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Directors Report of Mahindra CIE Automotive Ltd.

Mar 31, 2015

Dear Members,

The Directors present the 16th Annual Report of the Company together with the audited financial statements of your Company for the Financial Year ended 31st March, 2015.

A. FINANCIAL HIGHLIGHTS (STANDALONE)#

(Rs. in Million)

PARTICULARS 2014-15 2013-14

Total Income 16,624.8 3,929.9

Profit before Interest, Depreciation, 1,531.8 587.8

Exceptional Items and tax

Less : Depreciation 688.7 282.9

Profit before Interest, Exceptional 843.1 304.9

Items and tax

Less : Interest and Finance cost 140.4 37.3

Profit before Exceptional Items and 702.7 267.6

Tax

Less: Exceptional items - -

Profit before tax 702.7 267.6

Profit for the year 776.7 179.7

Balance of Profit & Loss Account (655.0) (834.7)

brought forward losses from earlier years

Adjustments related to merger & prior 1,618.8 -

period depreciation

Profit / (Loss) carried to Balance Sheet 1,740.5 (655.0)

Financials

During the year under review your Company registered a total income of Rs. 16,624.8 Million as against Rs. 3,929.9 Million in the previous year and Profit before Interest, Depreciation, Exceptional items and tax of Rs.1,531.8 Million as against Rs. 587.8 Million in the previous year. The net profit for the year stood at Rs.776.7 Million as against a net profit of Rs. 179.7 Million over the previous year.

# Consequent to the effectiveness of the Integrated Scheme and Composites Scheme of Amalgamation results for the Financial Year ended 31st March, 2015 include the results of the amalgamated companies and hence are not comparable to those of the prior periods/ year which do not include the results of the amalgamated companies.

Dividend

Your Directors do not recommend any dividend for the year.

Transfer to Reserves

The Company has not transferred any amount of profits to reserves.

B. OPERATIONAL HIGHLIGHTS

MCIE India:

Your Company has focused on increasing Plant efficiency and developing value added components to mitigate the effect of declining volumes in its addressable market segments. Majority of MCIE ''s plants are located in the state of Maharashtra (around Pune and in Nashik) where power tariffs have increased in FY15.

The forgings and castings verticals have significant power costs and they have launched projects to improve efficiency in the usage of power. With the help of CIE, the different verticals of the India operations are developing new products and exploring entry into ''Western OEMs'' in India.

Mahindra Forgings Europe (MFE):

MFE has followed a two phase strategy to achieve a turnaround in profitability. In the first phase, your company focused on cost reduction by improving productivity, reducing headcount and overtime. Most of this has been achieved and profitability is back on track.

Under the second phase of restructuring, the management has focused on further improvement in operational efficiencies by optimizing manufacturing locations and product portfolio wherein it has decided to close Jeco-Jellinghaus GMBH''s operations in a phased manner over next 6 months by shifting machines & equipment to other manufacturing locations of MFE and outsourcing most of the machining operations. No loss of revenue is expected. The management expects that this exercise will improve overall operational efficiencies at MFE.

CIE Forgings Europe (CIEF):

CIEF''s EBITDA margins are in line with the consolidated margins of the CIE group worldwide. The strategic focus is to maintain profitability at these plants while growing with the market.

Metalcastello (MC):

Metalcastello supplies mainly to the off road market which has seen a steady drop in volumes over the last few years leading to a drop in EBITDA%. A restructuring program involving headcount reduction and inventory write off has been implemented, leading to significant improvement in EBITDA margins.

Gears India:

The focus is on increasing operational efficiencies and developing new customers and machining facility.

C. SCHEME OF MERGER

The Board of Directors of the Company had, at its meeting held on June 15, 2013, approved (a) the scheme of amalgamation of Mahindra Hinoday Industries Limited ("MHIL"), Mahindra Ugine Steel Company Limited ("MUSCO"), Mahindra Gears International Limited ("MGIL"), Mahindra Investments (India) Private Limited ("MIIPL") and Participaciones Internacionales Autometal Tres, S.L. ("PIA 3") with Mahindra CIE Automotive Limited (the Company or MCIE) (the Integrated Scheme) AND (b) the scheme of amalgamation of Mahindra Composites Limited ("MCL") with the Company ("Composites Scheme") (The Integrated Scheme and the Composites Scheme are together referred to as the "Schemes" and MUSCO, MGIL, MIIPL, PIA3 and MCL are together referred to as "Transferor Companies").

Securities and Exchange Board of India ("SEBI") vide its observation letters dated 7th March, 2014 had conveyed its comments on the draft Integrated Scheme and the draft Composites Scheme to the BSE Limited ("BSE"). Pursuant to the SEBI letters, the BSE and the National Stock Exchange of India limited ("NSE") vide their Observation letters both dated 7th March 2014 had conveyed their respective no-objections to file the Integrated Scheme and the Composites Scheme with the Hon''ble High Court, subject to certain conditions specified therein.

Court Convened Meetings for approval of the Schemes

Approval of the members was sought for each of the Integrated Scheme and the Composites Scheme, pursuant to the provisions of Sections 391 to 394 of the Companies Act, 1956, at the separate meetings of the members held on 5th June, 2014, convened as per the directions of the Hon''ble High Court of Judicature at Bombay, received vide its orders, both dated 2nd May, 2014.

The Schemes were approved by requisite majority of shareholders attending and voting at the respective meetings.

Postal Ballot for Approval of the Schemes

In terms of SEBI circular No. CIR/CFD/DIL/5/2013 dated February 4, 2013 read with circular number CIR/CFD/DIL/8/2013 dated May 21, 2013 ("SEBI Circulars"), the Company has obtained approval of the public shareholders of the Company to each of the Integrated Scheme and the Composites Scheme through postal ballot and e-voting process.

Thereafter the Company filed petition seeking sanction of the Hon''ble High Court of Judicature of Bombay for each of the Integrated Scheme and the Composites Scheme.

The Hon''ble High Court of Judicature of Bombay approved the Integrated Scheme and the Composites Scheme on October 31, 2014 and an authenticated copy of each of the said orders were received by the Company on November 11,2014.

However, the effectiveness of the Schemes was subject to certain conditions precedent as provided in the respective Scheme.

The Company and transferor Companies had complied with all such Conditions Precedents and the certified copies of the respective court orders approving the Integrated Scheme and Composites Scheme were filed with the Registrar of Companies on December 10, 2014, the date on which schemes became effective.

Pursuant thereto the said Transferor Companies stand dissolved without winding-up with effect from the effective date and entire business of the Transferor Companies has been transferred to and vested in the Company with effect from the appointed date which is October 1,2013.

D. CHANGES IN SHARE CAPITAL AND ISSUE OF SHARES

Pursuant to the Integrated Scheme and the Composites Scheme, on 2nd January, 2015, the Company has issued and allotted 229,330,519 equity shares of Rs. 10/- each fully paid-up to the Shareholders of Transferor Companies.

The above allotment also includes 6,536 equity shares, arising out of the consolidation of fractional entitlements, which were allotted to KPM Business Solutions Private Limited, being the trustee nominated by the Company. The Trustee have sold said shares in the open market at the prevailing market prices and transferred the net proceeds thereof to the Company, for distributing the same to the Shareholders in proportion to their respective fractional entitlements. The Company has paid the fractional entitlements (after deduction of applicable taxes and other expenses incurred) through NEFT/RTGS to those fraction holders, whose bank account details were registered and dispatched the warrants to remaining fractional holders in February, 2015.

Further, in addition to the above, in terms of the Composites Scheme 945 equity shares of Rs. 10/- each were issued and kept in abeyance against the 1050 equity shares kept in abeyance by MCL, the Transferor Company under the Composites Scheme.

During the year ended 31st March, 2015, the Company has allotted 1,305,277 equity shares of face value of Rs. 10/- each, pursuant to exercise of options under the Company''s Employee Stock Option Scheme.

Pursuant to the above, as on 31st March, 2015 the issued capital of the Company was increased to Rs. 3,229,772,070 and subscribed and paid-up equity capital increased to Rs. 3,229,762,620/-.

Changes in Promoters Shareholding

Mahindra and Mahindra Limited ("M&M") and Participaciones Internacionales Autometal, Dos S.L ("PIA2") the promoters the Company were also shareholders in certain Transferor Companies.

Further, Prudential Management and Services Pvt. Ltd. (Prudential) which was holding shares in certain Transferor Companies became part of Promoter Group of the Company.

Pursuant to the Schemes, 98,735,844 equity shares, 64,975,298 equity shares and 4,784,068 equity shares of Rs. 10 each were issued and allotted to PIA2, M&M and Prudential respectively.

As on 31st March, 2015 PIA2 held 171,767,537 equity shares in the Company representing 53.18% of the paid up equity capital and M&M held 65,271,407 representing 20.21% of the paid up equity capital and Prudential held 4,784,068 equity shares in the Company representing 1.48% of the paid up equity capital of the Company.

Employees'' Stock Option Scheme

Employees'' Stock Option Scheme (ESOS) was formulated by the Remuneration/Compensation committee of directors of the Company and was approved by the shareholders at the Annual General Meeting of the Company held on 25th July, 2007. The Scheme has been effective from 26th October, 2007 and shall continue to be effective till terminated by Remuneration / Compensation Committee (now Nomination and Remuneration Committee).

The ESOS was amended vide special resolutions passed by the Shareholders in the 9th Annual General Meeting held on 29th July, 2008 and further amended by special resolutions passed by the Shareholders in the 12th Annual General Meeting held on 2nd August, 2011.

During the year, pursuant to the Integrated Scheme and the Composites Scheme of Amalgamation, the Board of Directors of the Company amended the ESOS on 12th December, 2014, incorporating suitable clauses to grant the Options to the Eligible employees of MUSCO and MCL who were holding Stock Options under the respective Schemes of MUSCO and MCL (now amalgamated and merged with the Company).

The exercise price payable for options granted by the Company to the Eligible Employees of MUSCO and MCL were adjusted so that the total exercise price payable by such Eligible Employees under the respective Stock Option Scheme of Transferor Companies is equivalent to the exercise payable for the options granted by the Company.

Total number of equity shares that can be issued under ESOS, pursuant to exercise of options was increased to 4,620,796. The increase of 227,307 was pertaining to the equivalent number of options granted to eligible employees of MUSCO and MCL, based on the respective share swap ratio provided under schemes in lieu of the outstanding stock options held by such employees under their respective employee stock option schemes, where each option conferring on the employee a right to get one equity share of Rs.10/- each of the Company.

Voting rights on the shares issued to employees under the ESOS are either exercised by them directly or through their appointed proxy.

No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The ESOS is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The certificate issued by the Statutory Auditors of the Company to the effect that the Scheme has been implemented in accordance with the said Regulations and the resolution passed by the members will be placed before the shareholders at the ensuing Annual General Meeting.

The information that a company is required to disclose, in relation to ESOS under the Companies Act, 2013, and the details of the ESOS being implemented, as specified by SEBI under Clause 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is uploaded on the website of the Company at http://mahindraforgings.com/ investor-zone/investor-relation.html.

The information is also provided in the Note No. XXVI (3) of the Notes to Financial Statements.

E. SUBSIDIARY COMPANIES

At the beginning of the Financial Year the Company has subsidiaries namely Mahindra Forgings International Limited, Mauritius, Mahindra Forgings Global Limited, Mauritius, Stokes Group Limited, U.K., Mahindra Forgings Europe AG, Jeco Jellinghaus Gmbh, Stokes Forgings Ltd., Stokes Forgings Dudley Ltd., Gesenkschmiede Schneider, Germany, Falkenroth Umformtechnik GmbH, Germany , Schoneweiss & Co. GmbH, Germany

During the year, consequent to the merger, Mahindra Gear & Transmissions Private Limited (MGTPL), India , Mahindra Gears Global Limited(MGGL) , Mauritius and CIE Galfor S.A. (Galfor), Spain became subsidiaries of the Company and Metalcastello SpA, Italy (MC) (subsidiary of MGGL), CIE Legazpi S.A., Spain (subsidiary of Galfor) and UAB CIE LT Forge, Lithuania (subsidiary of Galfor) and Crest Geartech Private Limited, India (subsidiary of MC) became step subsidiaries of the Company.

None of the subsidiaries have been liquidated or sold during the year.

No operating subsidiary of the Company is yet to commence operations as at end of the year.

The performance and financial position of each of the subsidiaries included in the consolidated financial statement is given in the Management Discussion and Analysis Report attached to the Board''s Report.

Further, as required under Section 129(3) of the Companies Act, 2013 read with the Rules, a statement containing the salient features of the financial statement of the subsidiaries in prescribed form AOC-1 is attached to the Financial Statements.

The Consolidated Financial Statements of the Company and its subsidiaries, as required under Section 134(1) of the Act, prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report

In accordance with Section 136 of the Act, the separate accounts in respect of each of the Subsidiaries are uploaded on the website of the Company and copies of the same shall be provided to shareholders of the Company on receipt of request for such copies.

F. MANAGEMENT DISCUSSION AND ANALYSIS

Management discussion and analysis of financial condition and results of operations along-with performance and financial position of each of the subsidiaries is provided in the Management Discussion and Analysis Report which forms part of the Annual Report.

G. BOARD OF DIRECTORS AND COMMITTEES Directors

During the year under review, the Board, on recommendation of Nomination and Remuneration Committee, appointed Mr. Zhooben Bhiwandiwala as an Additional Director on 29th July, 2014 who was confirmed as Director at the Annual General Meeting held on 29th September, 2014.

The Board, on recommendation of Nomination and Remuneration Committee, proposed to members the appointments of Mr. Daljit Mirchandani, (DIN: 00022951), Mr. Manoj Maheshwari (DIN: 00012341), Mr. Dhananjay Mungale (DIN: 00007563), Mr. Jose Ramon Berecibar Mutiozabal (DIN: 06704914), Mr. Jose Sabino Velasco Ibanez (DIN: 06704932), Mr. Juan Maria Bilbao (DIN: 06963805) and Ms. Neelam Deo (DIN: 02817083) as Independent Directors of the Company. The members at the Annual General Meeting held on 29th September, 2014 approved their appointment as Independent Directors for a term of five years with effect from that date.

The Board, on recommendation of Nomination and Remuneration Committee approved re-appointment of Mr. K. Ramaswami as Managing Director of the Company for a further period of three years with effect from 4th October, 2014 and approved his remuneration.

Mr. Jose Ramon Berecibar Mutiozabal (DIN: 06704914) resigned as Independent Director on 15th October, 2014. Thereafter Mr. Jose Ramon Berecibar Mutiozabal (DIN: 06704914) was appointed as an Additonal Director (Non-executive non-Independent) who resigned as Director with effect from 31st March, 2015.

The Board, on recommendation of Nomination and Remuneration Committee, appointed Mr. Pedro Echegaray as an Additional Director on 21st October, 2014 and also approved his appointment and remuneration as Executive Director for a period of three years.

Further on recommendation of Nomination and Remuneration Committee, Mr. Suhail Nathani (DIN: 01089938) was appointed as Independent Director, at the meeting of Board held on 12th December, 2014, to fill-up the casual vacancy caused by the resignation of Mr. Jose Ramon Berecibar Mutiozabal. In the same meeting Mr. Jose Ramon Berecibar Mutiozabal (DIN: 06704914) was also appointed as an Additional Director (non-independent) of the Company w.e.f. 12th December, 2014.

The Board at its Meeting held on 11th February, 2015, on recommendation of Nomination and Remuneration Committee, approved appointment of Mr. Hemant Luthra as Executive Chairman and his remuneration for a period of three years with effect from 1st April, 2015.

Mr. Shriprakash Shukla (DIN: 00007418) was appointed as Additional Director of the Company in the Board Meeting on 27th March, 2014 w.e.f. 1st April, 2015. Pursuant to Section 160 of the Companies Act, 2013 the Company has received notice in writing from a member signifying the intention of the member to propose his candidature for the office of Director of the Company along with the deposit of one lakh rupees.

Mr. Jose Ramon Berecibar Mutiozabal ceased as director w.e.f. 31st March, 2015 consequent to his resignation from the Board.

On 27th March, 2015, the Shareholders of the Company through postal ballot, inter-alia, approved -

* The Appointment of Mr. Suhail Nathani (DIN: 01089938) as an Independent Director of the Company for five consecutive years commencing from 12th December, 2014;

* Regularised the appointment of Mr. Pedro Jesus Echegaray Larrea as Director of the Company

* The Appointment and Remuneration of Mr. Pedro Jesus Echegaray Larrea (DIN: 06713892) as Whole-time Director (Executive Director) of the Company for a period of three years w.e.f. 21st October, 2014; and

* The Appointment and Remuneration of Mr. Hemant Luthra (DIN: 00231420) as a Whole-time Director (Executive Chairman) of the Company for a period of 3 (three) years w.e.f. 1st April, 2015.

* The Appointment and Remuneration of Mr. K. Ramaswami as Managing Director of the Company for a period of 3 (three) years w.e.f. 4th October, 2014.

Further Mr. Antonio Maria Pradera Jauregui and Mr. Zhooben Bhiwandiwala, Directors on the Board, are liable to retire by rotation at the ensuing general meeting, pursuant provisions of Section 152 of the Act, and Articles of Association of the Company and offered themselves for re-appointment.

Detailed profile of the Directors seeking re-appointment alongwith other details as may be required are provided in the Corporate Governance Report which forms part of the Annual Report.

The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and also in the Clause 49(II)(B) of the Listing Agreement.

Meetings of Board of Directors

The calendar of the Board/ Committee Meetings and the Annual General Meeting are circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/ Committee through circular resolutions.

The Board of Directors of the Company met eight times during the Financial Year ended 31st March, 2015, viz. 29th April, 2014, two meetings held on 29th July, 2014, 29th September, 2014, 21st October, 2014, 12th December, 2014, 11th February, 2015 and 27th March, 2015. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Details of attendance of meetings of the Board, its Committees and the AGM are included in the Report on Corporate Governance, which forms part of this Annual Report.

Meeting of Independent Directors

The Independent Directors met once during the year under review. The Meeting was conducted in an informal manner without the presence of the Non-Independent Directors and members of management

Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the individual directors as well as the evaluation of the working of its Committees.

The Company has formulated a Policy for performance evaluation of the Board as a whole, Individual Directors, Committees which also includes feedback to the Chairman.

A questionnaire, based on criteria approved by the Committee, for evaluation of performance of Board, Committees of Board and Individual director was prepared. The Board on recommendation of the Nomination and Remuneration Committee, approved to obtain the feedback of all the Directors on the said Questionnaire through electronic platform. An Independent Agency was appointed to provide the electronic platform. Web link of the electronic platform along-with username and passwords of respective board members for accessing such platform was forwarded by the Independent Agency.

The Board Members provided their feedback on the standard questionnaire through the electronic platform. The members were also able to give qualitative feedback apart from the standard questionnaire.

The reports of feedback received from all Directors on performance evaluation of individual directors were shared with respective Directors and Chairman of the Nomination Committee. Nomination and Remuneration Committee evaluated the performance of all individual directors based on the feedback so received.

The report of the feedback received from all the Directors on performance evaluation of Board and Committees of Board were shared with the Chairman of the Company. The Board on the basis of feedback so received evaluated performance of its own and Committees of Board. Performance Evaluation of the Chairman of the Company was also carried out by the Independent Directors of the Company, taking into account feedback of all the Directors including the Executive and Non- executive Directors.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are given in the Report on Corporate Governance and the same are also available on the website of the Company at the link: http://mahindraforgings.com/investor-zone/investor-relation/ governance.html

Policy on Appointment and Remuneration

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act") read with Section 178(2) of the Act and Clause 49 of the Listing Agreement, the Company has formulated following policies which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors.

i. A policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management,

ii. A policy on remuneration of Directors, Key Managerial Personnel and other employees of the Company

The extract of the above policies are annexed as Annexure VII & VIII respectively and forms part of this Report.

Committees of the Board

Your Company has duly constituted the Committees required under the Companies Act, 2013 read with applicable Rules made thereunder and the Listing Agreement.

The Board of Directors of the Company has formed an Audit Committee which consist of the Independent Directors namely Mr. Daljit Mirchandani as the Chairman, Mr. Jose Sabino Velasco Ibanez, Mr. Manoj Maheshwari and Mr. Dhananjay Mungale. All the recommendations of the Audit Committee were accepted by the Board during the year under review.

The other Committees of the Board are:

i) Nomination and Remuneration Committee

ii) Stakeholders'' Relationship Committee

iii) Corporate Social Responsibility Committee

iv) Allotment Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the members at such Meetings of the relevant Committees are provided in the Report on Corporate Governance of the Company which forms part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to Sub-Section (5) of Section 134 of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management, and after due enquiry, confirm that :

(a) in the preparation of the annual accounts for the Financial Year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2014-15 and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for the Financial Year ended 31st March 2015 on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

H. GOVERNANCE

Report on Corporate Governance

Your Company''s philosophy on Corporate Governance sets the goal of achieving the highest level of transparency, accountability in all its dealings with the stakeholders, employees and the government. The practice of responsible governance has enabled your Company to achieve sustainable growth, while meeting the aspirations of its stakeholder''s and societal expectations. A report on Corporate Governance along with a Certificate from the 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.

Vigil Mechanism / Whistle Blower Policy

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for Directors and Employees to report their genuine concerns.

Your Company has formulated a policy known as "Whistle Blower Policy/ (Vigil) Mechanism" pursuant to Section 177 of the Companies Act, 2014 read with Clause 49 of the Listing Agreement which provides a mechanism for employees and directors of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct or ethics policy. This mechanism also provide for adequate safeguards against victimisation of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The details of such Policy is explained in the Corporate Governance Report and has been uploaded on the website of the Company; http://mahindraforgings.com/investor- zone/investor-relation/governance.html

Risk Management Policy

In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically. Your Company has also 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 the Risks.

Brief of the Policy and important element of risk which may threaten the existence of the Company are provided in the Management Discussion and Analysis Report.

Internal financial controls

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working and endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has put in place a ''policy on Sexual Harassment" with aim to redress sexual harassment instances, to create mechanism on redressal of such issues at workplace and sensitises employees on how to report such offences to the committee or to a senior executive.

During the year 1 complaint was reported and the same was resolved as per the provisions of Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No Complaints were pending as at the end of the Financial Year under review.

I. EMPLOYEES

Key Managerial Personnel

The Board of Directors of the Company, on recommendation of Nomination and Remuneration Committee at its meeting held on 29th April, 2014, appointed Mr. K. Jayaprakash as Chief Financial Officer of the Company. Post the Schemes of amalgamation became effective he ceased to be Key Managerial Personnel of the Company with effect from 12th December, 2014 and on the recommendation of Nomination and Remuneration Committee re-designated him as Chief Financial Officer of the Forgings, Castings and Magnetics Products Divisions of the Company.

Thereafter, the Board of Directors of the Company, on recommendation of Nomination and Remuneration Committee and the Audit Committee appointed Mr. Sanjay Joglekar as Chief Financial Officer of the Company with effect from 12th December, 2014.

Further the Board appointed Mr. Romesh Kaul as Chief Executive - Composites Division and Mr. Ajit Lele as Chief Executive - Stamping Division with effect from 12th December, 2014

Mr. Ajit Lele retired at the end of Financial Year and ceased to be Key Managerial Personnel.

Mr. Krishnan Shankar continues to be Company Secretary and Head - Legal of the Company.

Particulars of Employees

As required under Section 197(12) of the Act and Rule 5 of Companies (Appointment and Remuneration of Managerial Remuneration) Rules, 2014 the ratio of the remuneration of each director to the median remuneration of employees of the Company and other details as prescribed therein are provided as Annexure V to this Report.

The Company has employees who were in receipt of remuneration not less than Rs. 60,00,000/- per annum during the year ended 31st March, 2015 or employee 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 during any part of the said year or employees who were employed throughout the Financial Year or part thereof. Statement of Particulars of such employees is provided as Annexure VI to this report

The Companies do not have employees who were employed throughout the Financial Year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

The Management Discussion and Analysis Report give an overview of the developments in Human Resources/Industrial Relations during the year.

J. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security are given is provided in the note no. X & XIII of the notes to the Financial Statements.

K. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the Financial Year were on an arm''s length basis and were in the ordinary course of business, accordingly, the disclosures pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, in Form AOC-2 is not applicable.

L. PUBLIC DEPOSITS AND LOANS/ADVANCES

Your Company has not accepted any deposits from the public or its employees during the year under review.

Mahindra Ugine Steel Company Limited (MUSCO), merged with the Company with effect from 10th December, 2014. During the year an amount of Rs. 87,725 in the aggregate, consisting of matured fixed deposits and interest pertaining to MUSCO which remained unpaid or unclaimed for a period of seven years has been duly transferred to Investor Education and Protection Fund. As on 31st March 2015 there were no unpaid or unclaimed matured deposits and interest thereon.

The Company has not made any loans and advances in the nature of loans to subsidiaries and associates and no loans and advances in the nature of loans were given where there is no repayment schedule or repayment beyond seven years or no interest or interest below Section 186 of the Companies Act, 2013, hence disclosure pursuant to Clause 32 of the Listing Agreement not required.

M. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the integrated Scheme and the Composites scheme Mahindra Ugine Steel Company Limited (MUSCO) and Mahindra Composites Limited (MCL) merged with the Company during the year under review. Both MUSCO and MCL had unclaimed dividends which are now transferred in the Books of the Company. Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of said unpaid and unclaimed amounts now lying with the Company on the website of the Company at http:// mahindraforgings.com/investor-zone/others/documents.html

Under the Companies Act, 1956, dividends that are unclaimed for a period of seven years are required to be transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government. Pursuant to the provisions of Section 205C of the Companies Act, 1956 and Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, MUSCO, which is now merged with the Company, had transferred an amount of Rs. 5,52,413 being unclaimed dividend for Financial Year ended on 31st March 2007 to the IEPF, no claim lies against the Company in respect of these dividends.

N. SUSTAINABILITY

Your Company''s vision on sustainability is "Continuously improve our capability by integrating environmental, social, and economic aspects in operations for creating better tomorrow than today". In line with its vision the Company has identified and implemented various projects for reduction in waste, energy and GHG emissions, to achieve the targets set under its Sustainability Road map.

Awareness on sustainability

Awareness about the need and the ways to drive sustainable business practices among all stakeholders is key to perpetual growth. The Company continues its initiatives to generate this awareness among employees who are the most important internal stakeholders of the organisation. This awareness campaign was taken to the external stakeholders, suppliers and vendors.

Safety, Health and Environment Performance

Your Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Safety and Health

The Safety Committee of the Company meets periodically to review the status of safety issues and reporting of accidents, if any. Various initiatives such as emergency mock drills and advanced fire protection system for improving the Safety have been taken. Common Guarantee Safety Scheme (CGSP) has been initiated as a step forward to focus on safety.

Safety week and Fire Service day are being celebrated. Safety Audits/Inspection along with Safety awareness training on safety is conducted.

Your Company''s plant continues to improve their well being of all its personnel by organising Occupational Health Examination Camps, Periodic Health Check-ups etc.

Environmental Initiatives

Since the last few years, your Company has been focusing external certifications for achieving world class environmental standards.

All plants of the Company except Zaheerabad Plant are certified for EHSMS certification using ISO 14001 and BS OHSAS 18001 standards. The OHSAS system aims to eliminate or minimise risk to employees and other interested parties who may be exposed to Occupational Safety risks in the Company. Sustainable development is promoted through sharing of best practices in the fields of Safety, Occupational Health & Environment.

The highlights of different initiatives taken by the Company at its various Plants for health, safety, environment and sustainability are as under:

* Safety - Incident status, safe workplace, awareness and stakeholder engagement were areas of focus this year at our plants. Noteworthy, is that in most of our plants no incidents were reported. Plants have made significant improvement in reducing non reportable and first aid injuries, by focusing on specific areas of operations to remove the occurrence of such incidents in the future. Your company is expanding the activities related to safety training and is including the other stakeholders as a responsible organization.

* Resource Consumption - Specific energy and water consumption at your company has reduced variably across our plants. The Plants have made consistent progress in waste to wealth, water conservation, rain water harvesting, energy saving and social development projects.

* Standards and Certifications - All our plants are certified individually for OHSMS and EMS by agencies of international repute.

* Green Infrastructure - Noteworthy for your Company is that, we have developed a state of the art new facility at Zaheerabad for Stampings, which is now commercially operational, wherein, green building principles have been incorporated right from the design stage.

Corporate Social Responsibility (CSR)

Your Company has constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013, it has developed and implemented the policy on Corporate Social Responsibility.

Further, your Company encourages its employees to participate in the Employee Social Options (ESOPs) program, to drive positive change in society, through Health checkup camps, tree plantation, vocational guidance to school children in the nearby schools etc.

During the year under review, the employees of your Company participated in various education and health related programs in local communities.

As part of its initiatives under CSR the Company has further undertaken projects in the areas of Rural Development, Infrastructure, Education, Health and Water. These projects are in accordance with Schedule VII of the Companies Act, 2013.

The Company was required to spent an amount of Rs. 4.94million towards CSR during the Financial Year. Accordingly Company has undertaken various CSR projects in and around the villages where plants of the Company are located. Total expenditure planned on these projects was above Rs. 5 Million. Few of the projects like Developing garden on Gram Panchayat land, Lake Cleaning & Tree Plantation and Tar Road Project are under progress and will be completed during the Financial Year commencing from 1st April 2015. Pursuant to the provisions of the Companies Act, 2013 the Company shall ensure that it spends, in every Financial Year, at least 2% of its average net profits calculated as per the provisions of the Act, made during the 3 immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.

The CSR Policy of the Company is hosted on the Company''s website at http://mahindraforgings.com/investor-zone/investor- relation/governance.html and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as "Annexure I".

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rule, 2014 are provided in Annexure IV to this Report.

O. EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2015 forms part of this report as Annexure II.

P. AUDITORS

Statutory Auditors

Messrs. B. K. Khare & Co., Chartered Accountants, Mumbai (Firm Registration No. 105102W) the Statutory Auditors of the Company hold office till the conclusion of the forthcoming Annual General Meeting (AGM) and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint Messrs. B. K. Khare & Co., as the Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the next AGM.

As required under the provisions of Section 139(1) of the Companies Act, 2013 the Company has received a written consent from Messrs. B. K. Khare & Co., Chartered Accountants to their re-appointment and a certificate, to the effect that their re-appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for re- appointment. .

The Auditors'' Report does not contain any qualification, reservation or adverse remark and notes thereto are self explanatory and does not require any explanations.

Secretarial Audit Report

The Board has appointed Mr. Sachin Bhagwat, Practising Company Secretary, Pune as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2014-15. Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of Sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2014-15 is appended to this Report as Annexure III.

The report does not contain any qualification, reservation or adverse remark and notes thereto are self explanatory and does not require any explanations.

Cost Audit Report

Messrs. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration Number 000030) conducted the audit of Cost Accounting Records maintained by the Company for the Financial Year 2013-14 and submitted their report to the Central Government, Ministry of Corporate Affairs, New Delhi.

The Board of Directors upon recommendation of the Audit Committee, appointed Messrs. Dhananjay V. Joshi & Associates, Cost Accountants, Pune as the Cost Auditors of the Company to conduct the Audit of the Cost Accounting Records maintained by the Company for the Financial Year commencing from 1st April, 2015. The Cost Auditors shall forward their report to the Central Government, Ministry of Corporate Affairs, New Delhi for the Financial Year 2014-15 within the prescribed time.

It is proposed to re-appoint Messrs. Dhananjay V. Joshi & Associates, Cost Accountants, Pune as the Cost Auditors of the Company to conduct the Audit of the Cost Accounting Records maintained by for Company for the Financial Year commencing from 1st April, 2015. As required under the provisions of Section 148 of the Act read with rules made thereunder, the Company has obtained a written confirmation from M/s. Dhananjay V. Joshi & Associates to the effect that they are eligible for reappointment as Cost Auditors under the said Sections. The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is placed before the Members in the ensuing Annual General Meeting for their ratification.

Q. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the Financial Year 2014-15, there are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

Acknowledgement

Your Directors wish to place on record their sincere appreciation to the Bankers of the Company, Company''s customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Hemant Luthra Chairman DIN:00231420

Date: 27th July 2015 Place: Mumbai


Mar 31, 2014

The Members,

Mahindra CIE Automotive Limited

The Directors present the 15th Annual Report of the Company together with the audited statement of accounts of your Company for the year ended 31st March, 2014.

Financial Highlights (Rs. in Lakhs)

Particulars 2013-14 2012-13

Total Operating Income 38,654 44,036

Profit before Interest, Depreciation, Exceptional Items and tax 5,233 6,646

Add: Other Income 645 420

Less : Depreciation 2,829 2,744

Profit before Interest, Exceptional Items and tax 3,049 4,322

Less : Interest and Finance cost 373 568

Profit before Exceptional Items and Tax 2,676 3,754

Less: Exceptional items

Profit before tax 2,676 3,754

Profit for the year 1,797 4,087

Balance of Profit & Loss Account brought forward losses from earlier years (8,347) (12,434)

Loss carried to Balance Sheet (6,550) (8,347)

Financials

During the year under review your Company registered a total operating income of Rs. 38,654 Lakhs as against Rs. 44,036 Lakhs in the previous year and Profit before Interest, Depreciation, Exceptional items and tax of Rs. 5,233 Lakhs as against Rs. 6,646 Lakhs in the previous year. The net profit for the year stood at Rs. 1,797 Lakhs as against a net profit of Rs. 4,087 Lakhs over the previous year.

Operations

During the year under review, with the help of CIE your company is working towards improving the operations in Europe. The plan for improvement is specified as below:

. Price negotiation to reduce "y-o-y reductions" with selectcustomers.

. Availing of electricity subsidy from the government to reduce power cost.

. Improve operational efficiency by reducing cycle times, increasing die life and improving process flow and layout.

. Outsourcing of some services which are low-value-added. All this will eventually result in reducing fixed costs, including personnel cost.

Your company''s operations in India continued to be affected by a decline in sales. Thus the approach has been to increase/maintain profitability by focussing on improving plant operations and gaining an enhanced customer focus. The strategy to achieving these goals is as explained below:

. Enhance the number of products offered to customers by building

upon our excellence in crankshafts and steering knuckles.

. Develop new products with new and existing customers using

VA/VE.

. Build upon the internal capabilities to provide value added

products.

. Focus on the tractor segments to enhance volumes.

Your Company will strive to maintain this performance in the coming year.

Changes in Share Capital and Issue of Shares

During the year ended 31st March, 2014, the Company has allotted 167,160 equity shares of face value of Rs. 10/- each, pursuant to exercise of options under the Company''s Employee Stock Option Scheme, out of which 89,887 shares were allotted at an exercise price of Rs. 57/- per equity share and 77,273 shares were allotted at an exercise price of Rs. 44/- per equity share. The aforesaid exercise of options has resulted in issued, subscribed and paid-up equity capital increasing from Rs. 921,733,060/- to Rs. 923,404,660/-.

After the close of financial year the Company allotted 634,208 equity shares of face value of Rs. 10/- each, pursuant to exercise of options under the Company''s Employees'' Stock Option Scheme. The aforesaid exercise of options has resulted in issued, subscribed and paid-up equity capital increasing from Rs. 923,404,660/- to Rs. 929,746,740/-.

Changes in Promoters Shareholding

The Company along with Mahindra & Mahindra Limited ("M&M") (including its subsidiaries/ associate entities Mahindra Hinoday Industries Limited, Mahindra Ugine Steel Company Limited, Mahindra Gears International Limited, Mahindra Investment (India) Private Limited, Mahindra Overseas Investment Company (Mauritius) Limited and Mahindra Composites Limited) ("Mahindra group") have entered into an alliance with CIE Automotive S. A. ("CIE") (including its subsidiaries Participaciones Internacionales Autometal Dos, S. L. ("PIA 2") and Autometal S. A. ("Autometal"), for consolidating their automotive components business globally ("Transaction").

Pursuant to the shareholders'' agreement dated 15th June, 2013, including subsequent modification, between the Company, M&M, CIE, Autometal and PIA2 ("Shareholders Agreement") 48,529,500

equity shares of Rs. 10/- each ("Sale Shares"), of the Company, were transferred from M&M to PIA 2 in October, 2013. Consequently PIA2 has become a Promoter of the Company. PIA2 and M&M are separately considered as Promoters of the Company.

Further, PIA 2 (Acquirer) along with Autometal and CIE, in their capacity as persons acting in concert with the Acquirer, made an open offer, as required under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, for acquisition of 24,502,193 equity shares of Rs. 10 each representing 26% of the then Fully Diluted Equity Capital from the public shareholders of the Company at a price of Rs. 81 per share as described in Detailed Public Statement dated June 21st, 2013 and Letter of Offer dated September 13th, 2013. Consequent to the Open Offer the Acquirer acquired 24,502,193 equity shares representing 26% of the then Fully Diluted Equity paid up capital of the company.

As on 31st March, 2014 PIA2 holds 73,031,693 equity shares in the Company representing 79.09% of the paid up equity capital and M&M holds 296,109 equity shares representing 0.32% of the paid up equity capital.

Scheme of Merger

The Board of Directors of the Company had, at its meeting held on June 15, 2013, approved the proposed merger of Mahindra Hinoday Industries Limited, Mahindra Ugine Steel Company Limited, Mahindra Gears International Limited, Mahindra Investments (India) Private Limited, Participaciones Internacionales Autometal Tres, S.L. with the Company and also approved the related scheme of merger under Sections 391-394 of the Companies Act, 1956 ("Integrated Scheme"). In the same meeting, the Board of Directors of the Company also approved the proposed merger of Mahindra Composites Limited ("MCL") with the Company and approved the related scheme of merger under Sections 391-394 of the Companies Act, 1956 ("Composites Scheme") (The Integrated Scheme and the Composites Scheme are together referred to as the "Schemes").

Securities and Exchange Board of India ("SEBI") vide its observation letters dated 7th March, 2014 has conveyed its comments on the draft Integrated Scheme and the draft Composites Scheme to the BSE Limited ("BSE").

Pursuant to the above SEBI letters, the BSE and the National Stock Exchange of India limited ("NSE") vide their observation letters both dated 7th March 2014 have conveyed their respective no-objections to file the Integrated Scheme and the Composites Scheme with the Hon''ble High Court, subject to certain conditions specified therein.

Court Convened Meetings for approval of the Schemes

Approval of the members was sought for each of the Integrated Scheme and the Composites Scheme, pursuant to the provisions of sections 391 to 394 of the Companies Act, 1956, at the separate meetings of the members held on 5th June, 2014, convened as per the directions of the Hon''ble High Court of Mumbai, received vide its orders, both dated 2nd May, 2014.

The Schemes were approved by requisite majority of shareholders attending and voting at the respective meetings.

Further the Company has also filed petition seeking sanction of the Hon''ble High Court of Mumbai for each of the Integrated Scheme and the Composites Scheme.

Postal Ballot for Approval of the Schemes

In terms of SEBI circular No. CIR/CFD/DIL/5/2013 dated February

4, 2013 read with circular number CIR/CFD/DIL/8/2013 dated May 21, 2013 ("SEBI Circulars"), the Company has obtained approval of the public shareholders of the Company to each of the Integrated Scheme and the Composites Scheme through postal ballot and e-voting process.

The effectiveness of the Integrated Scheme and Composites Scheme is conditional upon and subject to the approvals and/ or sanctions laid down in the respective Schemes.

Management Discussion and Analysis

A detailed analysis of the Company''s performance is contained in the Management Discussion and Analysis Report which forms part of the Annual Report.

Corporate Governance

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Your Company has been following good Corporate Governance practices. A report on Corporate Governance along with a Certificate from the 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.

Dividend

In view of past losses, your Directors do not recommend any dividend for the year.

Stock Options

No Stock Options have been granted during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

The Management Discussion and Analysis Report give an overview of the developments in Human Resources/Industrial Relations during the year.

Safety, Health and Environment Performance

Your Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Safety and Health

The Safety Committee of the Company meets periodically to review the status of safety issues and reporting of accidents, if any. Various initiatives such as emergency mock drills and advanced fire protection system for improving the Safety have been taken. Common Guarantee Safety Scheme (CGSP) has been initiated as a step forward to focus on safety.

Safety week and Fire Service day are being celebrated. Safety Audits/ Inspection along with Safety awareness training is conducted.

Your Company continues to improve well being of all its personnel by organising Occupational Health Examination Camps, Periodic Health Check-ups etc.

Environmental Initiatives

Since the last few years, your Company has been focusing external certifications for achieving world class environmental and safety standards.

Certification

Your Company is certified for TS 16949. Your Company''s Plants have also been certified with ISO 14001:2004 & OHSAS 18001. The OHSAS system aims to eliminate or minimise risk to employees and other interested parties who may be exposed to Occupational Safety risks in the Company. Sustainable development is promoted through sharing of best practices in the fields of Safety, Occupational Health & Environment.

Sustainability

Sustainability Initiatives

Your Company''s vision on sustainability is "Continuously improve our capability by integrating environmental, social, and economic aspects in operations for creating better tomorrow than today". In line with its vision the Company has identified and implimented on various projects for reduction in waste, energy and GHG emissions, to achieve the targets set under its Sustainability Road map. During the year, certain new projects were undertaken for example Improved Export Packing with cost optimization, Yield Improvement Projects to reduce Steel requirement for Forgings etc.

Awareness on sustainability

Awareness about the need and the ways to drive sustainable business practices among all stakeholders is key to perpetual growth. The Company continues its initiatives to generate this awareness among employees who are the most important internal stakeholders of the organisation. This awareness campaign was taken to the external stakeholders, suppliers and vendors.

During the year under review, the Triple Bottom-line performance was published as a part of the Mahindra Group''s sustainability report for the year 2013-14 in accordance with the latest guideline of the internationally accepted Global Reporting Initiatives or the GRI standards (G3.1). This report was externally assured by KPMG and GRI Checked with ''A ''.

Corporate Social Responsibility

Your Company encourages its employees to participate in the Employee Social Options (ESOPs) program, to drive positive change in society, through Health checkup camps, tree plantation, vocational guidance to school children in the nearby schools etc.

During the year under review, the employees of your Company participated in various education and health related programs in local communities, such as blood donation camp, drinking water for Pilgrims, distribution of clothes and other articles to needy villagers and health related programs.

Directors

The Board at its meeting held on 4th October, 2013 appointed Mr. Antonio María Pradera Jáuregui and Mr. Jesus Maria Herrera Barandiaran as additional directors (non-independent) and Mr. Jose Sabino Velasco Ibanez, Mr. Jose Ramon Berecibar Mutiozabal, Mr. Manoj Maheshwari and Mr. Dhananjay Mungale as additional directors (independent).

At the same meeting Mr. Ignacio Artazcoz Barrena was appointed as additional director who has resigned from the Directorship with effect from 10th February, 2014.

Further Mr. Zhooben Bhiwandiwala, Mr. V. K. Chanana, Mr. Nikhilesh Panchal, Mr. Fali P. Mama, Mr. Mohit Burman, Mr. Oliver Scholz and Mr. Harald Korte resigned from the Directorship of the Company with effect from 4th October, 2013.

Further, the Board appointed Mr. Zhooben Bhiwandiwala as an Additional Director on 29th July, 2014.

Pursuant to Section 161 of the Companies Act, 2013 the additional directors will hold office up to the date of ensuing Annual General Meeting (AGM) of the Company and have offered themselves for re-appointment.

Further Pursuant to Section 149 of the Companies Act, 2013, the Board, at its meeting held on 29th July, 2014, recommended appointment of Ms. Neelam Deo and Mr. Juan Maria Bilbao as Independent Directors of the Company. Mr. Daljit Mirchandani, Independent Director on the Board pursuant to Clause 49 of the Listing Agreement, shall be appointed for a period of five consecutive years at the ensuing AGM.

Pursuant to Section 160 of the Companies Act, 2013 the Company has received notices in writing from members signifying the intention of the members to propose Mr. Antonio María Pradera Jáuregui, Mr. Jesus Maria Herrera Barandiaran, Mr. Jose Sabino Velasco Ibanez, Mr. Jose Ramon Berecibar Mutiozabal, Mr. Manoj Maheshwari, Mr. Dhananjay Mungale Mr. Daljit Mirchandani, Mr. Zhooben Bhiwandiwala, Mr. Juan Maria Bilbao and Ms. Neelam Deo for the office of Directors of the Company along with the deposit of one lakh rupees each.

Further Mr. Hemant Luthra, Director of the Company, is liable to retire by rotation at the ensuing AGM pursuant to his terms of appointment and offers himself for re-appointment.

Mr. Jose Sabino Velasco Ibanez, Mr. Jose Ramon Berecibar Mutiozabal, Mr. Manoj Maheshwari, Mr. Dhananjay Mungale, Mr. Daljit Mirchandani, Ms. Neelam Deo and Mr. Juan Maria Bilbao are proposed to be appointed as Independent Directors on the Board pursuant to section 149 of the Companies Act, 2013 and in the opinion of the Board they are persons of integrity, have expertise and experience in their area of work which shall be beneficial for the Company. Pursuant to provisions of the Companies Act, 2013, these Directors shall be appointed for a fixed term of upto 5 consecutive years and shall not be liable to retire by rotation.

Mr. Antonio María Pradera Jáuregui Mr. Jesus Maria Herrera Barandiaran and Mr. Zhooben Bhiwandiwala being non-independent directors shall be liable to retire by rotation.

Detailed profile of the Directors seeking appointment / re- appointment alongwith other details as may be required forms part of the Annual Report.

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, confirm that :

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs

of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

The Statement pursuant to Section 212 of the Companies Act, 1956 containing details of Company''s subsidiaries is attached to the Balance Sheet.

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report.

In acc ordance with the general circular number 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account 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 to any member of the Company and the subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Member at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours upto the date of the Annual General Meeting.

Auditors

Messrs. B. K. Khare & Co., Chartered Accountants, Mumbai (Firm Registration No. 105102W) retires as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1B) of the Companies Act, 1956 and Section 139 (1) read with Section 141 of the Companies Act, 2013, the Company has obtained a written certificate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Cost Audit Report

Messrs. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration Number 000030) conducted the audit of Cost Accounting Records maintained by the Company for the Financial Year 2012-13 and submitted their report to the Central Government, Ministry of Corporate Affairs, New Delhi. They were reappointed to conduct the Audit of the Cost Accounting Records maintained by for Company for the Financial Year 2013-14. The Cost Auditors shall forward their report to the Central Government, Ministry of

Corporate Affairs, New Delhi for the Financial Year 2013-14 within the prescribed time.

As required under the provisions of Section 224(1B) read with Section 233B(2) of the Companies Act, 1956, the Company has obtained a written confirmation from M/s. Dhananjay V. Joshi & Associates to the effect that they are eligible for reappointment as Cost Auditors under the said sections. The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company.

Public Deposits and Loans/Advances

Your Company has not accepted any deposits from the public or its employees during the year under review.

The particulars of loans/advances in the nature of loan 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.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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 (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided in Annexure II to this Report.

Particulars of Employees

The Company has employees who were in receipt of remuneration not less than Rs. 60,00,000/- per annum during the year ended 31st March, 2014 or employee 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 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 members of the Company excluding the statement of particulars of employees. Any member interested in obtaining a copy of the Statement may write to the Company Secretary of the Company.

Acknowledgement

Your Directors wish to place on record their sincere appreciation of the consortium of banks comprising of State Bank of India (Lead Bank) and Axis Bank Limited, Company''s customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Hemant Luthra Mumbai, 29th July, 2014 Chairman


Mar 31, 2013

To, The Members of Mahindra Forgings Limited

The Directors present the 14th Annual Report of the Company together with the audited statement of accounts of your Company for the year ended 31st March, 2013.

Financial Highlights (Rs. in Lakhs)

Particulars 2012-13 2011-12

Total Income 44,455 43,468

Profit before Interest, Depreciation, Exceptional Items and tax 7,066 4,360

Less : Depreciation 2,744 2,392

Profit before Interest, Exceptional Items and tax 4,322 1,968

Less : Interest and Finance cost 568 1,134

Profit before Exceptional Items and Tax 3,754 834

Less: Exceptional items - 156

Profit before tax 3,754 678

Profit for the year 4,087 678

Balance of Profit & Loss Account brought forward losses from earlier years (12,434) (13,112)

Loss carried to Balance Sheet (8,347) (12,434)

Financials

During the year under review your Company registered a Total income of Rs. 44,455 Lakhs as against Rs. 43,468 Lakhs in the previous year and Profit before Interest, Depreciation, Exceptional items and tax of Rs. 7,066 Lakhs as against Rs. 4,360 Lakhs in the previous year. The net profit for the year stood at Rs. 4,087 Lakhs as against a net profit of Rs. 678 Lakhs over the previous year. The Total Income of the Company has grown by 2.2% over the previous year.

Operations

During the year under review, your Company''s operations in Europe were affected by a decline in sales compounded by significant operational problems at Schoeneweiss & Co. GmbH, Mahindra Forgings Europe AG''s (MFE) second largest plant. These problems have been identified and are being addressed. The mixture of market decline and operational problems has resulted in MFE ending the year with negative EBITDA.

In India, your Company has focused on increasing profitability by improving plant operations in the areas of Quality, Service, Cost and Technology with specific bias to enhancing Machining capabilities. Productivity has increased due to increased utilization of press shop and increasing output/day. Input costs like power and oil costs have been reduced while internal rejections have been significantly controlled. The steps taken above have translated into continuously improving profitability quarter-wise in the last financial year. Your Company will strive to maintain this performance in the coming year.

Changes in Share Capital and Issue of Shares

Pursuant to exercise of options under the Company''s Employee Stock Option Scheme, your Company has allotted 4,250 equity shares of face value of Rs. 10/- each at an exercise price of Rs. 57/- per equity share. The aforesaid exercise of options has resulted in issued and subscribed equity capital increasing from Rs. 92,16,90,560 to Rs. 92,17,33,060.

However, the shareholding of Promoters in the Company as at 31st March, 2013 remains at 52.97%.

Management Discussion and Analysis

A detailed analysis of the Company''s performance is contained in the Management Discussion and Analysis Report which forms part of the Annual Report.

Corporate Governance

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Your Company has been following good Corporate Governance procedures. A report on Corporate Governance along with a Certificate from the 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.

Dividend

In view of past losses, your Directors do not recommend any dividend for the year.

Stock Options

No Stock Options have been granted during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

The Management Discussion and Analysis Report gives an overview of the developments in Human Resources/Industrial Relations during the year.

Safety, Health and Environment Performance

Your Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Safety and Health

The Safety Committee of the Company meets periodically to review the status of safety issues and reporting of accidents, if any. Various initiatives such as emergency mock drills and advanced fire protection system for improving the Safety have been taken. Common Guarantee Safety Scheme (CGSP) has been initiated as a step forward to focus on safety.

Safety week and Fire Service day are being celebrated. Safety Audits/Inspection along with Safety awareness training on safety is conducted.

Your Company''s plant continues to improve their well being of all its personnel by organising Occupational Health Examination Camps, Periodic Health Check-ups etc.

Environmental Initiatives

With a clear focus on the need for clean environment, the Company is now in the process of calculating its carbon foot print and take adequate measures to mitigate the causes. Your Company is also reporting its performance on Sustainable Development as a part of Global Reporting Initiative (GRI).

Since the last few years, your Company has been focusing external certifications for achieving world class environmental and safety standards.

Certification

Your Company is certified for TS 16949. Your Company''s Plants have also been certified with the amended standards of ISO 14001:2004 & OHSAS 18001. Your Company has completed a three year cycle of continual improvement in Environment, Health & Safety Management certification. The OHSAS system aims to eliminate or minimise risk to employees and other interested parties who may be exposed to Occupational Safety risks in the Company. Sustainable development is promoted through sharing of best practices in the fields of Safety, Occupational Health & Environment.

''Sustainability'' Initiatives

Your Company continues to be aligned with Mahindra Group''s approach towards sustainable development by making conscious efforts to reduce the environmental impact of business as well as enhancing its responsibility towards society. This was achieved by way of continued identification and implementation of various projects for reduction in waste, energy and GHG emissions, to achieve the targets set under its Sustainability Road map. During the year, certain new projects were undertaken for example energy efficiency in lighting solution, engineering processes, waste water treatment and water conservation and recycling initiatives were put in place. These initiatives were backed by third party audits for energy and internal audits for water management.

Awareness on sustainability

Awareness about the need to drive and the ways to drive sustainable business practices among all stakeholders is key to perpetual growth. In the last few years various initiatives were taken to generate this awareness among employees who are the most important internal stakeholders of the organisation. This was further enhanced during the year through various programs conducted by the Company. During the year, this awareness campaign was taken to the external stakeholders, suppliers and vendors.

During the year under review, the Triple Bottom-line performance was published as a part of the Mahindra Group''s sustainability report in accordance with the latest guideline of the internationally accepted Global Reporting Initiatives or the GRI standards (G3.1). This report was externally assured by KPMG and got GRI Checked A rating.

Corporate Social Responsibility

Your Company encourages its employees to participate in the Employee Social Options (ESOPs) program, to drive positive change in society, through Health checkup camps, tree plantation, vocational guidance to school children in the nearby schools etc.

During the year under review, the employees of your Company participated in various education and health related programs in local communities, such as upgrading the skills of local community, through education, environmental and health related programs. Blood Donation drives and participation in Nanhi Kali activities.

Directors

Mr. Mohit Burman, Mr.Harald Korte and Mr. Oliver Scholz retire by rotation and, being eligible, offer themselves, for re-appointment as Directors.

Detailed profile of the Directors alongwith other details as may be required forms part of Corporate Governance Report attached to the Directors Report.

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, confirm that :

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

The Statement pursuant to Section 212 of the Companies Act, 1956 containing details of Company''s subsidiaries is attached to the Balance Sheet.

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account 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 to any member of the Company and the subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Member at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours upto the date of the Annual General Meeting.

Auditors

Messrs. B. K. Khare & Co., Chartered Accountants, Mumbai (Firm Registration No. 105102W) retire as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1 B) of the Companies Act, 1956, the Company has obtained a written certificate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Cost Audit Report

Messrs. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm Registration Number 000030) conducted the audit of Cost Accounting Records maintained by the Company for the Financial Year 2011-12 and submitted their report to the Central Government, Ministry of Corporate Affairs, New Delhi. They were reappointed to conduct the Audit of the Cost Accounting Records maintained by for Company for the Financial Year 2012- 13. The Cost Auditors shall forward their report to the Central Government, Ministry of Corporate Affairs, New Delhi for the Financial Year 2012-13 within the prescribed time.

As required under the provisions of Section 224(1B) read with Section 233B(2) of the Companies Act, 1956, the Company has obtained a written confirmation from Messrs. Dhananjay V. Joshi & Associates to the effect that they are eligible for re-appointment as Cost Auditors under the above-mentioned sections. The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company.

Public Deposits and Loans/Advances

Your Company has not accepted any deposits from the public or its employees during the year under review.

The particulars of loans/advances in the nature of loan 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.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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 (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided in Annexure II to this Report.

Particulars of Employees

The Company has employees who were in receipt of remuneration not less than Rs. 60,00,000/- per annum during the year ended 31st March, 2013 or employee 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 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 members of the Company excluding the statement of particulars of employees. Any member interested in obtaining a copy of the Statement may write to the Company Secretary of the Company.

Acknowledgement

Your Directors wish to place on record their sincere appreciation of the consortium of banks comprising of State Bank of India (Lead Bank) and Axis Bank Limited, Company''s customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Hemant Luthra

Mumbai, 6th June, 2013 Chairman


Mar 31, 2012

To,The Members of Mahindra Forgings Limited

The Directors present the 13th Annual Report of the Company together with the audited statement of accounts of your Company for the year ended 31st March, 2012.

Financial Highlights

Rs in Lakhs

2011-12 2010-11

Total Income 43,468 36,002

Profit before Interest, Depreciation, Exceptional Items and tax 4,360 3,336

Less: Depreciation 2,392 2,210

Profit/(Loss) before Interest, Exceptional Items and tax 1,968 1,126

Less: Interest and Finance cost 1,134 1,444

Profit/(Loss) before Exceptional Items and tax 834 (318)

Less: Exceptional items 156 -

Profit/(Loss) before tax 678 (318)

Profit/(Loss) for the year 678 (318)

Balance of Profit & Loss Account brought forward losses from earlier years (13,112) (12,794)

(Loss) carried to Balance Sheet (12,434) (13,112)

Financials

During the year under review, your Company registered a Total income of Rs 43,468 Lakhs as against Rs 36,002 Lakhs in the previous year and Profit before Interest, Depreciation, Exceptional items and tax of Rs 4,360 Lakhs as against Rs 3,336 Lakhs in the previous year. The net profit for the year stood at Rs678 Lakhs as against a net loss of Rs 318 Lakhs over the previous year. The Total Income of the Company has grown by 21% over the previous year.

Operations

During the year under review, your Company's operations in Europe were hit by press breakdowns in the last two quarters of the Financial Year 2011-12, increasing maintenance costs and lowering margins. These breakdowns have been corrected.

In India, your Company continues to stabilize operations reflected in consistent and higher quarterly EBITDA margins. Machining capacity was enhanced leading to increase in value added sales. Several projects are under implementation to reduce machine downtime and improve die management with a view to continuously improve Forging capacity utilization.

Changes in Share Capital and Issue of Shares On 3rd March, 2010, your Company allotted 72,99,270 warrants on a Preferential basis to the Promoters of the Company, Mahindra & Mahindra Limited, with an option to convert the same within 18 months into equal number of equity shares at a price of Rs 137/- per share. On 4th March, 2011, the Promoters exercised their option to convert 30,00,000 warrants into equal number of equity shares at the said price. Subsequently on 2nd September, 2011, the Promoters have exercised their option to convert the balance 42,99,270 warrants into an equal number of equity shares and have paid the balance amount.

The aforesaid exercise of options has resulted in the issued, subscribed and paid up equity share capital increasing from Rs 87,86,97,860/- to Rs 92,16,90,560/-.

As a result of the above, the shareholding of Promoters in the Company as at 31st March, 2012, stands at 52.97%.

Management Discussion and Analysis

A detailed analysis of the Company's performance is contained in the Management Discussion and Analysis Report which forms part of the Annual Report.

Corporate Governance

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Your Company has been following good Corporate Governance procedures. A report on Corporate Governance along with a Certificate from the 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.

Dividend

In view of past losses, your Directors do not recommend any dividend for the year.

Stock Options

The Remuneration/Compensation Committee of your Company has granted 25,89,883 Stock Options to eligible employees of the Company during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

The Management Discussion and Analysis Report gives an overview of the developments in Human Resources/Industrial Relations during the year.

Safety, Health and Environment Performance Your Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Safety and Health

The Safety Committee of your Company meets periodically to review the status of safety training and reporting of accidents to resolve the safety issues. Various initiatives such as emergency mock drills and advanced fire protection system for improving the Safety Performance have been taken.

Your Company has achieved significant reduction in accidents/ injuries by ensuring a safety culture throughout all levels of organization.

Safety week and Fire Service day are being celebrated. Safety Audits/Inspection along with Safety awareness training on safety are conducted regularly.

Your Company's plant continue to focus on improving the well being of the employees and contract workmen by organizing Occupational Health Examination Camps, Medical Check-ups etc. Certification

Your Company's Plant have been certified with the amended standards of ISO 14001:2004 & OHSAS 18001. Implementation of Occupational Health & Safety Management Standard has re-enforced the Company's commitment to Safety and Occupational Health. In 2010-11, your plant have been certified under OHSAS 18001:2007 which is the best existing safety standard. Your Company has completed a two year cycle of continual improvement in Environment, Health & Safety (EHS) Management certification. The OHSAS system aims to eliminate or minimize risk to employees and other interested parties who may be exposed to Occupational Safety risks in the Company. Sustainable development is promoted through sharing of best practices in the fields of Safety, Occupational Health & Environment.

Environmental Initiatives

With a clear focus on the need for clean environment, your Company is now in the process of calculating its carbon foot print and take adequate measures to mitigate the causes. Your Company is also reporting its performance on Sustainable Development as a part of Global Reporting Initiative (GRI).

Waste and Waste Water Management

Your Company has taken various initiatives to dispose its waste in an environmentally sound manner and achieve waste reduction. Awarenees of water conservation programmers' is enhanced through events like observing the World Water Day. Environment monitoring is done by implementing initiatives such as effluent treatment, increased Green Zones etc. The plan is to comply and go beyond applicable environment legislations and regulations in a phased manner.

Corporate Social Responsibility

As part of Corporate Social Responsibility (CSR) initiatives, the employees of your Company participated in upgrading the skills of local community by involving them in education, environmental and health related programs. Your Company had also organized Blood Donation drives and participated in Nanhi Kali activities of Mahindra Group.

Your Company encourages its employees in participating in local community schemes such as Health checkup camps, tree plantation etc. The Company is planning a sustainable tree plantation and nurturing programmer under Mahindra Hariyali. Employee Social Options

Your Company is tapping the hidden potential in each one of its employees to make a sustainable society; one which is healthier, cleaner, greener and more literate. Through your Company's Employee Social Options (ESOPs) program many employees are contributing towards making a difference to Society.

Your Company's ESOPs program encourages employees in supporting volunteering projects based on the needs of underprivileged communities in and around their places of work. 'Sustainability' Initiatives

In line with the philosophy of the Mahindra group, your Company recognises the importance of sustainability in business, and is committed to reduce its environmental foot print and enhance its commitment towards society. For instance, for the past 3 years, your Company has continued to voluntarily disclose its performance on the Triple Bottom lines of 'People, Planet & Profit' based on the framework designed by the Global Reporting Initiative (GRI). During the year, the report for the year 2010-11 was published which was externally assured by Ernst & Young with an A rating and GRI checked. The report for the year 2011-12 will be released shortly.

During the year under review, your Company continued with its efforts to conserve natural resources and reduce waste. Specific projects in this regard were identified and implemented. Directors

Mr. Hemant Luthra, Mr. Fali P. Mama and Mr. Daljit Mirchandani retire by rotation and, being eligible, offer themselves, for re-appointment.

During the year, Mr. Deepak Dheer retired as Managing Director and Director of the Company with effect from 31st August, 2011. The Board has placed on record its appreciation of the services rendered by Mr. Dheer during his tenure as the Managing Director of the Company.

The Board of Directors of the Company had, by a resolution dated 4th October, 2011 appointed Mr. K Ramaswami as an Additional Director of the Company with effect from 4th October, 2011. He holds office up to the date of ensuing Annual General Meeting. The Company has received Notice from a Member under Section 257(1) of the Companies Act, 1956 along with requisite amount of deposit, signifying his intention to propose the candidature of Mr. Ramaswami for the office of Director of the Company at the ensuing Annual General Meeting.

Mr. Ramaswami was also appointed as Managing Director of the Company with effect from 4th October, 2011 for a period of 3 years subject to approval of the members of the Company.

During the year under review, Mr. Piyush Mankad retired as a Director of the Company with effect from 2nd August, 2011. The Board has placed on record its appreciation of the services rendered by Mr. Mankad during his tenure as Director of the Company.

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, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

The Statement pursuant to Section 212 of the Companies Act, 1956 containing details of Company's subsidiaries is attached to the Balance Sheet.

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and the subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Member at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting,

Auditors

Messrs. B. K. Khare & Co., Chartered Accountants retire as Auditors of the Company and have given their consent for re- appointment. The shareholders will be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1 B) of the Companies Act, 1956, the Company has obtained a written certificate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Cost Audit Report

The Company has come under the purview of Cost Audit for the first time in Financial Year 2011-12. Accordingly, the Board of Directors of your Company has, upon recommendations of the Audit Committee, appointed M/s. Dhananjay V. Joshi& Associates, Cost Accountants as Cost Auditors for conducting an audit of Cost Accounting Records maintained by the Company for the Financial Year 2011-12 with the approval of Central Government. As required under the provisions of Section 224(1 B) read with Section 233B(2) of the Companies Act, 1956, the Company has obtained a written confirmation from M/s. Dhananjay V. Joshi & Associates to the effect that they are eligible for appointment as Cost Auditors under Section 233B of the Companies Act, 1956. The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm's length relationship with the Company. The Cost Auditors shall forward their report to the Central Government, Ministry of Corporate Affairs, New Delhi for the Financial Year 2011-12, within the prescribed time limit. Public Deposits and Loans/Advances Your Company has not accepted any deposits from the public or its employees during the year under review.

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.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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 (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided in Annexure II to this Report. Particulars of Employees

As required under Section 217(2A) of the Companies Act, 1956 and Rules There under a statement containing particulars of Company's employees who were employed throughout the financial year and who were in receipt of remuneration of not less than Rs 60,00,000/- per annum during the year ended 31st March, 2012 or employees 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 during any part of the said year is given in Annexure III to this report.

Acknowledgement

Your Directors wish to place on record their sincere appreciation of the financial institutions and consortium of banks led by State Bank of India, Company's customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by the employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Hemant Luthra

Chairman

Mumbai, 25th May, 2012


Mar 31, 2011

The Directors present the 12th Annual Report of the Company together with the audited statement of accounts of your Company for the year ended 31st March, 2011.

Financial Highlights

Rs. in Lakhs

2010-11 2009-10

Total Income 35,844 30,206

profit before Interest, Depreciation, Exceptional Items and tax 3,314 4,757

Less : Depreciation 2,210 2,151

profit/(Loss) before Interest, Exceptional Items and tax 1,104 2,606

Less : Interest and Finance cost 1,422 2,987

profit/(Loss) before Exceptional Items and tax and prior period expenses (318) (382)

Less: Exceptional items - 9,019

(Loss) before tax & before prior period expenses (318) (9,401)

Less: Prior period expenses - 71

profit /(Loss) before tax (318) (9,472)

Less : Provision for tax

Current Tax - -

Deferred Tax - -

Fringe benefit Tax(including prior period) - 1

(Loss) for the year (318) (9,473)

Balance of profit & Loss Account brought forward losses from earlier years (12,794) (3,321)

(Loss) carried to Balance Sheet (13,112) (12,794)

Financials

During the year under review, your Company registered a Total income of Rs.35,844 Lakhs as against Rs.30,206 Lakhs in the previous year and profit before Interest, Depreciation, Exceptional Items and tax of Rs.3,314 Lakhs as against Rs.4,757 Lakhs in the previous year. The net Loss before Exceptional Items, Taxes and prior period expenses stood at Rs.318 Lakhs. The Total Income of the Company has grown by 19 % over the previous year.

Operations

During the year under review, your Company focused on enhancing operational effciencies - improving yields, lowering rejections and enhancing capacity utilisation and are implementing projects to reduce machine downtime and improve die management. In implementing some of the above projects, there was an initial increase in costs which was compounded by operational problems in heat treatment during Financial Year 2010-11. This has led to inconsistencies in operational performance refected in quarterly margins for the Indian operations. In order to give a fllip to these efforts, the mentorship program, which endeavours to improve the Indian operations to European operational standards, has been strengthened. Joint teams across India and Europe have been formed to improve specifc operational areas in India under the guidance of the global Chief Technology Offcer (CTO) based out of Europe.

Your Companys European operations have substantially optimised costs and considerable success has been achieved in reducing the breakeven.

Changes in Share Capital and Issue of Shares

Pursuant to exercise of options under the Companys Employees Stock Option Scheme your Company has allotted 14,750 equity shares of face value of Rs.10 each at an exercise price of Rs.102 per equity share. The aforesaid exercise of option has resulted in the issued and subscribed equity share capital increasing from Rs.87,85,50,360/- to Rs.87,86,97,860/-.

As a result of the above the shareholding of Promoters stands at 50.67%.

Management Discussion and Analysis

A detailed analysis of the Companys performance is contained in the Management Discussion and Analysis Report which forms part of the Annual Report.

Corporate Governance

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Your Company has been following good Corporate Governance procedures. A report on Corporate Governance along with a Certifcate from the

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.

Dividend

In view of the losses, your Directors do not recommend any dividend for the year.

Stock Options

The Remuneration/Compensation Committee of your Company has granted 93,000 Stock Options to eligible employees of the Company during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

Safety, Health and Environment Performance

The Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Health and Safety

The Safety Committee of the Company has members comprising representatives from workers and executives from various departments who meet periodically to review the situation. Safety training and reporting of accidents are reviewed to resolve the safety issues and various initiatives such as emergency mock drills and advanced fre protection system for improving the Safety Performance have been taken. The Company has been imparting training to employees besides carrying out safety audits of various facilities of the Company.

The Company has achieved significant reduction in accidents/ injuries by ensuring a safety culture throughout all levels of organization.

The Company continues its commitment to improve the well being of the employees and medical checkups are regularly conducted for its employees.

New Certifcation

Your Companys Plants have been certifed with amended standard for ISO 14001:2004 & OHSAS 18001. Implementation of Occupational Health & Safety Management Standard has re-enforced the Companys commitment of Safety and Occupational Health to high levels. OHSAS 18001:2007 is the best existing safety practice which is implemented through the amended management system and your plants have been certifed during the year 2010-11. Your Company has completed one year cycle of continual improvement in EHS Management certifcation and now consolidated its system robustness.

Environmental Initiatives

With a clear focus on the need for clean environment, the Company is now in the process of calculating carbon foot print and take adequate measures to mitigate the causes. Your Company is also reporting its performance on Sustainable Development as a part of Global Reporting Initiative (GRI).

Waste and Waste Water Management

The Company has taken various initiatives to dispose its waste in environmentally sound manner and to achieve waste reduction. The water conservation awareness programmes are planned through observing World Water Day. The Company is committed towards resource conservation through water management methods such as recycling or re-use of treated waste water for gardening etc.

The Company attaches greater importance to environment monitoring by implementing various initiatives such as effuent treatment, increased Green Zones thereby complying and going beyond applicable environment legislations and regulations in a phased manner.

Corporate Social Responsibility

As part of Corporate Social Responsibility (CSR) initiatives, the employees of your Company participated in upgrading the skills by involving them in education, environmental and health related programs. The Company had also organized Blood Donation drives and participated in Nanhi Kali activities of Mahindra Group. Your Company encourages its employees in participating in local community development schemes such as Health checkup camp, AIDS awareness and tree plantation etc. The Company is planning a sustainable tree plantation and nurturing programme under Mahindra Hariyali by involving employees and local stake holders in large numbers. The overall focus of CSR would continue to be in the areas of health, education, environment and improving employability of youth.

Sustainability Initiatives

Your Company embarked on the sustainability journey in November 2007 as a part of Mahindra Groups Sustainability Reporting, and over the last four years has laid a foundation for developing a sustainable enterprise. Conscious efforts have been made to understand the challenges of business growth from a multi dimensional perspective i.e. consider the impact of business on the environment, responsibility towards the communities in which we operate besides looking at economic progress. During the year the triple bottom line performance for 2009-10 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 2 reports, this report was externally assured by E&Y with an A+ rating and GRI checked.

In order to ensure that the progress on your triple bottom line performance is focused, various sustainability project were identifed, planned & executed for reducing energy consumption, resource consumption and GHG emissions, and commitments for making business processes more conducive to sustainable development were taken.

During the year 2009-10, a Carbon foot-printing exercise was undertaken to inventorize GHG emissions from your business operations, under scope I, II & III emissions as per internationally accepted standards. This has enabled development of baseline data on emissions and undertake initiatives towards improving carbon intensive processes that offer reduction potential. This will be an ongoing exercise and reducing GHG intensity of our products on an ongoing basis.

Directors

Mr. Nikhilesh Panchal and Mr. Zhooben Bhiwandiwala retire by rotation and, being eligible, offer themselves, for re-appointment as Directors.

Mr. Piyush Mankad, Director retires by rotation at the ensuing Annual General Meeting of the Company, and has expressed his desire not to seek re-appointment. The Company does not intend to fll the vacancy caused by the retirement of Mr. Mankad.

During the year under review, Mr. Anand G. Mahindra resigned as Chairman and Director of the Company and Mr. Hemant Luthra was appointed as the Chairman of the Company. The Board has placed on record its appreciation of the service rendered by Mr. Mahindra during his tenure as the Chairman and Director of the Company.

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, confrm that :

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the loss of the Company for the year ended on that date;

(iii) proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

The Statement pursuant to Section 212 of the Companies Act, 1956 containing details of Companys subsidiaries is attached to the Balance Sheet.

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual

Accounts of the subsidiary companies and the related detailed information to any member of the Company and the subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any member at the Head Offce of the Company and at the Offce of the respective subsidiary companies, during working hours upto the date of the Annual General Meeting.

Auditors

Messrs. B. K. Khare & Co., Chartered Accountants retire as Auditors of the Company and have given their consent for re- appointment. The shareholders will be required to elect Auditors for the current year and fx their remuneration.

As required under the provisions of Section 224(1B) of the Companies Act, 1956, the Company has obtained a written certifcate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specifed in the said section.

Public Deposits and Loans/Advances

The Company has not accepted any deposits from the public or its employees during the year under review.

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.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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 (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided in Annexure II to this Report.

Particulars of Employees

As required under Section 217 (2A) of the Companies Act, 1956 and Rules thereunder a statement containing particulars of Companys employees who were employed throughout the financial year and who were in receipt of remuneration of not less than Rs. 60,00,000/- per annum during the year ended 31st March, 2011 or employee who were employed for a part of financial year and were in receipt of remuneration not less than Rs. 5,00,000/- per month during any part of the said year is given in Annexure III to this report.

Acknowledgement

Your Directors wish to place on record their sincere appreciation to the financial institutions and consortium of banks led by State Bank of India, Companys customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Hemant Luthra

Mumbai, 20th May, 2011. Chairman


Mar 31, 2010

The Directors present the 11th Annual Report of the Company together with the audited statement of accounts of your Company for the year ended 31st March, 2010.

Financial Highlights

Rs. in Lakhs 2009-10 2008-09 Gross Income 30,206 24,246 Profit before Interest, Depreciation, Exceptional Items and tax 4,757 1,149 Less : Depreciation 2,151 1,954 Profit/(Loss) before Interest, Exceptional Items and tax 2,606 (805) Less : Interest and Finance cost 2,987 2,539 Profit/(Loss) before Exceptional Items and taxes and prior period expenses (381) (3,344) Less: Exceptional items 9,019 - (Loss) before tax & before prior period expenses (9,400) (3,344) Less: Prior period expenses 71 133 Profit/(Loss) before tax (9,471) (3,477) Less : Provision for tax - - Current Tax Deferred Tax - 650 Fringe Benefit Tax (including prior period) 2 13 (Loss) for the year (9,473) (4,140) Balance of Profit & Loss Account brought forward losses from earlier years (3,321) (3,882) Add: Transfer from Securities Premium Account as approved in the Extraordinary General Meeting & confirmed by Honourable High Court of Bombay. - 4,701 (Loss) carried to Balance Sheet (12,794) (3,321)

Financials

During the year under review, your Company registered a Gross income of Rs.30,206 Lakhs as against Rs. 24,246 Lakhs in the previous year and Profit before Interest, Depreciation, Exceptional Items and tax of Rs.4,757 Lakhs as against Rs. 1,149 Lakhs in the previous year. The net loss before Exceptional ltems,taxes and prior period expenses stood at Rs.381 Lakhs. The Gross Income of the Company has grown by 25 % over the previous year.

Operations

In Europe, there was a sharp decline in the auto industry in FY09 and FY10, and it was only in the last three months of FY1 0 that the

European automotive markets showed signs of revival. Your Company expects that this growth will sustain in FY1 1. Whereas in India, the prospects of automotive markets remain positive, with the support of expanding domestic automotive manufacturing business and global OEMs entering into lower operating cost countries like India.

In light of the difficult conditions being faced by your Companys operations especially in Europe as a result of the global economic downturn, Company had to go through the process of restructuring which resulted in reduction in personnel costs and other operating costs by 33% and 27% respectively at a consolidated level and

predominantly in the European Operations. A structured cost reduction program was put in place to achieve the above.

The European operations continuously partner their customers especially for new engine programs. The Company focuses on innovation to meet the demands of OEMs and to differentiate the Company from the competition.

The Indian operations continue to focus on improving rejection levels, yield and productivity. Another focus area of improvement has been die engineering. Indian operations are in the process of adopting new die welding technology in collaboration with European subsidiaries which will help in die cost reduction, die life increase, die block sinking improvement and die block machining improvement. Your Company is also adopting hard dies as against soft dies to reduce rejections and increase die life.

Changes in Share Capital and Issue of Shares

On 18th February, 2010 the authorised capital of your Company was increased from Rs. 11 7,94,26,386/- to Rs. 167,94,26,386/- .

On 24th February, 2010 your Company successfully completed the Qualified Institutional Placement (QIP) issue consisting of 1,62,41,300 equity shares of face value of Rs. 10/- at a price of Rs. 107.75 per equity share aggregating Rs. 1 75 Crores.

On 3rd March, 2010 the Company allotted 72,99,270 Warrants on a Preferential basis to Mahindra & Mahindra Limited (Promoters), convertible at the option of the Promoters within 18 months into equal number of equity shares at a price of Rs. 137/- per share. The Promoters have made an upfront payment of 25% of the aggregate price amounting to Rs. 25 Crores. Subsequently on 4th March, 201 0 the Promoters exercised their option to convert 30,00,000 Warrants into equity shares out of 72,99,270 Warrants and have paid the balance of Rs. 30.82 Crores. The Promoters still have an option to convert balance 42,99,270 Warrants into equity shares by 3rd September, 201 1.

There has been an increase of Rs. 225.96 Crores (net of issue expenses) in the networth of your Company. A part of these proceeds from this issue were inter alia for repayment of borrowings of the Company, investment in subsidiaries and QIP issue expenses. The Company has temporarily invested the balance funds in liquid fund schemes of the Mutual Fund.

Pursuant to exercise of options by certain applicants under the Companys Employees Stock Option Scheme, your Company has allotted 46,000 equity shares of face value of Rs. 10/- each at an exercise price of Rs. 83/- per equity share. The aforesaid issue of QIP Preferential issue of shares and exercise of option has resulted in the issued and subscribed equity share capital increasing from Rs. 68,56,77,360/- to Rs. 87,85,50,360/-.

As a result of the above the shareholding of Promoters stands at 50.68%.

Management Discussion and Anal/sis

A detailed analysis of the Companys performance is contained in the Management Discussion and Analysis Report which forms part of the Annual Report.

Corporate Governance

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Your Company has been following good Corporate Governance procedures. A report on Corporate Governance along with a Certificate from the 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.

Dividend

In view of the losses, your Directors do not recommend any dividend for the year.

Stock Options

The Remuneration/Compensation Committee of your Company has not granted any Stock Options to the employees during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Industrial Relations

Industrial Relations generally remained cordial and harmonious throughout the year.

Safety, Health and Environment Performance

The Company has a Safety, Occupational Health and Environmental (SH&E) policy on occupational health, safety and environmental protection through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to occupational health and avoidable environmental pollutants.

Health and Safety

The Safety Committee of the Company has members comprising representatives from workers and executives from various departments who meet periodically to review the situation. Safety training and reporting of accidents are reviewed to resolve the safety issues and various initiatives such as emergency mock drills and advanced fire protection system for improving the Safety Performance have been taken. The Company has been imparting training to employees besides carrying out safety audits of various facilities of the Company.

The Company has achieved significant reduction in accidents/injuries by ensuring a safety culture throughout all levels of organization.

The Company continues its commitment to improve the well being of the employees and medical checkups are regularly conducted for its employees.

Environmental Initiatives

With a clear focus on the need for clean environment, the Company is now in the process of calculating carbon foot print and taking adequate measures to mitigate the causes. Your Company is also reporting its performance on Sustainable Development as a part of Global Reporting Initiative (GRI).

Waste and Waste Water Management

The Company has taken various initiatives to dispose its waste in environmentally sound manner and to achieve waste reduction. The water conservation awareness programmes are planned through observing World Water Day. The Company is committed towards resource conservation through water management methods such as recycling or re-use of treated waste water for gardening etc.

The Company attaches greater importance to environment monitoring by implementing various initiatives such as effluent treatment, increased Green Zones thereby complying and going beyond applicable environment legislations and regulations in a phased manner.

Corporate Social Responsibility

As part of Corporate Social Responsibility (CSR) initiatives, the employees of your Company participated in upgrading the skills by involving them in education, painting, tree plantation activities etc. of the local schools. The Company had also organized Blood Donation drives and participated in Nanhi Kali activities of Mahindra Group. Your Company encourages its employees in participating in local community development schemes such as Health checkup camp, AIDS awareness and global warming etc. The Company is planning a sustainable tree plantation and nurturing programme under Mahindra Hariyali by involving employees and local stake holders in large numbers. The overall focus of CSR would continue to be in the areas of health, education, environment and improving employability of youth.

Sustainability Initiatives

In the Directors Report for 2008-09, the Shareholders were informed of your Companys participation the Mahindra Groups Sustainability initiatives. These initiatives have been taken forward during the year under review.

In October 2009, the 2nd Mahindra Sustainability Review for the year 2008-09 was published, wherein your Companys performance on the three bottom lines i.e. People, Planet and Profit, was also included. Again this year, this report was externally assured by Ernst & Young and rated with the highest level of A+ and GRI checked. This 2nd report reflects your Companys progression in this journey and its commitment to taking a more responsible and holistic approach to business.

During the year under review i.e 2009-10 a further progress was made in this journey and a Carbon foot-printing exercise was undertaken to inventorize GHG emissions from all business operations, as per internationally accepted standards. This will enable us to baseline data on Companys emissions and undertake initiatives towards improving performance in this area. This will be reported in the 3rd Sustainability Report, which will be released shortly.

In keeping with the Mahindra philosophy of ALTERNATIVE THINKING your Company has been actively seeking and implementing alternative solutions that are inclusive and responsible.

Directors

Mr. Mohit Burman, Mr. Harald Korte, Mr. Oliver Scholz and Mr. V. K. Chanana, retire by rotation and, being eligible, offer themselves, for re-appointment as Directors.

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, confirm that :

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the loss of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

The Statement pursuant to Section 21 2 of the Companies Act, 1 956 containing details of Companys subsidiaries is attached.

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with Accounting Standard AS 21 forms a part of the Annual Report.

The Company has made an application to the Ministry of Corporate Affairs seeking exemption from attaching the copy of Balance Sheet, Profit and Loss Account, Reports of the Board of Directors and Auditors of the subsidiaries with the Balance Sheet of the Company. If, in terms of approval granted by the Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, the copy of the Balance

Sheet, etc. of the subsidiaries are not required to be attached with the Balance Sheet of the Company, the Company Secretary will make these documents available upon receipt of request from any member of the Company interested in obtaining the same. These documents will be available at Registered office of the Company and the office 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.

Auditors

Messrs. B. K. Khare & Co., Chartered Accountants retire as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1 B) of the Companies Act, 1956, the Company has obtained a written certificate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Public Deposits and Loans/Ad varices

The Company has not accepted any deposits from the public or its employees during the year under review.

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.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided in Annexure II to this Report.

Particulars of Employees

As required under Section 217 (2A) of the Companies Act, 1956 and Rules thereunder a statement containing particulars of Companys employees who are in receipt of remuneration of not less than Rs.24,00,000/- during the year ended 31st March, 2010 or not less than Rs.2,00,000/- per month during any part of the said year is given in Annexure III to this report.

Acknowledgement

Your Directors wish to place on record their sincere appreciation of the financial institutions and consortium of banks led by State Bank of India, Companys customers, vendors and investors for their continued support during the year.

The Directors also wish to place on record their appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board Anand G. Mahindra Mumbai, 12th May, 2010. Chairman

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