MIRA INFORM REPORT

Report Date :

30.09.2008

IDENTIFICATION DETAILS

Name :	MAHINDRA AND MAHINDRA LIMITED
Registered Office :	Gateway Building, Apollo Bunder, Mumbai - 400001, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	02.10.1945
Com. Reg. No.:	11-4558
CIN No.: [Company Identification No.]	L65990MH1945PLC004558
TAN No.: [Tax Deduction & Collection Account No.]	NGPM00599E
Legal Form :	A Public Limited Liability Company. The Company’s Share are Listed on the Stock Exchanges.
Line of Business :	Manufacturers of Light Commercial Vehicles, Agricultural Tractors, Implements and Utility Vehicles.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 220000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company of Mahindra Group. Available information indicates high financial responsibility of the company. Financial position is good. Payments are correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long run.

LOCATIONS

Registered Office :	Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra, India
Tel. No.:	91-22-22021031
Fax No.:	91-22-22028780/22875485
E-Mail :	mahindra@giasbm01.vsnl.net.in narayan.shankar@mahindra.com
Website :	http://www.mahindraworld.com http://www.mahindra.com
Factory :	Located at: Akurli Road, Kandivli (East), Mumbai - 400 101, Maharashtra Igatpuri, Maharashtra Nasik, Maharashtra Nagpur, Maharashtra Zaheerabad, Andhra Pradesh Rudrapur, Uttar Pradesh Haridwar Pune
Branches :	Located at : Dhun Building, 827, Anna Salai, Chennai - 600 827, Tamilnadu 7, Dr. Ishaque Road (Old KYD Street), Kolkata - 700 016, West Bengal Jeevan Deep Building, No. 8, Parliament Street, New Delhi - 110 001 Raheja Chambers, First Floor, 12, Museum Road, Bangalore – 560 001, Karnataka Mahindra Towers, 2-A, Bhikaji Cama Place, New Delhi – 110066 Mahindra Towers, First Floor, 17/18, Pattulous Road, Chennai – 600002, India 5th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai - 400 018. Tel No.: 91-22-24905624/ 24975074 Fax No.:91-22-24900833 Email: investors@mahindra.com narayan.shankar@mahindra.com Website : http://www.mahindra.com

DIRECTORS

Name :	Mr. Keshub Mahindra
Designation :	Chairman
Name :	Mr. Anand G. Mahindra
Designation :	Vice Chairman and Managing Director
Name :	Mr. R. K. Pitambar
Designation :	Director
Name :	Mr. Deepak S. Parekh
Designation :	Director
Name :	Mr. Nadir B. Godrej
Designation :	Director
Name :	Mr. M. M. Murugappan
Designation :	Director
Name :	Mr. David Friedman
Designation :	Director
Name :	Mr. V. K. Chanana
Designation :	Director – Nominee of Unit Trust of India
Name :	Mr. R. N. Bhardwaj
Designation :	Director - Nominee of Life Insurance Corporation of India
Name :	Mr. Narayanan Vaghul
Designation :	Director
Name :	Mr. A. S. Ganguly
Designation :	Director
Name :	Mr. R. K. Kulkarni
Designation :	Director
Name :	Mr. Anupam Puri
Designation :	Director
Name :	Mr. K. J. Davasia
Designation :	Executive Director
Name :	Mr. Bharat Doshi
Designation :	Executive Director
Name :	Mr. Alan E. Durante
Designation :	Executive Director
Name :	Mr. A. K. Nanda
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. K. J. Davasia
Designation :	President - Farm Equipment Sector
Name :	Mr. Narayan Shankar
Designation :	Company Secretary
Name :	Mr. Bharat Doshi
Designation :	President – Trade and Financial Services Sector
Name :	Mr. Alan E. Durante
Designation :	President – Automotive Sector
Name :	Mr. A. K. Nanda
Designation :	President – Infrastructure Development Sector
Name :	Mr. Ulhas N. Yargop
Designation :	President - Telecom and Components Sector
Name :	Mr. Uday Y. Phadke
Designation :	Executive Vice President – Finance, Accounts and Legal Affairs
Name :	Mr. Anjanikumar Choudhari
Designation :	Executive Vice President – Human Resources and Corporate Services
Name :	Mr. Raghunath Murthi
Designation :	Executive Vice President - Business Development
Name :	Mr. Hemant Luthra
Designation :	Executive Vice President – Corporate Strategy
Name :	Mr. R. R. Krishnan
Designation :	Managing Director – Mahindra Intertrade Limited
Name :	Mr. Rajeev Dubey
Designation :	Executive Vice President- Human Resources and Corporate Services.
	Audit Committee Mr. Deepak S. Parekh, Chairman Mr. Nadir B. Godrej Mr. R. K. Kulkarni Mr. M.M.Murugappan Mr. V. K. Chanana
	Remuneration/Compensation Committee Mr. Narayanan Vaghul, Chairman Mr. Keshub Mahindra Mr. Nadir B. Godrej Mr. M.M.Murugappan
	Share Transfer and Shareholders/ Investors Grievance Committee Mr. Keshub Mahindra, Chairman Mr. Anand G. Mahindra Mr. Bharat Doshi Mr. A. K. Nanda Mr. R. K. Kulkarni
	Loans and Investment Committee Mr. Bharat Doshi Mr. Alan E. Durante Mr. A. K. Nanda Mr. R. K. Kulkarni Mr. Anand G. Mahindra, Vice-Chairman and Managing Director Mr. Deepak S. Parekh Mr. Nadir B. Godrej Mr. M. M. Murugappan Mr. V. K. Chanana, Nominee of Unit Trust of India
	Research and Development Committee Mr. A. S. Ganguly Mr. R. K. Kulkarni Mr. Anupam Puri Mr. Bharat Doshi, Executive Director
	MANAGEMENT BOARD Mr. Anand G. Mahindra Vice-Chairman and Managing Director Mr. Bharat Doshi President -–Trade and Financial Services Sector Mr. Ulhas N.Yargop President -–Telecom and Software Sector Mr. Uday Y. Phadke Executive Vice President -–Finance, Accounts and Legal Affairs Mr. Anjanikumar Choudhari President -–Farm Equipment Sector Mr. Hemant Luthra President- MSAT Sector Mr. Raghunath Murti Managing Director -–Mahindra Intertrade Limited Mr. Rajeev Dubey Executive Vice President- Human Resources and Corporate Services Mr. Pawan Goenka President designate -–Auto Sector and Member of the Management Board designate Mr. A. K. Nanda Executive Director and Secretary Mr. Rajeev Dubey President – HR, After – Market and Corporate Services

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.03.2008)

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters and promoter Group	55590917	22.62
Mutual Funds	12706111	5.17
Banks, Financial Institutions, Insurance Companies, State Government	52315085	21.29
FIIs/FFIs/FCs	62701359	25.52
Private Corporate Bodies	15925273	6.48
Indian Public	25307730	10.30
NRIs/OCBs	1922946	0.78
Bank of New York (for GDR Holders)	19272392	7.84
Total	245741813	100.00

Note:

FIIs / FFIs / FCs / Foreign Bodies does not include shareholding aggregating 11.750 Millions Shares representing 4.78% of the paid-up share capital of the Company held by a FII as the same is included under the category of Promoters and Promoter Group.

BUSINESS DETAILS

Line of Business :

Manufacturers of Light Commercial Vehicles, Agricultural Tractors, Implements and Utility Vehicles.

Products :

Product Description	Item Code No.
Tractors	8701
Motor vehicles for the transport of more than six persons, excluding the driver	8702
Other motor vehicles principally designed for the transport of persons	8703

PRODUCTION STATUS(As on 31.03.2008)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
On Road Automobiles having four or more wheels such as light, medium and heavy commercial vehicles, jeep type vehicles and passenger cars covered under sub heading (5) of Heading (7) of First Schedule [Note (iv) below]	Nos.	276000	229000	162400
Three Wheelers	Nos.	111000	54000	34556
Agricultural tractor	Nos.	189000	173000	95301
Tractor Skids	-	-	These are manufactured against spare capacity under 2 (a)	3616
Manufactured and purchased parts and accessories for sale	Nos.	-	These are manufactured against spare capacityunder 1 and 2above	242709
Internal Combustion Piston Engines	Nos.	175000	136000	129236
Petrol and Accessories of motor Vehicles	Nos.	500000	125000	80967
Internal Combustion Engines	Nos.	60000	54000	47597
D. G. Sets	Nos.	24000	Assembly at 3^rd Party Locations	16943
Engines	Nos.	-	These are manufactured against spare capacity under 2 (a)	15129

Note:

• The installed capacity has been certified by Presidents, which the auditors have relied on without verification as this is a technical matter.

• The licensed capacities include/represent, as the case may be, registrations granted and Industrial Entrepreneur Memorandum filed with, and duly acknowledged by, the Government pursuant to the schemes of de-licensing. [Also see note (v) below].

• Within the overall licensed capacity in item 1 above, the Company is permitted to manufacture for outside sale 10,000 petrol/diesel engines and 4,000 tonnes grey iron castings.

• Bullet proof work and fabrication on base vehicles has been carried out at third party facilities. 38 (2007: 190) vehicles were produced and sold using such third party facilities and are included in item (A) 1(a).

• The installed capacity mentioned against item no. (A) 1(a) above includes 48,000 (2007: 42,000) for production of vehicles for third parties.

GENERAL INFORMATION

No. of Employees :

18821

Bankers :

• Standard Chartered Grindlays Bank Limited, Mumbai
• Bank of America N.T and S.A, Mumbai
• Bank of Baroda, Mumbai
• Bank of India, Mumbai
• Canara Bank, Mumbai
• Central Bank of India, Mumbai
• HDFC Bank Limited, Mumbai
• State Bank of India, Mumbai
• Union Bank of India, Mumbai

Facilities :

Secured Loan	31.03.2008 Rs. In Millions
(1) Debentures/Bonds	2055.100
(2) Foreign Currency Loans from Banks	1218.000
(3) Loans and Advances on cash credit account from Banks	90.400
(4) Short-term Foreign Currency Loans From Banks	2809.100
Total	6172.600
Uncured Loan
(1) Fixed Deposits	37.200
(2) Short-term Loans :	1061.400
(3) Other Loans
From Financial Institutions Foreign Currency Loan from Banks Zero Coupon Convertible Bonds From Others (Including Interests accrued and due Rs.0.203 Millions	5211.300 4910.200 8026.000 451.900 18599.400
Total	19698.000

Banking Relations :

Good

Auditors :

Name :

A. F. Ferguson and Company

Chartered Accountants

Address :

Allahabad Bank Building, Mumbay Samachar Marg, Mumbai – 400001, Maharashtra, India

Name :

Deloitte Haskins and Sells

Chartered Accountants

Address :

12, Dr. Annie Besand Road, Opposite Shiv Sagar Estate, Worli,. Mumbai – 400018, Maharashtra, India

Associates :

• Ramani Hotels Limited
• Mahindra Industrial Park Limited
• Mahindra Knowledge Park Limited
• Fairfield Atlas Limited
• Mahindra Ugine Steel Company Limited
• Mahindra Sona Limited
• Ford Credit Kotak Mahindra Limited
• PSL Erickson Limited
• Owens Corning India Limited
• Jayem Automotives Limited
• Officermartindia.com Limited
• Mega One Stop Farm Services Limited (From March 21, 2003)
• Kota Farm Services Limited (From March 21, 2003)
• Mriyalguda Farm Solution Limited (From March 21, 2003)
• Sembcorp Infrastructure (India) Private Limited
• Mahindra Water Utilities Limited
• Mahindra Construction Company Limited
• Ratnabhoomi Enterprises Private Limited
• Mahindra Composite Limited
• Mahindra Construction Company Limited
• Owens CorniWjs (India) Limited
• Mahindra Water Utilities Limited
• Mahindra Forgings Limited
• Mahindra Gesco Developers Limited

Subsidiaries :

• Mahindra Engineering and chemical Products Limited
• Mahindra Intertrade Limited
• Mahindra Holdings and Finance Limited
• Mahindra Acres Consulting Engineers Limited
• Mahindra Holidays and Resorts India Limited
• Mahindra and Mahindra Financial Services Limited
• Mahindra British Telecom Limited
• Mahindra Consulting (Singapore) Pte. Limited
• MBT GMBH
• Mahindra Logisoft Business Solutions Limited
• Mahindra Consulting Incorporated
• Mahindra Intertrade (UK) Limited
• Mahindra Shubhalabh Services Limited
• Mahindra Eco Mobiles Limited
• GKN Sintered Metals Limited (Formerly Known as Mahindra Sintered Products Limited (till July 18, 2002 only)
• Mriyalguda Farm Solutions Limited (till March 20, 2003)
• Mahindra Engineering and Chemical Products Limited
• Mahindra Steel Service Centre Limited
• Mahindra Gesco Developers Limited
• Mahindra Infrastructure Developers Limited
• Mahindra Ashtech Limited
• NBS International Limited
• Mahindra Information Technology Services Limited
• MBT Software Technolgies Pte. Limited
• MBT International Incorporated
• Mahindra Consulting Limited
• Automartindia Limited
• Mahindra USA Incorporated
• Mahindra Gujarat Tractors Limited
• Mega One Stop Farm Services Limited (till March 20, 2003 only)
• Kota Farm Services Limited (till March 20, 2003 only)
• Tech Mahindra Limited
• Tech Mahindra (Americas) Incorporated
• Tech Mahindra GmbH
• Tech Mahindra (Singapore) Re. Limited
• Tech Mahindra (Thailand) Limited
• Tech Mahindra Foundation
• Tech Mahindra (R and D Services) Limited
• Tech Mahindra (R and D Services) Incorporated
• Tech Mahindra (R and D Services) Re. Limited
• Bristlecone Limited
• Bristlecone Incorporated
• Bristlecone UK Limited
• Bristlecone India Limited
• Bristlecone (Singapore) Re. Limited
• Bristlecone GmbH
• Mahindra Renault Private Limited
• Mahindra International Limited
• Stokes Group. Limited
• Jensand Limited
• Stokes Forgings Limited
• Stokes Forgings Dudley Limited
• Ptexion Technologies (India) Private Limited
• Plexion Technologies (UK) Limited
• Plexion Technologies GmbH
• Rexion Technologies Incorporated

Joint Venture Company :

• Mahindra Sona Limited
• Ford Credit Kotak Mahindra Limited
• PSL Erickson Limited
• Jayem Automotives Limited

CAPITAL STRUCTURE

(As on 31.03.2008):-

Authorised Capital :

No. of Shares	Type	Value	Amount
550000000	Equity Share	Rs. 10/- each	Rs. 5500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
239073400	Equity Share	Rs.10/- each	Rs. 2390.734 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		2390.700	2380.327	2333.996
2] Employee Stock Options Outstanding		40.000	31.812	15.873
3] Share Application Money		0.000	0.000	0.000
4] Reserves & Surplus		41070.000	33116.956	26738.840
5] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		43500.700	35529.095	29088.709
LOAN FUNDS
1] Secured Loans		6172.600	1066.534	2166.760
2] Unsecured Loans		19698.000	15293.532	6667.062
TOTAL BORROWING		25870.600	16360.066	8833.822
DEFERRED TAX LIABILITIES		567.200	197.862	1467.500
TOTAL		69938.500	52087.023	39390.031
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		18144.500	15905.685	13752.593
Capital work-in-progress		5464.500	2805.991	1791.860
INVESTMENT		42150.500	22374.570	16690.884
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	10841.100	8784.837	8787.437
	Sundry Debtors	10048.800	7008.867	6379.689
	Cash & Bank Balances	8612.300	13260.719	7303.060
	Other Current Assets	132.700	33.124	31.412
	Loans & Advances	6918.800	8394.148	4988.983
Total Current Assets		36553.700	37481.695	27490.581
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	23075.500	19502.191	15208.412
	Provisions	9434.600	7154.252	5308.021
Total Current Liabilities		32510.100	26656.443	20516.433
Net Current Assets		4043.600	10825.252	6974.148
MISCELLANEOUS EXPENSES		135.300	175.525	180.546
TOTAL		69938.500	52087.023	39390.031

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		108046.400	96277.109	79887.679
Other Income		8670.000	6175.131	3377.715
Total Income		116716.400	102452.240	83265.394
Profit/(Loss) Before Tax		14067.700	14376.710	10995.049
Provision for Taxation		3034.000	3692.845	2424.000
Profit/(Loss) After Tax		11033.700	10683.865	8571.049
Earnings in Foreign Currency :
	Export Earnings	7953.800	6149.608	4651.026
	Commission Earnings	389.000	518.641	111.575
	Other Earnings	492.800	460.417	318.171
Total Earnings		8835.600	7128.666	5080.772
Imports :
	Raw Materials	46.300	179.623	368.566
	Stores & Spares	1211.100	1074.559	978.694
	Capital Goods	1447.000	827.237	290.716
	Others	85.700	80.014	92.139
Total Imports		2790.100	2161.433	1730.115
Expenditures :
	Raw Materials, Finished and Semi Finished Products	77259.100	62519.169	54780.044
	Excise Duty	181.800	(21.380)	116.105
	Personnel	8524.500	6661.533	5517.839
	Interests, Commitment Charges	242.400	(674.543)	(184.016)
	Depreciation & Amortization	2386.600	2095.865	2000.053
	Finance Charges	14054.300	13185.727	10040.320
	Other Expenditure	0.000	4309.159	0.000
Total Expenditure		102648.700	88075.530	72270.345

QUARTERLY RESULTS

PARTICULARS	30.06.2008 1^st Quarterly
Sales Turnover	32934.500
Other Income	383.500
Total Income	33318.000
Total Expenditure	30465.500
Operating Profit	2852.500
Interests	97.300
Gross Profit	2755.200
Depreciation	621.100
Tax	32.000
Reported PAT	1593.000

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt Equity Ratio	0.54	0.39	0.40
Long Term Debt Equity Ratio	0.51	0.37	0.37
Current Ratio	1.19	1.29	1.18
TURNOVER RATIOS
Fixed Assets	3.75	3.58	3.27
Inventory	13.11	12.40	11.08
Debtors	15.09	16.27	15.80
Interest Cover Ratio	14.88	72.64	33.02
Operating Profit Margin (%)	11.98	15.13	12.00
Profit Before Interest and Tax Margin (%)	10.13	13.21	9.80
Cash Profit Margin (%)	9.26	11.73	9.71
Adjusted Net Profit Margin (%)	7.41	9.81	7.51
Return on Capital Employed (%)	21.59	32.25	26.33
Return on Net Worth (%)	24.20	33.20	28.03

LOCAL AGENCY FURTHER INFORMATION

History:

The Mahindra brothers joined hands with a distinguished gentleman called Ghulam Mohammed and to make the birth of Mahindra and Mahindra in October 2nd, 1945 as Mahindra and Mohammed, a franchise for assembling jeeps from Willys, USA. Two years later, India became an independent nation and in 1948 Mahindra and Mohammed changed its name to Mahindra and Mahindra (M and M). The Steel trading business was commenced in association with suppliers in UK. Since then, Mahindra and Mahindra has grown steadily in size and stature and evolved into a Group that occupies a premier position in almost all key sectors of the economy. Mahindra Group is among the top 10 industrial houses in India. Its products and services are grouped into seven groups, such as Automotive, Farm Equipment, Trade and Financial Services, Information Technology, Infrastructure Development, Systech and Speciality Business.  

The first business was with Mitsubishi Corporation commenced and 5000 tons of wagon building plates from Yawata Iron and Steel were supplied during the period of 1950. In the year 1953 Otis Elevator Company (India) was established. A joint venture was made with Rubery Owen and Company Limited, UK and established a company under the name of Mahindra Owen. The company's Machine Tools Division was commenced its operations in the year 1958. During the year 1960 the Mahindra Sintered Products Limited was established based on a joint venture with Bir Field (GKN Group, UK) and the year later, the Mahindra Ugine Steel Company was established with a joint venture between the company and Ugine Kuhlmann, France. The company's major milestone was happened in the year 1963, the International Tractor Company of India established - a joint venture with International Harvester Company, USA and now the thing Subject is the only Indian company among the top three tractor manufacturers in the world. The company entered into light commercial vehicles segment also, the manufacture of light commercial vehicles was commenced in the year 1965. Vickers Sperry of India Limited established - a joint venture with Sperry Rand Corporation, USA in the same year. 1969 was the year to company; MandM entered the world market with export of utility vehicles and spare parts.  

Mahindra Engineering and Chemical Products Limited was originated its operations during the year 1970. In the year 1977, the International Tractor Company of India merged with Mahindra and Mahindra to become its Tractor Division and within two years Mahindra brand of tractors was launched. The company entered into Information Technology by the way of leading Tech Mahindra (formerly known as Mahindra British Telecom) established - a joint venture with British Telecommunications Plc (BT), UK. During the year 1991 the company introduced Commander range of vehicles and the Mahindra Financial Services Limited was established as a wholesale fund provider. Merged diverse activities of Steel, Machine Tools and Graphics into Intertrade Division in the year 1992. In 1993 M and M incorporated the Mahindra British Telecom International Inc., USA a wholly owned subsidiary of Mahindra British Telecom. The company established Mahindra Steel Service Centre Limited in association with Mitsubishi Corporation and Nissho Iwai Corporation of Japan. The company and Acres International Limited (Canada) was jointly instituted the Mahindra Acres Consulting Engineers Limited to provide multidisciplinary engineering consultancy service. During the period of 1994, Mahindra Realty and Infrastructure Developers Limited was brought its existence. 

Mahindra USA Inc. was established for distribution of tractors in the USA. The EAC Graphics (India) Limited also was established in the same year by collaboration with The East Asiatic Company Limited A/S, Denmark. Mahindra Allwyn Nissan Limited was merged with the company. In the year 2005, Mahindra Holding and Finance Limited became a subsidiary of M and M to carry out business as an investment company and the company made a technical collaboration with Mitsubishi / Samcor to manufacture the Mitsubishi L300. During the year 1996 the company made prestigious actions, the USA's Ford Motor Company was joined with the company and established Mahindra Ford India Limited to manufacture passenger cars. The company made a Foreign Currency Convertible Bond (FCCB) issue of US$ 115 million. The Mahindra Holidays and Resorts India Limited was established and also the Mahindra Consulting (now Bristlecone) was established in the equivalent year. 

A public private partnership initiative between Mahindra World City and Southern Railway, the Paranur railway station was the first to be redesigned and maintained by the corporate sector in the year 2007. During the same year 2007, the company's Farm Equipment Sector (FES) showcased India's first bio-diesel tractor at the Kisan Mela in Pune on December 14, 2007. Mahindra World City, Jaipur signed MoU with Deutsche Bank on the sidelines of the Resurgent Rajasthan - Partnership Summit' being held in Jaipur to set up campuses. M and M launched the Scorpio V-series, a new line-up of India's leading SUV, with the introduction of the Scorpio VLX. A wholly owned affiliate of Navistar International Corporation (Other OTC: NAVZ), signed a joint venture agreement with the company to produce diesel engines for medium and heavy commercial trucks and buses in India. As in part of Corporate Social Responsibility, the company inaugurated Impact India Foundation's Lifeline Express, world's first hospital on rails on October of the year. The company has been awarded the ISO/IEC 27001:2005 certificate. This completes the company's successful migration from BS 7799 to ISO 27001. Mahindra inaugurated its state -of-the-art Blanking Line facility in Nashik backed by German technology. Company Auto Sector's Zaheerabad plant has won the First Prize in the National Energy Conservation Awards - 2007.  

Subject was awarded the 'Excellence in Innovation' Award at the Indira International Innovation Summit (3i's Summit) in February 2008. The company won the BSE award for Best Corporate Social Responsibility Practice at the Social and Corporate Governance Awards (Innovative strategies - Measurable Impacts), presented by BSE and NASSCOM Foundation. As like above the company credited lot of awards from various reputed raters and sources. Acquired Auto Designing co., G.R. Grafica Ricerca Design S.r.l (GRD), an Italian auto designing, feasibility and styling company based out of Turin, Italy during the year 2008. Mahindra Holidays and Resorts India Limited (MHRIL) signs an MOU with West Bengal Tourism Development Corp. (WBTDC) and Sunderban Infrastructure Development Corp. (SIDC) for development of Tourism in West Bengal in February 2008. On March 2008, Mahindra signs MoU with Government of Maharashtra to invest an additional Rs.15000.000 Millions in Chakan Greenfield. As on April of the same year, a consortium of Subject (MandM) and ICICI Venture Funds Managements Limited, India's leading PE player with AUM of over $ 2 billion, has signed a definitive agreement agreeing to acquire 100% stake in Metalcastello S.p.A, a leading Italian independent gear manufacturer and in the same month of the same year launched Mahindra Scorpio SUV in Chile in partnership with Fortaleza of the Automotores Gildemeister Group. Mahindra launched new After-Market Business Vertical, Inaugurates first multi-brand car service centre in Mumbai on April 2008. As on May 2008, the company launched the Mahindra Pik up Double Cab in Paraguay, in partnership with the Rieder Group.

Performance Review

Automotive Sector:

For the sixth consecutive year the Company’s vehicle production and sales recorded outstanding performance levels despite the industry slowdown during the year. A total of 200132 vehicles and 34556 three-wheelers were Produced as against 144090 vehicles and 34892 three wheelers in the last year. These include 11,079 light commercial vehicles (LCVs) and 26653 cars (previous year 8,811 LCVs and 614 cars) manufactured and supplied to two of the subsidiaries, Mahindra International Limited (MIL) and Mahindra Renault Private Limited (MRPL).

The Company recorded sales of 161001 vehicles and 34076 three-wheelers as compared to 135961 vehicles and 33,718 three-wheelers in the previous year registering a growth of 18.4% and 1.1% in vehicles sales and three wheeler sales respectively.

The total domestic sales volume of 148791 vehicles was higher by 16.3% than the previous year’s volume of 127958 vehicles.

The Company reported a record sale of 148761 multi utility vehicles (MUV or MUVs) in the domestic market in the year as against sale of 127856 MUVs in the previous year. The Company’s domestic MUV sales volume grew a very healthy 16.4%, against the industry MUV sales growth of 5.1%.

The Company strengthened its dominant position in the domestic MUV sub-segment by increasing its market share to 51.5% over the previous year’s market share of 46.6%.

The small pick up model, Maxi Truck, was responsible for the Company pick up volumes registering a growth of 17% while the pick up sub-segment industry de-grew by 4%. As a result, the Company’s market share jumped to 76.9% from the previous year’s market share of 63.2%.

In the Overseas Markets, the Company’s initiatives resulted in a strong growth of 54% in export volumes - from 8,021 vehicles [including 254 vehicles sourced from MIL] in the previous year to 12,359 vehicles [including 363 vehicles sourced from MIL].

Spare parts sales for the year stood at Rs.3883.000 Millions as compared to Rs.3073.300 Millions in the previous year.

Farm Equipment Sector:

The Company registered a production of 98,917 Tractors for the year under review as compared to 103847 Tractors in the previous year. This was despite the material supply constraints faced by domestic tractor industry in the Financial Year 2008. In addition, 31,922 Engines were produced for the Mahindra Powerol brand. The strategy of increasing production at the Company’s Rudrapur Plant, compared to earlier dependence on the Kandivali Plant, and has significantly contributed to lowering the manufacturing cost.

The Company recorded sales of 99042 Tractors, as compared to 102531 Tractors sold in the previous year. Sale of domestic Tractors was 90,509 Tractors compared to 95,006 Tractors sold in the previous year (a de growth of 4.7%). This was in a year that witnessed industries degrowth of 5.1%, following four consecutive years of Industry growth. The de-growth was mainly due to slow down in bank financing on account of higher NPA’s, and tightening of lending norms. The situation was further aggravated by increased interest rates.

In this challenging scenario, the Company has maintained its market leadership in the domestic market for the 25^th consecutive year.

Against the backdrop of strengthening of the Rupee against the US dollar, exports of the Company’s Tractors have actually increased to 8,533 Tractors, a growth of 13.4%, compared to 7,525 Tractors exported last year. The Company’s Tractors are now being sold in 6 continents of the world. Apart from the US market and the African Countries, the neighbouring countries of Sri Lanka, Bangladesh and Nepal are the other large overseas markets. Forays have also been made into new markets, namely New Zealand and the Latin American Countries of Brazil and Chile.

A number of new products were introduced, in both the domestic and international space, with many more in the pipeline.

In the domestic market, the 30-40 HP Segment is the largest, comprising nearly 55% of the market. The Company introduced the 295 DI Super Turbo, which was the first turbo, charged Tractor in this Segment. Also, the 595 DI Super Turbo (greater than 40 HP Segment) was upgraded. The Arjun Ultra-1 has now been transformed into a versatile product which has demonstrated superlative performance both on and off the field. Mahindra Shaan - a 25 HP multi-utility Tractor, which was launched by the Company in 2007, won the ‘Outstanding Innovation Award’ from ASABE (American Society for Agricultural and Biological Engineers), USA. This Award has acknowledged the Company’s ability to conceive and deliver innovative products.

On the International front, Tier III and Tier IV compliant Tractors were introduced in the US market and to meet the demand of the higher HP Segment in Africa, the ‘8000’ Tractor series was launched there. To leverage domain expertise in logistics and to enhance effectiveness of the supply chain in operation, the Company outsourced a significant part of its Logistics operations to Mahindra Logistics, a Division of the Company. Additional savings have been accrued as a result of this move.

Under the Mahindra Powerol Brand, the Company sold 31,922 engines during the year, as against 24,141 engines last year, a growth of 32%. From having a single institutional customer in the Financial Year 2002, today the engine business has 22 corporate clients. Mahindra Powerol has retained its market leadership in gensets market, catering primarily to the telecom segment. The Company expanded the Mahindra Powerol genset product range up to 62.5 KVA with the introduction of 40, 50 and 62.5 KVA engines. Mahindra Powerol was recognised with the Frost and Sullivan ‘Voice of the Customer’ Award for being the ‘Most Preferred Genset Brand in the Telecom Segment’.

The Company has been awarded the Japan Quality Medal (JQM) in 2007, by the Union of Japanese Scientists and Engineers (JUSE), Tokyo, Japan. JQM is a rare honour given to a Company for excellence in Total Quality Management (TQM). The Company is the only Tractor Company in the world to win this Award. The Company had also won the Deming Application Prize in 2003. Both of these prizes are recognition of the Company’s customer focus, commitment to TQM practices and demonstration of results by significantly improving product and process quality.

Mahindra Defence Systems Division:

The Company provides world class armouring solutions for light combat vehicles and SUVs as well as high mobility vehicles for defence use. The Company developed the AXE, a high mobility fast attack vehicle. This Vehicle was awarded the “Indigenous Design of the Year” by Overdrive. The Marksman is another modern light armoured vehicle developed during the year.

The Company continues to develop competencies in special vehicles and is in the advanced stages of construction of the Mahindra Special Military Vehicles facility at Faridabad. This is the first such dedicated defence vehicle facility in the private sector.

The Company has established a manufacturing facility for underwater systems at Pune and is now well placed to deliver Sea Mines and Decoy Launchers to the Indian Navy. The Company has obtained an export order from Ghana for up-armoured Scorpios during the year under review.

Mahindra Logistics Division:

The Logistics arm of the Company continues its impressive growth by recording revenues of Rs.6070.000 Millions as compared to Rs.3830.000 Millions in the previous year, registering a sustained increase of over 50% on a year on year basis for the past few years. The business has acquired its leadership position in the Automotive / BPO and ITES Industry Segments and is now building its presence in Retail and other Industry Segments.

Profits:

The Profit for the year before Depreciation, Interest, Exceptional items and Taxation was Rs.15044.700 Millions as against Rs.14578.300 Millions in the previous year registering an increase of 3.20%. Profit after tax was Rs.11033.700 Millions as against Rs.10683.900 Millions in the previous year recording an increase of 3.27%. The Company continues with its rigorous cost restructuring exercises by efficiency improvements which have resulted in significant savings through value engineering, cost re-engineering and economising, optimum utilisation of available manufacturing locations, outsourcing of service activities, optimisation of plant capacity utilisation, cost competitiveness and right sizing in almost all areas.

Finance:

The Company raised resources from the capital markets to part finance its various ongoing modernisation and expansion programmers. The Company successfully accessed both overseas and domestic markets with diverse instruments, maturities and interest rate fixings.

The Company raised Unsecured External Commercial Borrowing (ECB) of US$ 50 million. The ECB was raised at an average maturity of six years at highly competitive rates.In the domestic market; the Company raised Rs.2000.000 Millions by way of Private Placement of Secured, Non-Convertible Redeemable Debentures with a bullet maturity of 3 years. ICRA has assigned a “LAA+” rating to these Debentures indicating high credit quality. The Company also raised Rs.1000.000 Millions through FCNR (B) Loan from a Consortium Bank at a highly competitive rate.

In order to meet short-term mismatches, the Company utilised its fund based working capital limits from time to time, apart from making regular use of non-fund based limits. The Company inter alia raised Rs.1000.000 Millions through issue of Commercial Paper at very competitive rates. The Paper was rated “P1+” by CRISIL, the highest rating for a short term paper. The Consortium of Bankers continues to brate the Company as a prime customer and extends facilities/ services at prime rates.

The Company follows a prudent financial policy and aims to maintain optimum financial gearing at all times. The

Company’s total Debt to Equity Ratio was 0.60 as at 31^st March, 2008.

During the year, CRISIL has reaffirmed the “AA+ with a Negative outlook” rating assigned by it to the Company’s outstanding Debentures in the previous financial year. CRISIL’s rating indicates high safety on timely payment of interest and principal. Subsequent to 31st March, 2008, the Board of Directors of the Company have considered and approved, subject to receipt of requisite approvals and consent of the Shareholders by means of a Postal Ballot, issuance of 9395974, 9.25% p.a. Unsecured Fully and Compulsorily Convertible Debentures (“FCD” or “FCDs”) of the Face Value of Rs.745 each aggregating Rs.700,00,00,630 to Golboot Holdings Limited, an entity controlled by Goldman Sachs, each FCD being convertible into one Equity Share of Rs.10 each in the Company at a price of Rs.745 per Share (including premium of Rs.735 per Share) in accordance with Chapter XIII of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

The FCDs shall be convertible into Equity Shares at anytime within 18 months from the date of allotment of FCDs at the option of the Investor and mandatorily convertible into Equity Shares on the date falling 18 months from the date of allotment. The Company will utilise the amount raised through this preferential offer towards its Automobile and Farm Equipment businesses.

MANAGEMENT DISCUSSION and ANALYSIS

Industry Structure

The Automotive Sector

The automotive industry is one of the key contributors to the Indian manufacturing economy. The Indian automotive industry achieved a turnover in excess of Rs.1650000.000 Millions in 2005-06. It accounted for over 13 mn direct and indirect jobs and 17% of the total indirect taxes as per the Automotive Mission Plan 2016, Government of India.

The total production of Multi Utility Vehicles (MUVs), Light Commercial Vehicles (LCVs) and three wheelers in India during the year under review grew by 1% over the previous year and stood at 1,100,303 vehicles. (Source: SIAM). The Company produced 208,035 vehicles during the same period, a growth of 16% over the previous year. The Company accounted for 18.9% of the Indian production of MUVs, LCVs and three wheelers in the year under review.

MUVs are a family of vehicles capable of versatile applications such as passenger transport, goods transport or a combination of the two. There are six manufacturers of multi utility vehicles in India. The Company is the largest manufacturer of MUVs in India, offering a range of over 20 models. 288,600 MUVs were sold in India in the year F-08, a growth of 5.1 % over F-07 (Source: Industry and internal). MUVs are further categorized into soft tops, hard tops and pick-ups.

LCVs (carrying a payload of 2MT to 4 MT) are commercial vehicles used mostly for intra-state movement of goods. In F-08 44,957 LCVs of this category were sold – a growth of 4.3% over F-07 (Source: Industry and internal).The company competes in this segment through its subsidiary Mahindra International Limited (MIL). There are six manufacturers in India in this specific LCV segment.

India is the largest market in the world for three wheelers. In F-08 this segment decelerated by 9.7% over F-07, with 364,700 three wheelers being sold in India. (Source: SIAM).

The Farm Equipment Sector

The Indian Tractor market is the largest in the world, in terms of sales volume. In the current year all the tractor manufacturers together sold 302241 tractors in the domestic market. Additionally, 44260 tractors were exported.

The domestic tractor market is segmented by horsepower into the low horsepower 25 HP segment, the mid segment of 35 HP and the high segment of above 45 HP. Most of the major players cater to all the three segments. However, their relative strengths and market positions differ from segment to segment. The domestic tractor industry is fragmented, with about 14 major players and some small local players.

Many factors affect tractor sales including monsoons, means of irrigation, water levels, government declared support prices for crops, general commodity prices, crop production expenses (including seeds, fuel, fertilizer, pesticides and other costs) and the credit policy announced by RBI. The availability of finance is one of the most significant factors influencing tractor demand, as more than 90% of tractors are sold through bank finance.

Company Farm Equipment Sector (FES), which designs, develops, manufactures and markets tractors for Indian and overseas markets, is the largest manufacturer of tractors in India. FES has sustained its market leadership in the Indian tractor market for over 25 years.

Industry Developments

The Automotive Sector

The Indian automotive industry had experienced a strong growth wave over the last five years. F-08 however, saw a drop in production (including two wheelers) by 2.3% and a drop in sales (including two wheelers) by 4.7% (Source: SIAM). The only segments that registered growth in sales were passenger vehicles (12.2%) and commercial vehicles (4.1%). The three wheeler and two wheeler segments witnessed a drop in growth of 9.7% and 7.9% respectively.

A combination of factors contributed to this situation, the main ones being a rise in interest rates, continued increase in fuel prices, sharp commodity inflation leading to higher costs and a slight economic slowdown.

The total number of MUVs sold in India increased by 5.1%, Within the MUV sub segments, the hard top sub segment, which is the largest sub segment in MUVs, saw a volume increase of 9% in the as compared to 16% in the previous year. The soft tops sub segment, which has been declining significantly over the last few years, declined a further 6 % in the year under review. The pick-up market declined by 4% this year, after a 20% growth last year.

The mid size car segment where the Logan competes, increased by 16%.

In the LCV segment (2-4 MT of payload) the sales increased by 4.3%. The volumes in the small three-wheeler segment (0.5T load) declined by 18.6% and the large three-wheeler segment witnessed a decline in volumes of 37.3%. (Source: Industry and internal)

The Farm Equipment Sector

The first monsoon (between June and Sept) of FY 07-08 was 105% of the Long Period Average, resulting in a good Kharif crop. The second monsoon was lesser than normal in more than half of the areas across India. Hence, Rabi sowing was lower than F-07 by 3%. However crop production during F-08 (Rabi and Kharif combined) is estimated to be 3% higher than the last year. The Government also announced significantly higher Minimum Support Prices for various crops for both Rabi and Kharif periods. Overall, it is estimated that the agricultural GDP of India will grow by 2.6% in F-08.

Credit allocation to agriculture had been increased to Rs.2250000.000 Millions. Yet, due to higher NPAs, they witnessed a slow down in bank financing and a tightening of lending norms. This, coupled with increased interest rates, caused a drop of 5.1% in domestic sales in the tractor industry over F-07. The domestic industry closed at 302241 tractors in F-08, compared to 318328 tractors in F-07. Exports from India totalled 44,260 tractors in F-08, a growth of 31.5% over the last year.

The industry had to bear the impact of hikes in the price of raw materials. Over the last four years, the prices of important input materials like steel, pig iron, and lead have continuously increased. The prices of crude oil increased significantly in the current year. Simultaneously, exports were impacted due to a significant appreciation of the rupee against the U.S. Dollar. Margins therefore continued to be under pressure.

The industry is witnessing consolidation in the domestic market. In F-06, Tractor and Farm Equipment Limited (TAFE) bought Eicher Tractors Limited In F-08, MandM FES increased its dominance of the domestic market with the acquisition of Punjab Tractors Limited (PTL), With this acquisition, MandM FES now commands nearly 40% of the domestic market.

M and M Performance

The Automotive Sector

The Automotive Sector (AS) of the Company is engaged in the Multi Utility Vehicle (MUV) and three wheeler segments directly. It competes in the Light Commercial Vehicle (LCV) segment through its joint venture subsidiary MIL, and in the passenger car segment through another joint venture subsidiary Mahindra Renault Private Limited (MRPL). The Company manufactures LCVs for MIL and passenger cars for MRPL on contract basis. The Company also markets these LCVs and cars for the two companies respectively under distribution contract for a fee.

For the sixth consecutive year, the Company’s vehicle production and sales touched an all-time high during the year under review, despite the industry slowdown. A total of 234,688 vehicles (including 34,556 three wheelers, 11,079 LCVs for MIL and 26,653 cars for MRPL) were produced, which is a growth of 31.1 % over the previous year.

On the domestic sales front, the company along with its subsidiaries MIL and MRPL sold a total of 218,998 vehicles (including 33,927 three wheelers, 10,373 LCVs through MIL and 25,907 cars through MRPL), recording a growth of 28.7% over the previous year.

The Company’s domestic MUV sales volumes grew a very healthy 16.4%, against the industry MUV sales growth of 5.1%. A record number of 148,761 MUVs were sold by MandM in the domestic market in the year under review as against the sale of 127,856 MUVs in the previous year.

The company strengthened its domination of the domestic MUV sub segment by increasing its market share to 51.5% over the previous year’s market share of 46.6% In the hard top MUV sub segment, the success of the refreshed Scorpio and the Bolero models helped the Company grow its volumes by 19%. The refreshed version of the Bolero that was launched in March 2007 was a hit with customers and the Bolero brand sales volume increased by 33% over the previous year. In the process, Bolero brand sales crossed the milestone of 50,000 vehicles sold in a year and Bolero continued to be India’s largest selling MUV, for the third year in a row. November 2007 saw the launch of the VLX variant of the Scorpio. Powered by the m-Hawk - a new indigenously developed, state of the art, 2.2 liter common rail diesel engine - and bundled together with a host of electronic features. The Scorpio VLX has found great favour with the customer.

In the soft top sub segment, the Company’s soft-top sale volume declined by 7 % in line with the industry decline of 6%. The Company pick up volumes registered a growth of 17% in spite of an industry de-growth of 4% in this sub segment. As a result, the Company’s market share jumped to 76.9% from the previous year’s share of 63.2%. The credit goes to the success of the small pick up model, the Maxi Truck.

In LCVs, MandM, through its subsidiary MIL, has a presence only in the lower payload (< 4MT) segment of the market. The Company’s sales in this sub segment improved by 20.3%, as against an industry sub segment growth of 4.4 % in the year under review. This was due to recent launches in the passenger segment as well as the repositioning of a load carrying model. One of the principal reasons for this very healthy growth was the increased focus on the business through MIL. This led to an increase in the Group’s market share in the segment from 20.1% in the previous year to 23.1% in the year under review. The subsidiary company is currently also working on developing products for the higher end of the LCV segment as well as larger commercial vehicles.

In November 2007, the company signed a joint venture agreement with International Trucks (a wholly owned affiliate of Navistar International Corporation) to produce diesel engines for medium and heavy commercial trucks and buses in India. The joint venture, named Mahindra Navistar Engines Private Limited (MNEL), is 51% owned by Mahindra and Mahindra (MandM) and 49% owned by Warrenville based Navistar, North America’s largest combined commercial truck, school bus and mid-range diesel engine producer. F-08 also witnessed the launch of the Logan car by MRPL.

The Logan boasts of best in class fuel efficiency, cabin space and driving comfort and has won multiple awards. Competing in the very competitive midsize segment of the domestic car market, the Logan has been amongst the top selling cars in the segment since launch and has captured an 11.2 % market share of this segment. 25,907 Logan cars were sold in F-08.

In the 0.5 T load segment of the three wheeler market, the company has now acquired a sizeable market share of

19.3% with the Alfa three wheeler selling 21,564 units. This is a growth of 10.3% over the previous year, in a scenario where the industry volumes declined by 18.6%. In February 2008 the company also entered the 3-seat three wheeler passenger markets with the launch of the Alfa passenger, in Chandigarh, Rajasthan, Bihar, Assam, West Bengal and Kerala. Customer acceptance has been positive and this model should contribute to the Company’s growth in the current year, with the Pan India launch being completed by July 2008.

In the declining large three wheeler segment, the Company sold 9,799 large three wheelers against 14,146 in the previous year. This is a decline of 30.7% in sales volumes compared to a 37.3% decline for industry as a whole. In the last MDA it was reported that two Greenfield manufacturing sites, one at Chakan, near Pune and one at Oragadam near Chennai, were being planned. During the year under review, based on a re-alignment of its manufacturing strategy, the company has deferred its investment at the joint manufacturing site at Chennai in partnership with Renault s.a.s and Nissan Motor Company Limited. The company will utilise the capacity available at their new plant in Chakan and other existing plants to meet its medium term requirements, for both domestic and overseas production.

Work on the greenfield plant at Chakan, near Pune has been initiated. Land acquisition is complete and construction work is in full swing. This plant near Pune will have the capabilities to manufacture the company’s range of new generation MUVs as well as commercial application vehicles. It will also manufacture CVs for MIL. Additionally, MNEL will manufacture engines at this facility. The Company has intensified its efforts to identify niche markets for its automotive products throughout the world, especially in geographical areas that have similar sales, distribution and marketing conditions as India. Over the last three years the Company introduced its vehicles into many new countries including Europe, Middle East, South America and South-East Asia by adapting unique business models for each country.

In F-08, vehicles were launched in Australia, Chile and Sudan. The year also witnessed the launch of the sector’s first CKD operations abroad with the opening of CKD assembly plants in Egypt and Brazil.

These initiatives resulted in continuing strong growth in export volumes, with a 54% export growth from 8,021 vehicles [including 254 vehicles sourced from MIL] in the previous year to 12,359 vehicles [including 363 vehicles sourced from MIL] in the year under review. The entry into all these new markets was under the “MAHINDRA” brand name, in keeping with the objective of promoting and establishing the Mahindra brand across the globe.

In Operations, the Company focused on increasing capacity at existing plants, on rigorous cost reduction, and on a ramp up of its new Uttaranchal plant. Energy conservation was an area of particular focus. The impact of their efforts was recognised when, the Zaheerabad and Nasik Plants were awarded the National Energy Conservation Award (1st rank and 2nd rank respectively), and the Nashik and Kandivli plants won the state level prizes for energy conservation. The Automotive Sector’s Nashik plant also won the National Award for excellence in water conservation.

The Company has also been making significant efforts to take customer satisfaction to even higher levels in its pursuit of becoming one of the most customer caring automotive companies. The Company significantly improved its standing to 3rd rank on sales satisfaction in syndicated studies conducted by independent third party agencies like J.D. Power. Two of the company’s products – Scorpio and Logan were ranked No. 1 in the TNS Total Customer Satisfaction scores in their respective categories. In the TNS study on Dealer Satisfaction released in 2007, the Company ranked first. The Company was also rated second in a TNS study on the Most Trusted Indian car companies.

The Farm Equipment Sector

FES achieved a major milestone in F-08 when the cumulative sales of its tractors till date crossed the 1.300 Millions mark. It sustained its leadership position for the 25th consecutive year with a market share of 30% in the domestic tractor market, 90,509 tractors were sold in F-08 as against 95,006 tractors in F-07. Additionally, 8,533 tractors were exported in F-08 against 7,525 tractors in F-07.

The year F-08 was marked by the introduction of new and upgraded products and technologies. The 295 DI Super Turbo and the upgraded Sarpanch 595DI Super Turbo were launched in the month of October 2007. The former is a 39HP Turbo charged tractor with a new technology. It is the first Turbo tractor in the mid segment and is one of the most powerful tractors in this category. The latter is an upgraded product, with significant improvement in the product performance and in the value offered to the customer. The Arjun Ultra-1 has now been transformed into a versatile product capable of being used in the fields, as well as for construction and mining applications.

The Mahindra ‘Shaan’, launched in F-07, won the “Outstanding Innovation Award” from ASABE (American Society for Agricultural and Biological Engineers). This is recognition of FES’ ability to conceive and develop innovative products that meet the customers’ latent needs. In its endeavor to offer unparalleled customer quality, durable and high performance products, FES tests its products in the most demanding environments. MandM - FES was awarded the ‘Indian Innovation Award 2006’ for ‘reducing time to market in New Product Development by bringing field to lab’. This is an acknowledgement of FES’ technological advances and its ability to test its products with the same rigor within the confines of a test lab.

This year, FES further increased its focus on Customer Centricity by leveraging technology to provide innovative new services. A 24x7 toll free number has been extended pan India to give customers a unique ownership experience.

To meet the growing demand for automobiles running on alternate fuels, Bio-Diesel technology readiness for up to 5% bio-fuel has been achieved. FES has sold tractors with this capability. Bio-fuel hubs have been created in some areas to facilitate availability of this green fuel. FES is at the forefront of efforts in the development of green technologies, which will contribute to environmental sustainability. FES also sells engines and gensets under the ‘Mahindra Powerol’ brand. ‘Mahindra Powerol’ retained its market leadership in the telecom segment for gensets. In F-08, it increased its customer base, with engine and genset sales put together increasing by 32% in volume terms, and by an even more substantial 72% in value terms. Mahindra Powerol also expanded its genset product range upto 62.5 KVA. This was accompanied by the introduction of super silent gensets (less than 62 db) for usage in silent zones in accordance with the Central Pollution Control Board norms. Innovative brand promotion like FM radio campaigns and advertisements in public transport were undertaken – a first in this segment. Branded show rooms were set-up in 25 Indian cities to boost its presence in the retail segment. Mahindra Powerol won with the Frost and Sullivan ‘Voice of the Customer’ Award” for being the ‘Most preferred Genset

Brand in the Telecom Segment’, which truly reflects the impact that Mahindra Powerol has created in the telecom space. This is another reflection of the FES spirit of customer centricity.

On the global front FES’ strategic joint venture in China - the Mahindra (China) Tractor Company Ltd. (MCTCL) increased its presence in the Chinese market by spreading its distribution to new regions in North West and Central China. This enabled a sales growth despite a sluggish domestic industry. On the exports front, MCTCL launched its 25HP - 4wd product in the USA market. This product has been well received by dealers in US. MCTCL has also made inroads in South Asia by penetrating markets like Bangladesh and Sri Lanka. MCTCL embarked on a product range expansion program by introducing products up to 55 HP. The enhanced market presence in domestic and exports markets and the product range expansion program will enable MCTCL to gain a significant presence in the China tractor industry.

In the USA, the 0-70 HP tractor industry declined by 13% between April 2007 and March 2008. The major reasons were fuel price increases, softening of the credit market due to sub prime crisis and higher energy costs. Mahindra USA (MUSA) sales increased by 1%.

Mahindra USA has been recognized as an important player in the American market, and has been invited to join the Board of the Association of Equipment Manufacturers (AEM), which is a leading international trade association focused on meeting the global business needs of equipment manufacturers and service providers.

The overall growth in exports for Rest of the World (ROW) tractor markets (excluding USA and China) in F-08 was 18%. Australia and Africa were major contributors to this growth. Satellite assembly plants were set up in the African states of Tchad and Mali in F-08. FES also entered new markets, including Iran in the Middle East, {where it had partnered with Iran Tractor Manufacturing Co. (ITMCo) and Brazil in South America.

FES won the All India Award for Export Excellence instituted by Engineering Export Promotion Council (EEPC), which recognized its outstanding contribution to Engineering Exports in the field of agricultural machinery. In addition, at the 74th International Fair of Agriculture, at Novi Sad, Serbia, MandM bagged the ‘Best Tractor Introduction’ award. The Union of Japanese Scientists and Engineers (JUSE), Tokyo, Japan awarded the ‘Japan Quality Medal’ to FES for 2007. The JQM is an internationally acclaimed Quality accolade, awarded to a company with outstanding Quality Management. FES is now the only tractor company in the world to attain this award, and with this win, it joins the league of global companies. FES also won the Deming Application Prize in 2003 for its Customer Focus, commitment to TQM practices and demonstration of results in improving product and process quality. For FES, after winning the Deming Prize, the JQM win signifies the culmination of a dream, the confirmation of their self-belief, and the embodiment of the ‘They can’ spirit.

FES continued its journey towards excellence in business process improvements in several ways. Its Lean Manufacturing initiative continued with strong momentum at all its plants. The Total Productivity Management (TPM) initiative that was launched at the Mumbai plant in November 2006 has been extended to Nagpur plant. Involving suppliers in the process strengthened the ongoing focus on continuous improvement. The ISO: 9000:2000, TS 16949 and ISO: 14001 re-certification and surveillance audits have continued at the various FES plants and all the stringent requirements have been met successfully.

The Mumbai and Rudrapur plants were certified in F-07 for ‘Occupational Health and Safety Assessment Series’ (OHSAS- 18001), making all the four FES plants OHSAS certified. This year, re-certification and surveillance audits for OHSAS were conducted. In recognition of its excellent health and safety practices, FES was awarded the ‘Golden Peacock Occupational Health and Safety Award’ for the year 2007. Similarly, for the efforts in the area of Quality, FES was awarded the ‘Golden Peacock National Quality Award -2007’.FES continues to improve its supply chain efficiency by reducing dealer stocks and outstanding.

Opportunities

The Indian economy has been growing at an annual average growth rate of well above 8% for the last four years making it one of the fastest growing large economies in the world. This kind of secular long term growth combined with the Company’s diligent expansion of its technological and product development capabilities, and its active search for overseas partners and markets, augurs well for the coming years for both sectors. The sectors also share synergies of resources, especially for sourcing, giving major opportunities for savings.

India’s automotive sector is one of the fastest growing in the world. With the Indian economy on a high growth path on a secular long-term basis and with the consequently increased disposable incomes of the population at large, the Indian automotive industry is expected to have significant growth opportunities. The Indian Government’s Automotive Mission Plan 2016 will enable such growth and targets a doubling of automotive industry’s contribution to the Indian economy over 2006-2016. With the Company’s enhanced presence in the Indian automotive industry thorough its joint ventures for CVs and cars as well with its entry into the smaller three wheeler category, the Company is well poised to garner an increasing share of this relatively high long term growth segment of the Indian economy. However the current year may witness sluggish growth due to global and local economic pressures as listed under the next section.

In the Automotive Sector, the Company believes that its core MUV market is likely to increase its share in the light vehicles category due to the inherent versatility of MUVs for a fast growing developing country. The proportion of MUVs in India is relatively low compared to corresponding figures in Asian countries that share a similar or more developed profile. In the long term, they believe that the light vehicle market will expand at a fast clip in India and that MUVs will take an increasing share of this market.

The AMP 2016 also states that fiscal benefits should be provided to MUVs, which could lead to further MUV growth. The Company’s entry into the car market and the CV market through joint ventures and its strong presence in the MUV segment will enable the leveraging of the full range of opportunities.

The WTO and Free Trade Area negotiations with Thailand, SEAN, SAARC countries and the Mercosur countries are likely to lead to lowered tariffs across many target export markets. This could provide a significant opportunity to generate larger volumes from export sales and further the auto sector’s strategic emphasis on the development of exports.

Given the current state of road infrastructure in the interiors, as well as the extremely high cost required for improvement, MUVs will continue to be the most appropriate and economical vehicles for transporting people in the interiors. Rural public transportation is not as extensively developed as in the urban areas, providing further opportunities for MUVs and LCVs.

MUVs and CVs are preferred vehicles for projects and construction sites like the Golden Quadrilateral road project and the North, South, East and West Corridor project. A higher level of industrial development generally leads to a greater demand for MUVs and CVs. Hence if the planned rate of GDP growth is achieved over the next decade, the demand for MUVs and CVs should increase commensurately.

The increased infrastructural investments required maintaining the high growth of the Indian economy - like the North South East West corridor which has a budget of tens of Millions - and the increased goods movement from a fast growing economy, would maintain a high demand for commercial vehicles. To capture a share of the growing medium and heavy commercial vehicles segment, the Company’s subsidiary, MIL, will launch a new range of medium and heavy commercial vehicles over the next few years and thus ensure the Company’s participation in this important segment of the Indian automotive industry.

The direct tax changes announced in the Government of India’s budget for F-09 would lead to an additional increase in the disposable incomes of taxpayers. In addition the release of higher salaries to government employees as a result of the sixth Pay Commission would also increase disposable incomes to a large group of people. Both these factors are likely to have a positive influence on vehicle demand, especially for personal use vehicles in the current year.

The burgeoning Indian middle class population, with fast growing disposable incomes, with an increasing propensity to spend, along with the huge increase in the working age population expected over the next 10 years, will drive high growth for passenger vehicles like Bolero and Scorpio. Given that over half the Indian market is accounted for by passenger cars, the Company’s partnership with Renault to introduce Renault models through its subsidiary MRPL will continue to provide the Company growth from participating in the other fast growing segment of the Indian auto industry.

Thus, through these strategic initiatives, the Auto Sector of Company has put in place plans to increase its size of the addressable market of the Indian automotive industry from 17% in F-05 to 75% by F-10, providing a huge opportunity for growth.

There are opportunities for the Farm Equipment Sector as well. The Govt. of India has increased its focus on agriculture in the budget for F-09. There are also certain states in India where penetration of tractors is low and these provide opportunities for growth. FES will leverage these opportunities by strong marketing initiatives like brand building, creating stronger franchisees, restructuring dealer sand the introduction of new products.

The USA and China are amongst the top three tractor markets in the world apart from India. To tap the potential in these markets, FES plans to continue its focus on these markets to become a global leader. Company is well positioned to grow sales in the Chinese market. Company is also exploring various global tractor markets in Africa, East Europe and the Middle East.

Facilities at Nagpur and Rudrapur Plant will ensure low cost manufacturing for FES. China will also serve as a low cost sourcing base for FES products. These can be leveraged suitably.

Threats:

A slowdown of the Indian economy is quite possible for the short term given current global developments. Due to the strong linkage of the automotive industry to the economy, such an event would adversely impact growth in the short term for the Company.

Trade Reference:

• Acey Engineering Private Limited 55
• Aditya Engineering Company 56
• Advance Cooling Systems Private Limited 57
• Aerocom Automotives Private Limited 58
• Agrofab Machineries India Private Limited
• Anandji Haridas and Company Private Limited
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• Drill jig Bushing Company (Madras) Private Limited
• Esoofali Esmailji Karachiwalla and Company
• Gear Master Engineering Company
• Genuine Manufacturing Company
• A J Auto Private Limited
• Aarvee Waxpol Tools India Private Limited
• Acey Engineering Private Limited
• Agrofab Machineries India Private Limited
• Akal Spring Limited
• Anilux Coated Products Private Limited
• Ashish Autoparts Private Limited
• Asia Automotive Limited
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• Avesta Enterprise Private Limited
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• Bell Agroma China Limited
• Bemco India Private Limited
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• Bentex Engineering Private Limited
• Bhagyashri Home Appliances Private Limited
• Bhpl Auto Engineers Private Limited
• Bil Metal Industries Limited
• Brahans Rubber Private Limited
• Caspro Metal Industries Private Limited
• Cast Metal Industries Private Limited
• Chishty Engineering Private Limited
• Circlips India Private Limited
• Classic Stripes Private Limited
• Deshpande Automech Private Limited
• Devki Auto Industries Private Limited
• Dham Fastners
• Disha Engineering
• Ehara Engineering Private Limited
• Emdet Engineers Private Limited
• Enginetech Systems India Private Limited
• Eros Metal Work Private Limited
• Fibre Foam (Bombay) Private Limited
• Goldseal Engineering Products Limited
• Gole Precision Tools Private Limited
• Hind Auto Cranks Private Limited
• Hindustan Fasteners Private Limited
• Hodek Engineering Works Private Limited
• Isha Steel Treatment Private Limited
• Jayashree Iron and Steel Alloys Private Limited
• K P Tools Private Limited
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• Paras Mechanical Works Private Limited
• Perfect Electric Concern Limited
• Perfect Mechanical Works Private Limited
• Phiroze Sethna Private Limited
• Polar Auto and Engineering Industries Private Limited
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• Pravin Wipers and Ancillaries Private Limited
• Precision Autowares Limited
• Precision Gears Indore Private Limited
• Radheya Machining Limited
• Rain Aagri Company Private Limited
• Ramkrishna Iron Works Private Limited
• Reliable Techno Craft Private Limited
• Ritvij Plastics Private Limited
• Sang Fasteners Private Limited
• Sarna Auto Tex Private Limited
• Satpuda Engineering Private Limited
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• Shivam Paints Private Limited
• Shivani Locks Limited
• Shroff Textiles Limited
• Sunax Automotive Plastics Private Limited
• Susira Engineering Industries Private Limited
• Suyog Rubber (India) Private Limited
• Sylea Automotive India Limited
• Tide Wateroil Company (India) Limited
• Tigon Pipe Benders Limited
• Tooledge Industries
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• Toyo Metal Lurgical Limited
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• Veltech Forging Private Limited
• Vidharbha Agro Industries Private Limited
• Vidharbha Gas Vessels Private Limited
• Vikas Automatic Fasteners Private Limited
• Vrc Plastmould India Private Limited
• Windals Auto Private Limited
• Zoroastrian Automobiles Private Limited

Fixed Assets:

• Land Freehold
• Land Leasehold
• Cycles

• Technical Knowhow
• Development Expenditure
• Software Expenditure
• Land
• Building
• Plant and Machinery
• Furniture and Fitting
• Vehicles

Contingent Liability:

(a) Guarantee Given by the company 31.03.2008

	Guarantee	Outstanding the Guarantee
For Employees	10.500	*
For other companies	381.000	343.700

*Denotes amounts less than Rs.0.050 Millions

News:

Mr. Arun Nanda, Executive Director Mahindra & Mahindra receiving the National Order of the Legion of Honour from the French Minister of State for Foreign Trade, Mrs. Anne- Marie Idrac at a special award ceremony held in New Delhi on Tuesday.

Mumbai September 18, 2008 Mr. Arun Nanda, Executive Director, Mahindra & Mahindra was conferred the French government honour, the Knight of the National Order of the Legion of Honour (Chevalier de la Legion d’Honneur) by the visiting French Minister of State for Foreign Trade, Mrs Anne-Marie Idrac yesterday.

In an apt recognition of the Mahindra Group’s contribution to India’s business and cultural ties with France, the French Ambassador to India, Mr. Jérôme BONNAFONT said in a letter to Mr. Nanda informing him of the award, “I warmly congratulate you for this distinction, which is a recognition of your remarkable career in the business community in Mumbai and of the part you took in the establishment of the partnership between Mahindra and Renault. But above all, it is your performance as President of the Indo French Chamber of Commerce and Industry, and the efficiency which you have restored in this association, that the French President wishes to pay tribute by conferring this distinction to you.”

The “Légion d'Honneur” (Legion of Honour) is the highest distinction that can be conferred by the French Republic on a French citizen as well as on a foreigner. The Order of the Legion of Honour was instituted in 1802 by Napoléon Bonaparte.

About The Mahindra Group

The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra is the market leader in multi-utility vehicles in India It made a milestone entry into the passenger car segment with the Logan. Mahindra & Mahindra is the only Indian company among the top tractor brands in the world.

The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade, retail and logistics, automotive components, after-market, information technology and infrastructure development. Mahindra has recently entered the two-wheeler segment. Mahindra's Farm Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win the Deming Prize. The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputation list.

For further enquiries, please contact:

Ms. Roma Balwani Sushant Balsekar

VP & Head - Corporate Communication Adfactors PR

Mahindra & Mahindra Ltd Phone: (022) 2204 9804

Phone: (+91-22) 24975176 Fax: (022) 2204 9814

Fax: (+91-22) 2490 0830 Mobile: (+91) 9819162987

Email: balwani.roma@mahindra.com Email: sushant.balsekar@adfactorspr.com

Senior appointments at Mahindra’s Automotive Sector

Mumbai, August 5, 2008: Mahindra & Mahindra Limited (M&M), one of India’s leading auto companies, today announced the appointment of Mr. Rajesh Jejurikar as Chief of Operations, Automotive Sector and Mr. Rajan Wadhera as Chief of Engineering and Development, Automotive Sector. Mr. Louis Pereira has been appointed CEO of Mahindra Automotive Limited (MAL).

All appointments are effective from August 1, 2008

As Chief of Operations, Mr. Rajesh Jejurikar will head End to End Operations. In addition to his current Sales & Marketing function, he will also oversee the manufacturing function.

As Chief of Engineering and Development, Mr. Rajan Wadhera will head Product Engineering and Development. In addition to his current Product Development role, he will also oversee the Materials Management function.

As CEO of Mahindra Automotive Limited (MAL), Mr. Louis Pereira will oversee the development of the Chakan Plant into a world-class manufacturing facility. He will also be responsible for the smooth functioning of the Plant which will manufacture new products from Mahindra & Mahindra Limited and Mahindra Navistar Automotives Limited.

Mahindra's Automotive Sector is the market leader in Utility Vehicles in India and makes a wide range of vehicles including MUVs, LCVs, passenger vehicles and three wheelers. M&M offers customers over 20 models including new generation utility vehicles like the Scorpio and the Bolero. Over the years, Mahindra has been steadily growing in stature as an international automotive major with a footprint in several countries across the world.

About The Mahindra Group

The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra is the market leader in multi-utility vehicles in India It made a milestone entry into the passenger car segment with the Logan. Mahindra & Mahindra is the only Indian company among the top tractor brands in the world.

The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade, retail and logistics, automotive components, after-market, information technology and infrastructure development. Mahindra is now poised to make an entry in the two-wheeler segment.

Mahindra's Farm Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win the Deming Prize. The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputation list.

Press Release

M&M Ltd. Tractors 16% growth in Sales in August 2008

MUMBAI, September 1, 2008: Mahindra & Mahindra’s Farm Equipment Sector (FES), a part of the U.S. $6.7 billion Mahindra Group, significantly consolidated its leadership position in the tractor industry in August 2008.

For the month of August 2008, domestic sales of tractors of Mahindra & Mahindra Ltd. were 7000 nos. as compared to 6011 nos. for the same period last year, a growth of 16% and exports during the month were 597 nos., as against 561 nos. for the same period last year, a growth of 6%. Total sales (domestic + exports) for the month were 7597 nos., as compared to 6572 nos. for the same period last year, a growth of 16%.

Cumulatively, during this fiscal, Mahindra & Mahindra tractors sales in the domestic market were 41455 nos., as compared to 37611 nos. for the April – August quarter last year, a growth of 10%. Total sales including exports were 45178 nos., as compared to 40850 nos. for to the corresponding April – August quarter last year, a growth of 11%.

About The Mahindra Group

The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra is the market leader in multi-utility vehicles in India It made a milestone entry into the passenger car segment with the Logan. Mahindra & Mahindra is the only Indian company among the top tractor brands in the world.

The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade, retail and logistics, automotive components, after-market, information technology and infrastructure development. Mahindra is now poised to make an entry in the two-wheeler segment.

Mahindra's Farm Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win the Deming Prize. The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputation list.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.46.94
UK Pound	1	Rs.85.57
Euro	1	Rs.67.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		81

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions