Your Directors present their Report together with the audited financial statements of
your Company for the year ended 31st March, 2018.
A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in crores)
|Revenue from Operations
|Profit before Depreciation, Finance
|Costs, Exceptional items and Taxation
|Less: Depreciation, Amortisation and
|Profit before Finance Costs,
|Exceptional items and Taxation
|Less: Finance Costs
|Profit before Exceptional items and
|Add: Exceptional items
|Profit before Taxation
|Less: Tax Expense
|Profit for the year
|Balance of profit for earlier years
|Less: Transfer to Debenture
|Profits available for appropriation
|Add: Due to Scheme of Arrangement
|Add: Other Comprehensive Income/ (Loss) *
|Less: Dividend paid on Equity Shares
|Less: Income-tax on Dividend paid
|Balance carried forward
* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of
In the year gone by, global growth and trade rebounded sharply and remained the story
of the year. Such broad based and strong growth has not been seen since the world's
initial sharp 2010 bounce back, from the financial crisis of 200809. In the United
States, fiscal policy even turned much more expansive as the Fed continued on its path of
interest rate normalisation. Other large Central Banks however, continued with their
accommodative monetary stance. Global commodity prices, including crude oil, rallied
significantly during the year.
On the domestic side, economic activity which flagged for five consecutive quarters,
began to recover as several elements started coming together to nurture this nascent
acceleration. This started manifesting in estimates and high frequency as well as
survey-based indicators. A normal monsoon, record foodgrains output, strong sales growth
by Corporations, depleting finished goods inventories and resilience in several services
sectors raised the prospects of sustained economic recovery.
However, even amidst this scenario, your Company recorded an increase of 4.4% in
revenue from operations at Rs. 49,445 crores in the year under review as against Rs.
47,384 crores in the previous year.
The Profit for the year before Depreciation, Finance Costs, Exceptional items and
Taxation recorded an increase of 23.9% at Rs. 7,259 crores as against Rs. 5,861 crores in
the previous year. Profit after tax increased by 19.6% at Rs. 4,356 crores as against Rs.
3,643 crores in the previous year.
Your Company continues with its rigorous cost restructuring exercises and efficiency
improvements which have resulted in significant savings through continued focus on cost
controls, process efficiencies and product innovations that exceed customer expectations
in all areas thereby enabling the Company to maintain profitable growth in the current
No material changes and commitments have occurred after the closure of the Financial
Year 2017-18 till the date of this Report, which would affect the financial position of
your Company. There has been no change in the nature of business of your Company.
Your Company's Automotive Sector recorded total sales of 5,48,508 vehicles (4,90,870
four-wheelers and 57,638 three-wheelers) as against a total of 5,06,624 vehicles (4,52,893
four-wheelers and 53,731 three-wheelers) in the previous year, registering a growth of
In the domestic market, your Company sold a total of 5,20,286 vehicles as compared to
4,69,384 vehicles in the previous year, resulting in a growth of 10.8%.
In the Passenger Vehicle segment, your Company sold 2,48,859 vehicles [including
2,33,915 Utility Vehicles (UVs), 14,219 Vans and 725 Cars] registering a growth of 5.4%,
as compared to the previous year's volume of 2,36,130 vehicles [including 2,22,541 UVs,
10,370 Vans and 3,219 Cars].
In the Commercial Vehicle segment, your Company sold 2,16,802 vehicles [including
41,305 vehicles <2T GVW, 1,58,269 vehicles between 2-3.5T GVW, 7,744 LCVs in the LCV
> 3.5T segment and 9,484 Heavy Commercial Vehicles (HCVs)] registering a growth of
19.8% over the previous year's volume of 1,80,948 commercial vehicles [including 30,043
vehicles < 2T GVW, 1,36,564 vehicles between 2-3.5T GVW, 7,626 LCVs in the LCV >
3.5T segment and 6,715 HCVs].
In the Three-Wheeler segment, your Company sold 54,625 three wheelers, registering a
growth of 4.4% over the previous year's volume of 52,306 three wheelers.
For the year under review, the Indian automotive industry (except 2W) grew 11.9%, with
the Passenger Vehicle (PV) industry growth of 7.9% and Commercial Vehicle (CV) industry
growth of 19.9%. Three industry sub-segments where your Company has an active presence,
posted very robust growth. These are Utility Vehicles (UV) which grew 21%, LCV Goods
< 3.5T at 29.8% and MHCV Goods at 19.4%.
Your Company's UV volume grew 5.1% to 2,33,915 units. The UV market share for your
Company stood at 25.4% as against 29.2% in the previous year. Scorpio continues to
strengthen its iconic status and recorded the highest ever sales with a volume of 53,934
units in Financial Year 2018. Bolero has been a very successful brand for your Company
over the last 10 years, and for the year under review, Bolero along with the all New
Bolero Power+, posted combined sales of 85,386 units. Your Company strengthened the UV
portfolio with the launch of the KUV100 NXT' in October, 2017, the All
Powerful Scorpio' in November, 2017 and the Plush New XUV500' in April, 2018.
Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year
under review, sold [along with its subsidiary Mahindra Electric Mobility Limited] 4,026
EVs (1,094 four wheelers and 2,932 three wheelers) as against 1,021 EVs in the previous
year. This growth is supported by the Government's thrust on adopting EVs and your
Company's efforts of working with various stakeholders, especially fleet operators.
In the LCV<3.5T segment, your Company retained the No. 1 position with a
47.4% market share. Your Company sold a total of 1,99,544 vehicles in this segment, which
is a growth of 19.8% over the previous year. The LCV<3.5T segment has two sub segments
viz. LCV<2T and LCV 2-3.5T, which is the Pik-UP segment. Your Company has a market
share of 25% and 61.9% in the two sub segments respectively.
In the HCV segment, your Company sold 9,484 trucks as against 6,715 trucks in the
previous year. This is a growth of 41.2%. The growth is driven by good product
performance, improved service reach and spares availability. The Blazo series of trucks
which are backed by guarantees on mileage and service are instrumental in building brand
and growing sales. Your Company's market share in the HCV segment stands at 4.5%.
During the year under review, your Company posted an export volume of 28,222 vehicles
as against the previous year's record exports of 37,240 vehicles. This is a de-growth of
24.2%. This de-growth is principally due to adverse business and regulatory environment in
key markets of Nepal and Sri Lanka. Sales in Africa grew 13%.
The spare parts sales for the year stood at Rs. 2,083.8 crores (including Exports of
Rs. 193.4 crores) as compared to Rs. 1,937.2 crores (including Exports of Rs. 115.6
crores) in the previous year, registering a growth of 7.6%.
Farm Equipment Sector
Your Company's Farm Equipment Sector recorded total sales of 3,17,531 tractors as
against 2,63,177 tractors sold in the previous year thus recording a growth of 20.7%.
For the year under review, the tractor industry in India recorded sales of 7,09,308
tractors, a growth of 21.9%. Second consecutive year of normal monsoon, increase in MSPs
and Government's thrust on Agriculture and rural development, helped drive the positive
sentiment in the Agriculture Sector and the rural economy at large. In the domestic
market, your Company sold 3,02,082 tractors, as compared to 2,48,594 tractors in the
previous year, recording a growth of 21.5%. In a very competitive industry, your Company
continued its market leadership for the 35th consecutive year, with a market
share at 42.6%.
Your Company's growth was driven by good performance of all products under the Mahindra
and Swaraj Brands. The new product trio of Mahindra NOVO, YUVO and JIVO have helped build
the technology leadership' image for the Company. JIVO which was launched in
Financial Year 2018, proved to be an ideal choice for farmers in the fast growing orchard
and horticulture space.
For the year under review, Swaraj Division of your Company, launched the Swaraj 963 in
the 60+ HP segment. The Swaraj 963 and its variants, will help grow volume in the higher
HP segment. Further, your Company had developed and demonstrated technology for driverless
tractors. First phase of this technology will be made available in the market in the
Financial Year 2019. With this, your Company would take another pioneering step to
revolutionise farming in India.
For the year under review, your Company exported 15,449 tractors registering a growth
of 5.9% over the previous year. This is the highest ever tractor exports from India by
your Company. There was growth in exports to USA and neighbouring countries.
Your Company continued to strengthen its global footprint by further expanding into
Turkey, through the acquisition of Erkunt Traktor Sanayii A.S. (Erkunt), the 4th
largest tractor brand in Turkey. This is the second acquisition by your Company in Turkey
after Hisarlar which is a farm equipment company. Spare parts net sales for the year stood
at Rs. 605.3 crores (including exports of Rs. 52.9 crores) as compared to Rs. 534.4 crores
(including exports of Rs. 43.8 crores) in the previous year, registering a growth of
Under the Mahindra Powerol Brand, your Company has been a leader in providing power
back-up solutions to the telecom industry for past 11 years. With a focus on changing
customer needs, your Company has further expanded the business in Tele infra management
and in the energy management solutions space.
In the retail genset business, your Company is the No. 2 brand by volume, and for the
year under review, expanded the product range with the launch of gensets in the higher KVA
Construction Equipment Business
For the year under review, your Company (under the Mahindra EarthMaster brand) sold
1,229 Backhoe Loaders (BHLs) against 1,025 in Financial Year 2017, which is a growth of
19.9%. With an uptick in infrastructure spending, the BHL market in India grew 23.5% over
the previous year. Your Company ranks 4th in the BHL industry.
Your Company forayed into fast growing road construction equipment business with the
launch of Motor Grader - RoadMaster G75, in October, 2017. Your Company sold 164 motor
graders in Financial Year 2018.
During the year under review, the two-wheeler business of Mahindra Two Wheelers Limited
was demerged into your Company. For the Financial Year 2017-18, your Company sold 32,661
two-wheelers (including 17,912 exports).
Transitioning to Goods and Services Tax
Effective 1st July, 2017, India introduced the landmark tax reform with
initiation of the Goods and Services Tax (GST) regime. All businesses of your Company,
made a timely and seamless transition to the new GST system.
Current Year's review
During the period 1st April, 2018 to 28th May, 2018, 72,813
vehicles were produced as against 62,615 vehicles and 67,244 vehicles were despatched as
against 59,361 vehicles during the corresponding period in the last year. During the same
period 56,961 tractors were produced and 57,290 tractors despatched as against 48,499
tractors produced and 48,210 tractors despatched during the corresponding period in the
Economic activity is expected to gather pace in Financial Year 2019 as the transitory
effects of implementation of the Goods and Service Tax (GST) recede. The Reserve Bank of
India (RBI) projects India's GDP growth to strengthen from 6.6 per cent in 2017-18 to 7.4
per cent in Financial Year 2019. The step-up in growth outlook is likely to be driven by a
revival of investment on the demand side and manufacturing on the supply side. Credit
off-take has also improved and is becoming increasingly broad-based, which augurs well for
the underlying economic activity.
This outlook will also be lifted by tailwinds from normal rainfall with the weather
bureau forecasting a normal' monsoon for the third successive year in its first
stage long range forecast. While the spatial and temporal distribution remain to be seen,
well spread out rainfall is likely to have a salutary impact on the overall demand
conditions. Moreover, the thrust on rural and infrastructure sectors imparted through the
Union Budget could further help rejuvenate rural demand and also crowd in private
Global growth backdrop too remains benign with a synchronised cyclical rebound. A boost
to US investment demand from corporate tax cuts, strong activity in the Euro area
supported by accommodative monetary policy and improvement in growth prospects of Emerging
Market Economies (EMEs) have been supportive of this rebound thus far. However, escalation
in trade frictions and protectionist policies, abrupt changes in the pace and timing of
normalization of monetary policy of developed country central banks and higher crude oil
prices could pose downside risks to global trade and demand growth.
Financial Year 2017-18 saw the broadest synchronized global growth since the financial
crisis. World economy grew at 3.8% in 2017 up from 3.2% in 2016, on the back of growth in
trade, pickup in investment particularly among advanced economies. US economy grew at a
robust pace and is expected to continue on the back of tax reforms and associated fiscal
stimulus. US Federal Reserve hiked interest rates by a cumulative of 75 bps during the
Financial Year. Eurozone also saw a rebound in business sentiment and investments with
still accommodative monetary policy, political uncertainties largely sorted and Brexit
negotiations making progress. Despite some slowdown recently, Japan recorded eight
consecutive quarters of growth up to December, 2017.
Economic activity also continued to expand in major emerging market economies such as
Brazil, Russia and South Africa - driven by higher crude and commodity prices. China
witnessed slight slowdown as it transitions from an export-driven to a domestic demand
driven growth model, and saw a rating downgrade with warnings on its excessive debt
levels. The latest World Economic Outlook by IMF predicts global growth to pick up to 3.9%
in 2018 supported by strong momentum, favorable market sentiment, accommodative financial
conditions, and the domestic and international repercussions of expansionary fiscal policy
in the United States. The key risks to the optimistic outlook are rising trade
protectionism and geo-political uncertainties especially in the Middle-East.
On the domestic front the year began on a jubilant note with the Union Budget giving a
strong thrust to the rural economy and a normal monsoon after two years of deficient
rainfall. The much awaited Goods and Services Tax (GST) was rolled out on 1st
July, 2017, replacing multiple taxes levied by Governments. Economic activity accelerated
as is evident from high frequency indicators such as strong retail sales, depleting
finished goods inventories and greenshoots of renewal of capex cycle.
On the other hand, financial markets saw volatility on the back of US Fed tightening
and rising crude prices. In addition, Banking Sector was also fraught with
non-performing assets and frauds.
Indian Rupee which appreciated till the early part of January, 2018 on buoyant capital
inflows, started depreciating subsequently over concerns of the impact of higher crude oil
prices on India's trade deficit and closed the year at Rs. 65.18 per USD.
CPI inflation remained benign during the first half of Financial Year 2018 which led to
the Reserve Bank of India (RBI) to ease policy rates by 25 bps. However, inflation
gradually started inching up in the second half of the year due to unfavourable base
effect and rise in food and fuel inflation. Going forward there are various uncertainties
on the inflation outlook primarily on account of impact of HRA increases by various State
Governments, increase in MSP in Union Budget 2018, rising fuel and commodity prices and
normalisation of monetary policy by major advanced economies. Systemic liquidity, which
had remained in surplus since demonetization, turned into deficit towards close of the
year. Consequently, even though RBI remained in a pause mode since August, 2017, bond
markets experienced rise in yields due to drying liquidity, concerns about inflation and
the fiscal situation.
Your Company continued to focus on managing cash efficiently and ensured that it had
adequate liquidity and back up lines of credit. During the year, your Company repaid Rs.
80.69 crores of long term borrowings from internal accruals. During the year, your Company
also availed short term export finance. As on 31st March, 2018, Rs. 668 crores
of export finance was outstanding, out of which Rs. 365 crores was under the interest
equalization scheme of Government of India. The Company's Bankers continue to rate your
Company as a prime customer and extend facilities/services at prime rates. Your Company
follows a prudent financial policy and aims not to exceed an optimum financial gearing at
any time. The Company's total Debt to Equity Ratio was 0.10 as at 31st March,
Your Company has been rated by CRISIL Limited (CRISIL), ICRA Limited (ICRA), India
Ratings and Research Private Limited (India Ratings) and CARE Ratings Limited (CARE) for
its Banking facilities. All have re-affirmed the highest credit rating for your Company's
Short Term facilities. For Long Term facilities and Non-Convertible Debenture (NCD)
programme, CRISIL, ICRA and India Ratings have re-affirmed their credit ratings of CRISIL
AAA/Stable, [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated by
them. With the above rating affirmations, your Company continues to enjoy the highest
level of rating from all major rating agencies at the same time.
The AAA ratings indicate highest degree of safety regarding timely servicing of
financial obligations and is also a vote of confidence reposed in your Company's
Management by the rating agencies. It is an acknowledgement of the strong credit profile
of your Company over the years, resilience in earnings despite cyclical upturns/downturns,
robust financial flexibility arising from the significant market value of its holdings and
Investor Relations (IR)
Your Company continuously strives for excellence in its IR engagement with
International and Domestic investors and has set up feedback mechanism to measure IR
effectiveness. Structured conference calls and periodic investor/analyst interactions
including one-on-one meeting, participation in investor conferences, quarterly earnings
calls and annual analyst meet with the Chairman, Managing Director and Business Heads were
organised during the year.
Your Company interacted with around 670 Indian and overseas investors and analysts
(excluding quarterly earnings calls and specific event related calls) during the year.
Your Company always believes in leading from the front with emerging best practices in IR
and building a relationship of mutual understanding with investor/analysts. As a key
milestone in this continuing endeavour, your Company created a digital interactive annual
review of the Company's performance on the Corporate website to provide an interactive
experience beyond what is available in the Annual Report. The Company had created its
first Integrated Report (for Financial Year 2017). Your Company also continues to organise
con-call on Environment, Social and Corporate Governance (ESG) for analysts and investors,
which has received excellent feedback from investors and ESG analysts for this
Your Company ensures that critical information about the Company is available to all
the investors by uploading all such information at the Company's website. Your Company has
created a Group Investor Relations Council' to share best practices across all the
listed group companies and learn from each other.
Issue of Shares
(a) Scheme of Arrangement between Mahindra Two Wheelers Limited and Mahindra and
Mahindra Limited and their respective Shareholders and Creditors (Scheme) Your Company on
8th November, 2017 allotted 5,03,888 Ordinary (Equity) Shares of Rs. 5 each to
the Shareholders of Mahindra Two Wheelers Limited (other than the Company) pursuant to the
(b) Bonus Shares
Pursuant to the recommendation of the Board of Directors at its Meeting held on 10th
November, 2017 and approval of the Members of the Company through a Postal Ballot, the
Results of which were declared on 16th December, 2017, your Company has on 26th
December, 2017 allotted 62,15,96,272 Ordinary (Equity) Shares of Rs. 5 each as fully
paid-up Bonus Shares in the ratio of one Bonus Share for every one existing Equity Share
of the Company held by the Shareholders as on the Record Date i.e. 23rd
Consequently, the paid-up Equity Share Capital of the Company increased to Rs.
621,59,62,720 divided into 124,31,92,544 Ordinary (Equity) Shares of Rs. 5 each, fully
Your Directors are pleased to recommend a dividend of Rs. 7.50 per Ordinary (Equity)
Share of the face value of Rs. 5 each on the enhanced Share Capital, payable to those
Shareholders whose names appear in the Register of Members as on the Book Closure Date.
The equity dividend outgo for the Financial Year 2017-18, inclusive of tax on distributed
profits (after reducing the tax on distributed profits of Rs. 69.52 crores on the
dividends declared by subsidiaries as of the date of this report and receivable during the
current Financial Year 2018-19) would absorb a sum of Rs. 1,054.53 crores [as against Rs.
927.62 crores comprising the dividend of Rs. 13 per Ordinary (Equity) Share of the face
value of Rs. 5 each and tax thereon paid for the previous year]. Further, the Board of
your Company decided not to transfer any amount to the General Reserve for the year under
review. The dividend pay-out is in accordance with the Company's Dividend Distribution
Dividend Distribution Policy
The Dividend Distribution Policy containing the requirements mentioned in Regulation
43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is attached as Annexure I and forms part of this Annual
B. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company, its subsidiaries, associates and
joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian
Accounting Standards along with all relevant documents and the Auditors' Report form part
of this Annual Report. The Consolidated Financial Statements presented by the Company
include the financial results of its subsidiary companies, associates and joint ventures.
The Financial Statements as stated above are also available on the website of the
Company and can be accessed at the Web-link:
Subsidiary, Joint Venture and Associate Companies
The Mahindra Group Companies continue to contribute to the overall growth in revenues
and overall performance of your Company.
Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated
revenue of Rs. 30,773 crores in the current year as compared to Rs. 29,141 crores in the
previous year, an increase of 6%. Its consolidated profit after tax is Rs. 3,800 crores as
compared to Rs. 2,813 crores in the previous year, an increase of 35%.
The Group's finance company, Mahindra & Mahindra Financial Services Limited
(Mahindra Finance), reported a consolidated operating income of Rs. 8,533 crores during
the current year as compared to Rs. 7,146 crores in the previous year, a growth of 19%.
The consolidated profit after tax for the year is Rs. 1,024 crores as compared to Rs. 512
crores in the previous year. Mahindra Finance financials is as per Indian Generally
Accepted Accounting Principles (IGAAP).
Mahindra Lifespace Developers Limited, the subsidiary in the business of real estate
and infrastructure registered a consolidated operating income of Rs. 566 crores as
compared to Rs. 762 crores in the previous year. The consolidated profit after tax for the
year is Rs. 101 crores as compared to Rs. 102 crores in the previous year.
Mahindra Holidays & Resorts India Limited, the subsidiary in the business of
timeshare registered a consolidated operating income of Rs. 2,317 crores as compared to
Rs. 2,267 crores in the previous year, an increase of 2%. The consolidated profit after
tax for the year is Rs. 132 crores as compared to Rs. 149 crores in the previous year.
Mahindra Logistics Limited, a listed subsidiary in the logistics business has
registered a consolidated operating income of Rs. 3,416 crores as compared to Rs. 2,667
crores in the previous year, an increase of 28%. The consolidated profit after tax for the
year is Rs. 64 crores as compared to Rs. 46 crores in the previous year, an increase of
Ssyangyong Motor Company, the Korean subsidiary of the Company has reported
consolidated revenues of Rs. 20,435 crores in the current fiscal year as compared to Rs.
21,153 crores in the previous year. The consolidated loss for the year is Rs. 502 crores
as compared to consolidated profit after tax of Rs. 245 crores in the previous year.
The consolidated group profit before exceptional item and tax for the year is Rs. 6,590
crores as against Rs. 5,004 crores in the previous year a growth of 32%. The
consolidated profit after tax after non-controlling interest and exceptional items for the
year is Rs. 7,510 crores as against Rs. 3,698 crores in the previous year.
During the year under review, Mahindra Automotive North America Inc., Merakisan Private
Limited, Mahindra Vehicle Sales and Services Inc., Mahindra Waste Energy Solutions
Limited, Mahindra Telecom Energy Management Services Limited, Mahindra Happinest
Developers Private Limited, Mahindra Fresh Fruits Distribution Holding Company (Europe)
B.V., Erkunt Traktor Sanayii A.S., Erkunt Sanayi A.S., Deep Mangal Developers Private
Limited, Moonshine Construction Private Limited, Mahindra Construction Company Limited,
Visionsbolaget 12191 AB and Visionsbolaget 12192 AB became subsidiaries of your Company.
During the year under review, Mahindra Yueda (Yancheng) Tractor Company Limited,
Defence Land Systems India Limited, Raigad Industrial & Business Park Limited,
Mahindra Telecommunications Investment Private Limited, Gateway Housing Company Limited
and Visionsbolaget 12192 AB ceased to be subsidiaries of your Company.
Subsequent to the year end, Mahindra Susten Bangladesh Private Limited and Blitz 18-371
GmbH became subsidiaries of your Company and Gipp Aero Investments Pty Limited and
Aerostaff Australia Pty Limited ceased to be subsidiaries of your Company.
Pursuant to the Ministry of Corporate Affairs Notification dated 7th May,
2018, the amendment to the definition of "subsidiary company" was made effective
Mahindra Knowledge Park Mohali Limited became a subsidiary of your Company and
Merakisan Private Limited ceased to be a subsidiary of your Company.
During the year under review, Mahindra Waste Energy Solutions Limited changed its name
to Mahindra Waste To Energy Solutions Limited, Mahindra Gujarat Tractor Limited changed
its name to Gromax Agri Equipment Limited, Mahindra Suryaurja Private Limited changed its
name to Mega Suryaurja Private Limited and Visionsbolaget 12191 AB changed its name to
re Villa 3 AB.
During the year under review, Mahindra Happinest Developers Private Limited and
Mahindra Defence Naval Systems Private Limited were converted into Public Limited
Companies and accordingly, their names were changed to Mahindra Happinest Developers
Limited and Mahindra Defence Naval Systems Limited.
Subsequent to the year end, Mahindra Retail Private Limited was converted into a Public
Limited Company and accordingly changed its name to Mahindra Retail Limited. Further,
Blitz 18-371 GmbH changed its name to Automobili Pininfarina GmbH and Industrial
Cluster Private Limited changed its name to Mahindra Industrial Park Private Limited.
During the year under review, M.I.T.R.A Agro Equipments Private Limited, ZoomCar Inc,
Carnot Technologies Private Limited and Resfeber Labs Private Limited became Associates of
your Company and subsequent to the year end, Merakisan Private Limited became Associate of
A Report on the performance and financial position of each of the subsidiaries,
associates and joint venture companies included in the Consolidated Financial Statement
and their contribution to the overall performance of the Company, is provided in Form
AOC-1 and forms part of this Annual Report.
The Policy for determining material subsidiaries as approved by the Board is uploaded
on the Company's website and can be accessed at the Web-link:
C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS
Demerger of Two-Wheeler Business of Mahindra Two Wheelers Limited (MTWL) into your
MTWL, a step down subsidiary of your Company, has been engaged in the businesses of
design, manufacture, sales and service of two wheelers (Two-Wheeler Business) and also
trading in spares and accessories for two wheelers. A Scheme of Arrangement between MTWL
and your Company and their respective Shareholders and Creditors (Scheme) was announced by
your Company to demerge the Two Wheeler Business into your Company. The appointed date of
the Scheme was 1st October, 2016. The National Company Law Tribunal
approved the Scheme and the Scheme has been made effective from 25th
In accordance with the Scheme, your Company has allotted 4,63,287 Ordinary (Equity)
Shares of Rs. 5 each to Aay Kay Global and 40,601 Ordinary (Equity) Shares of Rs. 5 each
to Emerging India Fund, the Shareholders of MTWL, in the share exchange ratio of 1 fully
paid-up Ordinary (Equity) Share of Rs. 5 each of the Company for every 461 fully paid-up
shares held in MTWL.
Divestment of 87,211 Equity Shares of Swaraj Engines Limited in the Buy-back offer
During this year, Swaraj Engines Limited (SEL), an associate company of your Company,
had come up with a Buy-Back Offer (Offer). Your Company successfully offered 87,211 Equity
Shares of SEL in the Offer. Your Company booked a profit of approximately Rs. 21 crores in
the process. Following this Offer, the shareholding of your Company has marginally
increased from 33.22% to 33.31% of SEL's share capital.
Sale of 64,50,000 shares representing 5% of the total share capital of CIE Automotive
During the year, Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), a
wholly owned subsidiary of the Company, executed a sale of 64,50,000 shares representing
5% of the share capital of CIE Automotive S.A at a price of Euro 23.5 per share,
aggregating to Euro 151.58 million on the Spanish Stock Exchange. The post-tax capital
gains booked by MOICML is Euro 91.4 million.
Post the sale, MOICML's shareholding in CIE Automotive S.A has come down to 7.435% of
its share capital. This transaction has facilitated diversification of the investor base
of CIE Automotive S.A.
Scheme of Amalgamation between Defence Land Systems India Limited (Transferor Company)
and Mahindra Defence Systems Limited (Transferee Company) and their respective
Shareholders and Creditors (Scheme)
The National Company Law Tribunal has approved the Scheme vide its order dated 5th
October, 2017. The appointed date of the Scheme is 1st January, 2017 and the
Scheme is effective from 18th October, 2017.
Initial Public Offer of Mahindra Logistics Limited
During this year, Mahindra Logistics Limited (MLL), a subsidiary of your Company,
successfully completed an Initial Public Offer (IPO) with an issue size of Rs. 829 crores.
As a part of this IPO, your Company sold 96,66,173 Equity Shares of MLL, amounting to
13.6% stake. The offer was oversubscribed nearly by 8 times and the allotment took place
at the upper end of the price band of Rs. 425-429 per share. The Equity Shares of MLL got
listed on BSE Limited and National Stock Exchange of India Limited (NSE) on 10th
This was the largest IPO from your Company till date and as a result of this secondary
sale during the IPO, your Company has realized gross proceeds of Rs. 414 crores and booked
profit of Rs. 386 crores, thereby unlocking substantial value creation for the
shareholders. Your Company's shareholding in MLL stood at 58.8% on completion of the IPO.
The Equity Shares of MLL traded at closing price of Rs. 484.80 per share on NSE on the
last trading day of the fiscal year ended on 31st March, 2018.
Consolidation of Smartshift and Porter
Orizonte Business Solutions Limited (Smartshift) is a step down subsidiary of your
Company which owns and operates a technology enabled load exchange marketplace platform
for matching the needs of cargo owners with transporters. Mahindra Trucks & Buses
Limited (MTBL), a wholly owned subsidiary of your Company held a 10.37% stake on a fully
diluted basis in Resfeber Labs Private Limited (Porter) which is a similar business to
that of Smartshift. To leverage synergies and obtain greater economies of scale for both
businesses, your Company agreed to a Scheme to merge Smartshift and Porter. As a part of
this strategy, on 23rd February, 2018, your Company executed a Share
Subscription Agreement and Shareholders Agreement which entailed a commitment to merge
Smartshift with Porter through a Scheme of Merger and make an investment of approximately
Rs. 65 crores in Porter and Smartshift. As on date, your Company has made the
aforesaid investment in Smartshift and Porter. Additionally, the aforementioned Scheme of
Merger was also approved by the Board of Directors of Smartshift and Porter and was filed
before the National Company Law Tribunal (NCLT), Mumbai Bench on 5th April,
2018. Pursuant to the merger, which is subject to the NCLT approval, Smartshift will cease
to be a subsidiary of the Company.
Post merger, the shareholding of your Company and its subsidiaries in Porter (the
combined entity) taken on a fully diluted basis would be 30.9% for the Company, 2.5% for
Mahindra & Mahindra Financial Services Limited and 7% for MTBL.
Investment in Zoomcar
Your Company has been keen to invest in the shared mobility space as part of its
strategy to promote and participate in sustainable mobility solutions, including multi
modal urban mobility, with the objective of enabling improved livelihoods and lifestyles
of people enabling them to RISE. As a part of your Company's strategy of promoting
Electric Vehicles and shared mobility, your Company invested in Zoomcar India Private
Limited (Zoomcar India) which is a leading self-drive car rental company based out of
Bangalore, India and had been 100% owned by Zoomcar Inc., a holding company incorporated
in the USA. Your Company subscribed to Compulsory Convertible Preference Shares (CCPS) of
Zoomcar India, which on an as-converted to Equity Share basis, would result in the
Company holding about 11.6% of the Equity Share Capital of Zoomcar India on a fully
diluted basis. Subject to receipt of regulatory approvals, the Company shall exchange its
CCPS holding of Zoomcar India for Preferred Stock of Zoomcar Inc. at a future date.
Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), a wholly owned
subsidiary of the Company, has also invested in Zoomcar Inc.
The effect of this investment, by your Company and MOICML, on an aggregate as-converted
to common stock of Zoomcar Inc. basis would result in your Company and MOICML together
holding approximately 16% of the Common Stock of Zoomcar Inc. on a fully diluted basis.
Exploration of Strategic Co-operation with Ford
During the year, your Company announced its intent of exploring a strategic alliance
with Ford Motor Company (Ford) which is designed to leverage the benefits of Ford's global
reach and expertise and your Company's scale in India and its successful operational model
to allow each company to leverage the others' strengths during a period of unprecedented
transformation in the global automotive industry. To that end the Company signed several
MOUs with Ford during the year which included an overall co-operation plan agreement and
the others being in specific areas of connected vehicle projects, battery electric
vehicle, powertrains and product development of mid-size and compact SUV.
Acquisition of Erkunt Traktor Sanayii A.S. and Erkunt Sanayi A.S.
During the year, your Company strengthened its presence in Turkey by acquiring Erkunt
Traktor Sanayii A.S. (Erkunt Tractor) and Erkunt Sanayi A.S. (Erkunt Sanayi). Erkunt
Tractor is the 4th largest tractor company in Turkey, and Erkunt Sanayi is a
leading casting and machining company catering to tractor and other industrial machinery.
Mahindra Overseas Investment Company (Mauritius) Limited, a wholly owned subsidiary of
your Company, acquired 100% of Erkunt Tractor and 98.7% of Erkunt Sanayi, for
approximately Rs. 450 crores. These acquisitions, along with investment in Hisarlar Makina
in Financial Year 2017, provide a strong base for your Company to participate in the
Turkish agri-machinery market which is among the largest globally.
Investment in M.I.T.R.A. Agro Equipment Private Limited
Your Company invested Rs. 8 crores in Equity Shares of M.I.T.R.A Agro Equipment Private
Limited (MITRA) during the year. MITRA is an Indian agri-machinery company, specialising
in equipment such as sprayers for horticulture. Your Company now has a 26% equity stake,
on fully diluted basis, in MITRA. The partnership with MITRA will enable your Company to
expand and strengthen its presence in the horticulture segment which is fast growing.
Investment in Carnot Technologies Private Limited
During the year, your Company invested approximately Rs. 6.1 crores in Carnot
Technologies Private Limited (Carnot), a startup founded in 2015 by purchasing existing
Equity Shares and subscribing to Series A Convertible Preference Shares. Your Company now
owns approximately 23% of the fully diluted equity capital of Carnot. Carnot provides
Internet of Things (IoT) products and solutions for automobiles currently and your Company
intends to partner with Carnot to develop innovative technology solutions and accessories
to supplement and enhance the value of its product and service offerings across segments.
Launch of ROXOR by Group company MANA in the US
Mahindra Automotive North America (MANA), a second level subsidiary of your Company
launched ROXOR, a new Off-Road vehicle in the powersports segment in March, 2018. ROXOR
was conceived, designed, engineered and is being produced in Metro Detroit by MANA which
recently opened a new North American Automotive Headquarter and manufacturing center in
Waste to Energy Solutions
During the year, your Company incorporated Mahindra Waste To Energy Solutions Limited
(MWESL) as a new subsidiary to carry out activities in relation to conversion of organic
wastes to energy. Currently there are multiple locations across India where projects at
different operational stages are being executed. In February, 2018, MWESL executed an MOU
with Indraprastha Gas Limited (IGL) for providing sustainable solutions to waste
management and stubble burning through design and development of bio-gas plants
which will use agro and other organic waste in the region where IGL operates.
Merger of Mahindra Telecommunications Investment Private Limited and Gateway Housing
Company Limited (Transferor Companies) with Mahindra Holdings Limited (Transferee Company)
and their respective Shareholders (Scheme)
The National Company Law Tribunal has approved the Scheme vide its order dated 4th
January, 2018. The appointed date of the Scheme is 1st April, 2016 and the
Scheme is effective from 27th February, 2018.
Capital Raising by Mahindra & Mahindra Financial Services Limited, a listed
subsidiary of your Company
During the year under review, Mahindra & Mahindra Financial Services Limited
(MMFSL), a listed subsidiary of your Company had received the approval of its shareholders
to issue upto 2.5 crores shares by way of Preferential Allotment to your Company and upto
2.4 crores shares by way of Qualified Institutions Placement (QIP). MMFSL had successfully
raised a total of Rs. 2,111 crores through the above issuances made to both the
Company (Rs. 1,055 crores) and a mix of domestic and international qualified institutional
bidders (Rs. 1,056 crores).
With your Company maintaining majority shareholding of 51.19%, MMFSL continues to
benefit by leveraging the financial and operational synergies with the Company and with
the simultaneous QIP issuance, it has been able to diversify its investor base. MMFSL's
Capital Adequacy has strengthened with this capital raise. It further enables MMFSL to
augment its long term resources to enable it to meet its business growth and funding
requirements as well as meet the investment required to be made in its subsidiaries
and joint ventures.
D. INTERNAL FINANCIAL CONTROLS
The Corporate Governance Policies guide the conduct of affairs of your Company and
clearly delineates the roles, responsibilities and authorities at each level of its
governance structure and key functionaries involved in governance. The Code of Conduct for
Senior Management and Employees of your Company (the Code of Conduct) commits Management
to financial and accounting policies, systems and processes. The Corporate Governance
Policies and the Code of Conduct stand widely communicated across your Company at all
Your Company's Financial Statements are prepared on the basis of the Significant
Accounting Policies that are carefully selected by Management and approved by the Audit
Committee and the Board. These Accounting policies are reviewed and updated from time to
Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of
Account. The transactional controls built into the SAP ERP systems ensure appropriate
segregation of duties, appropriate level of approval mechanisms and maintenance of
supporting records. The Information Management Policy reinforces the control environment.
The systems, Standard Operating Procedures and controls are reviewed by Management. These
systems and controls are audited by Internal Audit and their findings and recommendations
are reviewed by the Audit Committee which ensures the implementation.
Your Company has in place adequate internal financial controls with reference to the
Financial Statements commensurate with the size, scale and complexity of its operations.
This year your Company's Internal Financial Controls were deployed through Internal
Control Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), that addresses material risks in your
Company's operations and financial reporting objectives. Such controls have been assessed
during the year under review taking into consideration the essential components of
internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by The Institute of Chartered Accountants of India. Based on
the results of such assessments carried out by Management, no reportable material weakness
or significant deficiencies in the design or operation of internal financial controls was
observed. Your Company recognises Internal Financial Controls cannot provide absolute
assurance of achieving financial, operational and compliance reporting objectives because
of its inherent limitations. Also, projections of any evaluation of the Internal Financial
Controls to future periods are subject to the risk that the Internal Financial Control may
become inadequate because of changes in conditions or that the degree of compliance with
the policies or procedures may deteriorate. Accordingly, regular audits and review
processes ensure that such systems are reinforced on an ongoing basis.
E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the Management
Discussion and Analysis Report, which forms part of this Annual Report.
F. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions entered during the year were in the ordinary course of
business and on arms length basis. During the year under review, your Company had entered
into Material Related Party Transactions, i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial statements, with Mahindra
Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These
transactions too were in the ordinary course of business of your Company and were on arms
length basis, details of which, as required to be provided under section 134(3)(h) of the
Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this
The Policy on Materiality of and Dealing with Related Party Transactions as approved by
the Board is uploaded on the Company's website and can be accessed at the Web-link:
Statutory Auditors and Auditors' Report
Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number
101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold office
for a term of 5 years from the conclusion of the 71st Annual General Meeting
(AGM) held on 4th August, 2017 until the conclusion of the 76th AGM
of the Company to be held in the year 2022.
Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th
May, 2018, amending section 139 of the Companies Act, 2013, the mandatory requirement for
ratification of appointment of Auditors by the Members at every AGM has been omitted and
hence your Company has not proposed ratification of appointment of Messrs B S R & Co.
LLP, Chartered Accountants, at the forthcoming AGM. The Auditors' Report is unmodified
i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice
Number: 6029) to undertake the Secretarial Audit of the Company.
The Company has annexed to this Board Report as Annexure III, a Secretarial Audit
Report given by the Secretarial Auditor. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark or disclaimer.
The Board had appointed Messrs D. C. Dave & Co., Cost Accountants (Firm
Registration Number 000611), as Cost Auditor for conducting the audit of cost records of
the Company for the Financial Year 2017-18.
The Board of Directors on the recommendation of the Audit Committee, appointed Messrs
D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost
Auditors of the Company for the Financial Year 2018-19 under section 148 of the Companies
Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the
limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they
are free from any disqualifications specified under section 141(3) and proviso to section
148(3) read with section 141(4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditors certifying
their independence and arms length relationship with the Company.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost
Auditor is required to be placed before the Members in a General Meeting for their
ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration
payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening
the Annual General Meeting.
Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditor have not reported any instances of frauds committed in the Company by its Officers
or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013,
details of which needs to be mentioned in this Report.
H. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
Particulars of the loans given, investment made or guarantee given or security provided
and the purpose for which the loan or guarantee or security is proposed to be utilised by
the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 36 to
the Financial Statements.
I. PUBLIC DEPOSITS AND LOANS/ADVANCES
Your Company had discontinued its Fixed Deposit Scheme for 36 months with effect from
the close of office hours on 31st January, 2014 and has also
discontinued acceptance of Fixed Deposits with effect from 1st April, 2014.
All the deposits from public and Shareholders had already matured as at 31st
March, 2017. Out of the total outstanding 64 deposits of Rs. 50.11 lakhs from the public
and shareholders as at 31st March, 2018, all deposits amounting to Rs.
50.11 lakhs, had matured and had not been claimed as at the end of the Financial Year.
Since then 3 of these deposits of the value of Rs. 1.55 lakhs have been claimed.
There was no default in repayment of deposits or payment of interest thereon during the
year under review. There are no deposits which are not in compliance with the requirements
of Chapter V of the Companies Act, 2013.
The particulars of loans/advances, etc., required to be disclosed in the Annual
Accounts of the Company pursuant to Para A of Schedule V of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 are furnished separately.
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel of the Company
pursuant to sections 2(51) and 203 of the Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014: (a) Mr. Anand G.
Mahindra Executive Chairman (b) Dr. Pawan Goenka Managing Director (c) Mr. V
S Parthasarathy Group CFO & Group CIO (d) Mr. Narayan Shankar Company
There has been no change in the KMPs during the year under review.
Employees' Stock Option Scheme
During the year under review, on the recommendation of the Governance, Nomination and
Remuneration Committee of your Company, the Trustees of Mahindra & Mahindra Employees'
Stock Option Trust have granted Stock Options to employees under the Mahindra &
Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to
employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.
The Company has in force the following Schemes which get covered under the provisions
of SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations):
1. Mahindra & Mahindra Limited Employees Stock Option Scheme 2000 (2000
2. Mahindra & Mahindra Limited Employees Stock Option Scheme 2010 (2010
3. M&M Employees Welfare Fund No. 1
4. M&M Employees Welfare Fund No. 2
5. M&M Employees Welfare Fund No. 3
There are no material changes made to the above Schemes and these Schemes are in
compliance with the SBEB Regulations. Your Company's Auditors, Messrs B S R & Co. LLP,
have certified that the Company's above-mentioned Schemes have been implemented in
accordance with the SBEB Regulations, and the Resolutions passed by the Members for the
2000 Scheme and the 2010 Scheme.
Information as required under the SBEB Regulations read with SEBI Circular
CIR/CFD/POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the
Company's website and can be accessed at the Web-link: http://www.mahindra.com/resources/
Particulars of Employees and related disclosures
The Company had 296 employees who were in receipt of remuneration of not less than Rs.
1,02,00,000 during the year ended 31st March, 2018 or not less than Rs.
8,50,000 per month during any part of the year.
Details of employee remuneration as required under provisions of section 197(12) of the
Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office
of the Company during working hours, 21 days before the Annual General Meeting and
shall be made available to any Shareholder on request. Such details are also available on
your Company's website and can be accessed at the Web-link:
Disclosures with respect to the remuneration of Directors, KMPs and employees as
required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in
Annexure IV to this Report.
The year under review witnessed a very positive Industrial Relations Scenario across
all manufacturing locations for the Automotive and Farm Equipment Sectors.
Your Company's focus continues towards propagating proactive and employee centric
practices. The Transformational Work Culture initiative, which aims to create an engaged
workforce with an innovative, productive and competitive shop-floor ecosystem, continues
to grow in strength. The Transformational Work Culture Committee (TWCC) continually
engages with long-term strategic initiatives which range from anticipated Labour Law
reforms to Swachh Bharat Abhiyaan'. Some examples of the programs put in place
include Rise for Associates', Industrial Relations Skills for Frontline Officers,
Cultural Diagnostics Projects, Transformational work culture Projects, e-Compliance,
e-Quizz for associates, e-portal for reward and recognition of associates, e-safety module
and Code of Conduct for Associates. Some of the programs are run in collaboration with
Mahindra Leadership University (MLU).
In order to develop skills and foster togetherness at the workplace, your Company
rolled out multiple training and engagement programs covering a wide range of topics, viz.
positive attitude, stress management, creativity, team effectiveness, safety and
environment, quality tools, TPM, skill building programs, customer focus, awareness on
Promise 2019, Code of Conduct and a Union Leadership Development Program.
The Mahindra Skill Excellence initiative is a holistic approach to enhance the skill
and capabilities of shop floor associates, and has received good participation across
manufacturing facilities. As a result of this effort, an associate from your Company
represented India at the Worlds Skill Competition in Abu Dhabi in August, 2017 and the
Beijing Arc Cup Competition' for third year in a row.
In an endeavor to generate ideas towards improving quality, reducing cost, ensuring
safety and improving productivity, your Company's shop floor associates generated on an
average 20 ideas per person.
Significant emphasis was also laid towards raising awareness on health and wellness of
employees through annual medical check-ups, health awareness activities, and diet food has
become a way of life over past three years. Your Company maintains an Employee
Health Index' at an individual level and this has been a useful tool in identifying
employees who require focused counselling and monitoring. Proactive and employee-centric
shop floor practices, a focus on transparent communication of business goals, an effective
concern resolution mechanism, and a firm belief that employees are the most valuable
assets of the Company, are the cornerstone of your Company's employee relations approach.
An open door policy' with constant dialogue to create win-win situations, have
helped your Company build trust and harmony. The Industrial Relations scenario continued
to be largely positive across all Manufacturing locations. Bonus settlements were amicably
agreed upon at all locations. The sustained efforts towards building a transformational
work culture resulted in zero production loss in the Financial Year 2017-18 and helped
create a collaborative, healthy and productive work environment.
Safety, Occupational Health and Environment
During the year under review, your Company revised its Safety, Occupational Health
& Environmental (SOH&E) Policy. The leadership's commitment towards SOH&E, is
demonstrated through inclusion of compliance as well as voluntary commitments in the
revised policy. SOH&E targets have been set as per the revised policy. Implementation
of various initiatives under the policy and achievement of set targets were assessed
through audits (both internal and external) and management reviews. At each Plant
location, annual events were organised and commemorated like National Safety Day/Month,
World Environment Day, Road Safety Week and Fire Service Week. Training programs were
conducted for all stakeholders as per the scheduled training calendar through various
physical and e-learning modules. In the year under review, your Company completed second
batch of Accelerated Learning Program (ALP) on safety, to encourage innovations and best
practices related to SOH&E. To strengthen the safety culture, Behaviour Based Safety
(BBS) - Level 2 has been introduced at all plants. Your Company carried out statutory
safety audits including electrical safety audits of all facilities, as per the amended
legal requirements. For the year under review, your Company achieved substantial reduction
in the fire load at all the manufacturing plants. Your Company continued its commitment to
improve the wellbeing of employees and contract associates through various activities
under project Parivartan like organising physical fitness activities including Walkathon,
Yoga, Zumba, medical checkups, health consultation and counselling. Further, all locations
observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day.
Way2Wellness sessions were conducted covering topics like Healthy Heart and Diabetic feet.
In line with the Go Green' philosophy, your Company is continuously adopting new
techniques to eliminate and minimise the environmental impact. Various projects have been
implemented by your Company in air, water and waste water management and solid waste
management. These initiatives are also extended to the supplier community of your Company.
Your Company has adopted Global Reporting Initiative (GRI) - G4 Guidelines, and has
undertaken projects aimed at climate change mitigation, sustainable source use and
protection of bio-diversity. Some examples of successful initiatives are LED lighting
project, Energy efficiency Motors, Solar power installation and certified green building
projects with platinum and gold rated facilities. In addition to above, World Ozone Day,
World Environment Day, No Print Day, World Earth Day, World Water Day and Energy
Conservation Week and Water Conservation Week are also observed on an annual basis.
All Plants of your Company have been recertified under standard ISO 14001: 2015 and
OHSAS 18001: 2007. Further, all plants are in the process of implementing, integrated
management system along with adopting the revised environmental standard ISO 14001: 2015.
In March, 2018, all seven plants of Automotive Sector were awarded TPM excellence
award, by Japanese Institute of Plant Maintenance (JIPM). In April, 2018, five Plants of
your Company also received certification for "Zero Waste to Landfill" from
The Company has revised its targets under SOH&E policy and these targets are
reviewed periodically by senior management. The focused initiatives and reviews have
helped to improve SOH&E performance of your Company in the period 2017-18.
K. BOARD & COMMITTEES
As mentioned in the previous Annual Report, Mr. Deepak S. Parekh ceased to hold office
as an Independent Director of the Company from 8th August, 2017, upon
completion of his tenure as approved by the Shareholders at the 68th Annual
General Meeting. Further, Mr. T. N. Manoharan was appointed at the 71st Annual
General Meeting held on 4th August, 2017 as an Independent and Non-Executive
Director of the Company for a period of 5 consecutive years commencing from 11th
November, 2016 to 10th November, 2021.
Mr. Anand Mahindra retires by rotation and, being eligible, offers himself for
re-appointment at the 72nd Annual General Meeting (AGM) of the Company
scheduled to be held on 7th August, 2018.
The Company has received an intimation from Life Insurance Corporation of India
informing that Mr. S. B. Mainak has resigned from the Board of the Company. Accordingly,
Mr. S. B. Mainak ceased to be a Director of the Company with effect from 11th
The Board places on record its sincere appreciation of the valuable services rendered
by Mr. S. B. Mainak during his tenure as a Director of the Company.
The Governance, Nomination and Remuneration Committee, on the basis of performance
evaluation of Independent Directors and taking into account the external business
environment, the business knowledge, acumen, experience and the substantial contribution
made by Mr. M. M. Murugappan and Mr. Nadir B. Godrej during their tenure, has recommended
to the Board that continued association of Mr. M. M. Murugappan and Mr. Nadir B.
Godrej as Independent Directors of the Company would be beneficial to the Company. Based
on the above and the performance evaluation of Independent Directors, the Board recommends
re-appointment of Mr. M. M. Murugappan and
Mr. Nadir B. Godrej, as Independent Directors of the Company, not liable to retire by
rotation, to hold office for a second term of 2 (two) consecutive years on the Board of
the Company. The Company has received the requisite Notices from a Member in writing
proposing their appointment as Independent Directors.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed both under the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Pursuant to the provisions of the Companies Act, 2013, and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an
annual evaluation of its own performance and that of its Committees as well as performance
of the Directors individually. Feedback was sought by way of a structured questionnaire
covering various aspects of the Board's functioning such as adequacy of the composition of
the Board and its Committees, Board culture, execution and performance of specific duties,
obligations and governance and the evaluation was carried out based on responses received
from the Directors.
A separate exercise was carried out by the Governance, Nomination and Remuneration
Committee of the Board to evaluate the performance of individual Directors. The
performance evaluation of the Non-Independent Directors and the Board as a whole was
carried out by the Independent Directors. The performance evaluation of the Executive
Chairman of the Company was also carried out by the Independent Directors, taking into
account the views of the Managing Director and Non-Executive Directors. The Directors
expressed their satisfaction with the evaluation process. The Independent Directors and
Executive Chairman also carried out performance evaluation of the Managing Director of the
The details of programs for familiarization of the Independent Directors with the
Company, their roles, rights, responsibilities in the Company, nature of the industry in
which the Company operates, business model of the Company, number of programs and number
of hours spent by each Independent Director in terms of the requirements of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 are available on the Company's
website and can be accessed at the following Weblink: http://www.mahindra.com /resources
Your Company has adopted the following Policies which, inter alia, include criteria for
determining qualifications, positive attributes and independence of a Director: (a) Policy
on Appointment of Directors and Senior Management and succession planning for orderly
succession to the Board and the Senior Management; (b) Policy for remuneration of the
Directors, Key Managerial Personnel and other employees.
The Policies mentioned at (a) and (b) above are attached as Annexure V-A and V-B
respectively and form part of this Report.
Directors' Responsibility Statement
Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the
representations received from the Operating Management, and after due enquiry, confirm
that: (a) in the preparation of the annual accounts for the Financial Year ended 31st
March, 2018, the applicable accounting standards have been followed; (b) they had in
consultation with Statutory Auditors, selected accounting policies and applied them
consistently, and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31st
March, 2018 and of the profit of the Company for the year ended on that date; (c) they
have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets
of the Company and for preventing and detecting fraud and irregularities; (d) they have
prepared the annual accounts on a going concern basis; (e) they have laid down adequate
Internal Financial Controls to be followed by the Company and such Internal Financial
Controls were operating effectively during the Financial Year ended 31st March,
2018; (f) they had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively throughout
the Financial Year ended 31st March, 2018.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year 1st April, 2017 to 31st March, 2018, eight Board
Meetings were held on: 30th May, 2017, 13th June, 2017, 4th
August, 2017, 9th October, 2017, 10th November, 2017, 13th
December, 2017, 9th February, 2018 and 28th March, 2018. The 71st
Annual General Meeting (AGM) of the Company was held on 4th August, 2017.
Meetings of Independent Directors
The Independent Directors of your Company meet before the Board Meetings without the
presence of the Executive Chairman or the Managing Director or other Non-Independent
Director or Chief Financial Officer or any other Management Personnel. These Meetings are
conducted in an informal and flexible manner to enable the Independent Directors to
discuss matters pertaining to, inter alia, review of performance of Non-Independent
Directors and the Board as a whole, review the performance of the Executive Chairman of
the Company (taking into account the views of the Executive and Non-Executive Directors),
review the performance of the Company, assess the quality, quantity and timeliness of flow
of information between the Company Management and the Board that is necessary for the
Board to effectively and reasonably perform their duties.
Five Meetings of Independent Directors were held during the year and these meetings
were well attended.
The Board at its Meeting held on 4th August, 2017 re-constituted the Audit
Committee and appointed Mr. T. N. Manoharan as the Chairman with effect from 8th
August, 2017. The Committee comprises of four Directors viz. Mr. T. N. Manoharan (Chairman
of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan and Mr. R. K. Kulkarni. All
the Members of the Committee are Independent Directors and possess strong accounting and
financial management knowledge. The Company Secretary of the Company is the Secretary of
All the recommendations of the Audit Committee were accepted by the Board.
Your Company has a rich legacy of ethical governance practices many of which were
implemented by the Company, even before they were mandated by law. Your Company is
committed to transparency in all its dealings and places high emphasis on business ethics.
A Report on Corporate Governance along with a Certificate from the Statutory Auditors of
the Company regarding compliance with the conditions of Corporate Governance as stipulated
under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forms part of the Annual Report.
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed
thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 is implemented through the Company's Whistle Blower Policy to enable the Directors,
employees and all stakeholders of the Company to report genuine concerns, to provide for
adequate safeguards against victimisation of persons who use such mechanism and make
provision for direct access to the Chairman of the Audit Committee.
Whistle Blower Policy of your Company is available on the Company's website and can be
accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY18/ Annual
Reports/Links-AnnualReport.zip Further details are available in the Report on Corporate
Governance that forms part of this Annual Report.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints
received regarding sexual harassment. All employees (permanent, contractual, temporary,
trainees) are covered under this Policy. The Policy is gender neutral. During the year
under review, 1 complaint with allegations of sexual harassment was filed, which was
disposed-off as per the provisions of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and as of 31st March,
2018, no complaint was pending. One complaint pending as on 31st March, 2017,
was also disposed-off during the year under review.
Business Responsibility Report
The Business Responsibility Report' (BRR) of your Company for the year 2017-18
forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
Your Company strongly believes that sustainable and inclusive growth is possible by
using the levers of environmental and social responsibility while setting aspirational
targets and improving economic performance to ensure business continuity and rapid growth.
Your Company is committed to leverage Alternative Thinking' to build competitive
advantage in achieving high shareholder returns through customer centricity, innovation,
good governance and inclusive human development while being sensitive to the environment.
Your Company has a well-defined risk management framework in place. The risk management
framework works at various levels across the enterprise. These levels form the strategic
defence cover of the Company's risk management. The Company has a robust organisational
structure for managing and reporting on risks.
Your Company has constituted a Risk Management Committee of the Board which is
authorised to monitor and review risk management plan and risk certificate. The Committee
is also empowered, inter alia, to review and recommend to the Board the modifications to
the Risk Management Policy. Further, the Board has constituted a Corporate Risk Council
comprising the Senior Executives of the Company. The terms of reference of the Council
comprises review of risks and Risk Management Policy on periodic intervals.
Your Company has developed and implemented a Risk Management Policy which is approved
by the Board. The Risk Management Policy, inter alia, includes identification therein of
elements of risk, including those which in the opinion of the Board may threaten the
existence of the Company. Risk management process has been established across the Company
and is designed to identify, assess and frame a response to threats that affect the
achievement of its objectives. Further, it is embedded across all the major functions and
revolves around the goals and objectives of the organisation.
M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
Corporate Social Responsibility (CSR)
Your Company's Corporate Social Responsibility efforts continue to be directed towards
supporting the constituencies of girls, youth and farmers by innovatively supporting them
through programs in the domains of education, health and environment, while harnessing the
power of technology. It is only through these sustained and continued efforts that your
Company can build and consolidate its CSR initiatives which contribute to nation building.
During the last financial year, your Company has been making an impact through its ongoing
CSR programs, some of the notable ones include Project Nanhi Kali, which supports
the education of underprivileged girls, Mahindra Pride Schools and Mahindra Pride
Classrooms, which provide livelihood training to youth from socially and economically
disadvantaged communities, and a variety of other scholarship programs, which range from
providing opportunities to youth from low income group families to undergo diploma courses
at vocational education institutes, to allowing meritorious students to pursue their post
graduate studies at reputed universities overseas, to allowing meritorious and deserving
students to study at the Mahindra United World College in Pune. In the area of public
health, your Company sponsored Lifeline Express, through which medical care and treatment
was provided to communities who do not have access to any medical facilities. Further,
your Company supported critical patients suffering from cancer and other life threatening
illnesses and also lent support for setting up of the Head and Neck Cancer Institute.
Your Company also contributed to the environment by adding green cover through planting
of over 1.5 million trees this year through Project Hariyali. Your Company continues to
support small and marginal farmers by training them in effective farming practices
including soil health, crop planning, creating model farms with bio-dynamic farming
practices, and increasing the water table with a view to increasing crop productivity.
These initiatives are implemented through the Wardha Farmer Family Project, Krishi Mitra
Project and Integrated Watershed Development Project. Your Company also partnered with the
Maharashtra State Government to support the Village Social Transformation Mission of the
Government. Your Company is working to create a Zero Fatality Corridor' to ensure
zero' deaths due to accidents on Mumbai Pune Expressway. In addition to the above
CSR initiatives, your Company has a vibrant ESOPs (Employee Social Options) platform
through which the employees are provided opportunities to give back to the community.
During the last financial year, your Company was awarded the prestigious
Corporate Citizen of the Year 2017' by Economic Times as well as the Socially
Aware Corporate of the Year' at Business Standard Awards 2018, both being a validation of
the Company's sustained efforts to Rise for Good'.
The Corporate Social Responsibility Committee had formulated and recommended to the
Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently
adopted by it and is being implemented by the Company. The CSR Policy including a brief
overview of the projects or programs undertaken can be accessed at the Company's website
through the Web-link: http://www.mahindra.com/resources/investor-reports/FY18/ Annual
The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G.
Mahindra, Mr. R. K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The
Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.
During the year under review, your Company spent Rs. 81.97 crores on CSR activities.
The amount equal to 2% of the average net profit for the past three financial years
required to be spent on CSR activities was Rs. 81.27 crores. The detailed Annual Report on
the CSR activities undertaken by your Company in Financial Year 2018, is annexed herewith
marked as Annexure VI.
During the year under review, the 10th Non-Financial Report was released for
the year 2016-17. This year's Report was the first Integrated Report' conforming to
reporting frameworks viz. International Integrated Reporting Council (IIRC) and Global
Reporting Guideline - GRI G4 Core option'. The report was externally assured by
Your Company continued the focus on the Environmental, Social and Governance (ESG)
parameters, in the year under review by developing Mahindra Sustainability Framework to
ensure common language for sustainability across the Group. This framework defines
sustainability as building enduring businesses by rejuvenating the environment and
enabling stakeholders to rise. Under the three pillars People, Planet and Profit of
Sustainability; various actions have been identified for implementation across the Group.
Many of these actions are already underway as demonstrated by the Igatpuri Plant by
getting certified as Water Positive' and being the 1st Plant in India to
be certified by Intertek as Zero Waste to Landfill'.
The Company uses 63% less energy to produce a vehicle than what was done eight years
ago. Mahindra Towers at Worli and Kandivali are Indian Green Building Council (IGBC)
Platinum Certified existing buildings. The Mahindra IT Centre at Kandivali is USGBC LEED
gold certified green building. Mr. Anand G. Mahindra, Executive Chairman of your Company
represented the Corporate World Economic Forum at Davos and issued a Call to Action'
to all industries and businesses to adopt Science Based Targets to restrict average global
temperature rise to 2 degree Celsius in alignment of Paris Climate Change Agreement. Mr.
Anand Mahindra has been invited by Mr. Edmund G. Brown, Governor of California to be the
Co-Chair at the Global Climate Action Summit to be held in September, 2018 in San
The Sustainability performance for your Company for the Financial Year 2017-18 will be
ready for release shortly.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy, technology absorption, foreign
exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII
and forms part of this Report.
Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2
The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of
the Board of Directors' and General Meetings', respectively, have been duly complied
by your Company.
Extract of Annual Return
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with
Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the
Annual Return as on 31st March, 2018 in Form No. MGT-9 is attached as
Annexure VIII and forms part of this Report.
The Executive Chairman of the Company did not receive any remuneration or commission
from any of the subsidiary of your Company. The Managing Director of the Company did not
receive any remuneration or commission from any of the subsidiary of your Company.
However, the Managing Director has exercised ESOPs of a subsidiary company during the
year, which were granted in the earlier year(s).
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions/ events on these items during the year under
review except as !WARDR stated hereunder:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under
any Scheme save and except ESOS referred to in this Report.
3. Significant or material orders passed by the Regulators or Courts or Tribunals which
impact the going concern status and the Company's operation in future.
4. Voting rights which are not directly exercised by the employees in respect of shares
for the subscription/ purchase of which loan was given by the Company (as there is no
scheme pursuant to which such persons can beneficially hold shares as envisaged under
section 67(3) (c) of the Companies Act, 2013).
||For and on behalf of the Board
||ANAND G. MAHINDRA
|Mumbai, 29th May, 2018