Mahindra Sustainability Review 2009-2010

The Mahindra Group (“Group”) retained Ernst & Young Pvt. Ltd. (“EY”) to provide an independent assurance on its Corporate Sustainability Report for the financial year 2009-10 (“Report”).

The Group’s management is responsible for the contents of the Report, its presentation, identification of key issues, engagement with stakeholders and its presentation. EY’s responsibility is to provide independent assurance on the report content as described in the scope of assurance.

Our responsibility in performing our assurance activities is to the management of the Group only and in accordance with the terms of reference agreed with the Group. We do not therefore accept or assume any responsibility for any other purpose or to any other person or organization. Any dependence that any such third party may place on the Report is entirely at its own risk. The assurance report should not be taken as a basis for interpreting the Group’s overall performance, except for the aspects mentioned in the scope below.

Level of assurance and criteria used

The assurance engagement was planned and performed in accordance with International Federation of Accountants’ International Standard for Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000). Our evidence-gathering procedures have been designed to obtain a limited level of assurance (as set out in ISAE 3000) on which to base our conclusions. Moreover, for sustainability performance indicators our work employed the criteria of the reporting principles and indicators of GRI 2006 guidelines (GRI-G3) while for Scope 1, 2 and 3 GHG emissions the Greenhouse Gas Protocol (Revised Edition) developed by World Business Council for Sustainable Development (WBCSD) and World Resources Institute (WRI) was used.

What we did to form our conclusions

Within the scope of our engagement, we requested evidence on a sample basis based on risk and materiality criteria to obtain a limited level of assurance on the contents of the Report.

The performance of our engagement mainly involved the following key steps:

	Interviews at the Group’s corporate office to understand the sustainability commitment, management of key sustainability issues and review of stakeholders’ engagement process;

	Interviews and analytical considerations with employees from select departments at the Group’s corporate office, at sector level and at the sites visited as well as review of relevant documents and systems for gathering, analyzing and aggregating sustainability performance data in the reporting period;

	Review of material qualitative statements in the Report with regard to consistency and plausibility and review of select underlying documents;

	Appropriate evidences to support the conclusions in this assurance report were obtained. Most of the information and data reviewed were supported with documentary evidence; wherever such documentary evidence could not be collected on account of confidential information, our team physically reviewed the documents.

Scope and Exclusions of our engagement

The scope of assurance covers the following aspects of the Report:

	Data and information related to the Group’s sustainability performance for the period 1^st April 2009 to 31^st March 2010.

	Sustainability specific data and information related to energy, water and waste management, workforce and safety;

	Review of the GRI specific core performance indicators and information reported from the following business sectors, companies and locations:

	Automotive Sector
	(Mahindra & Mahindra Limited) - Kandivili, Igatpuri, Zaheerabad, Nasik, Haridwar;

	Farm Equipment Sector
	(Mahindra & Mahindra Limited) - Kandivili, Jaipur, Nagpur, Rudrapur, Swaraj division;

	Systems and Technologies Sector
	(Mahindra Ugine Steel Company Limited) Steel division -Khopoli, MUSCO Stampings division - Kanhe, Nasik, Rudrapur, Mahindra Forgings Limited (MFL) - Chakan, Mahindra Castings Limited (Hinoday) - Bhosari, Urse, Mahindra Composites - Pune, Mangoan, Mahindra Gears & Transmissions Private Limited - Rajkot;

	Infrastructure Development Sector
	(Mahindra Lifespace Developers Limited) -Splendour Mumbai, Eminente Mumbai, Royale Pune, Chloris Faridabad, Sylvan County Chennai, Mahindra World City Developers Limited – Chennai (MWC-C), Mahindra World City Jaipur Limited (MWC-J), Mahindra Holidays & Resorts India Limited – Coorg, Goa, Munnar)

	Mahindra Partners Division
	(Mahindra Intertrade Ltd.) - Nasik, Worli, Mahindra Steel Service Centre Ltd.- Kanhe, Mahindra Logistics Limited - Chennai, Delhi, Kolkata, Mumbai;

	Information Technology Sector
	(Tech Mahindra Limited)

	Financial Services Sector
	(Mahindra & Mahindra Financial Services Limited)

	Two Wheeler Sector
	(Mahindra Two Wheelers Limited) - Pithampur

	Visits to 17 sample sites across 8 sectors amongst those listed above where our work comprised review of the above mentioned indicators for these locations.

Exclusions

The assurance scope excludes:

	Operations of the Group outside India;

	Aspects of the Report other than those mentioned above;

	Data and information outside the defined reporting period (1 April 2009 to 31 March 2010);

	The Group’s statements that describe expression of opinion, belief, aspiration, expectation, aim or future intention provided by the Group;

	Data and information on economic and financial performance of the Group.

Observations and opportunities for improvement

Our observations and opportunities for improvements were raised in a report to the Mahindra Group management. Selected observations have been provided below:

	The Report covers the most significant business sectors of the Group. The reporting scope for FY 2009-10, compared to that of FY 2008-09, has been expanded with the inclusion of a new sector, namely, Mahindra Two Wheelers Limited as well as new businesses within the previously reporting sectors;

	The Group has identified key material issues across the value chain of its sectors;

	The progress against 7 commitments as articulated in the Group’s ‘Sustainability Roadmap’ has been reported for the Group;

	Coverage of certain indicators such as workforce and waste has increased across the sectors;

	A Group-wide exercise was conducted to determine the corporate carbon footprint involving both assessment of the carbon footprint for new sectors and update of the footprint of sectors that had previously established their respective baselines. While the current systems provides an appropriate basis for the disclosure of CO2 emissions data for Scope 1 and 2 emissions, systems to capture data relating to Scope 3 emissions need to be further strengthened. We were informed by the management that robust systems for capturing reliable data for Scope 3 emissions are in the process of being established, and that the data quality would improve in future reports.

	Data pertaining to a few environment indicators was found to have been reported on the basis of certain assumptions. The management has stated that the monitoring systems for the same are in the process of being established and would be effective from future reporting cycles.

Our conclusions

Based on our work, nothing has come to our attention that causes us not to believe that the Report contents are presented fairly, in material respects, in keeping with the GRI-G3 reporting principles and criteria.

Our assurance team

Our assurance team, comprising of multidisciplinary professionals, was drawn from our climate change and sustainability network and undertakes similar engagements with a number of significant Indian and international businesses.

for Ernst & Young Private Limited

Sudipta Das
Partner

10^th October 2010
Kolkata

Materiality

Report Boundary

Report Scope Limitations

Independent Assurance