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As on: Jul 21, 2018 03:32 PM
Mahindra & Mahindra Ltd
Industry: Automobiles - Passenger Cars
BSE Code ISIN Demat Book Value(Rs) NSE Symbol Mar.Cap(Rs Cr.) P/E(TTM) EPS(TTM) Face Value(Rs)
500520 INE101A01026 243.893566 M&M 113074.58 27.95 32.54 5

Dear Shareholders

Your Directors present their Report together with the audited financial statements of your Company for the year ended 31st March, 2017.


(Rs. in crores)

2017 2016
Revenue from Operations 47,096 43,639
Other Income 1,342 850
Profit before Depreciation, Finance
Costs, Exceptional items and Taxation 6,112 5,470
Less: Depreciation and Amortisation expense 1,327 1,068
Profit before Finance Costs,
Exceptional items and Taxation 4,785 4,402
Less: Finance Costs 146 186
Profit before Exceptional items and
Taxation 4,639 4,216
Add: Exceptional items 548 68
Profit before Taxation 5,187 4,284
Less: Tax Expense 1,231 1,079
Profit for the year 3,956 3,205
Balance of profit for earlier years 17,904 15,442
Less: Transfers from retained earnings 14 3
Add: Transfers to retained earnings 100
Profits available for appropriation 21,846 18,744
Add: Other Comprehensive Income / (4) 7
Less: Dividend paid on Equity Shares 745 745
Less: Income-tax on Dividend paid 96 102
Balance carried forward 21,001 17,904

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

The fiscal year gone by was marked by significant developments on both the global as well as domestic fronts. On the international front, Brexit and the US elections heralded a sea change, forebodingly laden with darker possibilities for the global and even the Indian economy. The political outlook for globalisation too changed in the wake of the above developments.

On the domestic side, a constitutional amendment paved the way for the long-awaited and transformational Goods and Services Tax (GST) while demonetisation of large denomination currency notes signalled a regime shift to punitively raise the costs of unaccounted transactions.

The currency swap move entailed short-term costs in the form of economic dislocations across Sectors, inconvenience and hardships, especially for those in the informal and cash-intensive sectors of the economy who lost out on income and employment. These costs have been real and significant but they may be minimised in recorded GDP because the national income accounts estimate informal activity on the basis of formal sector indicators. However, the costs are likely to be transitory as demonetisation has the potential to generate meaningful long-term benefits. Gross value added (GVA) growth estimate for 2016-17 has been pared down to 6.6% year on year as compared to the estimate of 7.6% when the year began.

However, even amidst this scenario, your Company recorded an increase of 7.92% in revenue from operations at Rs. 47,096 crores in the year under review as against Rs. 43,639 crores in the previous year.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 11.74% at Rs. 6,112 crores as against Rs. 5,470 crores in the previous year. Profit after tax increased by 23.43% at Rs. 3,956 crores as against Rs. 3,205 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 thereby enabling the Company to maintain profitable growth in the current economic scenario. No material changes and commitments have occurred after the closure of the Financial Year 2016-17 till the date of this Report, which would affect the financial position of your Company.

Performance Review

Automotive Sector

Your Company's Automotive Sector recorded total sales of 5,06,624 vehicles (4,52,893 four-wheelers and 53,731 three-wheelers) as against a total of 4,94,096 vehicles (4,37,911 four-wheelers and 56,185 three-wheelers) in the previous year, registering a growth of 2.5% in vehicle sales.

On the domestic sales front, your Company sold a total of 4,69,384 vehicles as compared to 4,58,065 vehicles in the previous year resulting in a growth of 2.5%.

In the Passenger Vehicle segment, your Company's volumes remained almost flat at 2,36,130 vehicles [including 2,22,541 Utility Vehicles (UVs), 10,370 Vans and 3,219 Cars] as compared to the previous year's volume of 2,36,307 vehicles [including 2,22,324 UVs, 10,588 Vans and 3,395 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 1,80,948 vehicles [including 30,043 vehicles < 2T GVW,

1,36,564 vehicles between 2-3.5T GVW, 7,626 Light Commercial Vehicles (LCVs) in the LCV > 3.5T segment and 6,715 Heavy Commercial Vehicles (HCVs)] registering a growth of 8.5% over the previous year's volume of 1,66,783 CV [including 27,834 vehicles < 2T GVW, 1,26,819 vehicles between 2-3.5T GVW, 6,425 LCVs in the LCV > 3.5T segment and 5,705 HCVs].

In the three-wheeler segment, your Company sold 52,306 three-wheelers, registering a de-growth of 4.9% over the previous year's volume of 54,975 three-wheelers.

For the year under review, the Indian automotive industry (except 2-Wheeler) grew 6.5%, with the Passenger Vehicle (PV) industry growth of 9.2% and record sales crossing the three million mark. The CV industry grew 4.2% with the LCV 2-3.5T (PU segment) posting the highest ever sales of 0.2 million and taking 29% share of the total CV industry. However, the Medium and Heavy Commercial Vehicles (MHCV) segment remained flat at a volume of 0.3 million. The

2-Wheeler (2W) industry grew 6.9%, with sales crossing a record 17 million mark.

Your Company's UV sales volume remained flat at 2,22,541 vehicles, resulting in an UV market share of 29.2% as against 37.9% in the previous year. Your Company's UV sales were adversely impacted in the first, third quarter and the early fourth quarter of the Financial Year 2017.

In the first quarter of the Financial Year 2017, rural demand continued to be subdued – a low sentiment continuing from the Financial Years 2015 and 2016 due to two years of deficit monsoon. In the third quarter of the Financial Year 2017, volumes were adversely impacted due to demonetisation. Though the industry at large was quick to recover in January, 2017 recovery was slightly slower in rural India as compared to urban India, having an adverse impact on your Company's volumes. Demand for your Company's products from urban markets was also under pressure due to continued shift in customer preference.

Scorpio continues to enhance its iconic status and the demand for Scorpio remained strong at 49,319 vehicles, a growth of 2.6% over the previous year.

Bolero has been a very successful brand for your Company over the last 10 years, and in September, 2016, your Company launched the new Bolero Power+ with the mHawkD70 engine. The all New Bolero Power+ is an evolution of the Bolero brand, with an enhanced value proposition, delivering more power, mileage and a peppier drive.

In the LCV<2T segment, riding on the success of Jeeto, your Company's volumes grew 7.9% and the market share strengthened to 25.7% as against 23.9% in the previous year. To further strengthen its presence in this segment, your Company launched the Supro Minitruck and Supro cargo van in February, 2017.

In the PIK-UP segment of commercial vehicles (LCV 2 to 3.5T), your Company maintained its leadership position with a market share of 65.8%. In April, 2016, your Company launched the Big Bolero PIK-UP with several best-in-class features.

In February, 2016, your Company launched the Blazo series of heavy commercial (HCV) trucks with Fuelsmart technology. The Blazo series of trucks are backed by a superior mileage guarantee and a 48 hours service guarantee. For the year under review, your Company extended the Blazo range of trucks from 25 to 49 Tons, and the trucks are well received by the customer. The total HCV sales for the year stood at 6,715 trucks, clocking a 17.7% growth. The market share of the HCV segment stood at 4.0% as compared to 3.4% in the previous year.

During the year under review, your Company posted the highest ever export volumes of 37,240 vehicles as against the previous year exports of 36,031 vehicles, a growth of 3.4%.

Your Company continued to grow in volumes and strengthen its presence in the neighbouring markets of Sri Lanka, Nepal and Bangladesh. With continued efforts of building its brand in key markets like South Africa and Chile, your Company reported a volume growth of 28.9% and 28.3% respectively. For the year under review, the KUV100 and TUV300 were launched in South Africa.

The spare parts sales for the year stood at Rs. 1,937.2 crores (including Exports of Rs. 115.6 crores) as compared to Rs. 1,765.3 crores (including Exports of Rs. 110.3 crores) in the previous year, registering a growth of 9.7%.

Farm Equipment Sector

Your Company recorded a total sales of 2,63,021 tractors as against 2,14,173 tractors sold in the previous year thus recording a growth of 22.8%.

For the year under review, the tractor industry in India recorded sales of 5,82,084 tractors recording a growth of 18%. A normal monsoon, good increase in minimum support prices and Government's focus on Agriculture and rural development, helped drive the positive sentiment in the Agriculture Sector and the rural economy at large. This positive sentiment and the pent-up demand due to two consecutive years of industry de-growth in the Financial Years 2015 and 2016, helped boost the demand for tractors in the Financial Year 2017.

Your Company sold 2,48,594 tractors in the domestic market in the year 2016-17, as compared to 2,02,628 tractors in the previous year, recording a growth of 22.7%. Your Company gained market share by 1.8%, taking the total market share to 42.7% which is the highest ever market share.

Your Company's market performance was supported by the good performance of YUVO, which has helped gain market share in the 30-50 HP segment. YUVO, an all-new tractor platform launched in April, 2016 has been highly successful in strengthening the technology leadership of Mahindra tractors.

After the successful launches of Arjun NOVO and YUVO in the previous two years, your Company launched its third new tractor platform JIVO in April, 2017. JIVO is a new age small tractor platform in the sub 25 HP category. With its narrow and compact design, high power and multi-application suitability, JIVO is an ideal choice for the growing segment of Horticulture and Row crop farming.

During the year under review, your Company exported 14,583 (including 156 Completely Knocked Down Units) tractors registering a growth of 26.3% over the previous year. This is the highest ever tractor exports by your Company. Spare parts sales for the year stood at Rs. 530.7 crores (including exports of Rs. 43.8 crores) as compared to Rs. 476.5 crores (including exports of Rs. 34.8 crores) in the previous year, registering a growth of 11.4%.

Other Businesses

In the power generation space, under the Mahindra Powerol Brand, your Company continues to be amongst the leaders in the industry for over a decade. Your Company earned its highest ever revenues of Rs. 1,204.9 crores in the current Financial Year as against Rs. 1,109.9 crores in the previous year, recording a growth of 8.6%. With a focus on changing customer needs, your Company has further expanded the business in Tele infra management and in the energy management solutions space. Amidst growing concerns on environmental sustainability, your Company took a step towards moving to greener solutions, by venturing into a new business of ‘Green Gensets' through battery based solutions.

Current Year's review

During the period 1st April, 2017 to 29th May, 2017, 63,251 vehicles were produced as against 60,164 vehicles and 60,052 vehicles were despatched as against 57,697 vehicles during the corresponding period in the last year. During the same period 49,425 tractors were produced and 49,154 tractors despatched as against 44,730 tractors produced and 44,778 tractors despatched during the corresponding period in the previous year.

The outlook for 2017-18 remains positive with a favourable domestic and global backdrop. On the domestic front, the economy is set to experience a growth recovery and the RBI expects Gross Value Added to grow at 7.3% Year on Year in Financial Year 2018 with some favourable tailwinds.

Monsoon is forecast to be normal for the second consecutive year which bodes well for demand recovery. Moreover, the ongoing remonetisation process and lagged effect of past rate cuts along with a further reduction in banks' lending rates will aid discretionary consumer spending and growth recovery.

Focused expenditure especially on the rural economy and affordable housing, implementation of Goods and Services Tax (GST) and steps to attract higher foreign direct investment (FDI) will also be supportive of growth. Importantly, notwithstanding initial challenges, GST implementation entails sustained positive gains for the economy in the long term.

On the global front too, demand backdrop is expected to be favourable with most forecasts pegging global output and trade higher in 2017 and 2018 as compared to the recent past.


Financial Year 2016-17 was a turbulent year for the world economy with events namely Brexit, US Presidential elections and Italian political reform referendum, which not only caused volatility during the year but also has the potential to have ramifications in the years to come. US economy continued showing signs of steady recovery and encouraging job growth which led the US Federal Reserve to hike interest rates two times in Financial Year 2016-17 by a cumulative 50 bps. Despite the political noise, the economic recovery in Eurozone was encouraging with growth picking up in the second half of 2016, which led the ECB to start tapering its quantitative easing program since December, 2016. Economic sentiment in Eurozone reached a nearly six-year high in February, 2017. Growth also remained solid in the United Kingdom, where spending proved resilient in the aftermath of Brexit.

Growth prospects for emerging market economies have also improved with reduced concerns on China's hard landing due to policy stimulus. Further, recessionary conditions also ebbed in Russia and Brazil due to firming up of commodity prices. Crude prices which touched a 13 year low in January, 2016, rebounded during Financial Year 2016-17 as oil producing nations agreed on output cuts. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. The latest World Economic Outlook by IMF predicts the Global economic activity to pick up with a long-awaited cyclical recovery in investment, manufacturing and trade projects.

On the domestic front in India also, the year was marked with two game changing events viz., Demonetization and passing of Goods and Services Tax (GST). Demonetisation, albeit its short term adverse impact on economy, has positively impacted the digital payments landscape in the country. GST holds the potential of providing impetus to growth and investments in the long term and is expected to benefit the GDP by more than 1%.

With positive macro-economic indicators, commitment to fiscal and monetary reforms and political stability, India continued to be a bright spot for global investors. Foreign Direct Investment (FDI) in Financial Year 2016-17 touched a record high of USD 60.1 billion. For the first time since the opening up of the economy in 1991, India's current account deficit is being funded by FDI, a sign of rising confidence among long term investors. The Indian Rupee displayed two-way movements up to mid-January, 2017, but since then has appreciated on resumption of portfolio inflows in both the debt and equity segments.

CPI inflation remained firmly anchored within RBI's target range which prompted them to reduce repo rates by a cumulative of 50 bps in Financial Year 2016-17. However, the persistence of core inflation, implementation of 7th pay commission and rise in global commodity prices led the RBI to undertake a calibrated shift in their policy stance from accommodative to neutral towards end of the Financial Year. Following the announcement of demonetisation in November, 2016, there was a huge surge in banking sector liquidity, impelling the Banks to reduce their lending rates and finally transmitting the policy rate cuts by the RBI over the last two years to the consumers.

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. During the year, your Company repaid Rs. 1,083.62 crores of long term borrowings from internal accruals.

During the year, your Company raised Rs. 475 crores by way of private placement of 7.57% Listed, Senior, Unsecured, Redeemable Non-Convertible Debentures with a 10 years' maturity. In addition, Euro 50 million was raised by way of External Commercial Borrowings for 5 years. The above borrowings were raised to part finance its ongoing modernisation and expansion programmes. In addition, your Company also availed export finance of Rs. 605 crores, out of which Rs. 305 crores was under the interest equalization scheme of Government of India.

The Company's Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company's total Debt to Equity Ratio was 0.11 as at 31st March, 2017.

Your Company has been rated by CRISIL Limited ("CRISIL"), ICRA Limited ("ICRA"), India Ratings and Research Private Limited ("India Ratings") 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. For Long Term facilities and Non-Convertible Debenture ("NCD") programme, CRISIL and ICRA have re-affirmed their credit ratings of CRISIL AAA/ Stable and [ICRA]AAA (stable) respectively. Further, CARE has also re-affirmed the ratings of the Company's long-term Bank facilities at CARE AAA. India Ratings and Research (Ind-Ra, a Fitch Group Company) has also re-affirmed Long-Term Issuer Rating of ‘IND AAA' with a Stable outlook to your Company. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company's Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagement with International and Domestic investors and has set up feedback mechanism to measure IR effectiveness. Structured conference calls and periodic investor/analyst interactions including one-on-one meetings, Telepresence meetings, participation in investor conferences, quarterly earnings calls and annual analyst meet with the Chairman, Managing Director and Business Heads were organised during the year. Your Company interacted with around 750 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls) during the year.

Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with investor/analysts. As a key milestone in this continuing endeavour, your Company created a digital interactive annual review of the Company's performance on the Corporate website to provide an interactive experience beyond what is available in the Annual

Report. Your Company also continues to organise con-call on Environment, Social and Corporate Governance (ESG) for analysts and investors. Your Company is pleased to report that the Company's IR function was awarded ‘Overall Best Company in India for Corporate Governance' and ‘Best for Shareholders' Rights and Equitable Treatment in India' by ‘Asia Money' based in Hong Kong. Your Company ensures that critical information about the Company is available to all the investors by uploading all such information at the Company's website. Your Company has created a ‘Group Investor Relations Council' to share best practices across all the listed group companies and learn from each other.


Your Directors are pleased to recommend a dividend of Rs. 13 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 2016-17, inclusive of tax on distributed profits (after reducing the tax on distributed profits of Rs. 44.17 crores on the dividends receivable from the subsidiaries during the current Financial Year) would absorb a sum of Rs. 927.62 crores [as against Rs. 841.68 crores comprising the dividend of Rs. 12 per Ordinary (Equity) Share of the face value of Rs. 5 each and tax thereon paid for the previous year]. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Dividend Distribution Policy

The Board of Directors at its Meeting held on 10th August, 2016 approved the Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is attached as Annexure I and forms part of this Annual Report.


The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with the Companies Act, 2013 and applicable Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: Reports/

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited (TML), the Company's Flagship Company in the IT Sector, has reported a consolidated revenue of Rs. 29,141 crores in the current year as compared to Rs. 26,494 crores in the previous year, an increase of 10%. Its consolidated profit after tax is Rs. 2,813 crores as compared to Rs. 2,993 crores in the previous year, a decrease of 6%.

*The Group's finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 7,146 crores during the current year as compared to Rs. 6,554 crores in the previous year, a growth of 9%. The consolidated profit after tax for the year is Rs. 512 crores as compared to Rs. 772 crores in the previous year.

* Mahindra Finance financials is as per Indian Generally Accepted Accounting Principles (IGAAP).

Mahindra Lifespace Developers Limited (MLDL), the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 762 crores as compared to Rs. 593 crores in the previous year. The consolidated profit after tax for the year is Rs. 102 crores as compared to Rs. 92 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,282 crores as compared to Rs. 1,602 crores in the previous year, an increase of 42%. The consolidated profit after tax for the year is Rs. 149 crores as compared to Rs. 87 crores in the previous year, an increase of 71%.

Ssyangyong Motor Company (SYMC), the Korean subsidiary of the Company has reported consolidated revenues of

Rs. 21,153 crores in the current fiscal year as compared to Rs. 20,079 crores in the previous year, a growth of 5%. The consolidated profit after tax for the year is Rs. 245 crores as compared to consolidated loss of Rs. (166) crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 5,004 crores as against Rs. 4,794 crores in the previous year – a growth of 4%. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 3,698 crores as against Rs. 3,148 crores in the previous year.

During the year under review, Mahindra West Africa Ltd, Limited, Merakisan Private Limited, Mahindra Airways Limited, Mahindra Mexico S. de. R. L., Bristlecone Middle East DMCC, Mahindra do Brasil Industrial Ltda., Classic Legends Private Limited, BSA Company Limited, Mahindra MSTC Recycling Private Limited, Mahindra Suryaurja Private Limited, OFD Holding BV, Origin Direct Asia Ltd, Origin Fruit Direct B.V., Origin Fruit Services South America SpA, Origin Direct Asia (Shanghai) Trading Co. Ltd., Mahindra Homes Private Limited, Hisarlar Makina Sanayi ve Ticaret Anonim uirketi and Hisarlar uthalat uhracat Pazarlama Anonim uirketi became subsidiaries of your Company.

During the year under review, Caribia Service Oy, Are Semesterby A AB, Are Semesterby B AB, Are Semesterby C AB, Are Semesterby D AB, Kiinteist Oy Tunturinrivi, Saimaa Gardens Arena Oy, Merakisan Private Limited and Mahindra Internet Commerce Private Limited ceased to be subsidiaries of your Company.

Subsequent to the year end, Mahindra Automotive North America Inc. and Merakisan Private Limited became subsidiaries of your Company.

During the year under review, Mahindra Univeg Private Limited changed its name to Mahindra Greenyard Private Limited and Mahindra Reva Electric Vehicles Limited changed its name to Mahindra Electric Mobility Limited.

During the year under review, Sampo Rosenlew Oy and PF Holdings B.V. became Associates of your Company and Mahindra Sona Limited ceased to be a Joint Venture of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company's website and can be accessed at the Web-link: investor-reports/FY17/Annual Reports/


Demerger of Two-Wheeler Business of Mahindra Two Wheelers Limited (MTWL) into your Company

Mahindra Two Wheelers Limited ("MTWL"), a step down subsidiary of your Company, is engaged in the businesses of manufacturing and selling of two wheelers ("Two Wheelers Business") and trading in spare parts and accessories ("Spares Business").

MTWL's past business strategy was focused on addressing the mass two wheeler market. Given the market response, MTWL has decided to make a strategy shift by focusing on the niche premium two wheeler segment. As your Company is present in many segments of the automotive industry, it is envisaged to demerge the Two Wheeler Business into your Company. The proposed demerger would enable the Two Wheeler Business to also benefit from your Company's R&D and sourcing capabilities. Besides, the proposed demerger of the Two Wheeler Business would enable MTWL to streamline its operations by focusing on the Spares Business.

To achieve the above, a Scheme of Arrangement between Mahindra Two Wheelers Limited and the Company and their respective Shareholders and Creditors ("Scheme") was announced by your Company whereby MTWL would demerge the Two Wheeler Business into your Company. The appointed date of the Scheme is 1st October, 2016. In accordance with the Scheme, your Company shall be allotting 4,63,287 Ordinary (Equity) Shares of Rs. 5 each to Aay Kay Global and 40,601 Ordinary (Equity) Shares of Rs. 5 each to Emerging India Fund, the shareholders of MTWL, in the share exchange ratio of 1 fully paid-up Ordinary (Equity) Share of Rs. 5 each of the Company for every 461 fully paid-up shares held in MTWL.

The Company had received the Observation Letters dated 8th March, 2017 from BSE Limited (‘BSE') and dated 10th March, 2017 from the National Stock Exchange of India Limited (‘NSE'), conveying no objection to the Scheme. Subsequent to the year end, pursuant to the directions of the National Company Law Tribunal, Mumbai Bench by its Order dated 5th April, 2017 a Meeting of the Equity Shareholders of the Company has been convened on 13th June, 2017, for seeking approval to the Scheme.

Acquisition of assets of Bramont Montadora Industrial e Comercial de Veiculos S.A.

As a part of its strategy to expand its operations in the Brazilian market, your Company had appointed Bramont Montadora Industrial e Comercial de Veiculos S.A. ("Bramont") as a distributor in Brazil since 2012. In October, 2016, your Company along with Mahindra Overseas Investment Company (Mauritius) Limited ("MOICML") acquired 100% of the equity (‘Quota') capital of Mahindra do Brasil Industrial Ltda. Your Company invested approximately USD 7.5 million in the equity capital of Mahindra do Brasil Industrial Ltda., for acquisition of Bramont's assets. Given the importance of the Brazilian market, the acquisition of Bramont's assets would help your Company in having a direct presence through its own assembly facility and distribution network in the Brazilian market.

Acquisition of BSA brands for Two Wheeler

With a view to realign the Two Wheeler Business of your Company to focus on premium niche segments and to create an international motorcycle company and revive vintage motorcycle brands, your Company, through its subsidiary Classic Legends Private Limited (CLPL) has acquired 100% of the share capital of UK based BSA Company Limited (BSA) on 20th October, 2016 for a consideration of GBP 3.4 million. BSA was incorporated in the UK in December, 1980 and has a presence in Japan, Singapore, Malaysia, USA, Mexico and Canada. The principal activity of BSA is licensing of its brands.

The BSA brand, which has a global appeal, will be primarily suited to international markets.

Acquisition of 75.1% stake in Hisarlar Makina Sanayi ve Ticaret Anonim uirketi, Turkey

In line with the vision of your Company's Farm Equipment Sector to pursue a globalisation strategy and expand your Company's product portfolio to include various new categories of farm machinery, your Company has entered into definitive agreements on 19th January, 2017, for acquiring 75.1% stake in Hisarlar Makina Sanayi ve Ticaret Anonim uirketi ("Hisarlar") for a consideration of Turkish Lira 71 million

(equivalent to approximately Euro 18 million) through a capital increase. This transaction was completed on 30th March, 2017. Hisarlar is a key player in tractor cabins, machinery components and agricultural machinery industry. It had revenues of Turkish Lira 215 million (approximately Euro 55 million) in 2016, with exports constituting approximately 40% of sales. Hisarlar has two production facilities in Western Turkey and employs approximately 820 people. Hisarlar is the market leader in Turkey in the soil preparation category of farm implements, supported by a distribution network of nearly 85 dealers across Turkey. This acquisition is an important milestone in your Company's globalisation journey.

Sale of 66,58,565 Equity Shares of Mahindra Holidays & Resorts India Limited in the Open Market through Stock Exchange

During this year, your Company, in order to increase the free float and to unlock part value out of its investments in Mahindra Holidays & Resorts India Limited ("MHRIL"), a listed subsidiary of your Company, sold around 7.5% of its holding in MHRIL, on the Stock Exchange, at an average gross price of Rs. 412.05 per share, resulting in a gain of Rs. 269 crores to your Company. Following this sale, the shareholding of your Company has come down from 75% to 67.5% of MHRIL's share capital.

Sale of 32,75,000 shares of Mahindra Sona Limited

As a part of the strategy of your Company to divest from non-core investments, your Company sold its entire holding of 32,75,000 Equity Shares (29.77%) in Mahindra Sona Limited ("Mahindra Sona") in favor of the other Promoter of Mahindra Sona, namely, M Sona Automotive Private Limited, for an overall consideration of Rs. 89.32 crores, resulting in a profit of Rs. 85.86 crores on sale of this investment in Financial Year 2017.


The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineates the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance. The Code of Conduct for Senior Management and Employees of your Company ("the Code of Conduct") commits Management to financial and accounting policies, systems and processes. The Corporate Governance Policies and the Code of Conduct stand widely communicated across your Company at all times.

Your Company's Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and also to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Information Management Policy reinforces the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

Indian Accounting Standards (Ind AS) – IFRS Converged Standard

Your Company has adopted Indian Accounting Standards ("Ind AS") for the accounting period beginning on 1st April, 2016 pursuant to Ministry of Corporate Affairs Notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015.


A detailed analysis of your Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.


All Related Party Transactions entered during the year were in the Ordinary Course of Business and on arms length basis. During the year under review, your Company had entered into Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These transactions too were in the Ordinary Course of Business of your Company and were at Arm's Length Basis, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this Annual Report.

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: investor-reports/FY17/Annual Reports/


Statutory Auditors and Auditors' Report

Messrs Deloitte Haskins & Sells, Chartered Accountants (ICAI Registration No. 117364W) the retiring Auditors have completed the maximum tenure as Statutory Auditors of the Company as provided under the Companies Act, 2013 and relevant Rules thereunder.

The Board of Directors on the recommendation of the Audit Committee has approved and recommended to the Members, the appointment of Messrs B S R & Co. LLP, Chartered Accountants (Firm Registration Number 101248W/W-100022) who have given a written consent to act as Statutory Auditors of your Company and have also confirmed that the said appointment would be in conformity with the provisions of sections 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

The Members are requested to appoint Messrs B S R & Co. LLP as Statutory Auditors of the Company in place of the retiring Auditors Messrs Deloitte Haskins & Sells, Chartered Accountants at the ensuing Annual General Meeting for a period of 5 years from the conclusion of the ensuing Annual General Meeting till the conclusion of the 76th Annual General Meeting and fix their remuneration.

The Auditors' Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board Report as Annexure III, a Secretarial Audit Report given by the Secretarial Auditor. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board had appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2016-17.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2017-18 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration payable to Messrs D. C. Dave

& Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.


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. 56, 4, and 9 to the Financial Statements.


Your Company had discontinued its Fixed Deposit Scheme for 36 months with effect from the close of office hours on 31st January, 2014 and has also discontinued acceptance of Fixed Deposits with effect from 1st April, 2014.

All the deposits from public and Shareholders had already matured as at 31st March, 2017. The total of such 126 deposits amounting to Rs. 83.60 lakhs had not been claimed as at the end of the Financial Year. Since then 32 of these deposits of the value of Rs. 15.85 lakhs has been claimed.

There was no default in repayment of deposits or payment of interest thereon during the year under review. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

The particulars of loans/advances, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are furnished separately.


Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Company pursuant to sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

(a) Mr. Anand G. Mahindra – Executive Chairman

(b) Dr. Pawan Goenka – Managing Director

(c) Mr. V S Parthasarathy – Group CFO & Group CIO

(d) Mr. Narayan Shankar – Company Secretary

During the year, the Board of Directors of the Company, at its Meeting held on 11th November, 2016 had pursuant to the recommendations of the Governance, Nomination and Remuneration Committee and subject to the approval of Members at the ensuing Annual General Meeting of the Company:

(a) Designated and appointed Mr. Anand G Mahindra as Executive Chairman of the Company for a period of five years with effect from 12th November, 2016 upto and including 11th November, 2021; and

(b) Appointed Dr. Pawan Goenka as Managing Director of the

Company for a period of four years from 12th November, 2016 upto and including 11th November, 2020.

There has been no other change in the KMPs during the year under review.

Employees' Stock Option Scheme

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee of your Company, the Trustees of Mahindra & Mahindra Employees' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme – 2000 (2000 Scheme)

2. Mahindra & Mahindra Limited Employees Stock Option Scheme – 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are in compliance with the SBEB Regulations. Your Company's Auditors, Messrs Deloitte Haskins & Sells, have certified that the Company's above-mentioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the Company's website and can be accessed at the Web-link: investor-reports/FY17/Annual Reports/

Particulars of Employees and related disclosures

The Company had 251 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2017 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request. Such details are also available on your Company's website and can be accessed at the Web-link: http://www.mahindra. com/resources/investor-reports/FY17/Annual Reports/

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure IV to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company's focus continues towards propagating proactive and employee centric practices. The Transformational Work Culture initiative, which aims to create an engaged workforce and an innovative, productive and competitive shop-floor ecosystem, continues to grow in strength. The Transformational Work Culture Committee (TWCC) continually engages with long-term strategic initiatives which range from anticipated Labour Law reforms to ‘Swachh Bharat Abhiyaan'.

Some examples of the programs put in place include Rise for Associates, Industrial Relations Skills for Frontline Officers, Cultural Diagnostics Projects, Transformational work culture Projects, e-Compliance, e-Quiz for associates, e-portal on reward and recognition for associates, e-safety module, Code of Conduct for Associates, and cutting edge ER Practices in collaboration with Mahindra Leadership University (MLU).

In order to develop skills and foster togetherness at the workplace, your Company rolled out multiple training and engagement programs covering a wide range of topics, viz. positive attitude, stress management, creativity, team effectiveness, safety and environment, quality tools, TPM, skill building programs, customer focus, awareness on Promise 2019, Code of Conduct and a Union Leadership Development Program.

The Mahindra Skill Excellence initiative is a holistic approach to enhance the skill and capabilities of shop floor associates, and has received good participation across manufacturing facilities. As a result of this effort, an associate from your Company will represent India at the Worlds Skill Competition - Abu Dhabi in August, 2017. This will be the third year in a row, where your Company's associates will represent India at the World Skills Competition.

In an endeavor to generate ideas towards improving quality, reducing cost, ensuring safety and improving productivity, your Company's shop floor associates generated about 20 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness of employees through annual medical check-ups, health awareness activities and diet food which has become a way of life in the last three years. Software, which generates a complete report for each individual, has been a useful tool in identifying the employees who require focused counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company's employee relations approach. An ‘open door policy' and constant dialogue to create win-win situations, have helped your Company build trust and harmony. The Industrial Relations scenario continued to be largely positive across all the Mahindra

Automotive and Tractor manufacturing locations. Bonus settlements were amicably agreed upon at all locations. All this resulted in zero production loss in the Financial Year 2016-17 and helped create a peaceful, healthy and collaborative work environment.

Safety, Occupational Health and Environment

The Company revised its Safety, Occupational Health & Environmental (SOH&E) Policy which, inter alia, covers and focusses on strengthening SOH&E awareness amongst all employees and stakeholders of your Company. The revised SOH&E Policy ensures compliance regarding skills and competency development of employees, business associates, plant and equipment, by maintaining e-compliance systems on monthly basis.

The apex level SOH&E Policy has been further drilled down through separate SOH&E Policies for each of its Businesses and Plants. The revised SOH&E Policy is displayed at prominent locations at all Offices and Plants of your Company and communicated to all its stakeholders.

Objectives and targets from the new revised SOH&E Policy are supported by focused integrated management programs such as i4 safety, safety rounds, kaizens and mistake proofing projects. Your Company demonstrates a strong leadership commitment towards SHO&E, and as a part of the same, multiple measures and actions are implemented with thorough competency training programs like Working on height, Welding and Gas cutting, working on LPG/PNG/CNG and Forklift driving.

At each Plant location, annual events were organised and commemorated like National Safety Day/Week, World Environment Day, Road Safety Week and Fire Service Week. Safety Culture building was demonstrated through Behaviour Based Safety (BBS), Safety Crusade, Levers of Excellence and Waste to Wealth programs in the manufacturing domain. SOH&E awareness training programs were conducted for all stakeholders as per the training calendar through various e-learning modules. In the year under review, your Company initiated an Accelerated Learning Program (ALP) on Safety, for all group employees to further strengthen innovations in safety and best practices related to SOH&E.

Your Company carried out Statutory safety risk assessments, quantitative risk analysis, electrical safety audits of all facilities absorbing new amended legal requirements. For the year under review, your Company initiated a Fire load reduction program at the Plant level. Your Company's Plants and locations continued their commitment to improve the wellbeing of employees and contract workmen by organising physical fitness activities like yoga, zumba, occupational health examination camps, medical check-ups, consultation and counselling. Further, all locations observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day along with Way2Wellness sessions covering topics like Healthy Heart, Diabetes, etc.

Various path breaking projects were implemented by your Company in the areas of Air Pollution Management, Water and Waste Water Management, Solid Waste Management and new techniques to propagate ‘Go Green' philosophy were undertaken. These Projects cover elimination/ minimisation of environment impact, in line with current and future environmental challenges, prevention of injury, ill health and OHS Hazards, at the first place of their control. Your Company extended the ‘Go Green' initiatives to its supplier community through Green Supply Chain Management practices. Your Company also proactively shared good safety practices with business partners. ‘Business Case for Safety' a book published in association with the National Safety Council and CII, was shared with all suppliers. Through stakeholder engagement, your Company monitors sustainability development initiatives, which include climate change mitigation, sustainable source use, protection of bio-diversity and certified green building projects with platinum and gold rated facilities at identified locations and reported as per the Global Reporting Initiative (GRI) - G4 Guidelines. World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week are also observed on an annual basis.


All Plants of your Company have been recertified under the standard ISO 14001: 2004 and OHSAS 18001: 2007. Further, all Plants are in the process of adopting the revised environmental standard ISO 14001: 2015. All targets under SOH&E are reviewed on a periodic basis through operations reviews conducted by Senior Management. The focused initiatives and reviews have helped improve SOH&E performance of your Company by over 50% in the period 2016-17.



Pursuant to the recommendation of Governance, Nomination and Remuneration Committee, the Board at its Meeting held on 11th November, 2016 designated and appointed Mr. Anand G Mahindra, who was holding the position of Chairman and Managing Director, as Executive Chairman of the Company for a period of five years with effect from 12th November, 2016 upto and including 11th November, 2021 and appointed Dr. Pawan Goenka who was holding the position of Executive Director and Group President (Auto & Farm Sector), as Managing Director of the Company for a period of four years from 12th November, 2016 upto and including 11th November, 2020, subject to approval of the Members of the Company at the ensuing Annual General Meeting ("AGM"). The Board of Directors at the same Meeting based on the recommendation of the Governance, Nomination and Remuneration Committee appointed Mr. T. N. Manoharan as an Additional Director (Independent and Non-Executive) of the Company for a period of 5 consecutive years commencing from 11th November, 2016 to 10th November, 2021 subject to the approval of the Members in the ensuing Annual General Meeting.

Dr. Pawan Goenka retires by rotation and, being eligible, offers himself for re-appointment at the 71st Annual General Meeting of the Company scheduled to be held on 4th August, 2017. Mr. Deepak S. Parekh would cease to hold office as an Independent Director of the Company from 8th August, 2017, upon completion of his tenure as approved by the Shareholders at the 68th AGM of the Company.

Mr. Parekh was appointed as a Director on the Board of the Company with effect from 29th August, 1990. He has made significant contributions towards effective functioning of the Board and has been acting as the Chairman of the Audit Committee and Member of the Strategic Investment Committee and Risk Management Committee of the Company. The Board has placed on record its sincere and deep appreciation of the invaluable counsel and contribution made by Mr. Parekh to the Company. The 27 years that Mr. Parekh was on the Board of the Company were very eventful and critical years in the Company's history. Mr. Parekh's immense knowledge, financial acumen and expertise helped the Board and the Company negotiate in these challenging times while at the same time adhering strictly to sound financial discipline with the highest standards of Corporate Governance.

Quote from Chairman Emeritus

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.

A separate exercise was carried out by the Governance, Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors. The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Director and Non-Executive Director. 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, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, number of programs and number of hours spent by each Independent Director in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the Company's website and can be accessed at the Web-link: Annual Reports/

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 Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

The Policies mentioned at (a) and (b) above are attached as Annexure V-A and V-B respectively and form part of this Report.

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) in the preparation of the annual accounts for the Financial Year ended 31st March, 2017, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis; (e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31st March, 2017; (f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31st March, 2017.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1st April, 2016 to 31st March, 2017, six Board Meetings were held on: 30th May, 2016, 10th August, 2016, 11th November, 2016, 3rd December, 2016, 10th February, 2017 and 28th March, 2017. The 70th Annual General Meeting (AGM) of the Company was held on 10th August, 2016.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Executive Chairman or the Managing Director or other Non-Independent 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 Executive Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), review the performance of the Company, assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Five Meetings of Independent Directors were held during the year and these meetings were well attended.

Audit Committee

The Committee comprises of five Directors viz. Mr. Deepak S. Parekh (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan, Mr. R. K. Kulkarni and Mr. T. N.

Manoharan. All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.


Corporate Governance

Your Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company's Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the Company's website and can be accessed at the Web-link: Reports/ 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 gender neutral. During the year under review, 4 complaints with allegations of sexual harassment were filed, of which 3 were disposed-off as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and as of 31st March, 2017, 1 complaint is pending.

Business Responsibility Report

The ‘Business Responsibility Report' (BRR) of your Company for the year 2016-17 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth. Your Company is committed to leverage ‘Alternative Thinking' to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company's risk management. The Company has a robust Organisational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorised to monitor and review risk management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board the modifications to the Risk Management Policy. Further, the Board has constituted a Corporate Risk Council comprising the Senior Executives of the Company. The terms of reference of the Council comprises review of risks and Risk Management Policy on periodic intervals.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification therein of elements of risk, including those which in the opinion of the Board may threaten the existence of the Company. Risk management process has been established across the Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives. Further, it is embedded across all the major functions and revolves around the goals and objectives of the organisation.


Corporate Social Responsibility (CSR)

Your Company's Corporate Social Responsibility efforts continue to be directed towards supporting the constituencies of girls, youth and farmers by innovatively supporting them through programs in the domains of education, health and environment, while harnessing the power of technology. It is only through these sustained and continued efforts that your Company can build and consolidate its CSR initiatives which contribute to nation building.

During the last Financial Year, your Company has been making an impact through its ongoing CSR programs, some of the notable ones include Project Nanhi Kali, which supports the education of underprivileged girls, Mahindra Pride Schools, which provide livelihood training to youth from socially and economically disadvantaged communities and a variety of other scholarship programs, which range from providing opportunities to youth from low income group families to undergo diploma courses at vocational education institutes, to allowing meritorious students to pursue their post graduate studies at reputed universities overseas, to allowing meritorious and deserving students to study at the Mahindra United World College in Pune. Your Company has also helped set up a premier engineering institution ‘Mahindra cole Centrale' (MEC) in Hyderabad, in partnership with Ecole Centrale, Paris and the Jawaharlal Nehru Technological University, Hyderabad. In the area of public health, your Company sponsored Lifeline Express, through which medical care and treatment was provided to communities who do not have access to any medical facilities. Further, your Company supported critical patients suffering from cancer and other life threatening illnesses. Your Company also contributed to the environment by adding green cover through planting of over two million trees this year through Project Hariyali. Your Company continues to support small and marginal farmers by training them in effective farming practices including soil health, crop planning, creating model farms with bio-dynamic farming practices, with a view to increasing crop productivity, through the Wardha Farmer Family Project, Krishi Mitra Project and

Integrated Watershed Development Project. Your Company also partnered with the Maharashtra State Government to support the Village Social Transformation Mission of the Government. Your Company created a ‘Zero Fatality Corridor' to ensure ‘zero' deaths due to accidents on Mumbai Pune Expressway. In addition to the above CSR initiatives, your Company has a vibrant Employee Social Options platform through which the employees are provided opportunities to give back to the community.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy ("CSR Policy") which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed at the Company's website through the Web-link: Reports/

CSR Committee

The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Mr. R. K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The Committee, inter alia, monitors the CSR activities.

During the year under review, your Company spent Rs. 83.57 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 83.30 crores. The detailed Annual Report on the CSR activities undertaken by your Company in Financial Year 2017, is annexed herewith marked as Annexure VI.

Sustainability Initiatives

During the year under review, the 9th Sustainability Report for the year 2015-16 was released. This year's Report was externally assured by KPMG and conforms to the fourth generation ‘GRI G4-Core option'.

Your Company maintained the focus on the Environmental, Social and Governance (ESG) parameters, on its journey from "Conservation to Rejuvenation" in the year under review by building on the initiatives of the previous years as also initiating new ones. Your Company continued the bio-diversity assessments across selected locations to further the actions on the India Business and Bio-diversity Initiative (IBBI).

Mr. Anand G. Mahindra, Executive Chairman of your Company represented the Corporate World at the historic Paris Climate Change Agreement Signing ceremony in the United Nations headquarters, New York.

Your Company is the first Indian Company to announce its internal Carbon Price of US $10 per ton of carbon emitted. Carbon Pricing is an internationally recognised business tool that enables companies to create resources which are invested in low carbon technologies, which help reduce future emissions and lower operating costs. An international webinar featuring Dr. Pawan Goenka, Managing Director was held in the reporting year in collaboration with Yale University and World Bank led Carbon Pricing Leadership Coalition.

The Sustainability performance for your Company for the Financial Year 2016-17 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was recognised for its leadership position on the ESG dimensions during the year under review, by way of:


Parivartan Sustainability Leadership Awards 2016.

• 7INNING THE SECOND PRIZE FOR THE 3USTAINABILITY the Indian Chamber of Commerce Awards 2016.


India Awards 2017.

• WINNING THEEPRESTIGIOUS #)) n )4# 3USTAINABILITY 2016 in CSR category as ‘Commendation for significant achievement'.


Management' (for Nashik Plant).


Rating' at World Renewable Energy Congre• , 2016 organised by Energy and Environment Foundation (for Igatpuri Plant).


Sustainability Index – 2016 under the ‘Emerging Market Index' for the consecutive third year with improvement in percentile scores.



Disclosure Leadership Index 2016.

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 VII and is attached to this Report.


Share Capital

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 310.55 crores as at 31st March, 2017 comprising of 62,10,92,384 Ordinary (Equity) Shares of Rs. 5 each fully paid-up. There was no change in Share Capital during the year under review.

Extract of Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31st March, 2017 in Form No. AT MGT-9 is attached herewith as Annexure VIII and forms part of this Report.



The Executive Chairman of the Company did not receive any 4)-% remuneration or commission from any of the subsidiary of your Company. The Managing Director of the Company did !WARD not receive any commission from any of its subsidiaries and has not 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 required7ATER in respect of the following items as there were no transactions/ events on these items during the year under review except as stated hereunder:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under any Scheme save and except ESOS referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operation in future.

The Honourable Supreme Court on 29th March, 2017, passed Orders that on and from 1st April, 2017, non BS-IV compliant vehicles would not be permitted to be sold in India by any manufacturer or dealer and prohibited vehicle registration authorities from registering such vehicles. The Financial Statements have recognised an impact of Rs. 171.01 crores arising from the above.

The said Order of the Honourable Supreme Court will not impact the going concern status of the Company.

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
Executive Chairman
Mumbai, 30th May, 2017


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Surya Kiran Investment & Capital Services Pvt. Ltd.  * Insurance is in the name of Surya Kiran Investment & Capital Services Ltd. IRDA No: CA0177
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