Mahindra & Mahindra Ltd
Directors Reports
Dear Shareholders
Your Directors present their Report together with the audited financial statements of
your Company for the year ended 31st March, 2021.
A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
|
(Rs. in crores) |
| Particulars |
2021 |
2020 |
| Revenue from Operations |
45,041 |
45,488 |
| Other Income |
1,221 |
1,668 |
| Profit before Depreciation, Finance Costs, |
|
|
| Exceptional items and Taxation |
7,727 |
7,466 |
| Less: Depreciation, Amortisation and |
|
|
| Impairment Expenses |
2,233 |
2,223 |
| Profit before Finance Costs, Exceptional |
|
|
| items and Taxation |
5,494 |
5,243 |
| Less: Finance Costs |
371 |
113 |
| Profit before Exceptional items and Taxation... |
5,123 |
5,130 |
| Add: Exceptional items |
(3,663) |
(2,014) |
| Profit before Taxation |
1,460 |
3,116 |
| Less: Tax Expense |
1,191 |
1,785 |
| Profit for the year |
269 |
1,331 |
| Balance of profit for earlier years |
29,102 |
28,967 |
| Less: Transfer to Debenture Redemption |
|
|
| Reserve |
— |
— |
| Profits available for appropriation |
29,371 |
30,298 |
| Add: Other Comprehensive Income/(Loss)*.. |
(60) |
(8) |
| Less: Dividend paid on Equity Shares |
292 |
1,057 |
| Less: Income-tax on Dividend paid |
— |
131 |
| Balance carried forward |
29,019 |
29,102 |
* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of
retained earnings.
Financial Year 2021 was one of the worst years for the Indian economy since
independence. As per the Second Advanced Estimates of National Income released by the CSO,
real economic activity is expected to have contracted by 6.5% during the fiscal as the
COVID-19 pandemic took a toll on economic activity. This was the first instance of a
contraction since the Financial Year 1980. Nominal per capita income fell quite sharply
during the year.
The pandemic hit all segments of the economy quite hard with the manufacturing,
construction and services segments reporting large contractions during the fiscal.
Agriculture, however, was the lone bright spot in the economy, growing by 3.6% in the
Financial Year 2021. Rural areas were not hit as hard by COVID-19 vis--vis urban India.
Besides, the Government also proactively intervened and supported this segment by way of
cash and kind transfers, record food grain procurement, frontloading rural-related
Government spending, hiking MGNREGA spending sharply, initiating a temporary rural works
program for returnee migrants and ensuring ample supply of credit. All these measures
provided support to the segment. India's food grain output is estimated to have touched
305.4 million tonnes in Financial Year 2021 which is the highest level ever. Likewise,
horticulture output is also pegged at a record level of 326.6 million tonnes during the
year.
On the demand side, all drivers of economic activity fared poorly in the Financial Year
2021. Private consumption spending declined sharply owing to a fall in Household incomes
while capital formation contracted as the private sector delayed investments owing to weak
demand and low capacity utilisation levels. Exports also fell sharply with a contraction
in world trade volumes owing to weak demand across the globe.
The Profit for the year before Depreciation, Finance Costs, Exceptional items and
Taxation recorded an increase of 3.5% at Rs. 7,727 crores as against Rs. 7,466 crores in
the previous year. Profit after tax decreased by 79.8% at Rs. 269 crores as against Rs.
1,331 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.
Details of Material Changes from the end of the Financial Year till the date of this
Report
The rampant spread of the Second Wave of COVID-19 and Lockdowns enforced in various
States/Parts of the Country coupled with disruption in the supply of oxygen for industrial
use, demand and supply for Vehicles and Tractors is expected to be impacted temporarily.
In addition, on the supply side, global shortage of microprocessors (semi-conductors)
used in Electronic Control Unit (ECUs) fitted in different components/aggregates for
Vehicles continues to pose challenges to the smooth Production Schedules.
The Company's estimated Sales Volume for the Quarter ending June 2021 is expected to be
lower by 15-20% as compared to the fourth quarter of Financial Year 2020-21.
The Revenue and profitability will be impacted in line with the fall in Volumes as
mentioned above. However, the Company is taking various cost optimisation measures to
limit the adverse impact.
The Company is also carefully reviewing the demand and supply situation and
re-calibrating its operations accordingly while protecting the interest of its customers,
dealers and suppliers. The endeavour is to ensure optimal level of inventory at plants and
dealerships in order to be prepared for a rebound in demand once the situation returns to
normalcy.
Performance Review
Automotive Sector
Your Company's Automotive Sector posted total sales of 3,48,621 vehicles (3,31,384
Passenger vehicles, commercial vehicles and 17,237 three-wheelers) as against a total of
4,71,141 vehicles (4,11,345 four-wheelers and 59,796 three-wheelers) in the previous year,
registering a de-growth of 26.0%.
In the domestic market, your Company sold a total of 3,30,271 vehicles as compared to
4,44,218 vehicles in the previous year, resulting in a de-growth of 25.7%.
In the Passenger Vehicle (PV) segment, your Company sold 1,57,215 vehicles [including
1,55,530 Utility Vehicles (UVs), 1,676 Vans and 9 Cars] registering a de-growth of 15.9%,
as compared to the previous year's volume of 1,86,942 vehicles [including 1,79,405 UVs,
6,679 Vans and 858 Cars].
In the Commercial Vehicle (CV) segment, your Company sold 1,56,159 vehicles [including
23,789 vehicles <2T GVW, 1,28,100 vehicles between 2-3.5T GVW, 1,160 Light
Commercial Vehicles (LCVs) in the LCV > 3.5T segment, 684 vehicles in the 7.5-16.2T GVW
segment and 2,426 Heavy Commercial Vehicles (HCVs)] registering a de-growth of 21.6% over
the previous year's volume of 1,99,131 vehicles [including 36,475 vehicles < 2T GVW,
1,51,384 vehicles between 2-3.5T GVW, 5,415 LCVs in the LCV > 3.5T segment, 760
vehicles in the 7.5-16.2T GVW segment and 5,097 HCVs].
In the three-wheeler segment, your Company sold 16,897 three-wheelers, registering a
de-growth of 70.9% over the previous year's volume of 58,145 three-wheelers.
For the year under review, the Indian automotive industry (except 2W) de-grew by 15.3%,
with the PV industry de-growth of 2.2% and CV industry de-growth of 20.8%. The UV
segment was the only segment to show growth in Financial Year 2021 with 12.1%. Within the
CV industry, the LCV goods <3.5T segment de-grew by 11.0% while the HCV goods segment
de-grew by 14.5%.
Your Company's UV volumes stood at 1,55,530 units, a de-growth of 13.3%. The UV market
share for your Company stood at 14.7%. For the year under review, your Company's PV volume
stood at 1,57,215 units with a market share of 5.8%. The stylish and off-roader New Thar
launched in October 2020, performed well in the UV segment with a volume of 14,186 units
for the Financial Year 2021. Scorpio, XUV500 and Bolero continued to be strong brands for
your Company in the UV segment.
In the LCV<3.5T segment, your Company retained its No.1 position with a 41.5% market
share. Your Company sold a total of 1,51,889 vehicles in this segment. Your Company has a
market share of 56.8% in the LCV 2-3.5T segment, which is the Pik-UP segment.
In the Medium and Heavy Commercial Segment (MHCV) segment, your Company sold 3,110
trucks as against 5,857 in the previous year. This is a de-growth of 46.9%. Your Company's
market share in the HCV segment stands at 2.8%.
Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year
under review, sold (along with its subsidiary Mahindra Electric Mobility Limited) 5,418
EVs (27 four wheelers and 5,391 three-wheelers) as against 14,602 EVs (966 four wheelers
and 13,636 three- wheelers) in the previous year.
During the year under review, your Company posted an export volume of 18,350 vehicles
as against the previous year's exports of 26,923 vehicles. This is a de-growth of
31.8%.
The spare parts sales for the year stood at Rs. 2,165.3 crores (including exports of
Rs. 133.5 crores) as compared to Rs. 2,494.5 crores (including exports of Rs. 230.8
crores) in the previous year, registering a de-growth of 13.2%.
Farm Equipment Sector
Your Company's Farm Equipment Sector recorded total sales of 3,54,498 tractors
(domestic + export) as against 3,01,915 tractors sold in the previous year, registering
a growth of 17.4%. This includes 3,067 tractors sold under the Trakstar brand, which
is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.
For the year under review, the tractor industry in India recorded highest ever sales of
8,99,407 tractors, a growth of 26.9%. Tractor Industry recorded growth in Financial Year
2021 after a de-growth in Financial Year 2020.
In the domestic market, your Company sold 3,43,833 tractors (including Gromax Agri
Equipment Limited), as compared to 2,91,901 tractors in the previous year, recording a
growth of 17.8%. It is the highest ever volume sold for your Company. Given the COVID-19
situation, the Company faced constraints on supply chain and supplier capacity; hence
market share is not a good performance indicator for Financial Year 2021. With the market
share at 38.2%, the Company continues to be the market leader for the 38th consecutive
year. Your Company's performance was supported by good performance of all products in the
portfolio.
Your Company continues to focus on growing the farm mechanisation space, by offering
affordable mechanisation solutions. The portfolio comprises of Rotavators, Cultivators,
Harvesters, Rice transplanters, Balers and Sprayers.
For the year under review, your Company exported 10,665 tractors which is a growth of
6.5% over the previous year.
Spare parts net sales for the year stood at Rs. 758.2 crores (including exports of Rs.
48.8 crores) in Financial Year 2021 as compared to Rs. 718.2 crores (including exports of
Rs. 42.4 crores) in the previous Financial year 2020, registering a growth of 5.6%.
Other Businesses
Mahindra Powerol
Under the Powerol brand, your Company has been a leader in providing power back-up
solutions to the telecom industry for over a decade. To cater to the changing customer
needs, your Company continues to consolidate its presence in tele-infra management and in
the energy management solutions space. In the overall genset business, your Company is No.
2 brand by volume, offering a wide range of solutions from Lower KVA range to mid to
higher KVA range.
Your Company is also focusing on Gas Powered Gensets and presently offers solutions in
25 to 125 KVA range. In addition to lowering emission, these gensets offer a significantly
lower operating cost. This segment will be the future growth area.
With a focus on green energy solutions, your Company also offers Energy Storage
Solutions powered with Lithium-ion batteries. These are for application in telecom towers
and bank ATMs. With the evolving BS IV engine demands, your Company's Industrial Equipment
vertical has already taken the first mover advantage and introduced various nodes to its
customers.
Despite the pandemic, Powerol was offering relentless service and support to emergency
services like healthcare, telecom, etc.
Construction Equipment Business
For the year under review, your Company (under the Mahindra EarthMaster brand) sold 681
Backhoe Loaders (BHLs) as compared to 880 in the Financial Year 2020, which is a de-growth
of 22.6%. The Construction Equipment industry recovered in the second quarter onwards.
With the increasing focus and spend in infrastructure sector by the Government, the BHL
market in India grew by 21% over the previous year.
Your Company also has presence in the road construction equipment business through
motor graders (under the Mahindra RoadMaster brand). During the year under review, your
Company sold 82 motor graders.
Two-Wheeler Business
In line with the strategy for the two-wheeler business, your Company through its
subsidiary, Classic Legends Private Limited had reintroduced the iconic brand ‘Jawa'
to the Indian market in the Financial Year 2019, with the launch of new range of JAWA
motorcycles - Jawa and Jawa Forty-Two. A new addition to that range - JAWA Perak was
launched in the Financial Year 2019-20 and the sale of the same started in the Financial
Year 2020-21.
Current Year's review
During the period 1st April, 2021 to 27th May, 2021, 43,414 vehicles were produced as
against 2,656 vehicles and 38,959 vehicles were dispatched as against 2,700 vehicles
during the corresponding period in the last year. During the same period 55,904 tractors
were produced and 55,682 tractors dispatched as against 8,445 tractors produced and 9,307
tractors dispatched during the corresponding period in the previous year.
The world continues to recover from the biggest crisis it has faced in the
modern times. Vaccination drives have been initiated across major economies since
January 2021 and the pace of vaccination would be critical to support economic recovery in
the medium term particularly as one country after another continue to reel under fresh
waves of infections and newer strains of the virus. The IMF expects global economic
activity to rebound with projections of a 6% growth in 2021 after a 3.3% contraction in
2020. The strength of the recovery varies across countries, depending upon the severity of
the crisis, the extent of disruptions and the effectiveness of policy support.
The RBI expects India's economic activity to rebound quite strongly, with a growth
projection of 10.5% for the Financial Year 2022. Both, fiscal and monetary policy have
lent support to India's growth recovery in Financial Year 2021 and this support is
expected to continue through Financial Year 2022. The Financial Year 2022 Union Budget
clearly focused on growth, not just for now but also for the medium term with a laser
focus on reviving investment demand. Government Capex has significantly higher multipliers
than other forms of spending and would play an important role in substituting and even
crowding in private investments in the economy at a time when private sector investment
demand is likely to remain subdued. The RBI cut rates, infused significant liquidity and
eased regulatory burden to support the economy and has guided that it would continue with
the accommodative stance as long as necessary to sustain growth on a durable basis.
The ongoing second wave of infections since end-February 2021 with many States imposing
localised lockdowns and restrictions and any future fresh waves of infections, like those
seen in other major economies, impart downside risks and huge uncertainty to the growth
trajectory. However, rapid mass vaccination and timely fiscal and monetary support could
provide the necessary backstop to economic activity.
Finance
Financial Year 2020-21 was an unprecedented year by all means, as the outbreak of
COVID-19 pandemic not only resulted in the loss of countless human lives, it also impacted
the global trade and commerce severely. Most major economies entered recession during the
year, as widespread lockdown measures to contain the spread of the pandemic brought
business activities to a standstill. Leave aside interest rates, it was the year in which
even ‘oil' treaded into the negative territory. The global output declined by 3.3% in
the calendar year 2020, as per IMF estimates, and most of the major economies, except
China, registered a negative growth. In order to support the battered economies, Central
Banks came to the forefront, announcing massive rate cuts and stimulus measures, doling
out trillions of dollars to pump growth. Policy easing by the Central Banks was timely,
swift, significant in scale and most importantly coordinated. Meanwhile, Central
Governments juggled to maintain the right balance between containing the spread of the
pandemic through strict lockdown measures and re-opening the economies to boost
consumption. Unfazed by the subdued business activity, the equity markets across the world
roared back from the March 2020 lows and rose sharply during the later part of the
year. The gains in the equity markets were driven by prospects of synchronous growth
recovery in 2021-22, fuelled by sustained fiscal policy support and further aided
by a global vaccination drive. The year 2020 saw global bond yields plunge to record lows
amidst large scale rate cuts and accommodative monetary policy stance of Central Banks to
aid growth and counter the impact of COVID-19 pandemic. Yields have risen sharply since
end-2020 across the globe, led by US, as inflation pressures are rising across. As Bond
yields surge, markets are seen to be discounting the Central Banks' assurances of
continued accommodative monetary policy. Commodity prices also witnessed an unabated rally
during the year, with most of commodities touching record highs in the pandemic-stricken
year. However, this was not before COVID-19 had caused widespread declines in commodity
prices in the first half of Calendar Year 2020. The rally since then has been
fuelled by a strong economic recovery in China, massive fiscal and monetary stimulus,
stronger push towards renewable energy, supply side disruptions and the return of
commodities as an asset class amidst economic uncertainty.
As the year 2020 drew to a close, the ramp up of global vaccination drive provided
optimism about a strong vaccine-led growth recovery in 2021. However, this crisis will
likely leave scars well into medium term as labour markets take time to heal, investment
is held back by uncertainty and Balance Sheet problems. As per the latest IMF estimates,
the global economy is expected to rebound by 6% in 2021 but would moderate to 4.4% in 2022
for the aforementioned reasons.
The global community still confronts extreme social and economic strain, with the
rising human toll worldwide amidst the resurgence of COVID-19 wave. Moreover, burgeoning
debt and deficits, rising inflation and impact of unwinding of quantitative easing are
some key risks that persist.
On the domestic front, India also witnessed sharp slowdown during the year. The Central
Government announced strict nationwide lockdown in March 2020, which was followed by
several localized lockdowns across States during the course of the year.
Reserve Bank of India further cut repo rate by 40 bps in the Financial Year 2020-21,
having already cut the rates by a cumulative of 160 bps in the preceding year. Moreover,
RBI announced several liquidity boosting measures including targeted long-term repo
operations, moratorium of loans, etc. The interest rates had fallen sharply in money
market due to the liquidity glut, resulting in real lending rates to fall to decade lows.
Extraordinary, novel and out of box measures taken by Reserve Bank of India to mitigate
the impact of pandemic have anchored financial stability and cushioned the damaging
effects of COVID-19 on economic activity.
Indian economy experienced subdued 1st half of Financial Year 2021, however it started
seeing good recovery in 2nd half of Financial Year 2021. Sensex reflected growth
sentiments as it wrapped 2020 on a bullish note by gaining 16% from a record low of March
2020. However, after close to six months of a receding case count, India is witnessing a
rise in the COVID-19 cases and the resultant partial/complete lockdowns by States, to
counter the rising cases, is expected to dent the ongoing economic recovery.
The Financial Year 2020-21 has been a roller-coaster ride for the rupee due to
COVID-19. The pandemic induced massive sell-off in the equity market led the rupee breach
record low of 76.90. However, easing of lockdown restrictions, infusion of stimulus by
Government and central banks all over the world, optimism over vaccine, enthused investors
resulting in sustained foreign fund inflows, helped rupee vault back to 72 zone.
In the Financial Year 2021, Foreign portfolio investment (FPI) in India was at a 6-year
high with record inflows into the equity markets and marginal outflows from the debt
markets. The total FPI inflows into the equity, debt and hybrid markets during the
Financial Year 2021 was at $36.1 billion compared with the previous two years of outflows
of $5.5 billion in the Financial Year 2019 and $3 billion in the Financial Year 2020.
Your Company continued to monitor the liquidity situation carefully. Given the
unprecedented impact that COVID-19 had on the business, the Company borrowed funds to
shore up liquidity as a precautionary measure. During the year, your Company raised long
term borrowings of Rs. 5,536.59 crores by way of a mix of both, market instrument like
Non-Convertible Debentures and Bank Loans. Additionally, short term borrowings of Rs.
2,376.90 crores were raised by issuance of Commercial Papers and availing of bank lines
during the year. This ensured sufficient liquidity to manage the adverse effects of
pandemic. Since the economic activity improved from June-July 2020, your Company saw
robust operating cash flows. As the year drew close to an end, sufficient liquidity
prompted pre/ repayment of some of the borrowings. During the year, your Company repaid
Rs. 3,387.41 crores of the total borrowings (long term, short term borrowing and lease
liabilities). As on 31st March, 2021, Rs. 7,642.07 crores of Long-Term borrowing
(including current maturities and lease liabilities) and Rs. 24.74 crores of Short Term
borrowing was outstanding. With a high liquidity level of Rs. 10,743.89 crores as at 31st
March, 2021, your Company is better placed to tide over the impact of the re-surge in
COVID-19 cases on the business, if any.
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 is 0.22 as at 31st March, 2021.
Your Company has been rated by CRISIL Limited ("CRISIL"), ICRA Limited
("ICRA"), India Ratings and Research Private Limited ("India Ratings")
and CARE Ratings Limited ("CARE") for its Banking facilities. All have
re-affirmed the highest credit rating for your Company's Short Term facilities. For Long
Term facilities and Non-Convertible Debenture ("NCD") programme, CRISIL, ICRA
and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA
(stable) and IND AAA/Stable for the respective facilities rated by them. With the above
rating affirmations, your Company continues to enjoy the highest level of rating from all
major rating agencies at the same time.
The AAA ratings indicate highest degree of safety regarding timely servicing of
financial obligations and is also a vote of confidence reposed in your Company's
Management by the rating agencies. It is an acknowledgement of the strong credit profile
of your Company over the years, resilience in earnings despite cyclical upturns/downturns,
robust financial flexibility arising from the significant market value of its holdings and
prudent management.
Your Company is a "Large Corporate" as per the criteria under SEBI Circular
No. SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November, 2018.
Investor Relations (IR)
Your Company always believes in leading from the front with emerging best practices in
IR and building a relationship of mutual understanding with domestic and foreign
investors/analysts. In the Financial Year 2021, the year characterised by a lot of
uncertainty amongst pandemic and lockdowns, your Company increased its interaction with
investors through video and audio conference calls. The top management, including the
Managing Director, Deputy Managing Director and Group CFO and Executive Director-Auto
& Farm Sectors, spent significant time to interact with investors to communicate the
strategic direction of the business, capital allocation policy and the way the Company was
handling COVID-19 crisis. All the four quarterly earnings calls conducted during the year
were also well attended by investors and analysts. Apart from the earning calls, the
Company also had a special investor/analyst call to discuss the implications of strategic
steps being taken by your Company.
During the year, your Company interacted with around 1,079 Indian and overseas
investors and analysts (excluding quarterly earnings calls and specific event related
calls). Your Company ensures that critical information about the Company is available to
all the investors by uploading all such information on the Company's website. Your Company
also engages with investors on Environment, Social and Corporate Governance (ESG), which
has received excellent feedback from investors and ESG analysts. Your Company was awarded
The Institute of Chartered Accountants of India's prestigious Gold Shield Award for its
Integrated Annual Report of Financial Year 2020.
Dividend
As per the Dividend Distribution Policy, dividend payout would have to be determined
based on available financial resources, investment requirements and taking into account
optimal shareholder return. Within these parameters, the Company would endeavour to
maintain a total dividend pay-out ratio in the range of 20% to 35% of the annual
standalone Profits after Tax (PAT) of the Company.
Despite the pandemic, your Company was able to deliver a good operational performance
during the period under review. While the performance has been good, the Profit After Tax
was low on account of exceptional items.
Your Directors, considering the good performance, a strong cash flow and this being a
milestone 75th Year of your Company, decided to recommend a Dividend of Rs. 8.75 (175%)
per Ordinary (Equity) Share of the face value of Rs. 5 each on the Share Capital out of
the accumulated balance of retained earnings representing the accumulated surplus in the
profit and loss account as at 31st March, 2021.
The equity dividend outgo for the Financial Year 2020-21 would absorb a sum of
Rs. 1,087.79 crores [as against Rs. 292.15 crores comprising the dividend of Rs. 2.35 per
Ordinary (Equity) Share of the face value of Rs. 5 each for the previous year]. Dividend
will be payable subject to approval of members at the ensuing Annual General Meeting and
deduction of tax at source to those Shareholders whose names appear in the Register of
Members as on the Book Closure Date. The Board of your Company decided not to transfer any
amount to the General Reserve for the year under review.
Dividend Distribution Policy
The Dividend Distribution Policy containing the requirements mentioned in Regulation
43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("Listing Regulations") is attached as Annexure
I and forms part of this Annual Report.
B. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company, its subsidiaries, associates and
joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian
Accounting Standards along with all relevant documents and the Auditors' Report form part
of this Annual Report. The Consolidated Financial Statements presented by the Company
include the financial results of its subsidiary companies, associates and joint ventures.
The Financial Statements as stated above are also available on the website of the Company
and can be accessed at the Web-link: https://www.mahindra.com/
resources/FY21/AnnualReport.zip
Subsidiary, Joint Venture and Associate Companies
The Mahindra Group Companies continue to contribute to the overall growth in revenues
and overall performance of your Company.
Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated
operating revenue of Rs. 37,855 crores in the current year as compared to Rs. 36,868
crores in the previous year, an increase of 3%. Its consolidated profit after tax after
non-controlling interests is Rs. 4,428 crores as compared to Rs. 4,033 crores in the
previous year, registering an increase of 10%. The Group's finance company, Mahindra &
Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating
income of Rs. 12,050 crores during the current year as compared to Rs. 11,883 crores in
the previous year, registering a growth of 1%. The consolidated profit after tax after
non-controlling interests for the year is Rs. 773 crores as compared to Rs. 1,075 crores
in the previous year.
Mahindra Lifespace Developers Limited, the subsidiary in the business of real estate
and infrastructure registered a consolidated operating income of Rs. 166 crores as
compared to Rs. 611 crores in the previous year. The consolidated loss after tax after
non-controlling interest for the year is Rs. 72 crores as compared to a loss of Rs. 193
crores in the previous year. Mahindra Holidays & Resorts India Limited, the subsidiary
in the business of timeshare registered a consolidated operating income of Rs. 1,730
crores as compared to Rs. 2,372 crores in the previous year. The consolidated loss
after tax after non-controlling interests for the year is Rs. 13 crores as compared to a
loss of Rs. 132 crores in the previous year.
Mahindra Logistics Limited, a listed subsidiary in the logistics business has
registered a consolidated operating income of Rs. 3,264 crores as compared to Rs. 3,471
crores in the previous year. The consolidated profit after tax after non-controlling
interests for the year is Rs. 30 crores as compared to Rs. 55 crores in the previous year.
Ssangyong Motor Company, the Korean subsidiary of the Company (under the Companies Act,
2013), treated as discontinued operation for the purpose of consolidation, has reported
consolidated operating revenues of Rs. 18,763 crores in the current fiscal year
(January 2020 to December 2020) as compared to Rs. 21,707 crores in the previous year. The
consolidated loss after tax after non-controlling interests for the year is Rs.
3,208 crores as compared to a consolidated loss of Rs. 2,045 crores in the previous year.
The consolidated profit before exceptional item and tax for the year from continuing
operations is Rs. 5,229 crores as against Rs. 4,832 crores in the previous year.
The consolidated profit after tax after non-controlling interest and exceptional items for
the year from continuing operations is Rs. 3,347 crores as against Rs. 2,392 crores
in the previous year.
The consolidated profit after tax after non-controlling interest and exceptional items
for the year from continuing and discontinued operations is Rs. 1,812 crores as
against Rs. 127 crores in the previous year. During the year under review, Sampo Rosenlew
Oy ceased to be an Associate and became a Subsidiary of your Company.
Further, Martial Solren Private Limited, The Birmingham Small Arms Company Limited, BSA
Corporation Limited and B.S.A. Motor Cycles Limited became Subsidiaries of your Company.
During the year under review, Graphic Research Design s.r.l., Divine Solren Private
Limited, Mahindra Trucks and Buses Limited, Mahindra Automobile Distributor Private
Limited, Mahindra First Choice Services Limited and Auto Digitech Private Limited ceased
to be Subsidiaries of your Company.
During the year under review, Mahindra Asset Management Company Private Limited changed
its name to Mahindra Manulife Investment Management Private Limited and Mahindra Trustee
Company Private Limited changed its name to Mahindra Manulife Trustee Private Limited.
Further, Mahindra ‘Electoral Trust' Company, a Section
8 Company has converted itself into a Public Company and changed its name to Mahindra
Publications Limited. Subsequent to the year end, Mahindra Solarize Private Limited became
a Subsidiary 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 Statements
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 in the Governance section at the Web-link
https://www.mahindra.com/investors/ reports-and-filings
C. JOINT VENTURES, ACQUISITIONS AND
OTHER MATTERS
Merger of Mahindra Vehicle Manufacturers Limited into Mahindra & Mahindra Limited
As mentioned in the previous Annual Report, the Board of Directors of the Company at
its Meeting held on 29th May, 2019, subject to requisite approvals /consents, approved the
Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited, a wholly owned
subsidiary of the Company ("MVML") with the Company and their respective
shareholders ("Scheme") under the provisions of sections 230 to 232 of the
Companies Act, 2013. The Scheme is subject to receipt of approvals from Directorate of
Industries, Maharashtra Industrial Development Corporation, National Company Law Tribunal,
Mumbai Bench ("NCLT") and such other statutory / Government authorities as may
be directed by the NCLT. The Appointed Date of the Scheme is 1st April, 2019 and the
entire assets and liabilities of MVML would be transferred to and recorded by the Company
at book values. The entire share capital of MVML is held by the Company. Upon the Scheme
being effective, all shares (‘Preference and Equity') held by the Company in
MVML shall stand cancelled, without any further act or deed and no consideration shall be
issued on merger. NCLT has approved the Scheme basis its Pronouncement of Order on 26th
April, 2021. However, the certified copy of the order is awaited.
Scheme of Merger by Absorption of Mahindra Trucks and Buses Limited and Mahindra
Automobile Distributor Private Limited with Mahindra Two Wheelers Limited
("Scheme")
The National Company Law Tribunal has approved the Scheme vide its order dated 30th
June, 2020. The Appointed Date of the Scheme is 1st April, 2019 and the Scheme is
effective from 31st July, 2020. Pursuant to the Scheme becoming effective, Mahindra Trucks
and Buses Limited and Mahindra Automobile Distributor Private Limited ceased to be
subsidiaries of the Company.
Divestment of 100% stake in Mahindra First Choice Services Limited ("MFCS")
and Auto Digitech Private Limited ("ADPL") by Mahindra Holdings Limited
("MHL") to TVS Automobile Solutions Private Limited ("TASL")
During the year, MHL, a 100% subsidiary of your Company agreed to divest its 100% stake
in MFCS and ADPL to TASL for a consideration of Rs. 35 crores. Your Company invested the
same amount in TASL for an upfront stake of around 2.76% and an earn-out right and
potential. On 25th February, 2021, your Company was allotted 3,32,195 Series IV
Compulsorily Convertible Preference Shares ("CCPS") in TASL for Rs. 34.99 crores
and consequently MHL divested 100% equity stake in MFCS and Optionally Convertible
Redeemable Preference Shares held in ADPL to TASL. Accordingly, both MFCS and ADPL ceased
to be subsidiaries of your Company. On 26th February, 2021, the Company acquired
additional 100 earn-out shares (i.e. Series V CCPS) for Rs. 0.01 crores.
Scheme of Merger by Absorption of Mahindra Electric Mobility Limited, a subsidiary of
the Company with the Company and their respective Shareholders
The Board of Directors of the Company at its Meeting held on 26th March, 2021, subject
to requisite permissions/ approvals/consents, accorded its in-principle approval for
consolidation of Mahindra Electric Mobility Limited ("MEML"), a subsidiary of
the Company into the Company. This consolidation is part of the Company's Electric Vehicle
("EV") strategy to simplify the structure and re-organise its EV operations into
two focused verticals of Last Mile Mobility and EV Tech Centre. With the electric vehicle
business at an inflection point and poised to grow exponentially, the realignment will
help in providing resources and direction to realize targeted growth.
Subsequent to the year end, the Board of Directors of the Company at its Meeting held
on 28th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger
by Absorption of MEML with the Company and their respective Shareholders
("Scheme") under sections 230 to 232 and other applicable provisions of the
Companies Act, 2013. The Appointed Date of the Scheme is 1st April, 2021 or such other
date as may be directed or approved by the National Company Law Tribunal or any other
appropriate authority. The entire assets and liabilities of MEML would be transferred to
and recorded by the Company as per applicable accounting standards. The Scheme
provides for issue of Ordinary (Equity) Shares by the Company to the shareholders of MEML
(other than the Company or subsidiary(ies) of the Company holding shares directly and
jointly with its nominee shareholders).
The share exchange Ratio is 480 (Four Hundred and Eighty) Ordinary (Equity) Shares of
Rs. 5 each fully paid-up of the Company for every 10,000 (Ten Thousand) Equity
Shares of Rs. 10 each fully paid-up held in MEML as on Record Date. Fractional
entitlements to be rounded off to the next higher whole number.
The shares held in MEML by the Company or its subsidiary(ies) directly and jointly with
its nominee shareholders, shall be cancelled upon the Scheme becoming effective.
Additionally, the stock options held by the eligible ESOP holders of MEML as on the
Record Date shall be substituted with ESOPs of the Company in accordance with the Scheme.
Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited,
Retail Initiative Holdings Limited and Mahindra Retail Limited with the Company and their
respective Shareholders
Subsequent to the year end, the Board of Directors of the Company at its Meeting held
on 28th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger
by Absorption of Mahindra Engineering and Chemical Products Limited ("First
Transferor Company" or "MECPL"), Retail Initiative Holdings Limited
("Second Transferor Company" or "RIHL") and Mahindra Retail Limited
("Third Transferor Company" or "MRL") (together referred to as
‘Transferor Companies'), direct/indirect wholly owned subsidiaries of the Company,
with the Company and their respective Shareholders ("Scheme") under sections 230
to 232 and other applicable provisions of the Companies Act, 2013. The Appointed Date of
the Scheme would be 1st April, 2021 or such other date as may be directed or approved by
the National Company Law Tribunal or any other appropriate authority.
The entire assets and liabilities of MECPL, RIHL and MRL are to be transferred to and
recorded by the Company at their carrying values. All inter-company balances and
investments amongst MECPL, RIHL, MRL and the
Company will stand cancelled as a result of the proposed merger. The entire share
capital of the Transferor Companies is held directly/indirectly by the Company. Upon the
Scheme becoming effective, no shares of the Company shall be allotted in lieu or
exchange of the holding of the Company in the First Transferor Company or one Transferor
Company in another Transferor Company (held directly and jointly with its nominee
shareholders) and accordingly, equity shares held in the Transferor Companies shall stand
cancelled on the Effective Date without any further act, instrument or deed.
Investment in Carnot Technologies Private Limited
During the year, your Company increased its shareholding in Carnot Technologies Private
Limited ("Carnot"), from 22.9% to 48.05% on a fully diluted basis, for an
aggregate consideration of Rs. 12 crores comprising of primary infusion in the Company of
Rs. 3 crores and secondary purchase from its shareholders of Rs. 9 crores. Carnot is an
Indian Company engaged in the business of research and development, related to IOT based
products and services. Carnot is expected to support the Company's strategy by developing
information technology solutions for its products, customers and businesses, especially
for the Farm Equipment Sector.
Increase of stake in Sampo Rosenlew Oy, Finland (‘'Sampo")
During the year, the Company's voting rights in Sampo increased from 49.04% to
79.13%, through conversion of Compulsorily Convertible Preference Shares, acquisition of
shares from other shareholders, and primary infusion of capital in Sampo, with a total
incremental outlay of Euro 8.5 million (approximately Rs. 72.9 crores). On account of the
increase in stake, Sampo ceased to be an Associate and became a Subsidiary of the Company.
Harvesting machinery is the second largest category in the global farm equipment industry.
The Company's scale in tractors and Sampo's expertise in combine harvesters allows both
companies to offer a broader product portfolio to address the needs of farmers in various
countries. In India, the combine harvester market is currently much smaller than tractors
but is growing rapidly with the penetration of mechanisation. Your Company is building a
strong position in this product line for India and other export markets.
Termination of Joint Venture discussions with Ford Motor Company
The Company and Ford Motor Company Inc., USA (‘Ford') mutually determined
that they will not complete a previously announced Joint Venture between the companies.
This followed the passing of the expiration date of the definitive agreements signed
between the two companies. This outcome was driven by fundamental changes in global
economic and business conditions since the agreement was first announced. Those changes
influenced separate decisions by Ford and the Company to reassess their respective capital
allocation priorities.
Ssangyong Motor Company ("Ssangyong")
During the year, the Board of your Company decided not to make any further equity
investment in Ssangyong Motor Company, a subsidiary in South Korea. Pursuant to the
decision, Ssangyong management initiated a search for a potential investor to invest
equity. During the year under review, the Members of the Company have, by way of a Postal
Ballot, approved the proposal of Transfer/Dilution of stake in Ssangyong and/or cessation
of control of the Company over Ssangyong.
Following a global search, one North America based investor expressed an interest to
invest and acquire a majority stake in Ssangyong. However, a term sheet could not be
concluded due to regulatory constraints. Following Ssangyong's inability to pay bank loans
which were due in December, 2020, Ssangyong applied to Korean Courts for commencement of
rehabilitation procedure. The Court allowed three months to Ssangyong to arrive at a
private investment agreement with the said investor.
Since that could not be concluded within the stipulated time, the Court initiated
rehabilitation process on 15th April, 2021 and appointed a Court receiver who took
over the day-to-day management of Ssangyong. An examiner appointed by the Court will
determine whether Ssangyong should be sold as a going concern or liquidated. If the
examiner recommends a sale, the receiver will oversee the preparation of a rehabilitation
plan which may include a combination of capital reduction, debt waiver, debt-to-equity
conversion and other similar actions. The rehabilitation plan is expected to be submitted
to the Court by July, 2021. Pursuant to the admission in the Autonomous Restructuring
Support (ARS) program and following the guidance under Ind AS 110 – Consolidated
Financial
Statements, the Company has ceased consolidating Ssangyong as a subsidiary from 28th
December, 2020 and has classified the investment to be measured at fair value as per Ind
AS 109 – Financial instruments. Accordingly, the losses from operations, resultant
gain on deconsolidation of Ssangyong and impairments/ provisions for the exposures of the
Company to Ssangyong have been recognised and presented under ‘Profit/(loss)
before tax from discontinued operation' in the Consolidated Statement of Profit and Loss.
However, Ssangyong continues to be a subsidiary of the Company under the Companies Act,
2013.
100% shareholding in Meru through primary infusion and secondary share purchase
In December 2019, your Company acquired 36.63% of the equity share capital along with
control of Meru Travel Solutions Private Limited ("Meru"), holding company of
the Meru Group. In January 2021, your Company increased its stake in Meru to 43.20% by way
of a primary investment of Rs. 15 crores in Meru. Further to this and with the
intent of increasing the focus on Mobility Sector, in May 2021 your Company
acquired the balance stake from the erstwhile shareholders of Meru for Rs.
97 crores. Meru also redeemed its preference shares held by its then shareholder through
proceeds of fresh issue on rights basis which was subscribed by your Company for Rs. 3
lacs. Post the above transactions, Meru is now a wholly owned subsidiary of your
Company.
D. INTERNAL FINANCIAL CONTROLS
The Corporate Governance Policies guide the conduct of affairs of your Company and
clearly delineate 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 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.
Your Company's Internal Financial Controls were deployed through Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), that addresses material risks in your Company's operations and
financial reporting objectives.
Such controls have been assessed during the year under review taking into consideration
the essential components of internal controls stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered
Accountants of India. Based on the results of such assessments carried out by the
Management, no reportable material weakness or significant deficiencies in the design or
operation of internal financial controls was observed.
Your Company recognizes that the Internal Financial Controls cannot provide absolute
assurance of achieving financial, operational and compliance reporting objectives because
of its inherent limitations. Also, projections of any evaluation of the Internal Financial
Controls to future periods are subject to the risk that the Internal Financial Controls
may become inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate. Accordingly, regular audits and review
processes ensure that such systems are reinforced on an ongoing basis.
E. MANAGEMENT DISCUSSION AND
ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the Management
Discussion and Analysis Report, which forms part of this Annual Report.
F. CONTRACTS OR ARRANGEMENTS WITH
RELATED PARTIES
All Related Party Transactions entered during the year were in the ordinary course of
business and on arm's length basis. During the year under review, your Company had entered
into Material Related Party Transactions i.e. transactions exceeding ten percent of the
annual consolidated turnover as per the last audited financial statements, with Mahindra
Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These
transactions too were in the ordinary course of business of your Company and were on arm's
length basis, details of which are disclosed in Form AOC-2 as Annexure II pursuant to the
requirements of section 134(3)(h) of the Companies Act, 2013, which forms part of this
Annual Report.
The Policy on Materiality of and Dealing with Related Party Transactions as approved by
the Board is uploaded on the Company's website and can be accessed in the Governance
section at the Web-link https://www.mahindra.com/investors/reports-and-filings.
G. AUDITORS
Statutory Auditors and Auditors' Report
Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number
101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold office
for a term of 5 years from the conclusion of the 71st Annual General Meeting (AGM) held on
4th August, 2017 until the conclusion of the 76th AGM of the Company to be held in the
year 2022.
The Auditors' Report is unmodified i.e. it does not contain any qualification,
reservation or adverse remark or disclaimer.
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's Report as Annexure III, a Secretarial Audit Report given by the
Secretarial Auditor.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark or disclaimer.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the Financial Year 2020-21 for all applicable
compliances as per Securities and Exchange Board of India Regulations and
Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly
signed by Mr. Sachin Bhagwat has been submitted to the Stock Exchanges and is annexed as
Annexure IV to this Board's Report.
Secretarial Audit of Material Unlisted Indian Subsidiary
Mahindra Vehicle Manufacturers Limited ("MVML"), a
materialsubsidiaryoftheCompanycarriedoutSecretarial Audit for the Financial Year 2020-21
pursuant to section 204 of the Companies Act, 2013 and Regulation 24A of the Listing
Regulations. The Secretarial Audit Report of MVML submitted by Mr. Sachin Bhagwat,
Practicing Company Secretary is attached as Annexure V to this Report and does not
contain any qualification, reservation or adverse remark or disclaimer.
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 2020-21.
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 2021-22 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 arm's length relationship with the Company. As per the provisions
of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be
placed before the Members in a General Meeting for their ratification. Accordingly, a
Resolution seeking Members' ratification for the remuneration payable to Messrs D. C. Dave
& Co., Cost Auditors is included in the Notice convening the Annual General Meeting.
Cost Records
As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records
and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly,
such accounts and records are maintained.
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.
H. PARTICULARS OF LOANS, GUARANTEES,
INVESTMENTS AND SECURITIES
Particulars of the loans given, investment made or guarantee given or security provided
and the purpose for which the loan or guarantee or security is proposed to be utilised by
the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 36 to
the Financial Statements.
I. PUBLIC DEPOSITS AND LOANS/ ADVANCES
Your Company had discontinued 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. All the 22 outstanding deposits aggregating Rs. 9.44 lakhs from the public and
shareholders as at 31st March, 2021 had matured and had not been claimed as at the end of
the Financial Year. Since then no deposits have been claimed.
There was no default in repayment of deposits or payment of interest thereon
during the year under review. There are no deposits which are not in compliance with the
requirements of Chapter V of the Companies Act, 2013.
The particulars of loans/advances/investments, etc., required to be disclosed pursuant
to Para A of Schedule V of the Listing Regulations are furnished separately. The
transaction(s) of the Company with a company belonging to the promoter/promoter group
which hold(s) more than 10% shareholding in the Company as required pursuant to para A of
Schedule V of the Listing Regulations is disclosed separately in the Financial Statements
of the Company.
J. EMPLOYEES
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. Anish Shah – Managing Director and CEO
(with effect from 2nd April, 2021) (c) Mr. Rajesh Jejurikar – Executive Director
(Automotive and Farm Sectors) (d) Mr. Manoj Bhat – Group Chief Financial Officer
(appointed with effect from 2nd April, 2021) (e) Mr. Narayan Shankar – Company
Secretary Dr. Pawan Goenka ceased to be the Managing Director and CEO of the Company with
effect from 2nd April, 2021. Dr. Anish Shah was re-designated as Managing Director and CEO
of the Company and ceased to be the Group Chief Financial Officer of the Company, with
effect from 2nd April, 2021.
Employees' Stock Option Scheme
During the year under review, on the recommendation of the Governance, Nomination and
Remuneration Committee ("GNRC") 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 B S R & Co. LLP, have certified
that the Company's above-mentioned Schemes have been implemented in accordance with the
SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the
2010 Scheme.
Information as required under the SBEB Regulations read with SEBI Circular
CIR/CFD/POLICYCELL/2/2015 dated 16th June, 2015 have been uploaded on the Company's
website and can be accessed at the Web-link: https://
www.mahindra.com/resources/FY21/AnnualReport.zip.
Particulars of Employees and related disclosures
The Company had 273 employees who were in receipt of remuneration of not less than Rs.
1,02,00,000 during the year ended 31st March, 2021 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 will be made available during 21 days
before the Annual General Meeting in electronic mode to any Shareholder upon request sent
at agm.inspection@mahindra.com. Such details are also available on your Company's website
and can be accessed at the Web-link: https://www.mahindra.
com/resources/FY21/AnnualReport.zip.
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
VI 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 even during the
toughest time of Pandemic.
Your Company's focus continues towards propagating proactive and employee centric
practices. The transformational work culture initiative that aims to create an engaged
workforce with an innovative, productive and a competitive shop-floor ecosystem continues
to grow in strength. Some examples of the programs put in place include ‘Rise for
Associates', industrial relations skills for frontline officers, transformational work
culture projects, e-compliance, e-portal for reward and recognition of associates, and
Code of Conduct for associates. The newly constituted Employee Relations Council is taking
forward the work of Transformational Work Culture Committee (TWCC) and leads the design
and implementation of these programs and reviews its progress.
With the objective of capability building, developing future ready workforce and
fostering togetherness at the workplace, your Company implements multiple training and
engagement programs on an ongoing basis. These include various behavioural and functional
programs such as team effectiveness, individual effectiveness, safety and environment,
quality tools, TPM, skill building programs, continuous improvement, result orientation,
relationship management, decision making and programs on union leadership development. The
Company launched the Success Factors Learning Management System for associates to enable
self-paced learning on a digital space.
The Mahindra Skill Excellence initiative, a holistic approach to enhance the skill and
capabilities of shop floor associates, is receiving good participation across
manufacturing facilities. As a result of this effort, till previous year associates from
your Company have participated at various international skill competitions which include
China Arc Cup 2020, WorldSkills 2019 and Beijing Arc Cup.
One of the Company's associates won the 1st prize in 135 GMAW process (Welding)
in the China Arc Cup 2020. The Company's associate won the ‘Medallion of Excellence'
at the WorldSkills 2019. At the Beijing Arc Cup, the Company's associate won the bronze
medal in finished product category and a female associate from your Company was awarded as
‘Excellent Female Welder'. However, since Pandemic has grappled the entire globe and
countries are struggling to fight back the COVID-19 effect, in Financial Year 2021, all
international competitions were put on hold.
In an endeavour to improve quality, reduce cost, ensure safety and improve
productivity, your Company's shop floor associates managed to generate on an average 11.5
ideas per person in the Financial Year 2021 even during the time of uncertainties and even
though the plant was non-operational for some time.
This year significant emphasis was also laid towards raising awareness on health and
wellness of employees and their family members on protection from COVID-19 under the brand
program on "24/7 Swasth Raho Mast Raho" over Google Teams platform in
addition to regular annual medical check-ups, health awareness activities. Diet food has
become a way of life over the past four years. Your Company maintains an ‘Employee
Health Index' at an individual level and this has been a useful tool in identifying
employees who require focused counselling and monitoring. Proactive and employee-centric
shop floor practices, a focus on transparent communication of business goals, an effective
concern resolution mechanism, and a firm belief that employees are the most valuable
assets of the Company, are the cornerstone of your Company's employee relations approach.
An ‘open door policy' with constant dialogue to create win-win situations, have
helped your Company build trust and harmony. The industrial relations scenario continued
to be largely positive across all the manufacturing locations. Bonus settlements were
amicably agreed upon at all locations. The sustained efforts towards building a
transformational work culture resulted in zero production loss in the Financial Year
2020-21 and helped create a collaborative, healthy and productive work environment.
Safety, Occupational Health and Environment
During the year under review, your Company revised its Safety, Occupational Health
& Environment (SOH&E) Policy and started its implementation as per the new
standard, ISO: 45001: 2018. The management commitment towards SOH&E is demonstrated
through adoption of new compliance and notifications during the pandemic period along with
its voluntary commitments. The Company implemented various initiatives under the new
normal guidelines with overall health and hygiene being merged with the SOH&E policy.
The achievements were assessed through management reviews from time to time.
At each Plant location, annual events like Road Safety Week, National Safety Day/Month
and Fire Service Week were organized virtually. As per new normal, various topics were
deployed to train employees on Safety, Health and Environment. Similarly, virtual meetings
and training programs were deployed for suppliers, with special focus on safety and fire
safety. The training programs were leveraged by sharing small clips to enhance learning.
To strengthen the safety practices, the Company continues to focus on theme-based
safety topics including Behavior Based Safety (BBS) Level 2. Additionally, your Company
introduced chemical safety management and office fire prevention and protection new
standards.
Overall, 16 safety standards for standardization in the M&M group companies are
under implementation across all plants.
Your Company carried out statutory Safety audits, Fire Safety Audit, Electrical Safety
Audit, Risk Assessment as per updated safety standards. For the year under review, your
Company achieved substantial reduction in the fire incidences by reducing fire load. The
initiatives in this space include installation of modern equipment and recyclable stores
packaging material in critical areas by substituting the flammable material as
appropriate. To eliminate and minimize the overall environmental impact in line with the
‘science-based targets' philosophy, your Company is continuously adopting new
techniques. Towards this objective, various projects have been implemented by your Company
in air, water-waste water management, solid waste recycling management, plastic waste
recycling management and E-waste recycling management. Carbon footprint reduction is
achieved by deploying IE3 motors and increasing share of renewable energy. Many of the
Company's new initiatives have been shared by your Company with the supplier community.
During the year under review, your Company started reporting the status under Extended
Producer Responsibility Organizations (EPRO) to Central Pollution Control Board. This
activity covers integral plastic waste recycling management for all the Company's plants,
Suppliers and Dealers.
Your Company implemented Central Ground Water Authority regulations for ground water
recharging and water recycling management. This has helped your Company reduce its
freshwater requirement and move towards water neutrality.
Your Company continued its commitment to improve the well-being of employees and
contract associates through various activities by screening at all gates and regular
distribution of vitamin supplement. Further, strict adherence to usage of PPE, displaying
posters of hand washing technique and precautions to be taken, formation of isolation room
and hands-free sanitization stands were provided. Additionally, the Company reduced the
sitting capacity in canteen area and sitting capacity in buses by 50%, installed safety
screens at each table of canteen, observed distancing at shop floor and promoted more of
virtual communications. Exclusive tie–up with various tertiary care hospitals,
special tie-up with ambulance services for transferring COVID-19 positive persons to the
Quarantine Centre or Hospitals, special tie up with Nightingale for virtual consultation
with Doctors,
Medicinal kit and Hygiene kit Development at Mahindra COVID Centers were the additional
measures taken by the Company to combat COVID-19.
The Company has successfully treated employees from all Mahindra Group Companies. This
includes activities like medical check-post vaccination drive, continuous consultation and
counselling on pandemic illness, special advisory publishing for all employees and family
members were also conducted. Robust implementation of compliance for Bio medical Waste
disposal Management as per pandemic notifications were also carried out.
To create awareness among society at large, your Company has installed a LED display
screen that displays consented real time readings for all air, water and hazardous as well
as non-hazardous waste generation and disposal limits. This screen is installed just
outside the manufacturing plant in Mumbai, which is located on the Western Express
highway. In addition, environment protection awareness is generated virtually amongst all
stakeholders on an annual basis for World Ozone Day, World Environment Day, World Earth
Day, World Water Day and Energy Conservation Week and Water Conservation Week, etc.
Certifications/Recertifications
All Plants of your Company are certified for Standard ISO 45001: 2018 and
re-certification of ISO 14001: 2015. Further, all plants have implemented Integrated
Management System (IMS), along with updated standard ISO 45001:2018.
All plants of your Company are certified for Zero Waste to Landfill with 99% and above
conversion rate which ensures the commitment of recycling of waste at maximum extent to
protect the environment.
The Company revises its year on year targets under SOH&E, and the performances are
reviewed periodically by the senior management. Focused initiatives involving all
stakeholders coupled with management reviews have helped your Company to improve SOH&E
performance.
K. BOARD & COMMITTEES
Directors
As mentioned in the previous Annual Report, Dr. Pawan Goenka was re-designated as
"Managing Director and Chief Executive Officer" with effect from 1st April, 2020
and re-appointed as "Managing Director and Chief Executive Officer" of the
Company from 12th November, 2020 to 1st April, 2021.
Dr. Anish Shah was appointed as Whole-time Director designated as "Deputy Managing
Director and Group Chief Financial Officer" from 1st April, 2020 to 1st April, 2021
and as the Managing Director of the Company designated as "Managing Director and
Chief Executive Officer" from 2nd April, 2021 to 31st March, 2025. Mr. Rajesh
Jejurikar was appointed as Whole-time Director designated as "Executive Director
(Automotive and Farm Sectors)" for a period of 5 years from 1st April, 2020 to 31st
March, 2025.
Mr. CP Gurnani was appointed as Non-Executive Non-Independent Director of the
Company with effect from 1st April, 2020.
Mr. M. M. Murugappan and Mr. Nadir B. Godrej ceased to hold office as Independent
Directors of the Company from 8th August, 2020, upon completion of their tenure as
approved by the Shareholders at the 72nd Annual General Meeting of the Company held on 7th
August, 2018.
Independent Directors
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed both under the
Companies Act, 2013 and Listing Regulations.
The Board is of the opinion that the Independent Directors of the Company hold highest
standards of integrity and possess requisite expertise and experience required to fulfill
their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the
Company have confirmed that they have registered themselves with the databank maintained
by The Indian Institute of Corporate Affairs, Manesar ("IICA"). The Independent
Directors are also required to undertake online proficiency self-assessment test conducted
by the IICA within a period of 2 (two) years from the date of inclusion of their names in
the data bank, unless they meet the criteria specified for exemption.
The Independent Directors of the Company are exempt from the requirement to undertake
online proficiency self-assessment test except Mr. Muthiah Murugappan who would be
undertaking the said test in due course.
Lead Independent Director
Mr. Vikram Singh Mehta, Independent Director and Chairman of Governance, Nomination and
Remuneration Committee has been appointed as the Lead Independent Director with effect
from 1st April, 2021. The role and responsibilities of the Lead Independent Director are
provided in the Corporate Governance Report forming part of the Annual Report.
Re-appointment of Independent Director for a Second Term
The Governance, Nomination and Remuneration Committee, on the basis of performance
evaluation of Mr. T. N. Manoharan and taking into account the external business
environment, the business knowledge, acumen, experience and the substantial contribution
made by him during his tenure, has recommended to the Board that the continued association
of Mr. T. N. Manoharan as Independent Director would be beneficial to the Company. Based
on the above and his performance evaluation, the Board recommends the re-appointment of
Mr. T. N. Manoharan as an Independent Director for a further period of 5 consecutive years
commencing from 11th November, 2021 to 10th November, 2026. The Company has received the
requisite Notice from a Member in writing proposing his appointment as Independent
Director.
Appointment of Independent Directors Ms. Nisaba Godrej
Pursuant to the recommendation of the Governance, Nomination and Remuneration
Committee, the Board at its Meeting held on 7th August, 2020 approved appointment of Ms.
Nisaba Godrej, as an Additional Director (Independent and Non-Executive) on the Board of
Directors of the Company, with effect from 8th August, 2020 to hold office up
to the date of the Annual General Meeting of the Company to be held thereafter and subject
to the approval of the Members at the said Annual General Meeting, to hold office as an
Independent Director for a term of 5 (five) consecutive years commencing from 8th August,
2020 to 7th August, 2025 (both days inclusive).
The Company has received the requisite Notice from a Member in writing proposing her
appointment as an Independent Director of the Company.
Mr. Muthiah Murugappan
Pursuant to the recommendation of the Governance, Nomination and Remuneration
Committee, the Board at its
Meeting held on 7th August, 2020 approved appointment of Mr. Muthiah Murugappan, as an
Additional Director (Independent and Non-Executive) on the Board of Directors of
the Company, with effect from 8th August, 2020 to hold office up to the date of the
Annual General Meeting of the Company to be held thereafter and subject to the approval of
the Members at the said Annual General Meeting, to hold office as an Independent
Director for a term of 5 (five) consecutive years commencing from 8th August, 2020 to
7th August, 2025 (both days inclusive).
The Company has received the requisite Notice from a Member in writing proposing
his appointment as an Independent Director of the Company.
Completion of tenure of Dr. Pawan Goenka
Dr. Pawan Goenka ceased to hold office as "Managing Director and CEO" of the
Company with effect from 2nd April, 2021 upon completion of his tenure as approved by the
Shareholders at the 74th Annual General Meeting of the Company. Dr. Goenka also ceased to
be a Member of the Board of Directors of the Company with effect from 2nd April, 2021. Dr.
Pawan 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 COO (Automotive
Sector) in April 2003, President (Automotive Sector) in September 2005, President
(Automotive & Farm Equipment Sectors) in April 2010. Dr. Pawan Goenka was first
appointed as an Executive Director and President (AFS) on the Board of the Company on 23rd
September, 2013, Executive Director and Group President (AFS) in April 2015, Managing
Director of Mahindra & Mahindra Limited, in November 2016 and designated as Managing
Director & CEO on 1st April, 2020. The Company has witnessed phenomenal growth under
his leadership. The path through which the Company passed through and the valuable
contribution made by him in guiding and shaping the business model and future of the
Company and the Group is commendable. He was instrumental in translating the global vision
of the Company into a reality.
He has been the Chairman of the Risk Management Committee and Member of the Corporate
Social Responsibility Committee, Loans & Investment Committee, Stakeholders
Relationship Committee, Research & Development Committee and Sale of Assets Committee
of the Board.
The Board placed on record its deep appreciation of the invaluable services rendered by
Dr. Pawan Goenka to the Company for over more than 27 illustrious years with the Company.
Quote from Executive Chairman
"Pawan joined your Company in 1993, fresh from a long stint in the USA, wanting to
make a career in India but uncertain about how this would work out. From that day to this,
he has spent 28 exciting years in the Company. He started as a General Manager reporting
to the head of Automotive R&D at Nashik and rose to cap his career as the MD and CEO
of your Company. That is an impressive trajectory.
Pawan's unique combination of engineering skills and commercial acumen have added great
value to your Company. Under his leadership, particularly in the area of R&D, your
Company produced a stream of products that put us on the automotive map. When he shared
the first Scorpio prototype with me, my spontaneous reaction was that I was witnessing the
birth of a new era. The Scorpio changed the Company's DNA, image and fortunes. From the
Scorpio to the XUV 700, Pawan has been the driving force behind the quantum leap achieved
by the R&D Function in M&M.
Pawan is a role model for many in your Company. His understanding of complex
engineering processes along with the demands of the market has been instrumental in
translating the Company's global vision into a reality. His commitment to Quality focus
and Customer first is now a part of the folklore of your Company. He has always possessed
a natural inclination towards fairness and transparency and has great respect for his own
time and the time of others. He believes he can learn from anyone, even the most
junior of colleagues. Fostering a meritocracy at Mahindra has always been a
priority for him. He is the living embodiment of our Core Values.
He has officially retired, but I know that our loss is going to be society's gain.
Amongst the many activities he has planned, giving back to the community in some form or
the other is a large part of his agenda. And although he will devote much less time to our
organisation, it is a comfort to know that we will always have access to his experience
and wisdom.
I wish Pawan a very happy, productive and fulfilling next chapter in his life. Wherever
his destiny takes him, he will always remain a valued part of our Mahindra Group
family."
Transition of Mr. Anand G. Mahindra, Executive Chairman to the role of Non-Executive
Chairman of the Company with effect from 12th November, 2021
At the 71st Annual General Meeting of the Company, based on the recommendations of the
Governance, Nomination and Remuneration Committee of the Board ("GNRC") and the
Board of Directors, the Company had appointed Mr. Anand G. Mahindra as Executive Chairman
of the Company for a period of 5 (Five) years with effect from 12th November, 2016 upto
and including 11th November, 2021.
In line with the requirement of Regulation 17(1B) of the Listing Regulations, the Board
of Directors pursuant to the recommendations of GNRC at its meeting held on 20th December,
2019, had approved the transition of Mr. Anand G. Mahindra, Executive Chairman to
the role of Non-Executive Chairman with effect from 1st April, 2020.
Subsequently, pursuant to the Securities and Exchange Board of India
("SEBI") notification dated 10th January, 2020 deferring the deadline for
compliance with Regulation 17(1B) of the Listing Regulations from 1st April, 2020
to 1st April, 2022, the GNRC and the Board at their Meetings held on 7th February, 2020
and 8th February, 2020 respectively, unanimously requested Mr. Anand G. Mahindra to
continue as the Executive Chairman till his original term of appointment as approved by
the Shareholders of the Company i.e. upto 11th November, 2021.
In deference to the wishes of the GNRC and Board, Mr. Anand G. Mahindra had acceded to
the request to continue as the Executive Chairman till his original term of appointment
i.e. upto 11th November, 2021.
Upon completion of his tenure as Executive Chairman, Mr. Anand G. Mahindra will transit
to the role of Non-Executive Chairman of the Company with effect from 12th
November, 2021, who shall be liable to retire by rotation. This will further enhance the
independence of the Board.
As Non-Executive Chairman, he will serve as mentor and sounding board for the Managing
Director and Senior Management especially in the areas of strategic planning, risk
mitigation and external interface. He will continue to play an important role in
epitomising and building Brand Mahindra. He will be available to provide feedback and
counsel to the Managing Director and Senior Management on key issues facing the Company.
Retirement by rotation
Mr. Vijay Kumar Sharma and Mr. CP Gurnani retire by rotation and, being eligible, offer
themselves for re-appointment at the 75th Annual General Meeting of the Company scheduled
to be held on 6th August, 2021.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the
Board has carried out an annual evaluation of its own performance and that of its
Committees as well as performance of all the Directors individually, including Independent
Directors, Chairman of the Board, Managing Director, Deputy Managing Director and Group
Chief Financial Officer and Executive Director (Auto and Farm Sectors).
Feedback Mechanism
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.
Evaluation of Committees
The performance evaluation of Committees was based on criteria such as structure and
composition of Committees, attendance and participation of member of the Committees,
fulfilment of the functions assigned to Committees by the Board and applicable regulatory
framework, frequency and adequacy of time allocated at the Committee Meetings to fulfil
duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated,
comprehensiveness of the discussions and constructive functioning of the Committees,
effectiveness of the Committee's recommendation for the decisions of the Board, etc.
Evaluation of Directors and Board
A separate exercise was carried out by the Governance, Nomination and Remuneration
Committee of the Board to evaluate the performance of Individual Directors. The
performance evaluation of the Non-Independent Directors and the Board as a whole was
carried out by the Independent Directors. The performance evaluation of the Executive
Chairman of the Company was also carried out by the Independent Directors, taking into
account the views of the Executive Directors and Non Executive Directors. The performance
evaluation of the Managing Director of the Company was carried out by the Executive
Chairman and other Directors.
Criteria for Independent Directors
The performance evaluation of Independent Directors was based on various criteria,
inter-alia, including attendance at Board and Committee Meetings, skill, experience,
ability to challenge views of others in a constructive manner, knowledge acquired with
regard to the Company's business, understanding of industry and global trends, etc.
Criteria for Chairman
The performance evaluation of Chairman was based on various criteria, inter-alia,
including style of Chairman's leadership, effective engagement with other Board members
during and outside the meetings, allocation of time provided to other Board members at the
meetings, effective engagement with shareholders during general meetings, etc.
Criteria for Managing Director and Executive Directors
The performance evaluation of Managing Director and Executive Directors was based on
various criteria, inter-alia, including leadership style, standards of integrity,
fairness and transparency demonstrated, identification of strategic aim, future demands
and opportunities, resource staffing to meet short term and long term goals, engagement
with Board and Committee members, updating Board on significant issues, commitment to
organisational values, vision and mission, adaptation to meet changing circumstances,
knowledge and sensitivity of stakeholders' needs within and outside the Company
demonstrated and effective communication skills.
Results of Evaluation
The results of evaluation showed high level of commitment and engagement of Board, its
various committees and senior leadership. The results of the evaluation were shared with
the Board, Chairman of respective Committees and individual Directors. Based on the
outcome of the evaluation, the Board and Committees have agreed on an action plan to
further improve the effectiveness and functioning of the Board and Committees.
The Directors expressed their satisfaction with the evaluation process. During the year
under review, the Committee ascertained and reconfirmed that the deployment of
"questionnaire" as a methodology, is effective for evaluation of performance of
Board and Committees and Individual Directors.
Policies
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.
Policy (a) mentioned above includes the criteria for determining qualifications,
positive attributes and independence of a Director, identification of persons who are
qualified to become Directors and who may be appointed in the Senior Management Team in
accordance with the criteria laid down in the said Policy, succession planning for
Directors and Senior Management, and Policy statement for Talent Management framework of
the Company.
Policy (b) mentioned above sets out the approach to Compensation of Directors, Key
Managerial Personnel and other employees in the Company. Policies mentioned at (a) and (b)
above are available on the website and can be accessed in the Governance section at the
Web-link https://www.mahindra.com/investors/reports-and-filings.
Familiarisation Programme for Independent Directors/Non-Executive Directors
The Members of the Board of the Company are afforded many opportunities to familiarise
themselves with the Company, its Management and its operations. The Directors are
provided with all the documents to enable them to have a better understanding of the
Company, its various operations and the industry in which it operates.
All the Independent Directors of the Company are made aware of their roles and
responsibilities at the time of their appointment through a formal letter of appointment,
which also stipulates various terms and conditions of their engagement. Executive
Directors and Senior Management provide an overview of the operations and familiarize the
new Non-Executive Directors on matters related to the Company's values and commitments.
They are also introduced to the organization structure, constitution of various
committees, board procedures, risk management strategies, etc.
Strategic Presentations are made to the Board where Directors get an opportunity to
interact with Senior Management. Directors are also informed of the various developments
in the Company through Press Releases, emails, etc.
The Company has a web based portal i.e. Board portal, accessible to all the Directors
which, inter alia, contains the following information:
• Roles, responsibilities and liabilities of Independent Directors under the
Companies Act, 2013 and the Listing Regulations
• Board Minutes, Agenda and Presentations
• Annual Reports
• Code of Conduct for Directors
• Terms and conditions of appointment of Independent Directors
Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various
familiarization programmes for its Directors including review of Investments of the
Company by Strategic Investment Committee, Industry Outlook at the Board Meetings,
Regulatory updates at Board and Audit Committee Meetings covering changes with respect to
the Companies Act, 2013, Listing Regulations, Taxation and other matters, Presentations on
Internal Control over Financial Reporting, Operational Control over Financial Reporting,
Prevention of Insider Trading Regulations, Framework for Related Party Transactions, Plant
Visit, Meeting with Senior Executive(s) of your Company, etc. Pursuant to Regulation 46 of
the Listing Regulations, the details required are available on the website of your Company
at the web link: https://www.mahindra.com/resources/FY21/ AnnualReport.zip
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, 2021, 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, 2021
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, 2021; (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, 2021.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year 1st April, 2020 to 31st March, 2021, seven Board Meetings were held on:
3rd April, 2020, 23rd April, 2020, 12th June, 2020, 7th August, 2020, 10th
November, 2020, 5th February, 2021 and 26th March, 2021. The 74th Annual General Meeting
(AGM) of the Company was held on 7th August, 2020 through Video Conferencing.
Meetings of Independent Directors
The Independent Directors of your Company meet before the Board Meetings without the
presence of the Executive Chairman or the Managing Director or other Non-Independent
Director or Chief Financial Officer or any other Management Personnel.
These Meetings are conducted in an informal and flexible manner to enable the
Independent Directors to discuss matters pertaining to, inter alia, review of performance
of Non-Independent Directors and the Board as a whole, review the performance of the
Executive Chairman of the Company (taking into account the views of the Executive and
Non-Executive Directors), review the performance of the Company, assess the quality,
quantity and timeliness of flow of information between the Company Management and the
Board that is necessary for the Board to effectively and reasonably perform their duties.
Five Meetings of Independent Directors were held during the year and these meetings
were well attended.
Audit Committee
The Board at its Meeting held on 7th August, 2020 re-constituted the Audit Committee
and appointed Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan as the Members with effect
from 8th August, 2020. Mr. Nadir B. Godrej and Mr. M. M. Murugappan ceased to be the
Members of the Committee upon the end of their term. The Committee comprises of four
Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma,
Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan. 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.
L. GOVERNANCE
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 Listing Regulations forms part of the Annual
Report.
Vigil Mechanism
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed
thereunder and the Listing Regulations 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 in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings.
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 a detailed policy in place in line with the requirements of The Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
("Act"). Internal Complaints Committees ("ICC") have been set up to
redress complaints received regarding sexual harassment and the Company has complied with
provisions relating to the constitution of ICC under the Act. All employees (permanent,
contractual, temporary, trainees) are covered under this Policy.
During the year under review, 7 complaints with allegations of sexual harassment were
filed and 5 were disposed off as per the provisions of the Act. 2 complaints are pending
as of 31st March, 2021.
Business Responsibility Report
The ‘Business Responsibility Report' (BRR) of your Company for the year 2020-21
forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing
Regulations.
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 organizational
structure for managing and reporting on risks.
Your Company has constituted a Risk Management Committee of the Board which is
authorized 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
include review of risks and Risk Management Policy at 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 of risks,
including cyber security and related risks and also 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 organization.
M. CORPORATE SOCIAL RESPONSIBILITY
AND SUSTAINABILITY
Corporate Social Responsibility (CSR)
This year marks the 75th year of inception of your Company. Over the past seven
decades, your Company has built its reputation as a good corporate citizen by not only
doing ‘good business', but also by driving positive change in society. 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".
This year was a particularly challenging year for humanity, with the adverse impact of
the COVID-19 pandemic felt by one and all but more so by the vulnerable and marginalized
groups on whom the impact has been the hardest. Your Company has invested in a concerted
manner to provide COVID-19 relief and rehabilitation with an aim of building resilient
communities. Apart from contributing to the Prime Minister's Citizen Assistance and Relief
in Emergency Situations Fund towards the end of Financial Year 2020, the Mahindra Group
swiftly responded to the pandemic by putting into action a series of relief initiatives.
Your factories were converted to produce face shields, face masks, sanitizers and
aerosol boxes to support the frontline warriors in the fight against the pandemic.
Further, a COVID-19 Relief Fund under the aegis of Mahindra Foundation was set up to
provide sustenance grants and in-kind support to those most severely affected by the
pandemic e.g. small businesses and traders, daily wage labourers, frontline COVID
warriors, etc. Till 31st March, 2021, the Mahindra Group has distributed 4,06,700 face
shields, 14,35,950 face masks and 624 aerosol boxes to hospitals and frontline workers
including the police force. The Group has also distributed 5,25,068 cooked food packets,
and ration and other essentials to 7,03,486 individuals including migrants and communities
around its office and factory locations. Your Company also supported Ratna Nidhi
Charitable Trust, with the provision of ICU beds for a COVID care centre set up at NESCO
in Goregaon, Mumbai, by BMC.
With the objective of building resilient communities, your Company's long-term focus
has been towards supporting the livelihood of communities, particularly migrants,
adversely affected by the pandemic. This was done through a partnership with Swades
Foundation for providing livelihood (goat rearing and fishing) support to 679 COVID-19
impacted households in Raigad district of Maharashtra. Your Company also entered into a
partnership with Naandi Foundation to support 6,000 individuals through an
Agri-Entrepreneurship Skilling Programme.
You will be happy to know that your Company has in line with its CSR vision, continued
to support the constituencies of girls, youth and farmers through projects in the domains
of education, health, and the environment. By investing CSR efforts in these critical
constituencies who contribute to nation building and the economy, the Company will enable
our stakeholders and communities to RISE.
The impact of some of the CSR projects your Company invested in Financial Year 2021 are
shown below:
– Project Nanhi Kali supported the education of over 1,71,950 underprivileged
girls through 6,346 Academic Support Centres across 24 locations in 9 states of India. Of
these 33,046 girls were supported by your Company, while the Mahindra Group as a whole,
supported 73,699 girls.
– Through the support of the Mahindra Group, the Mahindra Pride Schools (MPS)
trained 4,342 youth from socially and economically disadvantaged communities across 7
locations in Financial Year 2021. Of these, your Company supported the MPS in Chandigarh,
Varanasi, and 2 schools in Chennai, which together skilled 2,520 youth. Further, the
Mahindra Group supported training of 92,304 students through 1,816 Mahindra Pride
Classrooms (MPC) set up in ITIs, Polytechnics, Arts and Science Colleges across 13 states.
Of this, your Company supported the training of 61,677 MPC students. The delivery of
instruction was through virtual training thereby complying with the Government regulations
with respect to COVID-19.
– Over 12,500 students have benefitted through a variety of Scholarship Programs.
These ranged from providing opportunities to youth from low income group families to
undergo diploma courses at vocational education institutes, to enabling meritorious
students to pursue their post graduate studies at reputed universities overseas, to
allowing deserving students to study at the Mahindra United World College in Pune.
– Through Mahindra Hariyali, the Mahindra Group planted 1.14 million trees, which
contributed to building green cover and protecting the rich biodiversity of the country.
Your Company contributed towards plantation of 1 million trees of which 0.90
million trees were planted in the Araku valley, which besides greening the environment
also provided livelihood support to tribal farmers growing coffee and fruit bearing trees
in this region. Till date, 19.08 million trees have been planted through Mahindra
Hariyali, of which 11.68 million trees were planted in Araku to support the livelihood of
25,000 tribal farmer families.
– Your Company entered into a Public Private Partnership (PPP) for an Integrated
Water Management Program (IWMP) with Government of Madhya Pradesh at Bhopal and with
National Bank for Agriculture and Rural Development (NABARD) at Hatta. Your Company has
also partnered with NABARD in Maharashtra for a watershed project in Igatpuri, in Nashik
District covering 20 villages, over 13,500 hectares and benefitting a population of more
than 23,020 individuals.
– Through the Wardha Farmer Family Project, Prerna and Krishi Mitra Project, your
Company continued to support small and marginal farmers by training them in effective
farming practices including soil health, resource efficient agriculture, creating model
farms with bio-dynamic farming practices, and increasing agricultural income through
increasing crop productivity.
– Rise for Safe Roads: Through this first of its kind ‘Road Safety' project
in India, your Company aimed to make the Mumbai Pune Expressway a near ‘Zero Fatality
Corridor' by 2021. The interventions have been guided by the "4E" principle i.e.
Engineering, Enforcement, Education and Emergency Response. In addition, long haul truck
drivers were trained through the Anticipatory Driving and Action Prevention Training
(ADAPT™) program.
– Despite the challenges posed by the pandemic, our employees continued to drive a
positive change by volunteering. The employee volunteering platform provided 31,503
employees across the Group a menu of volunteering opportunities, enabling them to invest
2,72,467 hours towards giving back to society. Of these, 10,184 M&M employees
contributed 83,789 hours towards various social causes. Your Company also launched the
MySeva initiative, which encouraged employees to extend the spirit of giving in their
personal capacity by recognizing their individual acts of social responsibility. Of the
total volunteering hours, 51,625 hours was contributed by employees across the Group
through the MySeva initiative and the balance were contributed through the ESOPs (Employee
Social Options).
During the last Financial Year, your Company's efforts to drive positive change were
acknowledged by various forums and your Company received the following awards:
• India CSR Summit 2020 award for Watershed Management at Zaheerabad Plant and for
Project Prerna in Maharashtra, Karnataka.
• SIAM award in Category – Skills & Education for Project Prerna.
• Indo French Chamber of Commerce & Industry (IFCCI)
- CSR Award for Project Hariyali in the category of Environment and Sustainability.
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 in the Governance
section at the Web-link https://www.mahindra.com/investors/reports-and-filings.
CSR Committee
The Board at its Meeting held on 26th March, 2021 re-constituted the Corporate Social
Responsibility Committee. Dr. Pawan Goenka ceased to be the Member of the Committee with
effect from 2nd April, 2021, upon cessation as a Director of the Company.
Further, the Board at its Meeting held on 28th May, 2021 re-constituted the
Corporate Social Responsibility Committee by inducting Mr. Muthiah Murugappan as a
Member of the Committee. The CSR Committee comprises of Dr. Vishakha N. Desai
(Chairperson), Mr. Anand G. Mahindra, Dr. Anish Shah, Mr. Vikram Singh Mehta and Mr.
Muthiah Murugappan.
The Committee, inter alia, reviews and monitors the CSR as well as Sustainability
activities.
During the year under review, your Company spent Rs. 112,78,17,286 (including a set off
of Rs. 20 crores for contributions made by the Company to the PM CARES Fund) 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. 112,56,00,000. The detailed Annual
Report on the CSR activities undertaken by your Company in the Financial Year 2021, is
annexed herewith marked as Annexure VII.
The Company had contributed a sum of Rs. 20 crores to the PM CARES Fund on 31st March,
2020 in pursuance of MCA's appeal dated 30th March, 2020 made to the MDs/CEOs of top 1000
companies in terms of market capitalization, to contribute generously to PM CARES
Fund.
In terms of the MCA Circular No.CSR-01/4/2021-CSR-MCA dated 20th May, 2021, Mr.
Manoj Bhat, Group Chief Financial Officer and BSR & Co., the Statutory Auditors of the
Company have certified that the contribution to "PM CARES Fund" was
indeed made on 31st March, 2020 in pursuance of the appeal and the same was over
and above the mandatory CSR obligation under section 135(5) of the Companies
Act, 2013 for Financial Year 2019-20.
The said contribution of a sum of Rs. 20 crores to PM CARES Fund was made by the
Company over and above the mandatory CSR obligation under section 135(5) of the Companies
Act, 2013 for Financial Year 2019-20, which has been offset against the mandatory
CSR obligation for Financial Year 2020-21.
Sustainability
During the year under review, the 13th Sustainability Report for the year 2019-20 was
released. The report was externally assured by KPMG and prepared in accordance with the
GRI Standards - Core option.
Your Company continued the focus on the Environmental, Social and Governance (ESG)
parameters by implementing Mahindra Sustainability Framework. This framework defines
sustainability as "Building enduring business by rejuvenating the environment and
enabling stakeholders to rise". Various actions have been implemented across the
Group based on three pillars of the framework, People, Planet and Profit. The ESG
information is disclosed under Dow Jones Sustainability Index (DJSI) and Carbon Disclosure
Project (CDP). In DJSI, your Company has retained its position in the Emerging Market
Index. In CDP Carbon and CDP water, your Company has achieved level A. Your Company has
committed to Science Based Target, an initiative to restrict average global temperature
rise in alignment of Paris Climate Change Agreement. During the year, 21 companies across
the Group have committed to Science Based Target, while 16 companies have received
approval for their targets. By actively working towards making the locations certified for
Zero Waste to Landfill (ZWL), your Company is demonstrating its concern about the
environment. During the year,
22 Group locations got certified for ZWL.
Mr. Anand G. Mahindra, Executive Chairman of your Company participated at panel of
global CEO's session at International Solar Alliance, ‘First World Solar Technology
Summit'. Being one of the Board Members, he attended the United Nations Global Compact
Meeting.
The Sustainability performance for your Company for the Financial Year 2020-21 will be
elaborated in detail in the GRI Report which is under preparation and will be ready for
release shortly.
During the year under review, your Company was recognized for its leadership position
on the ESG dimensions by way of:
• Recognition as a part of 2020 CDP Supplier Engagement Leader-board. The Company
is among the top 7% assessed for supplier engagement on climate change, based on 2020 CDP
disclosure.
• Receiving an India Corporate Governance & Sustainability Vision Award 2021,
organised by The Indian Chamber of Commerce in the category of ‘Sustainability
Performance'.
• Recognition as part of ‘100 Most Sustainably Managed Companies in the
World' by The Wall Street Journal. The Company ranked 17th which is highest for an
automobile company and highest for an Indian company.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy, technology absorption, foreign
exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VIII
and forms part of this Report.
N. SECRETARIAL
Share Capital
The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.60
crores as at 31st March, 2021 comprising of 1,24,31,92,544 Ordinary (Equity) Shares of Rs.
5 each fully paid-up. There was no change in Share Capital during the year under review.
Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2
The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of
the Board of Directors' and ‘General Meetings' respectively, have been duly complied
by your Company.
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, a copy of
the annual return is placed on the website of the Company and can be accessed at https://
www.mahindra.com/resources/FY21/AnnualReport.zip.
O. POLICIES
The details of the Key Policies adopted by the Company are mentioned at Annexure IX to
the Board's Report.
P. GENERAL
Neither the Executive Chairman nor the Managing Director of the Company received any
remuneration or commission from any of the subsidiary of your Company. Your Directors
state that no disclosure or reporting is required in respect of the following items as
there were no transactions/events on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under
any Scheme save and except Employees Stock Option Schemes (ESOS) referred to in this
Report.
3. Significant or material orders passed by the Regulators or Courts or Tribunals which
impact the going concern status and the Company's operation in future.
4. Voting rights which are not directly exercised by the employees in respect of shares
for the subscription/ purchase of which loan was given by the Company (as there is no
scheme pursuant to which such persons can beneficially hold shares as envisaged under
section 67(3)(c) of the Companies Act, 2013).
5. There has been no change in the nature of business of your Company.
6. No application was made or any proceeding is pending under the Insolvency and
Bankruptcy Code, 2016 during the year in respect of your Company.
7. There was no one time settlement of loan obtained from the Banks or Financial
Institutions.
| For and on behalf of the Board |
| ANAND G. MAHINDRA |
| Executive Chairman |
| Mumbai, 28th May, 2021 |