The Directors present their Report together with the audited financial
statements of your Company for the year ended 31st March, 2015.
A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in crores)
Gross Income 41,982 43,838
Less: Excise Duty on Sales 2,188 2,612
Net Income 39,794 41,226
Profit before Depreciation, Finance
Costs, Exceptional items and Taxation 5,022 5,439
Less: Depreciation/Amortisation 975 863
Profit before Finance Costs,
Exceptional items and Taxation 4,047 4,576
Less: Finance Costs 214 259
Profit before Exceptional items
and Taxation 3,833 4,317
Add: Exceptional items 336 52
Profit before Taxation 4,169 4,369
Less: Provision for Tax - Current Tax
(including MAT credit entitlement) 743 350
Less: Provision for Tax - Deferred
Tax (Net) 105 261
Profit for the year 3,321 3,758
Balance of profit for earlier years 12,325 9,952
Less: Transfer to Debenture
Redemption Reserve 17 17
Profits available for appropriation 15,629 13,693
Add: Reversal of income tax on
dividend paid for 2013-14 3
Less: Transfer to General Reserve - 400
Proposed Dividends 745 862
Income-tax on Proposed Dividend 102 104
Depreciation as per transitional
provision specified in Schedule II of
the Companies Act, 2013 -
[Net of Tax of Rs. 18.24 crores] 35
Dividend for 2012-13 paid on
shares issued in June, 2013 2
Income-tax on Dividend Paid *
Balance carried forward 14,750 12,325
* denotes amounts less than Rs. 50 lakhs
Stabilisation and recovery are the two words that best characterise
India''s economic performance in the Financial Year 2014-15. Supported
by benign prices across the commodity complex - food, metals and crude
oil, the country''s macros witnessed a sharp and reassuring
consolidation. The centre''s fiscal deficit dropped to 4.1% from 4.4% a
year ago and is set to consolidate further in the current Financial
Year. The country''s balance of payments registered a healthy surplus,
while the current account deficit came in below 2% of GDP for the
second year in succession. Furthermore, consumer price inflation is
currently trending around the 5% mark, a sharp drop from the entrenched
double digit price acceleration experienced during the last couple of
years and considerably below the 8% target that the RBI had set for
itself a year ago. The latter''s monetary stance has, consequently,
eased considerably and may ease further in the coming months.
Economic activity, at the same time, witnessed a steady, albeit slow,
recovery through the year. While the regulatory and procedural reforms
undertaken by the new Government since taking office in June last year
did help improve the business climate prevailing in the country, weak
demand continued to constrain private sector activity for the second
year in succession. With global growth across developed and emerging
markets remaining below par in 2014, external demand remained tepid and
uninspiring through the year. At the same time, a poor monsoon season
coupled with benign food prices severely constrained rural incomes and
domestic demand. The one bright spot was the turnaround in investment
plans and expenditures signalled by the sharp pick up in capital goods
production and new project announcements in the second half of 2014-15,
which portends well for future growth.
However, even amidst this scenario, your Company demonstrated
resilience to economic cycles with a decline of only 3.47% in net
income at Rs. 39,794 crores in the year under review as against Rs.
41,226 crores in the previous year.
The Profit for the year before Depreciation, Finance Costs, Exceptional
items and Taxation recorded a decrease of 7.67% at Rs. 5,022 crores as
against Rs. 5,439 crores in the previous year. Similarly, Profit after
tax declined by 11.62% at Rs. 3,321 crores as against Rs. 3,758 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 and process efficiencies.
No material changes and commitments have occurred after the closure of
the Financial Year 2014-15 till the date of this Report, which would
affect the financial position of your Company.
Your Company''s Automotive Division recorded total sales of 3,96,534
vehicles and 59,404 three-wheelers as compared to 4,34,505 vehicles and
64,510 three-wheelers in the previous year registering a decline of
8.7% in vehicle sales and a decline of 7.9% in three-wheeler sales.
On the domestic sales front, your Company sold 2,23,968 Passenger
Vehicles [including 2,06,837 Utility Vehicles (UVs), 13,947 Multi
Purpose Vehicles (MPVs) and 3,184 Cars] which is a decline of 11.9%
over the previous year''s volumes of 2,54,344 Passenger Vehicles
[including 2,19,421 UVs, 25,189 MPVs and 9,734 Cars]. In the commercial
vehicle segment, your Company sold 1,45,010 vehicles [including 15,255
vehicles < 2T GVW and 1,29,755 vehicles between 2-3.5T GVW] registering
a decline of 4.8% over the previous year''s volume of 1,52,398
commercial vehicles, [including 29,223 vehicles < 2T GVW and 1,23,175
vehicles between 2-3.5T GVW]. In the three-wheeler segment, your
Company sold 56,764 three-wheelers registering a decline of 9.3% over
the previous year''s volume of 62,614 three-wheelers.
For the year under review, the Passenger Vehicle (PV) industry has
shown signs of revival, but this has been patchy. The Car industry
growth is largely driven by new launches. Your Company''s volume decline
in the UV segment is a reflection of the UV market shift towards
compact UVs attracting lower excise rates. The < 2T Light Commercial
Vehicle (LCV) industry continues to shrink and the 2 to 3.5T LCV
industry (Pik- Ups) suffered due to slowdown in Agri incomes and
Your Company''s UV sales volume declined by 5.7%, but your Company
continued to maintain its leadership position in the domestic UV market
by posting a market share of 37.4%. During this year, Bolero sales
once again crossed the milestone of 1 lakh sales in a year. This is the
fourth consecutive year that Bolero has achieved this milestone. Also,
Bolero retained the title of India''s largest selling Sports Utility
Vehicle (SUV) for the 9th consecutive year. It is also the 5th highest
selling passenger vehicle in India. In September, 2014, the Company
launched the New Generation Scorpio. The New Generation Scorpio is
built on an all new platform and comes with contemporary styling and
advanced technology features. New Generation Scorpio is all set to take
the Scorpio brand to new heights. The Scorpio posted record sales
since launch and strengthened its iconic status with sales of over
50,000 units for the fourth successive year. The XUV500 continued to be
the customer''s choice in the premium UV segment with sales of over
34,000 units in the year.
In the Pik-Up segment of commercial vehicles (LCV 2 to 3.5T), your
Company strengthened its leadership position with a market share of
73.3% (a gain of 9.5% points).
Your Company recorded total sales of 8,912 commercial vehicles
[including 5,413 LCVs in the LCV > 3.5T segment and 3,499 HCVs (Heavy
Commercial Vehicles)] which is a growth of 9.2% over the previous
year''s volumes of 8,161 commercial vehicles [including 5,876 LCVs in
the LCV > 3.5T segment and 2,285 HCVs].
In the Overseas market, your Company''s volume grew 1.8% over the
previous year. While the markets of Sri Lanka, Nepal, Bangladesh and
Bhutan witnessed good growth, there was a decline in Chile and South
Africa. During the year under review, your Company sold 27,556 vehicles
and 2,640 three-wheelers in the overseas market as compared to 27,763
vehicles [including 452 vehicles sourced from the erstwhile Trucks and
Bus Division of Mahindra Trucks and Buses Limited which subsequently
got demerged into the Company] and 1,896 three-wheelers in the previous
Spare parts sales for the year stood at Rs. 1,609.90 crores (including
exports of Rs. 104.04 crores) as compared to Rs. 1,427.81 crores
(including exports of Rs. 92.98 crores) in the previous year,
registering a growth of 12.8%.
In the Financial Year 2014-15, the Indian tractor industry witnessed a
steep decline of 13.1%. This was on account of poor monsoon followed by
unseasonal rains. The domestic market recorded sales of 5,50,963
tractors as compared to 6,33,656 tractors in the previous year.
In the face of this challenging industry situation, your Company''s Farm
Division (including Swaraj Division) recorded sales of 2,34,766
tractors as against 2,68,487 tractors sold in the previous year,
registering a decline of 12.6%.
Your Company''s sales in the domestic market stood at 2,21,020 tractors
as compared to 2,58,339 tractors in the previous year, registering a
decline of 14.4%. However, your Company continues to be the market
leader with a 40% market share. With a vision to offer class leading
tractors to the Indian farmer, your Company launched the
technologically advanced and stylishly designed Arjun Novo. Arjun Novo
is the first tractor model to roll out of the all new high Horse Power
(HP) platform, creating new benchmarks in performance, technology,
comfort and ergonomics. Arjun Novo boasts of a wide array of
world-class and category first features.
For the year under review, your Company exported 13,746 tractors
registering a growth of 35.5% over the previous year. This is the
highest ever tractor exports by the Company.
Beyond tractors, your Company has presence in crop care solutions and
distribution of seeds. The focus of this business is to provide quality
inputs and help improve farm productivity. In the Financial Year
2014-15, this business saw a good growth of 49.6% in terms of revenue.
In the power generation space, under the Mahindra Powerol Brand, your
Company continues to be amongst the leaders in the industry. Your
Company earned a revenue of Rs. 834.5 crores in the current Financial
Year as against Rs. 775.5 crores in the previous year, registering a
growth of 7.6%. Along with the revenue growth, your Company has
improved its presence in the retail segment and made good progress in
the ''Energy Management Solutions'' space.
Spare parts sales for the year stood at Rs. 549.43 crores (including
exports of Rs. 48.84 crores) as compared to Rs. 521.71 crores
(including exports of Rs. 39.91 crores) in the previous year,
registering a growth of 5.3%.
Current Year''s review
During the period 1st April, 2015 to 28th May, 2015, 58,905 vehicles
were despatched as against 59,243 vehicles during the corresponding
period of the previous year. During the same period, 37,519 tractors
were despatched as against 43,826 tractors despatched during the
corresponding period in the previous year.
Looking ahead, your Company expects that the economic recovery,
currently underway, will gather further strength through 2015-16, led
by a pick up in mining and infrastructural activity. The global
economy, while rife with risks, is forecast to grow at a faster pace in
2015-16. Exports, consequently, are expected to pick up pace in this
Financial Year. While rural incomes are difficult to forecast, the El
Nino warning currently in place, suggests that rural demand may remain
below par this year as well. However, multiplier effects flowing from
Government and, to a smaller extent, private sector initiatives in the
infrastructure space - roads, mining, power, railways, urbanisation and
smart cities - including projects already under implementation, will
help sustain demand through the year.
The Financial Year 2014-15 witnessed divergent economic performance and
monetary policies around the world. The United States economy saw
continued improvement with job creation, the US Fed ended its
quantitative easing (QE) program in October, 2014 and is the only
economy among G-20 countries expected to go into an interest rate hike
cycle. On the other hand, stagnant economic activity and falling
commodity prices (especially crude) prompted central banks in Europe
and Japan to embark on QE programs. Emerging markets witnessed a fall
in growth rates, led by a slowdown in China, a steep contraction in
Russia and a recession in Brazil. A large number of central banks have
cut rates in the fourth quarter of the Financial Year 2014-15 as they
fight the threat of deflation with the collapse in crude and other
commodity prices. The latest World Economic Outlook by IMF projects the
global growth to remain moderate in 2015. The outlook for advanced
economies is improving, while growth in emerging markets and developing
economies is projected to be lower, primarily reflecting weaker
prospects for some large emerging market economies and oil-exporting
countries. Financial Year 2014-15 witnessed unprecedented strength in
the US Dollar against most currencies. Countries over-reliant on
commodity exports saw their currencies coming under pressure. Indian
Rupee remained in a relatively narrow band as the new Government''s
commitment towards fiscal prudence and progressive economic policies,
led to surge of foreign flows into the country (both FDI and FII). The
Reserve Bank of India (RBI) steadily intervened in the forex market to
augment its forex reserves.
On the interest rate front, RBI, stayed on its path of inflation
targeting. With the CPI inflation target of 8% by March, 2015
comfortably achieved (Inflation for March, 2015 at 5.25%) and the
future outlook for coming quarters being benign, RBI reduced repo rate
by cumulative of 50 bps in the last quarter of the Financial Year
2014-15. RBI, in addition, effectively managed the systemic liquidity
conditions by way of its liquidity management framework comprising
fixed and variable rate repo and reverse repo, term repo and marginal
standing facility. Going forward, while RBI is expected to broadly
maintain an accommodative policy stance, future policy actions will be
dependent on evolving data points.
Your Company continued to focus on managing cash efficiently and
ensured that it had adequate liquidity and back up lines of credit.
During the course of the year, your Company repaid Rs. 489 crores of
borrowings from internal accruals. 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 0.19 as at 31st March, 2015.
Even in this challenging environment, in recognition of its prudent
financial policies, your Company for the first time now enjoys the
highest level of rating from all major rating agencies at the same
Your Company has been rated by CRISIL Limited (CRISIL), ICRA Limited
(ICRA) and Credit Analysis & Research Limited (CARE) for its banking
facilities under Basel II norms. All have re-affirmed the highest
credit rating for your Company''s Short Term facilities. During the
year, CRISIL and ICRA have upgraded their ratings on your Company''s
long-term bank facilities and Non-Convertible Debenture (NCD) programme
to ''CRISIL AAA/Stable'' and ''[ICRA] AAA (stable)'' respectively. Further,
CARE has also revised the ratings of the Company''s long-term bank
facilities upwards to ''CARE AAA''. India Ratings and Research (Ind-Ra, a
Fitch Group Company) has assigned Long-Term Issuer Rating of ''IND AAA''
with a Stable outlook to your Company since last year.
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 prudent management.
During the year, your Company earned recognition for Best Financing
Solution from Treasury Today Asia for its issuance of 50 year
Non-Convertible Debentures, which was the first of its kind in the
Indian financial markets.
Investor Relations (IR)
In the continuous search for excellence, your Company continued to
engage with investors in many ways, including one on one meetings,
telepresence meetings, participation in investor conferences,
quarterly earnings calls and annual analyst meet. Your Company
interacted with around 650 Indian and overseas investors and
analysts (excluding quarterly earnings calls and specific
event related calls) during the year. Your Company continuously
strives to improve IR engagement with International and Indian
investors and has set up feedback mechanism to measure IR
effectiveness. Structured con-calls and periodic investor/analyst
interactions with the Chairman & Managing Director, Executive Director
and Business Heads were organised 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 organised its first ever con-call on Environment, Social
and Corporate Governance (ESG) call for analysts and investors. The
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.
Your Directors are pleased to recommend a dividend of Rs. 12 per
Ordinary (Equity) Share of the face value of Rs. 5 each, 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
2014-15, inclusive of tax on distributed profits (after reducing the
tax on distributed profits of Rs. 50.15 crores on the dividends
receivable from the subsidiaries during the current Financial Year)
would absorb a sum of Rs. 846.89 crores [as against Rs. 963.01 crores
comprising the dividend of Rs. 13.50 per Ordinary (Equity) Share and
also a Special Dividend of Re. 0.50 per Ordinary (Equity) Share
aggregating Rs. 14 per Ordinary (Equity) Share of the face value of Rs.
5 each and tax thereon paid for the previous year].
B. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with the Companies Act, 2013 and
applicable Accounting Standards 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
Subsidiary, Joint Venture and Associate Companies
The Group Companies continue to contribute to the overall growth in
revenues of the Company.
Tech Mahindra Limited (TML), the Company''s Flagship Company in the IT
Sector, has reported a consolidated revenue of Rs. 22,621 crores in the
current year as compared to Rs. 18,831 crores in the previous year - an
increase of 20.1%. Its consolidated Profit After Tax is Rs. 2,628
crores as compared to Rs. 3,029 crores in the previous year.
The Group''s finance company Mahindra & Mahindra Financial Services
Limited (Mahindra Finance), reported a total consolidated income of Rs.
6,061 crores during the current year as compared to Rs. 5,301 crores in
the previous year registering a growth of 14.3%. The consolidated
Profit After Tax for the year is Rs. 913 crores as compared to Rs. 954
crores in the previous year.
Mahindra Lifespace Developers Limited (MLDL), your Company''s subsidiary
in the business of real estate and infrastructure registered a
consolidated operating income of Rs. 1,086 crores as compared to Rs.
705 crores in the previous year registering a growth of 54.0%. The
consolidated Profit After Tax for the year is Rs. 266 crores as
compared to Rs. 101 crores in the previous year.
Ssyangyong Motor Company (SYMC), the Korean subsidiary of the Company
has reported consolidated revenues of Rs. 18,316 crores in the current
fiscal year as compared to Rs. 20,303 crores in the previous year. The
consolidated loss for the year is Rs. 721 crores as compared to a
profit of Rs. 88 crores in the previous year. SYMC is working on
improving its profitability, which will strengthen its financial
The consolidated Group Profit for the year after exceptional items, tax
and after deducting minority interests is Rs. 3,137 crores as against
Rs. 4,667 crores earned in the previous year.
During the year under review, Competent Hotels Private Limited,
Mahindra Racing UK Limited, Mahindra UNIVEG Private Limited, MHR
Holdings (Mauritius) Limited,
Covington S.a.r.l., Lords Freight (India) Private Limited, Mriyalguda
Farm Solution Limited, Mahindra Two Wheelers Europe Holdings S.a.r.l.,
Mahindra Industrial Park Chennai Limited, Peugeot Motocycles S.A.S.,
Peugeot Motocycles Italia S.p.A and Peugeot Motocycles Deutschland GmbH
became subsidiaries of your Company.
During the year under review, Jiangxi Mahindra Yueda Tractor Company
Limited, Mahindra Holidays and Resorts USA Inc., Mahindra Conveyor
Systems Private Limited, Bell Tower Resorts Private Limited, Mahindra
Gears Cyprus Limited, Mahindra Engineering Services Limited, Mahindra
Engineering Services (Europe) Limited, Mahindra Engineering GmbH
, Mahindra Technologies Services Inc., Mahindra Ugine Steel Company
Limited, Mahindra Gears International Limited, Mahindra Gears
Global Limited, Metalcastello S.P.A., Crest Geartech Private Limited,
Mahindra Gears & Transmissions Private Limited, Mahindra Investments
(India) Private Limited, Gateway Housing Finance Corporation Limited
and Mahindra Construction Company Limited ceased to be subsidiaries
of your Company.
During the year under review, Mahindra Construction Company Limited
became an associate of your Company and Mriyalguda Farm Solutions
Limited ceased to be an associate of your Company.
Subsequent to the year end, Divine Solren Private Limited has become a
subsidiary of your Company and Mahindra Business & Consulting Services
Private Limited (MBCSPL) ceased to be a subsidiary of your Company
pursuant to the Scheme of Amalgamation of MBCSPL with Mahindra &
Mahindra Financial Services Limited, the appointed date of which was
1st April, 2014.
During the year, Mahindra United Football Club Private Limited has
changed its name to Mahindra Internet Commerce Private Limited,
Mahindra Housing Private Limited has changed its name to Industrial
Cluster Private Limited, Defence Land Systems India Private Limited has
changed its name to Defence Land Systems India Limited, Mahindra
Investments (International) Private Limited has changed its name to
Mahindra HZPC Private Limited.
Subsequent to the year end, Mriyalguda Farm Solution Limited has
changed its name to Mahindra eMarket Limited and Mahindra EPC Services
Private Limited has changed its name to Mahindra Susten Private
A Report on the performance and financial position of each of the
subsidiaries, associates and joint venture companies included in the
Consolidated Financial Statement 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 http://www.mahindra.com/Investors/
C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS
Formation of Joint Venture with Holland based company HZPC for seed
Your Company, through its Agri Business vertical has entered into a
Joint Venture with Holland based HZPC in April, 2014 to offer
the best quality seed potatoes to farmers within and outside
India. Your Company holds 60% in this JV Company which is formed and
made operational in the name and style of Mahindra HZPC Private
Limited. The balance 40% is held by HZPC. HZPC is one of the leading
innovative companies in the world in potato breeding and seed potato
growing. The Joint Venture will benefit from the expertise of both
companies where HZPC with their strong R&D focus will bring in access
to latest technology, new varieties and open up global markets for the
Indian farmers, while your Company will contribute through its strong
farmer connect, wide spread domestic distribution and agronomy
expertise. The new company is in the process of constructing a state of
the art facility to produce high quality tissue culture plants,
mini-tubers and early generation seed potatoes.
Mahindra Shubhlabh Services Limited (MSSL) enters into Joint Venture
with Belgium based Fresh Produce Company
Mahindra Shubhlabh Services Limited (MSSL), an unlisted subsidiary of
your Company entered into a Joint Venture with UNIVEG, a Belgium based
Fresh Produce Company in April, 2014. Your Company holds 60% in this
JV Company which is formed and made operational in the name and style
of Mahindra UNIVEG Private Limited The balance 40% is held by UNIVEG.
The Joint Venture will focus on developing fresh fruit supply chain to
provide high quality fruits that meets the needs of both the domestic
and international markets. UNIVEG will provide technical know-how and
best practices in quality control, post-harvest handling of fresh
produce, ripening process and farm agronomy practices and procedures to
meet international quality standards.
Mahindra Two Wheelers and Peugeot Motocycles strategic partnership
Mahindra Two Wheelers Limited, an unlisted subsidiary of your Company
(MTWL), as part of its strategic initiative, has acquired in January,
2015 a 51% stake in Peugeot Motocycles (Peugeot Scooters), part of the
Euro 54 billion PSA (Peugeot) Group based in France. Peugeot Scooters
is a key urban mobility player in Europe for over one century and is
the oldest motorised two-wheeler manufacturer in the world. It offers
one of the most comprehensive range of scooters and mopeds, from 50cc
to 400cc, including the successful three-wheeled scooter - Metropolis,
in the European market. The partnership would enable both MTWL and
Peugeot Scooters to speed up their international expansion by driving
synergies and leveraging respective strengths.
Strategic Partnership with Mitsubishi Heavy Industries through
acquisition of 33% stake in Mitsubishi Agricultural Machinery
In line with the vision of the Farm Equipment Sector (FES) to become a
global full line player in the agriculture machinery space and to
deliver Farm Tech Prosperity, your Company signed a definitive
agreement on 21st May, 2015, for acquiring a 33% voting stake in
Mitsubishi Agricultural Machinery Co. Ltd. (MAM) through fresh issue
of common shares and Class A (non-voting) shares of MAM.
The transaction is expected to close by October, 2015. The new funding
will be used for investment in new product development and to increase
MAM''s capital base. Mitsubishi Agricultural Machinery is a full range
agri-machinery company producing and selling tractors, combine
harvesters, rice transplanters and other agri-machinery. It had
revenues of approximately JPY 50 billion (USD 408 million) in 2014-15.
This partnership will enhance the product development capability of
FES, strengthen your Company''s position in the North American market
and help your Company to gain entry to new markets.
Mahindra First Choice Wheels Limited (MFCWL) raises million from
San Francisco Based Valiant Capital
Valiant Capital Management, L.P., a San Francisco based investment
advisory firm, has invested USD 15 million (Rs. 94 crores) in Mahindra
First Choice Wheels Limited, an unlisted subsidiary of your Company
(MFCWL), which is also India''s No. 1 multi-brand used vehicle company.
This is the second round of external private equity raised by MFCWL,
with the first one in 2008 from Delhi based Phi Capital, which
continues to be an investor in MFCWL.
The capital raised by MFCWL will be used to fund its growth plans over
the next few years, to accelerate both the expansion of its physical
network as well as adoption of its technology-enabled products and
services used by industry stakeholders. In addition, it plans to use
the funds to broaden its reach for its products and services across
other used-vehicle categories.
Your Company, as part of the secondary offer, has divested 1.5% of its
stake in favour of Valiant. At the conclusion of the transaction, your
Company holds 43.7% as at 31st March, 2015. However, your Company has a
right to appoint majority of Directors and by virtue of section
2(87)(i) of the Companies Act, 2013, MFCWL continues to be a subsidiary
of your Company.
Mahindra Engineering Services Limited (MESL) completes merger with Tech
Mahindra Limited (Tech M)
A merger scheme of Mahindra Engineering Services Limited, an unlisted
subsidiary of your Company (MESL) was announced on 29th November, 2013
and was reported last year. Further to this, the Hon''ble High Court of
Judicature at Bombay on 31st October, 2014 sanctioned the Scheme of
Amalgamation and Arrangement of MESL with Tech Mahindra Limited (Tech
M) and their respective Shareholders. The merger is effective from 8th
December, 2014. The Appointed Date of the Scheme is 1st April, 2013.
Mahindra CIE Merger
On 31st October, 2014, Mahindra CIE Automotive Limited (formerly known
as Mahindra Forgings Limited) received the approval from the Hon''ble
High Court of Judicature at Bombay for the Merger Schemes namely (a)
the Scheme of Amalgamation of Mahindra Hinoday Industries Limited
(MHIL), Mahindra Ugine Steel Company Limited (MUSCO), Mahindra Gears
International Limited (MGIL), Mahindra Investments (India) Private
Limited (MIIPL) and Participaciones Internacionales Autometal Tres,
S.L. (PIA 3) with Mahindra CIE Automotive Limited (MCIE) (the
Integrated Scheme) and (b) the Scheme of Amalgamation of Mahindra
Composites Limited (MCL) with MCIE (Composites Scheme). The Appointed
Date for the Merger Schemes was 1st October, 2013 and Effective Date of
the Merger Schemes was 10th December, 2014.
D. INTERNAL FINANCIAL CONTROLS
Your Company has in place, adequate internal financial controls with
reference to financial statements, commensurate with the size, scale
and complexity of its operations. During the year, such controls were
tested and no reportable material weaknesses in the design or operation
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
F. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions entered during the year were in the
Ordinary Course of Business and on Arm''s Length basis. No Material
Related Party Transactions, i.e. transactions exceeding ten percent of
the annual consolidated turnover as per the last audited financial
statements, were entered during the year by your Company. Accordingly,
the disclosure of Related Party Transactions to be provided under
section 134(3)(h) of the Companies Act, 2013, in Form AOC - 2 is not
The policy on 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. Deloitte Haskins & Sells, Chartered Accountants (ICAI
Registration No. 117364W) were re-appointed as the Statutory Auditors
of the Company to hold office from the conclusion of the 68th Annual
General Meeting (AGM) held on 8th August, 2014 until the conclusion of
the third consecutive AGM of the Company to be held in the year 2017
(subject to ratification of their appointment by the Members at every
AGM held after the AGM held on 8th August, 2014).
As required under the provisions of section 139(1) of the Companies
Act, 2013, the Company has received a written consent from Messrs.
Deloitte Haskins & Sells, Chartered Accountants to their appointment
and a Certificate, to the effect that their appointment, if made, would
be in accordance with the Companies Act, 2013 and the Rules framed
thereunder and that they satisfy the criteria provided in section 141
of the Companies Act, 2013.
The Members are requested to ratify the appointment of the Statutory
Auditors as aforesaid and fix their remuneration.
The Auditors'' Report does not contain any qualification, reservation or
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.
In terms of provisions of sub-section 1 of section 204 of the Companies
Act, 2013, the Company has annexed to this Board Report as Annexure I,
a Secretarial Audit Report given by the Secretarial Auditor.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
The Board had appointed Messrs. N. I. Mehta & Co., Cost Accountants
(Firm Registration Number 000023), as Cost Auditor for conducting the
audit of cost records of the Company for the Financial Year 2014-15.
However, as per the Companies (Cost Records and Audit) Rules, 2014 (the
Rules) issued by Ministry of Corporate Affairs vide Notification dated
30th June, 2014, the requirement for Cost Audit was not applicable to
the Company for the Financial Year 2014-15. Accordingly, Cost Audit was
not conducted for the Financial Year 2014-15.
Further, Ministry of Corporate Affairs vide its Notification dated 31st
December, 2014 amended the Rules, pursuant to which certain products of
the Company now require maintenance of Cost Audit records and conduct
of Cost Audit with effect from 1st April, 2015.
Accordingly, the Board of Directors on the recommendation of the Audit
Committee, appointed Messrs. N. I. Mehta & Co., Cost Accountants, as
the Cost Auditors of the Company for the Financial Year 2015-16 under
section 148 of the Companies Act, 2013. Messrs. N. I. Mehta & 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
The Audit Committee has also received a Certificate from the Cost
Auditors certifying their independence and arm''s 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 Member''s ratification for the remuneration payable to Messrs.
N. I. Mehta & Co., Cost Auditors is included in the Notice convening
the Annual General Meeting.
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. 43, 13A and 13B to the
Standalone Financial Statements.
I. PUBLIC DEPOSITS AND LOANS/ADVANCES
Your Company has discontinued its Fixed Deposits 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
Out of the previously accepted total of 6,610 deposits of Rs. 5,910.80
lakhs from the public and shareholders as at 31st March, 2015, 162
deposits amounting to Rs. 79.43 lakhs, had matured and had not been
claimed as at the end of the Financial Year. Since then, 50 of these
deposits of the value of Rs. 33.12 lakhs have been claimed and 1 of
these deposits of the value of Rs. 0.10 lakhs has been transferred to
the Investor Protection Fund.
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
The particulars of loans/advances and investment in its own shares by
listed companies, their subsidiaries, associates, etc., required to be
disclosed in the Annual Accounts of the Company pursuant to Clause 32
of the Listing Agreement 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 - Chairman & Managing Director
b) Dr. Pawan Goenka - Executive Director - Mahindra & Mahindra & Group
President (Auto and Farm Sector)
c) Mr. V S Parthasarathy - Group CFO, Group CIO & President (Group
Finance and M&A)
d) Mr. Narayan Shankar - Company Secretary
None of the KMP has resigned during the year under review.
Employees'' Stock Option Scheme
During the year under review, the Trustees of Mahindra & Mahindra
Employees'' Stock Option Trust have not granted any Stock Options to
employees under the Mahindra & Mahindra Limited Employees Stock Option
Scheme 2010 and the Mahindra & Mahindra Limited Employees Stock Option
Scheme 2000 (hereinafter collectively referred to as the Schemes).
Details of the shares issued under the Schemes, as also the disclosures
in compliance with SEBI (Share Based Employee Benefits) Regulations,
2014 read with erstwhile SEBI (Employees Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999 are set out in
Annexure II to this Report.
Particulars of Employees and related disclosures
The Company had 404 employees who were in receipt of remuneration of
not less than Rs. 60,00,000 during the year ended 31st March, 2015 or
not less than Rs. 5,00,000 per month during any part of the year.
Disclosures with respect to the remuneration of Directors, KMPs and
employees as required under section 197 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 III to this
Details of employee remuneration as required under provisions of
section 197 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 at: http://www.mahindra.
The year under review has witnessed positive vibes in Industrial
Relations Scenario across all manufacturing locations for the
Automotive and Farm Equipment Sectors.
Employees have always been valuable assets of the Company and focus was
laid in propagating proactive and employee centric practices at the
shop floor. The Company''s endeavour has been to ensure transparent
communication of overall business goals and implement an efficient
concern resolution mechanism.
Your Company has adopted a more holistic approach to enhance skill and
capabilities of employees at the shop floor through Mahindra Skill
Excellence Initiative. For the year under review, there was
participation of over 1,800 employees across all manufacturing
facilities. Your Company had one highly skilled associate, representing
India at the World Skill Competition 2014, held at Leipzig Germany.
Over the years, your Company has inculcated a culture of continuous
improvement through investment in training of employees for resolving
quality concerns, reducing cost, ensuring safety and improving
productivity. Processes have been established wherein employees are
encouraged to generate and implement improvement ideas. For the year
under review, the workmen generated about 20 ideas per person.
Your Company has taken initiatives to measure Employee Engagement and
Satisfaction through an Employee Satisfaction Survey (ESS). Employee
Engagement for all the Company''s Plants shows improvement over the
In January, 2015, your Company signed a wage settlement at the
Automotive Unit of the Zaheerabad Plant.
The proactive and participative approach adopted, has benefitted the
Company not just with zero production loss in the Financial Year, but
has also helped create a peaceful, healthy and collaborative work
Safety, Occupational Health and Environment
Your Company has a well-established Safety, Occupational Health &
Environmental Policy (SH&E Policy) which is in line with the National
Safety, Occupational Health & Environmental Policy. The Company Policy
has been further drilled down, through the Policy for the Automotive
and Farm Equipment Sectors, followed by the respective Plant Policy.
Each Plant has displayed and communicated the SH&E Policy to all
stakeholders. Objectives and Targets derived from the new amended SH&E
Policy are supported by focussed management programs, safety i4, safety
Kaizens and mistake proofing projects.
The Safety & Occupational Health of its employees is embedded as core
organisational values of your Company. The SH&E Policy, inter alia,
covers and ensures safety of public, employees, plant and equipment,
ensures compliance on a monthly basis, imparts training to all its
employees and stakeholders as per training calendar. It also carries
out statutory safety assurance and audits of its facilities by
absorbing all new amended legal requirements, conducts regular internal
and external medical and occupational check-up of its employees and
promotes health-friendly sustainable activities.
Your Company continued with its commitment to improve the wellbeing of
its employees and contract workmen by establishing Health and Wellness
Goals. To achieve the same, your Company organised Occupational Health
Examination Camps, medical check-ups, consultation and counselling
sessions. Way2Wellness training sessions covering topics on
Health were conducted. World Health Day, World Heart Day, World Kidney
Day and World Diabetes Day are being celebrated.
Your Company observed Road Safety Week, Safety Week and Fire Service
Day across locations with active participation from employees and other
stakeholders. World Environment Day, World Earth Day, World Water Day,
Energy Conservation Week and Water Conservation Week are being
celebrated through stakeholder engagement and employee''s involvement.
Your Company''s sustainability roadmap is based on the fundamentals of
Planet, People and Profit. Various projects have been implemented by
your Company by effective implementation of management driven
initiatives in the areas of Air Pollution, Water, Waste Water, Solid
Waste Management and Greenbelt Development with new techniques.
Your Company''s Sustainability Reporting System, provides a framework
for setting and review of targets towards Safety, Health and
All Plants of the Automotive and Farm Equipment Sectors have been
recertified with amended standard for ISO 14001: 2004 & OHSAS 18001:
Your Company''s commitment to environment stems from the Mahindra
Group''s abiding concern for Stakeholder engagement. The Company has
ensured that its operations have a minimal impact on the environment by
implementing a robust Environmental Management System. Further, your
Company has taken initiatives to extend sustainability awareness to its
business associates through ''Green Supply Chain Management''. Support is
also provided by conducting risk management exercise.
Goals on Sustainable development are included in the Balanced Scorecard
for various businesses under the Automotive and Farm Equipment Sectors.
These measures have seen an improvement in performance year on year.
K. BOARD & COMMITTEES
The Board of Directors based on the recommendation of the Governance,
Nomination and Remuneration Committee had appointed Mr. Bharat Doshi as
an Additional Director of the Company with effect from 14th November,
2013. Thereafter at the Annual General Meeting of the Company held on
8th August, 2014 he was appointed as a Director liable to retire by
The Board of Directors based on the recommendation of the Governance,
Nomination and Remuneration Committee had appointed Mr. S. B. Mainak as
an Additional Director of the Company representing Life Insurance
Corporation of India with effect from 13th November, 2013. Thereafter
at the Annual General Meeting of the Company held on 8th August, 2014
he was appointed as a Director liable to retire by rotation.
The Board of Directors had based on the recommendation of the
Governance, Nomination and Remuneration Committee and subject to the
approval of the Members to be obtained at the ensuing Annual General
Meeting of the Company, appointed Dr. Pawan Goenka as an Additional
Director and Executive Director of the Company for a period of 5 years
with effect from 23rd September, 2013 to 22nd September, 2018.
Thereafter at the Annual General Meeting of the Company held on 8th
August, 2014 he was appointed as a Director liable to retire by
rotation and as an Executive Director of the Company.
The Board of Directors at its Meeting held on 30th May, 2014 had
appointed Mr. M. M. Murugappan, Mr. Deepak S. Parekh, Mr. Nadir B.
Godrej, Mr. R. K. Kulkarni, Mr. Anupam Puri, Dr. Vishakha N. Desai and
Mr. Vikram Singh Mehta as Independent Directors, based on the
recommendation of the Governance, Nomination and Remuneration
Committee. The Members of the Company at the Annual General Meeting
held on 8th August, 2014 appointed Mr. R. K. Kulkarni, Mr. Anupam Puri,
Dr. Vishakha N. Desai and Mr. Vikram Singh Mehta as Independent
Directors for a period of 5 consecutive years commencing from 8th
August, 2014, Mr. M. M. Murugappan and Mr. Nadir B. Godrej for a period
of 4 consecutive years commencing from 8th August, 2014 and Mr. Deepak
S. Parekh for a period of 3 consecutive years commencing from 8th
As mentioned in the previous Annual Report, Mr. Narayanan Vaghul and
Mr. A. K. Nanda did not seek re-appointment and accordingly ceased to
be Directors upon expiry of their term at the 68th Annual General
Meeting held on 8th August, 2014.
Mr. Anand G. Mahindra retires by rotation and, being eligible, offers
himself for re-appointment at the 69th Annual General Meeting of the
Company scheduled to be held on 7th August, 2015.
Mr. Bharat Doshi, Non-Executive Director has conveyed his desire to
relinquish his position as a Director of the Company with effect from
the conclusion of the 69th Annual General Meeting scheduled to be held
on 7th August, 2015.
The Board acceded to his request and placed on record its deep
appreciation of the invaluable counsel rendered by Mr. Bharat Doshi to
the Company during his tenure as a Director of the Company.
Quote from Chairman Emeritus
Bharat Doshi joined the Company in 1973. He was elected to the M&M
Board in 1992 and appointed Executive Director thereafter.
Bharat in his capacity as Group CFO laid down uncompromising standards
of value and ethics which led to transparency, trust and confidence. He
created operational techniques, which guided the Organisation in its
efforts to achieve excellence. His unique understanding of human
nature endeared him to many and earned him universal respect.
Bharat truly epitomizes the resilient character of M&M''s culture.
Although he is stepping down from the M&M Board, I am very happy that
he will continue to be associated with the Group in other areas. His
knowledge and experience will continue to be available to the Group.
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
Clause 49 of the Listing Agreement entered with the Stock Exchanges.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, 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 Chairman of the Company
was also carried out by the Independent Directors, taking into account
the views of the Executive Director and Non-Executive Directors. The
Directors expressed their satisfaction with the evaluation process.
The details of programs for familiarisation of the Independent
Directors with the Company, their roles, rights, responsibility in the
Company, nature of the industry in which the Company operates, business
model of the Company and related matters are available on the website
of the Company at the web-link:
In line with the principles of transparency and consistency, 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
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
IV-A and IV-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, 2015, the applicable accounting standards have been
(b) the Directors 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, 2015
and of the profit of the Company for the year ended on that date;
(c) the Directors 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) the Directors have prepared the annual accounts on a going concern
(e) the Directors 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, 2015;
(f) the Directors 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, 2015.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the
During the year 1st April, 2014 to 31st March, 2015, five Board
Meetings were held on the following dates - 30th May, 2014, 8th August,
2014, 31st October, 2014, 13th February, 2015 and 26th March, 2015. The
68th Annual General Meeting (AGM) of the Company was held on 8th
Meetings of Independent Directors
The Independent Directors of the Company meet before the Board Meetings
without the presence of the Chairman & Managing Director or Executive
Director or other Non-Independent Directors 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 Chairman of the Company
(taking into account the views of the Executive and Non-Executive
Directors), 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
This Committee comprises of the following Directors viz. Mr. Deepak S.
Parekh (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M.
Murugappan, Mr. R. K. Kulkarni and Mr. Bharat Doshi. Except for Mr.
Bharat Doshi, all the Members are Independent Directors. All the
Members of the Committee possess strong accounting and financial
management knowledge. The Company Secretary of the Company is the
Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the
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 Clause 49 of the Listing Agreement form
part of this Annual Report.
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules
prescribed thereunder and the Listing Agreement is implemented through
the Company''s Whistle Blower Policy to enable the Directors and
employees 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
Whistle Blower Policy of the Company is available on the Company''s
website at the web-link: http://www.mahindra.
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) Act, 2013
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
The following is a summary of sexual harassment complaints received and
disposed off during the year 2014-15:
(a) Number of complaints of sexual harassment received during the year
(b) Number of complaints disposed off during the year - 3
(c) Number of cases pending for more than 90 days - 0
(d) Number of workshops/awareness programme against sexual harassment
carried out - 10
(e) Nature of action taken by the employer or District Officer - 1
Warning Letter, 2 Respondent Employees Resigned.
Business Responsibility Report
The ''Business Responsibility Report'' (BRR) of your Company for the year
2014-15 forms part of this Annual Report, in compliance with Clause 55
of the Listing Agreement. This disclosure on certain non-financial
parameters is a mandatory requirement for the top 100 listed companies
(based on market capitalisation) on the National Stock Exchange of
India Limited and BSE Limited.
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
The Board has approved the modifications to the Risk Management Policy
which are made with the intention of increasing the spectrum and reach
of the risk management processes across the Company. The Risk
Management Policy, inter alia, includes identification therein of
elements of risk, including those that may threaten the existence of
the Company. Risk management process has been established across the
organisation 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 RELATED MATTERS
Corporate Social Responsibility (CSR)
Since its inception your Company has been a socially responsible
corporate, making investments in the community which go beyond any
mandatory legal and statutory requirements. The redefined ''Core
Purpose'' of the Company is to challenge conventional thinking and
innovatively use all our resources to drive positive change in the
lives of our stakeholders and communities across the world, to enable
them to RISE. In line with the Company''s Core purpose, the CSR vision
is to focus our efforts within the constituencies of girls, youth &
farmers by innovatively supporting them through programs designed in
the domains of education, health and environment, while harnessing the
power of technology. By investing our CSR efforts in these critical
constituencies which contribute to nation building and the economy,
your Company will enable the stakeholders and communities to RISE.
The Corporate Social Responsibility Committee had formulated and
recommended a Corporate Social Responsibility Policy to the Board of
the Company which was subsequently adopted by it and is being
implemented by the Company. The web-link to the CSR Policy is -
A brief overview of projects or programs proposed to be undertaken is
available at the web-link http://www.mahindra. com/How-We-Help
Your Company has constituted a CSR Committee comprising of Dr. Vishakha
N. Desai (Chairperson), Mr. Anand G. Mahindra, Mr. Bharat Doshi, Mr. R.
K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta to monitor the
Major CSR initiatives undertaken by the Company during the Financial
Year 2014-15 were as follows:
a. Project Nanhi Kali: Provision of educational support to
underprivileged girls from poor urban, remote rural and conflict
afflicted communities across India.
b. Mahindra Pride School: Livelihood training program for youth from
socially and economically disadvantaged groups.
c. Lifeline Express: A Mobile hospital on a train, providing medical
interventions and surgeries in remote rural areas.
d. Mahindra Hariyali: Afforestation initiative to improve green cover
and protect bio-diversity in the country and also contribute to the
livelihood of farmers.
e. Swachh Bharat Swachh Vidyalaya: Construction of toilets primarily
for girls in Government Schools.
f. Integrated Watershed Development Project: A public private
partnership with the Government of Madhya Pradesh for conservation of
soil and water.
g. Mahindra Saarthi Abhiyaan: Scholarships to daughters of truck
drivers which allow them to pursue higher education thus reducing drop
outs amongst girls.
h. Vijay Vidharba: Improving livelihood opportunities and prosperity
of farmers by training them in effective farming practices including
soil health, crop planning, creating model farms with bio-dynamic
farming practices, etc., thereby increasing crop productivity.
i. Biogas Project: Setting up a biogas plant to covert food waste and
other waste into energy.
j. BAJA: Training under-graduate engineering students in automotive
engineering enabling them to get jobs in the automobile industry.
k. Employee Social Options (Esops): The Company''s Esops program
supports employees in creating volunteering projects based on the needs
of underprivileged communities in and around their places of work.
During the year under review, your Company spent Rs. 83.24 crores on
CSR activities. The amount equal to 2% of the average net profit for
the past three Financial Years is Rs. 83.03 crores. The detailed Annual
Report on CSR activities is annexed herewith and marked as Annexure V.
During the year under review, the 7th Sustainability Report for the
year 2013-14 was released and like earlier six years this Report was
also externally assured by KPMG with GRI checked application level A .
Your Company continued its ''Sustainability'' journey retaining the focus
on Environmental, Social and Governance (ESG) parameters, through
successful implementation of several projects like water management and
energy conservation, while consolidating the initiatives of the
Over the years, after consistently evolving on sustainability
performance, it was time for your Company to significantly raise the
bar and widen the sustainability horizon. During the year under review,
your Company looked deeper into existing as well as emerging
materiality issues and aligned the sustainability actions with newer
expectations of external stakeholders to crystallise business specific
Sustainability Roadmap for a period of 3 years. The issues included in
the roadmaps are Eco-efficiency, Green Supply Chain Management,
Responsible Product Development, Employee Care and Development and
Community Development. To ensure that the roadmaps remain relevant at
all times, an annual review and realignment process has been put in
During the year, your Company achieved the status of being a Water
Positive Company using offsetting methodology. The Micro Irrigation
installations in Gujarat have saved 8.4 million m3 of water against the
6.1 million m3 water consumed by the entire Mahindra Group Companies
put together. This is verified with limited level of assurance by
Bureau Veritas Certification (BVCI) based on references, data,
documentation, records and invoices submitted. This is a step towards
conserving water which is a fast depleting essential resource for
Your Company also believes in actively collaborating with the other
players in the Indian Industry to respond to the Country''s emerging
challenges. Hence, your Company has signed up for the India Business
and Bio-diversity Initiative (IBBI) with CII-ITC CESD.
Complete details of the Sustainability performance for 2014-15 will be
elaborated in the GRI Report which is under preparation and will be
ready for release shortly.
The consistent performance of your Company on the ESG dimensions was
recognised during the year, by way of:
* Getting listed on the Dow Jones Sustainability Index - 2014 under the
''Emerging Market Index'' for the consecutive second year with
improvement in percentile scores.
* Retaining its position in the top 10 in the India 200 Carbon
Disclosure Leadership Index 2014.
* Appearing 3rd in the list of Top 100 companies in India for
Sustainability and CSR presented by Economic Times Corporate Dossier,
in partnership with Futurescape and IIM Udaipur.
* Featuring in Sustainalytics - Channel NewsAsia Sustainability Ranking
- the first of its kind in Asia.
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 furnished in Annexure VI and is
attached to this Report.
During the year under review, your Company allotted 52,00,000 Ordinary
(Equity) Shares of Rs. 5 each to the Trustees of Mahindra & Mahindra
Employees'' Stock Option Trust. Consequently, the issued, subscribed
and paid-up Share Capital of the Company stood at Rs. 310.55 crores as
at 31st March, 2015 comprising of 62,10,92,384 Ordinary (Equity) Shares
of Rs. 5 each fully paid-up.
Extract of Annual Return
Pursuant to sub-section 3(a) of section 134 and sub-section (3) of
section 92 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, 2015 in Form No. MGT 9 is attached
herewith as Annexure VII and forms part of this Report.
The Chairman & Managing Director of the Company did not receive any
remuneration or commission from any of its subsidiaries. The Whole
Time Director of the Company did not receive any commission from any
of its subsidiaries. However, the Whole Time Director has exercised
ESOPs of subsidiaries of the 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:
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
3. Significant or material orders passed by the Regulators or Courts
or Tribunals which impact the going concern status and the Company''s
operations 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
Chairman & Managing Director
Mumbai, 29th May, 2015