The Directors present their Report together with the audited accounts
of your Company for the year ended 31st March, 2014.
(Rs. in crores)
Gross Income 43,838 43,962
Less: Excise Duty on Sales 2,612 2,972
Net Income 41,226 40,990
Profit before Depreciation, Finance
Costs, Exceptional items and Taxation 5,439 5,258
Less: Depreciation/Amortisation 863 711
Profit before Finance Costs,
Exceptional items and Taxation 4,576 4,547
Less: Finance Costs 259 191
Profit before Exceptional items
and Taxation 4,317 4,356
Add: Exceptional items 52 91
Profit before Taxation 4,369 4,447
Less: Provision for Tax - Current Tax
(including MAT credit entitlement) 350 933
Less: Provision for Tax - Deferred
Tax (Net) 261 161
Profit for the year 3,758 3,353
Balance of profit for earlier years 9,952 7,905
Less: Transfer to Debenture
Redemption Reserve 17 15
Profits available for appropriation 13,693 11,243
Reserve 400 400
Proposed Dividends 862 798
Income-tax on Proposed Dividend 104 93
Dividend for 2012-13 paid on
shares issued in June, 2013 2 --
Income-tax on Dividend Paid * --
Balance carried forward 12,325 9,952
* denotes amounts less than Rs. 50 lakhs
India''s macroeconomic situation as it entered Financial Year 2014 was
extremely weak. Growth had dropped to 4.5%, fiscal deficit and
inflation were at uncomfortably high levels and the country''s current
account deficit was at an alarming 4.8% of GDP leaving it extremely
exposed to the global financial turbulence triggered by the US Fed''s
''taper'' announcement, in May, 2013. As fund managers scrambled for safe
havens, portfolio flows to India, given its macro fragility, witnessed
a sharp reversal. The rupee, as a consequence, plunged over 25% against
the US dollar, stoking fears of a self-fulfilling balance of payments
crisis. Swift, defensive actions by the Government and the RBI,
however, helped turn the tide and by the year end the Indian Rupee had
stabilised, the current account deficit had halved, the fiscal deficit
was contained and inflation, while still high, had moved back to single
Domestic economic activity, though, remained weak and uninspiring
through the year. While a robust monsoon season provided strong support
to agricultural output and rural incomes, contra impact on demand
stemming from fiscal contraction, rising interest rates, stalling
infrastructure projects and, an increasingly uncertain business
regulatory environment, weighed heavily on the economy. Manufacturing
activity, as a result, witnessed a contraction in 2013-14, its worst
performance in over 20 years, and overall GDP growth dropped below 5%
for a second successive fiscal year.
In the challenging times that the Indian Auto Industry is currently
passing through, with volumes shrinking, your Company has registered a
marginal growth of 0.57% in the net income at Rs. 41,226 crores in the
year under review as against Rs. 40,990 crores in the previous year on
the back of a strong sales performance by its Farm Equipment Division.
Consequent to this performance, the Profit for the year before
Depreciation, Finance Costs, Exceptional items and Taxation recorded an
increase of 3.44% at Rs. 5,439 crores as against Rs. 5,258 crores in
the previous year. Similarly, Profit after tax clocked an increase of
12.08% at Rs. 3,758 crores as against Rs. 3,353 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 economic scenario.
Your Directors are pleased to recommend a 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, payable to those Shareholders whose
names appear in the Register of Members as on the Book Closure Date.
The Special Dividend is recommended in view of the profit made by the
Company on sale of part of its shareholding in long term investments of
the Company. The equity dividend outgo for the Financial Year 2013-14,
inclusive of tax on distributed profits (after reducing the tax on
distributed profits of Rs. 42.97 crores on the dividends receivable
from the subsidiaries during the current Financial Year) would absorb a
sum of Rs. 965.81 crores [as against Rs. 894.11 crores comprising the
dividend of Rs. 12.50 per Ordinary (Equity) Share and also a Special
Dividend of Re. 0.50 per Ordinary (Equity) Share aggregating Rs. 13.00
per Ordinary (Equity) Share of the face value of Rs. 5 each and tax
thereon paid for the previous year].
Your Company''s Automotive Division recorded total sales of 4,34,505
vehicles and 64,510 three-wheelers as compared to 4,83,734 vehicles and
67,735 three-wheelers in the previous year registering a de-growth of
10.2% in vehicle sales and a de-growth of 4.8% in three-wheeler sales.
On the domestic sales front, your Company sold 2,54,344 Passenger
Vehicles [including 2,19,421 Utility Vehicles (UVs), 25,189 Multi
Purpose Vehicles (MPVs) and 9,734 Cars] which is a de-growth of 18.1%
over the previous year''s volumes of 3,10,706 Passenger Vehicles
[including 2,63,925 UVs, 31,437 MPVs and 15,344 Cars]. In the
commercial vehicle segment, your Company sold 1,52,398 vehicles
[including 29,223 vehicles < 2T
GVW and 1,23,175 vehicles between 2-3.5T GVW] registering a growth of
6.7% over the previous year''s volume of 1,42,797 commercial vehicles
[including 39,911 vehicles < 2T GVW and 1,02,886 vehicles between
2-3.5T GVW]. In the three-wheeler segment, your Company sold 62,614
three-wheelers registering a de-growth of 4.4% over the previous year''s
volume of 65,510 three-wheelers.
The volume de-growth in most market segments is a reflection of the
prolonged slow-down faced by the Indian Automotive Industry. In fact,
the 9.6% de-growth of the Indian Automotive Industry (excluding
two-wheeler) is the worst ever since 1976.
Your Company''s UV sales volume de-grew by 16.9%, but your Company
continued its leadership of the domestic UV market by posting a market
share of 41.7%. During this year, Bolero once again crossed the
milestone of 1 lakh sales in a year. This is the third consecutive
year that Bolero has achieved this milestone. Bolero also retained the
title of India''s largest selling Sports Utility Vehicle (SUV) for the
8th consecutive year. It is also the 5th highest selling passenger
vehicle in India. The Scorpio posted record sales since launch and
strengthened its iconic status with sales of over 50,000 units for the
third successive year. The XUV500 continued to be the customers'' choice
with over 30,000 sales in the year.
In the commercial vehicle segment, your Company strengthened its
product portfolio with two highly successful launches in the Pik-Up
truck segment - The Bolero Maxitruck Plus and the New Bolero Pik-Up.
These successful launches resulted in a volume growth of 19.7% and your
Company''s market share of the Pik-Up segment now stands at 63.9% (a
gain of 9.9%).
Pursuant to the approval of the Scheme of Arrangement between Mahindra
Trucks and Buses Limited (MTBL), a wholly owned subsidiary of the
Company and its Shareholders and Creditors and Mahindra & Mahindra
Limited which has become effective from 30th March, 2014, the erstwhile
Truck and Bus Division of MTBL has been demerged and transferred into
the Company and now forms a Division of the Company.
In the Overseas market, your Company''s volume de-grew 8.6% over the
previous year. This de-growth was a result of the difficult market
conditions in the key markets of Sri Lanka, South Africa and Chile.
During the year under review, your Company sold 27,763 vehicles
[including 452 vehicles sourced from the erstwhile Truck and Bus
Division of MTBL] and 1,896 three-wheelers in the Overseas market as
compared to 30,231 vehicles [including 209 vehicles sourced from the
Truck and Bus Division of MTBL] and 2,225 three-wheelers in the
During the year under review, your Company sold 5,876 Light Commercial
Vehicles (LCVs) and 2,285 Heavy Commercial Vehicles (HCVs)
[comprising of the erstwhile Truck and Bus Division of MTBL] as
compared to 8,925 LCVs and 2,977 HCVs in the previous year of the
erstwhile Truck and Bus Division of MTBL. During the year under
review, the overall Commercial Vehicle Industry (3.5 Tonne to 49 Tonne)
was down by 23.2% and HCV Industry (25 Tonne to 49 Tonne) was down by
24.2% as compared to the previous year.
Spare parts sales for the year stood at Rs. 1,427.81 crores (including
exports of Rs. 92.98 crores) as compared to Rs. 1,190.30 crores
(including exports of Rs. 90.30 crores) in the previous year,
registering a growth of 20%.
Your Company''s Farm Division (including Swaraj Division) recorded sales
of 2,68,487 tractors as against 2,24,844 tractors sold in the previous
year, recording a growth of 19.4%.
In the Financial Year 2013-14, the Indian tractor industry enjoyed good
growth. The domestic market recorded sales of 6,33,656 tractors as
compared to 5,27,384 tractors in the previous year, recording a growth
Your Company performed marginally better than the tractor industry with
domestic sales of 2,58,339 tractors as compared to 2,12,555 tractors in
the previous year recording a growth of 21.5%. Your Company''s domestic
market share now stands at 40.6% as compared to 40.1% in the previous
financial year, thus completing 31 years of leadership in the Indian
tractor industry. Your Company exported 10,148 tractors which is a
decline of 17.4% over the previous year.
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
2013-14, this business saw a good growth of 46% in terms of revenue.
Beyond agriculture, in the power generation space under the Mahindra
Powerol Brand, your Company earned a revenue of Rs. 775.5 crores in the
current Financial Year as against Rs. 936.8 crores in the previous
year. The decline in revenue has mainly been the result of an Industry
slowdown. While retaining the leadership position in the genset market
catering to the telecom space, your Company has improved its presence
in the retail segment and also made its entry into the ''Energy
Management Solutions'' space.
Management Discussion and Analysis Report
A detailed analysis of the Company''s performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
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 alongwith 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 forms part of this Annual Report.
During the year under review, your Company has allotted 19,11,628
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. 308
crores comprising of 61,58,92,384 Ordinary (Equity) Shares of Rs. 5
each fully paid-up.
The Financial Year 2013-14 saw the global economy operating at
differing speeds. While amongst the developed world, the USA showed
signs of recovery leading to the tapering of Quantitative Easing,
Europe witnessed signs of stabilisation. The emerging economies which
had experienced a slowdown in the previous year, encountered new
domestic and international headwinds during the year 2013. While China
embarked on a soft landing programme by curtailing credit led growth,
countries like Brazil, Russia and South Africa faced problems in
commodity led growth apart from political and social issues. The latest
outlook published by IMF anticipates a continued recovery for the
global economy in the Calendar Year 2014, showing upward growth for the
developed world, while emerging economies as a whole are expected to
record a moderate growth, less than the high growth rates they had
witnessed until a couple of years ago.
In the domestic front, tight liquidity conditions prevailed throughout
the year, while interest rates remained high,
mainly to contain inflationary pressures. During the year, to counter
the inflationary pressures, Reserve Bank of India (RBI) increased
repo rate by 50 bps (net). The year also witnessed high volatility in
exchange rates, the impact of which RBI countered by effectively using
the swap window and by interest rate management. By employing a
combination of hikes in short term interest rates and restricting
access to liquidity adjustment facility (LAF), RBI kept liquidity in
the market on a tight leash. However, even in tight liquidity
conditions, good companies with strong governance did not face a dearth
of liquidity and finance was available to them at very competitive
rates. Further, the current outlook on the domestic economy is turning
positive, with drags on growth bottoming out, inflation moderating and
reduction in current account deficit, auguring well for the financial
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. 474 crores of
borrowings from internal accruals. The Company''s Bankers continue to
rate your Company as a prime customer and extend facilities/services at
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 0.24 as at 31st March, 2014. Your Company raised Rs.
500 crores byway of private placement of 9.55%, Listed, Rated,
Unsecured, Senior, Redeemable Non-Convertible Debentures with a 50
years'' maturity, to part finance its various ongoing modernisation and
expansion programmes. The debenture issuance by your Company was the
first of its kind in the Indian debt market, creating a benchmark 50
year debt instrument. The issue was dual rated by CRISIL Limited and
ICRA Limited. CRISIL Limited and ICRA Limited have respectively
assigned AA /Stable and [ICRA]AA (stable) rating to these
debentures indicating high credit quality.
Your Company has been rated by CRISIL Limited, ICRA Limited (ICRA)
and Credit Analysis & Research Limited (CARE) for its banking
facilities under Basel II norms. While they have all re-affirmed the
highest credit rating for your Company''s Short Term facilities, CRISIL
maintained the rating for your Company''s Long Term Banking facilities
at AA /Stable, ICRA maintained the Long Term Rating of [ICRA]AA
(stable) and CARE also maintained the rating CARE AA .
Your Company was also rated by India Ratings and Research (Ind-Ra, a
Fitch Group Company). Citing the resilience shown by the Company over
multiple business cycles over the last 19 years as a key rating driver,
India Ratings & Research has assigned your Company a Long-Term Issuer
Rating of ''IND AAA'' with a Stable Outlook. The recent rating upgrade is
an acknowledgement of the strong credit profile that the Company has
maintained over the years thereby offering it flexibility to finance
its future growth plans. The AAA rating indicates 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
During the year the innovative treasury initiatives taken by the
Company earned recognition from the prestigious Treasury Management
Investor Relations (IR)
In the continuous search for excellence, your Company continued to
engage with investors in many ways, including extensive one on one
meetings, telepresence meetings, participations in investor
conferences, quarterly earnings calls during the year and an annual
analyst meet in May, 2013. Your Company interacted with 520 Indian and
overseas investors and analysts in all (excluding quarterly earnings
calls) during the year. Your Company continuously strove to improve IR
engagement with International and Indian investors and has set up
feedback mechanism to measure IR effectiveness. Structured concalls and
periodic investor/analyst interactions with the Chairman & Managing
Director and Business Heads were organised during the year. Your
Company has introduced an IR App for Investor Relations which now can
be conveniently accessed from hand- held devices. A user friendly
investor relations page on the Company''s corporate website ensures the
benefit of easy access to relevant information for investors.
Acquisitions and other matters
1. Demerger of the Truck and Bus Businesses of Mahindra Trucks and
Mahindra Trucks and Buses Limited (MTBL), a wholly owned subsidiary
of your Company was engaged in the businesses of designing, developing,
marketing and distribution of Light Commercial Vehicles (LCVs) and
Medium and Heavy Commercial Vehicles (M&HCVs) including but not
limited to (a) vehicles such as trucks, buses, tippers and tractors and
(b) license fees and marketing service charges for lubricants and
trading in spare parts and accessories.
MTBL, earlier known as Mahindra Navistar Automotives Limited, was a
Joint Venture between Navistar Inc. and its affiliates (Navistar) and
your Company. Navistar had entirely exited from the Joint Venture in
Consequent to the divestment of Navistar from the Joint Venture, your
Company had assumed full control over the activities of MTBL.
Your Company is already dealing in all segments of automobile industry
e.g. passenger vehicles, commercial vehicles and three-wheelers. M&HCVs
and LCVs would be a perfect fit with the existing product portfolio of
Due to the divestment of Navistar and in order to consolidate, it was
proposed to demerge the Truck and Bus Businesses of MTBL into your
Company. A Scheme of Arrangement has been approved by the Hon''ble High
Court on 7th March, 2014 whereby MTBL would demerge the Truck and Bus
Businesses into your Company. MTBL being a wholly owned subsidiary of
your Company, the Hon''ble High Court dispensed with the requirement of
filing an application by your Company and the consequent processes,
including Shareholders'' Meeting. The demerger is effective from 30th
March, 2014. The appointed date of the Scheme is 1st April, 2013. As
per the Scheme, your Company''s investment cost in MTBL stands reduced
proportionate to the net worth of Truck and Bus Businesses vis-a-vis
total net worth of MTBL.
2. New Investors in Mahindra Two Wheelers Limited
During the Financial Year 2013-14, your Company has sold 4,97,51,640
shares in Mahindra Two Wheelers Limited (MTWL) to Kinetic Engineering
Limited (KEL). As part of its strategy to focus on building its
existing businesses, KEL has sold its entire stake to SAMENA Capital, a
private equity investment group focused on Asia and the Middle East.
Further, during the year, Emerging India Fund, a fund managed by ICICI
Investment Management Company Limited participated in a preferential
equity issuance by MTWL. Post the above two transactions, your Company
now holds 88.46% in MTWL.
3. Buyout of minority stake in Mahindra Europe S.r.l.
As a part of its strategy to expand its automotive operations in the
European market, your Company had appointed Mahindra Europe S.r.l. (ME
Sri) erstwhile Eurasia Motors in Italy, as a distributor of your
Company''s vehicles. In December, 2005, your Company, through Mahindra
Overseas Investment Company (Mauritius) Limited (MOICML) had acquired
80% of the equity (''Quota'') capital of ME Sri. During the year under
review, your Company through MOICML has acquired the balance equity
(''Quota'') capital of 20% in ME Sri. Accordingly,
MOICML, a wholly owned subsidiary of the Company, now holds 100% of the
equity (''Quota'') capital of ME Sri.
4. Mahindra Group and CIE Automotive forms Global Alliance in Auto
It had always been your Company''s stated intent to merge all of its
Auto Component subsidiaries into one listed entity to provide size and
scale and a one stop shop for its global customers. Your Company is
now in the process of executing this vision much beyond the scale
originally envisaged, by forging a Global alliance partnership with CIE
Automotive S.A. (CIE). An agreement for this purpose was entered
into on 15th June, 2013. The transaction leverages your Company''s
presence in India and Europe with that of CIE''s in Europe and Latin
America with a complementary set of customers thus creating a Global
Auto Component Alliance. The transaction has various stages of
execution. On completion of these stages, your Company will hold
21.78%* of the paid-up capital in the unified entity i.e. Mahindra CIE
Automotive Limited (the erstwhile Mahindra Forgings Limited). Your
Company through Mahindra Overseas Investment Company (Mauritius)
Limited (MOICML) is also the second largest shareholder in CIE
Automotive, S.A. of Spain, holding 13.5% of the Equity Share Capital.
CIE, through Autometal S.A. (downstream listed entity in Brazil) will
be indirectly holding 53.40%* of the paid-up capital in Mahindra CIE
Automotive Limited (Mahindra CIE) on completion of the transaction.
* Estimated as of 30th May, 2014 and subject to listing agreement
This transaction being complex in nature, required your Company to also
take some critical steps including:
1. Buyout of Mahindra Ugine Steel Company Limited''s (MUSCO) stake in
Mahindra Sanyo Special Steel Private Limited (MSSPL) and additional
land held by MUSCO.
2. Sale of Stake by the Company in Mahindra Forgings Limited
(MFL)**, Mahindra Hinoday Industries Limited (MHIL) and Mahindra
Composites Limited (MCL) to Participaciones Internacionales Autometal
Dos, S.L. (PIA 2), a downstream subsidiary created by CIE Group.
3. Sale of stake by Mahindra Holdings Limited in MCL to PIA 2.
4. PIA 2 acquires 26% stake in MCL and MFL respectively via open
offers to public shareholders.
5. Acquisition of 13.5% stake in CIE Automotive, S.A.
6. Schemes of Merger.
** M&M holds 0.32% of the paid-up share capital of Mahindra CIE as on
30th May, 2014.
In June, 2013, the Board of MCL approved the Scheme of Merger
(Composites Scheme) involving merger of MCL with MFL. The approved
share exchange ratio under the said scheme is 100 Equity Shares of MCL
for every 90 Equity Shares of MFL.
Additionally, the individual Boards of MFL, MHIL, MUSCO, Mahindra Gears
International Limited (MGIL), Mahindra Investments (India) Private
Limited (MIIPL) and Participaciones Internacionales Autometal Tres,
S.L. (PIA 3) approved an Integrated Scheme of Merger (Integrated
Scheme) of the respective companies into MFL. The approved share
exchange ratio of the said Scheme is as follows:
(i) 110 Equity Shares of MFL for 100 Equity Shares of MHIL;
(ii) 17 Equity Shares of MFL for 100 Equity Shares of MIIPL;
(iii) 20 Equity Shares of MFL for 100 Equity Shares of MGIL;
(iv) 284 Equity Shares of MFL for 100 Equity Shares of MUSCO;
(v) 105 Equity Shares of MFL for 100 Equity Shares of PIA 3.
The Appointed Date of the Schemes is proposed to be 1st October, 2013.
These Schemes are subject to the approval of the Hon''ble High Court.
All these investments have created value for all Shareholders,
including (as your Company is particularly pleased to report) for all
the minority Shareholders of all the constituent companies.
5. Mahindra Engineering Services Limited to merge with Tech Mahindra
Limited to boost Engineering Prowess
In order to create a unified engineering services Division within the
Mahindra Group with very strong aerospace and automotive verticals,
Mahindra Engineering Services Limited, a subsidiary of your Company
agreed to merge with another Group Company, Tech Mahindra Limited on
29th November, 2013. The combined Division under Tech
Mahindra Limited would have benefits of operational synergies in terms
of economies of scale, single ''go-to- market'' strategy, sourcing
benefits, vendor rationalisation, more focused operational efforts and
enhanced depth and breadth of capabilities, translating into increased
business opportunities and reduced expenses. The approved share
exchange ratio under the Scheme of Amalgamation is 5 Equity Shares of
Tech Mahindra Limited for every 12 Equity Shares of Mahindra
Engineering Services Limited held by your Company. The Appointed Date
of the Scheme is proposed to be 1st April, 2013. The Scheme is subject
to the approval of the Hon''ble High Court.
During the year under review, on the recommendation of the Governance,
Nomination and Remuneration Committee (erstwhile Governance,
Remuneration and Nomination Committee) of your Company, the Trustees of
the Mahindra & Mahindra Employees'' Stock Option Trust have granted
4,50,382 Stock Options to Eligible Employees under the Mahindra &
Mahindra Limited Employees Stock Option Scheme - 2010. Further, no
Stock Options have been granted under the Mahindra & Mahindra Limited
Employees Stock Option Scheme - 2000.
Details required to be provided under the Securities and Exchange Board
of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are set out in Annexure I to this Report.
On the Industrial Relations front, a major feat was accomplished by
signing eight wage settlements across Plants for the Automotive and
Farm Equipment Sectors. The Company was successful in maintaining a
cordial industrial relations environment across its manufacturing
units. A slight unrest was experienced at the Igatpuri Plant when the
workmen went on a 13 day ''tool down'' from 9th—21st April, 2013.
However, this did not affect the production schedule of the Plant.
Employees have always been valuable assets of the Company and major
focus was laid in propagating proactive and employee centric practices
at the shop floor. There was a focus on ensuring transparent
communication of overall business goals and efficient concern
resolution mechanism. Over the past few years, your Company has adopted
a more holistic approach to enhance capabilities of employees at the
shop floor which goes beyond mere technical skills.
Operators are trained and encouraged to generate ideas for resolving
quality concerns, reducing cost, ensuring safety and improving
productivity. For the year under review, the workmen generated about 20
ideas per person.
The proactive approach and quick response to situations benefited the
Company with zero production loss in the Financial Year 2013-14 and a
conducive work environment.
Safety, Occupational Health and Environment
The Safety and Occupational Health of its employees is embedded as a
core organisational value through crusading initiatives of the Company.
The Policy, inter alia, covers and ensures safety of all stakeholders
i.e. employees, public, plant and machinery, ensures compliance on a
monthly basis, imparts education and training to all its employees and
stakeholders. External surveillance audits of its facilities as per
legal and other statutory requirements are conducted regularly.
Internal and external medical check-ups of its employees and
contractors are conducted to promote healthy environment and
Your Company continues to demonstrate a strong commitment towards
Safety, Health and Environment and as a part of the same, multiple
measures and actions are implemented through Safety System
Standardisation and Safety Culture and Focus initiatives. Your Company
has a well-established Occupier''s Safety, Occupational Health &
Environmental Policy. This is in line with the National Safety,
Occupational Health & Environmental Policy. Objectives and Targets
derived from the new amended Safety, Occupational Health &
Environmental Policy (SH&E Policy) is duly signed by the new
Executive Director & President and Occupier for the Automotive and Farm
Equipment Sectors. This Policy is supported by various Management
Programs. Hence there is a strong commitment towards statutory
Road Safety Week, National Safety Day/Month and Fire Service Week,
World Environment Day, Sustainability Month and Energy Conservation
Week are being celebrated. Daily Work Management (DWM) includes
review of Safety, Occupational Health & Environment systems,
Behavioural Based Safety (BBS) observations, Plant Officers
observations and Safety observations tours (SoT). Awareness (internal
and external) on Safety, Occupational Health and Environment training
with benchmarks on overall SH&E performance are conducted in line with
the Policy. Your Company''s Plants continued their commitment to create
a culture of safe environment, openness and improvement of the well
being of its employees and contract workmen by organising Occupational
Examination Camps, expert advice on health topics, special medical
check-ups, consultation and counselling, etc.
Through stakeholders'' engagement and employees'' involvement, your
Company demonstrates tracking the objectives and targets as per the
road map on the fundamentals of triple bottom line approach. Various
green projects have been implemented by your Company in the areas of
abatement of Air Pollution, elimination, recycling and reduction,
conservation of water and solid waste management with the goal of
inculcating world class green supply chain standards. Steps have been
taken for reduction of Green House Gases (GHG) in the areas of
Inbound and Outbound logistics.
All Plants of the Automotive Division have been certified with amended
Standard for ISO 14001: 2004 & OHSAS 18001:2007. Your Company''s
commitment to the environment stems from the Mahindra Group''s abiding
concern for social issues. A healthy work place is provided to its
employees and environment friendly business is conducted. Besides, to
create a safe culture focused initiatives are carried out with the
underlying objective of risk free operations. Proactive sharing of
information across the value chain has also been initiated to bring
sensitivity to the Company''s supplier and dealer community.
External surveillance audit for Safety, Occupational Health &
Environment is conducted every year and all the Company''s Plants of the
Automotive Division have been certified during the year.
Safety, Occupational Health & Environment Management System is well
established in your Company and the periodic structured reviews are
undertaken to track the ongoing progress in performance.
The Company has a Sustainability Reporting System on the lines of the
framework of GRI G3.1 Guidelines. Balanced Score Cards are aligned to
the goals, continuously reviewed and revised, thus helping to improve
ambient air quality, recycled water and controlled waste.
Safety, Occupational Health and Environment practices are followed by
introducing Initiatives such as Human Error Prevention, Visitor
Management, improving culture through education, training and
communication. Standardisation is brought about through generic and
specific signage''s and visuals at manufacturing facilities.
Your Company has received several SH&E & Sustainability Awards and
accolades for Safety Innovation.
Corporate Social Responsibility
Since its inception, the Company has been a socially responsible
Corporate making investments in the community which go beyond any
mandatory legal and statutory requirements. The ''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 Corporate Social Responsibility (CSR)
vision is to focus efforts within 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. By investing in CSR efforts in these critical
constituencies that contribute to nation building and the economy, the
Company will enable its stakeholders and communities to RISE.
Some of the major initiatives in which the Company has invested during
the Financial Year 2013-14 are described below:
A. Project Nanhi Kali - for the Girl Child
The Mahindra Group has supported the education of 36,248
underprivileged girls through Project Nanhi Kali which was started by
the K. C. Mahindra Education Trust (KCMET) in 1996 and is jointly
managed by KCMET and Naandi Foundation since 2005. The Nanhi Kali
sponsorship provides underprivileged girls not only with academic
support classes where concepts of Maths, Science and Language are
taught but also with material support comprising uniforms, school bags,
shoes, socks, etc. which free their families from the hidden costs of
education and enable them to attend school with dignity. In the last
Financial Year, KCMET garnered support from 8,289 individuals and
Corporates resulting in 91,537 underprivileged girls accessing quality
remedial classes across 9 States of India. The significant impact of
this is evident from the fact that there was an 10% increase in
learning outcomes across all project areas and 90% of girls remained in
school to continue their education.
B. Mahindra Pride Schools - Skilling Program for Youth
The Mahindra Pride Schools (MPS) through its one- of-a-kind
livelihood training program continues to take forward its vision to not
only train youth from socially and economically disadvantaged
communities but also place them in high growth service sector careers
after a 90 day intensive training course. In Financial Year 2013-14 a
total of 2,233 Scheduled Caste/Scheduled Tribe students received
training at the 5 MPSs in Pune, Chennai, Patna, Chandigarh and
Srinagar, in one of the three areas of Hospitality Craft, Information
Technology Enabled Services (ITES - for BPOs & KPOs) and CRM. The total
number of MPs students trained since its inception is 8,677. Post
training, the MPS students have been recruited by hospitality chains
such as McDonald''s, Pizza Hut, KFC, Cafe Coffee Day, Marriott Group and
Hotel Le Meridien, department stores such as Westside, Mom & Me, BPOs
and KPOs such as Wipro, Capgemini, Syntel, HCL, TCS, Dell, Cognizant,
Tech Mahindra and Mphasis. The highlight of the placement process has
been 100% placement of students in lucrative jobs and a consistent
increase in average salary per batch to over Rs. 10,000 per month
C. Scholarships and Grants
7. Mahindra All India Talent Scholarships - Vocational Education
Instituted in 1995, Mahindra All India Talent Scholarships (MAITS)
are awarded to students from lower socio economic strata to enable them
to pursue a job oriented diploma course at a recognised Government
Polytechnic in India. Approximately 500 scholarships are given every
year to students who undergo a three year course. In Financial Year
2013-14, 550 students were awarded the MAITS and this scholarship has
benefitted 6,904 students till date.
2. K. C. Mahindra Scholarships for Post Graduate Studies Abroad
The K. C. Mahindra Scholarship for Post Graduate Studies Abroad is an
interest free loan scholarship which is awarded to deserving graduates
interested in pursuing their post graduate studies overseas. This
scholarship has been ongoing since 1956. In the Financial Year 2013-14,
43 students were awarded this interest free loan scholarship of Rs. 2
lakhs each and 3 students were awarded Rs. 8 lakhs each from the K. C.
Mahindra Fellows Fund. These scholarships were given to students who
gained admission in renowned Universities such as Harvard, Yale,
Stanford, Massachusetts Institute of Technology, Carnegie Mellon,
London School of Economics, across a wide variety of disciplines. The
total number of scholarships awarded till date is 1,115.
3. K. C. Mahindra United World College Scholarships
Till date 78 students have benefited from the K. C. Mahindra United
World College Scholarships enabling them to study at the Mahindra
United World College of India. During Financial Year 2013-14, 10
students were given these scholarships.
4. Mahindra Search for Talent Scholarship
This scholarship which rewards excellence in academics has been set up
in 37 institutions in India. In addition, students who receive the
Mahindra Search for Talent Scholarship for two consecutive years also
receive the Honours Scholarship Award comprising a cash prize of Rs.
5,000 and a citation from the Trust.
D. Mumbai Public School Initiative
The Mahindra Group supported 28 Mumbai Public Schools (BMC English
medium schools run by Naandi Foundation) enabling 12,174 children to
access quality education. In the last Financial Year, the project had a
noteworthy impact including 13% increase in enrollment numbers, 50%
increase in Government teacher recruitment and formation of 24 School
E. Disaster Relief and Rehabilitation
In response to the catastrophic calamity caused by the incessant rain
and flash floods which struck Uttarakhand in June, 2013, the Mahindra
Group immediately responded to the appeal put forth by the Chief
Minister and contributed Rs. 1 crore to the Chief Minister''s Relief
Fund (Uttarakhand). Further, employees of the Mahindra Group donated
one day''s salary to the Mahindra Foundation with a specific intent to
donate Mahindra vehicles such as Scorpio, Trucks, Buses and Bolero
Pik-Ups to support rehabilitation efforts being undertaken by the State
Government of Uttarakhand. Apart from these vehicles, 300 solar
lanterns, 150 solar street lights and a mobile DG set were also donated
to the State of Uttarakhand on 30th December, 2013. Further, Rs. 1
crore was donated to the ''Maharashtra Chief Minister''s Drought Relief
Fund'' to support the Government in its efforts to counter the serious
drought situation in the State of Maharashtra.
The Company also supported the education of 1,000 underprivileged
children in Udaipur and Rajsamand districts of Rajasthan, through the
NGO partner Seva Mandir.
Employee Social Options (Esops)
Esops stands for Employee Social Options. At Mahindra, all employees
are encouraged to contribute towards building a sustainable society;
one which is healthier, cleaner, greener and more literate where people
work with passion for social objectives. Through the Esops program many
Mahindra employees are contributing towards making a difference to
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. Employees generate ideas for projects,
prepare annual activity plans, implement each activity and monitor
Amongst the notable Esops initiatives this year was the Lifeline
Express at Karad, Maharashtra where 2,614 patients were treated by
performing surgeries, giving medicines and distribution of aids and
appliances free of cost. The Company also over-achieved the one million
tree plantation (per year) target of Mahindra Hariyali by planting more
than 1.49 million trees in the Financial Year 2014. Accolades such as
Esops Awards - 2013, Esops Star Performers Awards, Group level Esops
Champions Meet, etc. recognised outstanding contributions from
The other Esops activities included numerous initiatives in the areas
of Education, Health, Environment, etc. that have a short term as well
as a long term social impact.
Esops is also a culture that the Mahindra Group has cultivated as an
ethic. Esops platforms and a set of structures and protocols are
created to make it easier and possible for every employee, who wishes
to make a contribution to society, to do so.
During the year under review, the Sustainability Report for the year
2012-13 was released. As in the earlier five years this Report was also
externally assured by KPMG with GRI checked application level A .
Your Company continued its ''Sustainability'' journey using resource
efficiency and social commitment as important drivers of profitable
growth. Retaining the focus on the Environmental, Social and Governance
(ESG) parameters, initiatives of the previous years were consolidated
and fresh ones were taken up.
While energy conservation continued to hold center stage on the
sustainability agenda, water, an equally essential resource was also
retained on the radar. Relentless R&D on use of light weighting
alternate materials, start-stop technology, low friction lubrication,
downsizing engines to improve fuel efficiency of the products, coupled
with a host of energy and water efficiency programs at the operations
level, have resulted in improved trends in eco-efficiency. Taking the
water conservation agenda beyond the organisation, your Company entered
into a collaboration with the Government of Madhya Pradesh, to work on
an Integrated Watershed Management Project at Damoh. This partnership
is structured to offer holistic solutions for improving the quality of
life of 20,000 Indians across 32 villages and while the project is
still in progress, it is already showing positive impact in farm
productivity, water availability and local employment.
Your Company also believes in actively collaborating with other players
in Indian Industry to respond to the country''s energy and water
challenges. Hence, your Company has signed up to be a Member of the
''Working Group for developing an India Specific Water Measurement
Tool'', led by World Business Council for Sustainable Development
(WBCSD) and plans to be part of the ''India GHG Program'' initiated by
World Resources Institute (WRI) in collaboration with CM and
Complete details of the Sustainability performance for 2013-14 will be
elaborated in the GRI Report which is under preparation and will be
ready for release shortly.
Your Company''s consistent performance on the ESG dimensions was
recognised during the year, by way of:
— Retaining its position in top 10 in the India 200 Carbon Disclosure
Leadership Index 2013.
— Getting listed on the Dow Jones Sustainability Index - 2013 under the
''Emerging Market Index''.
— The bestowal of the Sustainable Development Leadership Award 2014 on
Mr. Anand G. Mahindra by The Energy & Research Institute (TERI) is a
recognition of the leadership''s commitment to sustainable and
responsible business growth.
Business Responsibility Report
Your Company has continued including ''Business Responsibility
Report''(BRR) as a part of the Company''s Annual Report in the
prescribed format in compliance with Clause 55 of the Listing
Agreement, introduced by Securities and Exchange Board of India
(SEBI) in August, 2012. 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. The BRR of your Company for
the year 2013-14 forms part of this Annual Report, in compliance with
the requirement of SEBI.
Your Company strongly believes that sustainable and inclusive growth is
possible only when its performance on the environmental and social
front is aligned to the performance on the economic front, ensuring
continued growth and development in business. Your Company is committed
to further leverage the ''Alternative Thinking'' mantra to achieve high
shareholder returns through good governance, customer centricity,
innovation, inclusive human development and by being environmentally
Mr. Bharat Doshi, Executive Director & Group Chief Financial Officer of
the Company, after 40 illustrious years of service in the Mahindra
Group (of which 21 years were as an Executive Director) decided to step
down from his executive position with effect from the close of working
hours on 13th November, 2013.
The Board has placed on record its deep appreciation of Mr. Doshi''s
immense contribution and valuable services during his long association
with the Company and acknowledged Mr. Doshi''s outstanding experience
and expertise in serving the Mahindra Group since 1973 including his
contribution as an Executive Director of the Company from 1992 onwards.
Considering his experience and expertise, Mr. Bharat Doshi, pursuant to
the recommendation of the Governance, Nomination and Remuneration
Committee (earlier known as Governance, Remuneration and Nomination
Committee) was appointed as an Additional Director of the Company with
effect from 14th November, 2013 at the Meeting of the Board of
Directors of the Company held on 13th November, 2013.
The Board of Directors has, pursuant to the recommendation of the
Governance, Nomination and Remuneration Committee approved the
appointment of Dr. Pawan Goenka as an Additional Director of the
Company with effect from 23rd September, 2013 and also as the Executive
Director for a period of 5 years from 23rd September, 2013 to 22nd
September, 2018, subject to the approval of the Members to be obtained
at the ensuing Annual General Meeting of the Company.
Dr. Goenka joined the Company as General Manager (R&D) in the year
1993. During his R&D tenure he led the development of the Scorpio SUV.
He was appointed as COO (Automotive Sector) in April, 2003, President
(Automotive Sector) in September, 2005 and President (Automotive & Farm
Equipment Sectors) with effect from April, 2010.
A brief resume of Dr. Goenka including his qualification, nature of his
expertise and names of companies in which he holds Directorships and
Memberships/Chairmanships of Board Committees and shareholding is
provided in the Corporate Governance Report forming part of the Annual
As reported in the Annual Report for the Financial Year 2012-13, the
Company received an intimation from Life Insurance Corporation of India
(LIC) on 10th June, 2013, to the effect that Mrs. D. Vijayalakshmi
had resigned from the Board of the Company with effect from 5th June,
Pursuant to the recommendation of the Governance, Nomination and
Remuneration Committee, the Board at its Meeting held on 13th November,
2013, appointed Mr. S. B. Mainak as an Additional Director of the
Company representing LIC with effect from 13th November, 2013, in place
of Mrs. D. Vijayalakshmi, such appointment to be valid upto the next
Annual General Meeting of the Company.
Mr. Mainak is a Chartered Accountant and is the Managing Director of
LIC since 9th July, 2013 and is also on the Boards of various
Mr. Doshi, Dr. Goenka and Mr. Mainak hold office upto the date of the
ensuing Annual General Meeting of the Company.
The Company has received Notices in writing from Member(s) proposing
Mr. Doshi, Dr. Goenka and Mr. Mainak for appointment to the office of
Directors at the forthcoming Annual General Meeting.
In terms of the Articles of Association of the Company, Mr. M. M.
Murugappan, Mr. Narayanan Vaghul and Mr. A. K. Nanda retire by
rotation and are eligible for re-appointment. However, Mr. Narayanan
Vaghul and Mr. A. K. Nanda have expressed their desire not to seek
re-appointment. It is proposed not to fill up the vacancies thereby
Mr. Vaghul was appointed as a Director on the Board of the Company with
effect from 31st October, 1996 and has made notable contributions
towards effective functioning of the Board. He has been acting as the
Chairman of the Governance, Nomination and Remuneration Committee of
the Company since 20th December, 2000.
The Board placed on record its deep appreciation of the invaluable
counsel rendered by Mr. Vaghul to the Company. The 18 years that Mr.
Vaghul was on the Board of the Company were critical years in the
Mr. Vaghul''s immense knowledge and financial expertise helped the Board
and the Company negotiate these sweeping changes with boldness while at
the same time adhering strictly to sound financial discipline and
ethical and corporate values of the highest order.
Quote from Chairman Emeritus
Mr. Narayanan Vaghul joined the Board of M&M in 1996 and has shared
his vast knowledge and experience with us over many years. His
unflinching adherence to the highest standard of ethics and integrity
while seeking excellence were significant contributions by him as he
chaired the Governance, Nomination and Remuneration Committee.
Personally Mr. Vaghul is a valued and a trusted friend. His wise
guidance on prudent fiscal management combined with his institution
building instincts and formidable strategic skills were invaluable to
us. While he retires, his offer of support to the management is most
comforting. I wish him many years of good health and happiness.
The Board placed on record its deep appreciation of the valuable
services rendered by Mr. Nanda during his tenure as a Director of the
Mr. Nanda, who is stepping down from the Board of the Company after a
total tenure of 22 years, brought to the Board an ebullient and
entrepreneurial spirit and a flair for reasoned risk taking, combined
with a strict adherence to values and ethics. This rare combination of
qualities has added a valuable perspective and dimension to the
deliberations and decision making authority of the Board.
Although Mr. Nanda is retiring from the Board of the Company, he
continues to be actively associated with several other initiatives of
the Mahindra Group.
Quote from Chairman Emeritus
Mr Arun Nanda joined the Board of Directors in 1992, and served as
Executive Director till 2010 and as Non-Executive Director thereafter.
Through his entrepreneurial spirit, commercial acumen and strong ''hands
on'' approach, he has imparted great value to the deliberations of the
Board. During the many years he served as Company Secretary he built up
an admirable rapport with our shareholders and served them diligently.
/ believe Arun embodies all that is best in the M&M culture. Both as a
Director and as a very long time employee and colleague, he has spotted
opportunities where others see problems, and brought an innovative mind
and a pioneering direction to the strategies of the Board and the
companies on which he serves.
We are fortunate that even though he is stepping down from the Board,
he will continue to be associated with other areas of the Mahindra
In view of the provisions of section 149 of the Companies Act, 2013,
the Board of your Company has proposed the appointment of 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 at the ensuing Annual General Meeting of
the Company. The Company has received the requisite Notices in writing
proposing the appointment of them as Independent Directors.
Directors'' Responsibility Statement
Pursuant to section 217(2AA) of the Companies Act, 1956, your
Directors, based on the representations received from the Operating
Management, and after due enquiry, confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and these have been applied consistently and
reasonable and prudent judgments and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at
31st March, 2014 and of the profit of the Company for the year ended on
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
Subsidiary and Associate Companies
The Group Companies continue to contribute to the overall growth of the
Company. Major subsidiaries such as the Group''s Korean subsidiary
Ssangyong Motor Company turned in a significantly improved performance
with a 20% growth in revenue and posted a profit in the Financial Year
2013-14 as compared to a loss in the previous year.
Tech Mahindra Limited, (TML) the Company''s flagship company in the IT
Sector, has reported a consolidated revenue at Rs. 18,831.38 crores in
the current year. During the year, Satyam Computer Services Limited
(earlier an associate company) merged with TML. On a comparable basis,
the consolidated revenue of TML grew by 31.4% and Profit after Tax grew
by 54.9% as compared to the previous year.
The Group''s finance company, Mahindra & Mahindra Financial Services
Limited (MMFSL), maintained a healthy growth of business and profits
despite slowdown in the auto industry and continuing high cost of
borrowings through control of transaction cost and high collection
efficiency levels. It reported a total consolidated income of Rs.
5,300.55 crores during the current year as compared to Rs. 4,112.96
crores in the last year - a growth of 28.9%. The consolidated profit
after tax of MMFSL for the Financial Year 2013-14 grew from Rs. 927.03
crores in the previous year to Rs. 954.42 crores in the current year.
The consolidated Group Profit for the year after exceptional items, tax
and after deducting minority interests is Rs. 4,666.93 crores as
against Rs. 4,099.20 crores earned in the previous year.
During the year under review, Mahindra Investments (India) Private
Limited, Mahindra Investments (International) Private Limited, Mahindra
Offgrid Services Private Limited, Cleansolar Renewable Energy Private
Limited, Brightsolar Renewable Energy Private Limited, Mahindra Auto
Steel Private Limited, Mahindra North American Technical Center, Inc.
and Mahindra ''Electoral Trust'' Company became wholly owned subsidiaries
of your Company and Mahindra Telephonies Integrated Systems Limited,
Mahindra Asset Management Company Private Limited, Mahindra Trustee
Company Private Limited, Gateway Housing Finance Corporation Limited,
Mahindra Construction Company Limited, became subsidiaries of your
During the year under review, Mahindra Homes Private Limited (earlier
known as Watsonia Developers Private Limited and prior to that Watsonia
Developers Limited), Mahindra Forgings Limited, Mahindra Hinoday
Industries Limited, Mahindra Forgings International Limited, Mahindra
Forgings Europe AG, Gesenkschmiede Schneider GmbH, Jeco-Jellinghaus
GmbH, Falkenroth Umformtechnik, GmbH, Stokes Group Limited, Stokes
Forgings Dudley Limited, Stokes Forgings Limited, Mahindra Forgings
Global Limited, Schoeneweiss & Co. GmbH, Ssangyong (Yizheng) Auto Parts
Manufacturing Company Limited, MHR Hotel Management GmbH, BAH
Hotelanlagen AG, ceased to be subsidiaries of your Company.
Subsequent to the year end, Gateway Housing Finance Corporation Limited
and Mahindra Holidays and Resorts USA Inc. ceased to be subsidiaries of
During the year, Mahindra Navistar Automotives Limited has changed its
name to Mahindra Trucks and Buses Limited and Mahindra Navistar Engines
Private Limited has changed its name to Mahindra Heavy Engines Private
The Statement pursuant to section 212 of the Companies Act, 1956
containing details of the Company''s subsidiaries is attached.
In accordance with the General Circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Statement of
Profit and Loss and other documents of the subsidiary companies are not
being attached with the Balance Sheet of the Company. The Company will
make available the Annual Accounts of the subsidiary companies and the
related detailed information to any Member of the Company who may be
interested in obtaining the same. Further, the Annual Accounts of the
subsidiaries would also be available for inspection by any Member at
the Head Office of the Company and at the Office of the respective
subsidiary companies, during working hours upto the date of the Annual
Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with Accounting Standard AS 21
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
Messrs. Deloitte Haskins & Sells, Chartered Accountants, retire at the
conclusion of the ensuing Annual General Meeting. They have been
Statutory Auditors of the Company since Financial Year 2008 i.e. for a
continuous period of 7 years including Financial Year 2014. In terms of
the Companies Act, 2013 (the new Act) and the Rules framed
thereunder, it is proposed to appoint them as Statutory Auditors of the
Company to hold office from the conclusion of the ensuing Annual
General Meeting, until the conclusion of the 71st Annual General
Meeting of the Company to be held in the Year 2017 (subject to
ratification of their appointment by the Members at every Annual
General Meeting held after the ensuing Annual General Meeting).
As required under the provisions of section 139(1) of the new Act, 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 re-appointment, if made, would be in accordance
with the new Act and the Rules framed thereunder and that they satisfy
the criteria provided in section 141 of the new Act.
The Members are requested to elect Auditors as aforesaid and fix their
As per the Order of the Central Government and in pursuance of section
148 of the Companies Act, 2013, your Company carries out an audit of
its cost records. The due date for filing of the Cost Audit Report with
the Ministry of Corporate Affairs for the Financial Year ended 31st
March, 2013, was 180 days from the closure of the Company''s Financial
Year. The combined Cost Audit Report for the Farm Equipment Sector and
Motor Vehicles for the Financial Year ended 31st March, 2013 was filed
on 26th September, 2013 in the XBRL format. The Central Government
approved the appointment of M/s. N. I. Mehta & Co., Cost Accountants as
Cost Auditors for conducting Cost Audit for the Financial Year 2013-14.
Pursuant to section 148 of the Companies Act, 2013, the Board of
Directors on the recommendation of the Audit Committee appointed M/s.
N. I. Mehta & Co., Cost Accountants, as the Cost Auditors of the
Company for the Financial Year 2014-15. M/s. N. I. Mehta & Co. have
confirmed that their appointment is within the limits of section 139(9)
read with section 141 (3)(g) of the Companies Act, 2013 and have also
certified that they are free from any disqualifications specified under
sections 141(3) and 141(4) read with proviso to section 148(3) of the
Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost
Auditors certifying their independence and arm''s length relationship
with the Company.
Public Deposits and Loans/Advances
Out of the total 8,825 deposits of Rs. 7,075.63 lakhs from the Public
and Shareholders as at 31st March, 2014, 104 deposits amounting to Rs.
42.56 lakhs had matured and had not been claimed as at the end of the
Financial Year. Since then, 18 of these deposits of the value of Rs.
5.45 lakhs have been claimed.
The Company has discontinued the 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
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.
During the period 1st April, 2014 to 29th May, 2014, 60,323 vehicles
were despatched as against 60,067 vehicles during the corresponding
period in the previous year. During the same period, 44,849 tractors
were despatched as against 43,103 tractors despatched during the
corresponding period in the previous year.
Looking forward, your Company believes that the economy has weathered
the worst and is now poised for a decisive, albeit gradual, turnaround
in growth. There are several factors that underlie the current
optimism. First, the country''s macro economic indicators are in
far-better shape today than they were a year ago, making it much more
resilient to risks emanating from US Fed''s monetary policy actions.
Second, with economic recovery in developed countries gaining strength
and the Indian Rupee more competitively valued than before, exports are
likely to witness a robust pick-up in the current year. Last, but
perhaps most important, given the strong mandate delivered by the
recently concluded Lok Sabha elections, swifter and more decisive
policy actions are expected to be undertaken by the Central Government
in the coming months, with special attention being paid to reviving
manufacturing activity and economic growth, as, seizing the historic
opportunity before it, the Government strives to fulfill the
''development with jobs'' agenda laid out in its election manifesto.
While El Nino risks cloud the immediate future, it is expected,
premised on the reasons outlined above, that the economy will witness a
nascent, infrastructure activity-led recovery in the current year,
followed by stronger, more broad based consumption-led growth through
Financial Year 2016, leading to a deeper, investment-led economic cycle
taking root in 2016-17, with growth reverting to levels of 7% or more
by the end of that year.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars required to be disclosed under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are set
out in Annexure II to this Report.
Particulars of Employees
The Company had 265 employees who were in receipt of remuneration of
not less than Rs. 60,00,000 during the year ended 31st March, 2014 or
not less than Rs. 5,00,000 per month during any part of the said year.
However, as per the provisions of section 219(1)(b)(iv) of the
Companies Act, 1956, the Directors'' Report and Accounts are being sent
to all the Members of the Company excluding the Statement of
particulars of employees. Any Member interested in obtaining a copy of
the Statement may write to the Company Secretary, whereupon a copy
would be sent.
For and on behalf of the Board
ANAND G. MAHINDRA
Chairman & Managing Director
Mumbai, 30th May, 2014