This is not an invitation for the public to

subscribe to any of the securities of

MMFSL, and hence not a Prospectus.

PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

UMBRELLA INFORMATION MEMORANDUM

Mahindra & Mahindra Financial Services Ltd.

Registered Office: Gateway Building, Apollo Bunder, Mumbai 400 001
Corporate Office: Sadhana House, 2nd Floor, Behind Mahindra Towers, Worli, Mumbai - 400 018
Ph: 56526000/07/08/09/10/37 Fax : 24900728
PRIVATE PLACEMENT OF 10000 UNSECURED/ SECURED REDEEMABLE NONCONVERTIBLE DEBENTURES OF RS. 10,00,000/- EACH AGGREGATING RS. 1000 CRORES
General Risk
Investment in debt instruments involves a degree of risk and investors should invest any funds in
the issue only after reading the Umbrella Information Memorandum (hereinafter referred to as
Information Memorandum) carefully. For taking investment decision, investors must rely on
their own examination of the Issuer and the issue including the risk involved. The Securities have
not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does
SEBI guarantee the accuracy or adequacy of this document.
Issuers Absolute Responsibility
The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this
offer document contains all information with regard to the issuer and the issue, which is material
in the context of the issue, that the information contained in the Information Memorandum is
true and correct in all material aspects and is not misleading in any material respect, that the
opinions and intentions expressed herein are honestly held and that there are no other facts, the
omission of which make this document as a whole or any of such information or the expression
of any such opinions or intentions misleading in any material respect.
Listing
The Debentures of the Company are proposed to be listed on The Stock Exchange, Mumbai.
Credit Rating:
The Debentures will carry an investment grade rating from recognized Indian rating agency.
DEBENTURE TRUSTEE
UTI Bank Ltd.
Merchant Banking Division
11th Floor, Maker Tower F
Cuffe Parade
Mumbai
Tel: 2216 2455, 22189706-9
Fax: 22162467
SEBI Reg. No. IND000000036
E mail : [email protected]
Issue Opening Date:

REGISTRAR TO THE ISSUE:

Sharepro Services
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Chakala, Andheri [East]
Mumbai 400 099
Tel: 28239828, 28348218, 28215168
Fax: 28375646
SEBI Registration No. INR000001476
E mail : [email protected]
Issue Closing Date

Deemed Date of Allotment

This Umbrella Information Memorandum is dated 26 February 2004 will be valid for one year
from this date

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PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

INDEX
CONTENTS

PAGE NO.

DEFINITIONS & ABBREVIATIONS

III

RISK FACTORS & PROPOSAL TO ADDRESS THE RISK

IV

HIGHLIGHTS
IMPORTANT NOTICE

V
VI

PART - I
I.

GENERAL INFORMATION

II.

CAPITAL STRUCTURE OF THE COMPANY

III.

TERMS OF THE PRESENT ISSUE

IV.

PARTICULARS OF THE ISSUE

12

V.

COMPANY MANAGEMENT & PROJECT

13

VI.

INDUSTRY SCENARIO AND ACTIVITIES OF THE COMPANY

20

VII.

STOCK MARKET DATA

26

VIII.

MANAGEMENT DISCUSSION & ANALYSIS OF THE FINANCIAL STATEMENTS

FOR THE LAST THREE FINANCIAL YEARS
26

IX.

FINANCIALS OF GROUP COMPANIES PROMOTED BY PROMOTERS

29

X.

CAPITAL ISSUES DURING LAST THREE YEARS:

44

XI.

BASIS FOR ISSUE PRICE

44

XII.

OUTSTANDING LITIGATIONS OR DEFAULTS

44

XIII.

RISK FACTORS AND PROPOSALS TO ADDRESS THE RISK

64

XIV.

DISCLOSURE ON INVESTOR GRIEVANCES AND REDRESSAL SYSTEM

65

XV.

GENERAL INFORMATION

66

XVI.

OTHER PROVISIONS RELATING TO ACCOUNTS OF THE ISSUER COMPANY 78

XVIII. STATUTORY AND OTHER INFORMATION

79

XIX.

RELATED PARTY DISCLOSURES

83

XX.

OTHER DETAILS

84

XXI.

MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS

86

XXII.

DECLARATION

87

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INFORMATION MEMORANDUM- 1000 crores-final

PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

DEFINITIONS/ABBREVIATIONS USED
Act
ALCO
BSE
CAR
CDSL
CRISIL
ED
FI
FII
G-Sec
NBFC
NPAs
NRI(s)
NSDL
RBI
SEBI

The Companies Act, 1956

Asset Liability Management Committee
The Stock Exchange, Mumbai
Capital Adequacy Ratio
Central Depository Services (India) Limited
CRISIL Ltd.
Executive Director
Financial Institution
Foreign Institutional Investors
Government Securities
Non-Banking Finance Company
Non Performing Assets
Non Resident Indians
National Securities Depository Limited
Reserve Bank of India
Securities and Exchange Board of India

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INFORMATION MEMORANDUM- 1000 crores-final

PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

RISK FACTORS
Following are certain considerations, which the investors should peruse before making an
investment in the issue. The material implication of the risks envisaged by the Management has
been quantified as far as possible. Where such quantification has not been made it may be
construed that the implication cannot be quantified.
Internal Risk Factors:
1.

The Companys business is vulnerable to volatility in interest rates. Changes in market

interest rates could affect the interest rates charged on Companys interest-earning assets
differently from the interest rates paid on its interest-bearing liabilities. Any volatility in
interest rates could adversely affect the Companys business and its future financial
performance.
Proposal to address the Risk: Even during a falling interest rate scenario, the Company
has been able to maintain its Gross Spread at 3% to 4% in FY02 and FY03. The Asset
Liability Management Committee (ALCO) of the Company continuously monitors
interest rate changes to assess the impact of change in interest rates and steps taken to
minimize adverse impact, if any.

2.

The primary business of Company is of lending which carries a risk of default by borrowers.
Proposal to address the Risk: Necessary controls like maintaining a diversified portfolio
with industry wise, borrower group wise and specific client wise exposure limit, to avoid
concentration of lending to any industry segment/borrower group/company are being
complied with. These limits help minimize credit risks. The performance of the asset
portfolio is monitored on a regular basis to take corrective action wherever necessary.

3.

Any increase in the NPA levels of the Company could adversely affect the Companys
performance. The Companys net NPAs represented 2.28% of its Total Assets at March 31,
2003, 2.00% at March 31, 2002 and 1.38% at March 31, 2001.
Proposal to address the Risk: The Company mainly operates in semi urban and rural
India. While approving the loan the customer background and application of the product
for which the loan is sought is studied in detail. The Company finances vehicles mainly
for commercial purpose. To reduce the NPA risk the Company finances only 75% of the
vehicle cost.

4.

Assets Liability position The Companys funding comprises of short and medium term
loans from its Bank Borrowing and Non-Convertible Debentures. The asset liability position
of the Company could be affected, impacting the business, if the Bankers do not roll over the
deposits or there is shortfall in the liquidity position in the Money Market.
Proposal to address the Risk: The Company has advanced risk management system in
place to monitor liquidity gap position vis--vis internal limits. This report is placed
periodically at ALCO so as to maintain a healthy and sustained growth within acceptable
risk parameters. The Company also maintains adequate levels of liquid assets, which can
be used to meet the liquidity gaps.

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PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

External Risk Factors:

The Company would like to clarify that RBI conducts regular inspection of registered NBFCs.
The inspection report is placed by the Company at its meeting of Board of Directors and
corrective steps are initiated. The reports of RBI are strictly confidential. RBI does not allow
disclosure of its inspection report and that all the disclosures made in Information Memorandum
are on the basis of management and Audit Reports of the Company.
Notes:
Creation of Redemption Reserve is not envisaged for the proposed issue of Debentures. As per
Circular issued by Department of Company Affairs, Government of India in April, 2002, NBFCs
are not required to create Debenture Redemption Reserve under Section 117 of Companies Act,
1956.
In the opinion of Directors of the Company, there are no circumstances that have arisen since the
date of the last financial statement disclosed in the Information Memorandum that materially or
adversely affect or are likely to affect the performance or profitability of the Company, or value of
its assets, or its liability to pay liabilities within the next twelve months.
HIGHLIGHTS

An existing profit making, dividend paying Unlisted NBFC

Large network throughout the Country with more than 200 branches spread across the
country

Net Profit of Rs. 44.35 crores and Total income of Rs.249.89 crores for year ended 31st March
2003.

The Debentures will carry an investment grade rating from recognized Indian rating agency.

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PRIVATE AND CONFIDENTIAL

MEANT FOR USE OF ADDRESSEE ONLY

IMPORTANT NOTICE
No part of this document is intended for the use of any recipient located outside India or any
recipient who is not resident in India. This document is also not intended for the use of NonResident Indians ('NRIs'), Overseas Corporate Bodies ('OCBs') or Foreign Institutional Investors
('FIIs')
This issue by Mahindra and Mahindra Financial Services Ltd. (the "Issuer"), of Unsecured /
Secured Non-Convertible Debentures ("Debentures") is being made strictly on a private
placement basis. It is not and should not be deemed to constitute an offer to the public in general
or any section or class thereof. This Umbrella Information Memorandum ("hereinafter referred to
as Information Memorandum") is neither a prospectus nor a statement in lieu of prospectus. It
cannot be acted upon by any person other than to whom it has been specifically addressed,
neither can this document be circulated, reproduced or redistributed in any form whatsoever.
This Information Memorandum is not intended to provide the sole basis of any credit decision or
other evaluation and should not be considered as a recommendation that any recipients of this
Information Memorandum should invest in the Debentures. Each potential investor should make
its own independent assessment of the investment merit of the Debentures and the Issuer.
This Information Memorandum is made available to potential Debentures investors on the strict
understanding that it is confidential. Recipients shall not be entitled to use any of the information
otherwise than for the purpose of deciding whether or not to invest in the Debentures.
No person including any employee of the Issuer has been authorized to give any information or
to make any representation not contained in this Information Memorandum. Any information or
representation not contained herein must not be relied upon as having being authorized by or on
behalf of the Issuer. Neither the delivery of this Information Memorandum at any time nor any
statement made in connection with the offering of the Debentures shall under the circumstances
imply that any information/representation contained herein is correct at any time subsequent to
the date of this Information Memorandum.
The distribution of this Information Memorandum and the offering of the Debentures in certain
jurisdictions may be restricted by law. Persons into whose possession this Information
Memorandum comes are required by the Issuer to inform themselves about, and observe any
such restrictions.

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INFORMATION MEMORANDUM- 1000 crores-final

PRIVATE AND CONFIDENTIAL

PART I
I.

GENERAL INFORMATION

Umbrella Information Memorandum (hereinafter referred to as Information Memorandum)

for Private Placement of 10000 Unsecured / Secured Redeemable Non-Convertible Debentures
of Rs. 10,00,000/- each for cash at par aggregating Rs. 1000 crores.

MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED

Registered Office:
Gateway Building, Apollo Bunder, Mumbai 400 001
Corporate Office:
Sadhana House, 2nd Floor, Behind Mahindra Towers, Worli, Mumbai 400 018
Tel No. (022) 56526007/8/9/10/37, Fax No. (022) 24900728
Government Approvals
The Company was incorporated on 1st January, 1991 as Maxi Motors Financial Services Limited
and received Certificate of Commencement of Business on 19th February, 1991. The name has
been changed to Mahindra & Mahindra Financial Services Limited and Fresh Certificate of
Incorporation was received on 3rd November, 1992. The Registration Certificate from Reserve
Bank of India (RBI) was received on 4th September 1998 in terms of Section 45 A of the Reserve
Bank of India Act 1934.
It must be distinctly understood, however, that the issuing of Certificate by RBI / Central
Government should not, in any way, be deemed or construed to be an approval by RBI / Central
Government, to this Information Memorandum nor should it be deemed that RBI / Central
Government has approved it nor does RBI / Central Government take any responsibility either
for the financial soundness of the Company or for the correctness of the statements made or
opinions expressed in this connection.
Authority for Present Issue
The present issue of Unsecured / Secured Redeemable Non-Convertible Debentures is made
pursuant to the Resolution passed by the Board of Directors of the Company at its meeting held
on 3rd February 2004.
Stock Exchange Disclaimer Clause
It is to be distinctly understood that the submission of the Information Memorandum to the Stock
Exchange should not in any way be deemed or construed that the Information Memorandum has
been cleared or approved by the Exchange. Stock Exchange does not take any responsibility
either for the financial or other soundness of this Issuer, or the achievement of the object for
which placement is proposed to be made or for the correctness of the statement made or opinions
expressed in the Information Memorandum.

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PRIVATE AND CONFIDENTIAL

General Disclaimer
The Issuer accepts no responsibility for statements made otherwise than in the Information
Memorandum or in the advertisement or any other material issued by or at the instance for the
issuer and that anyone placing reliance on any other source of information would be doing so at
his own risk.
Listing
Initial Application has been made to The Stock Exchange, Mumbai.
Underwriting
The present issue is not underwritten.
Minimum Subscription
Pursuant to the Notification No. SEBI/MRD/SE/AT/46/2003 dated 22nd December 2003 issued
by SEBI minimum subscription clause is not applicable to the privately placed debt securities.
Impersonation
Any person whoa) makes in a fictitious name an application to a company for acquiring, or subscribing for any
Securities therein, or
b) otherwise induces a company to allot, or register any transfer of Securities therein to him, or
any other person in a fictitious name
shall be punishable with imprisonment for a term which may extend to five years.
Issue of Letter of Allotment/ Allotment Advice and Debenture Certificates
The Issuer will execute and dispatch Letters of Allotment/ Allotment advice in favour of the
allottees or Refund Letter along with refund amount, not later than 7 days after the Deemed Date
of Allotment. After completion of all legal formalities, the Issuer will issue the Debentures
certificate(s) / credit the Depository Account of the allottees against surrender of the letter(s) of
allotment within three month(s) of the Deemed Date of Allotment, or such extended period
subject to obtaining the approvals, if any. Interest at coupon rate will be paid via interest
warrants on the application money to the applicants. Such interest will be paid for the period
commencing from the date of realisation of the cheque(s) / demand drafts (s) up to but excluding
the Deemed Date of Allotment. The interest warrants for interest payable on application money
will be dispatched by Registered Post/ Courier the next working day after the Deemed Date of
Allotment. The letters of allotment/ allotment advice/refund orders, as the case may be, will be
sent by Registered Post/ Courier /Hand Delivery within 7 days from the Deemed Date of
Allotment to the first/sole applicant, at the sole risk of the applicant. The payment will be subject
to deduction of tax at source at the rates prescribed under the provisions of the Income Tax Act,
1961 or any other statutory modification or re-enactment thereof.
Issue Schedule
Offer Opening Date
Offer Closing Date
Deemed Date of Allotment

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PRIVATE AND CONFIDENTIAL

The issuer reserves the right to close the issue earlier from the aforesaid date or change the issue
time table including the Deemed Date of Allotment at its sole discretion, without giving any
reasons or prior notice.
Names and Addresses of Auditors, Registrars, Debenture Trustees
Auditors
M/s. B.K.Khare & Co.
Chartered Accountants
706/708, Sharda Chambers
Mumbai 400 020

Registrars to the issue

Sharepro Services
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Chakala, Andheri[East]
Mumbai 400 099

Trustees to the Debenture holders:

UTI Bank Ltd.
Merchant Banking Division
111, Maker tower F
Cuffe Parade, Colaba,
Mumbai 400 005
Credit Rating
a.

Company will approach a recognized Indian rating agency to obtain an investment grade
rating for issue of each tranche of Debenture made under this umbrella information
memorandum. Offer under this umbrella information memorandum will be made if the
company obtain an investment grade rating from recognized Indian rating agency for its
Debentures.

b. Credit ratings obtained during the previous three years before filing of the Information
Memorandum for any of its listed debt securities at the time of accessing the market through
a rated debt security :
Rating
Agency

Date of Rating
Letter

Rating

Amount (Rs. Crs.)

Compliance Officer:
Mr. V.Ravi
Chief Financial Officer
Mahindra & Mahindra Financial Services Ltd.
Sadhana House, 2nd Floor,
Behind Mahindra Towers, Worli
Mumbai 400 018
Tel No. (022) 56526007/8/9/37, Fax No. (022) 24900728
E mail : [email protected]
The Investor may contact the Compliance Officer in case of any pre-issue / post issue related
problems such as non-receipt of letters of allotment / debenture certificates / refund orders.

-3-

PRIVATE AND CONFIDENTIAL

CAPITAL STRUCTURE OF THE COMPANY

II.

Equity Shares (Part of Tier I Capital)

Amount
(Rs. Crs.)
A. Authorised Capital
7,50,00,000 Equity Shares of Rs. 10 each
25,00,000 Redeemable Preference Shares of Rs. 100
each

75.00
25.00

B. Issued Subscribed and Paid-up Capital

6,06,23,303 Equity Shares of Rs. 10 each

60.62

C. Paid Up Capital after the present issue

6,06,23,303 Equity Shares of Rs. 10 each

60.62

D. Share Premium Account (before and after issue)

65.37

Unsecured Debentures (Subordinated Debt) - (Part of Tier II Capital)

Sr
Date of
Number of
No Allotment Debentures
1 28/03/02
2 12/07/02

Rate of
Interest

4
35

Date of
Redemption

11.19%
10.165%

28/09/07
15/01/08
Total

Outstanding
Amount
Rs. Lacs
400
3500
3900

Details regarding Shareholders

Top Ten Shareholders as on 31st January, 2004.
Sr. No
1
2
3
4
5
6
7
8
9
10

Name of the Shareholder

Shares Held
% Stake
( in Numbers)
In Total
MAHINDRA & MAHINDRA LIMITED
58821537
97.03
SULBHA SUBHASH LODHA
122500
0.20
RAMESH SING HUF
114285
0.19
SOMARAJU PENMETCHA
57142
0.09
RAMESH SING
57142
0.09
LAKSHMI CHANDIDAS GUPTA
52500
0.09
AUTORIDERS INDIA PRIVATE LTD.
50000
0.08
RASIKLAL MANIKCHAND DHARIWAL
44812
0.07
HARSOLIA FINANCE PVT. LTD
40828
0.07
SUBHASH HASTIMAL LODHA
39000
0.06

Top Ten Shareholders as on 31st January 2002 (two years prior)

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PRIVATE AND CONFIDENTIAL

Sr. No
1
2
3
4
5
6
7
8
9
10

Name of the Shareholder

Shares Held
% Stake
( in Numbers)
In Total
MAHINDRA & MAHINDRA LIMITED
58215309
AZRAEL INVESTMENTS LIMITED
250146
SULBHA SUBHASH LODHA
122500
RAMESH SING HUF
114285
HARSOLIA FINANCE PVT. LTD
91558
RAMESH SING
57142
SOMARAJU PENMETCHA
57142
LAKSHMI CHANDIDAS GUPTA
52500
AUTORIDERS INDIA LTD.
50000
KUMAR SHRIRAM GADEKAR
44812

96.03
0.41
0.20
0.19
0.15
0.00
0.00
0.00
0.00
0.00

Top Ten Shareholders as on ten days prior to 31st January, 2004

Sr. No
1
2
3
4
5
6
7
8
9
10

Name of the Shareholder

Shares Held
% Stake
( in Numbers)
In Total
MAHINDRA & MAHINDRA LIMITED
58821537
97.03
SULBHA SUBHASH LODHA
122500
0.20
RAMESH SING HUF
114285
0.19
SOMARAJU PENMETCHA
57142
0.09
RAMESH SING
57142
0.09
LAKSHMI CHANDIDAS GUPTA
52500
0.09
AUTORIDERS INDIA PRIVATE LTD.
50000
0.08
RASIKLAL MANIKCHAND DHARIWAL
44812
0.07
HARSOLIA FINANCE PVT. LTD
40828
0.07
SUBHASH HASTIMAL LODHA
39000
0.06

Details regarding Shareholding of Promoter and Promoter Group

Aggregate shareholding of the Promoters Group is given below:
Promoter/Promoter Group

Shares held
(Number)
58821537

MAHINDRA & MAHINDRA LIMITED

% Stake
In Total
97.03%

Details of shares traded by the Promoter Group and maximum and minimum price at which
purchases and sales were made along with the relevant dates, if any in last 6 months.
Name

Date

Mahindra & Mahindra Ltd.

9/9/2003

No of Share
Purchased
35575

-5-

Price (Rs.)
20.00 per share

PRIVATE AND CONFIDENTIAL

III.

TERMS OF THE PRESENT ISSUE

The company proposed to rise Rs. 1000 crores in one or more tranches in one year from the date
of this Umbrella Information Memorandum in The stock Exchange, Mumbai through issue of
Unsecured / Secured Redeemable Non Convertible Debenture of the face value of Rs. 10 lacs
each by way of private placement as per the terms and conditions mentioned in Annexure A
hereunder.
Payment of Interest
Interest will be paid only to the Debenture holders registered in the Register of Debenture
holders of the Issuer, which shall be maintained at the Corporate Office of the Issuer at Mumbai
or to the debenture holder(s) on the basis of beneficial ownership furnished by NSDL / CDSL for
this purpose. All the applications for transfer shall be accepted only at the Corporate Office of the
Company at the address given elsewhere.
In the case of joint holders, interest shall be payable to the first named Debenture holder. The
Record Date for the purpose of determination of the persons entitled to receive interest in respect
of the Debentures, shall be 21 days before the due date. The persons whose names are registered
in the Register of Debenture holders or NSDL / CDSL record on that date shall be entitled to
receive the interest for the preceding interest period. For the purpose of registering a transfer of
Debentures prior to the Record Date, the Debenture certificate(s)/letter(s) of the allotment, a duly
stamped transfer deed and all supporting documents must reach the Issuer at its Corporate
Office at least seven days before the Record Date. In case of the Debentures in demat mode the
provisions of NSDL/CDSL would be complied by the Registrar & Transfer Agent for facilitating
interest payment by the Issuer Company on Due date.
The interest warrant will be payable at par at Mumbai only.
Redemption
The entire principal amount of the Debentures will be repaid in one installment at par on Final
Maturity date.
Redemption of the Debentures will be made against the surrender of the Debenture certificate(s)
duly discharged by the Registered Debenture holder(s) or to the debenture holder(s) on the basis
of beneficial ownership furnished by NSDL / CDSL for this purpose. For this purpose, the
Registered Debenture holder should discharge the Debenture (s) and lodge the same along with a
certified true copy of a Power of Attorney or such other authority as may be required by the
Issuer from time to time so as to reach the Corporate Office at least thirty days before the
redemption date in person or by Registered Post. In case of the Debentures issued in
dematerialized mode, the surrender of Debentures shall be as per the procedures prescribed by
the NSDL/CDSL.
Place and Currency of Payment
All obligations under these Debentures are payable at Mumbai in Indian Rupees only.

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PRIVATE AND CONFIDENTIAL

Tax Deduction at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or reenactment thereof will be deducted at source on the interest payable on the debentures. Tax
exemption certificate / document / form, under Section 193 of the Income Tax Act, 1961, if any,
must be lodged at the Corporate Office, at least thirty days before the relevant interest payment
becoming due.
Issue Of Debentures in Dematerialized Form
The Company has made depository arrangements with NSDL/CDSL for issue of the Debentures
in the demat form. The investors will have the option to hold the debentures in dematerialized
form and deal with the same as per the provisions of Depositories Act, 1996 and Rules as notified
by NSDL/CDSL from time to time.
Investors desirous of receiving Debenture Certificate in the dematerialized form should mention
their Depository Participant's name, DP-ID and beneficiary account number in the appropriate
place in the application form. Debentures allotted to successful allottee(s) having depository
account shall be credited to their depository account against surrender of letter of allotment.
In case of incorrect details provided by the investors and inability of the Registrar to credit the
Depository Account the debentures will be issued in physical form to such investors.
Issue of Letter of Allotment/ Allotment Advice and Debenture Certificates
The Issuer will execute and dispatch Letters of Allotment/ Allotment advice in favour of the
allottees, not later than seven days after the Deemed Date of Allotment. After completion of all
legal formalities, the Issuer will issue the Debentures certificate(s) / credit the Depository
account of the allottee against surrender of the letter(s) of allotment within three month(s) of the
Deemed Date of Allotment, or such extended period subject to obtaining the approvals, if any.
Interest at coupon rate will be paid via interest warrants on the application money to the
applicants. Such interest will be paid for the period commencing from the date of realization of
the cheque(s) / demand drafts (s) up to but excluding the Deemed Date of Allotment.
Splitting and Consolidation
This concept is not applicable in the demat mode form since the saleable lot is one debenture.
Right to Re-purchase and Re-issue the Debentures
The Company will have power, exercisable at its sole and absolute discretion from time to time to
repurchase a part or all of its Debentures from the secondary markets or otherwise at any time
prior to the date of maturity as per the prevailing guidelines/regulations of Reserve Bank of
India and other Authorities.
In the event of a part or all of its Debentures being repurchased as aforesaid or redeemed under
any circumstances whatsoever, the Company shall have, and shall be deemed always to have
had, the power to reissue the Debentures either by reissuing the same Debentures or by issuing
other Debentures in their place.

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PRIVATE AND CONFIDENTIAL

Further the Company, in respect of such repurchased / redeemed Debentures shall have the
power, exercisable either for a part or all of those Debentures, to cancel, keep alive, appoint
nominee(s) to hold or reissue at such price and on such terms and conditions as it may deem fit
and as permitted by law.
Eligible Holders and Mode of Transfer
The Issuer will not register any transfers of the Debentures to any NRIs, OCBs, FIIs, or any
persons not resident in India, unless appropriate regulatory approvals are obtained. The Issuer
shall not be duty bound to take interest or trust in or over the Debentures.
The title to the Debentures shall pass by execution of duly stamped transfer deed(s) accompanied
by the Debentures certificate(s)/Letter of allotments(s) together with necessary supporting
documents. The transferee(s) should deliver the Debenture certificates to the Issuer for
registration of transfer in the Register of Debenture holders at the Corporate Office. The Issuer on
being satisfied will register the transfer of such Debentures in its Register of Debenture holders.
The person whose name is recorded in the Register of Debenture holders shall be deemed to be
the owner of the Debentures.
Request for registration of transfer, along with the necessary documents, and all other
communications, requests, queries and clarifications with respect to the Debentures should be
addressed to and sent to the Corporate Office. No correspondence shall be entertained in this
regard at any other Branches or any of the offices of the Company.
The request from Registered Debenture holder(s) for splitting/consolidation of Debenture
certificates will be accepted by the Issuer only if the original Debentures certificate(s) is/are
enclosed along with an acceptable letter of request.
No requests for splits below the Market Lot will be entertained.
Transfer of debentures in dematerialised form would be in accordance to the rules /procedures
as prescribed by NSDL/CDSL.
Succession
In the event of demise of a Registered Debenture holder of the Debentures, or the first holder in
the case of joint holders, the Issuer will recognize the executor or administrator of the demised
Debenture holder or the holder of succession certificate or other legal representative of the
demised Debenture holder as the Registered Debentures holder of such Registered Holders
Debentures if such a person obtains probate or letter of administration or is the holder of
succession certificate or other legal representation, as the case may be, from a Court of India
having jurisdiction over the matter and delivers a copy of the same to the Issuer. The Issuer may
in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter
of administration or succession certificate or other legal representation, in order to recognize such
holder as being entitled to the Debentures standing in the name of the demised debentures
holder on production of sufficient documentary proof or indemnity. In case a person other than
individual holds the debentures, the rights in the debentures shall vest with the successor
acquiring interest therein, including liquidator or such any person appointed as per the
applicable laws.

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PRIVATE AND CONFIDENTIAL

Issue of Duplicate Debenture Certificates

If any Debenture certificate(s) is/are mutilated or defaced, then, upon production of such
certificates at the Corporate Office, the same will be cancelled and a new certificate issued in lieu
thereof. If any Debenture certificate is lost, stolen or destroyed then, upon production of proof
thereof to the satisfaction of the Issuer and upon furnishing such indemnity as the Issuer may
deem adequate and upon payment of any expenses incurred by the Issuer in connection thereof,
new certificate(s) shall be issued. A fee will be charged by the Issuer on each fresh Debenture
certificate issued hereunder.
Modifications of Rights
The rights, privileges, terms and conditions attached to all Debentures may be varied, modified
or abrogated with the consent, in writing, of those holders of the Debentures who hold at least
three-fourths of the outstanding amount of Debentures or with the sanction accorded pursuant to
a resolution passed at a meeting of the Debenture holders, carried by a majority consisting of not
less than three-fourths of the persons voting there upon a show of hands or, if a poll is demanded
by a majority representing not less than three-fourths in value of the votes cast on such poll,
provided that nothing in such consent or resolution shall be operative against the Issuer if the
same are not accepted in writing by the Issuer.
Notices
The notices, communications and writings to the Debenture holder(s) required to be given by the
Issuer shall be deemed to have been given if sent by Registered Post to the Registered Debenture
holder(s) at the address of the Debenture holder(s) registered with the Corporate Office.
All notices, communications and writings to be given by the Debenture holder(s) shall be sent by
Registered Post or by hand delivery to the Issuer at Corporate Office or to such persons at such
address as may be notified by the Issuer from time to time and shall be deemed to have been
received on actual receipt.
Debenture holder not a shareholder
The Debenture holder (s) shall not be entitled to any right and privileges of shareholders other
than those available to them under the Act.The Debenture shall not confer upon the holder the
right to receive notice(s) or to attend and to vote out any General Meeting(s) of the Company.
Application for the Debentures

How to Apply

Applications for the Debentures must be made in the prescribed Debenture Application
Form attached and must be completed in block letters in English by investors.
Debentures Application forms must be accompanied by either a demand draft or cheque
drawn or made payable in favour of "Mahindra & Mahindra Financial Services Ltd.
The full amount of the face value of the Debentures applied for has to be paid along with
the delivery of the fully completed and executed Debenture Application Form together
with other applicable documents described below.

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PRIVATE AND CONFIDENTIAL

Cheques / demand drafts may be drawn on any bank which is situated and is a member
or sub-member of the Bankers Clearing House located at Mumbai. Investors are
required to make payments only through Cheque /demand drafts payable at Mumbai.
The Issuer assumes no responsibility for any applications / cheques / demand drafts lost
in mail or in transit.

Who can apply

Only Investors who have been addressed through a communication directly are eligible
to apply. Furthermore, NRIs, OCBs, FIIs and minors are not eligible to apply or hold the
Debentures.

Application by Banks/Corporate Bodies / Mutual Funds / FIs / Trusts/Statutory

Corporations.

The applications must be accompanied by certified true copies of (i) Memorandum and
Articles of Association / Constitution / Bye-laws / Trust Deed, (ii) Resolution
authorizing investment and containing operating instructions, (iii) Specimen signatures
of authorized signatories, (iv) Necessary form for claiming exemption from deduction of
tax at source on interest on application money. Application made by Asset Management
Company or custodian of Mutual Fund shall clearly indicate the name of the concerned
scheme for which application is being made.

Application under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be
along with the names and specimen signatures of all authorised signatories must be
lodged along with the submission of the completed Debenture Application form. Further
modifications/additions in the power of attorney or authority should be delivered to the
Issuer at Corporate Office.

Interest on Application Money

Interest at coupon rate will be paid via interest warrants on the application money to the
applicants. Such interest will be paid for the period commencing from the date of
realization of the cheque(s) / demand drafts (s) up to but excluding the Deemed Date of
Allotment. The interest warrants for interest payable on application money will be
dispatched by Registered Post/ Courier the next working day after the Deemed Date of
Allotment. The letters of allotment/ allotment advice/refund orders, as the case may be,
will be sent by Registered Post/ Courier /Hand Delivery within 7 days from the Deemed
Date of Allotment to the first/sole applicant, at the sole risk of the applicant. The
payment will be subject to deduction of tax at source at the rates prescribed under the
provisions of the Income Tax Act, 1961 or any other statutory modification or reenactment thereof.
Tax exemption certificates, if applicable, in respect of non-deduction of tax on interest on
application money must be submitted along with the Debenture Application Form. It is
clarified that interest shall not be paid on invalid and incomplete applications.

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PRIVATE AND CONFIDENTIAL

PAN / GIR No:

Where an application is for the total value of Rs 50,000 or more, the applicant or in case of
applications in joint names, each of the applicants should mention his /her/their
Permanent Account number (PAN) allotted under Income Tax Act,1961 or where the
same has not been allotted ,the GIR Number and the IT Circle/Ward/District should be
mentioned. In case where neither the PAN nor the GIR number has been allotted, or the
applicant is not assessed to Income Tax, the appropriate box provided for the purpose in
the application form must be ticked. Applications without this will be considered
incomplete and are liable to be rejected.

Basis of Allotment

The Issuer has sole and absolute right to allot the Debentures to any applicant.

Right to Accept or Reject Applications

The Issuer is entitled at its sole and absolute discretion to accept or reject any application,
in part or in full, without assigning any reason. Debenture Application Forms that are not
complete in all respects shall be rejected at the sole and absolute discretion of the Issuer.

Future Borrowings

The Issuer shall be entitled, from time to time, to make further issue of Debentures, other
debt securities (whether senior, pari passu or junior to the Debentures) and other
instruments and securities to any person or persons including to the public or a section of
the public and / or members of the Issuer and / or to raise further loans, advances and /
or avail further financial and / or guarantee facilities from financial institutions, banks
and / or any other person (s) without any further approval from or notice to the
Debenture-holders/Debenture Trustees.

Governing Laws and Jurisdiction

The Debentures are governed by and will be construed in accordance with the Indian
Law. The Issuer, the Debentures and Issuers obligations under the Debentures shall, at
all times, be subject to the directions of the Reserve Bank of India and Securities &
Exchange Board of India. The Debenture-holders, by purchasing the Debentures, agree
that the Bombay High Court shall have exclusive jurisdiction with respect to matters
relating to the Debentures.

Dispatch of Refund Orders

The Company shall ensure dispatch of refund orders of value over Rs. 1500/- and
Debenture certificates by Registered Post/Reputed Courier/ Hand Delivery only.
Undertaking by the Issuer Company:
a.

The complaints received in respect of the Issue shall be attended to by the Issuer
Company expeditiously and satisfactorily

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PRIVATE AND CONFIDENTIAL

b.

c.

d.

e.
f.

g.
h.

i.

j.
k.

l.

IV.

All steps for completion of the necessary formalities for listing and commencement
of trading at BSE where the securities are to be listed are taken within 21 working
days of finalization of deemed date of allotment.
No further issue of securities shall be made till the securities offered through this
Information Memorandum are listed or till the application moneys are refunded on
account of non-listing.
Necessary co-operation with the credit rating agency shall be extended in providing
true and adequate information till the debt obligations in respect of the instrument
are outstanding.
The funds required for dispatch of refund orders/allotment letters/certificates by
registered post shall be made available to the Registrar to the Issue.
The Company shall forward the details of utilization of the funds raised through the
debentures duly certified by the Auditors of the Company, to the Debenture Trustees
at the end of each half-year.
The Company shall disclose the complete name and address of the Debenture
Trustees in the annual report.
The Company shall provide a Compliance Certificate ( if applicable ) to the
debenture-holders (on yearly basis) in respect of compliance with the terms and
conditions of issue of debentures as contained in the Information Memorandum duly
certified by the Debenture Trustee.
The company shall forward the details of utilization of the funds raised through the
debentures duly certified by the statutory auditors of the company, to the debenture
trustees at the end of each half-year.
The company shall disclose the complete name and address of the debenture trustee
in the annual report.
The company shall provide a compliance certificate (if applicable) to the debenture
holders (on yearly basis) in respect of compliance with the terms and conditions of
issue of debentures as contained in the offer document, duly certified by the
debenture trustee.
The company shall furnish a confirmation certificate that the security created by the
company in favour of the debenture holders as per the terms of the issue.

PARTICULARS OF THE ISSUE

Objects of the Borrowing

To augment the resources of the Company for meeting ongoing long term working capital
requirements
Authority for the Present Offer
The Board of Directors of the Company at its meeting held on 3rd February, 2004 has approved
the issue of UNSECURED / SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES for
an amount upto Rs. 1000 crores in one or more tranches at an appropriate rate of interest by way
of Private Placement and on such other terms and conditions mutually acceptable to lender and
the company and subject to guidelines issued by SEBI, RBI and other regulatory authorities.

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PRIVATE AND CONFIDENTIAL

V.

COMPANY MANAGEMENT & PROJECT

History, Incorporation and Background

The Company was incorporated on 1st January, 1991 as Maxi Motors Financial Services Limited
and received Certificate of Commencement of Business on 19th February, 1991. The name has
been changed to Mahindra & Mahindra Financial Services Limited and Fresh Certificate of
Incorporation was received on 3rd November, 1992. The Registration Certificate from Reserve
Bank of India was received on 4th September 1998 in terms of Section 45 A of the Reserve Bank of
India Act 1934.
Its first branch outside Mumbai at Jaipur was opened in October 1995. The Company has over
200 branches in semi-urban and rural areas and has a customer base of more then 2,00,000.
OBJECTIVE
MMFSL is a focused automotive and equipment Hire Purchase and Leasing Company. It finances
dealers of M&M, their customers and small businesses by extending short term finance as well as
Lease and Hire Purchase Finance.
With the onset of boom in the automotive business and general growth in the economy as a
sequel to liberalized government policies, MMFSL can play a much bigger role in meeting the
requirement of small businesses, small transport companies and agriculturists
MMFSL is currently financing all its advances through Loans due to applicability of service tax
on Hire purchase receivables.
Promoters and their background
Mahindra & Mahindra Limited
Brief History :
Mahindra & Mahindra Limited (M&M) is the flagship company of the Rs. 6200 crores Mahindra
Group, which has a significant presence in key sectors of the Indian economy. A consistently high
performer, M&M is one of the most respected companies in the country.
Set up in 1945 to make general-purpose utility vehicles for the Indian market, M&M soon
branched out into manufacturing agricultural tractors and light commercial vehicles (LCVs). The
Company later expanded its operations from automobiles and tractors to secure a significant
presence in many more important sectors. The Company has, over the years, transformed itself
into a Group that caters to the Indian and overseas markets with a presence in vehicles, farm
equipment, information technology, trade and finance related services, and infrastructure
development.
An organizational restructuring exercise in 1994 arising from a Business Process Re-engineering
programme resulted in the core activities of manufacturing utility and light commercial vehicles
and agricultural tractors remaining with the flagship Company.

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PRIVATE AND CONFIDENTIAL

All other activities were spun off into separate entities and organized under business groups.
These groups are in the areas of Hospitality, Trade and Financial Services, Automotive
Components, Information Technology, Telecom and Infrastructure Development.
Today M&M has two main operating divisions:
The Automotive Division manufactures utility vehicles, light commercial vehicles and
three wheelers.
The Tractor (Farm Equipment) Division makes agricultural tractors and implements that
are used in conjunction with tractors. This division has also ventured into manufacturing
of industrial engines.
M&M employs around 12,000 people and has six state-of-the-art manufacturing facilities spread
over 500,000 square meters. M&M has also set up two satellite plants for tractors manufacturing.
It has 49 sales offices that are supported by a network of over 650 dealers across the country. This
network is connected to the company's plants by an extensive IT infrastructure.
M&M's outstanding manufacturing and engineering skills allow it to constantly innovate and
launch new products for the Indian market. Proof of this expertise is the launch of the Bolero,
Scorpio, a new-generation sport utility vehicle, and the Arjun, a sophisticated agricultural tractor.
M&M's commitment to technology-driven innovation is reflected in the setting up of the
Mahindra Research Valley, a facility that will house the M&M's engineering research and
product development wings, under one roof.
M&Ms philosophy of growth is centered on its belief in people. As a result, the company has put
in place initiatives that seek to reward and retain the best talent in the industry. M&M is also
known for its progressive labour management practices.
In the community development sphere, the company has implemented several programs that
have benefited the people and institutions in its areas of operations.
{Source: www.mahindraworld.com }

Board of Directors
The Board of Directors of the Company has, as its members, eminent persons from Industry,
Finance, Investment and other branches of business, who bring diverse experience and expertise
to the Board. The Board of Directors comprises seventeen members and has a mix of executive
and non-executive directors. A majority of the directors on the Board are non-executive directors.

The Company's current Board of Directors is as follows:

Mr. Keshub Mahindra
Mr. Anand G. Mahindra
Mr. R. K. Pitamber
Mr. Deepak S. Parekh
Mr. Nadir B. Godrej
Mr. M. M. Murugappan

Chairman
Vice-Chairman & Managing Director

- 14 -

PRIVATE AND CONFIDENTIAL

Mr. David Friedman

Mr. V. K. Chanana
Mr. B. R. Gupta
Mr. Narayanan Vaghul
Dr. A. S. Ganguly
Mr. R.K. Kulkarni
Mr. Anupam Puri
Mr. K.J. Davasia
Mr. Bharat Doshi
Mr. Alan Durante
Mr. Arun Nanda

Nominee of Unit Trust of India

Nominee of Life Insurance Corporation of India

Executive Director
Executive Director
Executive Director
Executive Director & Secretary

Financial Highlights:
(Rs. in lacs)
Particulars
Share Capital
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.
Market price in last 6 months
Highest Price
Lowest Price
Market price in last 6 months
Month
High (Rs.)
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04

2000-2001
11,048.44
194,159.09
426,700.59
435,289.58
12,055.56
10.91

2001-2002
11,600.86
137,188.71
388,650.99
399,675.26
10,269.36
8.62

2002-2003
11,600.86
143,831.21
445,264.97
459,679.21
14,553.41
12.55

366.00
113.00

146.00
50.90

126.65
78.75

Low (Rs.)
214.45
239.00
343.00
361.50
390.25
444.80

186.25
186.50
234.75
304.15
339.00
358.00

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PRIVATE AND CONFIDENTIAL

Shareholding Pattern of MMFSL:The shareholding pattern of the Issuer as on 31st January, 2004 is as follows:
Category

No of Equity
Shares

% to Total

PROMOTER'S HOLDING

Promoters

58821537

97.03

a
b
2

Indian Promoters (including CoPromoters)

Mahindra and Mahindra Ltd
Others
Co-promoters

58821537

97.03

a
b
c
d
e
f
3

Life Insurance Corporation of India

General Insurance Corporation of India
The New India Assurance Company
Limited
National Insurance Company Limited
United India Insurance Company
Limited
The Oriental Insurance Company
Limited
Foreign Promoters
Sub Total (2+3)

58821537

97.03

212730

0.35

1589036

2.62

Sub Total

1801766

2.97

Total ( 4+5 )

1801766

2.97

60623303

100.00

Total (1+2+3)
B

NON- PROMOTERS' HOLDING

Institutional Investors

Mutual Funds

Banks, Financial Institutions, Insurance

Companies (Central/State Government.
Institutions/ Non-Government.
Institutions)
FIIs

Sub Total
5

Others

Private Corporate Bodies

Indian Public

NRIs/OCBs

Any Other (please specify)

Grand Total (A + B)

- 16 -

PRIVATE AND CONFIDENTIAL

Key Managerial Personnel:

Name

Designation

Mr. Ramesh Iyer

Managing
Director

Mr. V.Ravi

Chief
Financial
Offier

Date of
Joining
01-10-1995

01-10-1995

Qualification Experience Ex-Employer Name

B.Com.,MBA

B.Com., ACA,
AICWAI

26 Years Regional Manager,

Ashok Leyland
Finance Ltd.
20 Years Sr. Executive Finance,
Mahindra Ugine Steel
Co. Ltd.

A team of professionals, who head various functional areas including Treasury, Accounts,
Information Technology, Operation and HRD supports the Managing Director and the Chief
Financial Officer. The Regional Offices and the Branches are headed by experienced personnel at
senior level of Asst. General Manager / Branch Head.
Change in Key Managerial Personnel in the preceding one year:
There has been no change in the Key Managerial Personnel in the preceding one year.
Name & Address
of the Director
Anand G
Mahindra
Chairman
Goolistan
65, Napean Sea
Road
Mumbai 400006

Occupation
Company
Executive

Directorship in other Companies

1.

Mahindra & Mahindra Ltd

2.

Mahindra Ugine Steel Co Ltd

3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.

Mahindra Intertrade Ltd

Mahindra Sona Ltd
Mahindra Consulting Ltd
National Stock Exchange of India Ltd
Mahindra Holdings and Finance Ltd
Mahindra British Telecom Ltd
Mahindra Consulting Inc
Kotak Mahindra Bank Ltd
Ford India Private Ltd
Automartindia Ltd
MBT International Inc
Avion Aerosols Private Ltd
MW.Com India Private Ltd
M. A. R. K Hotels Private Ltd
Angular Constructions Private Ltd
The Mahindra United World College of
India (a Section 25 Company )
19. Mahindra Gesco Developers Limited

- 17 -

Nature of
Interest in other
Companies
Vice Chairman
and Managing
Director
Vice Chairman
Chairman
Chairman
Chairman
Director
Director
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Member Board
of Governance
Director

PRIVATE AND CONFIDENTIAL

1.

Mahindra & Mahindra Ltd

Executive
Director
Vice Chairman
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Member-Board of
Governors
Director

Bharat Doshi
Director
8, St. Helen's
Court
Dr. Gopalrao
Deshmukh Marg
Mumbai 400026

Company
Executive

Alan Durante
Director
Sea Bird, Flat No
20,
114, Byramjee
Jeejeebhoy Road
Bandra (W)
Mumbai 400050

Company
Executive

1.
2.
3.
4.
5.
6.
7.

Mahindra & Mahindra Ltd

PSL Erickson Ltd
Mahindra Consulting Ltd
Mahindra International Pvt. Limited
Mahindra Automotive Steels Pvt Ltd
Automartindia Ltd
Mahindra Steel Service Centre Limited

Executive
Director
Director
Director
Director
Director
Director
Director

Uday Y Phadke
Director
Flat No 13, Neel
Tarang
208/210, Veer
Savarkar Marg,
Mahim, Mumbai
400016

Company
Executive

1.
2.
3.
4.
5.
6.
7.
8.
9.

Ford Credit Kotak Mahindra Ltd

Mahindra Shubhlabh Services Ltd
Mahindra Gujarat Tractor Ltd
Mahindra Intertrade Ltd
Officemartindia.com Ltd
Mahindra Gesco Developers Ltd.
Mahindra Construction Company Ltd
Mahindra Holdings and Finance Ltd
Mahindra Holidays and Resorts India Ltd

Director
Director
Director
Director
Director
Director
Director
Director
Director

K.J. Davasia
Director
121, Vishnu Baug,
137, S. V. Road,
Andheri (W)
Mumbai 400058

Company
Executive

1. Mahindra & Mahindra Ltd

Dhanajay Mungale
Director
10-A, Ameya Apts,
Near Kirti College
Off K D Road
Mumbai 400028

Company
Executive

2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Mahindra Intertrade Ltd

Mahindra Steel Service Centre Limited
Mahindra British Telecom Ltd
Mahindra Consulting Ltd
Mahindra Consulting Inc
Mahindra Holdings and Finance Ltd
Ford India Pvt. Ltd
NSE.IT Ltd
Templeton Trust Services Private Ltd
Godrej Consumer Products Ltd
The Mahindra United World College of
India ( a Section 25 Company )
13. Mahindra USA Inc

2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.

Mahindra USA Inc. Houston,Texas

Mahindra Shubhlabh Services Ltd
Mahindra Construction Company Ltd
Mahindra Consulting Ltd
Mahindra Gujarat Tractor Ltd
Mahindra Automotive Steels Pvt. Ltd
Camlin Ltd
Caprihans India Ltd
Chowgule Steamships Ltd
Electronic Machine Tools Ltd
Indoco Remedies Ltd
Novacel Life Sciences Ltd
South India Corporation( Agencies )Ltd

- 18 -

Executive
Director
Chairman
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director

PRIVATE AND CONFIDENTIAL

M.G.Bhide
Director
A/5, Bageshree
Shankar Ghanekar
Marg,
Prabhadevi,
Mumbai 400025

Company
Executive

8.
9.
10.
11.
12.

Inestor Advisores Private Ltd

Mentor Technologies Private Ltd
Millenium Broadcast Company Ltd
Zest Pharmaceuticals Private Ltd
Indo Count Industries Ltd.

Director
Director
Director
Director
IDBI Nominee
Director

1.
2.
3.
4.
5.
6.

CRISIL Ltd
Shipping Corporation of India Ltd
Finolex Industries Ltd
Mahindra Shubhlabh Services Ltd
J P Morgan Securities India Private Ltd
Deposit Insurance and Credit Guarantee
Corporation of India Ltd
Global Trade Finance Private Ltd
Indian Oiltanking Ltd
Asset Reconstruction Company (India ) Ltd

Director
Director
Director
Director
Director
Director

7.
8.
9.
Nasser Munjee
Director
20/21, Spenta
Towers
Forjett Street,
Cumballa Hill,
Mumbai 400026

Company
Executive

1. Asea Brown Boveri Ltd

2. Aga Khan Rural Support Programme
(India)
3. Bombay Chamber of Commerce & Industry
4. HDFC Ltd
5. HDFC Investments Ltd
6. Repro India Ltd
7. Cummins India Ltd
8. IDFC Ltd
9. Gujarat Ambuja Cements Ltd
10. KPIT Infosystems Ltd
11. Voltas Ltd
12. Indian Association of Savings & Credit
13. National Institute of Urban Affairs

Director
Chairman

17. Ambit Corporate Finance Pte Ltd.

18. Unichem Laboratories Ltd.
19. Skanska Cementation India Ltd.

Vice President
Director
Director
Director
Director
MD & CEO
Director
Director
Director
Chairman
Member of
Governing
Council
Director
Director
Member of
Managing
Council
Director
Director
Director

Business

K N Motors Private Ltd

Director

Business

Rudra Automobiles Pvt. Ltd.

Managing
Director

14. IDFC Asset Management Company Ltd

15. IDFC Trustee Company Ltd
16. The Associated Chambers of Commerce and
Industry of India (ASSOCHAM)

Rajeev Narain
Director
4, Shahnajaf Road
Narain
Automobiles
Lucknow 226001
Dipak Rudra
Director

Director
Director
Director

- 19 -

PRIVATE AND CONFIDENTIAL

Solar Chemical
Road
Ushagram (E),
Asansol 713303
West Bengal
Ramesh Iyer
Managing Director
A-2003, Oberoi
Towers I, 20th
Floor,
A Wing, Western
Express,
Kandivli (E),
Mumbai 400101

VI.

Company
Executive

Mahindra Allied Investments Ltd

Director

INDUSTRY SCENARIO AND ACTIVITIES OF THE COMPANY

Introduction to Non-Banking Finance Companies

The role of Non-Banking Finance Companies (NBFCs) in transferring the funds from lenders to
borrowers has been well-recognized. The main advantages of these companies lie in the lower
transactions costs of their operations, their quick decision-making ability, customer orientation
and prompt provision of services. Partly on account of these advantages, NBFCs have in recent
years grown sizeably both in terms of their numbers as well as the volume of business
transactions. The number of such financial companies grew more than seven-fold from 7,063 in
1981 to more than 50,000 by end of 2002.
The rapid growth of the NBFCs sector can also be attributed to other factors. NBFCs were
historically subjected to a relatively lower degree of regulation vis--vis banks. Secondly, the
higher rates of return on deposits offered by NBFCs have enabled them to attract a large base of
small savers. Added to these was the fact that the operations of NBFCs were characterized by
several distinctive features viz., no entry barriers, limited fixed assets and no holding of
inventories-all of which led to a proliferation of NBFCs.
Since 1997, a process of registration has been initiated for NBFCs. To make the figures
comparable, the discussion in the overview is upto 1996. Minimum Net Owned Fund for all
NBFCs has been mandated in the RBI Act only in January 1997.

Categorization of NBFCs
Non-Banking Finance Company

Principal Business

Equipment Leasing Company (EL)

Equipment leasing or the financing of such

activity.
Hire purchase transaction or the financing of
such transactions.
Providing finance by making loans or advances,
or otherwise for any activity other than its own;
excludes EL/HP/HFCs.

Hire Purchase Finance Company (HP)

Loan Company (LC)

- 20 -

PRIVATE AND CONFIDENTIAL

Investment Company (IC)

Mutual Benefit Financial Company

Acquisition of securities and trading in such

securities to earn a profit.
Notified by the Central Government under
Section 620 (MBFC) i.e. Nidhi Companies A of
the Companies Act, 1956.

Miscellaneous non-banking company

i.e. Chit Fund Companies

Housing Finance Companies (HFC)

The financing of the acquisition or construction

of houses including the acquisition or
development of plots of land.

Residuary non-banking Companies (RNBC)

Company which receives deposits under any

scheme or arrangement, by whatever name
called, in one lump sum or in instalments by
way of contributions or subscriptions or by sale
of units or certificates or other instruments, or in
any manner. These companies do not belong to
any of the categories as stated above.

Development of Regulatory Framework for NBFCs

The regulation of the deposit acceptance activities of the Non-Banking Finance Companies
(NBFCs) was initiated in the 'sixties with a view to safeguarding depositors' interests and to
ensure that the NBFCs function on healthy lines. Accordingly, in 1963, a new Chapter III-B was
inserted in the Reserve Bank of India Act, 1934 to effectively supervise, control and regulate the
deposit acceptance activities of these institutions. The Bhabatosh Datta Study Group (1971) set up
to examine the role and operations of NBFCs, recommended that NBFCs should be classified into
'approved' and 'non-approved' categories and the regulation should be centred primarily on the
'approved' (i.e., those which satisfy certain additional requirements such as adequate amount of
capital, reserves, liquid assets, etc) NBFCs. Subsequently, the regulatory framework suggested by
the James Raj Study Group (1974) aimed at keeping the magnitude of deposits accepted by
NBFCs within reasonable limits and ensuring that they were in conformity with the objectives of
monetary and credit policy.
In the light of these developments, the Reserve Bank appointed a Working Group on Financial
Companies (Chairman: Dr. A.C. Shah) in 1992 to make an in-depth study of the role of NBFCs
and to suggest regulatory and control measures to ensure healthy growth of these companies.
The Working Group, in its report submitted in September 1992, made wide-ranging
recommendations for ensuring the functioning of NBFCs on sound lines. The Reserve Bank
thereafter initiated a series of measures, including (i) the widening of the definition of regulated
deposits to include inter-corporate deposits, deposits from shareholders and directors and the
borrowings by issue of debentures secured by immovable property, (ii) the introduction of a
scheme of registration of NBFCs having Net Owned Fund of Rs.50 lakh and above, (iii) the
issuance of guidelines on prudential norms so as to regulate the asset side of the balance sheet of
NBFCs. These measures relating to the registration and prudential norms could not be given
statutory backing at that time since the provisions of the Reserve Bank of India Act, 1934, did not
confer it with adequate powers to make them mandatory.

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PRIVATE AND CONFIDENTIAL

In January 1997, an Ordinance was issued by the Government effecting comprehensive changes
in the provisions of the RBI Act, 1934. This was subsequently replaced by the Reserve Bank of
India (Amendment) Act in March 1997. The salient features of the amended provisions, based on
the recommendations of the Shah Committee, pertain to the entry point norm of Rs.25 lakh as
minimum Net Owned Fund (NOF), (which can be subsequently raised to Rs.2 crore by the
Reserve Bank), compulsory registration with the Bank, maintenance of certain percentage of
liquid assets in the form of unencumbered approved securities, creation of reserve fund and
transfer thereto every year an amount not less than 20 per cent of net profit, determination of
policy and issuing of directions by the Bank on prudential norms, prohibition of NBFCs from
accepting deposits and filing of winding-up petitions for violation of directions. The Company
Law Board was empowered to direct a defaulting NBFC to repay any deposits. Stringent penal
provisions were also included empowering the Reserve Bank to impose, inter alia, pecuniary
penalty for violation of the provisions of RBI Act.

Regulation of the Activities of NBFCs in Selected Countries

Australia: Until June 1992, the registered NBFCs in Australia were regulated by the Reserve Bank
of Australia (RBA) under the Financial Services Act, 1974. However, since 1992, the work of
regulating and supervising building societies and credit unions, which constitute the major
segment of the non-banking financial institution, had been delegated to the Australian Financial
Institutions Commission (AFIC), with the RBA retaining the power to focus exclusively on bank
supervision. In 1992, these building societies and credit unions were brought under the
jurisdiction of a principal statutory law, i.e., Financial Institutions Legislation and a scheme of
prudential supervision known as Financial Institution Scheme was introduced for them. For the
purpose of day-to-day supervision of these entities, State Supervisory Authorities (SSA) are given
the responsibility and the AFIC as a nodal agency is functioning under the overall supervision of
ministerial council (MINCIN).
France: The French banking system consists of a large number of credit institutions which may be
authorized as banks, mutual or co-operative banks, savings and prudential institutions,
municipal credit banks, specialised financial institutions and financial companies-all of whom are
governed by the French Banking Act of 1984. Under the Act, credit institutions need an
authorization from the French banking system before beginning their operations. Financial
companies, in particular, are classified into different categories depending on their area of
specialization such as consumer credit, investment credit, real estate financing, equipment
leasing, real estate leasing factoring etc., and they may carry out only such banking operations as
are covered by the decision authorizing them to operate or by the laws and regulations applying
to them. Unless authorized by the Banking Regulating Committee, financial companies and
specialized financial institutions may not receive funds from the public at sight or at less than
two years term.
Hong Kong: Hong-Kong maintains a three-tier system of deposit-accepting institutions, viz.,
licensed banks, restricted licensed banks (RLBs) and deposit-taking companies (DTCs). They are
collectively known as authorized institutions (AIs) and are subject to the supervision of the Hong
Kong Monetary Authority (HKMA). The Banking Ordinance of 1986 constitutes the legal basis
for the HKMA's powers to regulate and supervise AIs. Licensed banks alone are permitted to
conduct the full range of retail and wholesale banking business. RLBs, on the other hand, may
take call, notice or time deposits from the public in amounts of US$ 5,00,000 or above without any
restriction on maturity. DTCs are however restricted to taking deposits of US $ 1,00,000 or above
with an original term to maturity or call or notice period of at least three months. They are mostly

- 22 -

PRIVATE AND CONFIDENTIAL

owned or otherwise associated with banks and are engaged primarily in consumer finance, trade
finance and securities business.
Indonesia: Insurance companies comprise the largest non-bank intermediary in Indonesia. The
relative importance of insurance companies grew substantially in the decade of the eighties.
However, almost half of the assets of the insurance industry are held by five government-owned
social insurance companies which primarily provide pensions, health insurance, and workers'
compensation for the employees of government agencies. As part of the deregulation measures
announced in the late 1980s, insurance premiums have been de-regulated and since 1988, these
have been left to market forces. Prudential regulatory requirements for life insurance, casualty
insurance and re-insurance and restrictions on their investment portfolios were established in the
1990s. Besides insurance companies, there exist finance companies specially established to
conduct activities that cover leasing, factoring, credit card business, consumer financing,
securities trading, etc. The finance company has to be a limited liability company. All financing
institutions are obliged to have a license from the Government. Promoters' ability to bring in the
required capital, their sincerity and capability in conducting the operations are verified before
issuing a license. They are not allowed to draw funds from the public in certain forms of deposits.
There are restrictions on the amount of loan that can be raised by a finance company. Capital
participation by a finance company is restricted to only in another finance company. A finance
company engaged in the securities trading business is precluded from engaging in other types of
operations. The supervision is carried out by the Ministry of Finance (MOF) in co-operation with
the Bank Indonesia.
Malaysia: The banking system in Malaysia comprises three different types of institutions, viz.,
commercial banks, finance companies and merchant banks. They are licensed and governed
under the Banking and Financial Institutions Act, 1989 (BAFIA). Only a public company holding
a valid license granted by the Minister of Finance on the recommendations of Bank Negara
Malaysia (BNM) is allowed to carry on banking, finance company or merchant banking business.
Finance companies typically specialize in consumption credit comprising hire purchase finance,
leasing finance, housing loans and personal loans. They are differentiated from commercial banks
not only by the name and type of business they conduct, but also by the differences in a number
of regulatory requirements they have to comply with. There is a two-tier regulatory system
(TTRS) for financial institutions. The institutions with large capital base and which satisfy the
minimum criteria set by BNM are accorded tier-I status. Companies accorded such a status are
allowed to operate in a more liberal regulatory environment and can carry on activities such as
factoring services and venture capital activities, provide remittance services within Malaysia,
grant unsecured business loans upto a maximum of RM 5,00,000 and personal loans upto RM
10,000. TTRS was extended to finance companies in 1996. Large sized companies are obliged to
furnish monthly statement of assets and liabilities, break up of loans and advances, weekly return
of interest rate on deposits and eligible liabilities and are subject to reserve and statutory liquidity
ratio requirements.
Singapore: Finance companies in Singapore are governed by the Finance Companies Act, which
is administered by the Monetary Authority of Singapore (MAS). In accordance with the Act, only
those finance companies which have been granted licenses are permitted to transact financing
business. Except as provided in the Act, a finance company is not permitted to carry on any kind
of business other than financing activities. They are also not permitted to accept any deposit
which is repayable on demand, by cheque, draft or order drawn by a depositor on the finance
company. The Finance Companies Act was revised in 1994. The amended Act, inter alia,
stipulated minimum capital requirements of US $ 50 million, capital ratio not less than 12 per
cent, maintenance of a reserve fund and transfer a prescribed amount to that fund out of the net

- 23 -

PRIVATE AND CONFIDENTIAL

profits of each year. These apart, finance companies are also required to maintain adequate
provisions for bad and doubtful debts. The MAS also has powers to appoint auditors, other than
the auditors appointed by the company and inspect the books of accounts of the company.
Irregularities, breach or non-compliance with the provisions of the Act, if any, noticed during the
course of audit, need to be immediately reported to the MAS. If a financial company is unable to
meet its obligation or is conducting its business to the detriment of the depositors or creditors, the
MAS has powers to assume control of the company and can even petition to court to wind up a
company. Currently, non-bank financial institutions under MAS supervision comprise merchant
banks, finance companies, securities and financial futures firms, money changers and remitters
and insurance companies.
Thailand: Non-bank savings institutions consist of various units, which include, among others,
finance companies, credit foncier companies and life insurance companies. The finance
companies in Thailand are regulated under the Act on the Undertaking of Finance Business,
Securities Business and Credit Foncier Business, 1979, which was subsequently amended in 1985.
Newly developed prudential control measures relating to capital adequacy ratio, liquidity ratio,
single lending limits, portfolio investment limits, and disclosure requirements are covered under
the Act and are designed to follow international best practices. The Bank of Thailand has been
vested with adequate powers to regulate and supervise the finance companies. The laws
authorize the Bank to remove the institution's management if found unfit or improper; to order
financially troubled institutions to make corrections and improvements or to assume control or
revoke the licenses when deemed as necessary. The Bank of Thailand employs consolidated
supervision approach whereby financial institutions have to submit reports on activities of their
subsidiaries. In 1994, the Bank of Thailand stipulated that finance companies must have written
internal control procedures encompassing the following topics, (a) Receiving or paying of money;
(b) Lending and undertaking contingent liabilities; and (c) Selling the company's
securities/properties. Life insurance companies, on the other hand, operate under the Life
Insurance Act of 1967 and are regulated and supervised by the Ministry of Commerce. The Act
empowers the Ministry to specify various forms of investment in which such companies can
engage in.
The aforesaid discussion suggests that the regulation of NBFCs in different economies has
evolved over a period of time, depending on the country's political-economy and socio-economic
considerations. As the consolidation of the NBFC segment in India gathers momentum, the
regulatory framework will need to be tailored to meet the needs of the evolving situation as
evidenced in these countries.
Source: Reserve Bank of India 'Report of the Working Group on Financial Companies', Mumbai.

The Company has made its presence in the NBFC industry and the factors attributing to its
success are stated as under:
Branch Network
The Company has over 200 branches spread all over India. All branches are fully equipped with
adequate staff to handle the customer needs. The Company is in the process of computerizing all
its branches in phases and networking through VSATs/ leased lines. The Company continues to
introduce new products, upgrade the technology support systems to improve operational
efficiencies and strengthen its human resource base.

- 24 -

PRIVATE AND CONFIDENTIAL

Operations
The Total Assets as on 31st March 2003 were Rs. 1802 crores. Capital Adequacy of 16.53% as of 31st
March, 2003
The Company earned a Net Profit of Rs. 25.62 crores for the six months ended September 2003.
The Gross Profit before depreciation, tax and all other provisions was Rs. 62.11 crores. During the
period the net interest income was Rs. 139.29 crores, while other Income was Rs. 3.39 crores.
Total income of the Company for the period ended 30th September, 2003 was Rs.142.69 crores.
As on 30th September 2003, the Capital Adequacy Ratio of the Companys stood at 15.46% ( Tier I
Capital at 12.33% and Tier II Capital at 3.13%).
Control Systems
Critical areas of operation including Credit, Treasury, Personnel, Accounts, Information
Technology, Operation and Policy Planning and Review are headed by a management team of
senior professionals. The Company has a number of Committees to review the operations. The
Asset-Liability Committee controls risks arising out of asset-liability mismatches and takes a view
to assist in the deployment of resources and the enhancement of profits. The Committee of
Directors looks after the transfer, splitting and also approves the transfer of the shares.
Credit Policy
The Company has a well-diversified portfolio of assets spread across India.
Credit deployment of the Company involves a well-laid out system of appraisals of risks and
compliance with internal guidelines. The Company follows a strongly conservative and
prudential policy on provisioning for weak assets, thereby providing strength to the Companys
Balance Sheet.
-

Sustainable long term competitive advantage and managed by groups known for
competence and integrity.
Potential to evolve as market leaders
Adequate size, appropriate technology, sustainable product portfolio and satisfactory track
record.

Risk Management
Several important steps were taken to evolve a risk management system compatible with the type
and size of the Companys operations as well as the management's risk perceptions.
The Accenture (Consulting Firm) has been carrying out a review of the existing risk management
and Control systems. The Company has already implemented several risk management measures
in conformity with RBI guidelines. Periodic reviews of the Asset Liability Management (ALM)
Policy and approval obtained from the Company's Board for strengthening risk management.
Credit Rating
Recently, the Credit Rating Information Services Limited (CRISIL) has reviewed the performance
of the Company and reaffirms FAA for Fixed Deposit program and AA for Long term Debt and
P1+ for Short term Debt.

- 25 -

PRIVATE AND CONFIDENTIAL

The Company has been awarded AA rating by CRISIL for issue of Rs.910 crores Long Term
Non- Convertible Debentures, including the present issue. The Company has also been awarded
the highest P1+ rating for its short-term Non-Convertible Debenture issue of Rs. 407 crores and
Commercial Paper program of Rs.43 crores.
The Company has also been awarded Ind AA+ rating by Duff & Phelps (DCR) for the Rs.50
crores Long Term Non- Convertible Debentures.

VII.

STOCK MARKET DATA

The Issuer is an unlisted company and market data of stock exchange is not available.

VIII. MANAGEMENT DISCUSSION & ANALYSIS OF THE FINANCIAL

STATEMENTS FOR THE LAST THREE FINANCIAL YEARS
STATEMENT OF PROFITS AND LOSSES

For the year ended March 31,

2001

Income
Interest Earned
Lease Rentals
Income from Securtisation

2002

Rs Lacs
2003

11394.79
2259.01
0.00

17116.04
1420.41
342.02

22368.60
835.52
1450.67

233.09

255.48

334.49

13886.89

19133.95

24989.28

Interest & Bank Charges

Commission & Brokerage
Staff Costs
Provisions for Non Performing Assets/Bad
Debts/Loss on terminations

6588.60
394.16
650.63
1570.29

7443.82
274.27
886.83
3899.84

8569.36
1032.92
1238.55
4372.66

Depreciation
Administrative Expenses

1790.05
846.44

1187.45
1099.69

846.58
1753.85

11840.17

14791.90

17813.92

2046.72

4342.05

7175.36

965.12
0.00

2208.97
(646.84)

3521.73
(744.00)

1081.60

2779.92

4397.63

Other Income
Total
Expenditure

Total
Profit before tax
Provision for Taxes/Current Tax
Deferred Tax
Net Profit

- 26 -

PRIVATE AND CONFIDENTIAL

STATEMENT OF ASSETS AND LIABILITIES

As at March 31,

2001

A Fixed Assets
Gross Block
Less: Depreciation
Net Block
Less Revaluation Reserves
Net Block after adjustment for revaluation
reserves
B Investments
C Current Assets,Loans and Advances
Cash and Bank Balances
Stock on Hire/Loans against assets
Sundry Debtors
Other Current Assets
Loans and Advances

D Liabilities and Provisions

Secured Loans
Unsecured Loans
Current Liabilities and Provisions
E Net Worth (A+B+C+D)
F Represented by
Share capital
Reserves
Less : Revaluation Reserves
Reserves(Net of Revaluation Reserves)
Net Worth

2002

Rs Lacs
2003

5922.93
1608.25
4314.68
0.00
4314.68

4224.42
1570.09
2654.33
0.00
2654.33

2690.77
1215.44
1475.33
0.00
1475.33

943.94

1181.25

2790.12

3285.76
63794.15
6830.63
33.87
14059.35
88003.76

4529.86
83043.48
6497.47
1883.70
7694.08
103648.59

4357.58
115517.44
8338.23
2745.28
10383.75
141342.28

47264.09
22092.89
9763.52
79120.50
14141.88

57072.87
22723.69
10274.79
90071.35
17412.82

68913.17
42032.86
14118.74
125064.77
20542.96

6062.33
8079.55
0.00
8079.55

6062.33
11350.49
0.00
11350.49

6062.33
14480.63
0.00
14480.63

14141.88

17412.82

20542.96

The following discussion and analysis should be read in conjunction with financial
statements.
Comparison of financials for Financial year 2003 with financials of Financial year 2002
The total balance sheet size grew by 35% to Rs. 145608 lacs as on March 31, 2003 as compared to
Rs. 107484 lacs as on March 31, 2002.
The Companys net profit of Rs. 4398 lacs for the year 2002-03 as against Rs. 2780 lacs in the
previous year, registering a growth of 58%. The gross profit before tax was Rs. 7175 lacs as
against Rs. 4342 lacs in 2001-02. During the year, the net income went up by 31% to Rs. 24989 lacs.

- 27 -

PRIVATE AND CONFIDENTIAL

Networth improved from Rs. 17413 lacs in 2001-02 to 20543 lacs in 2002-03.
Disbursements touched a high of Rs.160985 lacs as compared to Rs. 116675 lacs disbursed during
2001-2002 registering a growth of 38%.
As on March 31, 2003 the Capital Adequacy Ratio of the Company stood at 16.53% as compared
to the required rate of 12%. The Company has raised Rs. 35 crores by issue of Unsecured NonConvertible Redeemable Sub-ordinated Debentures as its Tier II Capital during the year.
Results of Operations for the year ended March 31, 2002 as compared to the year ended March 31,
2001
The total balance sheet size grew by 15% to Rs. 107484 lacs as on March 31, 2002 as compared to
Rs. 93262 lacs as on March 31, 2001.
The Companys net profit of Rs. 2780 lacs for the year 2001-02 as against Rs. 1082 lacs in the
previous year, registering a growth of 157% The gross profit before tax was Rs. 4342 lacs as
against Rs. 2047 lacs in 2000-01. During the year, the net income went up by 38% to Rs. 19134 lacs.
During the year ended 31st March 2002 the company has also made an additional provision Rs.
1537.62 lacs on the Non Performing Assets in addition to the existing prudential norms laid by
the Reserve Bank of India for the Non Banking Finance Companies. The additional provision was
made in accordance with the guidelines formulated by the Audit Committee.
For hire purchase contracts entered into on or after 01.04.2001 the company has accounted for
income by applying the rate of interest implicit in the contract in keeping with the requirement of
Accounting Standard 19 on leasing transactions of recognising the finance income at a constant
periodic rate of return on net investment outstanding. Had the company followed the earlier
method of booking income on these contracts, the income from hire purchase would have been
lower by Rs. 2082.88 lacs. Accordingly the profit for the year & the Reserves & Surplus are higher
as compared to the method followed earlier by Rs. 2082.88 lacs
During the year ended 31st March 2002 the company has without recourse securitised future hire
purchase receivables of Rs.4348.07 lacs (including unmatured finance charges) for a consideration
of Rs. 3897.11 lacs. The excess of consideration received over the principal amount of the hire
purchase receivables is booked as income from securitisation.
Networth improved from Rs. 14142 lacs in 2000-01 to 17413 lacs in 2001-02.
Disbursements touched a high of Rs.116675 lacs as compared to Rs. 100197 lacs disbursed during
2000-2001 registering a growth of 16%.
As on March 31, 2002 the Capital Adequacy Ratio of the Company stood at 17.05% as compared
to the required rate of 12%. The Company has raised Rs. 4 crores by issue of Unsecured NonConvertible Redeemable Sub-ordinated Debentures as its Tier II Capital during the year.
Results of Operations for the year ended March 31, 2001 as compared to the year ended March 31,
2000

- 28 -

PRIVATE AND CONFIDENTIAL

The total balance sheet size grew by 33% to Rs. 93262 lacs as on March 31, 2001 as compared to
Rs. 69992 lacs as on March 31, 2000.
The Companys net profit of Rs. 1082 lacs for the year 2000-01 as against Rs. 584 lacs in the
previous year, registering a growth of 85%. The gross profit before tax was Rs. 2047 lacs as
against Rs. 1346 lacs in March 31, 2000. During the year, the net income went up by 17% to Rs.
13887 lacs.
Networth improved from Rs. 13588 lacs in 1999-00 to 14142 lacs in 2000-01.
Disbursements touched a high of Rs.100197 lacs as compared to Rs. 75748 lacs disbursed during
2000-2001 registering a growth of 32%. Company has achieved the landmark disbursements of
crossing Rs.1000 crore in the current financial year.
As on March 31, 2001 the Capital Adequacy Ratio of the Company stood at 15.40% as compared
to the required rate of 12%.

MMFSL confirms that:

1. There have been no unusual or infrequent events or transactions, since the date of the
Auditors Report (5th May 2003) contained herein.
2. There are no significant economic changes that materially affected or are likely to materially
affect income from continued operations.
3. There are no known trends or uncertainties that have had or are likely to have a material
adverse impact on the revenue or income from continuing operations.
4. There have been no changes in the activity of the Issuer which may have had a material effect
on the statement of profit / loss for the last five years.
Material Development:
In the opinion of the Company, since the date of the last financial statement disclosed in the
Information Memorandum, there have been no circumstances that materially and adversely
affect or are likely to affect the trading or profitability of the Company, or the value of its assets,
or its ability to pay its liabilities, within the next twelve months.

IX. FINANCIALS OF GROUP COMPANIES PROMOTED BY PROMOTERS

Name of the Company
Date of incorporation
Nature of Business

Mahindra Engineering & Chemical Products Limited

7th June 1954
Bucket Elevators, Cables Jointing Kits

Particulars
Share Capital
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
539.85
4,638.12
2994.49
3664.24
237.97
4.41

- 29 -

2001-2002
539.85
4,304.95
2,777.56
3,268.55
208.52
3.86

(Rs. in lacs)
2002-2003
539.85
10.15
3,038.65
4,170.82
(446.86)
(8.28)

PRIVATE AND CONFIDENTIAL

List of Directors

Hemant Luthra
D G Bokare
A S Bedi
A. D. Owen
J B Bowman (Alternate to A D Owen)

Name of the Company

Date of incorporation
Nature of Business

Mahindra Intertrade Limited

20 March,1978
Trading Company

Particulars
Share Capital
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
3,535.00
(1,064.46)
12,707.21
14,187.52
632.17
3.06

List of Directors

A G Mahindra
R R Krishnan
Bharat Doshi
A K Nanda
U Y Phadke
Z Bhiwandiwala
Tarjani Vakil
Raghunath Murti

Name of the Company

Date of incorporation
Nature of Business

(Rs. in lacs)
2002-2003
3,535.00
(157.33)
16,128.02
17,513.30
637.66
3.08

2001-2002
3,535.00
(668.09)
13,612.44
15,058.97
132.33
0.12

Chairman
Managing
Director

Mahindra Steel Service Centre Limited

15 January,1993
Trading of HRC,CRC sheets, Electrical sheets

Particulars
Share Capital
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
610.47
818.87
7,173.27
7,388.56
119.85
1.96

2001-2002
610.47
473.07
4,723.90
4,911.46
(55.56)
(0.91)

(Rs. in lacs)
2002-2003
610.47
613.41
2,351.71
2,940.09
192.00
3.15

List of Directors
Bharat Doshi
R R Krishnan
Alan Durante
Tadashi Sawada
Osamu Fujimoto
Yasushi Okayama
(Alternate to Tadashi

- 30 -

Chairman
Managing
Director

PRIVATE AND CONFIDENTIAL

Sawada)
Name of the Company
Date of incorporation
Nature of Business

Mahindra Holdings & Finance Limited

27 April,1985
Investment Company

Particulars
Share Capital
Share Application Money
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
6,540.15
7,435.18
1,362.18
650.04
0.99

List of Directors

Name of the Company

Date of incorporation
Nature of Business

Keshub Mahindra
R K Pitamber
A G Mahindra
Bharat Doshi
A K Nanda
U Y Phadke

Chairman

Mahindra Acres Consulting Engineers Limited

26 October,1993
Engineering Consultancy / Project Consultancy

Particulars
Share Capital
Reserves
Total Sales
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
100.00
104.99
119.46
8.63
0.87

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
7,194.16
69.00
4,054.26
1,160.87
(2,805.27)
(4.27)

(Rs. in lacs)
2002-2003
11,760.16
3,607.34
693.82
(446.92)
(0.59)

2001-2002
100.00
79.78
123.09
(25.93)
(2.59)

(Rs. in lacs)
2002-2003
100.00
81.42
586.10
1.64
0.16

A K Nanda
Dr. D C Kantawala
Dr A Z Erzinclioglu
Alan O Brien
Mahindra Ashtech Limited
9 October,1995
Ash Handling Systems / Travelling Water Screens

Particulars
Share Capital
Reserves
Total Sales

2000-2001
1,000.00
527.71
596.53

- 31 -

2001-2002
1,000.00
488.47
1,047.61

(Rs. in lacs)
2002-2003
1,000.00
388.56
927.93

PRIVATE AND CONFIDENTIAL

Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

5,822.48
174.02
2.90

List of Directors

Name of the Company

Date of incorporation
Nature of Business

Hemant Luthra
S Venkatraman
Raghunath Murti
Amar Banerjee

2000-2001
2,840.02
(2,569.26)
2,143.54
3,093.45
(852.07)
(5.02)

List of Directors

Managing
Director

2001-2002
2,840.02
(2,633.78)
3,255.75
4,689.18
16.49
( 0.40)

(Rs. in lacs)
2002-2003
2,840.02
(2,353.44)
4,306.59
6,214.54
280.34
0.97

A K Nanda
R Santhanam
U Y Phadke
Jaitirth Rao
Keki Mistry
Rohit Khattar
Cyrus Guzder
NBS International Limited
19 December, 1995
Auto Dealer

Particulars
Share Capital
Reserves
Total Sales/Traded Goods
Total Income
Profit/ (Loss) after Tax
Earning Per Share Rs.

2000-2001
0.25
nil
0.79
(3.42)
n.a.

2001-2002
0.25
25.35
67.61
42.63
1,705.39
Anjanikumar
Choudhari
P N Shah
A M Choksey
Rajesh Jejurikar

List of Directors

Name of the Company

3,333.40
(645.89)
(12.69)

Mahindra Holidays and Resorts India Limited

20 / 9 /1996
Time Share and Hotels

Particulars
Share Capital
Reserves
Total Sales/Timeshare Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

Name of the Company

Date of incorporation
Nature of Business

4,656.10
38.40
0.16

Mahindra Gesco Developers Limited

- 32 -

(Rs. in lacs)
2002-2003
5.05
39.03
4,460.38
4,506.44
25.34
147.07
Chairman

PRIVATE AND CONFIDENTIAL

Date of incorporation
Nature of Business

16 March,1999
Real Estate Development

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.
Market price in last 3 years
Highest Price
Lowest Price

Market price in last 6 months

Month
High (Rs.)
Aug-03
24.00
Sep-03
20.50
Oct-03
24.55
Nov-03
26.00
Dec-03
40.00
Jan-04
35.00

2000-2001
2,876.02
12,530.80
2,190.55
2,603.40
510.84
1.78

(Rs. in lacs)
2002-2003
10,456.25
10,156.09
5,927.97
8,960.88
230.53
0.47

24.50
16.25

17.95
10.45

Low (Rs.)
16.10
15.50
16.75
16.80
24.00
22.25

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
10,456.02
9,925.56
16,996.53
19,113.82
257.27
(2.09)

A.G.Mahindra
A K Nanda
Ghanshyam Sheth
Sanjiv Kapoor
Soli Cooper
U Y Phadke
Hemant Luthra
Mahindra Infrastructure Developers Limited
May 10,2001
Infrastructure Contracts

Particulars
Share Capital
Share Application Money
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
nil
-

List of Directors

2001-2002
5.00
25.00
(7.39)
nil
nil
(7.39)
(14.77)
A K Nanda

- 33 -

(Rs. In lacs)
2002-2003
5.00
(21.72)
nil
nil
(14.34)
(28.68)

PRIVATE AND CONFIDENTIAL

Rakesh Sharma
Anita George
Name of the Company
Date of incorporation
Nature of Business

Mahindra Consulting Inc.

28/04/2000
e-business & Integrated Value Chain management

Particulars
Share Capital
Reserves
Total Income
Profit /( Loss) after Tax

2000-2001
nil
nil
nil
nil

2001-2002
0.20
2.26
0.86
(1.70)

($ in million)
2002-2003
0.21
3.92
1.41
(1.46)

List of Directors
A G Mahindra
Ulhas Yargop
Bharat Doshi
Jack Goldstein
Ashok Santhanam
Z.Bhiwandiwala
Name of the Company
Date of incorporation
Nature of Business

Mahindra British Telecom Ltd.

October 24, 1986
Computer Software Services

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
2,021.05
21,318.16
38,739.08
39,132.09
9,658.49
9.57

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
2,021.05
30,715.38
51,610.41
52,743.93
12,627.88
12.50
A G Mahindra
Robert Helleur
Bharat Doshi
Hon Akash Paul
Dr Raj Reddy
Ulhas Yargop
Anupam Puri
Sinclair Stockman
Chris Price
Clive Goodwin

MBT International Incorporated

November 29,1993
Computer Consulting and Programming Support

- 34 -

(Rs. In lacs)
2002-2003
2,021.39
35,817.97
60,262.09
62,304.27
17,154.51
16.97

PRIVATE AND CONFIDENTIAL

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

2000-2001
0.38
1.54
16.67
16.69
0.53

List of Directors

Name of the Company

Date of incorporation
Nature of Business

A G Mahindra
Robert Helleur
Ulhas Yargop
Chris Price
Clive Goodwin
MBT GMBH Dusseldorf
November 22,2001
Telecommunications and IT Services

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

2000-2001
nil
nil
nil
nil
nil

List of Directors
Name of the Company
Date of incorporation
Nature of Business

2001-2002
25,000.00
(117,681.24)
(117,681.24)

(Euro)
2002-2003
575,000.00
(709,010.23)
133,464.52
135,791.84
(591,328.99)

Marcus Schueler - Managing Director

MBT Software Technologies PTE Limited
April 30,2002
IT Consultancy

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

2000-2001
nil
nil
nil
nil
nil

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
0.38
1.92
13.45
13.47
0.38

(US $. In million)
2002-2003
0.38
0.56
11.24
11.25
(1.36)

2001-2002
nil
nil
nil
nil
nil

(S$.)
2002-2003
50,000.00
385,752.00
1,108,088.00
1,108,088.00
385,752.00

Lim Tiong Beng

Robert John Helleur
Mahindra Consulting Limited
10 December,1991
Software Consultancy Services

Particulars
Share Capital
Reserves

2000-2001
71.94
856.15

- 35 -

2001-2002
71.94
336.13

(Rs. In lacs)
2002-2003
71.94
541.99

PRIVATE AND CONFIDENTIAL

Total Sales/Operating Income

Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2,644.80
2,736.01
198.05
341.14

List of Directors

2,247.34
2,314.35
(539.84)
(750.61)
A G Mahindra
K J Davasia
Bharat Doshi
A K Nanda
Alan Durante
Ulhas Yargop
A G Tawde
Hemant Luthra
Dr P G Hebalkar

4,052.19
4,118.00
205.87
286.15
Chairman

Total income contains PDD Writeback also

Name of the Company
Date of incorporation
Nature of Business

Mahindra Consulting( Singapore) Pte Limited

21/1/2003
Software Consultancy

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

2000-2001
nil
nil
nil
nil
nil

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
nil
nil
nil
nil
nil

(S $.)
2002-2003
25,000
10,994
103,750
10,994

Ulhas Yargop
Lim Tiong Beng
M Venkatraman
Mahindra Logisoft Business Solutions Limited
12 April,1999
Software Solutions

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
80.00
(487.28)
205.59
206.79
(236.90)
(29.61)

List of Directors

2001-2002
80.00
(821.54)
122.65
122.65
(334.26)
(41.78)
Ulhas Yargop
A G Tawde
V K Garg
S Durgashankar
V Mani

- 36 -

(Rs. In lacs)
2002-2003
240.00
(1,074.61)
151.26
162.34
(253.07)
(31.12)

PRIVATE AND CONFIDENTIAL

Name of the Company

Date of incorporation
Nature of Business

Automartindia Limited
22 December,1994
Pre-Owned Car Business

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
324.00
(616.41)
5.40
64.27
(644.52)
(19.89)

List of Directors

Name of the Company

Date of incorporation
Nature of Business

A G Mahindra
Hemant Luthra
Arun Sanghi
Sanjay Labroo
Alan Durante
N Ram
Mahindra USA Inc.
June 8, 1994
Manufacturer of Tractors

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

2000-2001
4.50
0.24
26.83
26.83
0.67

List of Directors

Name of the Company

Date of incorporation

2001-2002
416.73
(731.79)
3,408.79
3,809.86
(465.72)
(11.18)

(Rs. In lacs)
2002-2003
416.73
(1,266.52)
4,221.28
4,411.27
(534.73)
(12.83)

2001-2002
4.50
0.84
48.49
48.49
0.60

(US$.in million)
2002-2003
4.50
1.60
78.34
78.34
0.76

K J Davasia
Bharat Doshi
Jack Goldstein
V S Parthasarathy
Sanjay Gupta
Z Bhiwandiwala
Derek Johannes
A Choudhari
Mahindra Intertrade( UK) Limited
March 07,1996

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income

- 37 -

2000-2001
250,000.00
(179,590)

2001-2002
250,000.00
(226,980)

(Pounds)
2002-2003
250,000.00
(194,907)

127,083.00

46,169.00

809,091.00

PRIVATE AND CONFIDENTIAL

Profit /( Loss) after Tax

(109,393.00)

List of Directors

Name of the Company

Date of incorporation
Nature of Business
Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

Mahindra Gujarat Tractor Limited

31 March,1978
Manufacturer of Tractors
As on 30-09-2000
203,019,790
(176,973,308)
323,738,392
390,060,593
-106,258,974
-8.33

2001-2002
203,019,790
(293,874,314)
350,710,754
360,074,682
-103,875,268
-7.34
Sanjay Lalbhai
Indira Parikh
Raghunath Murti
K J Davasia
U Y Phadke
S S Wagh
P K Pujari

(Rs.)
2002-2003
203,019,790
(359,627,884)
307,254,109
312,583,655
-66,780,035
-4.57
Chairman

Mahindra Shubhlabh Services Limited

11 April,2000
Farm Solutions

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
46,500,030
-27,420,173
8,185,687
8,563,879
-27,420,173
-21.40

List of Directors

Name of the Company

Date of incorporation
Nature of Business

32,073.00

Z Bhiwandiwala
R R Krishnan
P S Raman

List of Directors

Name of the Company

Date of incorporation
Nature of Business

(47,390.00)

2001-2002
114,000,000
-79,769,873
72,004,485
73,724,987
-52,349,700
-4.9
K J Davasia
U Y Phadke
M G Bhide
S Durgashankar
Raghunath Murti

Mahindra Ugine Steel Company Limited

19 December 1962
Manufacturing Tool, Alloy and Special Steel

- 38 -

(Rs.)
2002-2003
114,000,000
-135,613,675
99,383,598
99,616,485
-55,843,802
-4.85
Chairman

PRIVATE AND CONFIDENTIAL

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.
Market price in last 3 years
Highest Price (Rs.)
Lowest Price (Rs.)

2000-2001
4,393.16
7481.71
23,892.89
24,261.36
(1,422.64)
(5.07)

2001-2002
4,739.16
7129.56
25,620.90
25,717.33
(566.57)
(2.18)

(Rs. In lacs)
2002-2003
4,739.16
610
28,334.19
28,589.77
(1,721.98)
(6.17)

9.05
5.00

6.45
2.70

13.60
5.70

Market price in last 6 months

Month

High (Rs.)
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04

Low (Rs.)
24.50
15.50
17.50
25.85
35.55
40.05

12.05
11.60
12.55
14.55
23.05
25.20

List of Directors

Name of the Company

Date of incorporation
Nature of Business

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax

Keshub Mahindra - Chairman

Anand G Mahindra - Vice Chairman
P.G.Chitale - Managing Director
K.V. Ramarathnam - Executive Director
N.V.Khote
Hemant Luthra
H.N. Sethna
M.R.Ramachandran
C.S.Madhav Rao
M.K.Garg
S.Ravi
Jayem Automotives Limited
31December,1999
Design, develop, improve, innovate, assimilate and
experiment in all kinds of vehicles of every description run
on conventional and non-conventional fuel.

2000-2001
100.00
(141.38)
100.01
101.43
(141.38)

- 39 -

2001-2002
100.00
(358.72)
93.20
93.73
(217.32)

(Rs. In lacs)
2002-2003
100.00
(555.20)
139.42
139.44
(196.47)

PRIVATE AND CONFIDENTIAL

List of Directors

Name of the Company

Date of incorporation
Nature of Business

Mr B Jayachandran Chairman
Mr J Anand
Managing Director
Mr S Kishore
Dr D N Rao
Dr Pawan Goenka
Mr S Durgashankar
Mr Jaideep Devare
Mahindra Engineering Design &Development Company
Limited
7 August, 1995
Scientific research and development for manufacture of all types
of industrial products & providing designing, engineering, reengineering etc.

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
0.0007
-

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
0.0007
-

(Rs. In lacs)
2002-2003
5.00
-

Mr Ulhas Yargop Chairman

Dr Pawan Goenka
Mr C Krishnadas
Mahindra Construction Company Limited
30 September, 1992
Construction of buildings, roads, highways

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
780.05
2,744.40
2,777.89
(1,813.47)
-

List of Directors

2001-2002
780.05
4,050.57
4,184.43
(661.70)
Mr A K Nanda
Mr K J Davasia
Mr U Y Phadke
Mr D K Tandon
Dr P P Mistry

- 40 -

(Rs. in lacs)
2002-2003
780.05
1,737.46
1,984.17
(28.94)
(1.20)
Chairman

PRIVATE AND CONFIDENTIAL

Mr Rajan
Narayan
Name of the Company
Date of incorporation
Nature of Business

Officemartindia.com Limted
17 May, 2000
Trade in stationery supplies, furniture, provide consultancy
services, technical knowhow

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
100
0
190.34
208.88
(35.43)
(3.54)

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2002-2003
149.99
0
97.15
101.39
(23.84)
(1.58)

Mr R R Krishnan
Mr Ulhas Yargop
Mr Anjanikumar Choudhari
Mr U Y Phadke
Mr Chandulal Shah
Console Estate & Investments Ltd.
31 October, 1988
Investment and Consumer Finance

Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

2000-2001
9.80
51.85
Nil
4.90
3.57
3.64

List of Directors

Name of the Company

Date of incorporation
Nature of Business

2001-2002
149.99
0
374.36
362.59
(69.83)
(4.90)

2001-2002
9.80
59.34
Nil
8.38
6.57
6.7

(Rs)
2002-2003
9.80
62.92
Nil
9.08
6.03
6.15

Dr. P.P.Mistry
Mr. A.M.Palekar
Mr. R. Sundaresan
Mr. R.M Desai
Mahindra Automotive Steels Pvt. Ltd.
13 August, 1999
Yet to commence business

Particulars
Share Capital
Reserves

2000-2001
Nil
Nil

- 41 -

2001-2002
0.007
Nil

(Rs.)
2002-2003
1.007
Nil

PRIVATE AND CONFIDENTIAL

Total Sales/Operating Income

Total Income
Profit /( Loss) after Tax
Earning Per Share Rs.

Nil
Nil
Nil
Nil

List of Directors

Name of the Company

Date of incorporation
Nature of Business
Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit / (Loss) after Tax
Earning Per Share Rs.

Mr. Keshub Mahindra

Mr. R. N. Singh
Mr. K.J.Davasia
Mr. Alan Durante
Mr. R.R.Krishnan
Gateway Housing Finance Corporation Limited
24 June, 1996
Long term Finance for Residential purposes
2000-2001
70
(1,529,444)
nil
nil
(268,232)
nil

2001-2002
70
(1,791,676)
nil
nil
(262,232)
nil

List of Directors

Name of the Company

Date of incorporation
Nature of Business
Particulars
Share Capital
Reserves
Total Sales/Operating Income
Total Income
Profit / (Loss) after Tax
Earning Per Share Rs.
List of Directors

Name of the Company

Date of incorporation
Nature of Business

Nil
Nil
Nil
Nil

(Rs.)
2002-2003
500,000
(2,054,213)
nil
nil
(262,537)
nil

J P Fernandes
S Krishnan
M K Rakshit
Mahindra Holidays & Resorts USA
24 October, 2003
Time share and Hotels
2000-2001
N.A
N.A
N.A
N.A
N.A
N.A

2001-2002
N.A
N.A
N.A
N.A
N.A
N.A
A K Nanda
Ravi Santhanam
Amar Korde

Mahindra Consulting Gmbh

7.12.2003
Software Consultancy Services

- 42 -

2002-2003
N.A
N.A
N.A
N.A
N.A
N.A

(Rs. in lacs)
2003-2004
0.46
nil
nil
nil
nil
nil

Nil
Nil
Nil
Nil

PRIVATE AND CONFIDENTIAL

(Euro)
Particulars
2000-2001
Share Capital
N.A
Reserves
N.A
Total Sales/Operating Income
N.A
Total Income
N.A
Profit / (Loss) after Tax
N.A
Earning Per Share Rs.
N.A
List of Directors

2001-2002 2002-2003 Upto 31st Jan 2004

N.A
N.A
50000
N.A
N.A
Nil
N.A
N.A
Nil
N.A
N.A
Nil
N.A
N.A
Nil
N.A
N.A
Nil
V Mani
Zhooben Bhiwandiwala
Nikhil Nayak

Managing Director
Managing Director
Managing Director

Note:
As per the information available there are no major listed companies in the group under BIFR.
We are awaiting information of some of the small group companies and related business
transaction within the group, which would be updated as and when received. Such additional
information will be deemed to form part of this information memorandum when updated.

- 43 -

PRIVATE AND CONFIDENTIAL

X.

CAPITAL ISSUES DURING LAST THREE YEARS:

A.

Equity Issued - Part of Tier I Capital:

In last three years the Company has not come out with any fresh Capital Market issue for
Equity shares.

B. Unsecured Redeemable Privately Placed Non Convertible Debentures issued by the

Company forming part of Tier II Capital
Sr. No

Date of
Number of
Allotment
Bonds
1
28/03/02
4
2
12/07/02
35

Rate of
Date of
Interest
Redemption
11.19%
28/09/07
10.165%
15/01/08

Outstanding
Amount Rs.
4,00,00,000/35,00,00,000/-

Promise V/s. Performance

Issuer Company is an unlisted company, hence this clause is not applicable.
There has been no fresh capital issue in the recent past by the promoter/group/associate
companies.

XI.

BASIS FOR ISSUE PRICE

The issue has been priced at around 100 - 300 basis points above the existing G-Sec rates of
corresponding maturities.

XII.

OUTSTANDING LITIGATIONS OR DEFAULTS

Outstanding litigations pertaining to Mahindra & Mahindra Financial Services Ltd.

There are no defaults, non payments or overdues of statutory dues, institutional or bank dues or
dues towards holders of debentures, bonds and fixed deposits and arrears of preference shares,
other than unclaimed liabilities of the Company.
Litigation Statistics of MMFSL as on 31st December 2003
Sr.
No.
1

Claim Amount
(Rs.)
11,31,02,608

Total no. of cases

Category (Type of case)

Claimant

640

MMFSL

9,35,162

3
4
5

Not applicable
Not applicable
Not applicable

137
1
135

U/s. 138 of Negotiable

Instruments Act, 1881
Civil Suit for recovery/
custody claim
Consumer Forum Cases
Consumer Forum Cases
Civil suit for injunction/
declaration

- 44 -

MMFSL
Various
MMFSL
Various

PRIVATE AND CONFIDENTIAL

6
7
8
9

Not applicable
Not applicable
Not applicable
55,30,666

9
4
45
1

Criminal
Appeal
Criminal
Company Petition

MMFSL
MMFSL
Various
MMFSL

In the above said litigations are pertaining to normal business of the Company. There is no major
litigation pending against the Company.
Cases before Income Tax Department
Demands against the Company by the tax department for the Assessment Year 2000-2001 for
Rs.132.97 Lacs but Company has not acknowledged them and are not likely to affect operation
and financials of the company.

Outstanding litigation pertaining to Promoter/Prompters Group

Name of the Company : Mahindra & Mahindra Limited

AutomotiveSector -Consumer Cases
Sr. No. Claim Amount Court/DRT/Forum
1 59193465.64

District Forums

2 9782652

State Commissions

3 4807482

State Commissions

4519492 State Commissions

1354795 State Commissions

13771444 National
Commissions

862751.2 Munsiff Court

8
9

2309638.6 Civil Court

1166966.85 High Court

Farm Equipment Sector -Consumer Cases

Sr. No. Claim Amount Court/DRT/Forum
1
2

29447414 District Forums

890796 State Commissions

Claimant

Total No. of Cases

Cases filed by
Complainants
Cases filed by
Complainants
Appeals filed by
M&M
appeals filed by
Complainants
Appeals filed by
dealers
Matters filed by
M&M,
complainants etc.

424

Cases filed by
Complainants
Civil Suits
High Court matters

13

Claimant
Cases filed by
Complainants
Cases filed by
Complainants

- 45 -

22
56
33
18
12

20
12

Total No. of Cases

205
6

PRIVATE AND CONFIDENTIAL

1171990 State Commissions

2102893 State Commissions

176937 State Commissions

7000 National
Commissions

7
1102821 Civil Court
LABOUR COURT MATTERS
Sr.No. Sector
Court/DRT/Forum
1 Automotive
Various
Sector
2 Farm
Various
Equipment
Sector

Appeals filed by
M&M
appeals filed by
Complainants
Appeals filed by
dealers
Matters filed by
M&M,
complainants etc.

21

Civil Suits

Claim Amount
Rs.55,56,386

3338311 Small CausesBombay

Maharao
Pragmulji III

5800000 Small Causes

Court -Bombay

Palm Court
Court Premises
Landlord
Mahindra &
Mahindra Ltd.

751271 High Court Bombay

342647 High Court of

Mumbai

7
3

No.of Cases

Rs. 8,31,26,186

PROPERTY MATTERS
Sr. No. Claim Amount Court/DRT/Forum Claimant

16

Free India
Engineers- Bus
Contractor engaged to ferry
employees from
Kandivli Station
to FES Plant

- 46 -

9
24

Remarks / Comments
Amount claimed as mesne profit from
July 2002 - Principal 1,73,104.00 per
month with interest at 18 percent
p.a..Amount calculated upto 31.1.2004
Amount claimed as mesne profit from September 2001. Calcultated upto
January 2004
amount Claimed by us from Bunayya
Sheet Metal on account of raw matrials
supplied by us for mnufcture of Gas
tanks for our vehicle. The material were
not returned to us. Principal amount
Rs.1,64,932.66 + interest at 18 percent
from 23.4.1984 to 22.1.2004

PRIVATE AND CONFIDENTIAL

2100000 Small Causes Bombay

Mesne profit at Rs.50,000 pr month from

Mercantile &
2nd August 2003 to January 2004
Industrial
Development
Co. - Landlord
of premises on
3rd floor,
National Housedesires
repossession of
the premises

SUITS/APPEALS FILED BY OR AGAINST MAHINDRA & MAHINDRA LTD.

Sr. No. Claim Amount Court/DRT/Forum Plaintiff/ Appellants/ Defendants/Respondents
1 Rs.61,00,000

Small Causes
Court, Mumbai

Octroi Authority, Mumbai Municipal Corporation

2 Rs.4,10,00,000

Small Causes
Court, Mumbai

Assessor & Collector Dept., Mumbai Municipal

Corporation

3 Rs.1,04,60,000

Debt Recovery
Tribunal
4 Rs.9,48,000
Civil Court at
Ponda
5 Rs.53,72,723
High court,
Mumbai
6 Rs.1,06,36,027 High Court,
Mumbai
7 Rs.6,86,75,245 High Court,
Mumbai
8 Rs.8,97,24,804 High Court,
Mumbai
9 Rs,1,19,97,000+ High Court,
Mumbai
10 Rs.1,53,13,358 High Court, Delhi
11 Rs.1,08,46,574

Canara Bank
Dynamatic Engineers
M&M v/s. Jord Eng. & Anr.
M&M v/s. NEPC Micon Ltd.
Credential Finance v/s. M&M
M&M v/s.Credential Finance .
M&M v/s. Kirloskar AAF
M&M v/s. Shiv Vani Universal Ltd.

Bank of Commerce & Credit International (Overseas) Ltd

v/s. M&M.
12 Rs.43,86,808/- Court of Additional International CRM Services Ltd v/s. M&M (erstwhile
MITS)
Civil Judge (S.D),
Kharar, District
Ropar, Chandigarh
13 Rs. 18,86,808/- Metropolitan
M&M (erstwhile MITS0 v/s. International CRM Services
Magistrate, 7th
Ltd
Court, Dadar
14

Rs.2,37100

DRT, Mumbai

District Consumer Mr Rajesh Kumar Tomar v/s. M&M (erstwhile MEML)

Disputes Redressal
Forum,New Delhi

- 47 -

PRIVATE AND CONFIDENTIAL

INCOME TAX MATTERS

A
1

Demands against the company not acknowledged

Rs 11845.32 Lacs

Demands against the company not acknowledged

Rs 5100.68 Lacs

Total A

Rs 16946 Lacs

B
3

Department's Appeal against Company

Rs 4635.8 Lacs

Department's Appeal against Company

Rs 272.29 Lacs

Total B

Rs 4908.09 Lacs

Total A + B

Rs 21954.09 Lacs

The above matters are pending before the

a) Commissioner of Income Tax ( Appeals )
b) Income Tax Appelate Tribunal
c) High Court
Of the above Sum,the Company has already paid the same except for an amount
Lacs
SALES TAX MATTERS

AS ON 30-09-2003

SR.
NO.

(Rs. In Lakhs)

1.

AUTOMOTIVE SECTOR

597.76

2.

FARM EQUIPMENT SECTOR

423.56

3.

HEAD OFFICE (MSL DIVN.)

142.49

1163.81

TOTAL

- 48 -

of Rs 5753.6

PRIVATE AND CONFIDENTIAL

CUSTOMS & EXCISE MATTERS

ZAHEERABAD PLANT
Sr. No. Claim Amount
1

6,924,108

15,867,674

IGATPURI
PLANT
Sr. No.
Claim Amount

Court/
DRT/Forum
CEGAT
CEGAT

Court/
DRT/Forum

Claimant
Collector of Customs

Remarks/Comments
Pending for hearing

Collector of Central
Excise

Pending for hearing

Claimant

Remarks/Comments

500000.00
3294759.00

CESTATMUMBAI
Commr.
(Appeals),
NASIK

M & M - IGATPURI

50000.00 Penalty

CESTATMUMBAI

M & M - IGATPURI

21563.00 Ex
2000.00 Penalty

CESTATMUMBAI

M & M - IGATPURI

NIL

Commr.
(Appeals),
NASIK

M & M - IGATPURI

55751.00 Ex
20000.00 Penalty

CESTATMUMBAI

M & M - IGATPURI

- 49 -

Stay order recd. & directed

us to pre-deposit Rs.5 Lacs
& bal. Amt. Unconditional
stay granted. Pre-deposited
on 31/03/2000. O.I.A No.
CEXXI/JMJ/200/916/NSK/
APL/03 rejected our appeal.
Appeal filed before CESTATMumbai. P.H. fixed on
08/10/03.In additonal to
above, for further period,
Deptt. Has filed an appeal
againt another O.I.O No.
158/2000 -29.24 lacs.
Penalty paid on 26/06/2000
UNDER PROTEST
( Appeal filed before CEGATMumbai )
Appeal filled on 23/01/98
before CEGAT-Mumbai. Also
Int. of Rs.3,308=00 paid on
delayed payment for 280
days " Under Protest" . P.H.
completed on 10/09/03 for
review matter.
O.I.A
No.CEX.XI/JMJ/186/916/N
SK/APL/03 dtd. 21/08/2003
passed by the Comm
(A),Nsk, in our favour
O.I.A No.
CEX.XI/JMJ/236/916/NSK/
APL/03 dtd. 07/08/2003
passed by the Comm (A),
Nsk, partly in our favour
(Amt. Rs.1,67,435 ) & Rs.
1167/= twice considered in

PRIVATE AND CONFIDENTIAL

5401.00 Ex
500.00 Penalty

CESTATMUMBAI

M & M - IGATPURI

790.00 Ex

M & M - IGATPURI

NIL

Commr.
(Appeals),
NASIK
Commr.
(Appeals),
NASIK

NASIK
1

PLANT
589,319

1,500,000

10,296,308

M & M - IGATPURI

Commissioner M&M - Nasik Plant

Appeal - Excise

Tribubal Excise

M&M - Nasik Plant

Commissioner M&M - Nasik Plant

Appeal - Excise

- 50 -

the demand ,hence deleted &

balance. Amt. Rs.55,751/disallowed, & penalty status
unchanged.
(Appeal to be
filed before CESTAT Mumbai.)
Appeal filed with CEGAT Mumbai on 16/04/98. Int.
Rs. 595/=paid on delay of
payment against O.I.O No.
10/96 dtd. 17/12/96
(Misc/09/2001 )
For file No.8 awaiting for
decision from Appeals,Nasik
O.I.A NO. RK/31 to
33/Nasik/2003 dtd.
30/07/03 & also O.I.A No.
C.EX.XI/JMJ/275/1916/NSK
/APL/03 dtd. 29/08/2003
are in our favour. Applied
for refund of Pre-deposit
Amt. of Rs. 1,12,690/= duty +
Rs. 2,500/= Penalty on 06-082003
Component spares &
accessories for capital goods,
modvat is taken by us.
However, as per Dept, they
are not covered under
definition of capital goods.
Pertaining to FY 98/99 &
99/00.
Vendor SRC was doing
processing on steel job for us.
Kdv was supplying material
@Rs.1200 to him, however
the final part coming from
vendor was valued @ Rs.900
for steel + his labour charges.
Dept. has claimed that this
difference is intentional
M&M Auto division had
received an order for bullet
proof vehicles from J&K
Police. This order was
handled by MDS (Mahendra
Defence Services). Nasik had
supplied base vehicle by
paying excise duty on normal

PRIVATE AND CONFIDENTIAL

vehicle and the bullet

proofing was done

35,000

Commissioner M&M - Nasik Plant

Appeal - Excise

KANDIVALI PLANT
163498 At Excise
1
Tribunal

2
3
4
5
6

48882 Commr. (A)

89831128 At Excise
Tribunal
16126 At Excise
Tribunal
48473 At Excise
Tribunal
5798192 Unconditional
stay granted by
tribunal
79972 At Excise
Tribunal

AD (Knd)

AD (Knd)
AD (Knd)
AD (Knd)
AD (Knd)
AD (Knd)

AD (Knd)

167925 At Excise
Tribunal

AD (Knd)

31033621 At Excise
Tribunal

AD (Knd)

- 51 -

This is due to some delay in

price revisions filed with the
Department, they have
charged us penalty.
Pertaining to FY 00/01.

SCN's adjudicated vide

O-I-O 679-693 Dtd
31/10/2000 & 672-674
Dtd 31/10/2000 &
Appeal filed for
Rs.163498.25 at Tribunal
Cases related to Modvat rejection Nil GP
Cases Related to Modvat
- Capital Goods
Cases Related to Modvat
- Non-Declaration CDR
Cases Related to Modvat
- SSI Unit
Cases Related to Scrap 57F(3)
Duty-Furniture

In relation to the matter

filed at Tribunal.
(Rs.55,074/-) matter an
amount of Rs.20000/- has
been paid as pre-deposit.
In realtion to the matter
of Rs.4949/- PH before
TRIBUNAL.Modvat 100% EOU
Tribunal order asking us
to deposit duty
amount.Penalty
waived.Modvat Tools Kit
Stay granted for unpaid
amt. and penalty by
Tribunal. Modvat on
scrap used in foundry

PRIVATE AND CONFIDENTIAL

10

11
12
13

99079100 Unconditional
stay granted by
tribunal

519180 Appeal before

Joint Commr.
1123503.00 Demurrage
claimed B.P.T.
11820273.00 B.P.T.

AD (Knd)

Inclusion of R& D
expenses, Admn
Ovhds,Interest,
Depn,Royalty and
proportionate profit
margin in the assessable
value.
DOUBLE BENEFIT ON
C.G.
( BMC petition no. 1425
of 1990)
(BMC Petition no. 394 of
1984)

AD (Knd)
AD (Knd)
AD (Knd)

AUTO SECTOR, Kandivli

Sr. No.
Claim amount
1
10.0 Lacs

Court/ Forum
Labour court

Claimant
Workman

8.0 Lacs

--Do--

workman

4.0 Lacs

--Do--

workman

15.0 Lacs

Supreme
Court-

Workman

1.0 Lac

Labour court

workman

TOTAL

38.0 Lacs

- 52 -

Remarks/Comments
Dismissed for theft,
claim for re-instatement
and back wages
Dismissed for
dishonesty, claim for
reinstatement and back
wages
Dismissed for riotous
behaviour,
reinstatement and back
wages
Workman won reinstatement from Div.
Bench, Mumbai., claim
for rein statement and
2/3 back wages
Company filed SLP in
Supreme Court.
Medical termination,
Claim for reinstatement
and back wages
This includes actual
cases for amount
claimed and
reinstatement with back
wages, if court verdict in
all case goes against the
company.

PRIVATE AND CONFIDENTIAL

Name of the Company : AutomartIndia Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.
1 2,71,820

Dist.Consumer
Forum, Bandra,
Mumbai

2 Nil

Cr. Writ Petition,

High Court New
Delhi

3 47,8,000
4 Nil

Remarks / Comments

Devdutt Navare Consumer Case, filed against the

Company.

Automart India Cr. Writ Petition filed by the Company

against Mr. Anoop Choudhary & Ors.,
for quashing the proceeding before the
Metropolitan Magistrate.
Civil Judge
Anoop
Suit for Injunction filed against the
Choudhary
Company.
M M Patiala
Delhi
Penalty involved Rs.50,000/- & Rs.250/House- New Delhi Development
per day for default for the time till default
Authorities
continues

Name of the Company : Mahindra Engineering & Chemical Products Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1 Nil

JMFC, Pimpri
Court, Pune

MECPL v/s.
M/s. Vikash
Trading Corp.

Criminal Complaint No. 321 of 2002 filed

for cheating u/s. 420 of Indian Penal
Code.

2 Nil

JMFC, Pimpri
Court, Pune

3 Nil

MECPL v/s.
M/s. S&S
Enterprises
MECPL v/s.
M/s. S&S
Enterprises

Pune District &

Sessions Court,
Shivaji Nagar,
Pune
Civil Judge, Sr.
MECPL v/s.
Div. Shivaji Nagar, M/s. S&S
Pune
Enterprises

Criminal Complaint No. 347 of 2002 filed

for cheating u/s. 420 of Indian Penal
Code.
Criminal Revision No. 404 of 2003 filed
against the Order of discharge of M/s. S
& S Enterprises in Original Complaint
347 of 2002.
Sp. Summary Suit for recovery.

4 Rs.3379173/-

5 NIL

3rd Labour Court, Mr. Ramdas

VRS Case No. 27/2000
Swargate Pune
Waqh and 5 Ors.
V/s. MECPL

6 Nil

3rd Labour Court, Mr. C.S.Borkar VRS Case No. 27/2000

Swargate Pune
and 15 Ors. V/s.
MECPL

7 Nil

2nd Labour Court, Mr. C.S.Borkar

Swargate Pune
V/s. MECPL

- 53 -

Leave Enchasment Case No. 257/1999

PRIVATE AND CONFIDENTIAL

Name of the Company : Mahindra Acres Consulting Ltd

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.
1 4614000
2 225000

Income
TaxTribunal
Service Tax
Tribunal

Remarks / Comments

Income tax

for the A.Y 1997-98

Service Tax

refund claim

Name of the Company : Mahindra Intertrade Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.

Remarks / Comments

1 188,937.95

Metropolitan
Magistrate Court,
Dadar, Mumbai

MIL v/s.Ispat
Profiles India
Ltd.

u/s 138 of Negotiable Instruments Act

2 8,13,000

High Court at
Ahmedabad

MIL
v/s.Rajhans
Foods

u/s 138 of Negotiable Instruments Act

3 2,65,270

Tis Hazari Court

New Delhi

MIL v/s.Dilip
Chaturvedi

u/s 138 of Negotiable Instruments Act

4 50,00,000

Tis Hazari Court

New Delhi

MIL
v/s.Mahavira
Foods &
Allahabad
Bank
MIL
v/s.Universal
Traders

u/s 138 of Negotiable Instruments Act

5 $ 440000
High Court,
equivalent to Rs Mumbai
15725600

Admirality Suit - non realization of

export proceeds

Name of the Company : Mahindra Steel Service Centre Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1 13,97,172

Metropolitan
Magistrates Court,
Dadar, Mumbai

Aldea
Electronics

u/s 138 of Negotiable Instruments Act

2 1,30,000

Metropolitan
Magistrates Court,
Dadar, Mumbai

MIL v/s.Fine
Metals Works

u/s 138 of Negotiable Instruments Act

- 54 -

PRIVATE AND CONFIDENTIAL

3 7,36,000

Civil Judge Pune

MIL
v/s.Ashoka
Buildcon

Name of the Company : Mahindra Consulting Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.
1

7.26 lacs

Sessions Court,
Ballard Pier,
Mumbai

Mahindra
Consulting
Emp.PF Trust

Civil Suit

Remarks / Comments
Complaint u/s. 138 of the Negotiable
Instruments Act.

Name of the Company : Mahindra Holidays & Resorts India Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1

49000

District Consumer Amir Jowher,

Disputes Redressal Chennai
Forum, Chennai

87060

District Consumer R. Ahmed

Disputes Redressal
Forum, Chennai

25208

50000

Addl. Sub-Judge at Mr. Sivasankar,

Pondicherry
Proprietor, Sri
Valli Vilas Gold
House,
Pondicherry
District Consumer Mr. Ketan
Disputes Redressal Sureshchandra
Forum, Surat
Jagirdar, Surat

25300

Nil

Challenging the deduction of cancellation

charges (Rs.25,208/-)

Alleges improper & inadequate services

& breach of assurance, etc. and claims
damages Rs.50,000/-. To restore season
classification of all existing resorts as at
the time of Membership and to restore
AMC & Utility Charges
District Consumer Mr. Amit
Requested for cancellation and refund of
Disputes Redressal Agarwal, Indore Rs.25,300/- with interest.
Forum, Indore.

PROPERTY CASES - 3 cases

S.No. Claim amount Court
Rs.
1

RCI enrolment not done inspite of

reminders & therefore demands refund
of payment made (24000) &
compensation of 25000.
Not provided holiday when requested.
Alleged Deficiency in service. Demands
full refund & compensation of 30000 for
mental agony

Munisiff Court,
Devikulam

Claimant

Nature of Complaint

Encroachment of our land by Chancellor

Mahindra
Holidays against Resort
Chancellor
Resort

- 55 -

PRIVATE AND CONFIDENTIAL

Nil

Civil Judge Senior Mr Joanita

Division, Margao Periera
(Neighbour) Goa against
Mahindra
Holidays
3
Nil
Magistrate Court, Binsar Almorah
Revenue
authorities
LEGAL ADMN. / OTHER CASES
S.No. Claim amount Court
Claimant
Rs.

Boundry Dispute - Goa Land

Alleging encroachment (construction) by

us in the Government land of about 500
sq ft.
Nature of Complaint

257899

Addl.
Metropolitan
Magistrate,
Bangalore

Mahindra
Holidays &
Resorts

Case u/s. 138 of Negotiable Instruments

Act. Cheque for Rs.2.57 lacs issued by
landlord towards refund of deposit
bounced. Filed criminal compliant
against landlord
Challenging levy of LT on Timeshare

2057954

High Court at
Shimla

298110

Chennai High
Court

105000

Munisiff Court,
Devikulam

Luxury Tax
(Shimla) filed by
Mahindra
Holidays against
Luxury Tax
authorities.
Tata Infomedia
Ltd filed against
Mahindra
Holidays
Mahindra
Holidays

Nil

Labour Court

IR Issue (Rajan - Mr Rajan, ex.employee terminated by the

Munnar)
Company for diesel theft. Mr Rajan
approached Labour Office for
reinstatement.

Nil

Magistrate Court
at Goa

Mahindra
Holidays &
Resorts

Winding up Petition for non-settlement

of their bill amounting to 2,98,110/-

Case filed by us for recovery of money

due to us by attachment of Car

Case u/s. 138 of Negotiable Instruments

Act. Defaulted in supplying Computers
and thus returned the Advance amount
of Rs.63,620/- by two cheques, but the
cheques bounced.

Name of the Company : Mahindra Gesco Developers Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1

Delhi

2 3,98,120

Labour Court,
Bandra

Karan
Promoters Pvt.
Lmt.
Filed by the wife
of a Labourer
who died at the
site of GE Links

- 56 -

PRIVATE AND CONFIDENTIAL

Name of the Company : Mahindra Logisoft Business Solutions Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1 Nil

Dy Commissioner
of Labour-Appeals
Chennai

2 Nil

Dy Commissioner
of Labour-Appeals
Chennai

He has not asked for any specific amount

He has prayed to set aside the
termination order . How ever he has
mentioned that July salary has not been
paid and performance pay has not been
paid for the year 2001-02 and 2002-03 and
has stated that he has reserve the right to
claim it independently .
His performance pay is Rs 3500/ Per
Month
His July salary Gross 25,000 Net payable
Rs 23,920
S.N Karmegam He has not asked for any specific amount
Asst.manager- He has prayed to set aside the
Personnel
termination order . How ever he has
mentioned that July salary has not been
paid and performance pay has not been
paid for the year 2001-02 and 2002-03 and
has stated that he has reserve the right to
claim it independently .
His performance pay is Rs 1500/ Per
Month
His July salary Gross 21,000 Net payable
Rs 20,280
M.Balasubram
anian
ManagerQuality
assurance

Name of the Company : Mahindra Holdings & Finance Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1 819104

Income Tax
Department

Mahindra
The demand was raised in the Income
Holdings &
Tax assessment in the year 1999-2000 and
Finance Limited recovered against the refund of 20012002. The Company has preferred an
appeal to Comm.of Income Tax (Appeal).

Name of the Company : Mahindra Shubhlabh Services Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Remarks / Comments
Rs.
1 8,05,000
2 1,74,000

High Court,
Mumbai
Nampatty Court,
Hyderabad

Mahindra
Shubhlabh
Mahindra
Shubhlabh

- 57 -

Case filed u/s. 138 of the Negotiable

Instruments Act .

PRIVATE AND CONFIDENTIAL

Name of the Company : Mahindra USA Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.
1

Nil

Cause No. 36,736;

In the 5th Judicial
District Court of
Richland Parish,
Louisiana

Gail Parnell
Creed v.
Mahindra USA,
Inc. and Scott
Trucking
Company,
L.L.C.

Name of the Company : Mahindra Ashtech Limited

Sr. No. Claim Amount Court/DRT/Forum Claimant
Rs.
1 73,77,000
2 36,00,000

C I T (A)

Income-tax
Dept.
Commissioner
Central Excise
(Appeals) Central (Service Tax
Excise Mumbai
Cell)

3 1,40,00,000

Dy.Commissioner U.P Sales Tax

(Appeal) Sales Tax, Dept. Lucknow
Lucknow

4 1,00,000

Commissioner
Central Excise
(Appeals) Mumbai

Remarks / Comments
Not yet able to evaluate the risk of an
adverse jury verdict or a possible adverse
verdict range at this time as discovery is
not yet very far advanced

Remarks / Comments
F. Y. 2000-01 A.Y. 2001-02

Name of the Company: Mahindra Gujarat Tractor Limited

Consumer Cases filed against the Company
Sr.no.
Case No.
Claim amount (in Court/DRT/forum
lacs) Rs.

Party

1 77/99

2.63

Dist.Consumer
Forum,
Khandwa

Champala
V/s.Om
Agencies &
GTCL.

2 149/98

1.00

Dist.Consumer
Forum,
Hoshangabad

Mr.
Shambudyal
Soni, V/s.
Manoj Trs.
Harda &
GTCL.

- 58 -

Remarks/Comments
Nobody attended the
court. The judgement
was in favour of party. A
copy of judgement not
received hence party
filed a suit in Civil Court
for recovery.
Order passed against the
Company.

PRIVATE AND CONFIDENTIAL

3 1821/99

0.86

4 306/93

1.02

5 144/95

1.00

19/97

6 288/95

1.22

26/99

7 690/98

0.75

55/99

8 158/94

0.50

9 250/95

0.10

State
Commission,
Bhopal,
National
Consumer
Foram
State Consumer
Forum.
Lucknow

. Mr.
Shambudyal
Soni, V/s.
Manoj Trs.
Harda &
GTCL.
Mr.Sanchit
V/s. Yantralok,
Basti,

Distt.Consumer Radheshyam
Forum, Etha
V/s. Ravi
Engg. Etah &
GTCL
Distt.Consumer Smt.Damodar
Forum,
Dasi
Sultanpur
V/s.Sultanpur
Agro. & GTCL
Distt.Consumer Smt.Damodar
Forum,
Dasi
Sultanpur
V/s.Sultanpur
Agro. & GTCL
Distt.Consumer Shri Ram
Forum,
Akbal Mishra
Sultanpur
V/s.Sultanpur
Agro & GTCL
Distt.Consumer Shri Ram
Forum,
Akbal Mishra
Sultanpur
V/s. Sultanpur
Agro & GTCL
Distt.Consumer Shri
Forum, Sravasti Ramsamokhan
V/s. Bhavani
Trs, Bahraich
& GTCL
State
Shri
Commission,
Ramsamokhan
Lucknow
V/s. Bhavani
Trs, Bahraich
& GTCL
Distt.Consumer Shri A.N.
Forum, Nainital, Agarwal
V/s.Bhai S.K.
Dist:
Bazpur &
Udhamsingh
GTCL
Nagar
State Consumer Mr. Shaymrao
Forum, Mumbai V/s. MAIDC,
Kolhapur &
GTCL -

- 59 -

One sided judgement for

replacement of tractor by
honourable District
Forum. Revision appeal
against order
Distt. Consumer Forum,
Basti reject the complain
on "Beyond Jurisdiction"
ground.
Consumer Case

Judgement in is favour of
GTCL

case re open by
complaint

Judgement in is favour of
complaint

case re open by
Company

Judgement in favour of
party

Appeal for revision over

order

State Forum dismissed

the order of Disctrict
Forum

Appeal filed in State

Commission

PRIVATE AND CONFIDENTIAL

Mr.G.Venkates Dealer is attending

waralu V/s.
Auto Eng.Ent.
& GTCL
Dealer is attending
Dist.Consumer Mr.
Forum, Siwan
Jawaharprasad
V/s.Hindustan
Auto. & GTCL
Dist.Consumer Shri Girimalla File appeal in State
Forum, Bijapur V/s. KAIC
Commission to get stay
Ltd. & GTCL - order
Additional
Shri Ramdas Valunj, V/s. GTCL &
Consumer, Dist. Anand Agro
Forum, Pune

10 30/97

1.00

11 568/95

0.50

12 31/92

0.50

13 391/00

2.00

14 423/99

1.00

Dist. Consumer Shri Sambhusingh, V/s. Sunder Motors

Forum, Kota
& GTCL

15 27/00

1.00

16 65/98

0.70

Dist.Consumer
Forum,
Hoshangabad
State Consumer
Forum, Madras

17 ------

0.50

18 176/00

Dist.Consumer
Forum,
Kakinada

Court of Add.
Civil Judge, Sr.
Divn. Barnala
0.70 Dist. Consumer
Forum, Rajkot

Shri Sultanali Sadiqali, V/s.Krishi Seva

Kendra & GTCL
S.Udaikumar, V/s.Madra Farm Equip. &
GTCL

Mukhtar singh, V/s. Barnala Trs. &

GTCL
Mr. Vallabhbhai V/s. Tractor Trading
Corpn. & MGTL

19 225/00

0.60 Dist. Consumer Mr.Jagdish Bairagi V/s. Bador Bros.

Forum, Guna
Ashoknagar

20 118/00

0.90 Dist. Consumer Mr. Sriniwas Mishra V/s. Abhishek

Forum
Motors & MGTL

21 119/00

0.60 Dist.Consumer
Forum

22 2993/01

0.50 Dist. Consumer Mr. Dhanraj V/s. MGTL & Jindal Auto
Forum, Sirsa

- 60 -

Mr. Rajbhansingh Vs. MGTL & Abhishek

Motors

PRIVATE AND CONFIDENTIAL

23 11/02

0.50 Dist.Consumer Mr. Ganeshram V/s. Mohit Motors &

Forum, Bikaner MGTL

24 05/03

0.50 Distt. Consumer Shri Ibhrahim V/s. Bhavani Scooters,

Forum,
Sarsawa
Saharanpur

Civil Cases filed by Company

Sr.no. Case No.
Claim amount

Court/DRT/foru Party
m

Remarks/Comments

(Rs. In lacs)
1 105/02

15.11 Civil Court,

Vadodara

2 106/02

7.41 Civil Court,

Vadodara

3 175/03

24.44 Civil Court,

Vadodara

4 296/03

14.94 Civil Court,

Vadodara

5 540/03

M/s. K.B.
Under Revival plan.
Automobiles,
Hanumangarh
M/s. Mitra
Motors,
Mancherial

Public Notice published

in local news paper
Vartha on 9.1.03. Framing
issue
M/s. Haryana Summons could not
Motors, Sirsa served, return back with
various remarks
M/s. Niranjan Summons served
Auto.
Waidhan

4.5 Civil Court,

Krishi Seva
Vadodara
Kendra
6 589/03
5.54 Civil Court,
Kisan Motors
Vadodara
7 588/03
9.8 Civil Court,
Shri Ram
Vadodara
Auto.
8 792/1981
Nil
Civil Court,
HEPL
Vadodara
9 1802/95
Nil
High court,
HEPL
Gujarat
Complaints filed u/s. 138 of Neg. Instruments Act by the Company
Sr.no.
Case No.
Claim amount Court/DRT/forum Party
(Rs. In lacs)
1
2437/02
3.40
Civil Court,
Shiva
Vadodara
Tractors
2
2702/01
12.13
Civil Court,
Lavanya
Vadodara
Motors
3
660/01
7.56
Civil Court,
Sunder
Vadodara
Motors
4
2336/00
2.40
Civil Court,
Om
Vadodara
Agencies

- 61 -

Summons to be served
Summons to be served
Summons to be served
Stay Continue

Remarks/Comments
B/warrant to be collect.
Balance 1.85 lacs.
Affidavit to be filed.
Fix for argument
Summons hand over to
Ad. Majmudar.Fresh
summons to be apply for

PRIVATE AND CONFIDENTIAL

2339/00

7.00

Civil Court,
Vadodara
Civil Court,
Vadodara

2337/00

12.50

2338/00

4.75

Civil Court,
Vadodara

1700/98

2.64

Civil Court,
Vadodara

617/98

3.55

Civil Court,
Vadodara

10

2747/01

2.77

11

2755/02

2.05

12

2755/02

13.70

13

2701/01

2.24

14

2449/02

2.60

Civil Court,
Vadodara
Civil Court,
Vadodara
Civil Court,
Vadodara
Civil Court,
Vadodara
Civil Court,
Vadodara

15

2448/02

4.33

16

3232/02

1.02

17

1320/03

4.35

18

3383 to 3387

5.00

19

3878

2.63

Civil Court,
Vadodara
Civil Court,
Vadodara
Civil Court,
Vadodara

Civil Court,
Vadodara
Civil Court,
Vadodara

Shakti
Tractors
Dharati
Tractors

B/warrant served.
Affidavit to be filed.
Summons could not
served as he settled at
other village.
Kissan
B/w to be served.
Trading Co Handover to Advocate
Majmudar
Shri Laxmi Summons sent to
Agencies
Chennai Office. Not
tressiable
Delhi
B/w to be served.
Automobiles Handover to Advocate
Majmudar
Bharat
Fresh summons given to
Tractors
Adv. Majmudar
Gaur
Dealer appoint Advocate
Tractors
Gaur
Dealer appoint Advocate
Bandhu
Amit
Summons served. MOU
Tractors
done, Balance Rs.1.70
Maharashtra B/warrant
Tractor
served.(Received Rs. 1.92
lacs), Balance Rs. 15000/Datta Sai
Fresh B/W to be collect.
Tractors
Ashwamegh B/w could not served as
Industries
he settled in Indore.
Rajdeep
Case filed on 25.4.03.
Automobiles Received Rs. 1.90 Lac
MOU done
Balance.37684/-. Letter
sent for Bal. Amt. B.W to
be served.
Bhavani
Summons to be served.
Tractors
Bhavani
Summons to be served.
Tractors

Name of the Company: Mahindra Construction Company Limited

Sr.no.
1.
2.

Claim
amount Rs
6,00,000
17,00,000

3.

29,00,000

Court/DRT/forum
High Court Delhi
High Court,
Bangalore
High Court,
Mumbai

Claimant
ATC Techno
Gem Sugar
Maini Associates

- 62 -

Remarks/Comments
Recovery Suit.
Petition
challenging
Arbitration Award
Winding Up Petition

the

PRIVATE AND CONFIDENTIAL

Name of the Company :

Mahindra Ugine Steel Limited

Sr No Claim Amount

Court / DRT / Forum

Claimant
Various Excise Tribunals
& Courts
Various Tax Tribunals &
Courts
Various Courts
CESTAT
Excise
CESTAT
Excise
CESTAT
Custom
Irrigation
Lower Court
Dept

1 Rs 308.35 Lacs
2 Rs 162.38 Lacs
3 Rs 642.09 Lacs
4 Rs.1303110
5 Rs.213080
6 Rs.41519887
7 Rs. 82865946

Remarks / Comments
Excise duty claims
Taxation demands
Other claims
Stay Granted
Stay Granted
Stay Granted
Decision Given in our
Fafour

Name of the Company :

Console Estate & Investments Limited

Sr No Claim Amount

Court / DRT / Forum

Claimant
Various Tax Tribunals &
Courts

1 Rs 5.006 Lacs

Remarks / Comments
Income Tax demands

Note: We are awaiting information of some of the small group companies, which would be
updated as and when received. Such additional information will be deemed to form part of
this information memorandum when updated.

- 63 -

PRIVATE AND CONFIDENTIAL

XIII. RISK FACTORS AND PROPOSALS TO ADDRESS THE RISK

Following are certain considerations, which the investors should peruse before making an
investment in the issue. The material implication of the risks envisaged by the management has
been quantified as far as possible. Where such quantification has not been made it may be
construed that the implication cannot be quantified.
Internal Risk Factors:
1.

The Companys business is vulnerable to volatility in interest rates. Changes in market

interest rates could affect the interest rates charged on Companys interest-earning assets
differently from the interest rates paid on its interest-bearing liabilities. Any volatility in
interest rates could adversely affect the Companys business and its future financial
performance.
Proposal to address the Risk : Even during a falling interest rate scenario, the Company
has been able to maintain its Gross Spread at 3% to 4% in FY02 and FY03. The Asset
Liability Management Committee (ALCO) of the Company continuously monitors
interest rate changes to assess the impact of change in interest rates and steps taken to
minimize adverse impact, if any.

2.

The primary business of Company is of lending which carries a risk of default by

borrowers.
Proposal to address the Risk : Necessary controls like maintaining a diversified portfolio
with industrywise, borrowal group wise and specific client wise exposure limit, to avoid
concentration of lending to any industry segment/borrowal group/company are being
complied with. These limits help minimize credit risks. The performance of the asset
portfolio is monitored on a regular basis to take corrective action wherever necessary.

3.

Any increase in the NPA levels of the Company could adversely affect the Companys
performance. The Companys net NPAs represented 2.28% of its Total Customer Assets
at March 31, 2003, 2.00% at March 31, 2002 and 1.38% at March 31, 2001.
Proposal to address the Risk: The Company mainly operates in semi urban and rural
India. While approving the loan the customer background and application of the product
for which the loan is sought is studied in detail. The company finances vehicles mainly
for commercial purpose. To reduce the NPA risk the Company finances only 75% of the
vehicle cost.

4.

Assets Liability position The Companys funding comprises of short and medium term
loans from its Bank Borrowing and Non-Convertible Debentures. The asset liability
position of the Company could be affected, impacting the business, if the Bankers do not
roll over the deposits or there is shortfall in the liquidity position in the Money Market.
Proposal to address the Risk: The Company has advanced risk management system in
place to monitor liquidity gap position vis--vis internal limits. This report is placed
periodically at ALCO so as to maintain a healthy and sustained growth within acceptable

- 64 -

PRIVATE AND CONFIDENTIAL

risk parameters. The Company also maintains adequate levels of liquid assets, which can
be used to meet the liquidity gaps.

XIV. DISCLOSURE ON INVESTOR GRIEVANCES AND REDRESSAL

SYSTEM
To ensure that Investors grievances are attended to expeditiously it will be handled by :
Mr. Nitin Shah
Treasurer
Mahindra & Mahindra Financial Services Ltd.
Sadhana House, 2nd Floor,
Behind Mahindra Towers,
Worli, Mumbai 400 018
Phone Nos.: 022-56526037/08/09
Fax No.: 022-24900728
E mail : [email protected]
Further, investors may note that a compliance officer has also been appointed by the Company
and he may be contacted in case of any grievances at the following address :
Mr. V.Ravi
Chief Financial Officer
Mahindra & Mahindra Financial Services Ltd.
Sadhana House, 2nd Floor,
Behind Mahindra Towers,
Worli, Mumbai 400 018
Phone Nos.: 022-56526000/08/09/37
Fax No.: 022-24900728
E amil : [email protected]
The details regarding normal time taken for disposal of various types of investors grievances is
given below:
1
Change of Address
: 2 days
2
Issuance of duplicate Debenture Certificate
: 30 days
3
Non receipt of Interest warrants
: 2 days
As on date there are no outstanding grievances against Mahindara & Mahindra Financial
Services Ltd. from investors/ shareholders.
All the listed companies under the same management within the meaning of Section 370(1B)
of the Companies Act, have instituted Investor Grievances and Redressal System in
compliance with SEBI Rules as applicable.

- 65 -

PRIVATE AND CONFIDENTIAL

PART II
XV.

GENERAL INFORMATION

Consent
M/s B.K.Khare & Co, Chartered Accountants, the Statutory Auditors of the Company have their
written consent to their report being included in the form and content in which it appears in this
Information Memorandum
This Information Memorandum was placed before the Board of Director for necessary approvals
at its meeting held on 3rd February, 2004 and all the disclosure made are true and correct. UTI
Bank Limited has given its written consent to act as Trustees to the issue and for including their
name in the Information Memorandum. M/s Sharepro Services has given its written consent to
act as Registrar to the issue and for including its name in the Information Memorandum as
Registrar.
Change in Directors of Mahindra & Mahindra Financial Services Limited during the Last
Three Years
The following Persons have been appointed and inducted into the Board as Directors during the
last 3 years
Sr.
No.
1
2
3
4

Name of Director
Mr. Ramesh Iyer
Mr Dipak Kumar Rudra
Mr Rajeev Narain
Mr Nasser Munjee

Date of Appointment
30.04.2001
26.06.2002
26.06.2002
17.03.2003

Reason
Whole time Director
Independent Director
Independent Director
Independent Director

The following Persons have ceased to be Directors during the last 3 years
Sr.
No.
1
2
3

Name of Director
Mr Uday S. Kotak
Mr Harsharaj A Kale
Mr Sunit Kumar Malhotra

Date
25.11.2002
26.06.2002
26.06.2002

Reason
Resignation
Resignation
Resignation

Change in Auditors of Mahindra & Mahindra Financial Services Limited During The Last
Three Years
There is no change in the Auditors in the last 3 years.

- 66 -

PRIVATE AND CONFIDENTIAL

Authority for the Present Offer

The Board of Directors of the Company at its meeting held on 3rd February, 2004 has approved
the issue of UNSECURED /SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES for
an amount upto Rs. 1000 crores in one or more trenches at a appropriate rate of interest to be
decided by any Director or the Chief Financial Officer of the Company by way of Private
Placement on such other terms and conditions mutually acceptable to lender and the company
and subject to guidelines issued by SEBI, RBI and other regulatory authorities.
This Information Memorandum was placed before the Board for necessary approvals at its
meeting held on 3rd February, 2004. Also the disclosures to be made by the Company in terms of
SEBI/MRD/SE/AT/36 /2003/30/09 circulars in the Information Memorandum were permitted
to be finalized and approved by any Director. Also the Information Memorandum containing
disclosures under SEBI guidelines are permitted to be finalised and approved by any Director or
Chief Financial Officer. Also any Director of the company was authorized to appoint Debenture
Trustees registered with SEBI and approve the terms and conditions of their appointment.
Procedure and Time Schedule for allotment and issue of certificates.
Debentures would be allotted by Committee of Directors of the Company and Letter of Allotment
would be issued / credited within 21 days from date of allotment and Debenture Certificates in
Physical/ Dematerialized form would be issued / credited within 3 months from the date of
allotment.
Name and address
Compliance Officer
Mr. V.Ravi
Chief Financial Officer
Mahindra & Mahindra Financial Services Ltd.
Sadhana House, 2nd Floor,
Behind Mahindra Towers,
Worli, Mumbai 400 018
Phone Nos.: 022-56526000/08/09/37
Fax No.: 022-24900728
Email: [email protected]

Auditors
M/s. B.K.Khare & Co.
Chartered Accountants
706/708, Sharda Chambers
Mumbai 400 020

- 67 -

PRIVATE AND CONFIDENTIAL

Company Secretary
Mr. N Shankar
Company Secretary
Mahindra & Mahindra Financial Services Ltd.
Sadhana House, 2nd Floor,
Behind Mahindra Towers,
Worli, Mumbai 400 018
Phone Nos.: 022-56526000/08/09/37
Fax No.: 022-24900728
Email: [email protected]

Bankers to the Company

1.

State Bank of India

Nariman Point, Mumbai

10. The Bank of Nova scotia

Nariman Point, Mumbai

2.

Union Bank of India

Nariman Point, Mumbai

11. Credit Lyonnais

Churchgate, Mumbai

3.

Corporation Bank
Fort, Mumbai

12. HDFC Bank Ltd.

Lower Parel, Mumbai

4.

Punjab National Bank

Mahim, Mumbai

13. IDBI Bank Ltd.

Nariman Point, Mumbai

5.

Canara Bank
Worli, Mumbai

14. ING Vysya Bank Ltd.

Worli, Mumbai

6.

Indian Overseas Bank

Nariman Point, Mumbai

15. UTI Bank Ltd.

Fort, Mumbai

7.

Statndard Chartered Bank

Fort, Mumbai

16. The United Western Bank Ltd.

Prabhadevi, Mumbai

8.

ABN Amro Bank

Nariman Point, Mumbai

17. The Dhanalakshmi Bank Ltd.

Fort, Mumbai

9.

Bank of America
Nariman Point, Mumbai

- 68 -

PRIVATE AND CONFIDENTIAL

AUDITORS REPORT
To
The Board of Directors
Mahindra & Mahindra Financial Services
Mumbai
In terms of the appointment for the purpose of certification of the financial information of
Mahindra & Mahindra Financial Services Ltd (the Company) annexed to this report, which is
required to be prepared in accordance with the Securities and Exchange Board of India
(Disclosure and Investor Protection) Guidelines, 2000 (the Guidelines), issued by Securities and
Exchange Board of India (SEBI) on 19 January 2000 in pursuance of section 11 of the Securities
and Exchange Board of India Act, 1992, we state as follows
The financial information is proposed to be included in the Offer Document of the Company in
connection with the umbrella approval(Valid for the period of 1 year) for the issue of 10000
Unsecured/Secured Redeemable Non-convertible Debentures of Rs10,00,000/- each aggregating
Rs.1000 crores on a private placement basis.
We have examined the annexed restated statements of assets and liabilities of the Company as at
30th September 2003, 31 March 2003, 31 March 2002, 31 March 2001, 31 March 2000 and
31 March 1999 and the annexed restated statements of Profit and loss for each of the years ended
on those dates (the summary statements)
The summary financial statements have been drawn up in conformity with the requirements of
Part II of Schedule II to the Companies Act, 1956. The summary financial statements have been
extracted from the Financial Statements for the half-year ending 30 September 2003 and years
ended 31 March 2003, 31 March 2002, 31 March 2001, 31 March 2000 and 31 March 1999 which
were audited by us.
In accordance with the requirements of Clause B of Part II to Schedule II of the Companies Act,
1956 and SEBI (Disclosure and Investor Protection) Guidelines, 2000, we have examined the
following:
1.

The audited Profit and Loss account of the Company (Annexure I) for the half-year
ending 30 September 2003 and years ended 31 March 2003, 31 March 2002,
31 March 2001, 31 March 2000 and 31 March 1999, the Statements of Assets and Liabilities
(Balance Sheets) of the Company (Annexure II) for the year / period ending as on the
respective dates and the specified ratios for the respective years (Annexure III).

2.

The capitalization statement as at 30 September 2003 (Annexure IV)

3.

The significant accounting policies for FY 2002-03. (Annexure V)

We further report that dividends declared by the Company in respect of five consecutive
financial years ending as on 31st March 2003 are set out in (Annexure VI) enclosed.
We further state that we have relied upon the management representation for the correctness of
Financial Information of Promoter Group companies disclosed in the Offer Document.
On the basis of our examination of above referred financial information we state as follows:

- 69 -

PRIVATE AND CONFIDENTIAL

1.

With respect to the restatement of Financial Statements we have taken a view that:
As per the SEBI Guidelines adjustments to Profit and Loss account are required to be done in
respect of following items, which are disclosed in the audited financial statements of the
respective years:
a.
b.
c.
d.

2.

3.

changes in accounting policies,

prior period items,
rectification of incorrect accounting policies, and
material amounts relating to the adjustments for previous years identified and adjusted
in arriving at the profits of the years to which they relate irrespective of the year in which
event triggering profit or loss occurred.

The summary statements have been restated with retrospective effect to reflect the significant
accounting policies adopted by the Company as at and for the year ended 31 March 2003, (as
disclosed in the audited financial statements), except for the following in respect of which no
adjustments could be carried out as the consequential effects could not be ascertained on a
retrospective basis:

Upto the financial year ending 31st March 2001, Provision for non-performing assets was
made in accordance with the Guidelines issued by Reserve Bank of India. From the
Financial year 2001-02 it was decided to make an additional provision over and above the
NPA provision required as per the Guidelines issued by Reserve Bank of India. This
additional provision was made in accordance with the directions of the Audit Committee

For the Financial Years 1998-99 and 1999-2000, repossessed assets (not capitalized) were
valued at market value or written down value (calculated by depreciating the asset @20%
on Straight Line Method) whichever is less. Further for the financial year 2000-01
repossessed assets lying with the company for a period exceeding 9 months were valued
at Rs.1000 per contract. From the financial year 2001-02 onwards the separate treatment
of Stock on Hire in respect of repossessed assets was dispensed with and the same was
stated at agreement value net of installments due and unmatured finance charges. The
difference in the WDV of the assets and the principal portion in the Stock on Hire was
provided for as NPA as per the Reserve Bank of India Guidelines.

Accounting for Hire Purchase / Lease transactions was changed prospectively with effect
from 01st April 2001 to comply with the requirements of Accounting Standard 19: Leases.

In accordance with the Accounting Standard 22: Accounting for Taxes on Income, the
provision for Deferred Tax Asset / Deferred Tax Liability was made in / from financial
year ending 31st March 2002.

Significant Changes in Accounting Policies effected during 1st April 1998 to 31st March
2003
a.

Upto the financial year ending 31st March 2001, Provision for non-performing assets was
made in accordance with the requirements of the Guidelines issued by Reserve Bank of
India. From the Financial year 2001-02 it was decided to make an additional provision
over and above the NPA provision required as per the Guidelines issued by Reserve

- 70 -

PRIVATE AND CONFIDENTIAL

Bank of India. This additional provision was made in accordance with the guidelines
formulated by the Audit Committee.
b.

Accounting for Hire Purchase / Lease transactions was changed prospectively with
effect from 01st April 2001 to comply with the requirements of Accounting Standard 19:
Leases.

c.

In accordance with the Accounting Standard 22: Accounting for Taxes on Income the
provision for Deferred Tax Asset / Deferred Tax Liability was made in / from financial
year ending 31st March 2002.

d. For the Financial Years 1998-99 and 1999-2000, repossessed assets (not capitalized) were
valued at market value or written down value (calculated by depreciating the asset @20%
on Straight Line Method) whichever is less. Further for the financial year 2000-01
repossessed assets lying with the company for a period exceeding 9 months were valued
at Rs.1000 per contract. From the financial year 2001-02 onwards the separate treatment
of Stock on Hire in respect of repossessed assets was dispensed with and the same was
stated at agreement value net of installments due and unmatured finance charges. The
shortfall if any in the WDV of the assets to cover the principal portion in the Stock on
Hire outstanding was provided for as NPA as per the Reserve Bank of India Guidelines.
4.

Significant changes in the activities of the issuer which have had a material effect on
the statement of profit/loss for the five years:
a.

In view of the regulatory changes relating to accounting, Leasing and Hire

Purchase transactions have been discontinued with effect from 01-04-2001 and
01-04-2002 respectively.
b. From the year 2001-02 company has started securitising (without recourse) its
future receivables on selective basis.
The Companys management is responsible for the preparation of the summary statements and
the Capitalization statement. Our responsibility is to report based on the work done.
We have performed such tests and procedures, which, in our opinion, were necessary for our
reporting to you. These procedures include comparison of the annexed financial information
with the Companys audited financial statements.
Based on such procedures carried out by us and review of the records produced to us and the
information and explanations given to us by the Companys management, we confirm that
nothing has come to our attention to show non- compliance with the SEBI Guidelines, except as
mentioned above.
This report is intended solely for your information and for the Company to comply with the
provisions of the SEBI Guidelines and may not be suitable for any other purpose.
Yours Sincerely,
for B.K.Khare & Co.
Chartered Accountants
Sd/Partner
Membership Number: 44784

Dated: 24th February 2004

- 71 -

PRIVATE AND CONFIDENTIAL

Annexure I
STATEMENT OF PROFITS AND LOSSES
(Rs. Lacs)
For the year ended March 31,

1999

2000

Interest Earned
Lease Rentals
Income from Securtisation @
Other Income

6199.90
3113.26
34.62
182.54

Total

2001

Half Year Ended

30/09/2003

2002

2003

9026.56 11394.79
2505.58 2259.01
0.00
0.00
325.34
233.09

17116.04
1420.41
342.02
255.48

22368.60
835.52
1450.67
334.49

12256.15
182.09
1491.08
339.40

9530.32 11857.48 13886.89

19133.95

24989.28

14268.72

Income

Expenditure
Interest & Bank Charges
Commission & Brokerage
Staff Costs
Provisions for Non Performing
Assets/Bad Debts/Loss on
terminations
Depreciation
Administrative Expenses

4367.15
682.77
262.42

5875.17
512.42
398.63

6588.60
394.16
650.63

7443.82
274.27
886.83

8569.36
1032.92
1238.55

4708.95
582.28
801.15

579.96

1112.71

1570.29

3899.84

4372.66

2776.53

2100.93
467.09

2031.07
581.91

1790.05
846.44

1187.45
1099.69

846.58
1753.85

248.22
1137.89

Total

8460.32 10511.91 11840.17

14791.90

17813.92

10255.02

Profit before tax

1070.00

1345.57

2046.72

4342.05

7175.36

4013.70

543.41

761.19

965.12

2208.97

3521.73

2067.75

0.00

0.00

0.00

(646.84)

(744.00)

(605.89)

526.59

584.38

1081.60

2779.92

4397.63

2551.84

0.00

0.00

0.00

0.00

0.00

0.00

526.59

584.38

1081.60

2779.92

4397.63

2551.84

Provision for Taxes/Current

Tax
Deferred Tax
Net Profit before extraordinary
items
Extraordinary Items
Net Profit after extraordinary
items

@
#

Income of non-recurring nature.

Prior period items have been adjusted in the relevant years to which they pertain by
restating items of income and expenditure.
Prior period items in the original financial statements were:
Rs. Lacs

- 72 -

PRIVATE AND CONFIDENTIAL

1999-2000
2001-2002
Sept.2003
Sept.2003

Short Provision for Income-tax (earlier years)

Excess Provision for Income-tax (earlier years)
Excess Provision for Income-tax (earlier years)
Deferred Tax Asset for (earlier years)

0.12
140.60
210.23
32.00

Annexure II
STATEMENT OF ASSETS AND LIABILITIES
Rs Lacs
As at March 31,

1999

2000

2001

2002

2003

Half Year
Ended
30/09/2003

A Fixed Assets
Gross Block

7748.21

7874.53

5922.93

4224.42

2690.77

2590.59

Less: Depreciation

2602.00

2879.09

1608.25

1570.09

1215.44

1136.73

Net Block

5146.21

4995.44

4314.68

2654.33

1475.33

1453.86

Less Revaluation Reserves

0.00

0.00

0.00

0.00

0.00

0.00

Net Block after adjustment

for revaluation reserves

5146.21

4995.44

4314.68

2654.33

1475.33

1453.86

1640.27

934.01

943.94

1181.25

2790.12

4216.87

2137.99

2942.89

3285.76

4529.86

4357.58

5198.55

32857.21

49338.69

63794.15

83043.48

115517.44

129478.86

4795.41

5347.52

6830.63

6497.47

8338.23

11274.05

Other Current Assets

51.46

36.25

33.87

1883.70

2745.28

3498.58

Loans and Advances

1271.30
41113.37

6396.79
64062.14

14059.35
88003.76

7694.08
103648.59

10383.75
141342.28

10194.00
159644.04

8224.18

34976.92

47264.09

57072.87

68913.17

94729.17

21619.01

15617.74

22092.89

22723.69

42032.86

30088.22

11083.90

5808.74

9763.52

10274.79

14118.74

17386.40

40927.09

56403.40

79120.50

90071.35

125064.77

142203.79

6972.76

13588.19

14141.88

17412.82

20542.96

23110.98

3190.32

6062.33

6062.33

6062.33

6062.33

6062.33

B Investments

C Current Assets, Loans and Advances

Cash and Bank Balances
Stock on Hire/Loans
against assets
Sundry Debtors

D Liabilities and Provisions

Secured Loans
Unsecured Loans
Current Liabilities and
Provisions

E Net Worth (A+B+C-D)

F Represented by
Share capital

- 73 -

PRIVATE AND CONFIDENTIAL

Reserves

3782.44

7525.86

8079.55

11350.49

14480.63

17048.65

0.00

0.00

0.00

0.00

0.00

0.00

Reserves(Net of
Revaluation Reserves)

3782.44

7525.86

8079.55

11350.49

14480.63

17048.65

Net Worth

6972.76

13588.19

14141.88

17412.82

20542.96

23110.98

Less : Revaluation Reserves

Annexure III
Specified Ratios
RATIOS

1999

2000

2001

2002

2003

Sep'03**

Earning per Share (Rs.)

2.14

1.84

1.78

4.59

7.25

8.42

11.76

8.30

4.75

6.60

8.71

9.29

7.56%

4.30%

7.65%

15.97%

21.41%

19.89%

21.86

22.41

23.33

28.72

33.89

42.33

Cash Earning per Share (Rs.)

Return on Networth (%)
Net Asset Value of Shares (Rs.)
** Annualised

1) The number of equity shares for the years ended 31st March 1999,2000 have been adjusted for the
rights issue in accordance with the Accounting Standard 20 on 'Earnings per Share' for computing the
Earnings per Share & the Cash Earnings per Share
Earning per Share (Rs.)
Cash earning per Share (Rs.)
Return on Net Worth (%)
Net Asset Value of Shares (Rs.)

Adjusted profits after tax/weighted average number of equity

shares
(Adjusted profits after tax+Depreciation+Dimn in
investment+Misc exp w/off)/weighted average number of
equity shares
Adjusted profits after tax/Shareholder's Fund
Shareholder's Fund/No's of Equity Shares

Annexure IV
CAPITALISATION STATEMENT
CAPITALISATION STATEMENT
Particulars

Short Term Debt (Borrowings)

Long Term Debt

Pre Issue as on
30.09.2003
60574
64243

- 74 -

Rs. Lacs
As Adjusted for the
Issue (Sub-debt) **

PRIVATE AND CONFIDENTIAL

Shareholder Funds
Share Capital
Reserves
Total Shareholder's Funds

6062
17049
23111

Long Term Debt / Equity

2.78

** This is an umbrella offer document and offers are made in tranches.

Annexure V
Significant Accounting Policies
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 Accounting Standards 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
except delayed payment charges, which are accounted as and when received on
account of uncertainty of ultimate collection. Also in accordance with the guidelines
issued by the Reserve Bank of India for Non Banking Finance Companies, income on
business assets classified as non-performing assets, is recognised on receipt basis.

ii) Income from Lease:

Finance earnings on lease transactions are calculated by applying the interest rate
implicit in the lease, to the investment in the leased assets, as reduced by the Net
Present Value of the lease instalments falling due.
iii) Income from Hire Purchase:
Income from Hire Purchase transactions entered into prior to 01.04.2001 is accounted
for on equated basis in accordance with the terms of the contract (except in some cases
in which it is accounted for by applying the interest rate implicit in such contracts).
For Hire Purchase transactions entered into by the company on or after 01.04.2001 the
income is accounted for by applying the interest rate implicit in such contracts.
iv) Income from Loan:
Income from loan transactions is accounted for by applying the interest rate implicit in
such contracts.
v) Income from Subvention/Service/Document Charges:

- 75 -

PRIVATE AND CONFIDENTIAL

Subvention received from dealers/manufacturers on retail cases is booked over the

period of the contract. However, service charges & documentation charges are booked
at the commencement of the contract.
vi) Income from Securitisation:
Securitised assets are derecognised as the contractual rights therein are transferred to
the special purpose vehicle. On derecognition, the difference between book value of the
securitised asset and consideration received is recognised as gain or loss arising on
securitisation.
vii) 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.
c) Income from investment in Pass Through Certificate is accounted on accrual basis.
3) Fixed Assets:
Fixed assets are stated at cost of acquisition (including incidental expenses), less
depreciation.
4) Depreciation:
i.

Depreciation on fixed assets, other than leased assets and repossessed assets capitalized
for own use, has been charged using 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. Assets
costing less than Rs.5000/- are written off in the year of purchase.

ii. Leased assets (acquired prior to 01.04.2001) are depreciated at rates specified in Schedule
XIV to the Companies Act, 1956 as required by the old Guidance note on lease
accounting issued by the Institute of Chartered Accountants of India prior to issuance of
Accounting Standard 19 on leasing transactions. To ensure capital recovery over the
primary lease period, the difference between the depreciation charged as computed
using the IRR implicit in the lease and the charge as disclosed for the period, is reflected
in the lease equalisation account.
iii. Repossessed assets that have been capitalised for own use are depreciated @15% using
the Straight Line Method over the remaining useful life of these assets. The same have
been grouped under the head Owned Assets.
5) Investments:
Investments held as long-term investments are stated at cost comprising of acquisition and
incidental expenses less permanent diminution, if any.
Investments other than long-term investments are classified as current investments and
valued at cost or fair value which ever is less.
Pass Through Certificates are accounted for as Investments.
6) Inventories / Future Receivables:

- 76 -

PRIVATE AND CONFIDENTIAL

Stock on hire / Future receivables is stated at agreement value net of installments due
less unmatured finance charges.
7) Miscellaneous Expenditure:
a.
Preliminary Expenses:
Preliminary and pre-operative expenses are amortised over a period of five years.
b.
Software Expenses:
Software expenses are either treated as revenue expense or amortised over a period of 3
years depending upon the type of software and evaluation of future benefits there from.
8) Retirement Benefits:
The Companys liability towards gratuity and superannuation to its employees is covered by
a group gratuity policy with LIC of India. Leave encashable at retirement/cessation are
provided for based on valuations, as at the Balance Sheet date, made by independent
actuaries.
9) Borrowing Cost:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale. All other borrowing costs
are charged to revenue.
10) Segment Reporting:
The company has single reportable segment namely financial services for the purpose of
Accounting Standard 17 on Segment Reporting.
11) Foreign Exchange Transactions:
All assets and liabilities in foreign currencies are translated at the relevant rates of exchange
prevailing at the year end, except those covered by forward exchange contracts which are
translated at contracted rates, where the difference between the contracted rate and the spot
rate on the date of the transaction (other than in respect of the contracts for the acquisition of
fixed assets) is charged to Profit and Loss Account over the period of the contract.
In case of the current assets, current liabilities and long term liabilities (other than those
for acquisition of fixed assets and technical know-how) the exchange differences are
recognised in the Profit and Loss account.
In the case of borrowed funds and liabilities incurred for the acquisition of fixed assets
and technical know-how, the exchange differences are adjusted to the cost of such
assets/technical know-how.

- 77 -

PRIVATE AND CONFIDENTIAL

Annexure VI
(Rs. Lacs)

Details of Dividend Declared for the last 5 financial years

Particulars
% age of Dividend on Equity Shares
Dividend on Equity Shares
% age of Dividend on Preference Shares
Dividend on Preference Shares

1999

2000

2001

2002

2003

10%
259.18
11.25%
53.36

6%
260.03

8%
484.99

10%
606.23

20%
1212.47

XVI. OTHER PROVISIONS RELATING TO ACCOUNTS OF THE ISSUER

COMPANY
DEBT OUTSTANDING
As at March 31,
Debentures
Bank Borrowing
Fixed Deposit
Other Borrowings

(Rs. Lacs)
1999
3810
10366
3549
14260

2000
12970
28177
3715
5732

2001

2002

22562
37864
3977
4954

36900
35688
4098
3126

2003
54400
40913
4375
11258

SECURED LOAN OUSTANDING AS ON 30TH SEPTEMBER 2003

Amount
Rs. in lacs Security
Purpose
14575.00 Secured by hypothecation over the Long Term
Company's current assets covered Working Capital
by Lease/HP/Loan agreements and
relative rentals/book debts
2 Cash Credit from Banks
10854.11 Secured by hypothecation over the Long Term
Company's current assets covered Working Capital
by Lease/HP/Loan agreements and
relative rentals/book debts
3 Short Term Foreign
5800.06 Secured by hypothecation over the Long Term
Currency Loans
Company's current assets covered Working Capital
by Lease/HP/Loan agreements and
relative rentals/book debts

Sr. No Particulars
1 Term Loans Banks

- 78 -

PRIVATE AND CONFIDENTIAL

4 Term Loan from

International Finance
Corporation
5 Non-Convertible
Debentures

4900.00 Secured by hypothecation over the Long Term

Company's current assets covered Working Capital
by Lease/HP/Loan agreements and
relative rentals/book debts
58600.00 Secured by hypothecation over the Long Term
Company's current assets covered Working Capital
by Lease/HP/Loan agreements and
relative rentals/book debts

BREAKUP OF TOTAL UNSECURED LOAN OUTSTANDING AS ON DATE

Particulars
Promoter/Group/ Associate Co.
Others
Total

Amount (Rs in Lacs)

400.00
28187.48
28587.48

Note: In the total outstanding unsecured loan of Rs. 28587.48 lacs, lender can recall Rs.16625 lacs
at any time.
TAX SHELTERS
Leasing Business :
The company has discontinued the activity of leasing of assets from F.Y.2001-02. Even for the
lease transactions carried out in the earlier financial years, there are no significant depreciation
claims carried forward to the subsequent years.
Provision for Non Performing Assets (NPA) :
The company is required to make prudential provisions towards Non Performing Assets under
the Reserve Bank of India (RBI) guidelines. However these provisions are disallowed and added
back to profits for calculating income chargeable to tax under the provisions of the Income Tax
Act 1961. Accordingly the company provides for much higher income tax as compared to the
applicable marginal rate to the pre tax profit as per audited accounts.

XVIII. STATUTORY AND OTHER INFORMATION

a) Minimum Subscription
Pursuant to the Notification No. SEBI/MRD/SE/AT/46/2003 dated 22nd December 2003
issued by SEBI minimum subscription clause is not applicable to the privately placed debt
securities.
b) Expenses of the Issue giving separately fee payable:
Trusteeship Fees: as per letter ref. UTB/CO/MMA/01-02/DT232 dated January 16,
2004.
Registrar and Transfer Agent Fees : Rs. 1500 per ISIN
c)

Commission/Brokerage:

- 79 -

PRIVATE AND CONFIDENTIAL

Debt : There is no Commission / Brokerage paid on this issue.

d)

Previous issue for cash:

(during last five years)
Issue of Equity Shares
ALLOTMENT
DATE
ISSUE PRICE
2/9/99
22
3/9/99
22
2/12/99
22

FACE VALUE
10
10
10

PREMIUM
12
12
12

SHARES
ALLOTTED
4618508
4604144
19497420

e)

Previous public or rights issue, if any: None

(during last five years)
.

f)

Debentures issued by the Company outstanding as on the date of Information

Memorandum and terms of issue:

Details of Debentures issued by the Company Outstanding as on 31st December, 2003

Sr. Type of

Series Alltoment

No Security
1 NCD
AO
2 NCD
AO
3 NCD
BC
4 NCD
BC
5 NCD
BH[B]
6 NCD
GT
7 NCD
HD
8 NCD
HI
9 NCD
HU
10 NCD
IG
11 NCD
IQ
12 NCD
IY
13 NCD
IZ
14 NCD
JA
15 NCD
JM
16 NCD
MR
17 NCD
MS
18 NCD
MT
19 NCD
MU
20 NCD
NC

No of

Face value

Date
Debenturs
16-Feb-01
5
16-Feb-01
10
14-May-01
10
25-May-01
10
26-Jun-01
10
5-Jul-02
20
18-Jul-02
10
31-Jul-02
5
16-Aug-02
20
18-Sep-02
20
3-Oct-02
24
23-Oct-02
20
25-Oct-02
15
25-Oct-02
5
21-Nov-02
5
5-Apr-03
10
9-Apr-03
5
28-Mar-03
1
9-Apr-03
2
7-May-03
20

Rs.
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000

- 80 -

Amount

% of

As on date Interest
50000000
12.10%
100000000
12.10%
100000000
11.60%
100000000
11.60%
100000000
11.40%
200000000
9.60%
100000000
8.50%
50000000
8.00%
200000000
9.00%
200000000
8.80%
240000000
8.80%
200000000
8.50%
150000000
8.50%
50000000
8.25%
50000000
7.25%
100000000
7.45%
50000000
7.25%
10000000
7.45%
20000000
7.25%
200000000
7.00%

Maturity
Date
16-Feb-04
16-Feb-04
14-May-04
25-May-04
26-Jun-04
5-Jul-05
18-Jul-05
31-Jul-05
16-Aug-05
18-Sep-05
3-Oct-05
23-Oct-05
25-Oct-05
25-Oct-05
21-Nov-05
3-Apr-04
7-Apr-04
2-Apr-04
7-Apr-04
7-May-05

PRIVATE AND CONFIDENTIAL

21
22
23
24

NCD
NCD
NCD
NCD

25 NCD
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60

NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD
NCD

NH-I-1
NH-I-1
NH-II-1
NH-II-2
NH-III1
NH-III2
NI
NJ
NL
NQ
NS
NX
NY
OM
OO
OP
OR
OY
OZ
PI
PJ
QI-1
QI-2
QJ-1
QJ-2
QV
QX-1
QX-2
QY
QZ
RB
RG
RH
RK
RM
RN
RO
RP
RR-1
RR-2

10-Jun-03
10-Jun-03
10-Jun-03
10-Jun-03

5
5
5
5

10000000
10000000
10000000
10000000

50000000
50000000
50000000
50000000

6.20%
6.20%
6.50%
6.50%

9-Jun-04
9-Jun-04
10-Dec-04
10-Dec-04

10-Jun-03

10

10000000 100000000

6.90%

10-Jun-05

10-Jun-03
10-Jun-03
20-May-03
22-May-03
4-Jun-03
11-Aug-03
4-Jul-03
20-Jun-03
3-Jul-03
4-Jul-03
7-Jul-03
8-Jul-03
5-Aug-03
1-Aug-03
25-Aug-03
27-Aug-03
10-Oct-03
10-Oct-03
15-Oct-03
15-Oct-03
7-Nov-03
11-Nov-03
12-Nov-03
13-Nov-03
14-Nov-03
14-Nov-03
4-Dec-03
4-Dec-03
8-Dec-03
11-Dec-03
11-Dec-03
12-Dec-03
15-Dec-03
24-Dec-03
24-Dec-03

15
10
17
5
5
25
15
7
15
25
20
25
50
25
20
25
25
25
5
15
25
5
5
25
20
15
5
5
25
5
5
10
25
25
25

10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000
10000000

150000000
6.90%
100000000
6.90%
170000000
7.10%
50000000
7.00%
50000000
6.20%
250000000
6.75%
150000000
6.10%
70000000
6.20%
150000000MBR+1.05
250000000
6.90%
200000000
6.75%
250000000
6.90%
500000000
6.90%
250000000
6.75%
200000000
6.38%
250000000
6.50%
250000000
6.21%
250000000
6.10%
50000000MBR+1.20
150000000
5.75%
250000000
6.27%
50000000
5.35%
50000000
5.30%
250000000MBR+1.30
200000000MBR+1.30
150000000
5.85%
50000000MBR+0.95
50000000MBR+0.10
250000000MBR+1.45
50000000MBR+0.99
50000000MBR+0.99
100000000MBR+1
250000000MBR+1
250000000MBR+0.95
250000000MBR+1.35

10-Jun-05
10-Apr-05
20-May-05
10-Apr-05
2-Jun-04
11-Aug-05
2-Jul-04
24-Jun-04
1-Jul-04
4-Jul-06
7-Jul-05
8-Jul-06
5-Aug-06
1-Aug-05
25-Aug-05
27-Aug-06
10-Oct-06
10-Oct-06
15-Oct-05
15-Oct-05
7-Nov-06
9-Nov-04
9-Nov-04
13-May-05
14-Nov-05
14-Nov-05
2-Dec-04
2-Dec-04
8-Jul-05
9-Dec-04
9-Dec-04
10-Dec-04
13-Dec-04
22-Dec-04
24-Jun-05

- 81 -

PRIVATE AND CONFIDENTIAL

Details of Subordinated Debentures issued by the Company Outstanding as on 31st December,

2003

Sr.
No

Type of
Security
1NCD
2NCD

g)

Series Alltoment
AAA
BBB

No of

Face value

Date
Debenturs
28-Mar-02
4
12-Jul-02
35

Amount

Rate of

Rs.
As on date Interest
10000000 40000000
11.19%
10000000 350000000
10.165%

Maturity
Date
29-Sep-07
16-Jan-08

Option to subscribe:

The Company has made depository arrangement with NSDL / CDSL for the Debentures. The
investors will have the option to hold the debentures in dematerialized form and deal with the
same as per the provisions of Depositories Act, 1996/Rules as notified by NSDL / CDSL from
time to time.
Investors desirous of receiving the debenture certificate in the dematerialized form should
mention their Depository Participants name, DP-ID and beneficiary account number in the
appropriate place in the application form. Debentures allotted to successful allottee(s) having
depository account shall be credited to their depository account against surrender of letter of
allotment.
In case of incorrect details provided by the investors and inability of the Registrar to credit the
Depository Account, the Debentures will be issued only after getting the correct details from the
Investors.
h)

Details of Managing Director.

Name & Address

Directorship in other Companies

Mr. Ramesh Iyer

Managing Director
A-2003, Oberoi Towers I,
20th Floor,
A Wing, Western Express,
Kandivli (E),
Mumbai 400101

Mahindra Allied Investments Ltd

Nature of Interest in other

Companies
Director

Mr. Ramesh Iyer was appointed as Managing Director of the Company from 30th April, 2001 upto
30th April, 2006 on the terms and conditions contained in the Resolution passed at the meeting of
the Board of Directors held on 30th April 2001.
Particulars
Consolidated Salary

Terms
Rs. 7,55,000 per annum in the scale of Rs 5,40,000 to
Rs. 7,80,000 per annum.
Perquisites - Housing, Medical Reimbursement, Leave Travel Concession, Club Fees, Provision
of car and telephone at the Managing Director's residence for his use and other amenities and
benefits as per the Company's Rules.

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Commission - In addition to salary and perquisites, the Managing Director will be entitled to
such commission based on the net profits of the company in any financial year not exceeding
1/4th Percent of such profits as the Board of Directors shall decide, having regard to the
performance of the company.
In the event of absence or inadequacy of profit in any financial year, the remuneration by way of
salary, allowance and perquisites payable to the Managing Director shall not exceed the limits
prescribed under Schedule XIII to the Companys Act 1956 and the Rules made thereunder or any
statutory modification or re-enactment thereof, including the provisions relating to the minimum
remuneration.
Note on qualification shares: As per the Articles of Association of the Company, the Directors of
the Company are need not required to hold any qualification shares.

XIX. RELATED PARTY DISCLOSURES

No.

Nature of transactions

1 INCOME
Hire Purchase / Lease / Loan
income
Other income
2 EXPENSES
Interest
Other Expenses
3 FINANCE
Non Convertible Debentures
placed
Unsecured Bonds placed
Dividend paid for previous
year
Dividend paid for current
year
Inter Corporate Deposits taken
Inter Corporate Deposits given
Net receivable on Hire
Purchase / Loan / Lease
agreements
4 OUTSTANDINGS
Receivables
Payables
5 PROVISIONS
Provision for Non Performing
Assets

Rupees in lacs

Companies
under the
Holding
control of
Company
Holding
Company

146.12

Fellow
Key
subsidiary Management
Companies Personnel

--

---

93.75
53.31

---

176.96
71.81

-(0.26)

20.52
1.08

-29.24

1,059.21
400.49

---

---

---

116.70

--

--

--

585.30

--

---

-100.00

-149.92
406.88

---

178.24

0.28

47.26

--

(0.15)
17.09

339.27
--

0.48
0.23

---

--

439.55

--

--

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XX.

OTHER DETAILS

A) Copy of the Board Resolution for appointment of Mr. Ramesh Iyer as Managing Director of
the Company.
Date of resolution: 30.04.2001
The Resolution basically covers the terms of appointment of Mr. Iyer as the Managing
Director and also the Salary and perquisites payable to him as the Managing Director.

B)

i.) Mr. Ramesh Iyer is the Managing Director of the Company.

Mahindra & Mahindra Ltd. as promoters of the Company are interested to the extent of
their investsment in the equity shares (Tier I capital) and Unsecured Redeemable NonConvertible Debentures (Tier II Capital).
ii) The Company has not acquired any property within two years from the Promoters.
iii) The following Directors are interested to the extent of their shareholding in the Company
Mr. K.J.Davasia 2000 Shares
Mr. Bharat Doshi 40 Shares

C)

Interest of Directors and Promoters

All the Directors of the Company may be deemed to be interested to the extent of fees, if any,
payable to them for attending meetings of the Board and of Committees thereof, reimbursement
of expenses as well as to the extent of other remuneration, if any, payable to them under the
Articles.
All the Directors may also be deemed to be interested to the extent of equity shares / Debentures,
if any, already held by them and / or by their friends and relatives in Company or the debentures
that may be subscribed for and allocated to them, out of the present offer in terms of this
Information Memorandum and also to the extent of any dividend / Interest payable to them and
other distributions in respect of the said equity shares / debentures.
All the Directors may also be deemed to be interested to the extent of normal transactions, if any,
with the Company.
The Directors may also be regarded as interested in the equity shares, if any, held or that may be
subscribed by and allocated to the companies, firms and trust in which they are interested as
directors, members, partners, and / or trustees.
Mr Ramesh Iyer, Managing Director may be considered as interested to the extent of
remuneration paid/payable to him.
The promoters may be deemed to be interested to the extent of equity shares / debentures held
by them or equity shares or the debentures that may be allotted to them / their group companies

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in this offer and to the extent of dividend / interest that may become payable to them against
equity shares / debentures held by them.
D

Rights of Debenture-holders

Debentureholders do not carry any rights regarding voting, dividend, lien on shares.
E

Modifications of Rights

The rights, privileges, terms and conditions attached to all Debentures may be varied, modified
or abrogated with the consent, in writing, of those holders of the Debentures who hold at least
three-fourths of the outstanding amount of Debentures or with the sanction accorded pursuant to
a resolution passed at a meeting of the Debentureholders, carried by a majority consisting of not
less than three-fourths of the persons voting there upon a show of hands or, if a poll is demanded
by a majority representing not less than three-fourths in value of the votes cast on such poll,
provided that nothing in such consent or resolution shall be operative against the Issuer if the
same are not accepted in writing by the Issuer.
F
Restrictions, if any, on Transfer and Transmission of Debentures and on their
Consolidation
The Issuer will not register any transfers of the Debentures to any NRIs, OCBs, FIIs, or any
persons not resident in India, unless appropriate regulatory approvals are obtained. The Issuer
shall not be duty bound to take interest or trust in or over the Debentures.
The title to the Debentures shall pass by execution of duly stamped transfer deed(s) accompanied
by the Debentures certificate (s) / Letter of allotments (s) together with necessary supporting
documents. The transferee(s) should deliver the Debenture certificates to the Issuer for
registration of transfer in the Register of Debentureholders at the Corporate Office. The Issuer on
being satisfied will register the transfer of such Debentures in its Register of Debentureholders.
The person whose name is recorded in the Register of Debentureholders shall be deemed to be
the owner of the Debentures.
Request for registration of transfer, along with the necessary documents, and all other
communications, requests, queries and clarifications with respect to the Debentures should be
addressed to and sent to the Corporate Office. No correspondence shall be entertained in this
regard at any other Branches or any of the offices of the Company.
Transfer of debentures in dematerialized form would be in accordance to the rules /procedures
as prescribed by NSDL /Depository Participant.
G.

Splitting and Consolidation

This concept is not applicable in the demat mode form since the saleable lot is one debenture.

Transmission

In the event of demise of a Registered Debenture holder of the Debentures, or the first holder in
the case of joint holders, the Issuer will recognize the executor or administrator of the demised

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PRIVATE AND CONFIDENTIAL

Debenture holder or the holder of succession certificate or other legal representative of the
demised Debenture holder as the Registered Debentures holder of such Registered Holders
Debentures if such a person obtains probate or letter of administration or is the holder of
succession certificate or other legal representation, as the case may be, from a Court of India
having jurisdiction over the matter and delivers a copy of the same to the Issuer. The Issuer may
in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter
of administration or succession certificate or other legal representation, in order to recognize such
holder as being entitled to the Debentures standing in the name of the demised debenture holder
on production of sufficient documentary proof or indemnity.
I

Revaluation of Assets

There has been no revaluation of the Companys assets during the last five years.

XXI. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS

The following contracts and also documents for inspection referred to hereunder, may be
inspected at the Corporate office of the Company at Mumbai from 11.00 am to 1.00 pm from the
date of this Information Memorandum until the date of closure of this Issue.

MATERIAL CONTRACTS

1.

Board Resolution for appointment of Mr. Ramesh Iyer as Managing Director and terms of
appointment of Mr. Iyer as Managing Director of the Company passed in the meeting of the
Board of Directors held on 30.04.2001 and Resolution passed by the shareholders at Annual
General Meeting held on 14th June 2001.

2.

Letter from Sharepro Services giving their consent to act as Registrar to the issue.

3.

Letter from UTI Bank Ltd. giving their consent to act as Trustees to the issue.

4.

Securitisation Transaction of Rs. 168.78 crores on 5th August, 2003

5.

Lease agreement for Corporate Office Premises of 21,036 Sq. feet area on 23/04/2003

DOCUMENTS

1. Memorandum and Articles of the Company.

2. Certificate of Incorporation of Maxi Motors Financial Services Ltd dated 01.1.91, and Certificate
of Commencement of Business dated 19.2.91. Fresh Certificate of Incorporation after change of
name to Mahindra & Mahindra Financials Services Ltd dated 03.11.92.
3. Certificate of Registration from RBI dated 04.09.98 in terms of Section 45 IA of the Reserve
Bank of India Act, 1934.
4. Audited Accounts of the Company for the year ended March 31, 2003, 2002, 2001, 2000 and
1999 and the Auditors Report thereon along with the tax opinions, if any.
5 Copy of Board Resolution dated 03/02/2004 authorizing the issue.

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PRIVATE AND CONFIDENTIAL

XXII. DECLARATION
We declare that all the relevant provisions of the Companies Act, 1956 and the guidelines issued
by the SEBI / Government have been complied with and no statement made in this Information
Memorandum is contrary to the provisions of the Companies act, 1956 and rules thereunder:
Signed for and on behalf of

MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD.

Ramesh Iyer
Managing Director

V.Ravi
Chief Financial Officer

Place: Mumbai
Date: 26th February, 2004

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PRIVATE AND CONFIDENTIAL

Annexure A
Term Sheet
Issue Date
Deemed date of Allotment
Final Maturity
Coupon Rate
Face Value
Issue Price
Amount Payable on Application
Type
Rating
Minimum Application Size
Interest Payment Date
Interest on application money
Computation of Interest
Trustees
Security
Security Cover
Holiday Convention

Redemption
Market Lot Size

10,00,000/- per Debenture

10,00,000/- per Debenture
10,00,000/- per Debenture

1 Debenture and in multiples of 1 Debenture thereafter

Actual number of days elapsed in a year of 365 or 366 days

as the case may be.
UTI Bank Ltd.

If any interest or Principal payment dates is a holiday in

Mumbai, interest will be payable on the next business day
in Mumbai which shall be the interest or principal payment
date.
1 Debenture

NOTE : FORMAT OF THE TERM SHEET WOULD BE PROVIDED ALONG WITH ADDENDUM TO
EACH TRANCHE WITHIN 30 DAYS FROM EACH DEEMED DATE OF ALLOTMENT. THIS
ANNEXURE WILL BE UPDATED WITH THE TERMS AND CONDITIONS OF ISSUE OF EACH
TREANCHE MADE UNDER THIS UMBRELLA INFORMATION MEMORANDUM.

Annexure B
APPLICATION FORM WOULD BE PROVIDED ALONG WITH THE ADDENDUM TO EACH
TRANCHE.

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