 18,396 1,024,841
Finance costs (1,004,269) (55,947,826) (472,824) (26,341,025)
Net cash used in operating activities (4,662,018) (259,721,023) (10,616,255) (591,431,567)
Payment for plant & equipment (1,949,270) (108,593,832) (31,617) (1,761,383)
Payment for capitalised project and research
& development costs (5,189,603) (289,112,783) (4,039,554) (225,043,553)
Net cash used in investing activities (7,138,873) (397,706,615) (4,071,171) (226,804,936)
Proceeds from borrowings 2,238,011 124,679,593
Repayment of borrowings (479,007) (26,685,480) (4,874,885) (271,579,843)
Funds received from parent entity 2,920,100 162,678,771 8,700,000 484,677,000
Loans from associated entities 7,212,244 401,794,113 11,130,934 620,104,333
Net cash provided by nancing activities 11,891,348 662,466,997 14,956,049 833,201,490
Cash at beginning of the nancial year 656,192 36,556,457 387,569 21,591,470
Net increase in cash held 90,457 5,039,359 268,623 14,964,987
Cash at end of nancial year 746,649 41,595,816 656,192 36,556,457
GIPPSAERO PTY LTD
1200
This nancial report is a special purpose nancial report prepared for use by
the directors and members of the company. The directors have determined
that the company is not a reporting entity. GippsAero Pty Ltd is a for-prot
report.
AASB 119: Employee Benets
AASB 138: Intangible Assets
The following specic accounting policies, which are consistent with the previous
period unless otherwise stated, have been adopted in the preparation of this report:
All Foreign currency amounts, including comparatives are translated
for convenience into Indian Rupees at the exchange rate of Rs 55.71 =
(c) Going concern
The company incurred a loss from ordinary activities of $6,921,694
(Rs 385,607,574) during the year ended 31 March 2014.
The company is dependant on the ongoing nancial support of its ultimate
parent entity at 31 March 2014. As at the date of signing the company has
received conrmation of on going nancial support from its ultimate parent
company.
The going concern basis above assumes the continued support of its
ultimate parent entity, the ability to source alternative nance if required,
and the Companys ability to generate sufcient cash ows from future
trading. If the going concern basis is found to no longer be appropriate
the recoverable amounts of the assets shown in the Statement of Financial
Position are likely to be signicantly less than the amounts disclosed and
the extent of the liabilities may differ signicantly from those reected.
At this time, directors believe that the ongoing nancial support of the
(d) Revenue
Revenue from sale of goods is recognised when the signicant risks and
rewards of ownership of the goods have passed to the buyer and the costs
incurred or to be incurred in respect of the transaction can be measured
reliably. Risks and rewards of ownership are considered passed to the
buyer at the time of delivery of the goods to the customer.
Revenue from the rendering of services is recognised upon the delivery of
the service to the customers.
Revenue from sale and lease back transactions is deferred and amortised
over the term of the lease.
Interest revenue is recognised when it becomes receivable on a proportional
basis taking in to account the interest rates applicable to the nancial assets.
(e) Income tax
Current income tax expense or revenue is the tax payable on the current
periods taxable income based on the applicable income tax rate adjusted
by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences
at the applicable tax rates when the assets are expected to be recovered
or liabilities are settled. No deferred tax asset or liability is recognised in
relation to temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not affect either
accounting prot or taxable prot or loss.
Deferred tax assets are recognised for deductible temporary differences
and unused tax losses only if it is probable that future taxable amounts will
be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised
directly in equity are also recognised directly in equity.
(f) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, short-term
deposits with an original maturity of three months or less held at call with
nancial institutions, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the statement of nancial position.
(g) Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of manufactured products includes direct material, direct labour and a
proportion of manufacturing overheads based on normal operating capacity.
(h) Work in progress
Work in progress is valued at cost, which includes both variable and xed
costs relating to specic items, and those costs that are attributable to the
WIP activity in general that can be allocated on a reasonable basis.
(i) Plant and equipment
Each class of plant and equipment is carried at cost or fair value less,
where applicable, any accumulated depreciation and any accumulated
impairment losses.
Plant and equipment
Plant and equipment is measured on a cost basis.
The carrying amount of plant and equipment is reviewed annually by
directors to ensure it is not in excess of the recoverable amount from those
assets. The recoverable amount is assessed on the basis of the expected
net cash ows which will be received from the assets employment and
subsequent disposal.
Depreciation
The depreciable amount of all xed assets is depreciated over their estimated
useful lives commencing from the time the asset is held ready for use.
Class of xed asset Depreciation rates Depreciation basis
Hangar at cost 5-20% Straight line
Leasehold improvements at cost 9-10% Straight line
Plant and equipment at cost 6-33% Straight line
Aircraft at cost 6-10% Straight line
Aircraft under lease at cost 10-15% Straight line
Motor vehicles at cost 20% Straight line
Computer equipment at cost 23-63% Straight line
GIPPSAERO PTY LTD
1201
(j) Intangibles
Goodwill
Goodwill is recognised initially at the excess over the aggregate of the
consideration transferred, the fair value of the non-controlling interest,
and the acquisition date fair value of the acquirers previously held equity
interest (in case of step acquisition), less the fair value of the identiable
assets acquired and liabilities assumed.
Goodwill is not amortised, but is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses.
Patents
Patents are recognised at cost and are not amortised. Patents are carried
at cost less any impairment losses.
(k) Research and development expenditure
Expenditure on research activities is recognised as an expense when
incurred.
Expenditure on development activities is capitalised only when technical
feasibility studies demonstrate that the project will deliver future economic
benets and these benets can be measured reliably. Capitalised
development expenditure is stated at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method to allocate the
cost of its estimated useful life commencing when the intangible asset is
available for use.
Other development expenditure is recognised as an expense when
incurred.
Project expenses are capitalised as incurred once identied as relating to
a project that will deliver future economic benets than can be measured
reliably.
Amortisation is calculated using the straight-line method to allocate the
cost of its estimated useful life commencing when the intangible asset is
available for use.
(l) Impairment
Assets with an indenite useful life are not amortised but are tested annually
for impairment in accordance with AASB 136. Assets subject to annual
depreciation or amortisation are reviewed for impairment whenever events
or circumstances arise that indicate that the carrying amount of the asset
may be impaired.
An impairment loss is recognised where the carrying amount of the asset
exceeds its recoverable amount. The recoverable amount of an asset is
dened as the higher of its fair value less costs to sell and value in use.
(m) Provisions
obligation, as a result of past events, for which it is probable that an out ow
of economic benets will result and that outow can be reliably measured.
(n) Leases
Leases are classied at their inception as either operating or nance leases
based on the economic substance of the agreement so as to reect the
risks and benets incidental to ownership.
Finance Leases
Leases of xed assets, where substantially all the risks and benets
incidental to the ownership of the asset, but not the legal ownership,
are transferred to the company are classied as nance leases. Finance
leases are capitalised, recording an asset and a liability equal to the
present value of the minimum lease payments, including any guaranteed
residual values. The interest expense is calculated using the interest rate
implicit in the lease and is included in nance costs in the statement of
comprehensive income. Leased assets are depreciated on a straight line
basis over their estimated useful lives where it is likely that the company
will obtain ownership of the asset, or over the term of the lease. Lease
payments are allocated between the reduction of the lease liability and the
lease interest expense for the period.
Operating leases
Lease payments for operating leases, where substantially all the risks and
benets remain with the lessor, are recognised as an expense on a straight-
line basis over the term of the lease.
Lease incentives received under operating leases are recognised as a
liability and amortised on a straight- line basis over the life of the lease term.
(o) Employee benets
(i) Short-term employee benet obligations
Liabilities arising in respect of wages and salaries, annual leave and
any other employee benets expected to be settled within twelve
months of the reporting date are measured at their nominal amounts
based on remuneration rates which are expected to be paid when
the liability is settled. The expected cost of short- term employee
benets in the form of compensated absences such as annual leave
is recognised in the provision for employee benets. All other short-
term employee benet obligations are presented as payables.
(ii) Long-term employee benet obligations
Liabilities arising in respect of long service leave and annual leave
which is not expected to be settled within twelve months of the
reporting date are measured at the present value of the estimated
future cash outow to be made in respect of services provided by
employees up to the reporting date.
Employee benet obligations are presented as current liabilities in the
balance sheet if the entity does not have an unconditional right to
defer settlement for at least twelve months after the reporting date,
regardless of when the actual settlement is expected to occur.
(p) Borrowing costs
Borrowing costs can include interest, amortisation of discounts or
premiums relating to borrowings, ancillary costs incurred in connection
with arrangement of borrowings, foreign exchange losses net of hedged
amounts on borrowings.
Borrowing costs are expensed as incurred, except for borrowing costs
incurred as part of the cost of the construction of a qualifying asset are
capitalised until the asset is ready for its intended use or sale.
(q) Goods and services tax (GST)
acquisition of the asset or as part of an item of the expense. Receivables and
payables in the statement of nancial position are shown inclusive of GST.
(r) Comparatives
(a) Intangible assets
All intangible assets are assessed for impairment by evaluating whether
indicators of impairment exist in relation to their carrying values.
For the purposes of impairment assessment, all of the companys intangible
assets are regarded as a single cash generating unit (CGU), relating
primarily to the manufacturing and sale of aircraft.
GIPPSAERO PTY LTD
1202
term budgets at the time. A formal valuation has also been completed by a
qualied business valuer which management has used in its assessments
of the carrying value of intangible assets.
average growth rate of 3% for the sale price of aircraft, a terminal value growth
rate of 2.5%, a discount rate in the range of 15-17% and sales volumes as
forecast by management following its analysis of the aerospace industry.
NOTE 3: ACCOUNTING STANDARDS AND INTREPRETATIONS ISSUED BUT
(a) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian
Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to
Australian Accounting Standards arising from AASB 9 (December 2010) and AASB
2012-6 Amendments to Australian Accounting Standards - Mandatory Effective Date
of AASB 9 and Transition Disclosure (effective from 1 January 2015)
139. The standard is not applicable until 1 January 2015 but is available for
early adoption.
for trading. In the current reporting period, the company recognised $nil in other
The company does not have any nancial liabilities that are designated at fair
value through prot or loss. The new requirements only affect the accounting for
nancial liabilities that are designated at fair value through prot or loss. Therefore,
there will be no impact on the companys accounting for nancial liabilities. The
company has not yet decided when to adopt AASB 9. The company has decided
not to early adopt AASB 9 at 31 March 2014.
Other standards and interpretations have been issued at the reporting date but
are not yet effective. When adopted, these standards and interpretations are
likely to impact on the nancial information presented, however the assessment
of impact has not yet been completed.
NOTE 4: REVENUE
2014
$
2014
Rupees
2013
$
2013
Rupees
Sale of goods 12,660,687 705,326,873 6,956,876 387,567,562
Spare parts and
maintenance 1,219,848 67,957,732 1,190,604 66,328,549
13,880,535 77,32,84,605 8,147,480 453,896,111
Other revenue
Interest income 54,599 3,041,710 18,396 1,024,841
Aircraft hire income 1,656,085 92,260,495 1,855,271 103,357,147
Other revenue 252,044 14,041,371 308,367 17,179,126
1,962,728 109,343,577 2,182,034 121,561,114
Foreign currency
translation losses (134,499) (74,92,939) (59,829) (33,33,074)
15,708,764 875,135,342 10,269,685 572,124,151
NOTE 5: OPERATING LOSS
2014
$
2014
Rupees
2013
$
2013
Rupees
Losses before income tax has
been determined after:
Cost of sales 9,627,365 536,340,504 3,886,442 216,513,684
Finance costs 1,004,269 55,947,826 472,824 26,341,025
Depreciation 611,494 34,066,331 564,780 31,463,894
Amortisation of non-current
assets
research and development 144,565 8,053,716 189,639 10,564,788
Bad and doubtful debts 49,903 2,780,096
Foreign currency translation
losses/(gains) 134,499 7,492,939 59,829 3,333,074
Employee benets 7,582,557 422,424,250 9,606,505 535,178,394
Cash at bank 746,266 41,574,479 651,212 36,279,021
Petty Cash 383 21,337 4,980 277,436
746,649 41,595,816 656,192 36,556,457
NOTE 7: RECEIVABLES
Trade Debtors 3,647,477 203,200,944 1,592,799 88,734,832
Provision for doubtful debts (12,046) (671,083) (4,648) (258,940)
3,635,431 202,529,861 1,588,151 88,475,892
Security deposit 32,593 1,815,756 32,593 1,815,756
Loan to Aerostaff Australia
Pty Ltd 922,396 51,386,681
Loan to Gipp Aero Investment
Pty Ltd 24,016 1,337,931
4,590,420 255,732,298 1,644,760 91,629,579
NOTE 8: INVENTORIES
2014
$
2014
Rupees
2013
$
2013
Rupees
Raw material and stores 2,790,696 155,469,674 1,971,245 109,818,059
Work in Progress 1,351,595 75,297,357 3,378,049 188,191,110
Completed aircraft 1,263,166 70,370,978 5,490,733 305,888,735
Trade in aircraft 602,521 33,566,445
5,405,457 301,138,009 11,442,548 637,464,349
CURRENT
Prepayments and other
receivables 1,736,452 96,737,741 1,517,572 84,543,936
NOTE 10: INTANGIBLE ASSETS
2014
$
2014
Rupees
2013
$
2013
Rupees
Goodwill at cost 788,669 43,936,750 788,669 43,936,750
Patents at cost 46,043 2,565,056 46,043 2,565,056
Research and development
at cost 1,972,974 109,914,382 1,972,974 109,914,382
Accumulated amortisation (615,302) (34,278,474) (470,737) (26,224,758)
1,357,672 75,635,908 1,502,237 83,689,624
Projects currently in
development at cost 13,745,283 765,749,716 8,555,680 476,636,933
Total intangible assets 15,937,667 887,887,430 10,892,629 606,828,363
GIPPSAERO PTY LTD
1203
All intangible assets are assessed for impairment by evaluating whether indicators
of impairment exist in relation to their carrying values.
For the purposes of impairment assessment, intangible assets are regarded as
a single cash generating unit (CGU), relating primarily to the manufacturing and
sale of aircraft.
cashows covering a period of 10 years and managements industry overview
of January 2014 which was prepared in conjuction with the long term budgets
at the time. A formal valuation has also been completed by a qualied business
valuer which management has used in its assessments of the carrying value of
intangible assets.
The present value of the future cashows has been calculated using an average
growth rate of 3% for the sale price of aircraft, a terminal value growth rate of
2.5%, a discount rate in the range of 1517% and sales volumes as forecast by
management following its analysis of the aerospace industry.
NOTE 11: PLANT AND EQUIPMENT
2014
$
2014
Rupees
2013
$
2013
Rupees
Hangar
At cost 51,503 2,869,232 51,503 2,869,232
Accumulated depreciation (7,766) (432,644) (4,911) (273,592)
43,737 2,436,588 46,592 2,595,640
At cost 78,620 4,379,920 43,116 2,401,992
Accumulated depreciation (15,388) (857,265) (11,303) (629,690)
63,232 3,522,655 31,813 1,772,302
Plant and equipment
Plant and equipment at cost 1,139,818 63,499,261 1,114,182 62,071,079
580,668 32,349,014 682,802 38,038,899
Aircraft under lease at cost 2,276,249 126,809,832
Accumulated depreciation (55,246) (3,077,755)
2,221,003 123,732,077
Aircraft at cost 1,641,102 91,425,792 2,176,281 121,240,615
1,232,552 68,665,471 1,841,926 102,613,698
12,636 703,951 21,113 1,176,205
Computer equipment at cost 794,545 44,264,102 780,381 43,475,026
190,460 10,610,527 382,266 21,296,039
Total plant and equipment 4,344,288 242,020,283 3,006,512 167,492,783
2014
$
2014
Rupees
2013
$
2013
Rupees
(a) Reconciliations
Hangar
Opening carrying amount 46,592 2,595,640 49,447 2,754,692
Closing carrying amount 43,737 2,436,588 46,592 2,595,640
Additions 35,504 1,977,928
2014
$
2014
Rupees
2013
$
2013
Rupees
Plant and equipment
Additions 25,636 1,428,182 8,084 450,359
Depreciation expense (127,770) (7,118,067) (162,111) (9,031,204)
Aircraft under lease
Opening carrying amount
Additions 2,276,249 126,809,832
Depreciation expense (55,246) (3,077,755)
Closing carrying amount 2,221,003 123,732,077
Aircraft
Opening carrying amount 1,841,926 102,613,697 1,123,783 62,605,950
Additions 5,500 306,405
Disposals (407,783) (22,717,591)
Transfer in 911,829 50,797,994
Closing carrying amount 1,232,552 68,665,472 1,841,926 102,613,697
Motor vehicles
Closing carrying amount 12,636 703,951 21,113 1,176,205
Computer equipment
Additions 14,164 789,076 14,391 801,723
Assets work in progress
Opening carrying amount 902,687 50,288,693
Additions 9,142 509,301
Transfers out 911,829 (50,797,994)
Closing carrying amount
Total property, plant and
equipment
Carrying amount at 1 April 3,006,512 167,492,783 3,539,675 197,195,294
Additions 2,357,053 131,311,422 31,617 1,761,383
Disposals (407,783) (22,717,591)
Carrying amount at 31 March 4,344,288 242,020,283 3,006,512 167,492,783
NOTE 12: PAYABLES
2014
$
2014
Rupees
2013
$
2013
Rupees
CURRENT
Trade creditors 794,835 44,280,258 3,319,349 184,920,933
Amounts payable to:
Mahindra Aerospace Ltd 343,268 19,123,460
Mahindra & Mahindra Ltd 1,324,629 73,795,082
Sundry creditors and accruals 919,090 51,202,504 181,554 10,114,373
3,381,822 188,401,304 3,500,903 195,035,306
GIPPSAERO PTY LTD
1204
2014
$
2014
Rupees
2013
$
2013
Rupees
NON CURRENT
Loan from Mahindra Aerospace
Australia Pty Ltd 17,550,000 977,710,500 11,107,273 618,786,179
NOTE 13: BORROWINGS
2014
$
2014
Rupees
2013
$
2013
Rupees
CURRENT
Secured liabilities
Finance lease liability 178,044 9,918,831
Hire purchase liability 14,529 809,411 387,129 21,566,957
192,573 10,728,242 387,129 21,566,957
NON CURRENT
Secured liabilities
Finance lease liability 1,981,417 110,384,741
Hire purchase liability 27,857 1,551,913
1,981,417 110,384,741 27,857 1,551,913
NOTE 14: PROVISIONS
2014
$
2014
Rupees
2013
$
2013
Rupees
CURRENT
Employee benets (a) 881,831 49,126,805 1,053,824 58,708,535
Warranties 7,122 396,767 7,122 396,767
888,953 49,523,572 1,060,946 59,105,302
NON CURRENT
Employee benets (a) 25,562 1,424,059
(a) Aggregate employee
benets liability 881,831 49,126,805 1,079,386 60,132,594
NOTE 15: OTHER LIABILITIES
2014
$
2014
Rupees
2013
$
2013
Rupees
CURRENT
Deferred income 571,131 31,817,708 886,150 49,367,417
Customer deposits 284,691 15,860,136 252,453 14,064,157
855,822 47,677,844 1,138,603 63,431,574
2014
$
2014
Rupees
2013
$
2013
Rupees
Issued and paid-up capital
10 (2013: 10) Ordinary
shares 10 557 10 557
NOTE 17: RESERVES
General reserve 27,250,000 1,518,097,500 24,329,900 1,355,418,729
The general reserve is used to record funds transferred from the ultimate parent
to GippsAero Pty Ltd for operational purposes which takes the form of equity.
2014
$
2014
Rupees
2013
$
2013
Rupees
Net loss for the year (6,921,694) (385,607,574) (6,982,929) (389,018,975)
Accumulated losses at end
of year (19,339,664) (1,077,412,683) (12,417,970) (691,805,109)
NOTE 19: CAPITAL AND LEASING COMMITMENTS
2014
$
2014
Rupees
2013
$
2013
Rupees
(a) Finance leasing commitments
Payable
not later than one year 370,413 20,635,708
later than one year and not
later than ve years 2,399,154 133,656,869
Minimum lease payments 2,769,567 154,292,577
Less future nance charges (610,106) (33,989,005)
Total nance lease liability 2,159,461 120,303,572
Represented by:
Current liability 178,044 9,918,831
Non-current liability 1,981,417 110,384,741
2,159,461 120,303,572
Finance leasing commitments relate to aircrafts
(b) Hire purchase commitments
Payable
not later than one year 15,293 851,973 395,243 22,018,988
later than one year and not
later than ve years 28,853 1,607,401
Minimum hire purchase
payments 15,293 851,973 424,096 23,626,389
Less future nance charges (764) (42,562) (9,110) (507,519)
Total hire purchase liability 14,529 809,411 414,986 23,118,870
Represented by:
Current liability 14,529 809,411 387,129 21,566,957
Non-current liability 27,857 1,551,913
14,529 809,411 414,986 23,118,870
Hire purchases relate to aircrafts and a motor vehicle.
company, or
company.
GippsAero Pty Ltd
Aireld Road
TRARALGON VIC 3844
GA8 AIRVAN PTY LTD
1205
DIRECTORS REPORT
report of GA8 Airvan Pty Ltd for the year ended 31 March 2014
and auditors report thereon.
Directors names
the end of the period are:
George Frederick Morgan
Arvind Kumar Mehra
Keith Douglas - appointed 25 June 2013
Terence Miles - resigned 25 June 2013
The directors have been in ofce since the start of the period
to the date of this report unless otherwise stated.
Results
The loss of the entity for the period after providing for income
tax amounted to $Nil.
The Company continued to engage in its principle activity,
statements.
affairs that occured during the nancial year, other than those
referred to in the nancial report.
The principal activity of the entity during the period was holding
of a CASA type cericate. No signicant change in the nature
of these activities occurred during the period.
No matters or circumstances have arisen since the end
of the nancial period which signicantly affected or may
signicantly affect the operations of the entity, the results of
those operations, or the state of affairs of the entity in future
nancial years.
Likely developments
of operations.
Options
duties as directors. Further disclosure required under section
300(9) of the corporations law is prohibited under the terms
of the contract.
Auditors independence declaration
A copy of the auditors declaration in relation to the audit for
the nancial year is provided with this report.
those proceedings.
Signed in accordance with a resolution of the board of directors.
Keith Douglas George Morgan
Director Director
Dated this 30
th
day of April 2014.
pages presents fairly the companys nancial position as at
31 March 2014 and performance for the year ended on that
date of the company in accordance with the accounting
Board of Directors.
For GA8 Airvan Pty Ltd
Director Director
Dated this 30
th
day of April 2014.
GA8 AIRVAN PTY LTD
1206
To the Members of GA8 Airvan Pty Limited
special purpose nancial report, of GA8 Airvan Pty Limited (the
company), which comprises the statement of nancial position
as at 31 March 2014, and the statement of comprehensive
income and statement of changes in equity for the year ended
on that date, a summary of signicant accounting policies and
other explanatory notes and the directors declaration of the
company.
Directors responsibility for the nancial report
requirements of the Corporations Act 2001 and is appropriate
to meet the needs of the members. The directors responsibility
also includes such internal control as the directors determine
is necessary to enable the preparation of a nancial report that
is free from material misstatement, whether due to fraud or
error.
nancial report.
opinion.
Independence
independence requirements of the Corporations Act 2001. We
conrm that the independence declaration required by the
Corporations Act 2001, provided to the directors of GA8 Airvan
Pty Limited on 30 April 2014, would be in the same terms if
provided to the directors as at the date of this auditors report.
Opinion
In our opinion, the nancial report of GA8 Airvan Pty Limited
is in accordance with the Corporations Act 2001, including:
a. giving a true and fair view of the companys nancial
b. complying with Australian Accounting Standards to
Regulations 2001.
Basis of Accounting
not be suitable for another purpose
LSH Accounting
JOANNE LOH Morwell
Partner 30
th
April 2014
TO THE DIRECTORS OF GA8 AIRVAN PTY LTD
31 March 2014, to the best of my knowledge and belief
there have been no contraventions of any applicable code of
professional conduct.
LSH Accounting
JOANNE LOH
Partner
Date: 30
th
April 2014
GA8 AIRVAN PTY LTD
1207
2014 2014 2013 2013
$ Rupees $ Rupees
Revenue
Less: expenses
Prot before income tax expense
Income tax expense
Prot for the year
GA8 AIRVAN PTY LTD
1208
Note 2014 2014 2013 2013
$ Rupees $ Rupees
Current assets
Cash on hand 3 167 3 168
Total current assets 3 167 3 168
Non-current assets
Total assets 3 167 3 168
Current liabilities
Total liabilities
Net assets 3 167 3 168
Equity
Retained earnings
Total equity 3 167 3 168
GA8 AIRVAN PTY LTD
1209
Australian Dollars
Contributed
equity
Retained
earnings
Total
equity
$ $ $
Balance at 1 July 2010 3 3
Balance at 31 March 2011 3 3
Balance at 1 April 2011
Balance at 1 April 2012 3 3
Balance at 31 March 2013
Indian rupees
Balance at 1 July 2010 167 167
Balance at 1 April 2011
Balance at 31 March 2013
GA8 AIRVAN PTY LTD
1210
company is not a reporting entity.
report.
of this report:
The functional currency of each entity in the company is measured using
the currency of the primary economic environment in which that company
operates. For disclosure purposes at year end this has been converted into
the currency of the parent company, Indian Rupees, at a pre-determined
Foreign currency amounts are translated for convenience into Indian
Rupees at the exchange rate of Rs. 55.71 = $1 AUD which is the average
Branch of State Bank of India on 31st March 2014.
(c) Comparatives
2014 2014 2013 2013
$ Rupees $ Rupees
Issued and paid-up
capital 3 (2013: 3)
Ordinary shares 3 167 3 168
NOTE 3: RETAINED EARNINGS
Retained earnings at
beginning of year
company, or
company.
GA8 Airvan Pty Ltd.
Aireld Road
TRARALGON VIC 3844
GA200 PTY LTD
1211
DIRECTORS REPORT
report of GA200 PTY LTD for the year ended 31 March 2014
and auditors report thereon.
Directors names
Arvind Kumar Mehra
Keith Douglas appointed 25 June 2013
Terence Miles resigned 25 June 2013
Results
statements.
of a CASA type cericate. No signicant change in the nature
of these activities occurred during the period.
nancial years.
Likely developments
of operations.
Options
of the contract.
those proceedings.
Signed in accordance with a resolution of the board of directors.
Director Director
Dated 30
th
day of April 2014.
Board of Directors.
Director Director
Dated 30
th
day of April 2014.
GA200 PTY LTD
1212
special purpose nancial report, of GA200 Pty Limited (the
company), which comprises the statement of nancial position
income and statement of changes in equity for the year ended
on that date, a summary of signicant accounting policies and
other explanatory notes and the directors declaration of the
company.
error.
based on our audit. We have conducted our audit in accordance
reasonable assurance whether the nancial report is free from
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the nancial report.
The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement
of the nancial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the
nancial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal
control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the
overall presentation of the nancial report.
Independence
independence requirements of the Corporations Act 2001. We
conrm that the independence declaration required by the
Corporations Act 2001, provided to the directors of GA200
TO THE MEMBERS OF GA200 PTY LIMITED
Pty Limited on 30 April 2014, would be in the same terms if
provided to the directors as at the date of this auditors report.
Opinion
in our opinion, the nancial report of GA200 Pty Limited is in
accordance with the Corporations Act 2001, including:
Regulations 2001.
Basis of Accounting
not be suitable for another purpose
LSH Accounting
JOANNE LOH Morwell
Partner 30
th
April 2014
TO THE DIRECTORS OF GA200 PTY LTD
LSH Accounting
JOANNE LOH
Partner
Date: 30
th
April 2014
GA200 PTY LTD
1213
2014
$
2014
Rupees
2013
$
2013
Rupees
Revenue
Less: expenses
Income tax expense
Prot for the year
GA200 PTY LTD
1214
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Current assets
Cash on hand ................................................. 3 167 3 168
Total current assets ...................................... 3 167 3 168
Non-current assets .......................................
Total assets .................................................... 3 167 3 168
Current liabilities ...........................................
Non-current liabilities ...................................
Total liabilities ................................................
Net assets ...................................................... 3 167 3 168
Equity
Share capital ................................................... 2 3 167 3 168
Retained earnings ...........................................
Total equity ...................................................... 3 167 3 168
GA200 PTY LTD
1215
Contributed
equity
$
Retained
earnings
$
Total
equity
$
Australian Dollars
Balance at 1 April 2011 ..................................................... 3 3
Balance at 31 March 2012 ................................................ 3 3
Balance at 1 April 2012 ..................................................... 3 3
Balance at 31 March 2013 ................................................ 3 3
Balance at 1 April 2013 ..................................................... 3 3
Balance at 31 March 2014 ................................................ 3 3
Indian Rupees
Balance at 1 April 2011 ..................................................... 167 167
Balance at 31 March 2012 ................................................ 167 167
Balance at 1 April 2012 ..................................................... 167 167
Balance at 31 March 2013 ................................................ 167 167
Balance at 1 April 2013 ..................................................... 167 167
Balance at 31 March 2014 ................................................ 167 167
GA200 PTY LTD
1216
report.
of this report:
Rupees at the exchange rate of Rs 55.71 = $1 AUD which is the average
st
March 2014.
(c) Comparatives
2014
$
2014
Rupees
2013
$
2013
Rupees
Issued and paid-up capital 3
(2013: 3) Ordinary shares 3 167 3 168
Retained earnings at beginning
of year
company, or
company.
GA200 Pty LTD.
Aireld Road
TRARALGON VIC 3844
AIRVAN FLIGHT SERVICES PTY LTD
1217
DIRECTORS REPORT
report of Airvan Flight Services Pty Ltd for the year ended 31
March 2014 and auditors report thereon.
Directors names
Arvind Kumar Mehra
Keith Douglas appointed 25 June 2013
Terence Miles resigned 25 June 2013
Results
statements.
of a CASA Air Operator Certicate No signicant change in the
nature of these activities occurred during the period.
nancial years.
Likely developments
of operations.
Options
of the contract.
those proceedings.
Signed in accordance with a resolution of the board of
directors.
Director Director
Dated this 30 day of April 2014.
Board of Directors.
Director Director
Dated this 30 day of April 2014.
1218
special purpose nancial report, of Airvan Flight Services Pty
Limited (the company), which comprises the statement of
nancial position as at 31 March 2014, and the statement of
comprehensive income and statement of changes in equity
for the year ended on that date, a summary of signicant
accounting policies and other explanatory notes and the
directors declaration of the company.
error.
nancial report.
opinion.
Independence
independence requirements of the Corporations Act 2001.
We conrm that the independence declaration required by
the Corporations Act 2001, provided to the directors of Airvan
TO THE MEMBERS OF AIRVAN FLIGHT SERVICES PTY LIMITED
Flight Services Pty Limited on 30 April 2014, would be in the
same terms if provided to the directors as at the date of this
auditors report.
Opinion
In our opinion, the nancial report of Airvan Flight Services
Pty Limited is in accordance with the Corporations Act 2001,
including:
Regulations 2001.
Basis of Accounting
LSH Accounting
JOANNE LOH Morwell
Partner 30
th
April 2014
TO THE DIRECTORS OF AIRVAN FLIGHT SERVICES PTY LTD
LSH Accounting
JOANNE LOH
Partner
Date: 30
th
April 2014
1219
2014
$
2014
Rupees
2013
$
2013
Rupees
Revenue
Less: expenses
Income tax expense
Prot for the year
Note 2014
$
2014
Rupees
2013
$
2013
Rupees
Current assets
Cash on hand 2 111 2 112
Total current assets 2 111 2 112
Non-current assets
Total assets 2 111 2 112
Current liabilities
Total liabilities
Net assets 2 111 2 112
Equity
Retained earnings
Total equity 2 111 2 112
1220
report.
of this report:
Rupees at the exchange rate of Rs 55.71 = $1 AUD which is the average
st
March 2014.
(c) Comparatives
2014
AUD
2014
Rupees
2013
AUD
2013
Rupees
Issued and paid-up capital 2
(2013: 2) Ordinary shares 2 111 2 112
Retained earnings at beginning
of year
There has been no matter or circumstance, which has arisen since 31 March 2014
that has signicantly affected or may signicantly affect:
company, or
company.
Airvan Flight Services Pty Ltd
Aireld Road
TRARALGON VIC 3844
Contributed
equity
$
Retained
earnings
$
Total
equity
$
Australian Dollars
Indian Rupees
NOMAD TC PTY LIMITED
1221
report of Nomad TC Pty Ltd (the company) for the year ended
31 March 2014 and auditors report thereon. This nancial
report has been prepared in accordance with Australian
Accounting Standards.
Directors names
George Morgan
Arvind Mehra
Results
The prot of the company for the year after providing for
income tax amounted to $NIL (2013: $NIL).
The company continued to engage in its principal activity,
statements.
holder of a CASA type certicate.
during the year.
nancial years.
Likely developments
of operations.
Options
those proceedings.
Director Director
This declaration is made in accordance with a resolution
of the Board of Directors.
Director Director
DIRECTORS REPORT
1222
TO THE MEMBER OF NOMAD TC PTY LTD
special purpose nancial report, of Nomad TC Pty Ltd, which
comprises the statement of nancial position as at 31 March
2014, the statement of comprehensive income and statement of
changes in equity for the year then ended, notes comprising a
summary of signicant accounting policies and other explanatory
information, and the directors declaration.
nancial report.
opinion.
Independence
Opinion
respects, the nancial position of Nomad TC Pty Ltd as at 31
March 2014 and of its nancial performance and its cash ows
for the year then ended in accordance with the accounting
policies described in Note 1 to the nancial report.
Basis of Accounting
of Nomad TC Pty Ltd to meet the nancial reporting
Partner Melbourne
Date: 22
nd
May 2014
1223
Note 2014 2014 2013 2013
$ Rupees $ Rupees
Revenue ...............................................................
Less: expenses
Prot before income tax expense ....................
Income tax expense .............................................
Prot for the year ................................................
Total comprehensive income.............................
1224
Note 2014 2014 2013 2013
$ Rupees $ Rupees
Equity
Share capital ......................................................... 2 11,308 629,969 11,308 629,969
Accumulated losses ............................................. 3 (11,308) (629,969) (11,308) (629,969)
Total equity ..........................................................
1225
Contributed
equity
Retained
earnings
Total equity
Australian dollars
Balance as at 1 April 2012 ................................ 11,308 (11,308)
Prot for the period...............................................
Balance as at 31 March 2013 ............................ 11,308 (11,308)
Australian dollars
Prot/(loss) for the year ........................................
Indian rupees
Prot/(loss) for the period ....................................
Indian rupees
Prot/(loss) for the year ........................................
1226
company is not a reporting entity Nomad TC Pty Ltd. is a for prot entity for the
purpose of preparing the nancial statements.
report.
AASB 139: Financial Instruments: Recognition and Measurement
of this report:
The nancial statements are measured using the currency of the primary
economic environment in which that entity operates (the functional
currency). For disclosure purposes at period end this has been converted
into the currency of the ultimate parent company, Indian Rupees, at a pre-
determined convenient rate. This is displayed as comparative balances
for both the current and prior years.
Rupees at the exchange rate of Rs 55.71 = $1 AUD as advised by the
ultimate parent entity.
(c) Comparatives
2014 2014 2013 2013
$ Rupees $ Rupees
Issued and paid up capital
11,308 (2013: 11,308)
Ordinary shares ..................... 11,308 629,969 11,308 629,969
2014 2014 2013 2013
$ Rupees $ Rupees
beginning of year ................... (11,308) (629,969) (11,308) (629,969)
Net prot/(loss) ......................
end of year ............................. (11,308) (629,969) (11,308) (629,969)
company, or
company.
Nomad TC Pty Ltd
Aireld Road
TRARALGON VIC 3844
MAHINDRA AEROSTRUCTURES PRIVATE LIMITED
1227
Your Directors present their Fourth Report together with the audited accounts of your Company for the year ended 31
st
March, 2014.
FINANCIAL RESULTS (Rs. in Lakh)
For the year ended
31
st
March, 2014
For the year ended
31
st
March, 2013
Income 140.86 46.07
Loss before Interest, Depreciation, Amortisation and Tax 1708.91 819.16
Depreciation and Amortisation 36.58 22.89
Interest Expense 8.50 32.04
Loss before Tax 1753.99 874.09
Less: Provision for Tax
Loss after Tax 1753.99 874.09
Loss brought forward 1627.24 753.15
Balance loss carried to Balance Sheet 3381.23 1627.24
effect from 28
th
The Nomination and Remuneration Committee of the Company
comprises of Mr. Hemant Luthra and Mr. Sanjay Joglekar.
Audit Committee
The Audit Committee comprises of Mr. Hemant Luthra,
Mr. Sanjay Joglekar, Mr. Arvind Mehra and Mr. R. Laxman. The
Audit Committee met twice during the year under review.
th
March, 2014 in
Act, 2013.
Directors
Mr. Sanjay Joglekar retires by rotation and being eligible offers
as at 31
st
Operations
During the year under review, construction of the manufacturing
facility at Narasapura Industrial Area, Kolar district, Karanataka,
was completed. The facility was formally inaugurated on 21
st
October, 2013. Installation of majority of the equipment is
completed. Employees of the Company underwent training
at the facilities of Aerometallic Components S.A.U, Spain
located in Spain and Mexico, as per the Technology Transfer
and Training agreement signed during the previous year.
The Company achieved the rst milestone by getting the
AS 9100 certication in April 14 and is working towards
achieving the NADCAP certications during 1
st
half of FY 15.
The management of the Company is closely working with
major aerospace OEMs/Tier 1 suppliers on various business
opportunities. Commercial production is expected to start
during the 1
st
half of FY 15.
Capital
During the year under review, the Authorized Share Capital
of the Company was increased from Rs.100,00,00,000/- to
Rs.150,00,00,000/- divided into 15,00,00,000 Equity Shares
of the face value Rs.10/- each by creating 5,00,00,000 Equity
Shares of Rs.10/- each. During the year under review, the paid
up share capital of the Company has been increased from
Rs.73,01,00,000/- to Rs.106,51,00,000/-
Dividend
1228
concern basis.
Auditors
Auditors of the Company, retire at the ensuing Annual General
Members are requested to appoint Auditors to hold ofce from
the conclusion of forthcoming Annual General Meeting until
the conclusion of next Annual General Meeting and x their
remuneration.
As required under the provisions of the Companies Act, 2013,
the Company has obtained a written certicate from the above
Auditors to the effect that their re-appointment, if made, would
said section.
Company pursuant to Clause 32 of the Listing Agreement of
the ultimate parent Company, Mahindra & Mahindra Limited
with the Stock Exchanges.
Your Company is committed towards ensuring adequate
measures for safety, health and environment. Your Company
encourages involvement of all the stakeholders in activities
related to safety, including promotion of safety standards.
of the Companies Act, 1956 and Rules framed there under.
31
st
Rs. 5,00,000 per month.
Acknowledgement
for assistance and co-operation received from Banks,
Employees, Vendors and Members during the year under
review.
Mr Arvind Mehra Mr Sanjay Joglekar
Director Director
Mumbai, 26
th
May, 2014
1229
ST
MARCH, 2014.
energy consumption.
in respect of Industries specied in the Schedule thereto: Not Applicable
1. Areas in which R & D is carried out by the Company : None
3. Future plan of action : Further quality improvement
4. Expenditure on R & D : NIL
(Rs. in Lakh)
2013-14 2012-13
Total Foreign Exchange earned NIL NIL
Mr Arvind Mehra Mr Sanjay Joglekar
Director Director
Mumbai, 26
th
May, 2014
1230
To the Members of Mahindra Aerostructures Private Limited
1. Report on the nancial Statements
of MAHINDRA AEROSTRUCTURES PRIVATE LIMITED
at March 31, 2014, and the Statements of Prot and Loss
information.
2. Managements Responsibility for the Financial
Statements
The Companys Management is responsible for the
control relevant to the preparation and presentation of
the nancial statements that give a true and fair view and
are free from material misstatement, whether due to fraud
or error.
3. Auditors Responsibility
3.1 Our responsibility is to express an opinion on
these nancial statements based on our audit. We
conducted our audit in accordance with the Standards
on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that
we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance
about whether the nancial statements are free from
3.2 An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the nancial statements. The procedures selected
depend on the auditors judgment, including the
assessment of the risks of material misstatement
of the nancial statements, whether due to fraud or
error. In making those risk assessments, the auditor
considers internal control relevant to the Companys
preparation and fair presentation of the nancial
statements in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit
also includes evaluating the appropriateness of
accounting policies used and the reasonableness
of the accounting estimates made by management,
nancial statements.
3.3 We believe that the audit evidence we have obtained
is sufcient and appropriate to provide a basis for our
audit opinion.
4. Opinion
In our opinion and to the best of our information and
accepted in India:
loss for the year ended on that date; and;
5. Report on Other Legal and Regulatory Requirements
5.1 As required by the Companies (Auditors Report)
Report) (Amendment) Order, 2004, issued by the
Central Government of India in terms of sub-section
(4A) of section 227 of the Act (the Order), and on
the basis of such checks of the books and records
of the Company as we considered appropriate and
according to the information and explanations given
to us, we give in the Annexure a statement on the
matters specied in paragraphs 4 and 5 of the Order.
5.2 As required by section 227(3) of the Act, we report
that:
c. the Balance Sheet, Statement of Prot and Loss, and
agreement with the books of account.
section (1) of section 274 of the Companies Act, 1956;
Partner
Mumbai,
Dated: 26
th
May, 2014
1231
AUDITORS REPORT
and Regulatory Requirements of the Auditors Report of even
date to the members of MAHINDRA AERSOSTRUCTURES
PRIVATE LIMITED on the nancial statements for the year
ended March 31, 2014).
1 (a) The Company has maintained proper records
and situation of its xed assets.
(b) The xed assets of the Company were physically
veried by the management during the year at
reasonable intervals and no discrepancies were
(c) The xed assets disposed-off during the year were
not substantial and therefore do not affect going
2 Clause 4(ii) of the Companies (Auditors Report) Order,
2003 (the Order) is not applicable to the Company.
3 (a) Based on the records examined by us and according
Company has:
explanations given to us, the Company has an adequate
Company and the nature of its business, for purchase of
xed assets and for the sale of services. On the basis of
our examination of the books and records of the Company
to us we have not observed any major weakness in such
internal control system.
be entered in the register maintained under Section 301
6 On our verication and according to the information and
any deposits from public within the meaning of Section
framed thereunder.
7 In our opinion, and according to the information and
explanations provided to us, the Company has a system
of internal checks and controls, which is commensurate
business.
8 The Company is yet to commence manufacturing operations
and hence maintenance of cost records pursuant to the
Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section
209(1)(d) of the Companies Act, 1956 is not applicable.
9 (a) According to the records of the Company, the
undisputed dues, including Provident Fund, Investor
Education and Protection Fund, Employees State
Insurance, Income-tax, Sales Tax, Wealth Tax, Custom
Duty, Excise Duty, Cess and other material statutory
dues applicable to it with the appropriate authorities.
According to the information and explanations given
to us, there were no undisputed amounts payable
in respect of Income-tax, Wealth Tax, Custom Duty,
than six months from the date they became payable
except for provident fund payable Rs. 86,475/- and
taxes deducted at source Rs. 858,664/- which have
been remitted subsequent to the year end on 16th
April, 2014 and 11th April, 2014 respectively.
(b) Based on our verication and according to the
information and explanations given to us, there are
no dues of Income-tax, Sales Tax, Wealth Tax, Service
not been deposited as on March 31, 2014 on account
of any dispute.
10 The accumulated losses of the Company at the end of
the nancial year have not exceeded fty percent of its
net worth. The Company has incurred cash losses in
the nancial year and had incurred cash losses in the
Company has not defaulted in the repayment of dues to
banks, nancial institutions and debenture holders.
securities.
Company does not attract the provisions of any special
statute applicable to chit fund and nidhi/mutual benet/
societies.
securities, debentures and other investments. Therefore
the provisions of sub-para (xiv) of para 4 of the Order are
us, the Company has given guarantee for loans taken by
others from banks or nancial institutions the terms and
1232
conditions whereof are not prejudicial to the interest of the
Company.
16 According to the information and explanations given to us
the term loans availed by the Company have been applied
for the purposes for which the loans were obtained.
17 According to the information and explanations given to us
and on an overall examination of the Balance Sheet and
Cash Flows of the Company, we report that the Company
has not utilised funds raised on short-term basis for long-
term purposes.
18 The Company has not made any preferential allotment
of shares during the year to parties and companies
19 The Company has not issued any debentures during the
year.
20 The Company has not raised any money through a public
issue during the nancial year.
21 Based on audit procedures performed and as per
the information and explanations given to us by the
Management, one instance of fraud by an employee was
identied by the Management involving an amount of
Rs. 3.75 lakhs and no fraud by the Company has been
Partner
Mumbai,
Dated: 26
th
May, 2014
1233
Rupees
Particulars Note As at
March 31, 2014
As at
March 31, 2013
1 SHAREHOLDERS FUNDS:
(i) Share capital .......................................................................... 3 1,065,100,000 730,100,000
(ii) Reserves and surplus ............................................................ 4 (338,123,415) (162,724,856)
726,976,585 567,375,144
2 Non- current liabilities
(i) Long term borrowings ........................................................... 5 676,850,365 421,384,512
(iii) Long term provisions ............................................................. 6 1,012,014 398,354
677,862,379 421,782,866
(ii) Short term borrowings ........................................................... 7 26,427,200
(iii) Trade payables ....................................................................... 8 187,495,364 142,977,310
(iii) Other current liabilities ........................................................... 9 44,990,409 7,386,017
(iv) Short term provisions ............................................................. 10 132,040 78,839
259,045,013 150,442,166
Total ............................................................................................... 1,663,883,977 1,139,600,176
II. ASSETS
Non-current assets
1 (a) Fixed Assets 11
(i) Tangible assets ............................................................... 8,477,725 1,661,769
(ii) Intangible assets ............................................................. 3,914,420 3,154,094
(iii) Capital work in progress ................................................ 1,426,822,051 845,600,196
1,439,214,196 850,416,059
(b) Long term loans and advances .......................................... 12 93,658,720 155,686,627
(c) Other non current assets .................................................... 13 10,452,288 13,753,795
1,543,325,204 1,019,856,481
2 Current assets
(i) Current Investments ............................................................... 14 43,681,096 80,754,414
(ii) Cash and Bank balances ...................................................... 15 11,304,598 4,077,694
(iii) Short term loans and advances ............................................ 16 65,573,079 34,911,587
120,558,773 119,743,695
Total ............................................................................................... 1,663,883,977 1,139,600,176
For Mahindra Aerostructures Private Ltd.
Padmini Khare Kaicker Mr. Yashesh Bhatt
M. No. 044784
Mr. Sanjay Joglekar
Director
Mr. Arvind Mehra
Director
Mumbai, Dated: 26
th
May 2014 Mumbai, Dated: 22
nd
May 2014
1234
Rupees
March 31, 2014
Year ended
March 31, 2013
I. Income from operations
II. Other income ........................................................................................ 17 14,086,162 4,607,311
III. Total Revenue ...................................................................................... 14,086,162 4,607,311
IV. EXPENDITURE:
Employee benets expense ................................................................. 18 69,553,688 18,268,910
Finance cost ......................................................................................... 19 2,215,611 3,956,685
Depreciation and amortisation expense .............................................. 11C 3,657,518 2,288,572
Other expenses ..................................................................................... 20 114,057,904 67,502,230
189,484,721 92,016,397
V. Prot (Loss) before tax ...................................................................... (175,398,559) (87,409,086)
VI. Less: Tax expense ................................................................................
Current tax .........................................................................................
Deferred tax .......................................................................................
VII. Prot (Loss) for the period ................................................................ (175,398,559) (87,409,086)
VIII. Basic and diluted Earnings Per Share [Refer Note No. 27] ............... (1.83) (1.90)
For Mahindra Aerostructures Private Ltd.
M. No. 044784
Mr. Sanjay Joglekar
Director
Mr. Arvind Mehra
Director
Mumbai, Dated: 26
th
May 2014 Mumbai, Dated: 22
nd
May 2014
1235
Rupees
March 31, 2014
For the year ended
March 31, 2013
Net Prot / (Loss) before extraordinary items and tax ... (175,398,559) (87,409,086)
Adjustments for:
Depreciation and amortisation ....................................... 3,657,518 2,288,572
Finance costs .................................................................. 2,215,611 3,956,685
(Prot) / Loss on xed assets sold, scrapped, written
off (Net) ........................................................................... (17,434)
Interest income ............................................................... (919,568)
Unrealised Foreign Exchange ....................................... (551,609)
Net (gain) / loss on sale of investments ........................ (9,902,894) (4,607,311)
(5,518,376) 1,637,946
Operating prot / (loss) before working capital changes .... (180,916,935) (85,771,140)
Adjustments for (increase) / decrease in operating
assets:
Short-term loans and advances ..................................... (30,661,492) (22,446,618)
Long-term loans and advances ..................................... 5,054,427 (16,591,895)
Adjustments for increase / (decrease) in operating
liabilities:
Trade payables ............................................................... 39,893,870 10,758,453
Other current liabilities.................................................... 3,882,080 4,579,991
Short-term provisions ..................................................... 53,201 52,646
Long-term provisions ...................................................... 613,660 235,693
18,835,746 (23,411,730)
Cash generated from operations ................................... (162,081,189) (109,182,870)
Net income tax (paid) / refunds ..................................... (100,094)
Net cash ow from / (used in) operating activities (A) (162,181,283) (109,182,870)
capital advances ............................................................. (454,989,591) (602,030,760)
Proceeds from sale of xed assets................................ 136,132
Interest received ............................................................. 919,568
Current investments
Purchased ................................................................... (342,500,000) (476,000,000)
Proceeds from sale .................................................... 389,476,212 424,880,844
(406,957,679) (653,149,916)
Net cash ow from / (used in) investing
activities (B) ................................................................... (406,957,679) (653,149,916)
1236
Rupees
March 31, 2014
For the year ended
March 31, 2013
Proceeds from issue of equity shares ........................... 335,000,000 470,000,000
Proceeds from borrowings (net) .................................... 312,224,853 329,384,512
Inter Corporate Deposit Received.................................. 10,000,000
Inter Corporate Deposit Repaid ..................................... (10,000,000)
Finance cost ................................................................... (70,858,987) (33,109,491)
Net cash ow from / (used in) nancing
activities (C) .................................................................. 576,365,866 766,275,021
Net increase / (decrease) in Cash and cash
equivalents (A+B+C) ................................................... 7,226,904 3,942,235
of the year ....................................................................... 4,077,694 135,459
Cash and cash equivalents at the end
of the year [Refer Note No.15] ................................... 11,304,598 4,077,694
M. No. 044784
Mr. Sanjay Joglekar
Director
Mr. Arvind Mehra
Director
Mumbai, Dated: 26
th
nd
May 2014
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014 (CONTINUED)
1237
1. Mahindra Aerostructures Private Limited (the Company) was incorporated
on 27
th
January, 2011 with an objective of manufacture and sale of aircraft
components, assemblies and aerostructures.
(A) Basis for preparation of nancial statements:
and the Accounting Standards notied under the said Act.
All assets and liabilities have been classied as current and
non current as per the Companys normal operating cycle and
other criteria set out in the Revised Schedule VI of the Companies
Act, 1956. Based on the nature of operation, the Company has
ascertained its operating cycle as 12 months for the purpose of
current noncurrent classication of assets and liabilities.
(B) Use of estimates:
(C) Cash ow statement:
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals
of past or future cash receipts or payments. The cash ows from
operating, investing and nancing activities of the Company are
segregated.
(D) Fixed Assets:
a) Tangible Fixed Assets:
I. All Fixed Assets are stated at cost less depreciation. Cost
of acquisition is inclusive of purchase price, levies and any
directly attributable cost of bringing the assets to its working
condition for the intended use.
II. Exchange difference arising on payment of liabilities for
purchase of xed assets in foreign currency and year end
conversion of such liabilities are charged/credited to the
III. When an asset is scrapped or otherwise disposed of, the
cost and related depreciation are removed from the books of
accounts and resultant prot or loss, if any, is reected in the
IV. Items of xed assets that have been retired from active use and
are held for disposal are stated at the lower of their net book
value and estimated net realizable value and are disclosed
separately in the nancial statements as current assets.
V. Depreciation is provided on a pro-rata basis on straight line
method over the estimated useful lives of the assets or the
rates prescribed under Schedule XIV of the Companies Act,
1956, whichever is higher, as follows:
Asset Rates
Data Processing Equipment 25%
Ofce Equipment 20%
Furniture and Fixtures 10%
Vehicle 25%
VI. Assets costing less than Rs.5000/- are fully depreciated in the
period of purchase.
b) Intangible Assets
I. All intangible assets comprising of computer software are
initially measured at cost and amortized so as to reect the
pattern in which the assets economic benets are consumed.
II. Computer Software capitalized as intangible asset is amortized
over a maximum period of three years or license period
whichever is lower.
c) Capital Work-in-Progress includes the cost of assets that are
not ready for intended use at the Balance sheet date.
(E) Investments:
Investments that are readily realizable and are intended to be
held for not more than one year from the date, on which such
investments are made, are classied as current investments. All
other investments are classied as long term investments. Current
investments are carried at cost or fair value, whichever is lower.
Long-term investments are carried at cost. However, provision for
diminution is made to recognize a decline, other than temporary,
in the value of the investments, such reduction being determined
and made for each investment individually.
(F) Employee Benets:
a) Dened Contribution Plans:
Provident Fund are charged to the Statement of Prot and Loss
on accrual basis
b) Gratuity:
Liabilities with regard to the gratuity benet payable in future
are determined by actuarial valuation at each balance sheet
date using the projected unit credit method and contributed
to employee gratuity fund managed by Life Insurance
Corporation of India. Actuarial gains and losses arising from
changes in actuarial assumptions are recognized in the
Statement of prot and loss in the period in which they arise.
c) Leave encashment/compensated absences:
pay subject to certain rules. The employees are entitled to
accumulate leave subject to certain limits for future encashment/
availment. The liabilities provided based on the number of days
of unutilized leave at each balance sheet date on the basis of
an independent actuarial valuation.
(G) Foreign Currency Transactions:
a) The Companys reporting currency is Indian Rupee (INR).
are accounted at the exchange rates prevailing on the date of
the transaction or at rates that closely approximate the rate at
the date of the transaction.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
1238
b) As at the Balance Sheet date non-monetary items which are
carried in terms of historical cost denominated in a foreign
currency are reported using the exchange rate at the date of
the transaction.
c) In the case of monetary assets and liabilities denominated in
foreign currency, the exchange rate prevalent on the Balance
Sheet date is applied to restate such assets and liabilities.
Exchange differences arising on restatement of foreign
currency assets and liabilities are recognized as income or
expenditure in the statement of Prot and Loss.
d) Exchange differences on forward exchange contracts,
entered into for hedging foreign exchange uctuation risk in
respect of an underlying asset/liability, are recognized in the
Statement of Prot and Loss in the reporting period in which
the exchange rate changes. Premium/Discount on forward
exchange contracts are recognized as an expense/income
over the life of the contract.
(H) Revenue Recognition:
a) Interest
Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(I) Taxes on income:
Deferred tax is measured based on the tax rates and tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax is recognized, subject to consideration of prudence, on timing
differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets
arising on account of unabsorbed depreciation or carry forward of
tax losses shall be recognized only when there is a virtual certainty
be realized.
(J) Provisions and Contingencies:
a. Provisions are recognized in accounts in respect of present
estimated.
b. Contingent liabilities are disclosed in respect of possible
obligations that arise from past events but their existence is
conrmed only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within the control of
the company.
(K) Leases:
a. Lease arrangements where the risks and rewards incidental
straight-line basis over the lease period.
b. Lease income on an operating lease is recognized in the
statement of prot and loss on a straight-line basis over the
lease period.
(L) Borrowing costs:
of qualifying assets are capitalised as part of the cost of such assets.
A qualifying asset is one that necessarily takes a substantial period
of time to get ready for its intended use or sale. Ancillary expenditure
incurred in connection with the arrangement of borrowings is
amortised over the tenure of the respective borrowings.
(M) Segment Reporting:
The company is in the process of setting up a facility to manufacture
Aerospace Components, Assemblies and Aerostructures and yet to
commence the commercial operations. Hence disclosures under
Accounting Standard 17, Segment Reporting are not applicable to
the Company.
(N) Earnings per Share:
a. Basic earnings per share is computed by dividing net income
by the weighted average number of common stock outstanding
during the period.
b. The number of shares used in computing diluted earnings
per share comprises the weighted average shares
considered for deriving basic earnings per share, and also
the weighted average number of equity shares that could
have been issued on the conversion of all dilutive potential
equity shares. The diluted potential equity shares are
adjusted for the proceeds receivable, had the shares been
actually issued at fair value (i.e., the average market value of
the outstanding shares). Diluted potential equity shares are
deemed converted as of the beginning of the period, unless
issued at a later date.
(O) Impairment of assets:
Management periodically, but at least annually, assesses using
external and internal indicators whether there is an indication that
an asset may be impaired. Impairment occurs where the carrying
amount exceeds the present value of future cash ows expected to
arise from the continuing use of the asset or its eventual disposal.
The impairment loss to be expensed is determined as the excess of
the carrying amount over the higher of the assets net present value
or sale price as determined above.
Note 3 - Share Capital:
Rupees
Nos Amount Nos Amount
1 Authorised: 150,000,000 1,500,000,000 100,000,000 1,000,000,000
(Equity Shares of
Rs 10 each)
Total ............................ 150,000,000 1,500,000,000 100,000,000 1,000,000,000
2 Issued and
Subscribed:
Equity: (Equity
shares of Rs 10
each)
Opening Balance 73,010,000 730,100,000 26,010,000 260,100,000
Add: Issued during
the year 33,500,000 335,000,000 47,000,000 470,000,000
Closing Balance 106,510,000 1,065,100,000 73,010,000 730,100,000
Total ........................... 106,510,000 730,100,000 73,010,000 730,100,000
Additional information:
1) Out of the above 106,510,000 (2013: 73,010,000) shares are held by
Mahindra Aerospace Private Ltd., the holding company, Including shares
held jointly with nominees
2) Details of shareholders holding more than 5% shares in the Company
1239
Name of the
Shareholder March 31, 2014 March 31, 2013
Nos % Nos %
Mahindra Aerospace
Private Limited 106,510,000 100.00% 73,010,000 100.00%
3) Rights, preferences and restrictions attached to equity shares:
The company has one class of equity shares having a par value of Rs.10
per share. Each shareholder is eligible for one vote per share held. The
dividend proposed by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting, except in case
of interim dividend. In the event of liquidation, the equity shareholders are
eligible to receive the remaining assets of the Company after distribution of
all preferential amounts, in proportion to their shareholding.
4) The Company had entered into a Share Subscription Agreement with
M/s. Aerometallic Company S.A.U, Spain (AMC) on 6th February 2013.
As per the terms of the said agreement, M/s. AMC will subscribe to 15%
equity stake in the Company after satisfactory completion of certain
Conditions Precedent, subject to applicable approvals under applicable
acts/regulations
Note 4 - Reserves and Surplus:
Rupees
Particulars
March 31,
2014
March 31,
2013
Decit in Statement of Prot and Loss
Opening Balance (162,724,856) (75,315,770)
Add: Loss for the year (175,398,559) (87,409,086)
Total ......................................................... (338,123,415) (162,724,856)
Note 5 - Long-term borrowings:
Rupees
Particulars
March 31,
2014
March 31,
2013
Secured
Rupee term loans from Banks 676,384,512 421,384,512
Vehicle loan from bank 465,853
Total ......................................................... 676,850,365 421,384,512
Note:
A) The Term Loan is secured by:
First charge by way of equitable mortgage of the immovable property
comprising leasehold land with building and other structures (existing
and to be constructed)
First charge by way of hypothecation of (a) entire current assets, present
and future, including stocks of rawmaterials, semi nished goods,
nished goods, stores, spares, bookdebts and other current assets and
(b) all the movable xed assets present and future
The loan is guaranteed by Mahindra Aerospace Private limited, the
holding Company
B) Repayment Terms and Interest
The Term Loan carries interest of base rate + 2.10% p.a. The Loan is
repayable in 23 quarterly installments from November 2014
C) Vehicle Loan is Secured by hypothication of Vehicle and is repayble over
36 months and carries interest rate of 10.35 %.
Note 6 - Long term provisions:
Rupees
Particulars
March 31,
2014
March 31,
2013
Provision for gratuity 623,915 138,487
Provision for compensated absences 388,099 259,867
Total ......................................................... 1,012,014 398,354
Note 7 - Short term borrowings:
Rupees
Particulars
March 31,
2014
March 31,
2013
Buyers credit in foreign currency 26,427,200
Total ......................................................... 26,427,200
Note:
A) The Buyers Credit is a sublimit under the Term Loan facility. For the details
of security refer Point No. (A) under Note No. 5
B) Repayment Terms and Interest
The Buyers Credit carries interest of 12 months EURIBOR + 60bps & 90
bps repayable at the end of 360 days from the date of loan due in July
2014 and December 2014
Note 8 - Trade payables:
Rupees
Particulars
March 31,
2014
March
31, 2013
1
Payables - Micro & small enterprises
[Refer Note No.35] 17,752,751
2 Payables - Other than micro & small
enterprises 65,652,585 25,859,351
3 Capital creditors 104,090,028 117,117,959
Total ................................................ 187,495,364 142,977,310
Note 9 - Other current liabilities:
Rupees
Particulars
March 31,
2014
March 31,
2013
1 Current maturity of long term liabilities 30,331,800
2 Interest accrued 7,559,536 4,169,024
3 Statutory dues 5,074,699 2,970,318
4 Other payables 2,024,374 246,675
Total ..................................... 44,990,409 7,386,017
Note 10 - Short term provisions:
Rupees
Particulars
March 31,
2014
March 31,
2013
Provision for Gratuity 61,854 37,405
Provision for compensated absences 70,186 41,434
Total ......................................................... 132,040 78,839
1240
Note 11 - Fixed Assets:
A : Tangible Assets Rupees
As at
April 1,
2013 Additions Deletions
As at
March 31,
2014
As at
April 1,
2013 For the year Deletions
As at
March 31,
2014
As at
March 31,
2014
As at
April 1,
2013
Furniture and Fittings 124,087 45,250 169,337 32,506 12,337 44,843 124,494 91,581
Ofce Equipments 380,166 2,021,421 2,401,587 131,833 320,464 452,297 1,949,290 248,333
Computers 1,464,525 5,021,780 6,486,305 412,711 838,352 1,251,063 5,235,242 1,051,814
Vehicles 541,567 1,455,889 541,567 1,455,889 271,526 438,533 422,869 287,190 1,168,699 270,041
Total 2,510,345 8,544,340 541,567 10,513,118 848,576 1,609,686 422,869 2,035,393 8,477,725 1,661,769
Previous Year 1,688,434 821,911 2,510,345 205,940 642,636 848,576 1,661,769
As at
April 1,
2013 Additions Deletions
As at
March 31,
2014
As at
April 1,
2013 For the year Deletions
As at
March 31,
2014
As at
March 31,
2014
As at
April 1,
2013
Software Expenditure 5,167,488 2,808,158 7,975,646 2,013,394 2,047,832 4,061,226 3,914,420 3,154,094
Total 5,167,488 2,808,158 7,975,646 2,013,394 2,047,832 4,061,226 3,914,420 3,154,094
Previous Year 2,095,870 3,071,618 5,167,488 367,458 1,645,936 2,013,394 3,154,094
C : Depreciation and Amortization Expense
March 31,
2014
Year ended
March 31,
2013
Depreciation on tangible Assets 1,609,686 642,636
Amortization on intangible Assets 2,047,832 1,645,936
Depreciation and Amortization Expense 3,657,518 2,288,572
Note:
1. Charge by way of equitable mortgage of the immovable property
comprising land with building and other structures (existing and to be
constructed) is created in favor of AXIS Bank Limited for the Term Loan
availed by the Company
2. Movable xed assets (present and future) are hypothecated to AXIS Bank
Limited for the Term Loan availed by the Company & also for the SBLC
facilities sanctioned to M/s. Mahindra Aerospace Private Limited, the
Holding Company
Note 12 - Long - Term Loans & Advances:
Rupees
Particulars March 31,
2014
March 31,
2013
1 Capital advances
Unsecured, Considered Good 2,736,426 63,111,507
2,736,426 63,111,507
2 Security deposits
Unsecured, Considered Good 3,771,000 5,523,920
3,771,000 5,523,920
3 Other loans and advances
Unsecured, Considered Good
Consideration paid for Lease
Land [Refer Note No. 32]
87,051,200 87,051,200
TDS receivable 100,094
87,151,294 87,051,200
Total ........................................................ 93,658,720 155,686,627
Note 13 - Other Non current Assets:
Rupees
Particulars March 31,
2014
March 31,
2013
Unamortised expenses
Unamortized portion of Finance
Charges
10,452,288 13,753,795
Total ......................................................... 10,452,288 13,753,795
Note 14 - Current & Non-Current Investments:
Rupees
Particulars
March 31,
2014
March 31,
2014
March 31,
2013
March 31,
2013
Non
Current Current
Non
Current Current
Investments (At Cost, unless
otherwise specied):
Investment in mutual funds
(other than trade)
Units:
Unquoted
ICICI Prudential Liquid
Plan - Growth
[114,031.093
(2013:255,205.128) units
of Rs. 100 each]

21,604,838 43,613,965
Axis Liquid Fund
Institutional Plan - Growth
[15,562.866
(2013:28,986.274) units
of Rs. 1000 each]

22,076,258 37,140,449
Total ............................... 43,681,096 80,754,414
Note: Aggregate net asset value of mutual funds - Rs. 43,759,640 (2013:
Rs. 81,957,787)
Note 15 - Cash & Bank balances:
Rupees
Particulars
March 31,
2014
March 31,
2013
1 Cash & Cash Equivalents
7,130 9,278
1241
Rupees
Particulars
March 31,
2014
March 31,
2013
2 In current account with Scheduled
Banks 11,297,468 4,068,416
11,297,468 4,068,416
Total ...................................................... 11,304,598 4,077,694
Note 16 - Short-term Loans & Advances:
Rupees
Loans and advances
Unsecured, Considered Good
Excise duty & service tax receivable 54,657,787 33,595,860
Security deposits 3,212,820 531,900
Prepaid expenses 3,172,174 217,665
Receivable from holding company 396,911
Employee advances 3,167,596 389,328
Others 965,791 176,834
Total ........................................................ 65,573,079 34,911,587
Note 17 - Other Income:
Rupees
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
1 Interest income on bank deposit 919,568
2 Gain/(loss) on foreign exchange
translation, net 2,100,206
3 Prot on sale of xed assets 17,434
4 Gain/(loss) on sale of investments, net 9,902,894 4,607311
5 Provision no longer required 1,146,060
Total ........................................................ 14,086,162 4,607,311
Note 18 - Employee Benet Expenses:
Rupees
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
1 Salaries, wages, bonus, etc 41,630,361 16,437,377
2 Contribution to provident fund 1,688,124 585,800
3 Gratuity expense 509,877 216,006
4 Staff welfare 25,725,326 1,029,727
Total ................................................ 69,553,688 18,268,910
Note 19 - Finance Cost:
Rupees
Particulars
Year Ended
March 31,
2014
Year Ended
March 31,
2013
1 Interest on Inter-Corporate Deposits 50,959
2 Other interest costs 798,856 3,203,669
3 Finance charges 1,365,796 753,016
Total ................................................ 2,215,611 3,956,685
Note 20 - Other Expenses:
Rupees
Particulars
Year Ended
March 31, 2014
Year Ended
March 31, 2013
1 Rates and Taxes 3,929,700 2,225,154
2 Power & fuel 406,249 401,727
3 Insurance 1,086,085 12,542
4 Rent 5,011,823 3,671,861
5 Stores & consumables 2,078,369
6 Professional and consultancy charges 31,549,280 26,544,855
7 Travelling and conveyance expenses 39,843,738 18,077,480
8 Communication expense 926,712 1,089,890
9 Business promotion expenses 12,506,843 9,537,482
10 Exchange Loss (Net) 1,842,913
11 Staff recruitment expenses 6,590,486 1,978,078
12 Auditors remuneration 1,032,121 417,500
13 Ofce and admin expenses 4,732,223 458,500
14 Miscellaneous expenses 4,364,275 1,244,248
Total ................................................ 114,057,904 67,502,230
Notes: Rupees
Particulars
Year Ended
March 31, 2014
Year Ended
March 31, 2013
1. Auditors remuneration includes
- Statutory audit 300,000 300,000
- Attestation services 374,467 117,500
- Other services 350,000
- Reimbursement of expenses 7,654
Total ................................................ 1,032,121 417,500
21. Directorate of Revenue Intelligence initiated an inquiry into acquisition
of certain pre-owned equipment by M/s. Mahindra Aerospace Private
Limited (MAPL) from M/s. The Boeing Company and subsequent transfer
of the equipment to the Company on High Sea Sale basis. Without
prejudice to the inquiry, the Company voluntarily paid Rs. 264.17 Lakhs
(2013: Rs.245.61 lakhs) being the applicable duty (along with interest) on
the expenses relating to acquisition of the said equipment.
22. The Company is setting up aerospace components manufacturing facility
on the land alloted by Karnataka Industrial Areas Board (KIADB). As on
31
st
March 2014, an amount of Rs. 14,268.22 Lakhs (2013: Rs. 8,456.00
Lakhs) is shown as capital work in progress being the amounts spent on
construction of the building, purchase of equipment and other expenses
directly related to the project.
23. Contingent Liabilities:
a. Corporate Guarantees issued in respect of SBLC facilities availed by
the holding company Rs.10,312.25 Lakhs (2013: 7562.25 Lakhs)
[equivalent to AUD 18.75 mn (2013: AUD 13.75 mn)]
b. Bank Guarantees given to customs authorities for import of capital
goods under EPCG license Rs.277.00 Lakhs (2013: Rs. 137 Lakhs)
[The Company had imported certain capital equipment under the
Export Promotion Capital Goods Scheme (EPCG). Accordingly,
the Company undertook an export obligation of Rs.3415.88 Lakhs
(2013: Rs.3415.88 Lakhs) within 8 years and of Rs.974.99 Lakhs
(2013: Rs. 269.72 Lakhs) within 6 years starting from the nancial
year 2012-13].
24. The estimated amount of contracts remaining to be executed on Capital
account and not provided for as at March 31, 2014 is Rs.160.39 Lakhs
(2013: Rs. 2977.76 Lakhs)
1242
25. Employee Benets:
a) Gratuity Liability
The Gratuity liability under dened benet plan as on 31.3.2014
is Rs. 8.46 Lakhs (2013: Rs. 5.10 Lakhs)
Rupees Lakhs
(i) Reconciliation of opening and closing balances of the present value of
gratuity liability.
Opening gratuity liability
Service cost
Interest cost
Actuarial gains and losses on liability
Benets paid
Closing gratuity liability
5.10
4.51
0.36
0.43
(1.94)
8.46
2.69
2.68
0.21
(0.48)
5.10
(ii) Reconciliation of the opening and closing balances of the fair value of
the plan asset (being an eligible insurance policy)
Opening Value of Plan Assets
Actuarial gains and losses
Contribution by the employer
Benets paid
Closing fair value of plan assets
3.35
0.19
0.01
0.00
(1.94)
1.60
2.89
0.24
0.02
0.20
3.35
(iii) Reconciliation of the present value of the gratuity liability and the fair
value of the plan assets to the assets and liabilities recognized in the
balance sheet:
Liability recognized in the balance
sheet
Plan liability
1.60
6.86

8.46
3.35
1.75

5.10
(iv) Total expense recognized in the Prot and loss Account:
Service cost
Interest cost on gratuity liability
recognized in the year
Net gratuity expense charged under
the head Personnel Costs
Actual return on plan assets
4.51
0.36
(0.19)

0.42

5.10
(0.19)
2.68
0.22
(0.24)

(0.50)

2.16
0.25
(v) The major categories of plan assets as a percentage of the fair value of
The Insurer managed fund 100% 100%
(vi) Return on Plan Assets
The overall expected rate of return on
assets is determined based on
Actual rate of return on plan assets

8.00%
8.00%

8.00%
8.00%
(vii) Principal actuarial assumptions used in determining gratuity liability as
at the balance sheet date are:
Discount rate
Salary Increase
Attrition rate
Retirement age
Interest Rate
8.78%

8.00%

7%
5%
60
8.78%
8.00%

8.00%

7%
5%
60
8.00%
Rupees Lakhs
(viii) Experience adjustments
Dened Benet Obligation at the end
of the year
Plant asset at the end of the period
Funded status
Experience adjustments on plan
liabilities
Experience adjustments on plant
assets

8.46
1.60
6.86
0.43
0.01

5.10
3.35
1.75
(0.48)
0.01
Note: In the absence of detailed information regarding plan asset which is
funded with insurance company, the composition of each major category
of plan asset, the percentage or amount for each category to the fair
value of plan assets and details of experience adjustments prior to 2012-
13 have not been disclosed.
b) Leave Encashment
Employees are entitled to accumulation of leave which can be
encashed at the time of retirement or termination. The leave
encashment benet scheme is not funded. Hence, there are no
plan assets attributable to the obligation. The Leave encashment
liability under the scheme as on 31.3.2014 is Rs.4.58 Lakhs
(2013: Rs. 3.01 Lakhs).
Rupees Lakhs
2013-14 2012-13
(i) Reconciliation of opening and closing balances of the present value of
Leave Encashment liability
Opening Leave encashment liability
Service cost
Interest cost
Actuarial gains and losses on liability
Benets paid
Closing Leave encashment liability
3.01
1.56
0.27
(0.26)
4.58
1.89
1.03
0.15
(0.06)
3.01
(i) Reconciliation of the present value of the leave encashment liability and
the fair value of the plan assets to the assets and liabilities recognized
in the balance sheet:
Leave Encashment
Past service cost not yet recognized
Other amount recognized in the
balance sheet
Plan asset/liability
4.58
3.01
(ii) Total expense recognized in the Prot and loss Account:

Service cost
Interest cost
recognized in the year
Net Leave encashment expense
charged under the head Personnel
Costs
1.56
0.27

(0.26)

1.57
1.03
0.15

(0.06)

1.12
1243
Rupees Lakhs
2013-14 2012-13
(iii) The major categories of plan assets as a percentage of the fair value of
Investments with insurer Nil Nil
(iv) Principal actuarial assumptions used in determining gratuity liability as at
the balance sheet date are:
Discount rate
assumption (to specify) -
Salary Increase
Attrition rate
Retirement age
8.78%

7%
5%
60
8%

7%
5%
60
Amount recognized as an expense and included in the schedule
Contribution to Provident and Other Funds of Personnel Expenses
Rs. 18.25 Lakhs (2013: Rs. 7.84 Lakhs) out of which Rs 3.39 Lakhs
(2013: Rs. 1.98 Lakhs) is capitalized.
26. Related Party Disclosure:
(i) Name of the related party and nature of relationship where control
exists:
S.No. Name of Related Party
Company
Nature of Relationship
1. Mahindra & Mahindra Limited Ultimate holding
company
2. Mahindra Aerospace Pvt. Ltd Holding company
(ii) Related Party transactions are as under:
Rupees Lakhs
Name of
the Related
Party
Description
of
Relationship
Nature of
Transactions
Amount of
Transactions
Amount outstanding at the
end of the year
Payable Receivable
Mahindra &
Mahindra
Ltd
Ultimate
Holding
Company
Services Received 242.73
(159.49)
247.06
(63.94)
Reimbursement of
Expenses paid
0.06
Reimbursement of
Expenses received
(0.76)
(0.76)
Mahindra
Aerospace
Pvt Ltd
Holding
Company
Services/Material
Received
21.34
(22.78)
(37.52)
3.97
Services Rendered 3.21

()
Rent Paid 30.10
(28.42)
Purchase of Fixed
Assets
1.59
()
Reimbursement of
Expenses paid
0.09
(712.88)
Capital Contribution 3350.00
(4700.00)
Inter Corporate
Deposit Received
100.00
()
Inter Corporate
Deposit Repaid
100.00
()
Interest on Inter
Corporate Deposit
Repaid
0.51
()
Name of
the Related
Party
Description
of
Relationship
Nature of
Transactions
Amount of
Transactions
Amount outstanding at the
end of the year
Payable Receivable
High Sea Purchase
Rent Deposit paid
(159.97)
26.81
(26.81)
Mahindra
Engineering
Services
(Europe)
Ltd
Associate
Company
()
37.59
()
Reimbursement of
Expenses paid
20.69
()
Purchase of Fixed
Assets
(5.42)
Mahindra
Integrated
Business
Solutions
Pvt Ltd
Associate
Company
(1.04)
0.10
(0.08)
Mahindra
Hinoday
Industries
Ltd
Associate
Company
Purchase of Fixed
Assets
(54.11)
(1.12)
Aerostaff
Australia
Pty Ltd.
Fellow
Subsidiary
Services Received
(79.49)
(65.53)
Reimbursement of
Expenses paid
(23.74)
Bristlecone
India Ltd.
Associate
Company
Services Received
(9.05)
()
Reimbursement of
Expenses paid
(2.17)
Mr Narendra
N Shanbag
Key
Management
Personnel
Remuneration 32.82
()
Note:- Figures in brackets are in respect of the corresponding previous year.
27. Earnings Per Share:
Rupees Lakhs
2013-14 2012-13
Loss as per statement of
Prot and Loss
(1753.99) (874.09)
Weighted Average No. of Equity
Shares outstanding during the year 95,811,370 46,001,781
Basic Earnings Per Share (Rs.) (1.83) (1.90)
Diluted Earnings Per Share (Rs.) (1.83) (1.90)
28. Operating Leases:
The Company has taken commercial premises on operating lease for
ofce and guest house purposes. There are no exceptional/restrictive
covenants in the lease agreements.
over the period of lease. Details of future minimum lease rentals payable
are as follows:
Rupees Lakhs
1 year 30.87
1 5 years
Beyond 5 years
1244
M. No. 044784
Mr. Sanjay Joglekar
Director
Mr. Arvind Mehra
Director
Mumbai, Dated 26
th
May 2014 Mumbai, Dated 22
th
May 2014
29. Details of Current investments purchased and sold during the year ended
31
st
March 2014
Particulars Purchased Sold
No. of
Units
Amount
(Rupees
Lakhs)
No. of
Units
Amount
(Rupees
Lakhs)
Axis bank Liquid
Fund-Institutional
Growth
128,884
(218,038)
1,720.00
(2710.00)
142,308
(210,165)
1,919.84
(2620.81)
ICICI Prudential
Liquid Regular Plan
Growth
957,533
(12,18,926)
1,705.00
(2,050.00)
10,98,707
(9,63,721)
1,974.92
(1,628.00)
30. CIF value of Imports Rs. 613.77 Lakhs (2013: Rs. 588.89 Lakhs)
31. Expenditure in Foreign Currency
Rupees Lakhs
2013-14 2012-13
Travel 115.78 33.24
Professional and Consultancy Fee 552.23 172.95
Others 2.51 106.86
32. The Company entered into a lease-cum-sale agreement for a period of
10 years with KIADB for 20 acres of land allotted in Narasapura Industrial
area, Kolar District, Karnataka, for the setting up of aerospace component
manufacturing facility. The title of the land will be transferred to the Company
during the currency of the lease term or at the end of 10 year or extended
period, if any, after fullling all conditions stipulated in the said Agreement.
During the year ended March 31, 2012, the company incurred Rs. 870.51
Lakhs towards allotment consideration and other related expenses in
connection with the said lease-cum-sale agreement. The said amount is
disclosed under the head Long term Loans and advances as the title of the
land is yet to be transferred to the Company. This amount will be included
in the tangible assets as and when the title of the land is transferred to the
Company.
33. The Company uses foreign currency forward contracts to hedge its risks
associated with foreign currency exposures relating to the underlying
transactions and rm commitments. The Company does not enter into any
derivative instruments for trading and speculative purposes.
The following are the outstanding Forward Exchange Contracts entered
into by the Company as at 31 March 2014.
Number of contracts Type Foreign
currency
INR
equivalent
(In lakhs)
2 Buy Euro 323,657 276.82
Unhedged Foreign Currency exposure
The year end foreign currency exposures that have not been hedged by a
Rupees
Lakhs
Foreign
currency
Rupees
Lakhs
Foreign
currency
Payable for capital goods 127.21 Euro
154,040

9.89 GBP
9,900
3.39 USD
5,645
Payable for consultancy 37.59 GBP
37,648
70.00 AUD 1.23
1.93 USD
3,213
Others 0.97 1,609
34. Deferred tax asset on the business loss amounting to Rs. 980.78 Lakhs
(2013: Rs. 466.14 Lakhs) is not recognized in view of absence of virtual
certainty of future prots as required by Accounting Standard (AS) 22,
Accounting for taxes on Income.
35. The information as required under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identied on the basis of information available with
the Company. This information has been relied upon by the Auditors. Total
outstanding dues of Micro and small enterprises, which are outstanding for
more than the stipulated period are given below:
Rupees Lakhs
S.No Particulars 2014 2013
A) Dues remaining unpaid as at 31
st
March
- Principal
- Interest on the above
B) Interest paid in terms of Section 16
of the Act, along with the amount of
payment made to the supplier beyond
the appointed day during the year
- Principal paid beyond the
appointed date

- Interest paid in terms of Section
16 of the Act

C) Amount of interest due and payable for
the period of delay on payments made
beyond the appointed day during the
year

D) Further interest due and payable even

E) Amount of interest accrued and
remaining unpaid as at 31
st
March
5.58
36. Previous year gures have been regrouped/ reclassied, to conform to the
current year disclosure.
MAHINDRA GEARS INTERNATIONAL LTD
1245
COMMENTARY OF THE DIRECTORS FOR THE YEAR ENDED 31
ST
MARCH, 2014
The directors present the separate audited nancial statements
of Mahindra Gears International Ltd. (the Company) for the
year ended 31
st
March, 2014.
PRINCIPAL ACTIVITY
The principal activity of the Company is to hold investments in
Mahindra Gears Global Limited.
SPECIAL PURPOSE AUDIT
On 14
th
August, 2013, the legal regime of the Company
changed from a Category 1 Global Business Licence (GBL)
company to a Category 2 GBL company which dispenses it
from preparing audited nancial statements. These separate
nancial statements have been prepared for the year ended
31
st
March, 2014 as they would be used for the purpose of
consolidation of the parent company, Mahindra & Mahindra
Limited. Consequently, an audit has been performed for the
year ended 31
st
March, 2014 on these separate nancial
statements. No consolidated nancial statements have been
prepared for the year ended 31
st
March, 2014 and therefore
no audit has been performed on the consolidated nancial
statements.
RESULTS
The results for the year are shown in the statement of
comprehensive income and related notes.
DIRECTORS
The present membership of the Board is set as follow:
Sanjay Vasant Joglekar
Veena Kunniah
Zakir Hussein Niamut
Mr Couldip Basanta Lala and Ms Rubina Anver Toorawa have
resigned as directors on 24
th
February, 2014 and Mr Zakir
Hussein Niamut and Ms Veena Kunniah have been appointed
as new directors on 24
th
February, 2014.
STATEMENT OF DIRECTORS RESPONSIBILITIES IN
RESPECT OF THE SEPARATE FINANCIAL STATEMENTS
Company law requires the directors to prepare separate
nancial statements for each nancial year which present
fairly the nancial position, nancial performance and cash
ows of the Company. In preparing those separate nancial
statements, the directors are required to:
consistently;
make judgements and estimates that are reasonable and
prudent;
state whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in the separate nancial statements; and
prepare the separate fnancial statements on the going
concern basis unless it is inappropriate to presume that
the Company will continue in business.
The directors have conrmed that they have complied with
the above requirements in preparing the separate nancial
statements.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time
the nancial position of the Company and to enable them to
ensure that the separate nancial statements comply with the
Mauritius Companies Act 2001. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
CERTIFICATE FROM THE SECRETARY UNDER SECTION
166 (d) OF THE MAURITIUS COMPANIES ACT 2001
We certify, to the best of our knowledge and belief, that we
have led with the Registrar of Companies all such returns as
are required of Mahindra Gears International Ltd. under the
Mauritius Companies Act 2001 during the nancial year ended
31
st
March, 2014.
For International Financial Services Limited
Secretary
Registered Ofce:
IFS Court
TwentyEight
Cybercity
Ebene
Republic of Mauritius
Date: 15
th
May, 2014
1246
INDEPENDENT AUDITORS REPORT TO THE MEMBER OF MAHINDRA GEARS
INTERNATIONAL LTD
Report on the Separate Financial Statements
We have audited the accompanying separate nancial
statements of Mahindra Gears International Ltd, the
Company, which comprise the statement of nancial position
income, statement of changes in equity and statement of cash
ows for the year then ended, and a summary of signicant
Directors Responsibilities for the Separate Financial
Statements
The directors are responsible for the preparation and fair
presentation of these separate nancial statements in
accordance with International Financial Reporting Standards,
as applicable and for such internal control as the directors
determine necessary to enable the preparation of nancial
statements that are free from material misstatements, whether
due to fraud or error.
Our responsibility is to carry out an audit and to express
an opinion on these separate nancial statements thereon.
We conducted our audit in accordance with International
Standards on Auditing. Those Standards require that we
comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the separate
The Company was incorporated in the Republic of Mauritius
under the Mauritius Companies Act 2001 on 22 May 2008 as a
private company with liability limited by shares. On 14 August
2013, the legal regime of the Company was changed from
a Category 1 Global Business Licence (GBL) company to a
Category 2 GBL company. By virtue of this status, the Company
is not required to appoint an auditor for carrying out an audit of
the nancial statements. However, the Company has voluntarily
appointed Grant Thornton to carry out an audit of the separate
nancial statements for the year ended 31 March 2014 as these
would be used for the purpose of consolidation of the parent
company, Mahindra & Mahindra Limited.
fraud or error. In making those risk assessments, the auditors
consider internal control relevant to the entitys preparation and
of the separate nancial statements.
opinion.
Opinion
In our opinion, the separate nancial statements give a true
and fair view of the nancial position of the Company as at
31 March 2014, and of its nancial performance and its cash
ows for the year then ended in accordance with International
Financial Reporting Standards, as applicable.
Grant Thornton
K RAMCHURUN, FCCA
Licensed by FRC
Date: 15 May 2014
Ebene, Republic of Mauritius
1247
Notes 2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
INCOME
Interest income on loan .................................................... 9 374,925 30,965,056 346,500 28,617,435
EXPENDITURE
Interest on borrowings ......................................................
13
374,241 30,908,564 343,750 28,390,312
Professional fees ............................................................... 15 18,804 1,553,023 13,136 1,084,902
Audit fees ........................................................................... 5,475 452,180 3,021 249,504
Licence fees ....................................................................... 2,517 207,879 1,498 123,720
Realised foreign exchange loss ........................................ 110 9,085 184 15,197
Bank charges ..................................................................... 423 34,936 71 5,864
401,570 33,165,667 361,660 29,869,499
LOSS BEFORE TAX (26,645) (2,200,611) (15,160) (1,252,064)
Tax expense ....................................................................... 7
LOSS FOR THE YEAR (26,645) (2,200,611) (15,160) (1,252,064)
OTHER COMPREHENSIVE INCOME FOR THE YEAR:
Items that will not be reclassied subsequently to prot
or loss ................................................................................
Items that will be reclassied subsequently to prot or
loss .....................................................................................
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF TAX ......................................................................
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ........ (26,645) (2,200,611) (15,160) (1,252,064)
1248
Notes 2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
ASSETS
Non-current
Investments in subsidiary ..................................... 8 22,935,949 1,894,280,028 22,935,949 1,894,280,028
Loan receivable..................................................... 9 5,500,000 454,245,000 5,500,000 454,245,000
Non-current assets ............................................. 28,435,949 2,348,525,028 28,435,949 2,348,525,028
Current
Loan receivable..................................................... 9 346,500 28,617,435 423,395 34,968,193
Other receivables and prepayments .................... 10 23,855 1,970,184 1,573 129,914
Cash and cash equivalents .................................. 104,844 8,659,066 1,601 132,227
Current assets ..................................................... 475,199 39,246,685 426,569 35,230,334
Total assets .......................................................... 28,911,148 2,387,771,713 28,862,518 2,383,755,362
Equity
Stated capital ........................................................ 11 23,000,001 1,899,570,083 20,700,001 1,709,613,083
Accumulated losses ............................................. (104,074) (8,595,472) (77,429) (6,394,861)
Total equity .......................................................... 22,895,927 1,890,974,611 20,622,572 1,703,218,222
Liabilities
Non-current
Redeemable Preference Shares .......................... 12 2,300,000 189,957,000
Borrowings ............................................................ 13 5,500,000 454,245,000 5,500,000 454,245,000
Non-current liabilities ......................................... 5,500,000 454,245,000 7,800,000 644,202,000
Current
Borrowings ............................................................ 13 495,988 40,963,649 420,034 34,690,608
Other payable and accruals ................................. 14 19,233 1,588,453 19,912 1,644,532
Current liabilities ................................................. 515,221 42,552,102 439,946 36,335,140
Total liabilities ...................................................... 6,015,221 496,797,102 8,239,946 680,537,140
Total equity and liabilities .................................. 28,911,148 2,387,771,713 28,862,518 2,383,755,362
Approved by the Board of Directors on 15 May 2014 and signed on its behalf by:

Director Director
1249
Stated
capital
Accumulated
losses Total
EUR EUR EUR
At 01 April 2012 .................................................................................. 20,700,001 (62,269) 20,637,732
Loss for the year ................................................................................. (15,160) (15,160)
Other comprehensive income ............................................................
Total comprehensive loss for the year ............................................... (15,160) (15,160)
At 31 March 2013 ............................................................................... 20,700,001 (77,429) 20,622,572
At 01 April 2013 ................................................................................ 20,700,001 (77,429) 20,622,572
Conversion of 2,300,000 (6.5%) non-cumulative redeemable
preference shares into ordinary shares ........................................ 2,300,000 2,300,000
Transactions with the owner ........................................................... 2,300,000 2,300,000
Loss for the year ............................................................................... (26,645) (26,645)
Total comprehensive loss for the year .......................................... (26,645) (26,645)
At 31 March 2014 .............................................................................. 23,000,001 (104,074) 22,895,927
Stated
capital
Accumulated
losses Total
INR INR INR
(Note 1) (Note 1) (Note 1)
At 01 April 2012 .................................................................................. 1,709,613,083 (5,142,797) 1,704,470,286
Loss for the year ................................................................................. (1,252,064) (1,252,064)
Total comprehensive loss for the year ............................................... (1,252,064) (1,252,064)
At 31 March 2013 ............................................................................... 1,709,613,083 (6,394,861) 1,703,218,222
At 01 April 2013 ................................................................................ 1,709,613,083 (6,394,861) 1,703,218,222
Conversion of 2,300,000 (6.5%) non-cumulative redeemable
preference shares into ordinary shares ........................................ 189,957,000 189,957,000
Transactions with the owner ........................................................... 189,957,000 189,957,000
Loss for the year ............................................................................... (2,200,611) (2,200,611)
Other comprehensive income .........................................................
Total comprehensive loss for the year .......................................... (2,200,611) (2,200,611)
At 31 March 2014 .............................................................................. 1,899,570,083 (8,595,472) 1,890,974,611
1250
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Loss before tax ....................................................................... (26,645) (2,200,611) (15,160) (1,252,064)
Adjustments for:
Interest on borrowings ........................................................... 374,241 30,908,564 343,750 28,390,312
Interest on loan ....................................................................... (374,925) (30,965,056) (346,500) (28,617,435)
(27,329) (2,257,103) (17,910) (1,479,187)
Increase in other receivables and prepayments .................. (22,282) (1,840,270) (167) (13,792)
(Decrease)/increase in other payable and accruals ............ (679) (56,079) 13,219 1,091,757
Net cash used in operations ............................................... (50,290) (4,153,452) (4,858) (401,222)
Interest received ..................................................................... 451,820 37,315,814
Interest paid ............................................................................ (448,287) (37,024,023)
Net cash used in operating activities (46,757) (3,861,661) (4,858) (401,222)
Loan from related company ................................................... 150,000 12,388,500
Loan from shareholder ........................................................... 2,500,000 206,475,000
Loan to subsidiary .................................................................. (2,500,000) (206,475,000)
Loan repaid to shareholder .................................................... (2,500,000) (206,475,000)
Repayment of loan by subsidiary .......................................... 2,500,000 206,475,000
Net cash from nancing activities ...................................... 150,000 12,388,500
Net change in cash and cash equivalents 103,243 8,526,839 (4,858) (401,222)
Cash and cash equivalents, beginning of year ..................... 1,601 132,227 6,459 533,449
Cash and cash equivalents, end of year 104,844 8,659,066 1,601 132,227
Cash and cash equivalents made up of:
Cash at bank .......................................................................... 104,844 8,659,066 1,601 132,227
1251
1. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Mahindra Gears International Ltd (the Company) was incorporated in the
Republic of Mauritius under the Mauritius Companies Act 2001 on 22 May
2008 as a private company with liability limited by shares. On 14 August
2013, the legal regime of the Company was changed from a Category 1
Global Business Licence (GBL) company to a Category 2 GBL company
and a new licence was issued to that effect by the Financial Services
Commission. The Companys registered ofce is IFS Court, Twenty Eight,
Cybercity, Ebene, Republic of Mauritius.
The principal activity of the Company is to act as an investment holding
company.
The separate nancial statements have been prepared in accordance with
and comply with International Financial Reporting Standards (IFRS), as
applicable.
Indian Rupee (INR) amounts are included solely for convenience. These
transactions should not be construed as representations that the EUR
amounts actually represent, or have been or could be converted into
INR. As the amounts shown in INR are for convenience only, the rate of
1 EUR = INR 82.59 has been used for the purpose of presentation of the
INR amounts in the accompanying nancial statements for the two years
ended 31 March 2013 and 2014.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL
REPORTING STANDARDS
2.1 New and revised standards that are effective for the year beginning on
01 April 2013
In the current year, the following new and revised standards issued by the
International Accounting Standards Board (IASB) are mandatory for the
rst time for the nancial year beginning on 01 April 2013:
IAS 27 Separate Financial Statements
(Revised 2011)
IAS 28 Investments in Associates and Joint Ventures
(Revised 2011)
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IFRS 7 Disclosures Offsetting Financial Assets and
Financial Liabilities (Amendments to IFRS 7)
IFRSs 10, 11 and 12 Transition Guidance (Amendments to IFRS
10, IFRS 11 and IFRS 12)
IFRS 1 Government Loans (Amendments to IFRS 1)
IAS 1 Presentation of Items of Other
(Amendments to
IAS 1)
IAS 19 Employee Benets (Revised 2011)
IFRIC 20 Stripping Costs in the Production Phase of a
Surface Mine
Various Annual Improvements to IFRSs 2009-2011
Cycle
The directors have assessed the impact of these revised standards,
interpretations and amendments and concluded that IAS 1, Presentation
of Items of Other Comprehensive Income (Amendments to IAS 1) and
IFRS 13, Fair Value Measurement have an impact on the disclosure of
these separate nancial statements
2.2 Standards, amendments and interpretations to existing standards that
are not yet effective and have not been adopted early by the Company
At the date of authorisation of these separate nancial statements, certain
new Standards, Amendments and Interpretations to existing Standards
have been published by the IASB but not yet effective, and have not been
adopted early by the Company.
Management anticipates that all of the relevant pronouncements will be
adopted in the Companys accounting policies for the rst year beginning
after the effective date of the pronouncements. Information on new
Standards, Amendments and Interpretations is provided below
IFRS 9 Financial Instruments
IAS 39 Novation of Derivatives and Continuation of
Hedge Accounting (Amendments to IAS 39)
IAS 36 Recoverable Amount Disclosures for Non-
Financial Assets (Amendments to IAS 36)
IFRS 10, 12 and IAS 27 Investment Entities (Amendments to IFRS 10,
IFRS 12 and IAS 27)
IAS 32 Offsetting Financial Assets and Financial
Liabilities (Amendments to IAS 32)
IAS 19 Dened Benet Plans: Employee Contributions
(Amendments to IAS 19)
IFRIC 21 Levies
Various Annual improvements to IFRS 2010-2013
Cycle
3. SUMMARY OF ACCOUNTING POLICIES
(a) Overall considerations
The separate nancial statements have been prepared using the
signicant accounting policies and measurement bases summarised
below.
(b) Revenue
Interest income is recognised on the accrual basis unless collectibility
is in doubt.
Dividend income is recognised when the right to receive payment is
established.
(c) Expenses
All expenses are reported for in the statement of comprehensive
income on the accrual basis.
(d) Financial instruments
Recognition, initial measurement and de recognition
Financial assets and nancial liabilities are recognised when the
Company becomes a party to the contractual provisions of the
nancial instruments and are measured initially at fair value adjusted
by transaction costs. Subsequent measurement of nancial assets
and nancial liabilities are described below.
Financial assets are derecognised when the contractual rights to the
cash ows from the nancial asset expire, or when the nancial asset
and all substantial risks and rewards are transferred.
A nancial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classication and subsequent measurement of nancial assets
For the purpose of subsequent measurement, the Companys
nancial assets are classied into the category of loans and
receivables upon initial recognition.
NOTES TO THE SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014
1252
All nancial assets are subject to review for impairment at least
at each reporting date to identify whether there is any objective
evidence that a nancial asset or a group of nancial assets is
impaired.
All income and expenses relating to nancial assets are recognised
in the statement of comprehensive income.
Loans and receivables
Loans and receivables are non-derivative nancial assets with xed
or determinable payments that are not quoted in an active market.
After initial recognition, these are measured at amortised cost
using the effective interest method, less provision for impairment.
Discounting is omitted where the effect of discounting is immaterial.
The Companys loan receivable, other receivables and cash and
cash equivalents fall into this category of nancial instruments.
Individually signicant receivables are considered for impairment
when they are past due or when other objective evidence is received
that a specic counterparty will default.
Classication and subsequent measurement of nancial
liabilities
The Companys nancial liabilities include borrowings, redeemable
preference shares and other payable and accruals.
Financial liabilities are measured subsequently at amortised cost
using the effective interest method.
All interest-related charges are reported in the statement of
Offsetting nancial instruments
reported in the statement of nancial position when there is a legally
enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the
liability simultaneously.
(e) Consolidated nancial statements
The nancial statements are separate nancial statements which
contain information about Mahindra Gears International Ltd as
an individual company and do not contain consolidated nancial
information as the parent of a group.
(f) Investment in subsidiary
A subsidiary is an entity over which the Company has control. The
Company controls an entity when the Company is exposed to,
or has the rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power
over the entity.
Investment in subsidiary is initially shown at cost. Where an indication
of impairment exists, the recoverable amount of the investment is
assessed. Where the carrying amount of an investment is greater
than its estimated recoverable amount, it is written down immediately
to its recoverable amount and the difference is charged to the
On disposal of an investment, the difference between the net
disposal proceeds and the carrying amount is charged or credited
to the statement of prot or loss and other comprehensive income
(g) Cash and cash equivalents
Cash and cash equivalents comprise of cash at bank. Cash
equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an
insignicant risk of change in value.
(h) Equity
Stated capital is determined using the value of shares that have been
issued.
Accumulated losses include current and prior years results as
disclosed in the statement of comprehensive income.
(i) Provisions
Provisions are recognised when the Company has a present legal or
constructive obligation as a result of past events and it is probable
that an outow of resources will be required to settle the obligation
and the amount can be estimated reliably. Timing or amount of the
outow may still be uncertain.
Provisions are measured at the estimated expenditure required to
settle the present obligation based on the most reliable evidence
available at the reporting date, including the risks and uncertainties
associated with the present obligation. The increase in the provision
due to passage of time is recognised as interest expense in the
Where there are a number of similar obligations, the likelihood that
an outow will be required in settlement is determined by considering
the class of obligations as a whole.
(j) Related parties
Related parties are individuals and companies where the individual
or company has the ability, directly or indirectly, to control the other
party or exercise signicant inuence over the other party in making
nancial and operating policy decisions.
(k) Foreign currency translation
(i) Functional and presentation currency
The separate nancial statements are presented in EUR
which is also the functional and presentation currency of the
Company. The Company has also presented the separate
nancial statements in Indian Rupee (INR) for the convenience
of users of accounts.
(ii) Foreign currency transactions and balances
Foreign currency transactions are translated into the functional
currency of the Company using the exchange rates prevailing
at the dates of the transactions (spot exchange rate). Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the remeasurement of monetary items
denominated in foreign currency at year-end exchange rates are
recognised in the statement of comprehensive income.
Non-monetary items are not retranslated at year-end and are
measured at historical cost (translated using the exchange
rates at the transaction date), except for non-monetary items
measured at fair value which are translated using the exchange
rates at the date when fair value was determined.
(l) Impairment of assets
At each reporting date the Company reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets have suffered any impairment loss. When an indication of
impairment loss exists, the carrying amount of the asset is assessed
and written down to its recoverable amount.
(m) Comparatives
Where necessary, comparatives gures have been adjusted to
conform with changes in presentation in the current year.
4. SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING
ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY
When preparing the separate nancial statements, management
undertakes a number of judgements, estimates and assumptions about the
recognition and measurement of assets, liabilities, income and expenses.
Signicant management judgement
The following is the signicant management judgement in applying the
accounting policies of the Company that has the most signicant effect on
the separate nancial statements.
Determination of functional currency
The determination of the functional currency of the Company is critical
since recording of transactions and exchange differences arising therefrom
are dependent on the functional currency selected. The directors have
considered those factors and have determined that the functional currency
of the Company is the EUR
1253
Estimation uncertainty
Information about estimates and assumptions that have the most signicant
effect on recognition and measurement of assets, liabilities, income and
expenses is provided below. Actual results may be substantially different.
In assessing impairment of investments in subsidiary, management
estimates the recoverable amount of each asset based on expected
future cash ows and uses an interest rate to discount them. Estimation
uncertainty relates to assumptions about future operating results and the
determination of a suitable discount rate.
5. FINANCIAL INSTRUMENT RISK
Risk management objectives and policies
The Companys activities expose it to a variety of nancial risks: market
risk (including foreign exchange risk and interest rate risk), credit risk and
liquidity risk.
The Companys nancial assets and nancial liabilities by category are
summarised below:
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Financial assets
Loans and receivables:
Non-current
Loan receivable ................... 5,500,000 454,245,000 5,500,000 454,245,000
Current
Loan receivable ................... 346,500 28,617,435 423,395 34,968,193
Other receivables .................. 22,690 1,873,967
Cash and cash equivalents .... 104,844 8,659,066 1,601 132,227
474,034 39,150,468 424,996 35,100,420
Total nancial assets ........ 5,974,034 493,395,468 5,924,996 489,345,420
Financial liabilities measured at amortised cost:
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Non-current
shares .................................. 2,300,000 189,957,000
Borrowings .......................... 5,500,000 454,245,000 5,500,000 454,245,000
5,500,000 454,245,000 7,800,000 644,202,000
Current
Borrowings .......................... 495,988 40,963,649 420,034 34,690,608
Other payable and accruals .... 19,233 1,588,453 19,912 1,644,532
515,221 42,552,102 439,946 36,335,140
Total nancial liabilities .... 6,015,221 496,797,102 8,239,946 680,537,140
The Companys risks are managed by the Board of Directors and focus on
securing the Companys short to medium term cash ows by minimising
the exposure to nancial risks. The Companys investment is managed to
generate lasting returns. The Company does not actively engage in the
trading of nancial assets and derivatives for speculative purposes. The
most signicant nancial risks to which the company is exposed to are
described below.
5.1 Market risk analysis
The Company is exposed to market risk through its use of nancial
instruments and specically to currency risk, interest rate risk which result
from both its operating and investing activities.
(i) Foreign currency sensitivity
The Company is not exposed to any currency risk as most of its
nancial assets and nancial liabilities are denominated in Euro, the
functional currency of the Company.
The currency prole of the Companys nancial assets and liabilities
is summarised as follows:
Financial
assets
2014
Financial
liabilities
2014
Financial
assets
2013
Financial
liabilities
2013
EUR EUR EUR EUR
Long-term exposure
Euro (EUR) .......................... 5,500,000 5,500,000 5,500,000 7,800,000
Short-term exposure
Euro (EUR) .......................... 474,034 505,938 424,996 434,348
United States Dollar (USD) .... 9,283 5,598
474,034 515,221 424,996 439,946
Total exposure ..................... 5,974,034 6,015,221 5,924,996 8,239,946
Financial
assets
2014
Financial
liabilities
2014
Financial
assets
2013
Financial
liabilities
2013
INR
(Note 1)
INR
(Note 1)
INR
(Note 1)
INR
(Note 1)
Long-term exposure
Euro (EUR) .......................... 454,245,000 454,245,000 454,245,000 644,202,000
Short-term exposure
Euro (EUR) .......................... 39,150,468 41,785,419 35,100,420 35,872,801
United States Dollar (USD) .... 766,683 462,339
39,150,468 42,552,102 35,100,420 36,335,140
Total exposure ..................... 493,395,468 496,797,102 489,345,420 680,537,140
(ii) Interest rate sensitivity
Interest rate risk is the risk that the fair value or future cash ows of
a nancial instrument will uctuate because of changes in market
interest rates.
The Company is not exposed to changes in market interest rates as
its interest bearing nancial assets and nancial liabilities have xed
interest rates.
5.2 Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to
the Company. The Companys maximum exposure to credit risk is limited
to the carrying amount of nancial assets recognised at the reporting date,
as summarised below:
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
ASSETS
Non-current
Loan receivable 5,500,000 454,245,000 5,500,000 454,245,000
Current
Loan receivable..................... 346,500 28,617,435 423,395 34,968,193
Other receivables ..................... 22,690 1,873,967
Cash and cash equivalents ....... 104,844 8,659,066 1,601 132,227
474,034 39,150,468 424,996 35,100,420
Total assets ........................ 5,974,034 493,395,468 5,924,996 489,345,420
(i) The loan to a subsidiary is unsecured, bears interest at 6.30% per
annum and repayable under agreed contractual terms. Accordingly,
the directors are of opinion that the loan is fully recoverable
1254
(ii) The Company has provided short term advances to related parties
during the year under review and the directors believe that these
receivables are not exposed to any credit risk.
(iii) The credit risk for the bank balance is considered negligible, since the
counterparty is a reputable bank with high quality external credit ratings.
(iv) None of the Companys nancial assets are secured by collateral or
other credit enhancements.
5.3 Liquidity risk analysis
Liquidity risk is the risk that the Company might be unable to meet its
obligations as and when they fall due.
The Company manages its liquidity needs by carefully monitoring all its
cash inows and outows. The Company maintains sufcient cash to meet
its liquidity requirements and the nancial support of its shareholder and
related companies are sought where necessary.
At 31 March 2014, the Companys nancial liabilities have contractual
maturities which are summarised below:
Within
1 year
Within
1 year
More than
1 year
More than
1 year
EUR INR EUR INR
(Note 1) (Note 1)
Borrowings ............................ 495,988 40,963,649 5,500,000 454,245,000
Other payable and accruals .... 19,233 1,588,453
515,221 42,552,102 5,500,000 454,245,000
This compares to the maturity of the Companys nancial liabilities in the
previous reporting period as follows:
Within
1 year
Within
1 year
More than
1 year
More than
1 year
EUR INR EUR INR
(Note 1) (Note 1)
Redeemable preference shares .. 2,300,000 189,957,000
Borrowings ............................ 420,034 34,690,608 5,500,000 454,245,000
Trade payable and accruals.... 19,912 1,644,532
439,946 36,335,140 7,800,000 644,202,000
5.4 Fair value measurement of nancial instruments
The Companys nancial assets and nancial liabilities are measured at
their carrying amounts which approximate their fair values.
6. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Companys objectives when managing capital are to safeguard the
Companys ability to continue as a going concern in order to provide
returns to its shareholder.
In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to its member, buy back shares or
issue new shares.
The Company monitors capital on the basis of the gearing ratio. This ratio
is calculated as net debt divided by total capital.
The details of the gearing ratio are disclosed as follows:
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Total borrowings (including
redeemable preference
shares) ................................. 5,995,988 495,208,649 8,220,034 678,892,608
Less: cash and cash
equivalents............................ (104,844) (8,659,066) (1,601) (132,227)
Net debt ................................ 5,891,144 486,549,583 8,218,433 678,760,381
Total equity .......................... 22,895,927 1,890,974,611 20,622,572 1,703,218,222
Total capital ....................... 28,787,071 2,377,524,194 28,841,005 2,381,978,603
Gearing ratio (%) ............... 20.46% 20.46% 28.50% 28.50%
The Company gearing ratio has decreased from 28.50% in 2013 to 20.46%
for the year under review. The directors consider that this level of gearing
is reasonable taking into account the Companys business activities.
7. TAX EXPENSE
Given that the Company has changed its legal regime from a Global
Business Category 1 Licence to a Global Business Category 2 Licence
with effect as from 14 August 2013 (the Conversion Date), there are
no requirements for the Company to le tax returns with the Mauritius
Revenue Authority in the Republic of Mauritius. The Company had led all
required tax returns up to the Conversion Date
8. INVESTMENTS IN SUBSIDIARY
2014 & 2013 2014 & 2013
EUR INR
(Note 1)
(i) Unquoted investments at cost:
At 01 April and 31 March .............................. 22,935,949 1,894,280,028
(ii) Details pertaining to the unquoted investments are as follows:
Name of investee
company
Class of
shares
Country of
incorporation
%
holding
Cost
2014
Cost
2014
EUR INR
(Note 1)
Mahindra Gears
Global Limited
Equity
Note 8 (iii)
Republic of
Mauritius 53.34% 22,935,949 1,894,280,028
Name of investee
company
Class of
shares
Country of
incorporation
%
holding
Cost
2013
Cost
2013
EUR INR
(Note 1)
Mahindra Gears Global
Limited
Equity Republic of
Mauritius 53.34% 20,642,354 1,704,852,017
Mahindra Gears Global
Limited
Preference
Note 8 (iii)
Republic of
Mauritius 53.34% 2,293,595 189,428,011
22,935,949 1,894,280,028
(iii) During the year under review, the 2,293,595 preference shares of
EUR 1 amounting to EUR 2,293,595 were converted into fully paid
equity shares without the payment of any further consideration.
(iv) The directors have assessed the recoverable amount of the
investments and conrmed that the carrying amount of these
investments has not suffered any impairment in value at the reporting
date. Since the investment in Mahindra Gears Global Limited does
not have a quoted price in an active market, the fair value of this
investment cannot be measured reliably.
(v) The proportion of the voting rights in the subsidiary undertakings
held directly by the Company does not differ from the proportion of
ordinary shares held. However, no consolidated nancial statements
are presented as only separate nancial statements would be used
for consolidation of the parent company, Mahindra & Mahindra
Limited, a quoted company incorporated in the Republic of India.
The registered ofce of Mahindra & Mahindra Limited is Mahindra
Towers, Worli, Mumbai 400018, the Republic of India.
(vi) Pursuant to the loan agreement entered by Metalcastello S.p.A. with
The Export-Import Bank of India (Exim Bank) on 10 July 2013, the
Company has to seek a written consent from Exim Bank prior to
disposal, transfer, assign, or create any pledge/lien on the shares
held in Mahindra Gears Global Limited.
1255
9. LOAN RECEIVABLE
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Loan to subsidiary:
Non-current
Principal amount ................ 5,500,000 454,245,000 5,500,000 454,245,000
Current
Interest receivable .............. 346,500 28,617,435 423,395 34,968,193
Total .................................. 5,846,500 482,862,435 5,923,395 489,213,193
(i) The movement during the year on the loan receivable are as follows:
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Balance at 01 April ............ 5,923,395 489,213,193 5,576,895 460,595,758
Loan given to a subsidiary
(Note 9 (iii)) ......................... 2,500,000 206,475,000
Loan repayment .................. (2,500,000) (206,475,000)
Interest received during
the year ............................... (451,820) (37,315,814)
Interest income for the year .. 374,925 30,965,056 346,500 28,617,435
Balance at 31 March .......... 5,846,500 482,862,435 5,923,395 489,213,193
(ii) The loan to the subsidiary is unsecured, bears interest at 6.30% per
annum and is repayable upon receipt of proceeds from an equivalent
amount of loan given by the subsidiary to Metalcastello S.p.A., an
unquoted company incorporated in the Republic of Italy. In case
of non-payment beforehand, the maximum tenure of the loan is
31 December 2017.
(iii) During the year under review, an additional loan of EUR 2,500,000
was granted to Mahindra Gears Global Limited. The loan was
unsecured, carried interest at 8.30% per annum and has been fully
repaid during the year ended 31 March 2014.
10. OTHER RECEIVABLES AND PREPAYMENTS
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Other receivables
(Note 10 (i)) ..................... 22,690 1,873,967
Prepayments ...................... 1,165 96,217 1,573 129,914
23,855 1,970,184 1,573 129,914
(i) Advances to related parties comprise of EUR 4,680 and EUR
18,010 provided to Mahindra Forgings Global Limited and Mahindra
Gears Global Limited respectively, both incorporated and regulated
under the laws of the Republic of Mauritius, during the year under
review. Such advances are interest free, unsecured and receivable
on demand.
(ii) The Companys non-nancial assets consists of only prepayments
amounting to EUR 1,165 (2013: EUR 1,573), for which fair value
measurement is not applicable.
11. STATED CAPITAL
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Issued and fully paid:
Balance at 01 April ............ 20,700,001 1,709,613,083 20,700,001 1,709,613,083
Conversion of 2,300,000
(6.5%) non-cumulative
redeemable preference
shares ............................... 2,300,000 189,957,000
Balance at 31 March ......... 23,000,001 1,899,570,083 20,700,001 1,709,613,083
During the year under review, the 2,300,000 (6.5%) non-cumulative
redeemable preference shares of EUR 1 amounting to EUR 2,300,000
(Note 12) have been converted into ordinary shares in the ratio of 1:1.
12. REDEEMABLE PREFERENCE SHARES
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Balance at 01 April ............ 2,300,000 189,957,000 2,300,000 189,957,000
Conversion into 2,300,000
ordinary shares .................. (2,300,000) (189,957,000)
Balance at 31 March ......... 2,300,000 189,957,000
During the year under review, the 2,300,000 (6.5%) non-cumulative
redeemable preference shares of EUR 1 amounting to EUR 2,300,000
(Note 11) have been converted into ordinary shares in the ratio of 1:1.
(i) In accordance with the Companys Constitution, the main rights and
obligations attached to the preference shares were as follows:
confer to its holder the rights to attend and exercise one vote
at meetings of members generally and class meetings of the
preference shares;
have a right of redemption at the option of the holder and the
redemption price would be determined by the Board of Directors;
be entitled to a non-cumulative coupon rate of such percentage
as determined by the Board of Directors;
be converted into such number of shares with other rights or
restrictions as determined by the Board of Directors; and
be entitled, on a winding up, to a return of the amount paid-up
on the preference shares in priority of the ordinary shares and
shall also be entitled to share in the assets of the Company
available for distribution.
Pursuant to a Board meeting of 05 January 2009, the directors have
decided to assign an annual 6.5% non-cumulative coupon rate to
the preference shares subject to any surplus income available for
distribution by the Company.
13. BORROWINGS
2014 2014 2013 2013
EUR INR EUR INR
(Note 1) (Note 1)
Non-current
Principal amount
(Note 13 (ii)) ........................ 5,500,000 454,245,000 5,500,000 454,245,000
Current
Principal amount
(Note 13 (iv)) ....................... 150,000 12,388,500
Interest payable .................. 345,988 28,575,149 420,034 34,690,608
495,988 40,963,649 420,034 34,690,608
Total..................................... 5,995,988 495,208,649 5,920,034 488,935,608
1256
(i) The movements during the year on the borrowings ar

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MAHINDRA & MAHINDRA LTD.

SUBSIDIARY ANNUAL REPORT 2014

50.21 551.09 58.32 700.50

20.72 344.67 24.18 515.40

Prot/(loss) for the year (52,849) (55,095)

Advances received 50,000,000

10 Mahindra World City

Mr.B.Suresh, CEO &

475,000 (INR 39,230,250)

425,000 (INR 35,100,750).

Intangible assets and

Subscribed capital 50 1,7 50 3,3 0

Net prot for the year + 308 + 136

In-/decrease of accounts trade

Sales 3.960 100,0 3.360 100,0 + 600

378.439,57 (Rs. 3,12,55,324)}

0,00 (Rs. 0.00)}

0,00 (Rs. 0.00)

75.898,32 (Rs. 62,68,442)

307.621,84 (Rs. 2,54,06,487) and the prot carried forward as

Prot and loss

Less: Tax on dividend (excess for

Less: Transfer to General Reserves

Balance carried forward to Balance Sheet 231.61 43.46

(Rs. 1,894,256) Since no

(ii) Total expense recognized in the Prot and loss Account:

Services Rendered 3.21

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