ANNUAL REPORT 2009-10 - Mahindra Financeuatmmfslwebsite.mahindrafs.com/media/236349/m... ·...

CMYK

ANNUAL REPORT 2009-10

CMYK

S u b s i d i a r y C o m p a n i e sMahindra Insurance Brokers Limited

Mahindra Rural Housing Finance Limited

Mahindra Business & Consulting Services Private Limited

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Annual Report 2009-10

DIRECTORS’ REPORT

SHARE CAPITAL

During the year ended 31st March, 2010, your Company increasedits Authorised Share Capital from Rs.1 crore to Rs.2.50 crores, inline with its business plans. The Memorandum of Associationhas subsequently been altered to reflect this, after passing ofnecessary Resolutions in a General Meeting of the shareholders.

DIVIDEND

The Company recommends a dividend of Rs.10 per share on theequity capital amounting to Rs.0.59 crores inclusive of tax ondistributed profits as against a dividend of Rs.0.59 crores paidfor the previous year. The total equity dividend for the yearunder review including dividend distribution tax, surcharge and

cess will absorb a sum of Rs.0.59 crores as against Rs.0.59 croresin the previous year.

OPERATIONS

During the year under review, your Company crossed an importantmilestone of servicing 1 million retail policies (10.76 lacs) sincethe commencement of operations in May 2004.

During the year, your Company crossed the 3,00,000 mark interms of policies distributed, with a total of 3,16,892 polices forboth Life and Non-Life retail business lines. The customizedLife insurance cover "Mahindra Loan Suraksha" (MLS) continuedto receive an encouraging response and grew by 54.2% from95,434 lives covered with a Sum Assured of Rs.2,180.4 crores in

DIRECTORS’ REPORT TO THE MEMBERS

Your Directors present the Twenty-third Report along with the audited accounts of your Company for the year ended 31st March 2010.

FINANCIAL RESULTS

(Figures in Rupees)

2010 2009

Income 31,36,06,766 23,14,68,218

Profit before Interest, Depreciation & Taxation 16,96,16,596 10,15,10,265

Interest

Depreciation (11,28,241) (9,02,073)

Profit before Taxation 16,84,88,355 10,06,08,192

Provision for Taxation

— Provision for Current Tax (5,83,00,000) (3,50,00,000)

— Provision for Deferred Tax 5,34,579 3,63,305

— Provision for Fringe Benefit Tax — (13,17,017)

(5,77,65,421) (3,59,53,712)

Profit after Taxation 11,07,22,934 6,46,54,480

Less: Income Tax Adjustment for earlier years — (3,044)

Net Profit 11,07,22,934 6,46,51,436

Balance of Profit for prior years 12,58,44,582 7,35,42,896

Amount available for Appropriation 23,65,67,516 13,81,94,332

Appropriations:

Transfer to General Reserve 1,20,00,000 65,00,000

Dividend on Equity Shares (Interim) — 50,00,000

Tax on Dividend (Interim) — 8,49,750

Dividend on Equity Shares (Proposed) 50,00,000 —

Tax on Dividend (Proposed) 8,49,750 —

Surplus carried to Balance Sheet 21,87,17,766 12,58,44,582

23,65,67,516 13,81,94,332

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the financial year 2008-09 to 1,47,154 lives covered with a SumAssured of Rs.3,518.4 crores in the financial year 2009-10, witha substantial portion being covered in the rural markets.

Your Company achieved a growth of 16.6% in Net Premiumgenerated for the Corporate and Retail business lines, increasingfrom Rs.159.8 crores (Gross Premium Rs.177.0 crores) in thefinancial year 2008-09 to Rs.186.3 crores (Gross PremiumRs.202.7) in the financial year 2009-10, crossing a milestone ofRs.200 crores Gross Premium.

The Income increased by 35.9 % from Rs.23.1 crores in thefinancial year 2008-09 to Rs.31.4 crores in the financial year2009-10. The Profit Before Tax increased by 66.3% from Rs.10.1crores to Rs.16.8 crores, and the Profit After Tax increased by70.8% from Rs.6.5 crores to Rs.11.1 crores during the same period.

DIRECTORS

Dr. Jaideep Devare and Mr. Ramesh Iyer retire by rotation, andbeing eligible, offer themselves for re-election.

Dr. Jaideep Devare was appointed as Managing Director of theCompany w.e.f. 1st August, 2009.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Companycomprises Mr. Rajeev Dubey (Chairman of the Committee),Mr. Ramesh Iyer and Mr. V. Ravi.

During the year under review, four Audit Committee meetingswere held. These were well attended.

REMUNERATION COMMITTEE

The Remuneration Committee constituted during the yearpresently comprises Mr. Uday Y. Phadke (Chairman of theCommittee), Mr. Rajeev Dubey and Mr. Ramesh Iyer. TheRemuneration Committee met once during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, yourDirectors, based on the representation received from the OperatingManagement, and after due enquiry, confirm that:-

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

(ii) they have, in the selection of the accounting policies,consulted the Statutory Auditors and these have been appliedconsistently and reasonable and prudent judgments andestimates have been made so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2010and of the profit of the Company for the year ended on thatdate;

(iii) proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detectingfraud and other irregularities;

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

AUDITORS

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

As required under the provisions of section 224 of the CompaniesAct, 1956, the Company has obtained a written certificate fromthe above Auditors proposed to be re-appointed to the effect thattheir re-appointment, if made, would be in conformity with thelimits specified in the said section.

PUBLIC DEPOSITS AND LOANS / ADVANCES

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

The particulars of loans/advances and investment in its own sharesby listed companies, their subsidiaries, associates, etc., requiredto be disclosed in the annual accounts of the Company pursuantto Clause 32 of the Listing Agreement of the parent companyMahindra & Mahindra Financial Services Limited and the ultimateparent company, Mahindra & Mahindra Limited, with the stockexchanges are furnished separately.

CODES OF CONDUCT

The Board of Directors of the Company had adopted separateCodes of Conduct for Corporate Governance ("the Codes") forits Directors, and Senior Management and Employees enunciatingthe underlying principles governing the conduct of its businessand seeking to reiterate the fundamental precept that goodgovernance must and would always be an integral part of theCompany's ethos.

The Company has for the year under review, received declarationsunder the Codes from the Board Members and the SeniorManagement Personnel and Employees of the Company affirmingcompliance with the respective Codes.

OUTLOOK FOR THE CURRENT YEAR

The robust growth of the Indian economy during the last financialyear has translated into a growth of 12% for the Non-Life and16% for the Life insurance industry. Economic growth isexpected to continue to be positive during this financial year asalso the outlook for the insurance industry. Your Company willcontinue to explore opportunities for expanding its customer basein the Commercial and Retail segments in both Life and Non-Life insurance. The Health insurance retail segment has showntremendous growth over the last financial year and offers potentialfor your Company to increase its penetration in the retail healthinsurance segment as well.

CONSERVATION OF ENERGY AND TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS& OUTGO

The particulars relating to the energy conservation, technologyabsorption and foreign exchange earnings and outgo, as requiredunder section 217(1)(e) of the Companies Act, 1956 read with

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the Companies (Disclosure of Particulars in the Report of Boardof Directors) Rules, 1988 are given in Annexure I to this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDERSECTION 217(2A) OF THE COMPANIES ACT, 1956 ANDRULES FRAMED THEREUNDER

As required under section 217(2A) of the Companies Act, 1956and Rules made thereunder, a statement containing particulars ofthe Company's employees, who were in receipt of remunerationof 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 ofthe said year is given in Annexure II to this Report.

SECRETARIAL COMPLIANCE CERTIFICATE

In accordance with the provisions of section 383A of theCompanies Act, 1956, a Certificate from Mr. J. P. Fernandes,Company Secretary in Whole-time Practice, certifying that

the Company has complied with all the provisions of theCompanies Act, 1956 is given in the Annexure and forms partof this Report.

ACKNOWLEDGEMENTS

The Directors thank the IRDA for their continuous support andguidance rendered to the Company. The Directors acknowledgethe trust reposed by the customers, the support of the shareholders,the advice of the auditors and the noteworthy performance of theemployees.

For and on behalf of the Board

Uday Y. PhadkeChairman

Mumbai, April 15, 2010

ANNEXURE I TO THE DIRECTORS REPORT

PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010

A. CONSERVATION OF ENERGY

(a) Energy Conservation measures taken:

Though the activities of the Company are not power intensive, necessary measures are taken to contain and bring aboutsavings in power consumption through improved operational methods and better housekeeping.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil

(c) Impact of the measures taken / to be taken at (a) & (b) above for reduction of energy consumption and consequent impact onthe cost of production of goods. These measures are expected to reduce energy consumption.

(d) Total energy consumption and energy consumption per unit of production as per Form-A to the Annexure to the Rules inrespect of Industries specified in the Schedule: Not Applicable.

B. TECHNOLOGY ABSORPTION

Research & Development (R & D)

1. Areas in which Research & Development is carried out : None

2. Benefits derived as a result of the above efforts : Not applicable

3. Future plan of action : None

4. Expenditure on R & D : Nil

5. Technology absorption, adaptation and innovation : None

6. Imported Technology for the last 5 years : None

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earningsduring the year.



Mumbai, 15th April, 2010

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ANNEXURE II TO THE DIRECTORS’ REPORTADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956, READ WITHTHE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS' REPORT FORTHE YEAR ENDED 31st MARCH 2010

Name of Designation/ Gross Re- Qualifications Experi- Age Date of Last Employ-Employee Nature of muneration ence (Years) Commence- ment Held

Duties (subject to (Years) ment of (Designation &Income-tax) Employment Organisation)(Rupees)

Dr. Jaideep Managing 31,88,767 Ph.D. in Management 19 42 01/01/2009 Head — BusinessDevare Director (Thesis on Insurance Development

Industry in India), (New Initiatives),B.E. (Hons.) (Production), Mahindra &MMS (Finance), Licentiate Mahindraof the Insurance Institute Financialof India (LII) Services Limited

Shri K.R. Principal 33,53,025 B.Com., Diploma in 33 54 01/10/2003 Head —Pherwani Officer Export Management, Insurance,

Associate of the Insurance Mahindra &Institute of India (AIII) Mahindra Limited

Shri Rajesh Head — 25,99,595 B.E. (Hons.) — Mechanical 16 38 01/04/2004 Retainer —Sharma Retail Engineering, Postgraduate Mahindra &

Diploma in Insurance and MahindraRisk Management Financial

Services Limited

Shri Sanjay Head — 24,76,114 B.A., Associate of the 21 46 23/07/2007 Assistant Vice-Sinha Commercial Insurance Institute of President —

India (AIII) Bajaj AllianzGeneral InsuranceCompany Limited

Notes:

1. Terms and conditions of employment are as per Company's Rules / contract.

2. 'Gross Remuneration' includes salary, taxable value of perquisites and Company's contribution to Provident Fund & SuperannuationFund.

3. The Company has made a provision for contribution to the Employees' Gratuity Fund based on actuarial valuation. This amounthas not been included in 'Gross Remuneration' as no separate figures are available for individual employees.

4. None of the employees mentioned above is relative of any Director of the Company.

5. All the employees have adequate experience to discharge the responsibilities assigned to them.

6. No employee holds by himself / herself or along with his / her spouse and dependent children 2% or more of the equity sharesof the Company.




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Particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., requiredto be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement of the parent company,Mahindra & Mahindra Financial Services Limited and the ultimate parent company, Mahindra & Mahindra Limited, with thestock exchanges

Loans and advances in the nature of loans to firms/companies in which directors are interested:

In Rupees

Name of the Company Balance as on Maximum Outstanding31st March, 2010 during the year

Mahindra & Mahindra Financial Services Limited 16,52,00,000 16,52,00,000

Mahindra Rural Housing Finance Limited 5,00,00,000 5,00,00,000

The Company has not made any loans and advances in the nature of loans to subsidiaries, associates, and loans and advances in thenature of loans where there is no repayment schedule or repayment beyond seven years or no interest or interest below section 372A ofthe Companies Act, 1956.

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ANNEXURE TO THE DIRECTORS’ REPORT

Secretarial Compliance Certificate

Registration No. : 11- 42609Authorised Share Capital : Rs. 2,50,00,000Paid-up Share Capital : Rs. 50,00,000

To,Members,Mahindra Insurance Brokers Limited,Mahindra Towers,Worli,Mumbai-400 018.

I have examined the registers, records, books and papers ofMahindra Insurance Brokers Limited (“the Company”) as requiredto be maintained under the Companies Act, 1956 (“the Act”), andthe rules made thereunder and also the provisions contained inthe Memorandum and Articles of Association of the Companyfor the financial year ended on 31st March, 2010. In my opinionand to the best of my information and according to theexaminations carried out by me and explanations furnished to meby the Company, its officers and agents, I certify that in respectof the aforesaid financial year:

1. The Company has kept and maintained all Registers as statedin Annexure ‘A’ to this certificate, as per the provisions ofthe Act and the Rules made thereunder and all entries thereinhave been duly recorded.

2. The Company has duly filed the forms and returns as statedin Annexure ‘B’ to this Certificate, with the Registrar ofCompanies, within the time prescribed under the Act andthe Rules made thereunder except otherwise stated.

3. The Company is a Public Limited Company within themeaning of the provisions of Section 3(1)(iv) of theCompanies Act, 1956. The paid-up share capital of theCompany is Rs. 50 lakhs.

4. The Board of Directors duly met 4 (four) times on 20thApril, 2009, 21st July, 2009, 16th October, 2009 and 16thJanuary, 2010 in respect of which proper notices/circularswere issued/given and the proceedings thereof were properlyrecorded in the Minutes Book and signed.

5. The Company has not closed/was not required to close itsRegister of Members or Debenture-holders during thefinancial year.

6. The Annual General Meeting (AGM) for the financial yearended on 31st March, 2009 was held on 21st July, 2009,after giving due notice to the members of the Company andthe resolutions passed thereat were duly recorded in theMinutes Book maintained for the purpose.

7. Three Extraordinary General Meetings of the Company wereheld on 29th June, 2009 for passing a Special Resolution forgiving loans in the form of Inter-Corporate Deposits, 8thOctober, 2009 for appointment of Dr. Jaideep Devare as aManaging Director of the Company w.e.f.1st August, 2009and on 21st January, 2010 for increase in the AuthorisedShare Capital of the Company from Rs. 1 crore to Rs. 2.5crores.

8. The Company has not advanced any loans to its Directorsor persons or firms or companies referred to in Section 295of the Act.

9. The Company has not entered into any contracts fallingwithin the purview of Section 297 of Act.

10. The Company has made necessary entries in the registermaintained under Section 301 of the Act.

11. As there was no instance falling within the purview of Section314 of the Act, the Company was not required to obtain anyapproval from the Board of Directors, members or CentralGovernment under that Section.

12. The Company has not issued any duplicate share certificate.

13. i) The Company has delivered all the certificates onlodgement thereof for transfer and/or for other purposesin accordance with the provisions of the Act;

ii) The Company has not declared any interim dividendduring the financial year.

iii) Transfer of any unpaid dividend amount to InvestorEducation and Protection Fund as required under theprovisions of Section 205C of the Act was not applicableto the Company;

v) The Company has duly complied with the requirementsof Section 217 of the Act.

14. The Board of directors of the Company is duly constitutedand the re-appointment of directors retiring by rotation havebeen duly approved by the members of the Company at theAGM.

15. The Company has appointed Dr. Jaideep Devare as ManagingDirector during the year ended 31st March, 2010 with effectfrom 1st August, 2009.

16. The Company has not appointed any sole selling agentsduring the financial year.

17. The Company has, wherever required, obtained all necessaryapprovals of the Central Government, Company Law Board,Regional Director, Registrar of Companies or such otherauthorities as may be prescribed under the various provisionsof the Act.

18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to theprovisions of the Act and the Rules made thereunder.

19. The Company has not issued any shares/Debentures/otherSecurities during the financial year.

20. The Company has not bought back any shares during thefinancial year.

21. There was no redemption of preference shares or debenturesduring the financial year.

22. The Company did not have to keep in abeyance rights orbonus shares pending registration of transfer of shares incompliance with the provisions of the Act as the Company

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had not issued any rights or bonus shares during the yearunder scrutiny.

The question of keeping in abeyance rights to dividend didnot arise as there was no transfer of shares required to bekept pending for registration during the year.

23. The Company has not invited/accepted any deposits includingany unsecured loans falling within the purview of Section58A of the Act during the financial year.

24. The Company has not made any borrowings during thefinancial year ended 31st March, 2010.

25. The Company has placed inter-corporate deposits with otherbodies corporate. The Company has not given any guaranteesor provided securities to other bodies corporate. Thenecessary entries have been made in the Register kept forthe purpose.

26. The Company has not altered the provisions of theMemorandum with respect to situation of the Company’sregistered office from one State to another during the yearunder scrutiny.

27. The Company has not altered the provisions of theMemorandum with respect to the objects of the Companyduring the year under scrutiny.

28. The Company has not altered the provisions of theMemorandum with respect to name of the Company duringthe year under scrutiny.

29. The Company has altered the provisions of the Memorandumwith respect to increase of share capital of the Companyduring the year under scrutiny from Rs. 1 crore to Rs. 2.50crores.

30. The Company has not altered its Articles of Associationduring the financial year.

31. There was/were no prosecution/s initiated against or showcause notices received by the Company and no fine or penaltyor any other punishment was imposed on the Company duringthe financial year, for offences under the Act.

32. The Company has not received any money as security fromits employees during the financial year.

33. The Company has deposited both employees’ and employer’scontributions to provident fund with the prescribed authoritiespursuant to Section 418 of the Act.

J. P. Fernandes

Company Secretary

FCS no. 711, CP No. 2923


Registers as maintained by the Company

Statutory Registers:

1. Register of Members under Section 150 of the Act.

2. Minutes Books of Meetings of the Board of Directors andof the General Meetings under Section 193 of the Act.

3. Register of Directors under Section 303 of the Act.

4. Register of Contracts under Section 301of the Act.

5. Books of Accounts under Section 209 of the Act.

6. Register of Renewed & Duplicate Share Certificates underRule 7 of the Companies (Issue of Share Certificates) Rules,1960.

7. Register of Investments or loans made, Guarantee given orSecurity provided under Section 372A of the Act.

Other Registers:

1. Transfer Register.

2. Register of Directors’ Attendance.

The Company has not maintained the following Registers sinceas informed by the Company, there were no entries/transaction tobe recorded therein.

1. Register of Investments under Section 49 of the Act.

2. Register of Deposits under Rule 7 of the Companies(Acceptance of Deposits) Rules, 1975.

3. Register of Securities Bought Back under Section 77A ofthe Act.

4. Register of Debenture-holders under Section 152 of the Act.

5. Register of Charges under Section 143/copies of InstrumentsCreating Charge under Section 136 of the Act.

6. Index of Members under Section 151 of the Act.

7) Register of Destruction of Records/Documents as requiredunder the Companies (Preservation & Disposals of Records)Rules, 1966.

8. Register of Directors’ Shareholdings under Section 307 ofthe Act.

Annexure ‘A’ to the Compliance Certificate dated April 5, 2010

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Annexure ‘ B’ to the Compliance Certificate dated April 5, 2010

Forms and returns as filed by the Company with the Registrar of Companies/Central Government, during the financial year ended on 31stMarch, 2010.

Sl. Form No./ Filed For Date of Whether filed If delay inNo. Return Under Filing within the filing, whether

Section Prescribed requisiteTime Additional Fee

Paid

1. Form No. 23 372A Authority to make loans not 08/07/2009 Yes Not Applicableexceeding Rs. 2000 lakhs in theform of Inter Corporate Deposits.

2. Form No. 32 303 Change in Designation of 28/07/2009 Yes Not ApplicableMr. U. Y. Phadke as Directorw.e.f. 21st July, 2009

3. Compliance 383A Compliance Certificate issued by 28/7/2009 Yes Not ApplicableCertificate J.P. Fernandes, Company SecretaryForm No. 66 in Practice

4. Annual 220 The Annual Accounts for the year 28/7/2009 Yes Not ApplicableAccounts ended on 31st March, 2009Form No. 23AC adopted at the Annual Generaland Meeting of the Company held onForm No. 23ACA 21st July, 2009

5. Form No. 23 269, 198, For Appointment of Dr. Jaideep 20/8/2009 Yes Not Applicable309, 310, Devare as Managing Director311 of the Company by the Board of

Directors at their Meeting held on21st July, 2009, w.e.f.1st August, 2009to 31st December, 2011

6. Form No. 32 303 Appointment of Dr. Jaideep Devare as 21/8/2009 Yes Not ApplicableManaging Director of the Company bythe Board w.e.f. from 1st August, 2009

7. Annual Return 159 Annual Return as at 21st July, 2009 11/9/2009 Yes Not ApplicableForm No. 20B

8. Form No. 23 269, 198, For Appointment of Dr. Jaideep Devare 16/10/2009 Yes Not Applicable 309, 310, as the Managing Director of the311 Company by the shareholders at their

Meeting held on 8th October, 2009

9. Form No. 25C 269(2) For Appointment of Dr. Jaideep Devare 16/10/2009 Yes Not Applicableas the Managing Director of theCompany and remuneration payableto him

10. Form No. 5 95, 97 For increase in Authorised Share 10/2/2010 Yes Not ApplicableCapital of the Company fromRs. 1 crore to Rs. 2.5 crores

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Auditors’ Report

TO THE MEMBERS OF MAHINDRA INSURANCE BROKERS LIMITED

We have audited the attached Balance Sheet of M/s. MAHINDRAINSURANCE BROKERS LIMITED, as at 31st March, 2010and also the Profit and Loss Account and also the Cash FlowStatement for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those Standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003issued by the Central Government of India in terms of sub-Section(4A) of Section 227 of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in paragraphs4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, wereport that:

i) We have obtained all the information and explanations, whichto the best of our knowledge and belief were necessary forthe purpose of our audit;

ii) In our opinion, proper books of account as required by lawhave been kept by the Company so far as appears from ourexamination of those books and proper returns adequate forthe purposes of our audit have been received from thebranches not visited by us;

iii) The Balance Sheet, Profit and Loss Account and Cash FlowStatement dealt with by this report are in agreement withthe books of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by this report complywith the accounting standards referred to in sub-section (3C)of Section 211 of the Companies Act, 1956;

v) On the basis of written representations received from thedirectors, as on 31st March, 2010, and taken on record bythe Board of Directors, we report that none of the directorsis disqualified as on 31st March, 2010 from being appointedas a director in terms of clause (g) of sub-section (1) ofSection 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information andaccording to the explanations given to us, the said accounts,read together with the Companies Accounting Policies andthe Notes thereto, give the information required by theCompanies Act, 1956, in the manner so required and give atrue and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairsof the Company as at 31st March, 2010, and

(b) in the case of the Profit and Loss Account, of the profitfor the year ended on that date.

(c) in the case of the Cash Flow Statement, of the cashflows for the year ended on that date.

For B. K. Khare and Co.Chartered Accountants

Firm Registration No. 105102W

H. P. MahajaniPartner

Membership No. 30168

Mumbai, Dated: 15th April, 2010

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ANNEXURE TO THE AUDITORS’ REPORT

Annexure to the Auditor’s Report referred to in our report ofeven date

1 (a) The Company has maintained proper records showingfull particulars, including quantitative details andsituation of the fixed assets. These assets werephysically verified by the Management during the yearat reasonable intervals and no discrepancies were noticedon such verification.

(b) None of the fixed assets have been revalued during theyear.

(c) Fixed assets disposed off during the year were notsubstantial and therefore do not affect going concernstatus

2 The Company has no inventory and hence the requirementsof Para (ii) (a), (b) and (c) of the Order are not applicable.

3 Based on the records examined by us and according to theinformation and explanations given to us, in our opinion, theCompany has:

i) not granted any loans to parties covered in the Registermaintained under Section 301 of the Companies Act, 1956.

ii) not taken any loans from parties covered in the Registermaintained under Section 301 of the Companies Act,1956.

4 In our opinion and according to the information andexplanations given to us, there is an adequate internal controlsystem commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixedassets and for the sale of goods and services. We have notcome across any major weaknesses in internal control.

5 (a) According to the information and explanations given tous, the particulars of contracts or arrangements referredto in Section 301 of the Act have been entered in theregister required to be maintained under that Section.

(b) In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of such contracts or arrangements have beenmade at prices which are reasonable having regard to theprevailing market prices at the relevant time.

6 In our opinion and according to the information andexplanations given to us, the Company has not accepteddeposits from the public and therefore the provisions of Section58A, 58AA or any other relevant provisions of the CompaniesAct, 1956 and Rules thereunder are not applicable to theCompany.

7 In our opinion and according to the information andexplanations provided to us, the Company has an internalaudit system, which is commensurate with its size and natureof its business.

8 On facts, the requirements of Para 4 (viii) requiringmaintenance of cost records are not applicable in case of theCompany.

9 (a) According to the records of the Company and informationand explanations given to us, the Company has beenregular in depositing undisputed statutory dues with theappropriate authorities during the year.

(b) According to the records of the Company and informationand explanations given to us, as on 31st March, 2010,there were no disputed dues of sales tax/income tax/customduty/wealth tax/service tax/excise duty/cess.

10 The Company does not have accumulated losses as at the endof the current year. The Company has not incurred cash lossesin such financial year and in the immediately preceding financialyear.

11 Based on the records examined by us and according to theinformation and explanations given to us, the Company hasno dues to any financial institution or bank or debentureholders.

12 Based on the records examined by us and according to theinformation and explanations given to us, the Company hasnot granted any loans and advances on the basis of security byway of pledge of shares, debentures, or other securities.

13 The provisions of any special statute applicable to the ChitFunds, Nidhi or Mutual Benefit Fund/Society are notapplicable to the Company.

14 Based on the records examined by us and according to theinformation and explanations given to us, the Company is notdealing or trading in shares, securities, debentures and otherinvestments.

15 According to the information and explanations given to us, theCompany has not given any guarantee for loans taken byothers from banks or financial institutions.

16 Based on the records examined by us and according to theinformation and explanations given to us, the Company hasnot obtained any term loans.

17 Based on the records examined by us and according to theinformation and explanations given to us, funds raised on short-term basis have, prima facie not been used during the year forlong-term investment.

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18 The Company has not made any preferential allotment ofshares to parties and companies covered in the Registermaintained under Section 301 of the Act;

19 The Company has not issued debentures and hence therequirement of this clause is not applicable;

20 The Company has not raised money by any public issues andhence the question of disclosure and verification of end use ofsuch money does not arise.

21 To the best of our knowledge and belief and according to theinformation and explanations given to us, no fraud by theCompany and no material fraud on the Company was noticed

or reported during the year, although there have been fewinstances of misappropriations by some employees, theamounts whereof are not material in the context of its businessand which have been provided for.



H. P. MahajaniPartner



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BALANCE SHEETAS ON MARCH 31, 2010

(Figures in Rupees)Schedule MAR. 2010 MAR. 2009

SOURCES OF FUNDS:Shareholders’ Funds:Share Capital I 5,000,000 5,000,000Reserves and Surplus II 248,961,224 144,088,040

TOTAL 253,961,224 149,088,040

APPLICATION OF FUNDS:Fixed Assets: IIIGross Block 9,179,601 7,449,238Less: Accumulated Depreciation 3,030,641 1,924,763Net Block 6,148,960 5,524,475Current Assets, Loans & Advances: IV(a) Sundry Debtors 34,947,880 24,089,366(b) Cash and Bank balances 15,149,894 22,181,867(c) Other Current Assets 4,579,090 3,044,350(d) Loans and Advances 231,409,069 125,696,231

286,085,933 175,011,814Less: Current Liabilities and Provisions: V(a) Current Liabilities 8,047,954 6,793,975(b) Provisions 30,937,505 24,831,485

38,985,459 31,625,460Net Current Assets 247,100,474 143,386,354Deferred Tax Asset (net) 711,790 177,211TOTAL 253,961,224 149,088,040The Schedules referred to above form an integral part of the Balance Sheet.This is the Balance Sheet referred to in our report of even date.

For B. K. Khare & Co.Chartered Accountants

H.P. MahajaniPartnerMembership No. 30168


Uday Y. Phadke Chairman

Dr. Jaideep Devare Managing Director

Rajeev DubeyRamesh Iyer

DirectorsV. RaviHemant Sikka

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PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED MARCH 31, 2010


INCOME:Income from Operations (Gross, inclusive of TDS ofRs. 3,97,37,390/-; Previous Year: Rs. 4,12,84,330/-) VI 300,883,629 224,611,336Interest (Gross, inclusive of TDS of Rs. 11,91,602/-; Previous Year: Rs. 15,06,678/-) 12,605,750 6,856,882Other Income 117,387 0TOTAL INCOME 313,606,766 231,468,218EXPENDITURE:Financial Expenses 155,194 213,320Employee Cost VII 109,307,421 94,859,451Other Expenses VIII 34,527,555 33,765,182Depreciation & Amortisation 1,128,241 902,073Provisions & Write-Offs (net) IX 0 1,120,000TOTAL EXPENDITURE 145,118,411 130,860,026PROFIT BEFORE TAXATION: 168,488,355 100,608,192Less: Provision for Current Tax 58,300,000 35,000,000(Add)/Less: Provision for Deferred Tax (including for previous year/s) 534,579 363,305Less: Provision for Fringe Benefit Tax 0 1,317,017

57,765,421 35,953,712PROFIT AFTER TAXATION: 110,722,934 64,654,480Less: Income tax adjustment for earliers years (net) 0 (3,044)Add: Balance brought forward from earlier years 125,844,582 73,542,896AMOUNT AVAILABLE FOR APPROPRIATION 236,567,516 138,194,332APPROPRIATION:General Reserve 12,000,000 6,500,000Proposed Dividend (Interim) 0 5,000,000Corporate Dividend Tax (Interim) 0 849,750Proposed Dividend (Final) 5,000,000 0Corporate Dividend Tax (Final) 849,750 0Balance carried forward to Balance Sheet 218,717,766 125,844,582

236,567,516 138,194,332EARNINGS PER SHARE (Face Value Rs. 10/- per share) (Rupees)

Basic 221.45 129.30Diluted 221.45 129.30

Notes to the Accounts XThe Schedules referred to above form an integral part of the Profit & Loss Account.This is the Profit & Loss Account referred to in our report of even date.Examined and found correct








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SCHEDULES

SCHEDULE I (Figures in Rupees)MAR. 2010 MAR. 2009

SHARE CAPITAL:Authorised :

2,500,000 Equity Shares of Rs. 10 each 25,000,000 10,000,000(Previous Year: 1,000,000 shares)

Issued Subscribed & Paid up:500,000 Equity Shares of Rs. 10 each 5,000,000 5,000,000

(Previous Year: 500,000 shares)Total 5,000,000 5,000,000

Note: Mahindra & Mahindra Financial Services Limited, the Holding Company holds 500,000shares as on 31st March, 2010 (Previous Year: 500,000)(including 6 shares held jointly with nominees)

SCHEDULE IIRESERVES & SURPLUSGeneral Reserve:As per last Balance Sheet 18,243,458 11,743,458Add: Transfer during the period 12,000,000 6,500,000

30,243,458 18,243,458Balance in Profit & Loss Account 218,717,766 125,844,582Total 248,961,224 144,088,040

SCHEDULE IIIFIXED ASSETS

(Figures in Rupees)GROSS BLOCK AT COST DEPRECIATION NET BLOCK

Description of As at Additions Deductions As at Upto Additions Deductions Upto As at As atAssets 31.03.09 for for 31.03.10 31.03.09 /Trf /Trf 31.03.10 31.03.09 31.03.10

Purch/Trf Sale/Trf

Vehicles 2,622,860 1,285,429 — 3,908,289 387,687 314,489 — 702,176 2,235,173 3,206,113

Furniture 484,136 218,025 — 702,161 55,685 39,162 — 94,847 428,451 607,314

Office Equipment 817,534 104,689 — 922,223 188,332 134,450 — 322,782 629,202 599,441

Computers 3,524,708 181,400 59,180 3,646,928 1,293,059 640,140 22,363 1,910,836 2,231,649 1,736,092

Total 7,449,238 1,789,543 59,180 9,179,601 1,924,763 1,128,241 22,363 3,030,641 5,524,475 6,148,960

As at 31.03.2009 6,626,784 1,274,461 452,007 7,449,238 1,066,801 902,073 44,111 1,924,763 5,559,984 5,524,475

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SCHEDULE IV(Figures in Rupees)

MAR. 2010 MAR. 2009CURRENT ASSETS, LOANS & ADVANCES(A) Current Assets:

Interest accrued but not due - Others 4,579,090 3,044,350Sundry Debtors (Unsecured):— Debts outstanding for a period exceeding six months 67,449 1,058,941— Other Debts 35,130,431 23,280,425

35,197,880 24,339,366— Less: Provision for Doubtful Debts 250,000 250,000Sundry Debtors (considered good) 34,947,880 24,089,366Cash & Bank Balances:— Cash and Cheques on hand 234,781 202,358— Balance with Scheduled Banks in Current Account 13,915,113 20,979,509— Term Deposit with Scheduled Banks [earmarked as IRDA Deposit] 1,000,000 1,000,000

TOTAL (A) 54,676,864 49,315,583

(B) Loans and advances (unsecured, considered good):Inter Corporate Deposits Given 215,200,000 97,700,000Other Advances recoverable in cash or kind or for value to be received 11,327,121 7,298,740Advance Payment of Tax (net of provision)

4,881,948 20,697,491TOTAL (B) 231,409,069 125,696,231TOTAL CURRENT ASSETS, LOANS & ADVANCES (A + B) 286,085,933 175,011,814

SCHEDULE V

CURRENT LIABILITIES & PROVISIONS:Current Liabilities:Sundry Creditors 4,332,732 3,978,846TDS Payable 1,314,754 535,575Other Liabilities 2,400,468 2,279,554TOTAL (A) 8,047,954 6,793,975

Provisions:Proposed Dividend 5,000,000 0Corporate Dividend Tax 849,750 849,750Provision for Employee Benefits 25,087,755 23,981,735TOTAL (B) 30,937,505 24,831,485TOTAL CURRENT LIABILITIES & PROVISIONS (A + B) 38,985,459 31,625,460

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SCHEDULE VI (Figures in Rupees)

MAR. 2010 MAR. 2009

INCOME FROM OPERATIONS:Brokerage 141,567,650 122,760,179Handling Charges 159,315,979 101,851,157TOTAL 300,883,629 224,611,336

SCHEDULE VIIEMPLOYEE COST:Salary, Bonus & Incentives 102,925,239 88,833,809Company’s Contribution to P.F.& Other Funds 5,421,557 5,000,539Staff Welfare 960,625 1,025,103TOTAL 109,307,421 94,859,451

SCHEDULE VIIIOTHER EXPENSES:Rent 2,206,724 2,427,384Administration Support Charges 4,831,823 5,740,864Insurance 3,748,017 3,623,181Rates and Taxes 298,088 171,147Legal & Professional Charges 1,163,405 817,974Loss on Sale/Retirement of Owned Assets 13,118 2,895Travelling Expenses 7,811,028 8,452,387Auditors’ Remuneration:— Audit Fees 200,000 200,000— Other Services 90,000 0Donations 250,000 70,857General & Administrative Expenses 13,915,352 12,258,493TOTAL 34,527,555 33,765,182

SCHEDULE IXPROVISIONS & WRITE-OFFS:Advances written-off 0 1,120,000TOTAL 0 1,120,000

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SCHEDULE X

NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010

SIGNIFICANT ACCOUNTING POLICIES (SAP):

1. Basis for Preparation of Accounts:

The accounts have been prepared to comply in all the material aspects with applicable accounting principles in India, the AccountingStandards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.

2. Revenue Recognition:

i) General:

The Company follows the accrual method of accounting for its income and expenditure.

ii) Brokerage Income:

Brokerage Income is recognised on accrual basis when services are rendered and is net of Service Tax.

iii) Handling Charges Income:

Handling Charges income is recognised on accrual basis when services are rendered and is net of Service Tax.

3. Share Issue Expenses:

Expenses incurred in connection with fresh issue of share capital are charged to the Profit & Loss Account in the year in which they areincurred.

4. Fixed Assets:

Fixed Assets are stated at cost of acquisition (including incidental expenses), less depreciation.

5. Depreciation:

Depreciation on fixed assets is charged using the Straight Line method at rates specified in Schedule XIV to the Companies Act, 1956,except for Office Equipment on which depreciation is charged at the rate of 16.21% instead of 4.75% as prescribed in Schedule XIV.Individual assets costing less than Rs. 5000/- are written off in the year of purchase.

6. Employee Benefits:

(a) Contributions during the year to the Government administered Provident Fund, Family Pension Fund, ESIC and Labour WelfareFund under defined contribution plans are charged to the Profit & Loss Account on accrual basis. Contributions during the yeartowards Superannuation to the Mahindra & Mahindra Financial Services Limited Employees’ Superannuation Trust administeredby Life Insurance Corporation of India are recognised in the Profit & Loss Account as incurred.

(b) The Company has a defined benefit gratuity plan which is funded with LIC under a Group Gratuity cum Life Assurance (CashAccumulation) Policy. Every employee who has completed five years or more of service is entitled to post-employment gratuityat specified rates. Gratuity liability is measured by actuarial valuation and is recognised on accrual basis. Estimates of future salaryincreases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supplyand demand in the employment market.

(c) The amount of employee benefit in the form of compensated absences being in the nature of short-term benefits in view of pasttrend of settlement thereof, is accounted for on accrual basis at undiscounted value.

7. Segment Reporting:

The Company has single reportable segment namely insurance auxiliary services for the purpose of Accounting Standard 17 on SegmentReporting.

8. Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subject toconsideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbeddepreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincingevidence that sufficient future tax income will be available against which such deferred tax assets can be realised.

9. Provisions and Contingent Liabilities:

Provisions are recognised in accounts in respect of present probable obligations, the amount of which can be reliably estimated.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed only bythe occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

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NOTES TO THE ACCOUNTS:

1. In the opinion of the Board, Current Assets, Loans & Advances are approximately of the value stated if realised in the ordinary courseof business.

2. The Company earns brokerage from several insurance companies. The accounts of these insurance companies remain underreconciliation and are subject to confirmation. The Company does not expect any significant variation in the book balances.

3. Related Party Disclosure as per Accounting Standard 18:

List of the related parties:

Holding Companies:

Mahindra & Mahindra Financial Services Limited

Mahindra & Mahindra Limited*

Fellow Subsidiary Companies: As per list given below

Mahindra First Choice Services Limited Mahindra Business & ConsultingServices Private Limited

Mahindra Rural Housing Finance Limited

Key Management Personnel:

Managing Director Dr. Jaideep Devare

Related Parties Transactions are as under (Figures in Rupees)

Sr. Nature of transactions Holding Fellow KeyNo. Companies* Subsidiary Management

Companies Personnel1. Income

Interest (Gross) 94,38,096 24,63,834 —(65,96,455) (52,603) —

Handling Charges(Net of Service Tax) 15,79,28,047 13,87,932 —

(10,18,32,934) (18,223) —2. Expense

Other Expenses(Net of Service Tax) 53,35,665 8,21,524 29,34,465

(63,82,813) — (6,16,542)3. Deputation Charges paid

To Related Parties(Net of Service Tax) 6,48,067 — —

(5,32,374) — —4. Finance

Inter-Corporate Deposits given 16,52,00,000 5,00,00,000 —(7,77,00,000) (2,00,00,000) —

Dividends Paid (for current year) — — —(50,00,000) — —

5. Other TransactionsPurchase of Fixed Assets — — —

(8,24,253) — —Sale of Fixed Assets — — —

— (3,90,000) —6. Outstandings

Receivables 2,49,08,246 15,76,294 —(1,91,46,777) (61,158) —

Payables 9,25,111 4,16,676 —(18,07,102) — —

Amounts in brackets represent amounts pertaining to previous financial year

* Mahindra Insurance Brokers Limited is a 100% subsidiary of Mahindra & Mahindra Financial Services Limited, which in turn is asubsidiary of Mahindra & Mahindra Limited.

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4. Expenditure incurred in Foreign Currency – Rs. 1,08,896/- (Previous Year: Rs. Nil/-)

Travelling Expenses – Rs. 1,08,896/- (Previous Year:– Rs. Nil/-)

5. In accordance with the provisions of Accounting Standard – 15 (revised) issued by the Institute of Chartered Accountants of India, costof employee benefits in the form of compensated absences for the period ended 31st March, 2010 is Rs. 12,99,645/- (Previous Year:Rs. 11,45,044/-) and has been recognised in the Profit & Loss Account as such. The Present Value of obligation on account of suchcompensated absences is Rs. 42,18,747/- (Previous Year: Rs. 29,19,102/-) as on 31st March, 2010.

6. Defined Employee Benefits:

(Figures In Rupees)

GRATUITY - Fully Funded MAR. 2010 MAR. 2009

I Change in Obligation during the period ended 31st March, 2010

1. Present value of obligation as the

beginning of the year 1,569,335 1,140,183

2. Interest Cost 150,864 110,135

3. Current Service Cost 2,094,294 1,847,529

4. Actuarial (Gain)/Loss on obligations (1,506,124) (1,528,512)

5. Benefits Paid 0 0

6. Present Value of Defined Benefit

Obligation at the end of the year 2,308,369 1,569,335

II Change in Assets during the period ended 31st March, 2010

1. Plan Assets at the beginning of the year 2,354,595 1,336,281

2. Expected return on plan assets. 187,580 106,904

3. Contributions by Employer 650,000 937,734

4. Actual benefits paid 0 0

5. Actual Gain/(Losses) (187,580) (26,324)

6. Plan Assets at the end of the year 3,004,595 2,354,595

III Net Asset/(Liability) recognised in the Balance Sheet as at 31st March, 2010

1. Present Value of Defined Obligation

as at 31st March, 2010 2,308,369 1,569,335

2. Fair Value of plan assets as at 31st

March, 2010 3,004,595 2,354,595

3. Fund status (Surplus/(Deficit)) 696,226 785,260

4. Net Assets/(Liability) as at 31st March, 2010 696,226 785,260

IV Expenses recognised in the statement of Profit and Loss for theperiod ended 31st March, 2010

1. Current Service cost 2,094,294 1,847,529

2. Interest Cost 150,864 110,135

3. Expected return on Plan Assets (187,580) (106,904)

4. Net Actuarial (Gains)/Losses (Net of Opening Actuarial Gain/(Loss) adjustment) (1,318,544) (1,467,522)

5. Expenses recognized in statementof Profit & Loss 739,034 383,238

V The Major Categories in Plan Assets as a percentage of total plan

1. Insurer Managed Funds – Life

Insurance Corporation of India 100% 100%

VI Method of Valuation Projected Unit Credit Method

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VII Actuarial Assumption1. Discount Rate 8% 8%2. Expected rate of return on plan assets 8% 8%3. Mortality Table LIC (1994-96) LIC (1994-96)

ULTIMATE ULTIMATE4. Salary Increment Rate 5% 5%5. Retirement Age 60 Years 60 Years6. Withdrawal Attrition rate of 1% upto

the age of 30 Years

7. The holding company, Mahindra & Mahindra Financial Services Limited (MMFSL), has incurred cost of Rs. 1,19,010/- (Previous Year:Rs. 1,91,396/-) when issuing Employee Stock Options (ESOS) to employees of the Company.

8. Earnings per Share:

MAR. 2010 MAR. 2009

Amount used as numerator – Balance of Profit after Tax available for shareholders (Rs.) 11,07,22,934 6,46,51,436

Weighted average number of equity shares used in computing basic earnings per share 500,000 500,000

Weighted average number of equity shares used in computing diluted earnings per share 500,000 500,000

Basic earnings per share (Rs.) (Face value of Rs. 10 per share) 221.45 129.30

Diluted earnings per share (Rs.) 221.45 129.30

9. In accordance with Accounting Standard 22 on Accounting for Taxes on Income the Company has accounted for Deferred Tax Asset ofRs. 7,11,790/- (Previous Year: Rs. 1,77,211/-) as at 31st March, 2010. The break up of the Deferred Tax Asset as at 31st March, 2010is as under:

(Figures in Rupees)

Particulars Deferred Tax DeferredTaxAsset/(Liability) Asset/(Liability)

MAR. 2010 MAR. 2009

Provision for Doubtful Debts 84,975 84,975

Depreciation (6,04,480) (6,67,047)

Gratuity (2,36,647) (2,66,910)

Leave Encashment 14,33,952 9,92,203

Bonus and Incentive 33,990 33,990

Total 7,11,790 1,77,211

10. There are no dues payable to Small Scale industrial undertakings in view of the nature of the business of the Company.

11. Suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006, have not furnished the informationregarding filing of necessary memorandum with appointed authority. In view of this and legal opinion obtained by the Company,information required under Section 22 of the said Act is not given.

12. Dr. Jaideep Devare was appointed whole-time director of the Company w.e.f. 1st January, 2009. He was re-designated as ManagingDirector w.e.f. 1st August, 2009.

(Figures in Rupees)

GRATUITY - Fully Funded MAR. 2010 MAR. 2009

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Managerial Remuneration for Whole-time Director:(Figures in Rupees)

MAR. 2010 MAR. 2009(a) Salaries (Including Company’s Contribution to Provident Fund) 41,34,703 9,20,660(b) Perquisites 1,93,107 1,861

43,27,810 9,22,521

Note: The above figures do not include contribution to Gratuity Fund as separate figures are not available for the whole time Director.

Computation of Net Profit in Accordance with Section 309(5) of the Companies Act, 1956:

(Figures in Rupees)

MAR. 2010 MAR. 2009Profit before Taxation as per Profit and Loss Account 16,84,88,355 10,06,08,192Add:

i) Depreciation charged in the Accounts 11,28,241 9,02,073ii) Directors’ Remuneration 43,27,810 9,22,521

iii) Loss of Capital Nature (including sale of fixed assets/write-off of capital advances)debited to Profit & Loss Account (Net) 13,118 11,22,895

iv) Donations debited to Profit & Loss Account 2,50,000 70,85757,19,169 30,18,346

17,42,11,634 10,36,35,688Less:

i) Depreciation u/s 350 of the Companies Act, 1956 10,33,188 8,39,000ii) Lower of Donations permissible u/s 293(1)(e) and amount actually donated 2,50,000 70,857

12,83,188 9,09,857Net Profit as per Section 309(5) 17,29,24,335 10,27,16,681

13. Previous year’s figures have been regrouped wherever necessary.

Signatures to shedule I to X








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CASH FLOW STATEMENTFOR THE YEAR ENDED MARCH 31, 2010

(Figures in Rupees)

MAR. 2010 MAR. 2009

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxes and contingencies 168,488,355 100,608,192

Add / (Less):

Depreciation & Amortisation 1,128,241 902,073

Interest Income (12,605,750) (6,856,882)

Provision for Doubtful Debts / Advances Written-off (net) — 1,120,000

(Profit) / Loss on sale / retirement of assets 13,118 2,895

Operating profit before working capital changes (I) 157,023,964 95,776,278

Less:

(Increase)/Decrease in Trade receivables (10,858,513) 5,371,770

(Increase)/Decrease in Loans & Advances (4,028,382) (927,517)

(14,886,895) 4,444,253

Add: Increase/(Decrease) in Current liabilities 2,359,999 6,946,217

(II) (12,526,896) 11,390,470

Cash generated from operations (I + II) 144,497,068 107,166,748

Income Taxes paid (42,484,457) (47,755,882)

NET CASH FROM OPERATING ACTIVITIES (A) 102,012,611 59,410,866

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (1,789,543) (1,274,461)

Sale of fixed assets 23,700 405,001

Interest received 11,071,009 4,902,275

Inter-Corporate Deposits Placed (117,500,000) (45,000,000)

NET CASH FROM INVESTING ACTIVITIES (B) (108,194,834) (40,967,185)

C. CASH FLOW FROM FINANCING ACTIVITIES

Dividends paid (849,750) (5,000,000)

NET CASH FROM FINANCING ACTIVITIES (C) (849,750) (5,000,000)

NET INCREASE / (DECREASE) IN

CASH AND CASH EQUIVALENT (A + B + C) (7,031,973) 13,443,682

CASH AND CASH EQUIVALENTS AS AT:

Beginning of the period 22,181,867 8,738,186

End of the period 15,149,894 22,181,867

Examined and found correct








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ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF

SCHEDULE VI TO THE COMPANIES ACT, 1956.

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details

Registration No. 1 1 - 4 2 6 0 9 State Code 1 1

Balance Sheet 3 1 0 3 2 0 1 0

Date Month Year

II. Capital Raised during the year (Amount in Rs. Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

2 5 3 9 6 1 2 5 3 9 6 1

Sources of Funds

Paid-up Capital Reserves & Surplus

5 0 0 0 2 4 8 9 6 1

Secured Loans Unsecured Loans

N I L N I L

Application of FundsNet Fixed Assets Intangible Assets

6 1 4 9 N I L

Investments Net Current Assets

N I L 2 4 7 1 0 0

Miscellaneous Expenditure Accumulated Losses

N I L N I L

Deferred Tax Asset (Net)

7 1 2

IV. Performance of the Company (Amount in Rs. Thousands)

Turnover Total Expenditure

3 1 3 6 0 6 1 4 5 1 1 8

+ – Profit/Loss Before Tax + – Profit/Loss After Tax

1 6 8 4 8 8 1 1 0 7 2 3

Earning per share in Rs. Dividend Rate %

2 2 1 . 4 5 1 0 0

V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code) N I L

Product Description I N S U R A N C E

A U X I L I A R Y S E R V I C E S




DirectorsV. RaviHemant SikkaMumbai, 15th April, 2010

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DIRECTORS’ REPORT

OPERATIONS

In the third year of its Operations your Company has disbursedincremental loans aggregating Rs.90.6 crores (previous year Rs.43.4 crores), covering over 5,700 families. The profit after tax forthe year ended 31st March, 2010, was Rs. 2.2 crores (previousyear loss of Rs. 0.8 crores). The outstanding loan portfolio as at31st March, 2010 stood at Rs. 129.8 crores.

Your Company was successful in establishing its presence in theHousing Finance sector, by leveraging the branch network of itsparent company, Mahindra & Mahindra Financial Services Limitedduring the year under review. During the year, operations werestrengthened in the states of western and southern India. In additionto this, the Company launched its operations in Madhya Pradesh.

The housing loans sanctioned during the year ended 31st March,2010 were to the extent of Rs. 107.2 crores as against Rs. 52.9crores sanctioned during the previous year. The cumulative loanssanctions of your Company as at the end of financial year2009-10 was Rs. 163.2 crores as compared to Rs. 56.7 crores inthe previous year. The cumulative loan disbursement at the end ofthe year stood at Rs. 137.0 crores as compared toRs. 46.4 crores in the previous year.

DIVIDEND

Your Directors recommend a dividend of Re. 0.10 per fully paid-upequity share on 57,14,285 fully paid-up equity shares of Rs.10each, and on a pro-rata basis on 3,99,99,995 partly paid-up equityshares of the face value of Rs.10 each, Rs.2 per share paid-up,

DIRECTORS' REPORT TO THE SHAREHOLDERS

Your Directors present their Third Report together with the audited accounts of your Company for the year ended 31st March, 2010.The summarized financial results of the Company are given below:

FINANCIAL RESULTS In Rupees

March 2010 March 2009

Total Income 16,30,20,546 4,82,22,089

Less : Finance Costs 5,21,03,108 1,83,94,877

Expenditure 8,50,95,874 3,71,48,703

Depreciation / Amortisation 6,15,057 1,16,284

Total Expenses 13,78,14,039 5,56,59,864

Profit / (Loss) Before Tax 2,52,06,507 (74,37,775)

Less : Provision For Tax

Current Tax (net of MAT credit entitlement) 48,00,000 —

Deferred Tax (14,06,664) 1,97,615

Fringe Benefit Tax — 3,28,000

Profit / (Loss) After Tax for the Year 2,18,13,171 (79,63,390)

Add / (Less) : Profit / (Loss) brought forward from Previous Years (1,39,29,454) (59,66,063)

Amount available for Appropriation 78,83,718 (1,39,29,454)

Appropriations:

Statutory Reserve 55,21,638 —

Proposed dividend on equity shares 13,71,429 —

Income-tax on proposed dividend 2,33,075 —

Surplus / (Loss) carried to Balance Sheet 7,57,576 (1,39,29,454)

78,83,718 (1,39,29,454)

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aggregating Rs.0.14 crores. The above dividend, if declared, will bepaid to those Members whose names appear in the Register ofMembers as on the Record Date fixed for this purpose.The dividend including dividend distribution tax, surcharge andeducation cess will absorb a sum of Rs. 0.16 crores.

FINANCE

During the year under review, your Company has availed of atotal sanction of Refinance Assistance from National HousingBank (NHB) of Rs. 75.0 crores. As on 31st March, 2010 refinanceoutstanding from NHB amounted to Rs. 62.5 crores.

As part of its Liability Management, your Company endeavoursto achieve an appropriate maturity structure. During the year underreview, Term loans of Rs.10 crores were availed from bank(s).

During the year under review, Credit Analysis & Research Limited(CARE) has upgraded the Issuers rating assigned to your Companyfrom 'CARE BBB- (Is)' (Triple B Minus (Issuer)) to'CARE BBB+(Is)' (Triple B Plus (Issuer)). Issuers with this ratingare considered to offer moderate safety for timely servicing ofdebt obligations. Such issuers carry moderate credit risk.

CAPITAL ADEQUACY

As at 31st March, 2010, the Capital to Risk Asset Ratio (CRAR) ofyour Company was 17.6 per cent as against the minimum require-ment of 12.0 per cent stipulated by the National Housing Bank (NHB).

NON PERFORMING ASSETS AND PROVISIONS FORCONTINGENCY

Your Company scrupulously adhered to the prudential guidelinesfor Non Performing Assets (NPAs), issued by the NationalHousing Bank (NHB) under its Housing Finance Companies(NHB) Directions, 2001, as amended from time to time.Your Company has made adequate provision for the assets onwhich installments are overdue for more than 90 days and onother assets, as required.

INSURANCE PROTECTION TO BORROWERS

Your Company has tied up with Kotak Mahindra Old MutualLife Insurance Limited and Cholamandalam MS General InsuranceCompany Limited for insuring its housing loan product calledSampoorna Suraksha Plan which covers the borrowers of theCompany.

HUMAN RESOURCES AND TRAINING

The ever changing demands of the evolving economy necessitatecompanies to appreciate the importance of Human Resources(HR). In the current scenario, an organization requires a moresophisticated approach for managing and developing human capital,which gives your Company the desired competitive advantage tosurvive in the long run.

Your Company took a number of initiatives to strengthen humanresources during the year. Focussed development programmes wereinitiated to build managerial and functional skills across variouslevels of your Company with a focus particularly on Branchpersonnel. Specific interventions were initiated to improve several

HR practices in the organization. Your Company also conductedvarious training programmes for the employees across all thebranches in order to develop their skills. Your Company alsosponsored its employees to attend programmes conducted by variousorganizations and institutions, including National Housing Bank soas to update their knowledge and to keep them abreast of all thedevelopments in their respective fields.

KNOW YOUR CUSTOMER (KYC) GUIDELINES, ANTIMONEY LAUNDERING (AML) STANDARDS AND FAIRPRACTICES CODE

NHB has issued comprehensive KYC and AML guidelines in thecontext of recommendations made by the Financial Action TaskForce on Anti Money Laundering Standards and on CombatingFinancing of Terrorism Standards. During the year, the Companyhas adhered to the KYC and AML guidelines and has compliedwith the requirements of monitoring and reporting cash/suspicioustransactions.

The Fair Practices Code framed by NHB seeks to promote goodand fair practices by setting minimum standards in dealing withcustomers, increase transparency for customers to have a betterunderstanding of what they can reasonably expect of the servicesbeing offered, encourage market forces through competition toachieve higher operating standards, promote fair and cordialrelationship between customers and the housing finance companyand foster confidence in the housing finance system. During theyear, your Company has framed and adhered to the Fair PracticesCode as approved by the Board of Directors.

NATIONAL HOUSING BANK GUIDELINES

Your Company is in compliance with the various Guidelines issuedby the National Housing Bank (NHB) from time to time. TheCirculars and the Notifications issued by NHB are also placedbefore the Board at regular intervals.

DIRECTORS

Mr. Ramesh Iyer retires by rotation and, being eligible, offershimself for re-appointment.


Pursuant to section 217(2AA) of the Companies Act, 1956, yourDirectors, based on the representation received from the OperatingManagement, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicableaccounting standards have been followed;

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

iii) proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the

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assets of the Company and for preventing and detecting fraudand other irregularities;

iv) the annual accounts have been prepared on a going concernbasis.

AUDIT COMMITTEE

The Audit Committee of the Board presently comprisesMr. Uday Y. Phadke (Chairman of the Committee), Mr. RameshIyer and Mr. V. Ravi. The Audit Committee met once during theyear under review.

REMUNERATION COMMITTEE

The Remuneration Committee of the Board comprises Mr. UdayY. Phadke, Mr. Ramesh Iyer and Mr. V. Ravi. The RemunerationCommittee met once during the year under review.

ASSET LIABILITY COMMITTEE

The Asset Liability Committee (ALCO) of the Board comprisingMr. Uday Y. Phadke, Mr. Ramesh Iyer and Mr. V. Ravi wasconstituted at the Meeting of the Board of Directors held on 16thJanuary, 2010.

It reviews the working of the Asset Liability Operating Committee,its findings and reports in accordance with the guidelines of theNational Housing Bank.

AUDITORS

Messrs. B. K. Khare & Co., Chartered Accountants, retire asAuditors of the Company at the forthcoming Annual GeneralMeeting, and have given their consent for re-appointment.TheShareholders will be required to elect Auditors for the currentyear and fix their remuneration.

As required under the provisions of section 224 (1B) of theCompanies Act, 1956, the Company has obtained a writtencertificate from Messrs. B.K. Khare & Co., Chartered Accountantsto the effect that their re-appointment, if made, would be inconformity with the limits specified in the said section.

PUBLIC DEPOSITS AND LOANS/ADVANCES

The Company has not accepted deposits from the public or itsemployees during the year under review.

The Company has not made any loans/advances of the naturewhich are otherwise required to be disclosed in the annual accountsof the Company pursuant to Clause 32 of the Listing Agreementof the parent Company - Mahindra & Mahindra Financial ServicesLimited and the ultimate parent company- Mahindra & MahindraLimited, with the Stock Exchanges.

CODES OF CONDUCT

The Company had adopted Codes of Conduct for CorporateGovernance ("the Codes") for its Directors and Senior Managementand Employees. These Codes enunciate the underlying principlesgoverning the conduct of the Company's business and seeks toreiterate the fundamental precept that good governance must andwould always be an integral part of the Company's ethos.

The Company has for the year under review, received declarationsunder the Codes from the Board Members and the SeniorManagement and Employees of the Company affirming compliancewith the respective Codes.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO

The particulars relating to the energy conservation, technologyabsorption and foreign exchange earnings and outgo, as requiredunder section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 are given in Annexure I to this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDERSECTION 217(2A) OF THE COMPANIES ACT, 1956 ANDRULES MADE THEREUNDER

As required under section 217(2A) of the Companies Act, 1956and Rules thereunder, a statement containing particulars of theCompany's employee who was in receipt of remuneration of notless than Rs.24,00,000 during the year ended 31st March, 2010or not less than Rs.2,00,000 per month during any part of thesaid year is given in Annexure II to this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record theirsincere appreciation to National Housing Bank, the Company'scustomers, bankers, shareholders and employees for the supportreceived from them during the year under review.




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ANNEXURE I TO THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010.

A. CONSERVATION OF ENERGY

a) Energy Conservation measures taken: The operations of your Company are not energy-intensive. However, adequate measureshave been initiated to reduce energy consumption.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil

c) Impact of the measures taken/to be taken at (a) & (b) above for reduction of energy consumption and consequent impact onthe cost of production of goods: These measures are expected to reduce the energy consumption.

d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules inrespect of Industries specified in the Schedule: Not Applicable

B. TECHNOLOGY ABSORPTION


1. Areas in which R & D is carried out : None

2. Benefits derived as a result of the above efforts : Not Applicable





C. FOREIGN EXCHANGE EARNINGS AND OUTGOThere were no foreign exchange earnings or outgo during the year under review.


Uday Y. PhadkeMumbai, 15th April, 2010 Chairman

ANNEXURE II TO THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956, READ WITHTHE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS' REPORT FORTHE YEAR ENDED 31ST MARCH 2010.

Name of Designation/ Gross Qualifications Experience Age Date of Last EmploymentEmployee Nature of Remuneration (Years) (Years) Commencement held, Designation

Duties (subject to of Employment and Organisationincome tax)

Mr. Anuj Mehra Manager 4,479,102 Bachelor in 26 49 1st March, 2009 Vice President -Economics, Marketing

P.G.D.M., I.I.M. Mahindra Lifespace(Ahmedabad) Developers Limited

Notes:1. Nature of employment is permanent, subject to termination on one month's notice on either side.2. The above employee is not a relative of any Director of the Company.3. The above employee does not hold by himself or along with his spouse and dependent children 2% or more of the equity shares

of the Company.4. Terms and conditions of employment are as per Company's Rules/contract.5. Gross remuneration received as shown in the statement includes Salary, Bonus, House Rent Allowance or value of perquisites for

accommodation, car perquisites value/allowances applicable, employer's contribution to Provident Fund, Superannuation schemeand Gratuity Fund including group insurance premium, leave travel facility, reimbursement of medical expenses and all allowances/perquisites and terminal benefits as applicable.


Uday Y. PhadkeMumbai, 15th April, 2010 Chairman

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Auditors’ Report

TO THE MEMBERS OF MAHINDRA RURAL HOUSING FINANCE LIMITED

We have audited the attached Balance Sheet of M/S. MAHINDRARURAL HOUSING FINANCE LIMITED, as at 31 March 2010and also the Profit and Loss Account and Cash Flow Statementfor the year ended on that date annexed thereto. These financialstatements are the responsibility of the Company's management.Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. These Standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act, 1956, as amendedfrom time to time, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.


(i) We have obtained all the information and explanations, whichto the best of our knowledge and belief were necessary forthe purpose of our audit;

(ii) In our opinion, proper books of account as required by lawhave been kept by the company so far as appears from ourexamination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash FlowStatement dealt with by this report are in agreement withthe books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by this report complywith the accounting standards referred to in sub-section (3C)of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from thedirectors, as on 31st March, 2010, and taken on record bythe Board of Directors, we report that none of the directorsis disqualified as on 31st March, 2010 from being appointedas a director in terms of clause (g) of sub-section (1) ofsection 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information andaccording to the explanations given to us, the said accountsread together with the Company's Accounting Policies andthe Notes thereto, give the information required by theCompanies Act, 1956, in the manner so required and give atrue and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairsof the Company as at 31st March, 2010, and


(c) in the case of the Cash Flow Statement, of the cashflows for the year ended as on that date.



Padmini Khare KaickerPartner



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Annexure to the Auditor's Report referred to in our reportof even date:

1. i. The company is maintaining proper records showingfull particulars, including quantitative details andsituation of fixed assets.

ii. Fixed assets have been physically verified by themanagement during the year. In our opinion,management's program of verification provides forphysical verification of all fixed assets at reasonableintervals. No material discrepancies were noticed onsuch verification.

iii. No fixed assets were disposed off during the year.

2. Clause 4(ii) of Companies (Auditor's Report) Order, 2003is not applicable to the Company.

3. i In our opinion and according to the information andexplanations provided to us, during the period,Company has not granted any loans to parties coveredunder section 301 of the Companies Act, 1956.

ii During the period, Company has not taken anyunsecured loans from the parties covered in the registermaintained under section 301 of the CompaniesAct, 1956.

4. In our opinion and according to the information andexplanations given to us the company is having an adequateinternal control system commensurate with the size andthe nature of its business, for the purchase of fixed assetsand sale of services. The activities of the company do notinvolve purchase of inventory and sale of goods. No majorweaknesses in internal control system were noticed in thecourse of our audit.

5. i. In our opinion and according to the information andexplanations given to us all the particulars of contractsand arrangements referred in section 301 of the Acthave been entered in the register required to bemaintained under that section.

ii. In our opinion and according to the information andexplanations given to us each of these transactions inrespect of any such parties during the financial periodhave been made at prices, which are reasonable, havingregard to the prevailing market prices at the relevanttime.

6. In our opinion and according to the information andexplanations given to us, provisions of sections 58A, 58AAand any other relevant provisions of the Act and the rulesframed there under, in respect of deposits accepted fromthe public are not applicable to the company.

7. In our opinion and according to the information andexplanations provided to us the company has an internalaudit system, which is commensurate with its size andnature of its business.

8. In respect of the activities of the company, maintenance ofcost records has not been prescribed by the CentralGovernment under clause (d) of sub-section (1) of section209 of the Act.


9. i On the basis of our examination of books of accountsand according to the information and explanationsgiven to us the company is regular in depositingundisputed statutory dues including Provident Fund,Investor Education and Protection Fund, Employees'State Insurance, Income-tax, Sales-tax, Wealth Tax andService Tax, cess and other applicable statutory dueswith the appropriate authorities.

ii There are no disputed tax dues remaining to bedeposited with the relevant authority.

10. On the basis of our examination of books of accounts anddocuments and according to the information andexplanations given to us the company has not defaulted inrepayment of dues to any financial institution or bank ordebenture holders.

11. From the examination of books of accounts and accordingto the information and explanations provided to us, thecompany has not granted any loans or advances on thebasis of security by way of pledge of shares, debenturesand other securities.

12. The company is not a Chit Fund, Nidhi, Mutual BenefitFund or a Society.

13. The company is not dealing or trading in shares, securities,debentures or any other investments.

14. In our opinion and according to the information andexplanations given to us the company has not given anyguarantee for loans taken by others from bank or financialinstitutions, the terms and conditions whereof are prejudicialto the interest of the company.

15. In our opinion and according to the information andexplanations given to us, during the year term loans wereapplied for the purpose for which the loans were obtained.

16. On the basis of overall examination of the financialstatements and other financial information furnished, wereport that the company has not used short-term funds forlong-term investments.

17. During the period, no preferential allotment of shares wasmade to any of the entities covered in the register maintainedunder section 301 of the Companies Act, 1956.

18. The Company has not issued any secured debentures.

19. During the period, company has not made any public issueof its equity shares.

20. To the best of our knowledge and belief and according tothe information and explanations given to us, no fraud bythe Company and no material fraud on the Company werenoticed or reported during the year.

For B.K.Khare and Co.Chartered Accountants



Membership No. 44784Mumbai, Dated: 15th April, 2010

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BALANCE SHEETAS ON MARCH 31, 2010


SOURCES OF FUNDS :Shareholders' Funds :Capital I 137,142,840 137,142,840Reserves & Surplus II 6,279,214 —

143,422,054 137,142,840Loan Funds :Secured Loans III 837,500,000 150,000,000Unsecured Loans IV 287,900,000 178,100,000

1,125,400,000 328,100,000TOTAL 1,268,822,054 465,242,840

APPLICATION OF FUNDS :Fixed Assets : VGross Block 4,458,845 797,344Less : Depreciation 740,969 125,913Net Block 3,717,876 671,431Deferred Tax Asset (Refer Notes to the Accounts - 6) 1,406,664 —Current Assets, Loans & Advances : VI(a) Cash & Bank Balances 6,191,194 6,668,118(b) Other Current Assets & Deposits 2,645,364 614,315(c) Loans & Advances 1,298,335,971 453,584,273

1,307,172,529 460,866,707Less : Current Liabilities and Provisions :(a) Current Liabilities VII 25,453,375 7,509,279(b) Provisions VIII 18,021,640 2,715,473Net Current Assets 1,263,697,514 450,641,955Profit & Loss Account (Dr.) — 13,929,454TOTAL 1,268,822,054 465,242,840The Schedules referred to above form an integral part of the Balance Sheet.This is the Balance Sheet referred in our report of even date.


Padmini Khare KaickerPartnerMembership No. 44784 Anuj Mehra Binal ThakkerMumbai, 15th April, 2010 Chief Executive Officer Company Secretary


Ramesh IyerV. Ravi DirectorsK. Muralidharan

}

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}


INCOME :Income from Operations IX 162,988,450 45,911,787Other Income X 32,096 2,310,302TOTAL INCOME 163,020,546 48,222,089EXPENDITURE :Financial Expenses XI 52,103,108 18,394,877Employee cost XII 52,522,941 17,878,165Other Expenses XIII 29,775,670 19,270,538Depreciation XIV 615,057 116,284Provisions & Write Off's XV 2,797,263 —TOTAL EXPENDITURE 137,814,039 55,659,864PROFIT / (LOSS) BEFORE TAXATION : 25,206,507 (7,437,775)Less: Current tax 5,000,000 —Less: MAT credit entitlement (200,000) —

4,800,000 —Add/(Less): Deferred Tax (Refer Notes to the Accounts - 6) (1,406,664) 197,615Less : Provision for Fringe Benefit Tax — 328,000PROFIT AFTER TAXATION : 21,813,171 (7,963,390)Add : Balance brought forward from earlier years (13,929,454) (5,966,063)AMOUNT AVAILABLE FOR APPROPRIATION 7,883,718 (13,929,454)APPROPRIATION :Statutory Reserve 5,521,638 —Proposed Dividend on Equity Shares (Final) 1,371,429 —Corporate Dividend Tax on Equity Shares (Final) 233,075 —Balance Profit / (Loss) carried to Balance Sheet 757,576 (13,929,454)

7,883,718 (13,929,454)EARNINGS PER SHARE (Refer Notes to the Accounts - 5):(Face Value of Rs.10 per share) (Rupees)

Basic 1.59 (1.07)Diluted 1.59 (1.07)

Notes on Accounts : XVIThe Schedules referred to above and attached notes form an integral part of the Profit & Loss Account.This is the Profit & Loss referred to in our report of even date.

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SCHEDULE I (Figures in Rupees)

MAR. 2010 MAR. 2009

SHARE CAPITAL :

Authorised :

5,00,00,000 Equity shares of Rs.10/- each

(Previous Year 5,00,00,000 equity shares of Rs. 10/- each) 500,000,000 500,000,000

Issued Share Capital :

4,57,14,280 Equity shares of Rs.10/- each 137,142,840 137,142,840(Previous Year 4,57,14,280 equity shares of Rs.10/- each)

Subscribed and Paid-up :

57,14,285 Equity shares of Rs.10/- each fully paid up and 137,142,840 137,142,8403,99,99,995 Shares are partly paid of Rs 2 /- each

(Previous Year 57,14,285 shares of Rs. 10/-each fully paid up and 3,99,99,995 shares arepartly paid of Rs 2 /-)

Total 137,142,840 137,142,840

NOTE :- Mahindra & Mahindra Financial Services Ltd.,the Holding Company holds 4,00,00,000 shares (Previous Year 4,00,00,000 shares)as on 31st March, 2010 (including 6 shares held jointly with nominees)

SCHEDULE II

RESERVES & SURPLUS :

Statutory Reserve

As per last Balance Sheet — —

Add : Transfer during the period 5,521,638 —

5,521,638 —

Balance in Profit & Loss Account 757,576 —

Total 6,279,214 —

SCHEDULE III

SECURED LOANS :

National Housing Bank 625,000,000 —

(Repayable within a Year Rs. 8,66,53,056)

(Secured by hypothecation over the Company's current assets covered byLoan agreements and relative book debts)

Term Loans from Banks 212,500,000 150,000,000

(Repayable within a Year Rs. 7,08,00,000 ; Previous Year Rs. 3,75,00,000)(Secured by hypothecation over the Company's current assets covered by Loanagreements and relative book debts)

Total 837,500,000 150,000,000

SCHEDULES

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SCHEDULE IV (Figures in Rupees)

MAR. 2010 MAR. 2009

UNSECURED LOANS :

Inter Corporate Deposits 287,900,000 178,100,000(Repayable within a year)

Total 287,900,000 178,100,000

SCHEDULE V

FIXED ASSETS :

(Figures in Rupees)

GROSS BLOCK AT COST DEPRECIATION NET BLOCK

Description of Assets As at Additions Deductions As at Upto For the Deductions/ As at As at As at31.03.2009 for Purch./Trf. for Sale/Trf. 31.03.2010 31.03.2009 Year/Trf. Trf. 31.03.2010 31.03.2009 31.03.2010

Owned Assets :

Computers 144,013 266,636 — 410,649 25,480 59,390 — 84,870 118,533 325,779

OfficeEquipment 602,230 205,232 — 807,462 98,921 130,435 — 229,356 503,309 578,106

Furniture 51,101 457,167 — 508,268 1,511 29,546 — 31,057 49,590 477,211

Vehicles — 2,732,466 — 2,732,466 — 395,686 — 395,686 — 2,336,780

TOTAL 797,344 3,661,501 — 4,458,845 125,913 615,057 — 740,969 671,431 3,717,876

As at 31.03.2009 96,356 700,988 — 797,344 9,628 116,284 — 125,913 86,728 671,431

SCHEDULE VI (Figures in Rupees)

MAR. 2010 MAR. 2009

CURRENT ASSETS, LOANS & ADVANCES :

[A] Current Assets :

Other Current Assets 2,645,364 614,315

Cash & Bank balances :

— Cash & Cheques on hand 1,877,546 656,927

— Balance with Scheduled Banks in Current Accounts 4,313,648 6,011,191

Total (A) 8,836,558 7,282,433

[B] Loans & Advances (Unsecured unless otherwise stated) :

Deposits - Others 2,254,225 500,000

Housing Loans (Secured)(including overdue loans) 1,297,599,492 452,689,393

Less:Provision for NPA and doubtful debts 2,797,263 —

Loans considered good 1,294,802,230 452,689,393

Loans and Advances (Unsecured) 1,079,516 —

MAT credit entitlement 200,000 —

Advance payment of tax (net of provisions) — 394,881

Total (B) 1,298,335,971 453,584,273

Total Current Assets, Loans & Advances (A+B) 1,307,172,529 460,866,707

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SCHEDULE VII (Figures in Rupees)

MAR. 2010 MAR. 2009

CURRENT LIABILITIES :

Sundry Creditors 19,826,060 4,467,936

Other Current Liabilities 2,472,718 1,386,265

Credit balances in Current Accounts with Banks 1,139,824 —

Interest Accrued but not due - Loans 2,014,772 1,655,078

Total 25,453,375 7,509,279

SCHEDULE VIII

PROVISIONS :

Provision for Taxation (net of taxes paid) 860,652 —

Proposed Dividend 1,371,429 —

Corporate Dividend Tax 233,075 —

Provision for Employee Benefits 15,556,484 2,715,473(Refer Notes to the Accounts - 3)

Total 18,021,640 2,715,473

SCHEDULE IX

INCOME FROM OPERATIONS :

Income from Loan 162,394,422 45,897,035

Profit on Pre-termination 594,029 14,752

Total 162,988,450 45,911,787

SCHEDULE X

OTHER INCOME :

Dividend received from investments in Mutual Fund units — 1,439,153

Interest on ICD — 51,644(TDS Rs.Nil, Previous Year Rs. 11,702)

Interest on Term Deposit — 798,822

Profit/Premium on Sale/Redemption of Investments — 20,683

Other Interest 32,096 —

Total 32,096 2,310,302

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SCHEDULE XI (Figures in Rupees)

MAR. 2010 MAR. 2009

FINANCIAL EXPENSES :

Interest on

— Fixed loans 18,640,369 13,999,012

— Others 32,201,215 3,509,616

Bank Charges 1,261,524 886,249

Total 52,103,108 18,394,877

SCHEDULE XII

EMPLOYEE COST :

Salary,Bonus & Incentives 49,232,697 16,663,868

Company's Contribution to P.F. & other funds 2,682,610 1,028,726

Staff Welfare 607,634 185,571

Total 52,522,941 17,878,165

SCHEDULE XIII

OTHER EXPENSES :

Rent 155,365 216,413

Rates and Taxes 2,705,113 1,410,754

Legal and Professional Charges 4,676,058 6,508,434

Auditor's Remuneration

— Audit Fees 100,000 55,150

— Other Services 55,000 66,984

Insurance 1,373,561 551,603

Printing and Stationery 1,858,127 1,161,262

Travelling Expenses 1,760,097 1,395,083

Conveyance Expenses 4,490,940 1,556,579

Recruitment Expenses 1,499,659 428,736

Administration Support Charges 2,400,909 881,150

General and Administrative Expenses 8,700,841 2,851,245

Share Issue Expenses — 2,187,143

Total 29,775,670 19,270,538

SCHEDULE XIV

DEPRECIATION & AMORTISATION :

Depreciation 615,057 116,284

Total 615,057 116,284

SCHEDULE XV

PROVISIONS & WRITE OFF'S :

Provision for Non Performing Assets 2,797,263 —(Refer Notes to the Accounts - 7)

Total 2,797,263 —

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SCHEDULE XVI

NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010.SIGNIFICANT ACCOUNTING POLICIES (SAP)

1) Accounting Convention :

The accounts have been prepared to comply in all the material aspects with (a) applicable accounting principles in India, (b) theAccounting Standards issued by the Institute of Chartered Accountants of India and (c) relevant provisions of the Companies Act,1956. Further, the Company follows prudential norms for Income Recognition and provisioning for Non-performing Assets asprescribed by The National Housing Bank.

2) Use Of Estimates :

The preparation of financial statements requires the management to make estimates and assumptions considered in the reportedamount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income andexpenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements areprudent and reasonable. Future results could differ from these estimates.

3) Inflation :

Assets and liabilities are recorded at historical cost to the Company. These costs are not adjusted to reflect the changing value inthe purchasing power of money.

4) Revenue Recognition :

i. General: The Company follows the accrual method of accounting for its income and expenditure except delayed paymentcharges and service charges, fee based income, which on account of uncertainty of ultimate collection are accounted on receiptbasis. In accordance with the guidelines issued by the National Housing Bank for Housing Finance Companies, income onbusiness assets classified as non-performing assets, is recognised on receipt basis.

ii. Interest and other income from Housing Loans : Repayment of housing loans is generally by way of Equated Monthly/Quarterly/Half yearly Installments (EMIs) comprising principal and interest. EMIs commence once the entire loan is disbursed.Pending commencement of EMIs, pre-EMI interest is accounted every month.

iii. Income From Investments:

a. Dividend from Investments is accounted for as income when the right to receive dividend is established.

b. Interest income is accounted on accrual basis.

5) Fixed Assets :

Fixed assets are stated at cost of acquisition (including incidental expenses), less accumulated depreciation. Assets held for sale ordisposals are stated at the lower of their net book value and net realisable value.

6) Investments :

Investments held as long-term investments are stated at cost comprising of acquisition and incidental expenses less permanentdiminution in value, if any.

Investments other than long-term investments are classified as current investments and valued at cost or fair value which ever isless.

7) Depreciation :

Depreciation on fixed assets is charged using Straight Line Method at rates specified in Schedule XIV to the Companies Act, 1956except for:

a) Office Equipment on which depreciation is charged at the rate of 16.21% instead of 4.75% as prescribed in Schedule XIV.

b) Assets costing less than Rs.5,000/- are fully depreciated in the year of purchase and

c) Vehicles used by employees are depreciated over the maximum period of 48 months based on the useful life of vehicle for theCompany

8) Income-Tax :

The accounting treatment for Income-tax in respect of the Company's income is based on the Accounting Standard on 'Accountingfor Taxes on Income' (AS 22) issued by the Institute of Chartered Accountants of India. The provision for Income-tax made in theAccounts shall comprise of tax on current income and deferred tax. Deferred tax assets and liabilities for the year, arising on account

37

CMYK


of timing differences, are recognised in the Profit and Loss Account; and the cumulative effect thereof is reflected in the BalanceSheet. The major components of the respective balances of deferred tax assets and liabilities are disclosed in the Accounts.

9) Miscellaneous Expenditure :

Preliminary Expenses:

Preliminary and pre-operative expenses are charged to Profit and Loss account in the year of incurrence.

10) Employee Benefits :

Retirement Benefits in respect of gratuity at retirement/cessation are provided for based on valuations, as at the Balance Sheet date,made by independent actuaries.

(a) Defined Contribution Plans -

Company's contribution paid/payable during the year to Provident Fund and Labour Welfare fund are recognised in the Profitand loss Account.

(b) Defined Benefit Plan -

Company's liabilities towards gratuity & sick leave is determined using the projected unit credit method which considers eachperiod of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up thefinal obligation. Actuarial gain and losses are recognised immediately in the statement of profit and loss as income or expense.Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by referenceto market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds areconsistent with the currency and estimated terms of the defined benefit obligation

(c) Liability on account of encashment of leave to employees is considered as short term compensated expense provided atactuals.

11) Borrowing Cost :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost ofsuch assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. Theexpenditure incurred in raising long-term borrowings is amortised over the period of borrowings. On early repayment of borrowings,any unamortized expenditure is fully written off in that year.


1) In the opinion of the Board, Current assets, Loans & Advances are approximately of the value stated, if realised, in the ordinarycourse of business.

2) Special Reserve has been created in terms of Section 36(1)(viii) of the Income-tax Act, 1961 out of the distributable profits of thecompany.

3) Employee Benefits:

Defined Benefit Plans -As per Actuarial valuation on 31st March, 2010(Figures in Rupees)

Leave BenefitsGratuity Gratuity (Sick leave-(Funded) (Funded) unfunded)

Mar-10 Mar-09 Mar-10

I. Expense recognised in the Statement of Profit & Loss Accountfor the year ended 31st March

1 Current service cost 549,913 330,947 67,435

2 Interest cost 19,534 — —

3 Expected return on plan assets (27,685) — —

4 Actuarial (Gains)/Losses (164,171) — 49,013

5 Total expense 377,591 330,947 116,448

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II. Net asset/(liability) recognised in the Balance Sheetas at 31st March

1 Present Value of Defined Benefit obligation as at 31st March 736,223 330,947 116,448

2 Fair value of plan assets as at 31st March 646,848 — —

3 Funded status (surplus/(deficit)) (89,375) (330,947) (116,448)

4 Net asset/(liability) as at 31st March (89,375) (330,947) (116,448)

III. Change in the obligations during the year ended 31st March

1 Present Value of Defined Benefit obligation at thebeginning of the year 330,947 — —

2 Current service cost 549,913 330,947 67,435

3 Interest cost 19,534 — —

4 Actuarial (Gains)/Losses (164,171) — 49,013

5 Benefits paid — — —

6 Present Value of Defined Benefit obligation at theend of the period 736,223 330,947 116,448

IV. Change in the fair value of plan assets during theyear ended 31st March

1 Fair value of plan assets at the beginning of the year 92,140 — —

2 Expected return on plan assets 27,685 — —

3 Contributions by employer 527,023 — —

4 Actuarial (Gains)/Losses — — —

5 Actual Benefits paid — — —

6 Fair value of plan assets at the end of the year 646,848 — —

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

Funded with LIC 100% 100%

Others

VI. Actuarial Assumptions

1 Discount Rate 8% p.a. 8% p.a. 8% p.a.

2 Rate of Salary increase 5% p.a 5% p.a. 5% p.a.

3 In-service Mortality LIC LIC(1994-96) (1994-96)

ULTIMATE ULTIMATE

4) The company has only one reportable segment of business viz. Housing Finance business for the purpose of AS 17 SegmentReporting and all other activities are incidental to the main business activity.

(Figures in Rupees)

Leave BenefitsGratuity Gratuity (Sick leave-(Funded) (Funded) unfunded)

Mar-10 Mar-09 Mar-10

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5) In accordance with the Accounting Standard on " Earning Per Share" (AS 20) issued by the Institute of Chartered Accountants ofIndia, the EPS is calculated as follows:

Particulars MAR. 2010 MAR. 2009

Net Profit/(Loss) attributable to Equity Share Holders 21,813,171 (7,963,390)

Weighted Average Numbers of Shares (Basic) 13,714,279 7,422,842

Weighted Average Numbers of Shares (Diluted) 13,714,279 7,422,842

EPS - (Basic) (Rs.) 1.59 (1.07)

EPS - (Diluted) (Rs.) 1.59 (1.07)

6) Deferred Tax Asset/Liability has been recognised in the current accounting year in view of certainty of profits and accounted for inaccordance with the AS-22 on "Accounting for Taxes on Income". The break up of the deferred tax asset as on 31st March, 2010of Rs. 1,406,664/- (Previous Year Rs. Nil) is as under:

Particulars Deferred Tax Deferred TaxAsset / (Liability) - Asset / (Liability) -

MAR. 2010 MAR. 2009

Provision for Non Performing Assets 929,181 Nil

Depreciation (23,689) Nil

Other Disallowances 501,172 Nil

Total 1,406,664 Nil

7) The Company has complied with norms prescribed under Housing Finance Companies (NHB) Directions, 2001 for recognizingNon-performing Assets in preparation of accounts. The Company has made adequate provision on non-performing assets asprescribed under Housing Finance Companies (NHB) Direction, 2001.

8) The holding company, Mahindra & Mahindra Financial Services Limited (MMFSL), has incurred cost of Rs. 77,700 (previous yearRs. 62,799) and Mahindra and Mahindra Limited has incurred cost of Rs. 49,269 (previous year Rs. 48,302) on account of issuanceof Employee Stock Options (ESOS) to employees of the Company.

9) There are no dues payable to Small Scale Industrial undertakings in view of the nature of the business of the Company.

10) Suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006 have not furnished the informationregarding filing of necessary memorandum with appointed authority. In view of this and legal opinion obtained by the Company,information required under Schedule VI of the Companies Act, 1956 to that extent is not given.

11) Related Party Disclosure as per Accounting Standard 18:

List of the related parties which has transactions with our Company during the year:

Holding Company / Companies : Mahindra & Mahindra Limited *


Fellow subsidiary Companies : Mahindra Insurance Brokers Limited

Mahindra Business & Consulting Services Pvt. Ltd.

Key Management Personnel : Mr. Anuj Mehra (Chief Executive Officer)

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Related Parties transactions are as under (Figures in Rupees)

Sr. Nature of transactions Holding Fellow KeyNo. Companies Subsidiary Management

Companies Personnel

1 IncomeInterest — — —

(51,644) — —

2 ExpensesInterest 29,729,684 2,463,834 —

(1,864,226) (52,602) —

Other Expenses 2,400,866 1,800,503 4,479,102(881,150) (18,223) (3,145,659)

3 Issue of equity shares — — —(100,000,000) — —

4 FinanceInter Corporate Deposits taken (including interestaccrued but not due) 238,902,070 50,824,795 —

(159,541,792) (20,040,683) —

5 Purchase of Fixed Assets 541,232 — —— — —

6 OutstandingsReceivables — — —

(60,530) — —

Payables 1,472,502 780,184 —(511,489) (20,475) —

* Mahindra Rural Housing Finance Limited is a subsidiary of Mahindra & Mahindra Financial Services Limited, which in turn isa subsidiary of Mahindra & Mahindra Limited.

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12) Computation of Net Profit in accordance with Section 198 and 309(5) of the Companies Act, 1956 for the year ended on 31stMarch, 2010.

(Figures in Rupees)

Financial Year Financial Year2009 - 2010 2008 - 2009

Profit/(Loss) before Taxation as per Profit and Loss Account 25,206,507 (7,437,775)

Add : Depreciation charged in the Account 615,057 116,284

Managers' Remuneration including Directors' fees 4,479,102 3,145,659

Provision for Non-performing assets (Net) 2,797,263 —

7,891,422 3,261,943

33,097,929 (4,175,832)

Less : Depreciation u/s 350 of the Companies Act, 1956 615,057 116,284

615,057 116,284

TOTAL 32,482,872 (4,292,116)

Restricted to 16,24,144 —

Manager's Remuneration paid* 4,479,102 3,145,659

*(Approved by special resolution in EGM held on 25th June, 2008and prior approval of Central Government obtained in terms ofSection 198(4) of the Companies Act, 1956)

TOTAL 4,479,102 3,145,659

13) Previous year figures have been regrouped wherever found necessary.

Signatures to Schedules I to XVI





}

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(Figures in Rupees)MAR. 2010 MAR. 2009

A. CASH FLOW FROM OPERATING ACTIVITIESProfit before taxes and contingencies 25,206,507 (7,437,775)Add/(Less):Non Cash Expenses :Depreciation 615,057 116,284Provision for non-performing assets (net) 2,797,263 —

3,412,320 116,284Add/(Less):

Income / Expense considered separately:Income on investing activities (32,096) (2,310,302)Share Issue Expenses — 2,187,143

(32,096) (123,159)Operating profit before working capital changes (I) 28,586,731 (7,444,650)Less:

(Increase)/Decrease in interest accrued others (2,031,049) (286,844)(Increase)/Decrease in Loans & Advances (847,743,841) (423,305,913)

(849,774,890) (423,592,757)Add: Increase in Current liabilities 30,785,108 2,469,823

(II) (818,989,782) (421,122,933)Cash generated from operations (I+II) (790,403,051) (428,567,583)Advance taxes paid (3,744,467) (599,058)

(794,147,519) (429,166,641)NET CASH FROM OPERATING ACTIVITIES (A) (794,147,519) (429,166,641)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (3,661,501) (700,988)Sale of Investments — 90,039,468Income received on Investments 32,096 2,310,302NET CASH FROM INVESTING ACTIVITIES (B) (3,629,405) 91,648,782

C. CASH FLOW FROM FINANCING ACTIVITIESIssue of Equity Shares (net of issue expenses) — 114,955,697Increase/(Decrease) in long term borrowings (net) 797,300,000 228,100,000NET CASH FROM FINANCING ACTIVITIES (C) 797,300,000 343,055,697NET INCREASE / (DECREASE) INCASH AND CASH EQUIVALENT (A+B+C) (476,924) 5,537,838CASH AND CASH EQUIVALENTS AS AT:Beginning of the period 6,668,118 1,130,281End of the year 6,191,194 6,668,118

Examined and found correct.




Ramesh IyerV. Ravi DirectorsK. Muralidharan }

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CMYK





Registration No. 0 0 1 6 9 7 9 1 State Code 1 1


Date Month Year



N I L N I L


N I L N I L



1 2 6 8 8 2 2 1 2 6 8 8 2 2

Sources of Funds


1 3 7 1 4 3 6 2 7 9


8 3 7 5 0 0 2 8 7 9 0 0

Application of FundsIntangible Assets Net Fixed Assets

N I L 3 7 1 8

Investments Net Current Assets

N I L 1 2 6 3 6 9 8

Miscellaneous Expenditure Accumulated Losses

N I L N I L

Deferred Tax Asset (Net)

1 4 0 7



1 6 3 0 2 1 1 3 7 8 1 4


2 5 2 0 7 2 1 8 1 3

Earning per share in Rs.Basic Diluted Dividend Rate %

1 . 5 9 1 . 5 9 1



Product Description H O U S I N G L O A N


Ramesh IyerAnuj Mehra Binal Thakker V. Ravi Directors

Chief Executive Officer Company Secretary K. Muralidharan }

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CMYK

DIRECTORS' REPORT TO THE SHAREHOLDERS

Your Directors present their Second Report together with the audited accounts of your Company for the year ended31st March, 2010.

FINANCIAL RESULTSRupees in lakhs

For the year ended For the Period31st March, 2010 16th September, 2008

to 31st March, 2009

Income 1840.61 —

Profit / (Loss) before Interest and Taxation 24.88 (0.19)

Interest 4.58 —

Profit / (Loss) before Taxation 20.30 (0.19)

Provision for Taxation for the year

— Current Tax 9.74 —

— Deferred Tax (2.76) —

Profit / (Loss) for the year after Taxation 13.32 (0.19)

Balance of Profit/(Loss) from earlier year (0.19) —

Balance carried forward 13.13 (0.19)

OPERATIONS

During the year under review the Main Objects Clause of theMemorandum of Association of the Company was amended toenable the Company to carry on the business of a captive staffingcompany and for providing allied services. Your Company startedcommercial operations on 1st April, 2009.

Your Company has 2,573 number of employees as on 31st March,2010, sourced for Mahindra & Mahindra Financial ServicesLimited, the parent company and Mahindra Insurance BrokersLimited and Mahindra Rural Housing Finance Limited, subsidiariesof the parent company. The Company registered a Profit After Taxof Rs.13.32 lakhs.

CHANGE OF NAME

During the year under review, the name of the Company waschanged from 'Mahindra IT Consulting Private Limited' to'Mahindra Business & Consulting Services Private Limited' in orderto reflect its new business activities. A fresh Certificate ofIncorporation consequent upon Change of Name dated 4th June,2009, was received from the Registrar of Companies, Maharashtra.

DIVIDEND

With a view to conserve the cash resources of the Company, yourDirectors deem it prudent not to recommend a dividend for theyear.

CAPITAL

During the year under review, the Company has increased itsAuthorised Share Capital from Rs. 1,00,000 to Rs.10,00,000.

HOLDING COMPANY

During the year under review, Bristlecone India Limited (BIL) hastransferred its entire shareholding in the Company to Mahindra &Mahindra Financial Services Limited (MMFSL). Accordingly, yourCompany has become a wholly owned subsidiary of MMFSL,which in turn is a subsidiary of Mahindra & Mahindra Limited.

DIRECTORS

Mr. Ramesh Iyer, Mr. V. Ravi, Dr. Jaideep Devare and Mr. VinayDeshpande were appointed as Additional Directors of the Companyat the Meeting of the Board of Directors held on 16th June, 2009.

Mr. Ulhas Yargop (Chairman), Mr. C. Krishnadas andMrs. Sandhya Sharma, the First Directors of the Company resignedfrom the Board of Directors of the Company with effect from theconclusion of the Board Meeting held on 16th June, 2009. TheBoard has placed on record its sincere appreciation for the servicesrendered and guidance received from Mr. Ulhas N. Yargop asChairman and Director and Mr. C. Krishnadas and Mrs. SandhyaSharma as Directors of the Company.

DIRECTORS’ REPORT

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CMYK

Mr. Ramesh Iyer has been appointed as Chairman of the Board ofDirectors at the Meeting of the Board of Directors held on16th June, 2009.

Mr. Apurv Verma, Mr. Anuj Mehra and Mr. Rajesh Vasudevan wereappointed as Additional Directors of the Company at the Meetingof the Board of Directors held on 21st July, 2009.

Mr. Ramesh Iyer, Mr. V. Ravi, Dr. Jaideep Devare, Mr. VinayDeshpande, Mr. Apurv Verma, Mr. Anuj Mehra and Mr. RajeshVasudevan held office upto the date of the First Annual GeneralMeeting and the shareholders have at their First Annual GeneralMeeting held on 22nd September, 2009, approved the appointmentof Mr. Ramesh Iyer, Mr. V. Ravi, Dr. Jaideep Devare, Mr. VinayDeshpande, Mr. Apurv Verma, Mr. Anuj Mehra andMr. Rajesh Vasudevan as Directors of the Company.

Mr. Ramesh Iyer and Mr. V. Ravi retire by rotation at theforthcoming Annual General Meeting and, being eligible, offerthemselves for re-appointment.


Pursuant to section 217(2AA) of the Companies Act, 1956, yourDirectors, based on the representation received from the OperatingManagement, and after due enquiry, confirm that:

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

(ii) they have, in the selection of the accounting policies,consulted the Statutory Auditors and these have beenapplied consistently and reasonable and prudentjudgements and estimates have been made so as to give atrue and fair view of the state of affairs of the Companyas at 31st March, 2010 and of the profit of the Companyfor the year ended on that date;

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

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

AUDITORS

Messrs. B. K. Khare & Co., Chartered Accountants, retire asAuditors of the Company at the forthcoming Annual GeneralMeeting and have given their consent for re-appointment. Theshareholders will be required to elect Auditors for the current yearand fix their remuneration.

As required under the provisions of section 224 (1B) of theCompanies Act, 1956, the Company has obtained a written

certificate from Messrs. B. K. Khare & Co., Chartered Accountants,to the effect that their re-appointment, if made, would be inconformity with the limits specified in the said section.

PUBLIC DEPOSITS AND LOANS/ADVANCES

The Company has not accepted deposits from the public or itsemployees during the year under review.

The Company has not made any loans/advances of the nature whichare otherwise required to be disclosed in the annual accounts ofthe Company pursuant to Clause 32 of the Listing Agreement ofthe parent Company - Mahindra & Mahindra Financial ServicesLimited and the ultimate parent company- Mahindra & MahindraLimited, with the Stock Exchanges.

CODES OF CONDUCT

The Company had adopted Codes of Conduct for CorporateGovernance ("the Codes") for its Directors and Senior Managementand Employees. These Codes enunciate the underlying principlesgoverning the conduct of the Company's business and seeks toreiterate the fundamental precept that good governance must andwould always be an integral part of the Company's ethos.

The Company has for the year under review, received declarationsunder the Codes from the Board Members and the SeniorManagement and Employees of the Company affirming compliancewith the respective Codes.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The particulars relating to the energy conservation, technologyabsorption and foreign exchange earnings and outgo, as requiredunder section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 are given in Annexure I to this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDERSECTION 217(2A) OF THE COMPANIES ACT, 1956 ANDRULES MADE THEREUNDER

The Company had no employee who was in receipt of remunerationof 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 thesaid year.


Ramesh IyerChairman


46

CMYK

ANNEXURE I TO THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2010

PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARDOF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED31ST MARCH, 2010.

A. Conservation Of Energy

a) Energy Conservation measures taken: The operations of your Company are not energy-intensive. However, adequate measureshave been initiated to reduce energy consumption.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil

c) Impact of the measures taken/to be taken at (a) & (b) above for reduction of energy consumption and consequent impact on thecost of production of goods: These measures are expected to reduce the energy consumption.

d) Total energy consumption and energy consumption per unit of production as per Form-A of the Annexure to the Rules in respectof Industries specified in the Schedule: Not Applicable

B. Technology Absorption


1. Areas in which R & D is carried out : None

2. Benefits derived as a result of the above efforts : Not Applicable





C. Foreign Exchange Earnings And Outgo

There were no foreign exchange earnings or outgo during the year under review.


Ramesh IyerChairman


47


CMYK

We have audited the attached Balance Sheet of M/S. MAHINDRABUSINESS & CONSULTING SERVICES PRIVATELIMITED, as at 31 March, 2010, and also the Profit and LossAccount and the Cash Flow Statement for the year ended on thatdate annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based on ouraudit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those Standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit providesa reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003issued by the Central Government of India in terms of sub-section(4A) of Section 227 of the Companies Act, 1956, as amended fromtime to time, we enclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.


i) We have obtained all the information and explanations, whichto the best of our knowledge and belief were necessary forthe purpose of our audit;

ii) In our opinion, proper books of account as required by lawhave been kept by the Company so far as appears from ourexamination of those books;

iii) The Balance Sheet, Profit and Loss Account and Cash FlowStatement dealt with by this report are in agreement with thebooks of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by this report complywith the accounting standards referred to in sub-section (3C)of Section 211 of the Companies Act, 1956;

v) On the basis of written representations received from thedirectors, as on 31st March, 2010, and taken on record by theBoard of Directors, we report that none of the directors isdisqualified as on 31st March, 2010, from being appointed asa director in terms of clause (g) of sub-section (1) of Section274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and accordingto the explanations given to us, the said accounts read togetherwith the Company’s Accounting Policies and the Notesthereto, give the information required by the Companies Act,1956, in the manner so required and give a true and fair viewin conformity with the accounting principles generallyaccepted in India:

(a) in the case of the Balance Sheet, of the state of affairs ofthe Company as at 31st March, 2010, and


(c) in the case of the Cash Flow Statement, of the cash flowsfor the year ended as on that date.




Membership No. 44784Mumbai, Dated : 15th April, 2010

Auditors’ ReportTO THE MEMBERS OF MAHINDRA BUSINESS & CONSULTING SERVICES PRIVATE LIMITED

48

CMYK


Annexure to the Auditors’ Report referred to in our report ofeven date:

1. i) The Company has maintained proper records showingfull particulars, including quantitative details andsituation of fixed assets.

ii) Fixed assets have been physically verified by themanagement during the year. In our opinion,management’s programme of verification provides forphysical verification of all fixed assets at reasonableintervals. No material discrepancies were noticed on suchverification.

iii) No fixed assets were disposed off during the year.

2. Clause 4(ii) of Companies (Auditor’s Report) Order, 2003, isnot applicable to the Company.

i) In our opinion and according to the information andexplanations provided to us, during the period, Companyhas not granted any loans to parties covered under Section301 of the Companies Act, 1956.

ii) During the period, Company has not taken any unsecuredloans from the parties covered in the register maintainedunder Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information andexplanations given to us the Company is having an adequateinternal control system commensurate with the size and thenature of its business, for the purchase of fixed assets andsale of services. The activities of the Company do not involvepurchase of inventory and sale of goods. No major weaknessesin internal control system were noticed in the course of ouraudit.

5. i) In our opinion and according to the information andexplanations given to us all the particulars of contractsand arrangements referred in Section 301 of the Act havebeen entered in the register required to be maintainedunder that section.

ii) In our opinion and according to the information andexplanations given to us each of these transactions inrespect of any such parties during the financial year havebeen made at prices, which are reasonable, having regardto the prevailing market prices at the relevant time.

6. In our opinion and according to the information andexplanations given to us, provisions of Sections 58A, 58AAand any other relevant provisions of the Act and the rulesframed there under, in respect of deposits accepted from thepublic are not applicable to the Company.

7. In our opinion and according to the information andexplanations provided to us the Company has an internal auditsystem, which is commensurate with its size and nature of itsbusiness.

8. In respect of the activities of the Company, maintenance ofcost records has not been prescribed by the CentralGovernment under clause (d) of sub-section (1) of Section209 of the Act.

9. i) On the basis of our examination of books of accountsand according to the information and explanations givento us the Company is regular in depositing undisputedstatutory dues including Provident Fund, InvestorEducation and Protection Fund, Employees’ StateInsurance, Income-tax, Sales-tax, Wealth Tax and ServiceTax, cess and other applicable statutory dues with theappropriate authorities.

ii) There are no disputed tax dues remaining to be depositedwith the relevant authority.

10. On the basis of our examination of books of accountsand documents and according to the information andexplanations given to us the Company has not defaulted inrepayment of dues to any financial institution or bank ordebenture holders.

11. From the examination of books of accounts and accordingto the information and explanations provided to us, theCompany has not granted any loans or advances on the basisof security by way of pledge of shares, debentures and othersecurities.

12. The Company is not a Chit Fund, Nidhi, Mutual Benefit Fundor a Society.

13. The Company is not dealing or trading in shares, securities,debentures or any other investments.

14. In our opinion and according to the information andexplanations given to us the Company has not given anyguarantee for loans taken by others from bank or financialinstitutions, the terms and conditions whereof are prejudicialto the interest of the Company.

15. In our opinion and according to the information andexplanations given to us, during the year, the Company hasnot taken any term loans.

16. On the basis of overall examination of the financial statementsand other financial information furnished, we report that theCompany has not used short-term funds for long-terminvestments.

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CMYK

17. During the year, no preferential allotment of shares was madeto any of the entities covered in the register maintained underSection 301 of the Companies Act, 1956.

18. The Company has not issued any secured debentures.

19. During the year, the Company has not made any public issueof its equity shares.

20. To the best of our knowledge and belief and according to theinformation and explanations given to us, no fraud by the

Company and no material fraud on the Company were noticedor reported during the year.




Membership No. 44784Mumbai, Dated : 15th April, 2010

50

CMYK

(Figures in Rupees)

Schedule MAR. 2010 MAR. 2009

SOURCES OF FUNDS:

Shareholders’ Funds:

Capital I 100000.00 100000.00

Reserves & Surplus II 1313414.16 0.00

1413414.16 100000.00

Loan Funds:

Unsecured Loans III 17454406.00 0.00

TOTAL 18867820.16 100000.00

APPLICATION OF FUNDS:

Deferred Tax Asset (Refer Notes to the Accounts - 9) 276183.00 0.00

Current Assets, Loans & Advances:

(a) Sundry Debtors 15925317.00 0.00

(b) Cash & Bank Balances 2191709.16 100000.00

(c) Other Current Assets 3605.00 0.00

(d) Loans & Advances 20077281.00 0.00

IV 38197912.16 100000.00

Less: Current Liabilities and Provisions:

(a) Current Liabilities V 13783284.00 18660.00

(b) Provisions VI 5822991.00 0.00

19606275.00 18660.00

Net Current Assets 18591637.16 81340.00

Profit and Loss Account 0.00 18660.00

TOTAL 18867820.16 100000.00

The Schedules referred to above form an integral part of the Balance Sheet.

This is the Balance Sheet referred in our report of even date.

BALANCE SHEETAS on MARCH 31, 2010


Padmini Khare KaickerPartnerMembership No.44784


Ramesh Iyer Chairman

V. Ravi

Vinay Deshpande

Apurv VermaDirectors

Anuj Mehra

Dr. Jaideep Devare

Rajesh Vasudevan

}

51


CMYK

(Figures in Rupees)

Schedule MAR. 2010 MAR. 2009

INCOME:

Income from Operations VII 184060616.00 0.00

TOTAL INCOME 184060616.00 0.00

EXPENDITURE:

Financial Expenses VIII 458239.00 0.00

Employee Cost IX 151741442.00 0.00

Other Expenses X 29830466.84 18660.00

TOTAL EXPENDITURE 182030147.84 18660.00

PROFIT BEFORE TAXATION: 2030468.16 (18660.00)

Less : Current Tax 974577.00 0.00

Add/(Less): Deferred Tax (276183.00) 0.00

PROFIT AFTER TAXATION: 1332074.16 (18660.00)

Add : Balance profit for earlier year (18660.00) 0.00

AMOUNT AVAILABLE FOR APPROPRIATION 1313414.16 (18660.00)

APPROPRIATION:

Balance Profit carried to Balance Sheet 1313414.16 (18660.00)

1313414.16 (18660.00)

EARNINGS PER SHARE (Refer Notes to the Accounts - 5):(Face Value of Rs. 10/- per share) (Rupees)

Basic 133.21 (3.47)

Diluted 133.21 (3.47)

Notes on Accounts : XI

The Schedules referred to above and attached notes form an integral part of the Profit & Loss Account.

This is the Profit & Loss Account referred to in our report of even date.

Examined and found correct





V. Ravi

Vinay Deshpande


Anuj Mehra

Dr. Jaideep Devare

Rajesh Vasudevan

}


52

CMYK

SCHEDULE I (Figures in Rupees)

MAR. 2010 MAR. 2009

SHARE CAPITAL:

Authorised:

1,00,000 Equity Shares of Rs.10/-each

(Previous Year: 10,000 shares) 1000000.00 100000.00

Issued Share Capital:

10,000 Equity Shares of Rs. 10/- each


Subscribed and Paid-up:

10,000 Equity Shares of Rs. 10/- each fully paid up


TOTAL 100000.00 100000.00

Note:

Mahindra & Mahindra Financial Services Ltd., the Holding Company holds 10,000 sharesas on 31st March, 2010 (Previous Year: Nil)

SCHEDULE II

RESERVES & SURPLUS:

Balance in Profit & Loss Account 1313414.16 0.00

TOTAL 1313414.16 0.00

SCHEDULE III

UNSECURED LOANS:

Inter Corporate Deposits (Repayable fully within a year) 17454406.00 0.00

TOTAL 17454406.00 0.00

SCHEDULE IV

CURRENT ASSETS, LOANS & ADVANCES:

(A) Current Assets:

Sundry Debtors:

(a) Debts Outstanding for a period exceeding six months 0.00 0.00

(b) Other Debts 15925317.00 0.00

Debtors Considered good 15925317.00 0.00

Cash & Bank Balances:

— Balance with Scheduled Bank in current account 2191709.16 100000.00

Other Current Assets 3605.00 0.00

TOTAL (A) 18120631.16 100000.00

(B) Loans & Advances (Unsecured unless otherwise stated)

Loans and advances:

Considered good 325110.00 0.00

Considered doubtful 0.00 0.00

325110.00 0.00

Advance payment of tax (net of provisions) 19752171.00 0.00

TOTAL (B) 20077281.00 0.00

TOTAL (A+B) 38197912.16 100000.00

SCHEDULES

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SCHEDULE V (Figures in Rupees)

MAR. 2010 MAR. 2009

CURRENT LIABILITIES:

Sundry Creditors 9257613.00 18660.00

Other Current Liabilities 4180492.00 0.00

Interest accrued but not due 345179.00 0.00

TOTAL 13783284.00 18660.00

SCHEDULE VI

PROVISIONS:

Provision for Employee Benefits (Refer Notes to the Accounts - 3) 5822991.00 0.00

TOTAL 5822991.00 0.00

SCHEDULE VII

INCOME FROM OPERATIONS:

Income from Services rendered 180392416.00 0.00

Income from Service charges 3668200.00 0.00

TOTAL 184060616.00 0.00

SCHEDULE VIII

FINANCIAL EXPENSES:

Interest on ICD 458239.00 0.00

TOTAL 458239.00 0.00

SCHEDULE IX

EMPLOYEE COST:

Salary, Bonus & Incentives 139758439.00 0.00

Company’s Contribution to P.F. & other funds 11960313.00 0.00

Staff Welfare 22690.00 0.00

TOTAL 151741442.00 0.00

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SCHEDULE X (Figures in Rupees)

MAR. 2010 MAR. 2009

OTHER EXPENSES:

Insurance 517789.00 0.00

Rates & Taxes 35700.00 0.00

Legal & Professional Charges 11155.00 0.00

Conveyance 26202158.00 0.00

Travelling Expenses 1864276.00 0.00

Bank Charges 20614.84 0.00

Auditors’ Remuneration - Audit Fees 25000.00 11030.00

- Other Services 10000.00 0.00

General & Administrative Expenses 1143774.00 7630.00

TOTAL 29830466.84 18660.00

SCHEDULE XINOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010SIGNIFICANT ACCOUNTING POLICIES (SAP)1. Basis of preparation of Accounts :

These accounts are prepared in accordance with historical cost convention and they confirm in all material respects with (a) generallyaccepted accounting principles in India, (b) applicable Accounting Standards issued by the Institute of Chartered Accountants ofIndia and (c) relevant provisions of the Companies Act, 1956.

2. Use of Estimates :

The preparation of financial statements requires the management to make estimates and assumptions considered in the reportedamounts of assets and liabilities as on the date of the financial statements and the reported income and expenses during the reportingperiod. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actualresults could differ from these estimates.

3. Revenue Recognition :

The Company adopts the accrual method for recognizing all income and expenses.

Dividend from investments is accounted for as income when the right to receive dividend is established.

4. Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, subjectto consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income thatoriginate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account ofunabsorbed depreciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported byconvincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

5. Miscellaneous Expenditure :

Share Issue Expenses:

Expenses incurred in connection with fresh issue of share capital are charged to the Profit & Loss Account in the year in which theyare incurred.

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6. Employee Benefits :

(a) Provident Fund Contributions:

Contributions to the Government Provident Fund under a defined contribution plan are charged to the Profit & Loss Account onaccrual basis.

(b) Other Employee Benefits:

Privilege leave or other compensated balances is considered as long term unfunded benefit & is recognized on the basis ofactuarial valuation using Projected Unit Credit Method determined by appointed actuary.

7. Segment Reporting :

The Company has a single reportable segment namely Manpower Supply Services for the purpose of Accounting Standard 17 onSegment Reporting.

8. Provisions and Contingent Liabilities :

Provisions are recognised in accounts in respect of present probable obligations, the amount of which can be reliably estimated.Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed onlyby the occurrence or non-occurrence of one or more certain future events not wholly within the control of the Company.


1. The Company became a wholly owned subsidiary of Mahindra & Mahindra Financial Services Ltd from 09th April 2009, subsequentto purchase of all equity shares of the Company from Bristlecone India Limited.

2. In the opinion of the Board, Current assets, Loans & Advances are approximately of the value stated, if realized, in the ordinarycourse of business.

3. Employee Benefits:

Defined Benefit Plans -As per actuarial valuation on 31st March, 2010

(Figures in Rupees)

Leave Benefits MAR. 2010

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

1. Current service cost 831438.00

2 Interest cost 0.00

3 Expected return on plan assets 0.00

4 Actuarial (Gains)/Losses 0.00

5 Total expense 831438.00

II. Net asset/(liability) recognised in the Balance Sheet as at 31st March

1. Present Value of Defined Benefit obligation as at 31st March 831438.00

2. Fair value of plan assets as at 31st March 0.00

3. Funded status (surplus/(deficit)) (831438.00)

4. Net asset/(liability) as at 31st March (831438.00)

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III. Change in the obligations during the year ended 31st March

1. Present Value of Defined Benefit obligation at the beginning of the year 0.00

2. Current service cost 831438.00

3. Interest cost 0.00

4. Actuarial (Gains)/Losses 0.00

5. Benefits paid 0.00

6. Present Value of Defined Benefit obligation at the end of the period 831438.00

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

Funded with LIC 100%

Others 0%

V. Actuarial Assumptions

1. Discount Rate 8% p.a.

2. Rate of Salary increase 5% p.a

3. In-service Mortality LIC (1994-96)

ULTIMATE

4. The Company has only one reportable segment of business viz. Manpower Supply Business for the purpose of AS 17 SegmentReporting and all other activities revolve around the main business of Manpower Supply.

5. In accordance with the Accounting Standard on “ Earning Per Share “ (AS 20) issued by the Institute of Chartered Accountants ofIndia, the EPS are as follows:

(Figures in Rupees)

Particulars FY 2009-10 FY 2008-09

Net Profit/ (Loss) attributable to Equity Share Holders 13,32,074.00 (18,660)

Weighted Average Numbers of Shares 10,000 10,000

EPS – (Basic) 133.21 (3.47)

EPS – (Diluted) 133.21 (3.47)

6. There are no dues payable to Small Scale Industrial undertakings in view of the nature of the business of the Company.

7. Suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006 have not furnished the informationregarding filing of necessary memorandum with appointed authority. In view of this and legal opinion obtained by the Company,information required under Schedule VI of the Companies Act, 1956 to that extent is not given.

8. Related Party Disclosure as per Accounting Standard 18:

Holding Company / Companies : Mahindra & Mahindra Financial Services Ltd.

Fellow subsidiary Companies : Mahindra Insurance Brokers Ltd.

Mahindra Rural Housing Finance Ltd.

(Figures in Rupees)

Leave Benefits MAR. 2010

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CMYK





V. Ravi

Vinay Deshpande


Anuj Mehra

Dr. Jaideep Devare

Rajesh Vasudevan

}

Related Parties transactions are as under:(Figures in Rupees)

Sr. No. Nature of transactions Holding Fellow SubsidiaryCompanies Companies

1. Income

Manpower Supply income 182,833,015.00 1,227,601.00

0.00 0.00

2. Expenses

Interest 458,239.00 0.00

0.00 0.00

3. Finance

Inter Corporate Deposits taken (including interest accrued but not due) 17,799,585.00 0.00

0.00 0.00

4. Outstandings

Receivables 15,404,807.00 520,510.00

0.00 0.00

9. In accordance with Accounting Standard 22 on Accounting for Taxes on Income the Company has accounted for Deferred Asset/Liability. The break up of the deferred tax asset as on 31st March, 2010, of Rs. 2,76,183/- (Previous Year: Nil) is as under:

(Figures in Rupees)

Particulars Deferred Tax Asset / Deferred Tax Asset/

(Liability) (Liability)

March 2010 March 2009

Leave Benefits 2,76,183.00 0.00

Total 2,76,183.00 0.00

10. Previous year figures have been regrouped wherever found necessary.

Signatures to Schedules I to XI

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(Figures in Rupees)

MAR. 2010 MAR. 2009

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxes and contingencies 2030468.16 (18660.00)

Add:

Expenses considered separately:

Interest expense 458239.00 0.00

Operating profit before working capital changes (I) 2488707.16 (18660.00)

Add / Less:

(Increase)/Decrease in Trade receivables (15928922.00) 0.00

(Increase)/Decrease in Loans & Advances (325110.00) 0.00

(16254032.00) 0.00

Add: Increase in Current Liabilities 19242436.00 18660.00

(II) 2988404.00 18660.00

Cash generated from operations (I+II) 5477111.16 0.00

Advance taxes paid (20726748.00) 0.00

NET CASH FROM OPERATING ACTIVITIES (A) (15249636.84) 0.00

B. CASH FLOW FROM INVESTING ACTIVITIES

NET CASH FROM INVESTING ACTIVITIES (B) 0.00 0.00

C. CASH FLOW FROM FINANCING ACTIVITIES

Issue of Equity Shares (net of issue expenses) 0.00 100000.00

Increase/(Decrease) in Short Term Borrowings (net) 17454406.00 0.00

Interest paid (113060.00) 0.00

NET CASH FROM FINANCING ACTIVITIES (C) 17341346.00 100000.00

NET INCREASE / (DECREASE) IN CASH AND

CASH EQUIVALENT (A+B+C) 2091709.16 100000.00

CASH AND CASH EQUIVALENTS AS AT:

Beginning of the year 100000.00 0.00

End of the year 2191709.16 100000.00

Examined and found correct.






V. Ravi

Vinay Deshpande


Anuj Mehra

Dr. Jaideep Devare

Rajesh Vasudevan

}

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Registration No. State Code 1 1


Date Month Year



N I L N I L


N I L N I L



1 8 8 6 8 1 8 8 6 8

Sources of Funds


1 0 0 1 3 1 3


N I L 1 7 4 5 5

Application of FundsNet Fixed Assets Investments

N I L N I L

Net Current Assets Miscellaneous Expenditure

1 8 5 9 2 N I L

Accumulated Losses Deferred Tax Asset (Net)

N I L 2 7 6



1 8 4 0 6 0 1 8 2 0 3 0


2 0 3 0 1 3 3 2

Earning per share in Rs.Basic Diluted Dividend Rate %

1 3 3 . 2 1 1 3 3 . 2 1 N I L



Product Description M A N P O W E R S U P P L Y

U 7 2 2 0 0 M H 2 0 0 8 P T C 1 8 6 7 8 9


V. Ravi

Vinay Deshpande


Anuj Mehra

Dr. Jaideep Devare

Rajesh VasudevanMumbai, 15th April, 2010

}

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NOTES

CMYK

Pan India network of 459 offices enabling

1.19 million customers to bank on us

1 ANDAMAN

AND NICOBAR

35 ANDHRA

PRADESH

18 WEST

BENGAL

54 UTTAR

PRADESH

6 UTTARANCHAL

3 TRIPURA

23TA

MIL

NA

DU

36 RAJASTHAN

1 SIKKIM

1 PONDICHERRY

No. of Offices

13 PUNJAB

13 ORISSA

46 MADHYA

PRADESH

45 MAHARASHTRA

1 MEGHALAYA30

KE

RA

LA

24K

AR

NA

TAK

A

2 JAMMU &

KASHMIR

10 JHARKHAND

6 HIMACHAL

PRADESH

13 HARYANA

39 GUJARAT

2 GOA

4 NEW DELHI

13 BIHAR

14C

HH

AT

TIS

GA

RH

6 ASSAM

CMYK


Sadhana House, 2nd Floor, Behind Mahindra Towers,

570, P. B. Marg, Worli, Mumbai - 400 018.

www.mahindrafinance.com

AP

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